Alliance Center for
Intellectual Property Rights
IMPORTANCE OF IP FOR GROWING MSE IN INDIAN MARKETS
June 1, 2024
*Ms. Bhavana Tewari
INTRODUCTION
Intellectual Property Rights refers to the legal privileges given to people in exchange for their original ideas and innovations. Different types of Intellectual Property Rights include Patent, Copyright, Trademark, Trade Secret, Industrial Design. In Indian markets, intellectual property is essential to the expansion and prosperity of micro and small businesses. IPR applies to certain components and all creative conceptions. Under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 it states that Micro Enterprises include investment in plant and machinery or equipment that does not exceed Rs 1 Crore and the turnover does not exceed Rs 5 Crore. The Small Enterprises include investment in plant and machinery or equipment that does not exceed Rs 10 crore and turnover does not exceed Rs 50 crore. This kind of enterprise often plays a vital role in fostering economic growth. Sometimes when they face challenges, IP protection emerges for the success and growth of MSEs.
In this competitive world where the market is diverse, the IP not only protects the ideas of MSEs but also enhances marketability. Through this MSE can attract investment, maintain loyalty, and promote innovation and investment.
As there is more emphasis on the development of the MSE Sector, IP rights must get recognized so that creativity and innovation can thrive.
ROLE OF MSE IN IP LAW
MSMEs give these companies a competitive edge by safeguarding their original concepts, one-of-a-kind goods, and original content. MSEs can preserve a distinct market position by preventing others from replicating or copying their goods or services by safeguarding their intellectual property rights. Furthermore, MSEs can attract investors and obtain funds for additional research and development under intellectual property rights. Furthermore, with confidence that their inventions and concepts will be protected, MSEs are encouraged to invest in innovation and technology by robust intellectual property protections. Consequently, this encourages economic expansion and a culture of creativity within the MSE industry. Additionally, MSEs can grow and penetrate new markets by using intellectual property. MSEs can confidently enter into license agreements or develop collaborations with larger companies, gaining access to new technology, distribution networks, and resources, by safeguarding their intellectual property. Furthermore, intellectual property rights can also help MSEs in India secure financing and loans from banks and financial institutions. Therefore, intellectual property is essential for the growth and competitiveness of micro and small enterprises in the Indian market. An announcement about the creation of the "National Manufacturing Competitiveness Council (NMCC)" and the National Manufacturing Competitiveness Programme (NMCP) to improve the competitiveness of the MSMEs sector was made in the 2005–06 Budget.
There are some other important benefits in which IPR tries to work as a catalyst for their growth. It encourages innovation and creativity within the MSMEs. Along with that, trying to generate new ideas or products, they are motivated to invest in research and development. By this method, the MSMEs can differentiate themselves in the market. Trademarks will help them build strong brand recognition and establish a market presence. In essence, it will help them in enhancing their reputation and create a competitive edge. They can even commercialize their intellectual assets through Patents they can license their inventions or enter some kind of partnerships with bigger companies which in the end foster business growth. This thus allows MSMEs to monetize their artistic creation through licensing or sale.
INCREASING VALUE OF MSMEs AND THEIR PRODUCTS/ SERVICES
When a company has IPR protection, it builds confidence among investors and potential partners. This shows that the intellectual property of MSMEs is legally protected which eventually reduces the risk of infringement and increases the value of business. Secondly, it also increases trust and loyalty among the customers. Through this (IPR), the consumers recognize that a particular brand has its intellectual property, it increases trust or loyalty among customers as it shows that the product is genuine, reliable, and of the highest quality. This is considered to be a positive perception which in the end leads to an increase in sales and market share for MSMEs. Talking about facilities provided to the government like subsidies, and support programs. Many governmental agencies and funding bodies prioritize businesses that have secured IPR, recognizing their potential for economic growth, job creation, and technological advancement. This can provide MSMEs with additional resources and opportunities for expansion.
To enter a new market, it must broaden its reach by utilizing IPR. Through IPR protection, it gives a competitive edge in foreign markets. It can protect them from stealing or abusing their ideas or brand identification by rival markets. MSMEs can also expand themselves by offering licenses or franchises to local partners.
CONCLUSION
MSMEs are an essential component of the Indian economy, making up a sizeable portion of the GDP and acting as the foundation of numerous economies across the globe. MSMEs need intellectual property rights (IPR) since it gives them a competitive and technological advantage. They support their company's growth into new markets, organizational identity establishment, and prevention against competitors replicating their goods and services. Promoting innovation in the MSME sector is crucial in the post-COVID-19 age. IPR for MSMEs can be more effective when it is used regularly. To emphasize the value of IPR, those who use it should be rewarded. IPRs are viewed as catalysts for technological, social, and economic advancement because they foster innovation, protect intellectual property, and make it easier to create new technologies. MSMEs need help and education to use resources efficiently and maintain their competitiveness in the global market. To create an environment that is favorable to MSME competitiveness, governments schemes or programs should be established in a way to create or build an environment favourable to them. Meeting the demands of the global market and guaranteeing commitment to international quality standards should be the main goals of policy. To improve its competitiveness, India should join global innovation networks and partner with corporations, universities, and research centers.
Many MSMEs are cautious about adopting IPR as a business strategy despite the increased competition. MSMEs will become more effective in the global economy if they are encouraged the use of Intellectual Property Rights.
SUGGESTION
- Organizing workshops or webinars to educate people about the importance of MSEs on IP protection.
- Raising awareness about the government programs that support IP protection like subsidies or filing patents for IP enforcement.
- Enhancing market value for the MSE so that people could get some benefit out of it.
REFERENCES
- https://www.linkedin.com/pulse/importance-intellectual-property-rights/
- https://www.researchgate.net/publication/362179391_Intellectual_Property_Rights_IPRs_and_its_role_in_propelling_the_growth_of_the_MSME_sector
- https://ijlljs.in/intellectual-property-rights-and-small-medium-enterprises-smes/
- Souleima El Achkar, Micro and Small Enterprises: engines of job creation, INTERNATIONAL LABOUR ORGANISATION (June 06, 2024, 4:30 PM), https://ilostat.ilo.org/blog/micro-and-small-enterprises-engines-of-job-creation/
Author:
*Ms. Bhavana Tewari
4th Year B.A. LL.B. (Hons.) LLB Student,
Alliance School of Law, Alliance University, Bengaluru
Disclaimer: The opinions expressed in the article are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of the Alliance Centre for Intellectual Property Rights (ACIPR) and the Centre does not assume any responsibility or liability for the same.