by Zen Webnet | Mar 31, 2021 | Blog
Keeping view of the evolving startup ecosystem in the country and with an aim to increase accessibility, the capital markets regulator Securities Exchange Board of India (“SEBI”) has reworked the framework of Innovators Growth Platform under the ICDR Regulations, 2018. The Innovators Growth Platform (“IGP”) is an initiative by SEBI that aims to address capital needs of companies by creating a separate exchange, an avenue for new-gen start-up companies with eased out framework than the regular exchange. SEBI, through its press release capturing the Minutes of their Board Meeting, has notified several key changes.
Eligibility: Primarily, for a company to be eligible to be listed on IGP, the requirement of company’s 25% pre issue shareholding to be held for at least two-year period by the eligible investor has now been reduced to one year only.
IGP Investors: “Accredited Investors” have now been re-named as “IGP Investors”. Also, the pre-issue shareholding of such investors for meeting eligibility has been increased from 10% to 25%.
Discretions: The start-ups are now allowed to allocate up to 60% of the issue size on discretionary basis prior to issue opening, to eligible investors with a lock in of 30 days on such shares. Alike the Main Board IPO, Issuer companies, which have issued Superior Voting Rights equity shares to promoters / founders shall be allowed to do listing under IGP framework.
The open offer trigger has been alleviated from existing 25% to 49% in event of a takeover of a company listed on IGP. Rules regarding migration of start-ups listed on IGP to the main board of a stock have also been relaxed. Start-ups that do not meet the conditions of profitability, net assets and net-worth for migration to the main board can now do so if 50 % of the capital is being held by qualified institutional buyers as against the earlier requirement of 75%.
Delisting: As far as delisting of start-ups under the IGP framework are concerned, they will now be considered successful if the post offer acquirer/promoter shareholding, taken together with the shares tendered and accepted, reaches 75% of the total issued shares of that class; an at least 50% shares of the public shareholders are tendered and accepted. Also, for delisting, the Reverse Book Building mechanism shall not be applicable, and for computation of offer price the floor price will be determined in terms of Takeover Regulations, 2011, along with delisting premium as justified by the acquirer/promote.
AIFs: SEBI has proposed to change the alternative investment funds regulations by providing the definition of “start-up” as specified by government to enable investment by angel funds. Also, the list of restricted activities or sectors from the definition of “venture capital undertaking” has been removed to provide more flexibility to VC funds.
These changes will make it seamless for start-ups to go public on the IGP and simultaneously provides them an easy exit route. The thresholds for investments and the bar for only accredited investors prevented start-ups from availing this avenue and with these changes it would be easier for them to raise funds. NSE’s IGP is a public market platform for new economy companies both for raising funds as well as exploring exits.
Authored by
Neeraj Dubey, Partner, Corporate Law and Rajveer Agri, Associate
by Zen Webnet | Dec 3, 2020 | Blog
The Indian Patent Office in its notification dated November 04, 2020 presented Patents (2nd Amendment Rules), 2020. The Amendments have come into force on November 04, 2020.
The amendments bring forth significant changes in the fee schedule w.r.t filings made to the Patent Office. The amended rules quashes the earlier categorization of applicants, for the purposes of fees, into three categories, viz., natural person or startup, small entity and others. According to the new rules, the applicants are now categorized into two categories, viz., natural person or startup or small entity and others.
Since small entity is now included in the same category as natural person and startup, the patent office’s official fee for small entity has been reduced and shall be same as the official fee for natural person or startup. The new amended fees can be accessed here.
Further, the existing sub rule (3) of rule 7of Patent Rules, 2003 is substituted with the following:
“(3) In case an application processed by a natural person or startup or small entity is fully or partly transferred to a person other than a natural person, startup or small entity, the difference, if any, in the scale of fees between the fees charged from the natural person, startup or small entity and the fees chargeable from the person other than a natural person, startup or small entity in the same matter, shall be paid by the new applicant with the request for transfer.
