The Draft Design Amendment Rules was published on 18th October, 2019, and was open to objections or suggestions from any person likely to be affected, for a period of 30 days. After much awaited time, on 25th January 2021, the Design Amendment Rules, 2021 was officially published in the Gazette.
The key changes implemented by the Rules are the following:
- ‘Start-ups’ were recognized as a category of applicant.
- Definition of ‘Start-up’ is now inserted in Rule 2(eb).
- Start-ups can be:
- an Indian entity recognised as a start-up by the competent authority under Start-up India initiative
- a foreign entity fulfilling the criteria for turnover and period of incorporation/ registration as per Start-up India Initiative and submitting declaration to that effect.
- Under Rule 5, clause (e) has been substituted and now states that in the event of any application filed originally in the name of an individual, start up or small entity, being transferred fully or partly, to an entity which is none of the above, the higher fees chargeable for such entity shall be paid by the new applicant along with the request for transfer.
- The Rules also clarify that when a start-up ceases to be a start-up, owing to lapse of period of recognition or crossing of financial threshold for turnover, no such difference in the scale of fees is payable.
- Rule 10(1) has been substituted and as per the newly added provision, articles for design registration are to be classified as per the current edition of “International Classification for Industrial Designs (Locarno Classification)” published by World Intellectual Property Organization (WIPO).”
- The First Schedule (Schedule of Fees) now stands amended and as per the new amendment, the fees for start-ups and small entities have been reduced and made at par with natural persons. All other entities will have to pay higher fees (4 times higher).
- The Second Schedule introduces a Form-24 Declaration by applicant to claim status as a small entity or start-up. Proof of registration/recognition under MSME / DPIIT (for Indian applicant) and any proof of eligibility (for foreign applicant) has to be filed by small entity/start up.
- The Fourth Schedule which provides costs allowed in proceedings before the Controller, also provides for a differentialcosts for natural persons, start-ups and small entities, when compared to other entities.
Note: The definition of Start-ups was modified by a Notification by the Ministry of Commerce and Industry (DPIIT) on 19.02.2019 with a view to include more entrepreneurs in its ambit. An entity is now considered as a Start-up:
- Up to ten years from the date of its incorporation/ registration as a private limited company or a registered partnership firm or a limited liability partnership in India.
- Its annual turnover has not exceeded Rs.100 cr for any of the financial years since incorporation/ registration.
- The entity is working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation.