INTELLECTUAL PROPERTY RIGHTS & MSME SECTOR

INTELLECTUAL PROPERTY RIGHTS & MSME SECTOR

Introduction

The term Intellectual property (IP) refers to a number of distinct types of creations of the mind or the intellect in the industrial, scientific, literary, and artistic fields, exclusive rights for which are protected by legal instruments and in some cases granted by the Government. The legal instruments and exclusive rights provided by the Government differ in their subject matter, extent of protection, and field of application, reflecting society’s objective to balance the interests of creators and consumers for different types of intellectual works. Common types of intellectual property rights are industrial property and copy rights and  include patents, trademarks, industrial designs, geographical indications, copyrights and trade secrets/traditional knowledge.

Patents are legal titles granting the owner the exclusive right to make commercial use of an invention.  To qualify for patent protection, inventions must be new, non-obvious, and commercially applicable.  The term of protection is usually limited to 20 years, after which the invention moves into public domain.  The patent system is one of the oldest and most traditional forms of IPRs protection. Some countries have introduced utility models (or petty patents).  The novelty criteria for utility models are less stringent and are typically granted for small, incremental innovations.  Their term of protection is far shorter than for “regular” invention patents (typically four to seven years). This type of practice is not in practice in India. Similarly, industrial designs protect the ornamental features of consumer goods such as electronics, textiles, footwear, cars, etc.  To be eligible for protection, designs must be original or new.  They are generally conferred for a period of five to fifteen years and 10 years in India.

Trademarks are words, signs, or symbols that identify a certain product or company.  They seek to offer consumers the assurance of purchasing what they intend to purchase.  Trademarks are indefinite, provided they remain in use.  Use of trademarks is of high significance in certain consumer goods industries, such as electronics, FMCG and clothing.

Grant of Trade Mark is given for 10 years with renewals after every five years.  Similar to trademarks, geographical indications identify a product either Agricultural or Industrial. (e.g., Pochampalli Sarees, Banginapally mangoes or Kondapalli dolls,Coimbatore Wet grinders) with a certain city or region.

Copyright protects original works of authorship. Copyright protection differs from patent protection in that copyright only protects the expression of an intellectual creation, whereas the ideas or methods advanced in the title can be freely copied.  Copyright protection typically lasts for the life of the author plus 50 to 60 years.  It is applicable to literary, artistic, and scientific works.  During the past decade, copyright protection has also developed as the main form of protection for computer software.  Rights related to copyright—often referred to as neighboring rights—are accorded to phonogram producers, performers, and broadcasting organizations.  Limits to exclusive copyrights and neighboring rights exist in certain “fair use” exemptions, such as educational or library use or for purposes of criticism and scholarship.

Besides these traditional forms of IPRs, ongoing technological change and the unique characteristics of certain industries and products have led to additional, so-called sui generis forms of protection.  Layout designs for integrated circuits protect producers of semiconductors.  Protection is limited to the design of an integrated circuit and does not restrict reverse engineering of a semiconductor.  In this regard, protection of layout designs is similar to copyright.  However, the term of protection is shorter than under copyright—typically ten years.  Title holders have the right to prevent unauthorized reproduction, importation, sale or other distribution of the layout design for commercial purposes.  Exclusive rights to test data submitted to regulatory agencies have been granted in the pharmaceutical and chemical industries.  Companies that first submit these data can prevent competing firms from using the same data to obtain own marketing approval. Plant breeders’ rights (PBRs) protect new plant varieties that are distinct from existing varieties, uniform, and stable.

Finally, the protection of trade secrets is part of many countries’ IPRs systems.  Trade-secret protection differs from other forms of protection in that it does not grant an explicit title to the creator of an original work.  Instead, it protects businesses from the unauthorized disclosure or use of confidential information.  Such confidential information includes inventions not yet at the patenting stage, ways of organizing business, client lists, purchasing specifications, and so on.

Intellectual Property Rights Protection System in India

The Indian IPR system is governed by the following legislations:

·         Indian Patent Act, 1970 as amended in 1999, 2002 and 2005

·         The Design Act, 2000

·         The Trade Marks Act: 1999,2010

·         The Geographical Indications of Goods (Registration & Protection) Act, 1999

·         Copy Rights Act 1957, as amended in 1999,2012

·         Semi-Conductor IC Layout Design Act, 2000

·         Protection of Plant Varieties and Farmers’ Rights Act, 2001

The Office of the Controller General of Patents, Designs& Trade Marks (CGPDTM), located at Mumbai is responsible for coordination and guidance to the Entrepreneurs in the areas of Industrial Property. The Head Office of the Patent office is at Kolkata with its Branch offices located at Chennai, New Delhi and Mumbai. The Trade Marks Registry is located at Mumbai and its Branches are in Kolkata, Chennai, Ahmedabad and New Delhi. The Design Office is at Kolkata, in the Patent Office. The Offices of The Patent Information System (PIS) and National Institute of Intellectual Property Management (NIIPM) are  established at Nagpur.