Explanation— Where a startup or small entity, having filed an application for a patent, ceases to be a startup or small entity due to the lapse of the period during which it is recognized by the competent authority, or its turnover subsequently crosses the financial threshold limit as notified by the competent authority, no such difference in the scale of fees shall be payable.”
As per substituted sub rule (3) of rule 7, small entity, natural person and startup are now in the same category.
The new rules set forth the following:
• In a scenario where an application is filed by a natural person, a startup or a small entity and is later transferred to a person other than a natural person, a startup or a small entity, the difference in fees due to the change in applicant status shall be paid by the new applicant with the request for transfer.
• In a scenario where an application is filed by a startup or small entity, and during the prosecution of the application, the applicant changes to others, either due to lapse of period which it is recognized by the competent authority, or its turnover subsequently crosses the financial threshold limit as notified by the competent authority, no difference in fee is payable.
Further, the proviso to sub rule (5) of rule 24C of Patent Rules, 2003 is substituted with the following:
“Provided that a request for expedited examination under this rule filed by a startup or small entity shall not be questioned merely on the ground that the startup or small entity, having filed an application for a patent, ceases to be a startup or small entity due to the lapse of the period during which it is recognised by the competent authority, or its turnover subsequently crosses the financial threshold limit as notified by the competent authority.”
According to the above proviso, in a scenario where the applicant is a startup or small entity and a request for expedited examination was filed by the applicant and the applicant’s status changes to others, either due to lapse of period which it is recognized by the competent authority, or its turnover subsequently crosses the financial threshold limit as notified by the competent authority, the request made for the expedited examination is not questionable.
In conclusion, The Patents (2nd Amendment) Rules, primarily tries to reduce the burden of fees incurred by a small entity. This move coupled with the reduction of fee for expedited examination will encourage small entities to file patent applications for their inventions.
The key highlights of the 2nd Amended Rules 2020 are broadly set out below:
• The fees applicable to small entities for filing and prosecuting Indian patent applications have been reduced and made at par with those of natural persons / start-ups.
• No difference in the scale of fees shall be payable in case the small entity ceases to be a small entity after filing a patent application (a similar provision already exists for start-up entities).
• Request for expedited examination filed by a small entity shall not be questioned merely on the ground that it ceases to be a small entity due to crossing of the financial threshold limit as notified by the competent authority (a similar provision already exists for start-up entities).
Comments:
Even before the amendment, the fees applicable to a small entity were 50% less than the fees applicable to a large entity. With the 2nd Revised Rules 2020, the fees applicable to a small entity has significantly reduced (almost 1/5th when compared to a large entity). This reduction will hopefully encourage small entities to innovate and also seek patent protection for their innovations.
Authored by
IPR Team
by Zen Webnet | Dec 3, 2020 | Blog
The Ministry of Road Transport and Highways has issued Motor Vehicle Aggregators Guidelines, 2020 (“Guidelines”) to regulate the cab aggregator market. The Guidelines have been issued vide notification S.O. 4251(E), in pursuance of Section 36 of the Motor Vehicles (Amendment) Act, 2019, which provides for amendment of Section 93 of the Motor Vehicles Act, 1988. The Guidelines will serve as a guiding framework for State Governments. Therefore, state governments whenever issuing the license to any cab aggregator may allude to the Guidelines. The key aspects of the Guidelines are:
(i) Regulating the aggregator: It seeks to regulate the cab aggregator market and defines “aggregator” as a digital intermediary or market place for the passenger to connect with a driver for the purpose of the transportation. An aggregator should have a registered office in India as a company registered under Companies Act, or, a LLP, or a Co-operative Society and has to comply with Information Technology Act, 2000 and rules made thereunder such as Intermediary guidelines.
