Patent for Startup Firms under DPIIT: A Comprehensive Guide

Introduction

In the fast-paced world of startups, innovation is the key to survival and success. Protecting these innovations through patents is crucial to maintaining a competitive edge. Recognising the importance of intellectual property (IP) for startups, the Indian government, through the Department for Promotion of Industry and Internal Trade (DPIIT), has introduced various incentives to make patent filing more accessible and affordable for startups. 

This blog delves into the significance of patents for startups, the benefits provided by DPIIT, and the process for obtaining a patent under this scheme.

What is Patent in India?

A patent is a legal right granted by the government to an inventor, giving them exclusive control over the use, production, and sale of their invention for a specified period, typically 20 years. This protection prevents others from making, using, selling, or importing the patented invention without the inventor’s permission.

Patents are crucial in fostering innovation by providing inventors with a period of exclusivity to commercialise their inventions and potentially recoup research and development costs. In exchange for this exclusive right, inventors must publicly disclose detailed information about their invention, contributing to the overall knowledge base and enabling others to build on their work after the patent expires.

Why Patents Matter for Startups

Patents are legal protections granted for inventions, allowing the inventor exclusive rights to use, sell, and license the invention for a specific period. For startups, patents offer several strategic advantages:

1. Competitive Advantage: 

A patent prevents competitors from copying or using the invention, giving the startup a unique market position.

2. Attracting Investors: 

Investors are more likely to fund startups with patented technologies, as it reduces risks and increases the potential for returns.

3. Revenue Generation: 

Patents can be monetised through licensing agreements, providing a steady revenue stream for the startup.

4. Market Expansion: 

Patents enable startups to expand into new markets without fear of competition, allowing them to scale effectively.

Benefits of Securing a Patent under DPIIT for Startups

1. Cost Savings: 

Substantial reduction in patent filing and prosecution fees makes the patenting process more accessible to startups.

2. Time Efficiency: 

The expedited examination process helps startups secure patents faster, enabling them to bring their innovations to market swiftly.

3. Expert Assistance: 

Access to government-appointed facilitators ensures that startups receive professional guidance throughout the patenting process, reducing the risk of errors and rejections.

4. Increased Valuation: 

Patents add significant value to a startup, making it more attractive to investors and potential buyers.

DPIIT’s Role in Supporting Startups

The DPIIT plays a pivotal role in fostering innovation among startups in India. Recognising the financial and administrative challenges startups face in securing patents, DPIIT has introduced several benefits under the Startup India initiative, including:

1. Faster Examination of Patents: 

Startups can opt for expedited examination of their patent applications, significantly reducing the time required to secure a patent.

2. Reduced Fees: 

DPIIT-recognized startups enjoy substantial reductions in patent filing fees, including for examination and prosecution, making the process more affordable.

3. Facilitated Assistance: 

Startups can access government-appointed facilitators who provide legal and technical support in preparing and filing patent applications at no cost. The government bears the facilitator’s fees, reducing the financial burden on startups.

4. IPR Awareness Programs: 

DPIIT conducts various workshops and training sessions to educate startups about the importance of IP protection and the process of securing patents.

Startup Firm under DPIIT and its Advantages

The benefits of using DPIIT to get a patent for your startup company include financial savings because approved firms only have to pay formal filing fees to file patents in India. Efficient examination requests also speed up the patent process. The official cost of filing for an expedited patent in India is (2,000 for filing fees + 2,500 for early publication + 8,000 for expedited examination) = 12,100.

Startup business governed by DPIIT

“Startup” refers to:

(a) any organisation in India that has been approved by the relevant authorities under the Startup India initiative as a startup.

(b) If the entity is international, it must meet the Startup India Initiative’s requirements for turnover and the duration of incorporation/registration and provide a declaration to that effect.

As per the 2016 Patents (Amendment) Rules, startups were classified as

entities that, with a maximum annual turnover of INR 25 crore, are working toward innovation, development, deployment, or commercialisation of new products, processes, or services driven by technology or intellectual property and for which more than five years have not passed since the date of incorporation or registration.

