Registered MSMEs and DPIIT Recognized Startups enjoy concessions in Trademark Registration fees by the Indian Government. In this blog, we have clarified this discounted cost as per the latest update.
Intellectual Properties are unique creations and inventions that need to be protected against plagiarism and misuse. To obtain such protection, all kinds of intellectual properties, namely, trademarks, patents, designs and copyrights must be registered under the respective laws that regulate them. Intellectual Property registrations are available to both individual and corporate entities. As far as corporate entities are concerned, their unique names and logos are protected by trademark registrations, new and inventive products are protected by patent registrations, and design features original to their products are protected by design registrations.Here we have elaborated on different aspects of Trademark Registration for corporate entities, registered as Startups and MSMEs in India.
Table of Contents
MSME and Startup businesses in India operate with limited resources and a marginal amount of capital. They generally operate at a smaller scale and cater to the local consumer demand only, especially during the initial stages of their operations. As a result, their potential to grow, expand, and earn profits are quite restricted. Added to this, are the costs of mandatory legal and tax compliances, that increase the burden of MSMEs and Startups exponentially. In order to financially assist such businesses, and reduce their costs of compliance, the government has reduced the registration fees for their trademarks by a whopping 50%, compared to businesses of larger size and scale of operations. We have discussed the absolute cost of trademark registration for MSMEs and Startups in the article below.
Meaning and Classification of MSMEs
MSME stands for micro, small and medium enterprises. The MSME industry has recently gained popularity due to its marginal investment needs, shorter gestation period, and different benefits offered by the government. They play an important role in the economic development of the country, especially by generating employment as labor-intensive businesses. To operate as MSMEs in India, businesses simply need to obtain the MSME registration by applying online on the MSME Registration Portal. MSMEs are registered under the MSME Act, 2006. Such registrations are applicable to both goods-based and services-based industries. As a conclusive proof that your business has been registered as MSME by the concerned authority, you shall receive a Certificate of Registration which shall be valid for a lifetime.
As effective from 1st July 2022, a new definition of MSMEs has been drawn on the basis of their net turnover, and their net investments in plants, machineries, and other equipment required for the proper functioning of their business. The eligibility criteria for businesses to be classified as micro small and medium enterprises according to the new definition have been mentioned below. Besides, you may also read our detailed and comprehensive article on the new classification of MSMEs to get a complete overview of the same. new-definition-of-msme
| Types of Enterprises | New Definition applicable to both goods & services based businesses |
|---|---|
|
Micro Enterprises |
Net investment in plant and machinery or equipment upto Rs. 1 crore and net turnover ≤ Rs. 5 crores |
|
Small Enterprises |
Net investment in plant and machinery or equipment ≤ Rs. 10 crores and net turnover ≤ Rs. 50 crores |
|
Medium Enterprises |
Net investment in plant and machinery or equipment ≤ Rs. 50 crores and net turnover ≤ Rs. 250 crores |
Meaning and Classification of Startups
Startup India is a flagship programme of the Indian government, introduced in January 2016. It aims to create a robust ecosystem for nurturing startups and their innovative products, in order to achieve long-term economic growth and large-scale employment in India. The primary objective of this scheme is to provide a number of legal, tax and funding benefits to startups and reduce their costs of compliances, so that they can focus on the growth and expansion of their business in the initial stages of their establishment. To avail the benefits under the startup India initiative, businesses must get recognized and registered as Startups in India.
The eligibility conditions for businesses to be qualified for being registered as Startups under the Startup India Scheme, have been mentioned in the Gazette Notification issued by the DPIIT, on the 19th Of February, 2019. The conditions have been drawn on the basis of the date of incorporation, types of businesses, turnover limits, nature, and outcome of business activities. A list of all such eligibility conditions has been mentioned in the table below.
| S.No. | Eligibility conditions for businesses to get registered as Startups |
|---|---|
|
1. |
Businesses can exist as Startups for not more than 10 years since their incorporation |
|
2. |
An unincorporated entity cannot get recognized and registered as Startups |
|
3. |
Only registered Partnership firms, LLPs, and Private Limited Companies can be qualified as startups |
|
4. |
The turnover must not have crossed Rs.100 crores for any financial year since the inception of the business |
|
5. |
The business must either be involved in introducing new and innovative products in the market, or in improving existing products through technology |
|
6. |
The business should be established with the goal of earning profits, and generating employment |
|
7. |
Businesses must be original and not formed by splitting or reconstructing and existing businesses |
Meaning and Classification of trademarks
A trademark ensures that the unique name, symbol or logo of a business or brand is protected from being misused or plagiarized by its fellow competitors in the market. Since the trademark is unique and original to the business, it also acts as its distinct legal identity and distinguishes it from other businesses in the market. MSMEs and Startups usually hesitate in getting their intellectual properties registered under the Trademark Act, fearing that it might increase their expenses to the extent of unaffordability. Hence, to encourage trademark registration by MSMEs and Startups, the government has reduced its fees by 50%. We have discussed in detail the cost of trademark registration for startups and MSMEs later in this article.
Prior to getting your trademark registered with the relevant authority, you must first identify and classify all the possible trademarks of your business correctly. The NICE classification classifies trademarks into 45 different classes based on the nature of industrial activity of the business which owns the trademark. Out of these, classes 1 to 34 are dedicated to products-based businesses, and the rest are dedicated to services-based businesses. This classification of trademarks applies to all corporate entities in India, including MSMEs and Startups. You can check out the entire list of all classes of trademarks on the official website of IPIndia.
