Earlier, it was not easy for startups to be considered for various government schemes as the definition of startup wasn’t established. However, the Department of Industrial Policy and Promotion (DIPP) has now established the definition of a startup to avoid any ambiguity in such matter.
The more liberal definition of a startup ensures that more and more startups become eligible for various benefits being handed over to startups in India, including lower fees, under the latest patent framework introduced by the authorities.
For the expedited process of patent registration, startups have to pay double fees against thrice the amount for other companies. Individuals and startups opting for the fast-track mechanism route for patent filling will be required to pay an application fee of ₹8,000 while established companies will be paying ₹60,000.
The new process will drastically help in cutting down the time taken for granting patents to two-and-a-half years from five to seven years immediately and to one-and-a-half years by March next year.
Earlier, startups in India would be defined as companies that are only five years old with a maximum turnover of ₹25 crore per year and are working towards innovation. For this year, we have seen the government making some minor changes in the definition.
In May, in a notification sent out by the DIPP, the government announced that an entity will be recognised as a startup up to seven years instead of the previous five years rule. For startups working in the biotechnology sector, this period has been extended up to 10 years.
In addition to the extended time period, the new definition also required an entity to be incorporated as a private limited company, or a partnership firm, or a limited liability partnership.
The government has also included patents in its Startup India Action Plan. This is done to promote awareness and adoption of Intellectual Property Rights (IPRs) by startups.
The revised rules makes way for startups growing in the Indian subcontinent eligible for an 80 percent rebate on their patent application fees. It has also launched a scheme where the Central Government bears the fees of the facilitators for any number of patents, trademarks or designs that a startup may file.