(ii) Licensing Requirements: The aggregator now, needs to apply for license in states, where it seeks to operate. A license issued by the state government will be a mandatory pre-requisite for permitting business operations by the aggregator. State governments will have to follow the guidelines issued by the Centre while issuing the license to an aggregator. The aggregator must commence its operations within 6 months from the date of grant of license, otherwise, the license stands cancelled. The validity of such license is valid only for 5 years, and the price of such license is fixed at INR 5,00,000, and renewal of such license will cost INR 2,500. In addition, the aggregator license can be suspended if there is “systemic failure” to ensure safety of the rider and the driver, violation of contractual obligations, repetitive instances of financial inconsistencies with regard to the fares charged to riders, unjustified surge pricing, severity of financial swindling, and violation of safety standards, among others.
(iii) Fare Regulation: The base fare of a trip would be on the basis of city tax fare as indexed in WPI and surge pricing has been capped at 1.5x of the base fare, while minimum price chargeable has been capped at 50% off of the base fare. The Guidelines have also capped the share of aggregator at 20%, while the driver of the vehicle must receive 80% of the total fare. The cancellation charge for the driver and the rider has also been capped at 10% of the total fare, as long as it not more than 100 INR. Surge pricing, which means the pricing applicable when the demand for cabs outnumbers the supply of cabs, in a particular area, at a particular point in time, cannot be charged unjustifiably. Aggregators will be allowed to charge a fare 50% lower than the base fare and a maximum surge pricing of 1.5 times the base fare.
(iv) While engaging a driver: After conducting a comprehensive background check of the driver along with a medical examination, the aggregator should have an Induction Training Programme for on-boarding drivers, to train the drivers on how to use the app, follow the relevant Motor Vehicle Laws, drive carefully, imparting first responder training, gender sensitization, and maintain hygiene in the cab etc. The aggregator also needs to insure their drivers with health and term insurance amounting to 5 and 10 Lakh Rupees respectively, with 5% increment each year. The Guidelines also make it mandatory for the driver to take a 10-hour break, and the driver cannot drive for more than 12 hours on a single day.
(v) Compliances for Aggregator: The aggregator should also ensure that the vehicle is in compliance with all the relevant motor vehicle laws, as well as insurance and emission norms. The aggregator should also set up a 24/7 control room to monitor cabs and a 24/7 call center with a valid telephone number, to assist the driver and rider, as well as for grievance redressal. The aggregator should also ensure women’s safety and protect their rights. Further, women who wish to car pool, they should be given an option to car pool with women only.
(vi) App related Requirements: The app of the aggregator must be in Hindi and English, as well as in official state language, where Hindi is not a state language. The app data should be stored on the server in India, for minimum a period of 3 months and maximum for a period of 24 months. This data would be accessible to the relevant government authorities, however, no customer data would be shared without the written consent of the customer.
(vii) Power of the Competent Authority: Empowered to take suo moto cognizance and suspend the license of the aggregator, if there is any wrongdoing at the end of the aggregator. If the number of suspensions in one financial year exceed 3, then that would lead to cancellation of license. Further, if the aggregator commits any gross offence, or has failed to receive its license and NOC pursuant to the suspension order, that would also lead to cancellation of order. As soon as the license is cancelled, the aggregator must suspend and stop all its operations. The aggregator, if it wishes, can voluntarily surrender the license as well. Lastly, if the aggregator wishes, it can appeal against the order passed by the authority within 30 days of such order being passed, to the State Government or any authority notified by the State Government. The state government under the Guidelines is empowered to investigate the drivers, who have been off boarded more than once. Further, the State Government can call for any information, it deems necessary from the aggregator, for compliance under the Guidelines. The authorities are also empowered to conduct search and investigation at the aggregator’s premises under the Guidelines.
Authored by
Neeraj Dubey, Partner and Vibham Raman, Associate
by Zen Webnet | Nov 25, 2020 | Blog
The Advertising Standards Council of India (“ASCI”) has come up with a guideline for “Online Gaming For Real Money Winnings” (“Guideline”), which is effective from December 15, 2020. The ASCI had consulted the Ministry of Information & Broadcasting, the Department of Consumer Affairs as well as Ministry of Electronics & Information Technology, who have provided their full support to the Guideline as it comprehensively addresses the growing concerns about the potentially misleading and harmful advertisements in the sector. ASCI even consulted the All India Gaming Federation, the industry body for online skill gaming in India before releasing the Guideline. The Guideline has been developed to guide advertisers so that their advertisements do not violate the ASCI code pertaining to misleading advertisements, or of being harmful to society or individuals. These guidelines would be applicable to the content of all advertisements of “Online gaming for real money winnings”. ASCI can process complaints regarding the advertising content of “Online Gaming for Real Money Winnings”, when such advertisements potentially violate the ASCI code.
