MSMEs are one of the largest contributors to the Indian economy, however, awareness about IPRs is lacking in Indian MSMEs.

Intellectual Property Rights (IPRs) are important instruments to foster a culture of innovation. It is very much necessary to protect the IPRs which include trademarks, copyrights, patents, geographical indication and industrial designs and protecting them enhances the competitiveness of Micro, Small & Medium Enterprises (MSMEs). Conventionally enterprises relied upon physical assets for their growth but over the years, increasingly it is the IPRs which determine the growth and bottom line of the enterprises. IPRs essentially protect brands, inventions, designs, creative, and literary works from being copied and commercially exploited by third parties. They grant exclusivity to the creators or owners of IPRs to commercially exploit their works. The exclusivity and potential gains by commercial exploitation of the IPRs act as an incentive to promote innovation in various fields. IPR protection grants legal rights in favour of the rights owner who may restrain third parties for using his IPRs and also claim damages. To cite an example acquisition of Motorola by Google for $12.5 billion was primarily for its patent portfolio of about 24,500 patents. Subsequently, Google retained the patent portfolio but sold the brand and the physical assets of Motorola to Lenovo for US$ 3 billion. This clearly shows the importance of protecting IPRs.

MSME sector is one of the largest contributors to the Indian economy, however, awareness about IPRs is lacking in Indian MSMEs. The Indian government has taken various steps for promoting knowledge and facilitating IPR protection amongst MSMEs including various amendments in the laws, modernising IPR Offices and digitisation for filing applications for protecting IPRs. The central government brought a Scheme for Facilitating Start-Ups Intellectual Property Protection (SIPP) with a vision to protect and promote intellectual property rights of start-ups and thus encourage innovation and creativity among them. SIPP is envisaged to facilitate protection of Patents, Trademarks and Designs of innovative and interested start-ups. Under this scheme start-ups do not have to pay fee to the registered facilitator for the facilitation, it will be reimbursed by the central government through CGPDTM by respective IP offices according to fees schedule in SIPP scheme upon submission of claim after filing of application as per the guidelines.

Also, Intellectual Property Awareness Scheme was launched by the Cell for IPR Promotion and Management (CIPAM) in association with the Department of Industrial Policy and Promotion to build and promote IP culture in the country with the objective to enhance the awareness of IPR in the MSME Sector by conducting seminars/workshops covering topics like international filing procedures, impact of counterfeiting and piracy, promote government schemes for filing of IPRs and how to use IPR as an asset to grow business.

The protection of IPR helps increase the competitiveness of MSMEs in a variety of ways. It helps in: 1. Preventing competitors from copying or closely imitating a company’s products or services; 2. Avoiding wasteful investment in research and development (R&D) and marketing; 3.Creating a corporate identity through a trademark and branding strategy; 4. Negotiating licensing, franchising or other IP-based contractual agreements; 5. Increasing the marketing value of the company; 6. Acquiring venture capital and enhancing access to finance; 7. Obtaining access to new markets.

In India, Intellectual property plays an important role in MSMEs development and protection. India MSMEs should identify various prospects viz. how best to use an IP structure for their own payback and profits? IP may support MSMEs in every part of business development and competitive strategy which ranges from product development to product design, product marketing to service and from raising financial resources to export or mounting business abroad through IP assignments i.e. franchising and licensing. MSMEs can identify various potential such as improvement in the market values and competitiveness of MSMEs by generating an income for MSMES through IP assignments of IP protected products.

At certain point MSMEs will look for investors who will invest in their company, as every MSME will be growing its business. Here, IP helps in enhancing the value or worth of the company in the eyes of investors and financial institutions. At the time of sale or merger and acquisitions of assets IP play an important role in increasing the MSMEs value to certain level which cannot be achieved without considering IP assets. A successful IP management enables companies to recover their IP system properly and in a profitable way.

Government of India has taken significant steps to educate and encourage MSMEs to protect their IPRs. It is important that MSMEs view IPR protection as an investment to create an asset rather than an expense. Creation of an IP portfolio would not only make an enterprise more competitive but will also enhance its valuation for future merger and acquisitions.