SMEs and intellectual property rights: Long-awaited pairing to improve legal values, boost employment

Published: November 4, 2019 6:31:07 PM

With many MSMEs operating in overlapping and crowded markets, the need for competitive advantages and unique selling propositions has long existed. IPRs provide just that, especially for businesses that operate in the manufacturing or engineering space.

For small businesses, concepts like IPR have often been beyond their means and dreams.

MSMEs in developing countries like India typically focus on protecting tangible assets such as land or machinery and leave the domain of intellectual property rights (IPR) to larger enterprises. This propensity is set to change with the introduction of the L2Pro platform, launched in the second week of October 2019. India’s base of more than 63 million MSMEs will now be able to utilise this e-learning platform that is designed to guide them on IPR and how they can leverage it to expand their business operations.

For small businesses, concepts like IPR have often been beyond their means and dreams. Without a proper understanding of the subject, or training in it, IPR can be a daunting domain for MSMEs to operate in.

However, the newly launched L2Pro platform is looking to change that. Working on it behind the scenes is a mix of private players – Qualcomm; government-led public bodies [the Cell for IPR Promotion and Management (CIPAM) of the Department for Promotion of Industry and Internal Trade (DPIIT)]; and academia [Centre for Innovation, Intellectual Property and Competition (CIIPC) at the National Law University Delhi (NLUD)].

Through the unique contribution of each party, the L2Pro platform is designed to help MSMEs understand the IPR domain, file for copyrights and patents, and leverage IPR to enhance their business models and R&D efforts.

The Need for IPR Training For MSMEs

With many MSMEs operating in overlapping and crowded markets, the need for competitive advantages and unique selling propositions has long existed. IPRs provide just that, especially for businesses that operate in the manufacturing or engineering space. Filing patents, copyrights or trademarks can prevent other business owners from simply copying an idea, and it can help MSMEs boost their technological gains. Moreover, it can convince MSMEs that knowledge-based innovations can be just as profitable as raw material or labour-based ones, and that intellectual research is crucial for commercial success.

It also protects them from exploitation – which is the single biggest threat that Indian MSMEs have had to deal with. Left at the mercy of notorious loan sharks, or vulnerable to larger enterprises copying a unique idea, MSMEs have often had to deal with lost business opportunities, merely because they did not have the awareness or the expertise to file for patents, copyrights or trademarks for their products.

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With the right IPR training, such situations can be avoided. Platforms like L2Pro can put MSMEs in charge of their destiny and give them ownership of their unique ideas or products. Every small contribution made by IP training to innovation or competitiveness can benefit the overall MSME sector in the long run. Thus, this is an area that needs suitable attention and resources. The coming together of the private, public and academic sectors for this cause is a good step in the right direction, and its long-term impact is sure to be positive.

In Sync with Global IPR Policies

Indeed, even in a global context, it is essential to protect a country’s indigenous and small-scale industries. They provide employment to a large number of people and contribute significantly to a nation’s national output. However, they remain vulnerable to competitors – big and small – and thus need all the protection they can get. IPR training and platforms are a great way to offer them such protection and enable them to protect their investments and business ideas.

All 164 members of the World Trade Organisation (WTO) are also in agreement with basic IPR protection systems being an essential requirement. This is significant in an international trading context as well. Research indicates that IP-intensive industries generate 72 per cent more value-per-employee than non-IP-intensive industries globally. There is universal agreement that good IPR policies lead to more jobs, more productivity and more skills. The L2Pro platform has already seen success in developed countries such as the UK, Germany, Italy and France.

Roadmap for the Future

However, effective IPR training does not simply constitute educating MSMEs about trademarks, patents and copyrights. It also demands entrepreneurial training on how to commercialise and market innovations, how to monitor and enforce IPR, how to collaborate with other MSMEs, and how to create contracts. Without such holistic training in the IPR space, MSMEs will always struggle to make sense of IPR and how it can benefit them.

The Indian government is also recognizing the need for better IPR training and development for MSMEs. In September 2019, it announced reductions in fees of more than 50 per cent for various rights like patents and designs for MSMEs to promote innovation. With the right support from regulatory bodies, MSMEs can hope to make the most of fast IP applications, streamlining of procedures and augmentation of manpower in the future. The intention is for MSMEs to begin viewing intellectual property as assets. This can help MSMEs include IP in their balance sheets, get better investment and interest rates, and control their destiny.

This is why launches such as L2Pro are a welcome measure in the MSME domain. With its 11 modules ranging from basic to advanced levels and varied multimedia offerings and a mobile app, the platform is poised to transform IPR understanding for MSMEs. It will not only improve the legal and ethical values of the India MSME space but also strengthen the employment and national output figures of the MSME sector in the long run.

(R Narayan is the Senior Vice President at FICCI-CMSME and Founder & CEO at Power2SME. Views expressed are the author’s own.)

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