"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.

"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.SrilakshmiDr N.SrilakshmiHead C-LAIMS & IPFC for MSMEs,ni-msmeHead C-LAIMS & IPFC for MSMEs,ni-msme

An UK Regd /Approved Lead Auditor & An UK Regd /Approved Lead Auditor & Tutor: ISO Tutor: ISO

9001:2000,14001:2004,OHSAS,HACCP9001:2000,14001:2004,OHSAS,HACCP,TS16949, TQM/CMM/,TS16949, TQM/CMM/

Six sigma/NAAC(UGC) Assessor, ni-msmeSix sigma/NAAC(UGC) Assessor, ni-msmecell: 9391010682; email: [email protected]/[email protected]: 9391010682; email: [email protected]/[email protected]

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• 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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• 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.

Contd..

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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.

–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. 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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Contd..IPR for MSMEs

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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• 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

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.

Contd..

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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.

• -6-• Realizing 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

THANQ