Category Archives: regulatory updates

Draft Amendment to Geographical Indications of Goods (Registration and Protection) Rules, 2002

Ministry of Commerce and Industry vide Gazette Notification No.G.S.R. 645(E) dated September 12, 2019, notified the draft Geographical Indications of Goods (Registration and Protection) (Amendment) Rules, 2019, inviting objections from public. Inter-alia, the amendment proposes to shorten the procedure of applying for registration of geographical indication by omitting certain clauses. The proposed draft amendment is summarized in the below table:

Rule Present Position Proposed Amendment
56(1) Application for registration as an authorized user was to be made in Form GI-3 jointly by the producer and the registered proprietor. Rule is proposed to be substituted to remove joint application by the registered proprietor, and mandating the producer to only forward a copy of the application to the registered proprietor and intimate the Registrar of the due service of the same.
59(1) Registration Certificate in Form GI-3 was to be issued by the Registrar upon receipt of a request with prescribed fee. Rule is proposed to be substituted to remove references of Form GI-3, receipt of request and payment of prescribed fees.
59(2) Registrar has to specify all particulars required under Section 6(1) in the register for authorized user. Requirement for the Registrar to specify priority date and appropriate office of Registry is proposed to be omitted.
59(3) Any request for duplicate or further copies of registration was to be made in Form GI-7 along with an un-mounted representation of the geographical indication as shown in form of application for registration. Proposed to omit accompaniment of un-mounted representation of the geographical indication as shown in form of application for registration.
Sch. I Fees of 500 is payable for application/renewal of registration of an authorized user of a geographical indication Proposed to remove payment of fees.
Sch. II Request for issuance of registration certificate is to be made in Form-GI-3. Proposed to omit the procedure of requesting for issuance of certificate by deletion of entry in Schedule-II and renaming entry 3C as 3B.
GI-3 Form consists of three entries A for application, B for request for certificate issuance, and C for renewal Proposed form consists of only two i.e. entries A for application and B for renewal.

 

Source: http://egazette.nic.in/WriteReadData/2019/212426.pdf

 

Amendment of Patent Rules, 2003 with emphasis on a Start-up

Ministry of Commerce and Industry vide Gazette Notification No.G.S.R. 663(E) dated September 17, 2019, notified the Patents (Amendment) Rules, 2019, effective from the date of notification in the gazette.  Inter-alia, the amendment abolishes the requirement of filing original documents after submitting scanned copies and includes a start-up and a female person to the list of eligible persons for requesting for expedited examination.

Following is the summary of the changes:

Rule Earlier Position Amended Position
6(1A) Patent agent to submit documents by electronic means and in addition to submit original documents within 15 (fifteen) days. Rule 6 (1A) is substituted to remove the mandatory filing of original documents by the patent agent.  Now patent agent to submit original document only if asked by the Department.
7(1) Small entity was to file Form-28 with every document for which fee is prescribed. Second proviso to the rule is amended to include a ‘start-up’ to file Form-28.
24C(1) Small entity could file a request for expedited examination of application in Form-18A. New sub-clauses are added for filing of Form-18A for expedited examination, which include:

  • a ‘start-up’
  • a female applicant in case of single or joint applicants who are natural persons
  • a government institution/company
  • applicant under an arrangement pursuant to agreement between Indian Patent Office and a foreign Patent Office
Sch.I Entry number 48 provides the transmittal fee payable for international application. A new entry 48A is inserted whereby no fee is payable for transmittal fee for international application through e-PCT filing.
Sch.I Entry number 49 provides the fee payable for preparation of certified copy of priority document and transmission of the same to the International Bureau of World Intellectual Property Organization. A new entry 49A is inserted whereby no fee is payable for preparation of certified copy of priority document and e-transmission through WIPO DAS.
Sch. II Form-18A which provides for request for expedited examination of application for patent The form is amended to substitute paragraph 3 with additional grounds for request for examination and addition of paragraph 4 mentioning documents to be mandatorily submitted as evidence of eligibility for availing expedited examination.

