NEW DELHI: Time and again, it has been proved that a major part of the Indian economy is pushed by growth of the small and medium enterprises (SMEs). Many of these small units in India are functioning on the ideas of products manufactured, services offered and also the designs developed. These SMEs are proving their mettle at the global platform basis these. This sector has emerged as a major source for employment generator in the past few years. As self-reliance is becoming a dominant factor among the developing economies, SMEs are facing hurdles such as decreasing opportunities and stiff competition to maintain their foothold. Among the key issues, the one causing worry is Intellectual Property Rights (IPR) and SMEs' trade secrets. Analysts believe that intellectual property (IP) is an efficient and important tool which can enhance the growth for Indian SMEs significantly.
IPR are a particular set of exclusive rights, which helps protect the innovative activity behind any new products, designs and commercial activity. These rights have potential to bring progress by offering support to creativity. IPR owners are given certain benefits when commercially exploited. IPR are governed by provisions of related legislations and can be further classified as trademark, patent, copyright, industrial design and geographical indications. Moreover, IPR can be divided in two broad categories - industrial property and copyrights. The industrial property comprises of inventions, industrial designs, trademarks, and geographical indications, while copyrights consist of rights related to the literary, artistic, musical works etc.
IPR norms in India
On January 1, 1995 the Trade Related Aspects of Intellectual Property Rights (TRIPS) became effective in the country. Moreover, the TRIPS took off in India with provisions for protection and enforcement of IPR with minimum standards. It was also enacted in India with the aim to promote IPR and remove all possible hurdles from global trade.
Importance of IPR for Indian SMEs
IPR can help the Indian entrepreneurs prepare better for competition from their global peers. It assists them to develop their business and competitive management strategy. With the adoption of unique trademarks and brand names, every trader enjoys the right to develop a robust recall value and also create market for his product. Earlier, just tangible assets were considered as significant in regard to value addition to a business. But, now-a-days, intangible assets, such as Intellectual Capital (IC), innovation and technologies are also considered important for value addition to any business. It is believed that by purchasing intangible assets like patents in key technologies, businesses witness strong growth. Securing IPR helps promote the idea of innovation among the small units and also offers opportunity to bag profit.
Which IPs' SMEs can purchase to enhance growth and value
● Buying intellectual property, SMEs can makes sure that IP becomes a valuable asset for their business.
● Innovative processes’ patent is useful and can be used for the production of new products.
● In regard to artistic work and computer softwares, copyrights are best suited.
● Trademarks help form a distinctive brand name along with recall value.
● With an aim to save the creative packaging and textile designs, industrial designs for protection can be used.
● For commercial use, trade secrets are important.
How IPR can effect businesses
● IPR can generate greater revenue in businesses via assignment, licensing, sale. It has potential to start private investments, specialized bank loans, venture capitalists, which will help the SMEs in long run.
● Intangible assets prove beneficial for SMEs at the time of acquisition and/or at a merger opportunity. It helps in Joint Ventures (JV) also.
● Although SMEs make up close to 90% of the overall industrial enterprises, the Indian SMEs face problems such as garnering IP and using it fruitfully. These issues come up often in the absence of awareness, financial constraints, poor technical knowledge and absence of competitive strategy.
Centre adopting steps to promote IPR usage by SMEs
It is believed that Indian MSMEs are not properly aware about various advantages of IPR and this is also one of the reasons, why they are not intelligently used by these units. National Manufacturing Competitive Council (NMCC) unveiled a national campaign for strengthening investment in IP. It helps create awareness and also encourage participation in research & technology, strengthening brand strategy using IPR tools, promotion of innovation via shared patenting costs. NMCC has carried out pilot studies on SME clusters as well. NMCC is a forum meant to energise and sustain growth of Indian manufacturing sector, which proposed five-year National Manufacturing Competitiveness Programme (NMCP) for the Indian SMEs.
Indian SMEs often fail to take necessary action to make their business profitable due to different constraints. In this regard, central government has been adopting various measures to raise their (SMEs) competitiveness. The small units can ensure sufficient legal protection and security for their intellectual property with proper investment in developing trademarks, copyrights for protection of brands, artistic work and softwares. As generating 'awareness about the company, business, product or service' is slowly becoming the norm of the day, the SMEs should aim to adopt IPR in their businesses.