Official fees for Patent Filing in India goes up by 60 – 100%!
Last Friday, the Patent (Amendment) Rules, 2014 (the “Rules”) came into effect. The public notice issued by the Controller General of Patents, Designs & Trade Marks summarises that the Rules basically deal with a revised official fee structure and the inclusion of a new category of applicants called the “small entity”.
The draft rules
The draft rules were made available to the public for their comments and suggestions on June 12, 2013. These draft rules suggested a hike in the existing official fees and did not include the new category of “small entity”. However, there were suggestions from the stakeholders to include separate and possibly subsidised official fees for applicants who could fall within the purview of medium and small scale industries. Further there were suggestions for a reducing the official fees for individual applicants. It is rather pleasant to see that some of these suggestions have been considered and implemented.
Fee hikes generally
Per the Rules now, there are three categories of applicants for patents in India: individuals, small entities and entities other than small entities. There is a 60% hike in the official fees payable by individuals. The official fees which were listed for applicants other than individuals in the previous rules are now the official fees payable by the small entity. Further legal entities other than the small entities would now pay official fees which have been increased by 100%, basically double the amount of what they were initially paying.
As always the worst affected by this fee hike would be the applicants for inventions pertaining to biotechnology, especially those submit gene sequences which are voluminous. Unlike many jurisdictions, the Indian law for patents does not provide a cap on official fees while filing gene sequences. Since the sequence listing, though ideally required to be provided in .txt format, is considered a part of the specification and each page over the statutory limit of 30 pages would incur official fees.
Classifying small entities
For defining small entities, the Rules refer to the classification of enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 (the “MSME” Act). The Rules classify the small entity as a “medium enterprise” under the MSME Act.
To qualify as a small entity, the applicant’s investment in plants and machinery should be between Rupees 5 to 10 crores (approx. USD 0.8 to 1.6 million) if it is in the business of productions and manufacture of goods. These goods include the goods specified in the First Schedule of the Industries (Development and Regulation) Act, 1951 (available at Page 42 of the Act). However, if the applicant is a service provider, his investment in equipment should be between Rupees 2 to 5 crores (approx. USD 0.3 – 0.8 million). A sample of the hike in fees is as illustrated below:
The Rules are however strict about the “investment in plant and machinery” part. They specifically explain that the cost of pollution control, investment on safety devices, research and development extra are to be excluded while calculating the applicant’s investment in plants and machinery.
Further apart from the regular forms to be submitted for patent filing, the applicant claiming to be a small entity would be required to submit another form (“Form 28”). An Indian applicant would be required to submit evidence of registration under the MSME Act.
Ambiguity in terms of foreign applicants
As regards the foreign applicants, there are no specified documents which are mandated to accompany Form 28. It is therefore not clear as to how the Patent Office would verify if a foreign applicant is indeed a “small entity”.
In further efforts to go paperless, the Indian Government would now levy 10% additional fee on the official fees if the patent applications and forms are submitted by paper. Considering the hike in the regular official fees, this additional fee could encourage applicants to file their applications electronically.
While this post is just a brief look at what the Rules provide, we will update you as soon as we have some clarification in terms of the ambiguity in the Rules.