Transcript "How IP can be leveraged as tangible assets for a MSME and the role of the Government, Publicly funded institutions, private sector.

"How IP can be leveraged as tangible assets for a MSME
and the role of the Government, Publicly funded
institutions, private sector and civil society”
Dr N.Srilakshmi
Head C-LAIMS & IPFC for MSMEs,ni-msme
An UK Regd /Approved Lead Auditor & Tutor: ISO
9001:2000,14001:2004,OHSAS,HACCP,TS16949, TQM/CMM/
Six sigma/NAAC(UGC) Assessor, ni-msme
cell: 9391010682; email: [email protected]/[email protected]
• The Government of India is fully aware of the challenges of
globalization and has taken appropriate measures for preparing
the Micro & Small Enterprises (MSEs) to meet the challenges of
liberalization and globalization. Taking a view of the whole
situation, the Government has put in place several measures to
help small enterprises to become globally competitive. These
include schemes /programmes for technology up gradation,
development of clusters of such industries, making collateral
free bank credit available up to US$ 1,25,000, creating
awareness among these industries regarding export-related
issues, etc.
The Ministry of Micro, Small & Medium
Enterprises (MSME) in India also conducting workshops on
various aspects of WTO, Anti-dumping seminars, IPR, etc. to
sensitize the MSEs entrepreneurs and other stakeholders about
the likely impact of liberalization and globalization.
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Contd..
• Although, Government policies implemented through direct
means are indeed important for providing support for SMEs,
especially in the short term, there is a limit to such
interventions in a market driven global economy.
Accordingly, indirect approach need to be followed for
supporting MSME, which, inter alia, includes putting in
place a well defined institutional and legal provisions/
mechanism to facilitate equal access to global resources
especially in the long run. Further, indirect means of
providing support to MSME for remaining competitive in this
era of liberalization and globalisation is relatively cheaper
than the direct means and compatible with market driven
economy.
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– The strategic thinking about intellectual capital that emerged during
the closing decade of the 20th century precipitated a renaissance of
economic activity that has driven the global economy to record
heights, and, with the end of 2008, back again to 2003 levels with the
world's first global recession.
– SME Entrepreneurs often know very little about IP and how it
relates to the value of a company. Also, it is not sufficiently associated
with technology and many governments and intergovernmental
development agencies have not yet profited from the full advantage
the IP perspective offers.
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Governments need to set an adequate regulatory framework for IP
strategies at the micro- and macroeconomic level. The administration
can either provide direct funds to entrepreneurs or offer tax
incentives to market participants operating in the field of early stage
technology. Singapore, Malaysia, Thailand or Indonesia are very
active in this area and can look back to a successful track record in
promoting early stage technology and an IP culture.
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– After only a year of intensive examination several Thai banks such as
the Thai SME bank have started to consider IP as collateral. Contd..
This
probably significantly decreased the cost of capital for entrepreneurs.
Firms and research centers may be able to take loans on the basis of
their IP assets rather than referring to expensive mezzanine finance that
require 20-30% of returns.
– Indonesia has launched several programs of privately managed public
venture capital funds that seek to promote early stage IP. Also, research
centers like the Technology Institute of Ban dung in Indonesia are very
active in licensing IP and forming strategic alliances and partnerships.
A recent initiative of the Institute includes a partnership with young
entrepreneurs in Indonesia that seek to add value to their business
model. Success stories of Indonesia include a small agro-business that
started using an invention of the institute and doubled its revenues.
Governments and intergovernmental development agencies in India
can also take advantage of their role in promoting private sector
initiatives. The public sector institutions in India can act as an
intermediary, can offer insurance services, provide information, offer a
platform for networks and communicate trust to the market.
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• With the liberalization and globalization of the Indian economy, the small
enterprises in India have unprecedented opportunities on the one hand, and
face serious challenges, on the other. While access to global market has
offered a host of business opportunities in the form of new
• Target markets, possibilities to exploit technological advantage, etc., the
challenges in this process have flowed mainly from their scale of operation,
technological obsolescence, and inability to access institutional credit and
intense competition in marketing.
Also, the institutional framework for obtaining IP protection needs to be
systematized .Obtaining
• IP protection must be affordable, uncomplicated and reliable. This calls for
the strengthening of the role of Government IP Facilitation Centers as
integrated approach for MSMEs as given below:
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IPR for MSMEs
Contd..
This is the era not only of the survival of the fittest, but also of the survival of
the faster
and stronger. The latter two, in marketing lexicon, are termed as ‘competitive
advantage’. One way to enable the MSMEs to gain competitive advantage is the use of
IPR which have become a precious commodity in today’s world If innovation is to play
a part in enhancing the competitiveness of MSMEs, it seems to follow that IPR must
also have a role in facilitating innovations.
Some people point to yet other range of inputs to innovation – from research and
development to entrepreneurial spirit, from product champions to tax relief – and
consider IPR of little or no importance among these inputs. They, thus, conclude that if
IPR makes only a small contribution to innovation, and also too small a contribution to
competitiveness, it is very hard to believe that IPR is crucial to gaining competitiveness
in MSME sector. Some critics of IP point at intellectual monopolies as harming the
health, preventing the progress and benefiting the concentrated interests to the detriment
of the masses and argue that the public interest is harmed by ever expansive monopolies
in the form of copyright extensions, software patents and business method patents.
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• Nonetheless, majority of the countries in the world today have a strong
IPR regime to power their industries. Therefore, it is for MSMEs in India
also to make efforts to reap the benefits accruing from IPR system.