 

Source: http://egazette.nic.in/WriteReadData/2019/212575.pdf

Amendment of Apprenticeship Rules, 1992 to mandate engagement of apprentices by certain establishments

Ministry of Skill Development and Entrepreneurship vide Gazette Notification No.G.S.R.686 (E) dated September 25, 2019, notified the Apprenticeship (Amendment) Rules, 2019 with, inter-alia, below changes:

  1. 7 (seven) definition clauses are inserted, which includes ‘degree apprentice’, and ‘fresher apprentice’
  2. The period of apprenticeship is increased from maximum 2 (two) years to maximum 3 (three) years
  3. A new rule is added to exempt applicability of any labour laws to an apprentice and to consider an apprentice as a trainee and not a worker
  4. Every establishment employing 30 (thirty) or more number of workers shall compulsorily engage apprentice [earlier it was not obligatory to engage apprentices for an establishment with 40 (forty) or more workers]
  5. Ratio of apprentices to workers in a financial year is increased from 10% to 15% and a minimum of 5% is to be reserved for fresher apprentices and skill certificate holders
  6. Minimum rates of stipend payable to apprentices are increased from INR 4984 per month to INR 9,000 per month for graduate apprentices or degree apprentices
  7. Prohibition of engaging trade apprentices between 10 pm to 6 am is removed for apprentices above the age of eighteen. For those below eighteen, working hours to be between 8 am to 6 pm only.
  8. Schedule-I Group 35 is amended to include computer hardware and network technician

Source: http://egazette.nic.in/WriteReadData/2019/212757.pdf

Cabinet to consider relaxing FDI norms to attract Overseas Investment

Foreign Direct Investment (FDI) is major driver of growth and development of the economy of the country. With this intent, the Government of India has time and again come up with investor friendly reforms under FDI regulations to have more liberalized reforms across various sectors.

To boost up FDI, the Union Cabinet headed by Prime Minister Narendra Modi on 28 August 2019, has approved the proposal for reviewing of the FDI policy on various sectors. They have considered relaxing foreign direct investment (FDI) norms in several sectors, including coal mining, manufacturing, single-brand retail and digital media, to attract overseas players.

The key highlights of the proposed changes are as follows:

Coal Mining

The present FDI policy allows 100% FDI under automatic route for captive coal mining only. The captive coal mining deals with coal & lignite mining for captive consumption by power projects, iron & steel and cement units and other eligible activities. Along with the captive coal mining, 100% FDI under automatic route is also allowed for setting up coal processing plants like washeries. However, the companies are prohibited to sell washed coal or sized coal from its coal processing plants in the open market and supply the washed or sized coal to those parties who are supplying raw coal to coal processing plants for washing or sizing.

This proposal aims at allowing 100% FDI under automatic route for “Associated Processing Infrastructure”. Associated Processing Infrastructure includes coal washery, crushing, coal handling, and separation (magnetic and non-magnetic). This proposal has opened 100% FDI for selling coal subject to provisions of Coal Mines (Special Provisions) Act, 2015 and the Mines and Minerals (Development and Regulation) Act, 1957.

In crux

  • 100% FDI under automatic route is allowed for Associated Processing Infrastructure.
  • 100% FDI under automatic route is allowed for sale of coals.

Contract Manufacturing

Contract manufacturing in international markets is used in situations when one company arranges for another company in a different country to manufacture its products. This concept is not captured in Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017 and therefore there is no clear laws and rules regulating FDI in contract manufacturing in India. Therefore, the Government through this proposal has allowed to include contract manufacturing under the manufacturing sector and has allowed 100% FDI under automatic route. Manufacturing activities may be conducted either by the investee entity or through contract manufacturing in India under a legally tenable contract, whether on Principal to Principal or Principal to Agent basis.

In crux

  • Contract manufacturing included as an activity under the manufacturing sector.
  • 100% FDI under automatic route is allowed for contract manufacturing.

Single Brand Retail Trade (SBRT)

The present FDI policy provides that 30% of the value of goods has to be procured from India if SBRT entity has FDI more than 51% and the same can be met as an average during the first 5 years, and thereafter annually towards its India operations. As regards local sourcing requirement, the Government has decided to count procurements made from India by the SBRT entity for that single brand as local sourcing, irrespective of whether the goods procured are sold in India or exported. Also, the Government would relax the cap of 5 years by removing it. The approvals allow ‘sourcing of goods from India for global operations’ can be done directly by the entity undertaking SBRT or its group companies (resident or non-resident}, or indirectly by them through a third party under a legally tenable agreement.

The present policy limits the global sourcing by stating that only that part of the global sourcing shall be counted towards local sourcing requirement which is over and above the previous year’s value. The Government is trying to relax this restriction by considering sourcing from India for global operations shall be considered towards local sourcing requirement.

The present FDI policy states that if any SBRT wants to trade through e-commerce, they would be required to operate through brick and mortar stores before trading through e-commerce. The Government by approving this proposal is relaxing the said condition by allowing SBRT to operate through e-commerce subject to the opening of brick and mortar stores within 2 years of starting to trade online.

In crux

  • Goods procured are sold in India or exported to be considered as local sourcing.
  • The 5 years cap removed.
  • No incremental value for calculating local sourcing requirement.
  • SBRT can trade through e-commerce prior to having a brick and mortar store.

