A patent is a legal right given to an inventor or the assignee the right to manufacture and sell an invention invented or assigned by him within its useful life. This granted exclusive rights prevent others from creating, using, or selling it for a period after, normally 20 years, against publishing it to the world. Patents play a very important role in promoting innovation by granting inventors exclusive rights to commercialize their inventions. Patents in India help protect local inventors, attract foreign investment, promote technology transfer, and enhance the global competitiveness of domestic industries. They also contribute to creating an ecosystem that nurtures entrepreneurship and job creation.
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Why Does Patent Cost Matters?
Patent filing and maintenance can be very expensive-including for individual inventors, startups, and small businesses. It can become an economical hurdle in drafting a patent application, the fees to file the patent, and the subsequent maintenance. Many would find themselves deterred by the costs of protecting patents.
For a healthy IP ecosystem, patent costs should not disproportionately burden the smaller entities or individuals. With high patenting costs, less access to innovation occurs, especially for areas of healthcare, education, and renewable energy, because the benefits of innovation have to be spread widely. Patent cost diminution would democratize the access to IP protection in these sectors to encourage greater creativity and progress.
Types of Costs Involved in Filing & Maintaining a Patent in India
Initial Filing Costs
Application Filing Fees: The initial cost to file a patent application in India depends on the type of applicant and the number of claims made. Application fees are usually paid at the time of filing, and they can vary depending on the category of the applicant.
Fees of Individual Applicant, Startup, and Small Entity
Individuals: A lower amount compared to the larger units.
Start-Ups: The government's "Start-Up India" is also eligible for reduced fee
Small Entities: Small scale industries with a turnover less than INR 40 lakhs annually are eligible for fee waiver.
Fees for Large Entities: Large corporations, foreign applicants, and all other categories that are not mentioned above have to pay the full fees.
Classification: The fee structures for patents are different for individuals, small entities, start-ups, and educational institutions. All of these are classifications intended to make patents more accessible to more minor players in the innovation ecosystem.
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Additional Fees
Multiple Claims, Pages, and Sequences: Filing additional claims or extending the number of pages in the application may increase the filing fee. There is an additional charge if the application includes more than 30 pages or more than 20 claims.
International PCT Applications: For those who wish to extend their protection internationally via the Patent Cooperation Treaty (PCT), additional fees apply for international filing, translation, and handling charges by the Indian Patent Office.
Examination Fees
Requesting for Substantive Examination: In India, an applicant must request for a substantive examination of their patent application within 48 months of filing. The examination fee is paid at this step. The patent office is also obliged to carry out an in-depth assessment of the application before issuing the patent. The cost varies with the nature of the applicant-be it an individual, startup, small entity, or large entity.
Time Limit for Filing Examination Request: The request must be filed within 48 months of the filing date or priority date of the application. Failure to file the examination request within this timeframe will result in the abandonment of the application.
Payment Details: Examination fees can be paid online through the official IP India portal. Payment receipts are essential for processing the application and advancing to the next stage of examination.
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Post-Filing Costs
Annual Maintenance Fees: The applicant is required to pay annual maintenance fees beginning with the 3rd year after filing to keep a patent in force. These fees rise every year and are paid on the anniversary of the date of filing the patent.
Step-up Costs: Maintenance fees step up yearly, and the highest payable fee occurs at the end of the 20th year of the patent term.
Reduced Fees for Small Entities and Startups: Small entities and startups qualify for maintenance fee discounts, which can substantially reduce the cost burden over the life of the patent.
Additional filing fees for Amendments, Divisions, and Restorations: Amending the patent application (for example, claims changes or priority), dividing a patent application into multiple applications, or restoring a lapsed patent may involve extra fees.
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Attorney Fees and Professional Charges
Legal Services for Preparation of Patent Applications, Responses, etc.: Patent applicants typically hire patent attorneys or agents to prepare their applications, respond to office actions, and address other procedural matters. Legal costs can be very high depending on the complexity of the invention and the scope of the patent application.
Patent Agent Fees for Filing and Prosecution: In India, applicants are obliged to file applications and prosecute patents by using a registered patent agent. Agent fees would usually cover filing, follow-up responses to the Patent Office, and liaising with the authorities.
