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ipr.THMB.jpg Enhancing competitiveness in SMEs through IPR protection

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India set up a WTO compatible Intellectual Property Right (IPR) regime
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Writuparna Kakati | 02 Apr, 2008
Today Small and Medium Enterprises (SMEs) face the challenge of extracting the latent value of their Intellectual Property (IP) and using it effectively in their business strategy. Companies that dedicate time and resources to protecting their intellectual property assets can increase their competitiveness in a variety of ways.

The World Intellectual Property Organization (WIPO) is also of the opinion that Intellectual property protection helps in:
  • preventing competitors from copying or closely imitating a company's products or services
  • avoiding wasteful investment in research and development (R&D) and marketing
  • creating a corporate identity through a trademark and branding strategy
  • negotiating licensing, franchising or other IP-based contractual agreements
  • increasing the market value of the company
  • acquiring venture capital and enhancing access to finance
  • obtaining access to new markets

IPR - an overview:
SMEs are often the driving force behind innovations. Their innovative and creative capacity, however, is not always fully exploited as many SMEs are not aware of the intellectual property system or the protection it can provide for their inventions, brands, and designs.

Here's is what you should know about Intellectual Property Rights (IPR):

The output of any intellectual activity which has commercial value and can be bough or sold are legitimately described as intellectual property.

As a property, it must be adequately protected. In law, Intellectual property right is the umbrella term for various legal entitlements the holder of which can exercise various exclusive rights.

These rights are legally protected enabling owners of the intellectual property to exert monopoly control over the exploitation of these rights. The owners may give the right to others to exploit their properties for a fixed period or an indefinite time.

In the world of business, Intellectual property rights are used with the attempt to help the owners of intellectual property fetch adequate commercial value for their efforts in the market. The government of a country gives these rights to a creator citizen of intellectual property which may be in different forms like Copyrights, Patents, Trade Marks, Industrial Designs, etc.

But Intellectual Property rights vary from county to country, and these differences may become a source of tension in international economic relations. To find a solution to this problem, it is necessary to have some internationally-agreed trade rules for intellectual property rights. The WTO's TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement is an significant attempt to to bring IPR under common international rules. As per WTO's TRIPS, all the member countries are to abide by some mutually negotiated norms and standards in relation to Intellectual Property Rights.

Intellectual property rights in India
Our country has also set up a WTO compatible Intellectual Property Right (IPR) regime. In India, the Controller General of Patents, Designs and Trade Marks (CGPDTM) under the Ministry of Commerce and Industry supervises the functioning of the following offices to administers all matters relating to Intellectual Property Rights-  

  • The Patent Office (including Designs Wing)
  • The Patent Information System (PIS)
  • The Trade Marks Registry (TMR)
  • The Geographical Indications Registry (GIR.

Besides the above mentioned offices, a Copyright Office (under the Department of Education of the Ministry of Human Resource Development) has been set up to look after copyright related issues, Protection of Plant Varieties and Farmers' Rights Authority (under the Ministry of Agriculture) is established to administer IPR policies relating to plant varieties, while the IPR issues related to layout design of integrated circuits are taken care of by the Department of Information Technology (under the Ministry of Information Technology).
 
Types of intellectual property:

1. Copyrights: Copyright acts protect a creator from having his creation (literary work, dramatic work, musical work, artistic work, cinematographic film, sound recording, etc.) copied or exploited by someone without the creator's permission.

2. Trade marks: In simple term, a trade mark (or brand name) is nothing but  a visual symbol or sign such as signature, name, device, label, numerals, etc. which distinguishes the creator's goods or services or other articles from other similar goods or services created by others.  

3. Patents: Patents allow the inventor of an invention to exert monopoly of the invention and thus to fetch adequate commercial value for a period of 20 years. To gain patent, an invention must be new, inventive and capable of industrial application (the are some excluded categories such as mathematical algorithm, methods of diagnosis, etc.).    

4. Geographical indications: According to Geographical Indication of Goods (Registration and Protection) Act,1999, the term 'geographical indication' (in relation to goods) means "an indication which identifies such goods as agricultural goods, natural goods or manufactured goods as originating, or manufactured in the territory of a country, or a region or locality in that territory, where a given quality, reputation or other characteristic of such goods is essentially attributable to its geographical origin and in case where such goods are manufactured goods, one of the activities of either the production or of processing or preparation of the goods concerned takes place in such territory, region or locality, as the case may be". Geographical indication does not necessarily say where the product was made but it identifies a product's special characteristics.

5. Industrial designs: In India, the Designs Act,2000 has been enacted to regulate the registration and protection of new and original industrial designs. This act defines the term 'design' as "only the features of shape, configuration, pattern, ornament or composition of lines or colours applied to any article whether in two dimensional or three dimensional or in both forms, by any industrial process or means, whether manual, mechanical or chemical, separate or combined, which in the finished article appeal to and are judged solely by the eye; but does not include any mode or principle of construction or anything which is in substance a mere mechanical device, and does not include any trade mark as defined in the Trade and Merchandise Marks Act, 1958 or property mark as defined in the Indian Penal Code or any artistic work as defined in the Copyright Act, 1957". 

6. Layout designs of integrated circuits: The IPR rights relating to Layout Design of Integrated Circuits give protection against copying of original designs. In the Semi-Conductor Integrated Circuits Layout-Design Act,2000, the term 'design' is defined as "a layout of transistors and other circuitry elements and includes lead wires connecting such elements and expressed in any manner in a semiconductor integrated circuit" 

7. Undisclosed information (Trade secrets or know hows): Trade Secrets or Know Hows are confidential information which may be commercially or technically valuable, and therefore, they need protection. These kind of information includes technical data, process of manufacture, techniques, training material, list of customers, a new invention for which a patent application has not yet been filed, etc. In India, there is no specific legislation to regulate the protection of Trade Secrets or Know Hows. All matters related to this IPR are generally covered under the Contract Act, 1872.  

8. Plant varieties: The Plant Varieties and Farmers' Right Act,2001 defines the term 'variety' (in relation to plant) as "a plant grouping except micro organism within a single botanical taxon of the lowest known rank, which can be:- (i) defined by the expression of the characteristics resulting from a given genotype of that plant grouping; (ii) distinguished from any other plant grouping by expression of at least one of the said characteristics; and (iii) considered as a unit with regard to its suitability for being propagated, which remains unchanged after such propagation; and includes propagating material of such variety, extant variety, transgenic variety, farmers' variety and essentially derived variety". This act has been enacted to regulate the protection of IPR related to plant varieties.  

Insufficient information on the relevance of intellectual property rights in day-to-day business, high costs associated with obtaining and enforcing IP rights, perceptions that the intellectual property rights system is too cumbersome and time-consuming are among the reasons why many SMEs are sometimes slow to protect their intellectual property assets.

However considering the current market situations SMEs have to overcome these obstacles and take better advantage of the IP system. Given the importance of SMEs to the economies of all nations effective use of IPR by SMEs is a key factor in ongoing economic development. It is beneficial for both the business and Indian economy alike.

 
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