Let us understand this with the help of an example-
For an MSME dealing with products related to leather, the entrepreneur will have to apply under class 18 of NICE since class 18 deals with trademarks of businesses dealing in Leather Goods. And in case of services if a particular service deals in Hotel, Restaurants, cafes, etc. then they will have to apply under class 43 in order to get their trademark registered as class 43 deals with Hotels and Restaurants Services under the NICE.
| S.No | TM Registration benefits for Startups & MSMEs |
|---|---|
|
1. |
Protection Against Plagiarism and misuse |
|
2. |
A unique mark of identity |
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3. |
Enhancement of Brand Credibility |
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4. |
Products and Services are easily identifiable |
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5. |
Effective branding and marketing strategy |
Things you must know before applying for trademark registration of MSMEs
- Before beginning the process of trademark registration, you must first identify all the possible trademarks related to your business. This may include the legal name, trade, name, logo, or product mark of the business
- The next step in registering the MSME trademark is figuring out carefully which class to apply under. One has to check the NICE Classification system which contains over 45 different classes, out of which, the first 34 are for products and the remaining are for services.
- The trademark applications can be tricky at times for a layman and therefore it is better to take help from legal experts to ensure timely and correct registration of the trademark. The process is lengthy, sometimes taking up to 18 months, therefore it is advised to start the process as early as possible to avoid competitors taking advantage of your business.
- One must keep in mind that trademarks are not international and are limited only to the country where one has obtained it. In order to get your trademark registered in a foreign country, you will have to apply for trademark registration in that very country. Furthermore, trademarks are only valid for 10 years, after the expiry of which, business owners shall have to renew it.
- It should be noted that when applying for a trademark registration, the ™ symbol next to the mark can be used to indicate that an application has been filed. They can begin using the Ⓡ symbol next to the mark, once their application is approved and they receive a Trademark registration certificate.
Trademark Registration fee for Startups and MSMEs in India
The cost of an application filed for trademark registration for all corporate entities is Rs. 9000/- per application. Considering that this amount is huge for small businesses like MSMEs and nascent businesses like startups, the government of India, in pursuance of the Trademark Rules, 2017, has reduced the fees for MSMEs and Startups by a whopping 50%, to Rs.4,500 per application. The purpose of this reduction is to free up small businesses from the added expense of legal compliances like trademark registrations. Follow the table below to check out the detailed cost and conditions of the applicable fees for trademark registration.
| Type of applicant | Individual Applicant | Non Individual Applicants (Company, LLP, Firm etc) | MSME and Startup Availing 50% Concession |
|---|---|---|---|
|
Trademark Filing Fee |
₹ 4500/- |
₹ 9000/- |
₹ 4500/- |
|
Conditions to apply for Trademark registration |
No conditions applied |
No conditions applied |
Must possess MSME / Startup registration certificate |
Procedure and Documents Required for Trademark Registration of MSMEs
To apply for Trademark Registration, all you have to do is subscribe to our trademark registration package and avail of our high quality services available to you at the most affordable prices. Our services are rendered by our highly qualified, skilled, and experienced team of dedicated professionals. Besides trademark registration services, our consultants will also help you identify and classify all trademarks related to your business. Trademark Registration
The Application for Trademark Registration must be accompanied by all supporting documents prescribed by law. Since the application is to be filed online, the required supporting documents must also be submitted in the digital format. We have provided a list of all supporting documents required for trademark registration of MSMEs and Startups below. A failure to furnish any of the below mentioned documents might result in the rejection of the application, and might compel MSMEs and Startups to file a new application and pay the application fee again.
| S.No. | Documents required for Trademark Registration |
|---|---|
|
1. |
Address and ID proof of the applicant |
|
2. |
Certificate of Incorporation or partnership deed in case of unregistered Partnership Firm |
|
3. |
Proof of registered business address |
|
4. |
Copy of Trademark / Logo to be registered |
|
5. |
Udyam / Startup Registration Certificate |
Conclusion
With the benefits provided by various schemes, initiatives, and policies of the government, MSMEs and Startups have witnessed tremendous growth in India in the past few years. Reduction in the trademark registration fees is also one of the significant ways by which the government has successfully reduced the burden of cost and expenses for such small and nascent businesses, besides protecting their intellectual properties against misuse and plagiarism. Not only does trademark registration provide protection to MSMEs and Startups, but also entitle them to sue parties that infringe on their intellectual property rights. Thus, it is for this reason, that we strongly recommend MSMEs and Startups in India, to obtain Trademarks and other intellectual property registrations at the concessional fee prescribed by the government.
FAQs
Trademark registration is crucial for MSMEs and Startups as it provides legal protection to their unique brand names, logos, and product names. It helps prevent plagiarism and misuse of a brand’s trademark by its competitors, enhances brand credibility, and allows the brand to establish its distinct identity in the market.
The reduced trademark registration fee, which is 50% lower for MSMEs and Startups, helps alleviate the financial burden on these businesses. It enables them to protect their intellectual properties at a more affordable cost, encouraging them to secure legal rights and safeguards for their brands.
Yes, MSMEs and Startups can avail the reduced fee for trademark registration without any specific conditions. However, they must possess the respective MSME or Startup registration certificate to qualify for the concessional fee.
The supporting documents needed for trademark registration of MSMEs and Startups include the Udyam or Startup registration certificate, and the image of the trademark, if it is a device mark. Additionally, the power of attorney may be submitted if the filing is being done by an attorney on the applicant’s behalf.
Trademark registration is territorial, meaning it provides protection within the country where it is registered. To obtain international trademark protection, MSMEs and Startups need to file separate applications in each country where they seek protection. It is essential to consider the specific trademark laws and regulations of each country when pursuing international registration.