The Controller General supervises the working of the Patents Act, 1970, as amended; the Designs Act, 2000 and the Trade Marks Act, 1999 and also renders advice to the Government of India on matters relating to these subjects. In order to protect the Geographical Indications of goods a Geographical Indications Registry has been established in Chennai to administer the Geographical Indications of Goods (Registration and Protection) Act, 1999 under the CGPDTM.

The Indian Copy Rights are governed by Copy Right Act, 1957 as amended in1983, 1984, 1992, 1994 and 1999; the Copy Right Rules, 1958, 1995 &2012 and International Copy Rights Order 1999 as amended in 2000. The Copyright Office is under the immediate control of a Registrar of Copyrights who acts under the superintendence and directions of the Central Government. The Copyright Office is currently located in New Delhi.

Intellectual Property Rights – International Organizations, Treaties & Conventions

WIPO: The World Intellectual Property Organization (WIPO) is a specialized agency of the United Nations dedicated to developing a balanced and accessible international Intellectual Property System (IP) system, which rewards creativity, stimulates innovation and contributes to economic development while safeguarding the public interest. WIPO was established by the WIPO Convention in 1967 with a mandate from its Member States to promote the protection of IP throughout the world through cooperation among states and in collaboration with other international organizations. Its headquarters are in Geneva, Switzerland. The Organization is headed by the Director General.

Treaties and Conventions: The IPRs are governed by various International Treaties and Conventions to be followed by all WTO member countries. They are as follows:

·         The Paris Convention for the Protection of Industrial Property.

·         The Berne Convention for the Protection of Literary and Artistic Works.

·         The WIPO Copyright Treaty (WCT).

·         The Patent Cooperation Treaty (PCT).

·         Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure.

·         The Madrid Agreement Concerning the International Registration of Marks and the Protocol Relating to the Madrid Agreement.

·         The Hague Agreement Concerning the International Deposit of Industrial Designs.

·         The Trademark Law Treaty (TLT).

·         The Patent Law Treaty (PLT).

·         Treaties on Classification.

·         Special Conventions in the Field of Related Rights: The International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting.

·         Organizations (“the Rome Convention”).

Other Special Conventions

·         The WIPO Performances and Phonograms Treaty (WPPT).

·         The International Convention for the Protection of New Varieties of Plants.

·         The Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS”) and WIPO-WTO Cooperation.

·         Progressive Development of International Intellectual Property Law.

Among the above, the TRIPS Agreement is the most important international agreement for the protection of intellectual property. It is binding on all members of the WTO and enforceable through the WTO’s dispute settlement system.  It sets minimum standards of protection for all IPRs instruments, but also leaves governments important flexibilities to design IPRs regimes to suit domestic needs.

IPRs and MSMEs

It is a well known fact that over ninety percent of enterprises in India are in the MSME sector and they are among the major driving forces for innovations. MSMEs which are continuously creating new products, brands, and ideas stand to reap greater benefits from innovation if they consider the full range of intellectual property (IP) issues in new product development.

Intellectual property protection helps MSMEs to:

·         prevent competitors from copying or imitating their products or services;

·         create market identity through trademarks;

·         increasing market value of the business;

·         avoid waste expenditure in R&D and marketing;

·         increase access to finance and venture capital;

·         minimize litigations through avoidable infringements of rights;

·         negotiate IP-based licensing, franchising or other contracts; and

·         expand markets.

However MSMEs are not always successful in fully utilizing the potential of their IPRs. Most of them are face the following challenges in acquiring IP protection:

·         no adequate knowledge of the IPR system and procedures for protection of rights;

·         no proper manpower to undertake necessary groundwork needed for IP acquisition, like searches and filing procedures;

·         high costs of IP protection, including consultant fees; and

·         resource constraints to challenge bigger firms with competing claims.

The Govt. of India and State Governments are encouraging IPRs with various incentive schemes. There is a need for serious consideration of IPR value also as an asset for financing enterprises to modernize and encourage R&D and innovations.

Conclusion

Registering an IP and creating value out of it gives businesses an incentive to invest in further research and development and fostering more innovation in products and processes. The time has also come now for financial institutions to consider IPR assets in the valuation of businesses as is the practice in Western Countries. This will give the IP owners/ holders the confidence to share new technologies through collaborations, joint ventures and licensing agreements, thus exposing them to a wide spectrum of business opportunities. Governments at Central and State may also conduct more awareness meets and financial incentives to MSMEs for IPRs.