Digital Media

The present FDI policy is silent on the fast-growing digital media segment. In the print media sector, 26 percent FDI is allowed through government approval route. Similarly, 49 percent FDI is permitted in broadcasting content services through government approval route. With this proposal, it has been decided by the Government to permit 26% FDI under government route for uploading/ streaming of News & Current Affairs through Digital Media, on the lines of print media.

In crux

  • Introduction of the concept of digital media
  • 26% FDI under governmental route is allowed for uploading/ streaming of News & Current Affairs through Digital Media.

The proposed change reflects that the Government is keen on promoting FDI in various sectors. These amendments are meant to liberalize and simplify the FDI policy to provide ease of doing business in the country. These changes will lead to benefits of increased investments, employment and growth.

Source:  https://pib.gov.in/PressReleseDetail.aspx?PRID=1583294

Extension of Order Permitting Telangana Shops & IT/ITES to remain open on all days of the year

Government of Telangana vide Government Order (G.O.) No.24 dated July 25, 2019[1], extended the permissions to all Shops and Establishments to keep open on all days of the year for a period of three (3) years till June 15, 2022 subject to fulfilment of the conditions in the extension G.O.

Further, vide G.O. No. 25 dated July 25, 2019[2], the Telangana Government also extended the exemption issued to all Information Technology (IT) and IT-enabled services (ITES) establishments in Telangana with regard to the below provisions for a period of five (5) years till May 29, 2023:

  1. Section 15: Prohibition on keeping open of establishments before/after the fixed hours
  2. Section 16: Daily work of eight (8) hours and weekly work of 48 hours
  3. Section 21: Prohibition on employment of young persons between the age of 14 to 18 years after 7 pm and before 6 am
  4. Section 23: Prohibition on employment of women after 8:30 pm and before 6 am
  5. Section 31: Mandatory five (5) holidays on Republic Day, May Day, Independence Day, Gandhi Jayanthi and Telangana formation day

Earlier the exemption was in effect for five (5) years from May 30, 2013 in the combined State of Andhra Pradesh, while this G.O. 25 is applicable only for the State of Telangana.

[1] https://labour.telangana.gov.in/content/gos/GOMsNo24_Exempt_to_all_Shops365_days.PDF

[2] https://labour.telangana.gov.in/content/gos/GOMsNo25_Exemption_to_IT.PDF

Creche rules notified in Karnataka for establishments with 50 or more employees

Karnataka State Government vide Gazette Notification No.LD 127 LET 2018 dated August 8 2019, notified the Karnataka Maternity Benefit (Amendment) Rules, 2019 (“Karnataka Creche Rules”), wherein new rules relating to crèche facilities is inserted in the Karnataka Maternity Benefit Rules, 1966.

Earlier, the Central Government vide Gazette Notification dated March 28, 2017 had amended the Maternity Benefit Act, 1961 (“Act”) by inserting a new Section 11A mandating every establishment with fifty or more employees to have the facility of crèche and also to intimate in writing and electronically to every woman at the time of her initial appointment regarding every benefit available under the Act.  Further, the Central Government vide Gazette Notification No.S.O. 1026(E) dated March 31 2017, & S.O. 1049 (E) dated April 3 2017, had notified that the crèche related provision will be effective from July 1, 2017.

Further, the Government of India vide its Circular dated November 17 2017, requested that the State Governments being the appropriate Government under the Act, may take immediate action to frame and notify rules for the crèche facilities. The Karnataka State Government had published the draft rules on July 21 2018, inviting comments from the public and the present Karnataka Creche Rules was notified effective from the date of publication in the Official Gazette.

The compliance under the Karnataka Creche Rules is shown in the below table:

Standards Compliance Requirements
Number of Creches
  • One crèche for use of children below 6 years of age for every thirty children
  • Creche facility to be provided to employees of all types of employment like permanent, temporary, regular, daily wage, contract labour etc.
Location
  • To be situated within half a kilometre from the gate of the establishment
  • Easy access to the parents
  • To be away from excessively noisy process or dust/fumes/odours etc.
Building
  • Construction of room height of at least 9 feet with heat resistant material and waterproof with fencing
  • 5 Square Feet floor area for each child in crèche
  • Shady open-air playground well maintained/safe/secure or ensure safety/security in case of use of public playgrounds or parks
  • Artificial lightning to be connected with emergency power back up
  • Kitchen or in its absence, employer to make available hygienic food/beverages
  • Dedicated water purifier & washbasins at 1 for every 15 children
  • Washroom adjoining crèche with a separate facility for drying of soiled clothes and change of dresses
  • Separate ‘Latrine’ for children at 1 for every 20 children and separate ‘Latrine’ for staff/mothers adjoining the bathroom
Facilities
  • To be open 24/7 for employees working in shifts  with not more than eight hours a day per shift
  • Uniforms and clean clothes for staff as well as children
  • Water supply at the rate of 5 gallons per child per day
  • Supply of clean towels, oil and soap
  • Play and teaching materials, display of daily schedule/norms of child safety etc.
  • Medical check-up of children before admission and once in two months
  • Recording of Body-Mass Index once a month and other medical examination to be stored in the crèche
  • 250 ml of milk per child below the age of two years and adequate refreshments for child above two years
Equipments
  • Cradles
  • Cots
  • Beds
  • Mattresses
  • Cotton Sheets
  • Utensils to feed
  • Furniture for child and parents
  • Rubber sheets
  • Blankets
  • Pillow
  • First Aid Kit/ Medicine Kit
  • Toys
Staff
  • One women ‘Teacher cum Warden’ who is Government recognized qualification  holder & training in childcare
  • One woman ‘Creche Attender’ who is qualified or trained in midwifery
  • One woman ‘Ayah’ for every 10/15 children

