Under the Indian patent law, an applicant (Indian or foreign) may claim the status of a “Small Entity” if it meets certain specified criteria. The “Small Entity” status can be claimed either for filing direct patent applications in India or for filing National Phase or Convention Applications in India. Since September 2019, it is possible to file a request for expedited examination where the status of the applicant is a “Small Entity”. Further, from 4th November, 2020, an 80% concession in the government fee has been provided to applicants who fall under the category of “Small Entity”. However, for claiming the “Small Entity” status, extensive documentation work is required to be submitted by the applicant.

Definition of Small Entity:
Under the Indian Patents Rules, 2003, which was amended on 28th February, 2014, to include the definition of a small entity, an entity shall be considered as a “Small Entity” if it meets the following criteria:

1. in case of an enterprise engaged in the manufacture or production of goods, an enterprise where the investment in plant and machinery does not exceed the limit specified for a medium enterprise under section 7(1)(a) of the Micro, Small and Medium Enterprises Development Act, 2006; and
2. in case of an enterprise engaged in providing or rendering of services, an enterprise where the investment in equipment is not more than the limit specified for medium enterprises under Section 7(1)(b) of the Micro, Small and Medium Enterprises Development Act, 2006.

Explanation 1: An "enterprise" means an industrial undertaking or a business concern or any other establishment, by whatever name called, engaged in the manufacture or production of goods, in any manner, pertaining to any industry specified in the First Schedule to the Industries (Development and Regulation) Act, 1951, or engaged in providing or rendering of any service or services in such and industry.
Explanation 2: In calculating the investment in plant and machinery, the cost of pollution control, research and development, industrial safety devices and such other things as may be specified by notification under the Micro, Small and Medium Enterprises Development Act, 2006, shall be excluded.

Definition of a Medium Enterprise:
From 1st July 2020, the government of India revised the definition of a “Medium Enterprise” under section 7 of the MSME Development Act. Under this revised definition, an entity shall be considered as a medium enterprise if it meets the following criteria:

1. where the investment in plant and machinery or equipment does not exceed USD 6.8 million (INR 50 crore); and
2. where the annual turnover is not more than USD 34 million (INR  250 crore)

Documents Required to be Submitted:
The following documents are required to be submitted for claiming “Small Entity” status:

1. Evidence of eligibility:
2. For Indian applicant: Evidence of registration under the Micro, Small and Medium Enterprises Act, 2006.
3. For foreign applicant: Any document as evidence of eligibility. For example, a certified copy of the financial statement or a certificate from a Chartered Accountant, showing that the investment in plant & machinery and the annual turnover on the date of filing the application does not exceed the limit specified under the MSME Development Act.
4. A declaration in the form of an affidavit, in original (in the English language), duly signed by an authorized signatory of the entity.
5. Duly filled Form-28.

Expedited Examination:
Under the Indian Patents Rules, applicants (Indian or foreign) in the “Small Entity” category may file a request for expedited examination in Form 18-A. However, it must be accompanied by Form-28.

Concession in Government Fee:
Under the recent amendments to the Indian Patents Rules (effective from 4th Nov. 2020), only two categories of government fee have been specified:

1. Natural person(s) or Startup(s) or Small entit(y)/(ies)
2. Other(s), alone or with natural person(s) or Startup(s) or Small entit(y)/(ies)

Therefore, applicants claiming the “Small Entity” status can get 80% fee concession, as compared to other legal entities. The lower government fee will apply at every stage and throughout the life of the patent, e.g., filing of application, request for urgent publication, request for examination, extension of time, renewal of patent, post-grant opposition, etc.

Government Fee in Case of an Assignment: If prior to grant of the patent, the patent application is fully/partly assigned to a person other than a natural person, startup or small entity, the difference in fee shall be paid by the new applicant. If it is assigned after the grant of the patent, the balance in fee is not payable, but the full fee for renewals would have to be paid by the new applicant.
Government Fee in Case of Change in Status: where a small entity, having filed an application for a patent, ceases to be a small entity, due its turnover subsequently crossing the financial threshold limit, no such difference in fee shall be payable.