The Guideline prescribes that they should not depict any person under the age of 18 years, or who appears to be under the age of 18, engaged in playing a game of OGRM or suggest that such persons can play these games. The advertisements should not present “Online gaming for real money winnings” as an income opportunity or an alternative employment option. The advertisement should not suggest that a person engaged in gaming activity is in any way more successful as compared to others. Every such gaming advertisement must carry a disclaimer saying that “This game involves an element of financial risk and may be addictive. Please play responsibly and at your own risk.” Such a disclaimer should occupy no less than 20% of the space in the print advertisement and should also specifically meet disclaimer guidelines 4 (i) (ii) (iv) and (viii) laid out in the ASCI code. In audio/visual media, such advertisement must be placed in normal speaking pace at the end of the advertisement, in the same language as the advertisement and in both audio and visual formats.
If we look at other regulations on the subject-matter, we find that the Telecom Commercial Communications Customer Preference Regulations, 2010 issued by The Telecom Regulatory Authority of India had the objective of prohibiting “Unsolicited Commercial Communications” – which includes spam calls or SMSs and any sort of unsolicited commercial communication pertaining to gambling or betting. The Cable Television Network Rules, 1994 prohibit the advertisement of gambling activities with exception of games of skills, such as horse racing, rummy and bridge. Finally, if any contest or lottery or game of chance or skill promotes betting or gambling, such means employed for promotion would be considered unfair trade practice under the Consumer Protection Act, 1986. Though the Sports (Online Gaming and Prevention of Fraud) Bill, 2018 was introduced in Lok Sabha in 2018 as a private members bill, it lapsed with the dissolution of the Parliament and was not re-introduced.
The Public Gambling Act, 1867 (“PGA”) is the main enactment dealing with gaming in India and criminalises the act of gambling in a public forum in India with an exception to the games of skill. Currently, fourteen (14) States/Union Territories have passed enactments adopting the PGA as it is, namely: Andaman & Nicobar, Arunachal Pradesh, Chandigarh, Dadra and Nagar Haveli, Haryana, Himachal Pradesh, Lakshadweep, Punjab, Madhya Pradesh, Chhattisgarh, Manipur, Mizoram, Tripura and Uttarakhand. Other States have resorted to enacting their own gambling legislations. While States like Assam and Odisha have banned real money based card games, other States like Telangana, Andhra Pradesh and Tamil Nadu (Karnataka to follow) have banned online gaming recently.
Authored by
Neeraj Dubey, Partner – Corporate Law
by Zen Webnet | Nov 22, 2020 | Blog
1. What are Working Statements and its purpose?
Granted patents should act as an instrument to promote public interest especially in sectors of vital importance for socio-economic and technological development of India. In view of above and to check that the patent right is not abused by the patentee, Section 146(2) of the Indian Patents Act, 1970 & Rule 131(2) of the Indian Patent Rules, 2003 requires every Patentee and Licensee to submit a statement regarding the extent to which the patented invention has been worked on a commercial scale in India (called as Working Statements) on Form 27.
2. What amendments are brought about in the Patent Rules w.r.t. Filing of Working Statements?
1.1. Rule 131(2), which specifies the furnishing of statements of working has been amended as marked below:
“The statements referred to in sub-rule (1) shall be furnished once in respect of every financial year, starting from the financial year commencing immediately after the financial year in which the patent was granted, and shall be furnished within six months from the expiry of each such financial year.“
1.2. Form 27 for submitting the statement of working of patented invention on a commercial scale in India has been substituted. New Form 27 is annexed herewith – Annexure A.
