IPR PROTECTION SCHEME FOR FACILITATING START-UPS (SIPP) & EXEMPTIONS PROVIDED UNDER THE VARIOUS LAWS

In January 2016, Department of Industrial Policy and promotion (DIPP) of the Government of India had launched “Scheme for Facilitating Start-Ups Intellectual Property Protection (SIPP) to promote awareness and encourage IPR protection amongst Start-Ups. The scheme shall run initially on a pilot basis and shall be applicable for a period of one year from the date of launch of startup India.

On 11th July 2016, scheme has been further updated by removing the clause of obtaining certificate of eligibility from Interministrial Board of Certification. The highlights of the scheme are summarized below:

VISION

The vision of the scheme is to protect and promote intellectual property rights of start-ups and to encourage innovation and creativity amongst them.

 OBJECTIVE

The scheme of SIPP aims to promote awareness and adoption of Intellectual Property Rights amongst startups. Scheme is inclined to nurture and mentor innovative and emerging technologies among Startups and assist them in protecting and commercializing it by providing them access to high-quality IP services and resources.

 WHO CAN APPLY

Any ‘Startup’ recognized in terms of explanation 5 of the Government of India notification GSR 180(E) dated 17.02.2016.

Definition of Startup: According to the notification an entity shall be considered as a ‘startup’-

  1. Up to five years from the date of its incorporation/registration,
  2. If its turnover for any of the financial years has not exceeded Rupees 25 crore, and
  3. It is working towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property;

Provided that any such entity formed by splitting up or reconstruction of a business already in existence shall not be considered a ‘startup’;

Explanation:

An entity shall cease to be a startup on completion of five years from the date of its incorporation/registration or if its turnover for any previous year exceeds Rupees 25 crore.

  1. Entity means a private limited company (as defined in the Companies Act, 2013), or a registered partnership firm (registered under section 59 of the Partnership Act, 1932) or a limited liability partnership (under the Limited Liability Partnership Act, 2002).
  2. Turnover is as defined under the Companies Act, 2013.
  3. An entity is considered to be working towards innovation, development, deployment or Commercialization of new products, processes or services driven by technology or intellectual Property if it aims to develop and commercialize:
    1. A new product or service or process, or
    2. A significantly improved existing product or service or process that will create or add value for customers or workflow

Provided that the mere act of developing:

 

        1. products or services or processes which do not have potential for commercialization, or
        2. undifferentiated products or services or processes, or
        3. products or services or processes with no or limited incremental value for customers or workflow would not be covered under this definition.

 

Documents required:

Startups are required to submit a simple application with any of the following documents:

      1. recommendation (with regard to innovative nature of business), in a format specified by DIPP, from any Incubator established in a postgraduate college in India; or
      2. a letter of support by any incubator which is funded (in relation to the project) from
      3. Government of India or any State Government as part of any specified scheme to promote innovation; or
      4. a recommendation (with regard to innovative nature of business), in a format specified by DIPP, from any incubator recognized by Government of India; or
      5. a letter of funding of not less than 20 per cent in equity by any Incubation Fund,/Angel Fund/Private Equity Fund/Accelerator/Angel Network duly registered with Securities and Exchange Board of India that endorses innovative nature of the business. Department of Industrial Policy and Promotion may include any such fund in a negative list for such reasons as it may deem fit; or
      6. a letter of funding by Government of India or any State Government as part of any specified scheme to promote innovation; or
      7. a patent filed and published in the Journal by the Indian Patent Office in areas affiliated with the nature of business being promoted.

Department of Industrial Policy and Promotion may, until such mobile app/portal is launched make alternative arrangement of recognizing a ‘startup’. Once such application with relevant document is uploaded a real-time recognition number will be issued to the startup. If on subsequent verification, such recognition is found to be obtained without uploading the document or uploading any other document or a forged document, the concerned applicant shall be liable to a fine which shall be fifty per cent of paid up capital of the startup but shall not be less than Rupees 25,000.

 APPOINTMENT OF FACILATORS

Controller General of Patents, Trademark and Designs (CGPDTM) empanelled facilitators for the effective implementation of the scheme. Application were invited from patent/trademark agents for Patents and Trade Marks for Enrolment as a Facilitator for Start-ups. Thereafter a list of selected facilitators was published by DIPP on the website.

The list of facilitators is available on Patent Office website. CGPDTM is the regulating authority for the empanelled facilitators.

DIPP of Government of India has also recognised government organizations like TIFAC, NRDC, BIRAC, DIETY, DSIR etc. for the purpose of consideration as a facilitators for startups vide notice dated 27.05.2016 and invited proposals for the same.

 

Role of a Facilitator

Facilitators are responsible for providing following assistance to the startups:

 

  1. General advisory on different intellectual property rights to startups on probone
  2. General advice in different IPRs to startups on a pro bono basis.
  3. Information with regard to protection and promotion of IPRs of startups in other countries.
  4. Assistance in filing and disposing off the IP applications with regard to patents, trademarks, and designs.
  5. Drafting complete or provisional specifications for inventions of startups and other ancillary functions.
  6. Preparing and filing responses to the examination reports and other notices or letters sent by the patent office.
  7. Appearing on behalf of startups for hearings.
  8. Contesting oppositions, if any.
  9. Ensuring the final disposal of the IPR application.

Fees for Facilitators:

The Fee structure given below is applicable to the empanelled facilitators for any number of patents, trademarks or designs that may be applied for by a startup. This fee is paid directly to the facilitator by the Central Government through CGPDTM office and facilators shall not charge anything from the startups.

 

Stage of payment Patent Trademark Design
At the time of filing application 10000 5000 2000
At the time of final

disposal of application

Without opposition 10000 2000 2000
With apposition 15000 5000 4000

EXEMPTIONS AVAILABLE TO STARTUPS UNDER INDIAN LAWS:

 

    1. Amended Patent rules 2016 recognized startups as an additional fourth category of applicant and provided minimum fee structure equivalent to natural person. Start-               ups may also request for expedited examination of patent applications under new rules.
    1. A Startup is now not required to obtain a Certificate of Eligibility from the Inter-Ministerial Board of DIPP and Certificate of DIPP would suffice along with application form under this scheme.
    2. Income tax exemption is provided to a startup under provisions of The Finance Act 2016 for three years in a block of 5 years, if they are incorporated between 1st April 2016 and 31st March                 2019.
    3. Tax exemption on investments above Fair Market Value have been introduced for investments made in Startups.
    4. Startups falling under the list of 36 “white” category industries have been exempted from all the applicable compliances under 3 Environment laws.
    5. Relaxed norms on prior experience and turnover for public procurement for micro and small enterprises have been provisioned in the Procurement Policy and ministry Of MSME.
    6. Reserve Bank of India introduces regulatory relaxations for startups
    7. Startups will be allowed to self- certify compliances with various labor laws.
    8. Insolvency and bankruptcy code 2016 has been published which has provisions to allow businesses to wind up in 3 months.
    9. Exemptions are also provided under the Apprentices Act 1961 and rules 1992. In the first year of setting up of startups, inspection be completely dispensed with against self-declaration. 

 

 

 

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One thought on “IPR PROTECTION SCHEME FOR FACILITATING START-UPS (SIPP) & EXEMPTIONS PROVIDED UNDER THE VARIOUS LAWS

  1. Pingback: IPR Protection Scheme for Facilitating Start-Ups & Exemptions Provided Under the Various Laws – Anand and Anand Blog

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