Intellectual Property – Importance and Benefits for Enterprises and SMEs
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Intellectual Property (IP)and its value is often not adequately appreciated, and its potential for providing opportunities for future growth and profit is widely underestimated by enterprises in India. IP should rather be seen as a powerful tool for economic development, instead of an obscure legal concept. If used properly, IP can be instrumental in keeping the competitive advantage for enterprises. IP can help protect the innovative ideas and concepts from theft by competitors. Also, IP can help in enhancing the overall value or worth of the company in the eyes of the investors and financial institutions.
Especially SMEs who are often regarded as the backbone of a developing country like India, as they generate employment opportunities far more than larger corporates as a whole. According to the estimates, the number of registered & unregistered SMEs operating in India are roughly 42 million. Collectively, they provide employment to roughly 100 million people, which is roughly 40% of total workforce. Due to these reasons it is important for these companies to invest in building their own IP for sustenance and growth.
Importance of Patents and Trademark
IP is sometimes confused with Trademarks and Patents – it is true that Trademarks and Patents are two classes of IP, there are other lesser known classes such as Geographical Indication – which serve to protect enterprises within a geographical area, by preventing copying of their products by competitors outside the geographical area. Another class of IP is trade secret, which is also protection under Indian Legal system. If a competitor gains a trade secret of a company using unlawful or wrongful methods, the company can initiate a litigation against the competitor for recovery of costs. It should however, be noted that the trade secret should be well guarded by the company in order to be accorded protection. A classical example of a well-kept trade secret is the Pepsi composition – everyone knows that the composition includes Water, Sugar, Colour, Caffeine and CO2, but how do they mix them – in what order and amount is a trade secret.
Depending on the nature of business enterprise should carefully craft its IP strategy i.e. by choosing the right combination of patents, trademarks, trade secrets and/or geographical indication, every company can create a strong value and position for its services/products in the market to gain competitive edge. Alot of awareness programmes proposed on IPR are held in various parts of the country providing an overview of IPR issues related to patents, copyrights, trademarks, industrial designs and geographical indications.
Advantages to SMEs
Various institutions are working to build awareness among enterprises and SMEs in India. National Institute of Intellectual Property Management(NIIPM) provides training, education and research in the field of Intellectual Property Rights. It is catering to the needs of the four IP types – patents, designs, trademarks and geographical indications. The Patent Information System(PIS) established by the Government of India in 1980, maintains a collection of patent specifications and patent related literature on a worldwide basis used by various government organisations, industries and other users. Other institutions namely, National Intellectual Property organisation (NIPO), National Manufacturing Competitiveness Council (NMCC), National Manufacturing Competitiveness Council (NMCC), Confederation of Indian Industry (CII) are also working on providing knowledge and help in economic development of enterprises and SMEs. In 2017, Government of India introduced the India Innovation Index, which ranks the states on degree of innovation.
The Government also revealed an Intellectual Property Rights Scheme (IPR) awareness action plan in the same year – a key step furthering the implementation of the 2016 National IPR Policy. The enterprises can take full advantage of such programs in carving out their IP strategy.