3. What is the due date to file working statement?
Working statement on Form 27 with respect to previous financial year shall be filed within six months from the expiry of such financial year, i.e., Form 27 shall be filed by 30th September. For example, for the financial year 2020-21, Form 27 shall be filed by 30th September 2021.
4. What is the duration of financial year in India?
A financial year in India is the period staring 01st April to 31st March of the following year. Accordingly, financial year 2020-2021 ranges from 01st April 2020 to 31st March 2021.
5. Can a single Form 27 be filed for multiple patents?
Yes, after the said Amendment, single Form 27 can be filed for multiple “related patents”.
6. What information/data is to be provided on new Form 27?
Now the Patentee(s) and Licensee(s) shall provide below listed information while furnishing statement of commercial working of patent in India on Form 27:
i. Name(s) of the Patentee(s) / Licensee(s)
ii. Patent No.
iii. Worked / Not Worked [Yes / No]
iv. Approximate revenue / value accrued in India to the Patentee(s) or Licensee furnishing the statement from Patent No(s) where the working is through:
a) Manufacturing in India (in INR)
b) Importing into India (in INR)
v. Brief in respect of approximate revenue / value accrued in India or the Working of the Patent at the commercial scale in India –Brief may include countries from which patented articles are imported, name of licensee(s), sub-licensee(s), how multiple patents (if on single Form 27) are related, how approximate value was derived or any other information which the Patentee/Licensee deem appropriate while filing Form 27.
vi. If not worked, reasons for not working of the Patented invention and steps being taken for working of the invention
7. Are any documents required to be enclosed with the working statement on Form 27?
Apart from the above stated information to prepare Form 27, we would require a Power of Authority (if not provided already) from the Applicant(s)/Licensee(s) authorizing S&A to file statement of working of patent(s) at the Patent Office.
8. Which Patents are eligible for filing Working Statements for financial year 2020-21?
For financial year 2020-21, working statements should be filed for all patents granted on or before 31st March 2021 and are active/ subsisting on Patents Register for part or whole of the financial year 2020-21.
9. Does all Patentees and Licensees need to file the Working Statements?
Yes, all Patentees and Licensees shall file working statement. While co-Patentees over a patent can collectively file single Form 27, the Licensees are required to file Form 27 separately.
10. When can the Patentee/ Licensee/ In-House Attorney provide instruction with information for preparing and filing working statements?
Required information for preparing and filing of working statement on Form 27 can be provided any time before 30th September of the year. However, to avoid the last weeks’ rush to file working statements in thousands of subsisting patents in India and to reasonably correct/clarify on the information, the Client should preferably give instructions with relevant information for Form 27 by July 2021.
11. Guidance on what is meant by “related patents” and how related they have to be to each other.
i. How Patents will be classified as ‘related patents’?
Phrase “related patents” includes all patents relating to the same product or are interlinked such that approximate value for a particular patent or each patent cannot be derived separately. Further, it should be kept in mind that the Patentee or Licensee making the Statement is the same for all patents included on the single Form 27.
ii. Are patents only allowed to be considered as “related” if the approximate revenue / value accrued from a particular patented invention cannot be derived separately from the approximate revenue/value accrued from related patents?
To use single Form 27 for multiple patents, it is assumed that the Patentee/Licensee cannot derive value for a particular or each patent separately from the said group of “related patents”.
iii. Does it have to be stated how the patents are related?
While the Form 27 does not particularly asks for “how the patents are related”, it is advisable to put information with respect to the same in column 4.(b) Brief in respect of (a) above. One may also include how total approximate revenue/value was derived.
iv. Will it be assumed that all the patents mentioned on the same form 27 are related?
Yes.
v. In case the patents are not related, is a separate form 27 needed?
Yes.
12. What options are available if the due date for filing the Statement of Working is missed?
In case the working statement (Form 27) is not filed by 30th September, the same can be filed along with petition under Rule 137/138 giving detailed reasons for such delayed submission. The acceptance of such petition and delayed Form 27 will be at the discretion of the Controller.
