Recently the Engineering Export Promotion Council Chairman, Ravi Seghal, emphasized on the need for the adoption of Intellectual Property rights to protect  innovative ideas and strategies of Micro, Small and Medium enterprises (MSME’s) in a highly competitive global economy. His observation verbatim, “the Micro, Small and Medium enterprises are important assets to the country’s economy; however, they lose out when it comes to the protection and management of their creation”.

As an MSME, it is possible that the business attracts certain elements of Intellectual property, be it  Trademark,  Designs or Trade secrets . Certain IPs are more relevant than others from the perspective of MSMEs.

For instance, trademarks can be a vital IP asset for an MSME. A trademarks is a distinctive element that help in the identification of the goods and services of the person so producing it. It gives a unique identity to the producer/service provider, as the case maybe and the same can, in the long run and after gaining credibility and name through the products/services, earn financial leverage to an MSME. There are numerous MSMEs whose business models are based on designs; for example, a textile business that comes up with new, original and unique prints which are not otherwise available in the market. Protection of this IP as “design” is imperative which all the more emphasizes the need to understand and implement IP and IP protection. .

Sources of IP awareness

IP, having become an integral aspect for businesses, especially MSMEs, there are various institutions like National Institute for Micro, Small and medium Enterprises, National Institute of Intellectual Property Management, The Intellectual Property Facilitation (IPFC), Confederation of Indian Industry (CII) that provide  IP awareness programs . These institutions provide interactive seminars, workshops, short-term and long-term training programs, IP facilitation centers, which would familiarize MSMEs about IP.

The need for a proper IP framework

Since the emergence of new products, brands and creative concepts have become a daily thing and is the result of constant human innovation usually originating from  MSME’s, it is vital for MSMEs to be aware of the protection available to these innovations, for   otherwise there is a chance that they would lose the same at the hands of  bigger players in the market who will not run shy from exploiting them as they are more  familiar with the concept of Intellectual property and its benefits. Thus, having a proper IP management framework is not only crucial but beneficial to MSMEs.

Having a proper IP management framework not only allows for MSME’S to protect their innovation/invention/work but also enhances their prospects in the eyes of a potential investor.  This is a very crucial point of consideration because when an acquisition or a merger takes place, intellectual property can raise the value of the enterprise allowing it to substantially profit out of such transactions. The strategic utilization of IP assets can, therefore, enhance the competitiveness of MSMEs, which is why it is important for MSMEs to understand the significance of protecting Intellectual property available to them.  Like physical assets, IP assets if acquired, must be maintained, valued and accounted for.

The present scenario

The MSME’s, contributing to around 45 per cent of the overall shipments from India and around 50 per cent of the manufacturing sector are considered a powerful engine for the growth of the economy, Hence there is a pressing need for MSMEs to be intellectual property privy. There are still struggles due to factors like high costs associated with obtaining and enforcing IP rights, perceptions that the IP system is complex and can only be understood by persons who possess the required skill. However, this scenario is evolving with many MSMEs evincing interest in IP and understanding the significance of IP. Hopefully it will not be long before a larger chunk of the MSMEs appreciate IP and its inextricability from their businesses.