Startups (SUP’s) are back in the news again. From the Government of Bihar bringing in a new policy for startups and announcing a 67 million dollar fund (Approx. 500 crores) just a couple of days ago, to the Central government proposing a disbursement of about 5 Crores of collateral free loan for SUP’s, startups are everywhere in the news. The Startup India Action Plan completed a year this January and several schemes have already been laid down based on the action points listed in the action plan. One such scheme that we intend to discuss in this post is the Start-Ups Intellectual Property Protection (SIPP) scheme, simply referred to as the SIPP scheme.
Action point 4 of the Startup India Action Plan was aimed at providing legal support and fast-tracking patent examination at lower costs for startups and to achieve this objective, the SIPP scheme was given form which aimed at creating a panel of IPR facilitators, who would provide the startups with a range of services related to the protection and commercialisation of their IPRs. In less than four months time, the SIPP scheme will have completed one year and the validity of the scheme will draw to a close. This is considering the fact that the scheme was launched on a pilot basis for one year and was valid from the date of launch of start-up India. A recent notification by the Controller’s office however has put several people (facilitators) in an unsure mind, causing them to question certain aspects of the scheme, including its validity.
The public notice reads “…However, instances have been reported in this office whereupon the registered facilitators have been ignoring facilitation to the start-ups citing various reasons and asking extra fees from them.
All such facilitators are hereby cautioned to avoid such practices. It may be noted that any act of denial of facilitation to the start-ups shall be considered as an act of misconduct in his professional capacity. Same shall lead to removal of their name from the list of facilitators and subsequently, action for removal of him / her from the registered list of patent / trademark agent under relevant provisions of the patents / trademark act.”
While the notification dated February 17, 2016 provided a uniform definition to startups and all subsequent documents or notifications sought to build upon this, there haven’t been any notifications that can clear the air of confusion amongst facilitators. For instance, the Startup India portal indicates that while 1,621 applications have been received by the government, only 592 applicants have been recognized as startups. One among the several problems that facilitators seemed to have come across pertains to determining the authenticity of an applicant claiming to be startup. One is well aware of the procedural backlogs that one has to encounter while dealing with the government and governmental organizations. In this context applicants have often found themselves with incomplete documents which can support their claims of being a startup. The question that then arises is – does the burden of proof of authenticity of an applicant claiming to be startup lie on the facilitators? Further, how can a facilitator accept facilitating anyone claiming to be a startup without any proof of the same?
Another confusion that the scheme seems to be causing is – how long is the scheme truly valid in light of the aforementioned public notice? If the scheme was launched on a pilot basis for a duration of one year from the date of launch of Startup India, the scheme is technically over and the government must notify the next steps in this regard.
Facilitators at BananaIP Counsels have in the past understood the issues quite well and in several instances have helped startups file patents, trademarks and design applications at no cost whatsoever. The only cost involved in the whole exercise has been the statutory fees borne by the startup. Having said that, it is important for us to address the following questions that facilitators at BananaIP Counsels often come across:
Who is a startup?
An entity is considered as a startup if it is incorporated or registered in India and meets the followings conditions:
- more than five years have not lapsed from the date of its incorporation or registration;
- the turnover for any of the financial years, out of the aforementioned five years, has never exceeded rupees twenty-five crores; and
- is working towards innovation, development, deployment or commercialisation of new products, processes or services driven by technology or intellectual property
- has not been formed by the splitting up, or reconstruction, of a business already in existence.
The entity as mentioned above 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.
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 only if it aims to develop and commercialize:
- A new product or service or process, or
- A significantly improved existing product or service or process that will create or add value for customers or workflow.
How to register as a startup?
The process of recognition as a ‘startup’ can be achieved through the mobile app/portal of the Department of Industrial Policy and Promotion, where startups are required to submit a simple application with any of the following documents:
- a recommendation (with regard to innovative nature of business), in a format specified by the Department of Industrial Policy and Promotion (DIPP), from any incubator established in a postgraduate college in India; or
- a letter of support by any incubator which is funded (in relation to the project) from Government of India or any State Government as part of any specified scheme to promote innovation; or
- a recommendation (with regard to innovative nature of business), in a format specified by the DIPP, from any Incubator recognized by Government of India; or
- 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.
- a letter of funding by Government of India or any State Government as part of any specified scheme to promote innovation; or
- a patent filed and published in the Journal by the Indian Patent Office in areas affiliated with the nature of business being promoted.
Who is a facilitator?
A facilitator is someone who has been empanelled by the Controller General of Patents, Designs and Trademarks to help startups under the SIPP scheme. An empanelled facilitator can be any of the following:
- a patent agent registered with CGPDTM
- a trademark agent registered with CGPDTM
- an Advocate who is actively involved in the filing and disposal of applications for patents, trademark and design or
- a government organization like TIFAC, NRDC, BIRAC, DEITY, DSIR etc.
How do facilitators help you?
Facilitators help startups by providing the following services:
- general advisory on different IPR issues on a pro bono basis;
- information on protecting and promoting IPRs in other countries on a pro bono basis;
- assistance in filing and disposal of the IP applications related to patents, designs and trademarks;
- drafting of complete/ provisional specification for inventions of startups;
- preparing and filing responses to examination reports, notices and letters sent by the IP office;
- appearing on behalf of startups at hearings;
- contesting oppositions; and
- ensuring final disposal of application.
How to reach out to a facilitator?
Currently, there is a panel of over 409 facilitators for Patent and Design and 475 facilitators for Trademark. With over 3 facilitators at BananaIP Counsels, we would be extremely delighted to help you if you are a startup.
How much does a facilitator charge you?
The SIPP scheme provides that facilitators shall not charge anything from the startups. However, the fee for filing the patent, trademark or design application and other statutory fees will have to be borne by the Startups themselves.
If you are a startup and have any questions or queries regarding the scheme or if you would like to have applications filed for Patents, Trademarks or Designs, please feel free to approach us and we would gladly help you. If you wish to avail the Startup India IP Scheme of the Government of India, kindly provide us with the necessary documentation such as the RTR number and other details when you contact us.
To register under the startup scheme with us, please click here
Please feel free to write to us at [email protected]
Authored by Gaurav Mishra