However, as per the Patent (Amendment) Rules, 2017, a startup can be any foreign entity that satisfies the requirements for turnover and period of incorporation/registration as per Startup India Initiative or any Indian entity recognised as a startup by the relevant authority under Startup India Initiative. 

An eligible startup under the Startup India Initiative meets the following requirements:

• Registered in India as a limited liability partnership, partnership firm, or private limited company;
• Registered or established in India no earlier than ten years ago;
• Turnover has not surpassed INR 100 crores in any of the fiscal years since incorporation or registration;
• Has not been created by dismantling or rebuilding an already-existing company; and
• Striving for product, process, or service innovation, development, or improvement; or if it’s a scalable company strategy with a strong potential for creating income or jobs. 

Patent Application Process under DPIIT

Securing a patent for your startup under DPIIT involves several key steps:

1. DPIIT Recognition

• Eligibility: Your startup must be recognised by DPIIT. To qualify, the startup should be less than 10 years old, have an annual turnover of less than ₹100 crores, and work towards innovation, development, or improvement of products or processes.
• Registration: You can apply for DPIIT recognition through the Startup India website. Once recognised, your startup is eligible for various benefits, including those related to patent filing.

2. Conducting a Patent Search

• Before filing a patent application, it is crucial to conduct a thorough patent search to ensure that your invention is novel and has not been patented before. This step helps avoid infringement issues and strengthens your application.

3. Drafting the Patent Application

• Patent drafting is a specialised task that requires both legal and technical expertise. DPIIT facilitates access to professional patent agents who can assist in drafting a comprehensive and robust patent application.

4. Filing the Patent Application

• Once the patent application is drafted, it is filed with the Indian Patent Office (IPO). As a DPIIT-recognized startup, you can avail of reduced filing fees.
• There are different types of patent applications you can file, such as provisional and complete specifications, depending on the stage of your invention.

5. Request for Examination

• After filing, a request for examination (RFE) must be submitted within 48 months from the date of filing or the priority date. DPIIT-recognized startups can opt for expedited examination, which accelerates the process.

6. Responding to Examiners’ Queries

• The patent examiner may raise queries or objections during the examination process. With the assistance of DPIIT facilitators, you can address these issues effectively.

7. Grant of Patent

• Once all objections are resolved, the patent is granted. This grants your startup exclusive rights over the invention for 20 years from the filing date.

Cost Benefits for Startups under DIPP

We must go back to two crucial aspects that were covered earlier in order to comprehend the cost benefits for startups. 

• Cost of filing patent in India by normal route
• Cost of filing patent in India by Expedited route

The major cost benefit is:

You won’t be required to pay any professional fees for filing a patent in India if you have been certified as a start-up by DPIIT (link for details here). This is in accordance with the Scheme for Facilitating Startups Intellectual Property Protection (SIPP) (link for details here) for patent and trademark registration. The Government Patent Office is the sole entity you must pay formal fees. Government funds, not you as the startup, are used to pay patent agents’ and attorneys’ fees.

That implies that you would just have to pay the official fees associated with the patent process, which are 1600 for filing a patent application and 8000 for requesting an expedited examination. Therefore, you would end up saving a sizable amount of money in this scenario when we compare it to the standard method or usual patent application process, which requires 30,000 to 45,000 in attorney fees for the patent process.

In addition to the financial advantages, there are time benefits, which were covered in-depth in the preceding section. When compared to the regular method, the expedited examination request form (Form 18A) allows you to speed up the patent procedure if you are identified as a startup under DIPP.

Request For Expedited Examination Of Application For Patent

Form 18(A)

The cost of an expedited assessment for a small or beginning company is Rs. 8,000.

