In India, the protection available under the Intellectual Property laws extends to Patents, Copyrights, Trademarks, Geographical Indications, and Designs. An Industrialist engaged in the production of any “article” usually spends a considerable amount of resources in its “design” to distinguish it from the “articles” of its competitors. To protect the interests of such Industrialists, the Patents & Designs Protection Act of 1872 became the first Indian legislation to protect Industrial Designs. Over the years, several changes were made to the aforesaid piece of legislation.
In 1995, India became a “member State” of the WTO and the Designs Act of 2000 (hereinafter referred to as the Act) was enacted by the Legislature to ensure that the Indian Designs Law is in consonance with TRIPS. In addition to this, the Act also intended to increase the efficiency of the existing law by incorporating the changes made by the progress in the field of science and technology, and promote design activity by giving adequate protection to Industrial Designs. To effectively implement the provisions of the Act, the Central Government is empowered to make rules under Section 47 of the Act.
Acting under the power bestowed upon it by the aforementioned section, the Department of Industrial Policy and Promotion (DIPP) notified the Designs Rules, 2001 (hereinafter referred to as the Principal rules) on May 11, 2001. Subsequently, these rules were amended in the years 2008, 2013 and 2014. Recently, the DIPP notified the Designs (Amendment) Rules, 2021 (hereinafter referred to as the Amending rules) and this article seeks to cover the same.
The Amended Rules
On October 18, 2019, the DIPP had released the draft Designs (Amendment) Rules, 2019 to invite public comments. On January 25, 2021, the rules were officially notified by the DIPP and carried out a total number of eight amendments in the existing rules. At the onset, it must be noted that the overarching scheme of the amended rules is aimed at making the rules ‘Startup' complaint.
Definition of a ‘Startup'
Rule 2 of the Amending rules seeks to define the term “Startup” by adding clause (eb) after clause (ea) in Rule 2 of the Principal rules. This clause provides two definitions of the word “startup”. Firstly, any Indian entity recognized as a startup by a competent authority under the ‘Startup India Initiative.' Secondly, any foreign entity which fulfills the requirement for turnover and period of incorporation or the registration criteria necessitated by the ‘Startup India Initiative', and submits a declaration to that effect. The explanation attached to clause (eb) further provides that the reference rates of foreign currency provided by the Reserve Bank of India shall be considered to calculate the turnover requirements.
Mobile Phones as Address for Service
Rule 4 of the Principal rules deals with address for service of documents. Rule 3 of the Amending Rules replaces the proviso to Rule 4 to allow mobile numbers registered in India to be act as a sufficient mode for service of documents.
Fees to be paid in Transfer of Rights
Rule 5 of the Principal rules concerns with the fees to be paid in respect of registration of designs and other related matters. Clause (e) of Rule 5 further deals with the difference in fees to be paid when a transfer of rights take place. Substituting Clause (e) and omitting Clause (f), Rule 4 of the Amending rules provides that if an application processed by a natural person, startup or a small entity is fully or party transferred to a person not belonging to any of the three aforementioned categories, then any difference in the fees charged from a natural person, startup or a small entity with respect to a given matter and the fees charged from a person not belonging to any of these categories in respect of the same matter, shall be charged from the person in whose favour the rights are being transferred. However, the explanation attached to the new Clause (e) provides that this clause won't be applicable if the concerned entity ceases to be a startup.
Compliance with Locarno Classification
In 1968, the Locarno Agreement was concluded at Locarno, Switzerland and an international classification to be used for the purposes of the registration of Industrial Designs was established. This international classification was published by the World Intellectual Property Organization and later came to be known as the Locarno Classification. Rule 5 of the Amending rules substitutes sub-rule (1) of Rule 10 of the Principal rules and provides that registration of designs shall take place in accordance with the Locarno Classification.
Amount of Fees Payable
The fees payable with regard to registration of designs and associated matters is specified in the First Schedule of the Principal rules. Rule 6 of the Amending rules seeks to introduce a change in the fee structure envisaged by the Principal rules by replacing the First Schedule. A ‘small entity' is now required to pay a reduced fee which is equivalent to the fees payable by a ‘natural person'. A ‘startup', the newly introduced entity, is also required to the pay the same fees as payable by a ‘natural person'.
Award of Cost by Controller
Rule 43 of the Principal rules allows the Controller to award reasonable costs in proceedings before the Controller. Such costs must be in consonance with the amount and matters specified in the Fourth Schedule. While the scale of costs allowable in proceedings before the Controller remains the same, Rule 9 substitutes the Fourth Schedule to make the Principal rules compliant with the concept of ‘Startups'.
Rule 7 of the Amending Rules substitute Form-1 and Form-24 under the Second Schedule to incorporate Startups. In addition to this, Rule 8 of the Amending Rules omits Third Schedule from the Principal rules.
A bare perusal of the amended rules suggests that these changes would further smoothen the process of ‘Industrial Design' registration in India. The inclusion of “startups” broadens the protection afforded by the Designs Act, 2000, and considering the lowered fees charged from Startups, this would further promote design activity in India. Incorporation of the Locarno Classification into the Design Laws of India is a step in the positive direction as it places the Indian law at par with the International Standards.
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