13. Will the new Form 27 information still be submitted online?
Yes.
14. With respect to imports, does the patentee/licensee need to specify country of origin?
The revised Form does not particularly require “country of origin” for imported items. Further, the old version of Form 27 is still showing and revised Form 27 is not yet updated on the IPO’s e-Filing portal. In the given scenario, while “country of origin” is not required as per revised Form 27, the Patentee/Licensee may choose to provide “country of origin” and we can include the same in Col. 4(b) of revised Form 27. Further, we will keep a watch on revised Form 27 over e-Filing portal and will inform our clients in case there is any clarity in this regard.
15. What sort of information is required for the brief about working statements (4b)?
As on date, there is no prescription from the Patent Office as to what can be included in Col. 4(b) Brief in respect of (a) Approximate Value…. The Patentee/Licensee may choose to including “how patents are related” in case of multiple patents, “how approximate value was derived” and/or “country of origin” in case of value by importing in India or any other information that the Patentee/Licensee deem appropriate while providing statement of working of patent(s) in India.
i. Does the brief only relate to the information in 4a?
Yes.
ii. Can the brief be omitted entirely, or be blank/empty?
We will be able to answer “whether 4(b) is mandatory while e-Filing of Form 27 or not” once the e-Filling portal is updated with revised Form 27.
16. What are the consequences if the Working Statement is not filed with the correct information or within the stipulated time (or with petition)?
As per Section 122(1) (b) of the Patents Act, 1970, failure to supply such information as required under Section 146 is punishable with fine which may extend to ten lakh rupees. If the information or statement furnished by the patentee is false, there is a punishment with imprisonment up to six months, or with fine, or both [Section 122(2)]. Consequently, non-submission of statement regarding working of invention can lead to penalty, and may further lead to a valid ground for grant of compulsory license over the patent.
FORM 27
THE PATENTS ACT, 1970 (39 of 1970)
AND
THE PATENTS RULES, 2003
No Fee
STATEMENT REGARDING THE WORKING OF PATENTED INVENTION(S) ON A COMMERCIAL SCALE IN INDIA
[See section 146(2) and rule 131(1)]
| 1. Insert name, address, nationality, patent number(s). |
I/ We, the Patentee(s)/ Licensee ……………, in respect of patent number(s) ………………., furnish this statement,
(Explanation: One form may be filed in respect of multiple patents, provided all of them are related patents, wherein the approximate revenue / value accrued from a particular patented invention cannot be derived separately from the approximate revenue/value accrued from related patents, and all such patents are granted to the same patentee(s)). |
| 2. State the financial year to which the statement relates. |
in respect of the financial year ……… |
| 3. Worked / not worked.
Please state whether each patent in respect of which this form is being filed is worked or not worked. |
Patent Number(s) |
Worked [Tick (✔) if applicable] |
Not worked [ Tick (✔) if applicable] |
|
|
|
| (more lines can be added to include multiple related patents) |
|
|
| 4. If worked. |
(a) Approximate revenue / value accrued in India to the patentee(s)/ licensee furnishing the statement from patent number(s) where the working is through: |
| (1) Manufacturing in India …… (in INR) |
(2) Importing into India ………. (in INR) |
| (b) Brief in respect of (a) above (maximum 500 words) |
| 5. If not worked. |
Reasons for not working the patented invention(s) and steps being taken for working of the invention(s).(maximum 500 words) |
|
The facts and matters stated above are true to the best of my/ our knowledge, information and belief.
Dated this ……… day of……. 20…… |
| 6. To be signed by Patentee(s) /
Licensee / Authorised Agent furnishing the statement. |
Signature(s) ……………………………
To
The Controller of Patents, The Patent Office,
at ………………
|
Note: Every patentee and every licensee (exclusive or otherwise) is required to file this Form; where a patent is granted to two or more persons, all such patentees may file this Form jointly; however, each licensee shall file this Form individually.
Authored by
IPR Team