Government Patent Fees in India

When filing for a patent in India, several government fees must be paid. These fees vary based on the type of applicant, and whether the process is conducted online or offline. Here’s a detailed breakdown of the government patent fees:

1. Filing the Patent Application:
   • Individuals and Startups: ₹1,600
   • Small Entities: ₹1,600
   • Large Entities: ₹8,000
2. Request for Early Publication (Optional):
   • Individuals and Small Entities: ₹2,500
   • Large Entities: ₹12,500
3. Request for Examination:
   • Individuals and Small Entities: ₹4,000
   • Large Entities: ₹20,000

Total Patent Costs In India

The total cost of your patent can vary from one invention to another but a rough estimate for the same can be calculated:

• Patent Search

• Government Fees: NA
• Professional Fees:  ₹ 10,000 to ₹ 20,000
• Patent application drafting & filing

• Government Fees:  ₹ 1,600-  ₹ 8,000
• Professional Fees:  ₹  25,000 –  ₹ 75,000
• Filing request for examination

• Government Fees:  ₹ 4,000 –  ₹ 20,000
• Professional Fees:  ₹ 4,000 –  ₹ 10,000
• Responding to the examination report

• Government Fees: NA
• Professional Fees:  ₹ 12,000-  ₹ 35,000
• Hearing and post-hearing submissions

• Government Fees: NA
• Professional Fees:  ₹ 12,000 –  ₹ 20,000
• Grants 

• Government Fees: NA
• Professional Fees: varies

Patent Renewal Fees in India

The patent, once granted, has to be renewed and fees have to be paid for renewal. The government fees for the renewal are:

• 3rd – 6th year:

• For individuals, startups, MSMEs, and institutes: ₹800
• For Large Entity: ₹4,000
• 7th – 10th year:

• For individuals, startups, MSMEs, and institutes: ₹2,400
• For Large Entity: ₹12,00
• 11th – 15th year:

• For individuals, startups, MSMEs, and institutes: ₹4,800
• For Large Entity:₹24,000
• 16th – 20th year:

• For individuals, startups, MSMEs, and institutes:₹8000
• For Large Entity:₹40000

A professional can charge around ₹3000 – ₹10000 per year for patent renewal.

Documents required for Patent for startup firm under DPIIT

1. Proof of DPIIT Recognition

• DPIIT Certificate: This certificate proves that your startup is recognised by DPIIT under the Startup India initiative. It qualifies you for various benefits, including reduced fees and expedited examination.

2. Patent Application Documents

• Form 1 (Application for Grant of Patent): This form includes details about the applicant, inventor(s), and type of application (provisional or complete).
• Form 2 (Provisional/Complete Specification): This is the detailed document describing the invention. If the invention is still in development, a provisional specification can be filed first, followed by a complete specification later.
• Form 3 (Statement and Undertaking Under Section 8): This form provides information about any foreign patent applications filed for the same invention.
• Form 5 (Declaration as to Inventorship): This form is a declaration stating the names of the true and first inventors.
• Form 9 (Request for Publication): This is an optional form used if you want to publish your patent application before the standard 18-month period.
• Form 18 (Request for Examination): This form is mandatory for the patent application to be examined. DPIIT-recognised startups can opt for expedited examination.

3. Technical Documents

• Abstract of the Invention: A brief summary of the invention, usually not exceeding 150 words, highlighting its novelty and usefulness.
• Drawings (if applicable): If the invention involves a process, machine, or product, detailed drawings or diagrams may be required to illustrate the invention clearly.
• Detailed Description: A full, clear, and concise description of the invention, explaining how it works and its industrial applicability.
• Claims: A section defining the scope of legal protection sought. This is crucial as it determines the extent of the patent rights.

4. Power of Attorney (Form 26)

• If the patent application is filed through a patent agent or attorney, a Power of Attorney must be submitted authorising them to act on behalf of the applicant.

5. Assignment Deed or Agreement (if applicable)

• If the invention has been assigned or transferred from the original inventor(s) to the startup, an assignment deed or agreement must be provided.