Source: Kindly click here to access the notification

RBI on Processing of e-mandate on cards for recurring transactions

Reserve Bank of India (“RBI”) vide its notification on August 21 2019 has permitted the processing of e-mandate on cards for recurring transactions (“Notification”). RBI has put in place various safety measures for card payments including the requirement of additional factor of authentication (AFA), especially for ‘card-not-present’ transactions. With this view in mind RBI earlier in 2011 notified that recurring transactions based on the standing instruction given to the merchant was to be brought within the ambit of AFA.

Keeping abreast with the changing payment needs RBI has permitted e-mandate on cards for recurring transactions with AFA during e-mandate registration, modification and revocation, and also for the first transaction and subsequent successive transactions.

APPLICABILITY:

This Notification shall become effective from 1st September 2019, and shall be applicable to all types of cards i.e. debit, credit, pre-paid instruments (PPI) including wallets. Further, the e-mandate arrangement shall be only for recurring transactions and not for a one-time payment. Kindly note that the maximum limit for a transaction under this arrangement is INR2000/- and no charges are levied on the cardholder for availing the e-mandate facility.

CONDITIONS TO BE FULFILLED FOR PROCESSING E-MANDATE ON CARDS FOR RECURRING TRANSACTIONS:

  1. Registration of card details for e-mandate– The cardholder who wishes to opt for the e-mandating facility shall undertake a one-time registration with AFA validation by the issuer. Further, the registration shall only be complete after all the requisite information is obtained by the issuer. Kindly note that the cardholder at the time of registration is given an option to provide the e-mandate for either a pre-specified value of recurring transactions or a variable value; in case of the latter, the cardholder shall clearly specify the maximum value of the recurring transaction (currently INR2000/- per transaction).
  2. Processing of the first transaction and subsequent recurring transactions- AFA validation shall be performed for processing the first transaction in the e-mandate based recurring transaction. Kindly note the AFA validation may be combined if the first transaction is being performed along with the registration of e-mandate. Further, any subsequent recurring transaction shall be only performed for those cards which have been successfully registered and for which the first transaction has been authenticated and authorised. Kindly note that the subsequent transitions may be performed without AFA.
  3. Pre-transaction notification- To mitigate the risk the issuer shall send a pre-transaction notification at least 24 hours to the cardholder. It is at the time of registering for the e-mandate on the card, the cardholder shall be given the option for receiving the notification through SMS, email, etc. In addition, the cardholder is also given a facility to change the mode of receiving the notification. Kindly note that the pre-transaction notification shall inform the cardholder about the name of the merchant, transaction amount, date/time of debit, reference number, and reason for debit. The same information shall be notified for a post-transaction notification. Finally, at the time of a receipt of a pre-transaction notification, the cardholder shall be provided with an option to opt-out of that particular transaction or the e-mandate. Any such opt-out shall require an AFA validation by the issuer.
  4. Withdrawal of e-mandate- The cardholder shall be given an online facility to withdraw any e-mandate at any point of time by the issuer. However, the exception to this will be a pipeline transaction for which a pre-transaction notification has been communicated to the cardholder and the debit has not been communicated to the cardholder. After an e-mandate is withdrawn the acquirer shall ensure that the merchants on-boarded by them delete all the details including the payment instrument information.
  5. Dispute resolution and grievance redressal- The issuer shall put in place an appropriate redress system with a clear turnaround time for lodging and resolving the grievances put forward by the cardholder. Further, the card network shall make arrangements to separately identify chargebacks and disputes in respect of e-mandates based recurring payments. Also, it is the responsibility of the acquired to ensure that the merchants fulfil the compliance as laid down in this Notification.

Source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11668&Mode=0