However, most of the Indian MSMEs have not yet been able to effectively
use IPR as a business tool to increase their competitiveness in the national
and global markets. Nonetheless, there are some quite compelling reasons
why IPR must figure high on India’s economic development as
mentioned below:
• Firstly, in order to make the Indian economy knowledge-based to the
maximum extent possible, and build up India’s international
competitiveness, more on the basis of knowledge than on the basis of cheap
labor and raw materials, it is imperative for India to encourage,
accumulate and protect its IPR.
• Secondly, an effective and enabling administrative and legal regime for
IPR bestows confidence to the IP owner and creator, allowing them to
manage and eventually create the crucial link between research
(innovation) and its economic applications.
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Contd..
Thirdly, an effective IPR protection system to use IPR by MSMEs? The
process of exploiting the IPR by MSMEs for their commercial competitive
advantages involves two major steps:
Recognition of one’s rights over innovated tools/machinery developed or
other products of intellect;
The registration of patents, industrial designs, trade marks and other
available rights over the same.The protection of IPR helps increase the
competitiveness of MSMEs in a variety of ways. It 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 trade mark 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
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Contd..
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Efforts that need to help MSMEs to exploit the benefits of IPR:
With the objective of helping the MSMEs to utilize their IP assets more fully in their
business activities, the World Intellectual Property Organization (WIPO) is
promoting series workshops/trainers training programmes to assist SME
entrepreneurs in increasing awareness and use of the IP system across the globe.
Acknowledging the role of IPR system in powering/strengthening the MSMEs in
India, the Government of India has also enacted the MSMED Act, 2006 to, inter alias,
address (I) the long-standing demand of the MSME sector, and (ii) the developmental
concerns of what is globally known as “small and medium enterprises.” In the recent
times, several other steps have been taken to address MSME growth through, among
other things, IPR system. The major initiatives include, but not confine to the
following only:
At state level
Several state governments are offering a number of incentives and assistance schemes
to encourage the MSMEs to get their IP registered. These schemes provide
reimbursement of 50 per cent of the expenses incurred towards registration of
Intellectual Property, subject to a ceiling of Rs.5 lakh.
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At national level
The Department of Information Technology (IT) under the Ministry of
Communication & Information Technology provides the financial support to the
MSMEs and technology based new business entities for their patent prosecution
at international level. The said scheme provides for reimbursement of 50 per
cent of the total patent cost for filling at international level in respect of the
technological innovation in the field of Information Technology and electronics.
These government policies emphasize the increased use of public-private
partnership (PPP) to spread awareness on IPR.
-6Realizing that MSMEs also need support and guidance in IPR to help them enter
the foreign market, the MSME Ministry as a part of its National Manufacturing
Competitiveness Programme (NMCP), has initiated “Building Awareness on
IPR for MSMEs” by setting up 40 facilitation centers for making the MSMEs
aware of IPR all across the country by the end of the eleventh plan. Ten
facilitation centers have already been established in different parts of the
country spreading awareness about IPR regime among the MSMEs. The
Government of India provides 90 per cent financial support for awareness and
sensitization programmes, pilot studies with associations/clusters’ interactive
seminars and workshops, short-term and long-term training programmes, IP
facilitation centers, grant of patents and GIs registration, activities with
international agencies and contingencies expenditure.
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– The Ministry of MSME, in collaboration with several
institutions like ni-msme has set up an IP Facilitating
Centre for MSMEs. The centre aims at helping MSMEs in
promoting innovation, niche products/services. It also registers
MSMEs for filing of IP Tools in a cost effective manner backed
by the incentive schemes of Government of India.
– The centre aims to encourage and empower MSMEs to create
value addition and building assets through effective exploitation
and commercialization of IP such as Patents, Designs,
Trademarks, Industrial designs /Copyrights,protect also the trade
secrets and confidential information and GIs. The centre serves
as a repository of IP information for MSMEs in the country
establishing networks in the above areas for use and sourcing by
MSMEs and entrepreneurs.
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• Need for future actions
• Research evidence confirms that IPR has been powering MSMEs by
providing competitive advantage through technological gain. The
Government has made arrangements and provisions to enable MSMEs to
reap the maximum advantage of IPR in empowering them. However, a few
aspects need to be considered to power the MSMEs through IPR.
Accordingly, the following five key areas have been suggested to further
power the MSMEs through IPR:
• There is a need for more user-friendly information about IPR, presented in
the context of current and potential business plans.
• There is a need to involve industry associations/professional bodies in
preparing and disseminating information.
• There is a need for MSME managers to be able to assess the value of IPR for
business strategy.
• In preparing and providing information and advice to MSMEs on IPR
issues, there is a need to develop a regional database on the current uptake
of IPR by MSMEs and the sectors and types of business activity in which
these MSMEs are engaged.
• There is an urgent need to start SME Entrepreneurs’ Clubs to make SME
sector participates in the adoption of IPR tools more rigorously.
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Useful web search engines of IPR
www.espacenet.com
www.uspto.gov
http://copyright.gov.in
www.copyright-india.com
www.wipo.int
www.ces.iisc.ernet.in
www.nipoonline.com
Madrid express search from Google.com
Indian Patent office,Mumbai,chennai,Delhi & calcutta with common website:
1. www.patentoffice.nic.in (Indian Patent office,Mumbai & all branches)
2. copyright.gov.in (Indian Copyright office,Delhi)
3. www.indiaip.com Indian Trademark office,New delhi & Mumbai
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THANQ