NEW AMENDMENT TO THE DESIGN RULES

In India, the Designs Act of 2000 was enacted by the Legislature to ensure that the Indian Designs Law is in consonance with TRIPS. India also became a member State of the WTO in 1995. The Designs act also strives to promote progress in the field of science and technology, and promote design activity by the way of giving adequate protection to Industrial Designs. As per the provisions of Section 47 of the Act, the Department of Industrial Policy and Promotion (DIPP) notified the Designs Rules, 2001(Principal Rules) on May 11, 2001. These rules were later amended in the years 2008, 2013 and 2014. Recently, the DIPP notified the Designs (Amendment) Rules, 2021.

Introduction:

In India, the Designs Act of 2000 was enacted by the Legislature to ensure that the Indian Designs Law is in consonance with TRIPS. India also became a member State of the WTO in 1995. The Designs act also strives to promote progress in the field of science and technology, and promote design activity by the way of giving adequate protection to Industrial Designs. As per the provisions of Section 47 of the Act, the Department of Industrial Policy and Promotion (DIPP) notified the Designs Rules, 2001(Principal Rules) on May 11, 2001. These rules were later amended in the years 2008, 2013 and 2014. Recently, the DIPP notified the Designs (Amendment) Rules, 2021.

The Amended Rules

The DIPP released the draft Designs (Amendment) Rules, on October 18, 2019 in order to invite public comments. These rules were officially notified by the DIPP on January 25, 2021. The amending rules introduced a total number of eight amendments in the Principal rules.

Definition or Recognition of ‘Startups’

The term “Startup” is defined under Rule 2 of the Amending Rules by addition of clause (eb) after clause (ea) in Rule 2 of the Principal rules. This clause clarifies about two definitions of the word “startup”.

Firstly, a competent authority under the Union Government’s ‘Startup India Initiative.' Must recognize any Indian as a startup.

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.

will classify as a startup. The explanation attached to clause (eb) further clarifies the consideration of reference rates of foreign currency provided by the Reserve Bank of India for calculating the turnover requirements.

Mobile Phones as Address for Service

Keeping the recent global trend of moving to digital communications, Rule 3 of the Amending Rules replaces the proviso to Rule 4 to allow mobile numbers registered in India to act as an adequate as well as sufficient mode for the service of documents. Therefore, the amended rules also mandated the reference of an Indian cell phone number to be provided at the time of recording an address for service of documents.

The difference in fees to be paid in Transfer of Rights

The rule 5 of the Principal rules talks about the fees to be paid in respect of registration of designs and other related matters. Rule 5 clause (e) further deals with the difference in fees to be paid when a transfer of rights take place. Rule 4 of the Amending rules substituted Clause (e) and omitted Clause (f) of the Principal rules and provides that if an application processed by a natural person, startup or the small business is transferred in whole or in part to a person who does not fall into any of the above three categories, and then the difference between the fees charged by an individual, start-up or small business for a specific matter and the fees incurred does not belong to any of these in the same matter The category of people will charge a fee to the person who is transferring rights.

However, an important thing to note here is that 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 System

The Locarno Agreement was concluded at Locarno, Switzerland in 1968 and an international classification was established which was to be used for the purposes of the registration of Industrial Designs. This international classification later came to be known as the Locarno Classification and was published by the World Intellectual Property Organization. The Amendment Rules also formally represented India’s official adoption of the Locarno Classification. Rule 5 of the Amending rules substituted sub-rule (1) of Rule 10 of the Principal rules through the amendment and it provides that registration of designs shall take place in accordance with the Locarno Classification.

Amount of Fees Payable and simplification of fee structure

The First Schedule of the Principal rules specified the fees payable with regard to registration of designs and associated matters. As per the provisions of the previous Designs Rules, the official fees payable used to vary depending upon whether the applicant entity classified as a natural person, small entity, or any other type of entity. The fee structure was such that the fees for a small entity were higher than those applicable for a natural person but less than for other entities. However, Rule 6 of the Amending rules introduced a change in the fee structure envisaged by the Principal rules by replacing the First Schedule. According to the change, a ‘small entity' is now required to pay a reduced fee which is equivalent to the fees payable by a ‘natural person'. A ‘startup', is also required to the pay the same fees as payable by a ‘natural person’.

Change in Award of Cost allowed in proceedings by the Controller

The rule 43 of the Principal rules gives the power to the controller to award reasonable costs in proceedings before him. However, such costs were required to be as per the prescribed amount and matters specified in the Fourth Schedule. With the amendment, Rule nine substitutes the Fourth Schedule to make the Principal policies compliant with the idea of ‘Startups'. However, the scale of costs allowable in proceedings before the Controller remains the same,

Other Changes

Form-1 and Form-24 under the Second Schedule of the Principal rules were amended and substituted by Rule 7 of the Amending rules. Additionally, Third Schedule from the Principal rule was omitted by Rule 8 of the Amending rules.