6. Proof of Right to File the Patent

• This is required if the applicant is not the original inventor. The proof can be in the form of an assignment deed or an agreement.

7. Startup Declaration (Form 28)

• This form is used to declare the startup’s status, allowing the applicant to claim benefits such as fee reductions.

8. Identification Proofs

• Aadhar Card/PAN Card: ID proofs of the applicant(s) and inventor(s) may be required for verification purposes.

9. Fee Payment Receipt

• Receipt of payment for the applicable fees (reduced for DPIIT-recognized startups).

Additional Documents (if applicable):

• Prior Art Search Report: If you have conducted a prior art search to ensure the novelty of the invention, include this report.
• Foreign Filing Permission: If the patent is first filed in India and then abroad, permission from the Indian Patent Office may be required.

Conclusion

In the competitive startup ecosystem, protecting your innovations through patents is vital. The DPIIT’s initiatives under the Startup India program offer invaluable support to startups, making the patenting process more streamlined, affordable, and accessible. By leveraging these benefits, startups can secure their innovations, attract investment, and pave the way for long-term success.

Frequently Asked Questions on Patent for Startup Firms under DPIIT

Q1. What is a patent and why is it important for startups?

Ans1. A patent is a legal right granted to an inventor, giving them exclusive control over the use, production, and sale of their invention for a specified period, typically 20 years. For startups, patents are crucial as they provide a competitive advantage, attract investors, generate revenue through licensing, and enable market expansion.

Q2. How does the DPIIT support startups in securing patents?

Ans2. The Department for Promotion of Industry and Internal Trade (DPIIT) supports startups by offering expedited examination of patent applications, reduced filing fees, access to government-appointed facilitators, and IPR awareness programs, making the patenting process more accessible and affordable.

Q3. What are the benefits of obtaining a patent under DPIIT for startups?

Ans3. DPIIT-recognized startups enjoy benefits such as substantial cost savings on patent filing, faster patent examination, professional guidance from facilitators, and increased valuation, making them more attractive to investors and potential buyers.

Q4. What are the eligibility criteria for a startup to be recognised by DPIIT?

Ans4. To be recognised by DPIIT, a startup must be less than 10 years old, have an annual turnover of less than ₹100 crores, and work towards innovation, development, or improvement of products, processes, or services.

Q5. How does a startup apply for DPIIT recognition?

Ans5. A startup can apply for DPIIT recognition through the Startup India website. Once recognised, the startup becomes eligible for various benefits, including those related to patent filing.

Q6. What is the cost of filing a patent for startups under DPIIT?

Ans6. For DPIIT-recognized startups, the cost of filing a patent includes ₹1,600 for filing the patent application, ₹2,500 for early publication (optional), and ₹8,000 for expedited examination, significantly reducing the overall cost compared to the standard route.

Q7. What documents are required for filing a patent for a startup under DPIIT?

Ans7. Required documents include the DPIIT recognition certificate, patent application forms, technical documents (such as an abstract and detailed description), power of attorney (if applicable), and fee payment receipts. Additional documents like prior art search reports and foreign filing permissions may also be needed.

Q8. How does the expedited examination process work for DPIIT-recognized startups?

Ans8. DPIIT-recognized startups can opt for expedited examination by submitting Form 18A. This process accelerates the patent examination, allowing startups to secure their patents faster and bring their innovations to market more swiftly.

Q9. What are the renewal fees for patents in India?

Ans9. Patent renewal fees vary based on the year and the type of entity. For startups, the fees range from ₹800 (for the 3rd to 6th year) to ₹8,000 (for the 16th to 20th year).

Q10. Can startups save on professional fees for patent filing under DPIIT?

Ans10. Yes, DPIIT-recognized startups can save on professional fees for patent filing, as the government bears the cost of patent agents and attorneys under the Scheme for Facilitating Startups Intellectual Property Protection (SIPP). Startups only need to pay the official government fees.