Can patent really protect - SMEs still not aware

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Saurabh Gupta | 01 May, 2009
Indian SMEs (Small and Medium Enterprises) are still not aware about the dos and don'ts of Intellectual Property Rights (IPR) & Patent. SMEs must know that how imperative is IPR and Patent are for their business health.

The only way to really protect your product or idea, other than keeping it a secret, is to obtain a patent. There really isn't any other way to do it. None of the other IP rights, copyright and trademark, protect the underlying ideas, only expressions of the idea (in the case of copyright) or only that part used to identify a product or service in commerce (trademark).

"From SMEs' point of view, patent is still a gray area and so SMEs are needed to be sensitized," said NN Prasad, Joint Secretary, Department of Industrial Policy and Promotion, Ministry of Commerce and industry, during a seminar on IPR in New Delhi.

"As we all know that, necessity is the mother of invention. Mother is the invention of need. Media reports that invention intensely is much larger in SMEs than the big companies. So, no matter whether a company is big or small, good ideas are needed to be protected," said Madhav Lal, Additional Secretory and Development Commissioner of MSME.

"SMEs are not using patent as an IP tool because of lack of resources and reliability," he added.

If an organization or individual does not get the patent rights over his product/ services and introduces his product/ process based on his invention in the market, anybody can copy his invention and exploit it commercially. To debar others from using, selling or working out his product/ services (invention), the inventor must go for getting a patent.

A patent is an exclusive monopoly granted by the government to an inventor over his invention for limited period of time. An inventor or any other person/ company assigned by the inventor can obtain the patent over his invention. A patent is obtained by the inventor or his assignee by filing an application with the patent office in the stipulated forms as required by the patent act of that country.

A patent is valid for 20 years from the filing date of the patent (or earliest effective filing date if the particular patent is a continuation or CIP or divisional patent).

"IPR gives SMEs the essential lifeline," said Gopi Kumar Bulusu, CEO, Sankhya Technologies Private Limited.

"Piracy of software is also a big issue before the Indian IT industry and IP laws can play a vital role in the protection of these software but still SMEs don't care due to the major factor of nonavailability of liquidity. There are almost 34,000 IT companies in India and 80 percent of these IT companies are SMEs," said Keshav Dhakad, Chairman, BSA India Committee.

"Another way to protect your product is by making the recipe, formula, practice, process, design, instrument, pattern of your product a trade secret. SMEs should look at trade secret method," said T.R. Rao, Director, Sustainable Technologies & Environmental Projects Pvt. Ltd.

One can divulge a secret to a company under a nondisclosure agreement, but this doesn't protect the idea, it can still be stolen, it just creates a contractual remedy if the idea is stolen. And it certainly doesn't protect you if someone else comes up with the same idea (or nearly the same idea) on their own, only a patent can do that.

A secret can be kept secret forever, as long as it can be kept secret. In case if somebody get the same idea or formula of your product/ services and make it patent then he will get more protection from the law. Although the patent law is not uniform globally, Indian IP law is the strictest in the world.

According to the Patents (Amendment) Act 2005, which was passed by the Parliament and came into force on April 20, 1972 along with Patent Rules 1972, patent system in India is administered under the superintendence of the Controller General of Patents, Designs, Trademarks and Geographical Indications.

Infringement of a patent is the violation of the exclusive rights of the patentee. Determination of infringement depends on the scope of exclusive rights of the patentee, whether the infringerâs acts amount to making, using, selling or distributing a product or using a method and if in fact the acts amount to an infringement. The burden of proof is on the patent owner for proving infringement.

"Copying is stealing. It's important that companies are educated about the advantages of patenting their technology," Dominic Keating, secretary for intellectual property (IP) told to a news agency.

"This is a very good time for Indian companies to apply for patents," he said.

Small and medium enterprises (SMEs) should also come forward to protect their inventions and technologies through the patent system. "It gives them a competitive edge and it's the way to the future," Keating said.

Arpinder Singh, executive director of global consulting firm KPMG, shared similar views: "Awareness needs to be created about the patenting advantages. Companies, especially SMEs, should monetise this opportunity."

He added that the government should step in and create an IP (intellectual property) section to help the SME sector, as small enterprises may find its difficult to raise enough funds to apply for patents.

According to Deepak Maheshwari, Microsoft director (legal and corporate affairs), patent ensures more transparency and healthy competition.

"Patent brings in efficiency, consistency and self-check. It encourages healthy competition and overall growth," Maheshwari said.

File a patent application before any disclosure to anyone else. This provides the best protections (longest patent term, etc.), but requires that the patent application be drafted and filed up front, before you learn if anyone is interested in your idea.

"The Patents Act 2005 is very big to explain but to beat these challenges SMEs need to be more IPR savvy and need to invest more in R&D. SMEs are required to set aside their budget for IP protection. We can also encourage inventions among the employees by rewarding them," said Dhakad.