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Patent Cost Structure by Type of Applicant
Individual Applicants
Schemes for reduction of fee by individuals: The Patents Act also sets up eligibility for individuals to file for patented items at reduced fees. Since individual inventors are generally quite inexpensive compared to big corps, there is an element of saving money by filing under patents.
Case Examples of Individuals Inventors: An application by an individual inventor developing a new medical device or mobile software application may incur more significant fees for patent registration and subsequent maintenance compared to corporations. The government support through schemes like Startup India and Make in India also provides individual inventors with better opportunities to obtain patent protection at lower costs.
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Small Entities
Definition and Benefits under the Indian Patents Act: A small entity is generally defined as an enterprise whose annual turnover is less than INR 40 lakhs, that is approximately USD 50,000 and which does not employ more than 100 people. Application and examination fees are reduced by 50% for small entities.
Reduction in Fees for Small Enterprises: For small enterprises, the issue of affording patent protection is quite challenging. The reduced fee is a way of making IP accessible. The Indian government aims to make the intellectual property policy easy to facilitate innovation and entrepreneurship by easing the financial burden.
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Startups
Legal Framework and Startup-Specific Benefits: Startups in India are provided with special incentives under the Startup India initiative, such as fee cuts, fast tracking of patent applications, and subsidies for patent filing and prosecution. The startups can avail 80% reduction in patent filing fees, making it more economical to protect their innovations early in their lifecycle.
Special Incentives and Fee Waivers: Startups also enjoy shorter processing times for patent applications, and may even be exempt from fees when seeking government-sponsored intellectual property services.
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Large Entities
Fees for Large Companies
Large entities such as multinationals are not eligible for the lower fees accorded to individual applicants, small entities or start-ups. This means the cost of filing and keeping patents is significant for such corporations.
International filing and legal costs for large corporations are also higher as they file patents in many jurisdictions.
Example of a Multinational Corporation Filing in India
A large pharmaceutical company, which wants to obtain patent protection for a new drug in India, will incur not only the cost of filing and examination but also that of maintaining the patent over its 20-year life cycle.
Educational Institutions & Research Organizations
Specific Benefits and Reduced Fees for Academic Bodies
Educational institutions, universities, and research organizations take advantage of lower patent filing fees in India. These entities, with research and development activities in place, are motivated to seek patents on new inventions, with special provisions to lower the costs of patent filing and prosecution .
Universities also benefit from government-sponsored schemes that financially assist the filing of patents.
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Conclusion
Filing and maintenance of patents in India depends on the applicant's classification as an individual, small entity, startup, or large entity. Some of the major costs include the cost of filing, examination, maintenance, and professional charges. The benefit of such discounts to small businesses and startups makes patents more affordable. For businesses and innovators, understanding the full range of costs involved in the patent process is crucial for effective budget planning and IP strategy. Early financial planning can ensure that an invention is protected for its full term and that maintenance costs are manageable over time.
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FAQs on Patent Cost in India
Q1. How much is the patent filing fee in India?
For an individual applicant, the online application costs INR 1,600. For small entities, it's INR 4,000 and large entities INR 8,000. The start-ups enjoy a reduction of 80%. So, the filing fee stands at just INR 800.
Q2. How much is the cost of patent maintenance in India?
Maintenance fees in India start from INR 800 in the 3rd year for individual applicants and increase progressively with each year. By the 20th year, the fee can reach INR 10,000 for individual applicants and INR 50,000 for large entities. Maintenance fees must be paid annually to keep the patent in force.
Q3. Are there any discounts for small businesses?
Yes. Small enterprises, which have an annual turnover less than INR 40 lakhs, have a reduction of 50% of the filing, examination, and maintenance fees of large entities.
Q4. Are there any discounts for a startup?
Under the Startup India scheme, startups are eligible for an 80% discount on filing fees, faster examination procedures, and other government incentives to make patenting more affordable.
Q5. Do I require a patent agent to file a patent in India?
Yes, a registered patent agent is required for filing a patent application in India. Though individuals and entities can file online, an agent has to deal with the application and its prosecution process.
