Did you know: 60% Indian Small Businesses Suffer From IPR Lawsuits?

October 13, 2015

Did you know: 60% Indian Small Businesses Suffer From IPR Lawsuits?

A huge number of small and medium enterprises (SMEs) in India are reported to be losing millions in revenues due to lack of awareness about IPRs (intellectual property rights).

About 40,000 IP applications are filed in India annually and multinational corporations, leaving a sizable number filed by SMEs, file 85 per cent of these. In the developed world, owing to high awareness levels, small entrepreneurs approach venture capital and private equity funds to meet the expenses incurred on cost of protection, enforcement and commercialization of IPRs. In India, the lack of awareness among small players effectively denies them the fruits of the intellectual property they create.

Let’s start by Understanding What IPR is?

IPR stands for Intellectual Property Rights! Intellectual property is a legal term for the creations of mind and intellectual property rights are the rights provided by law for the exclusive use of creations of the mind. Examples of intellectual property include music, literature, and other artistic works; discoveries and inventions; and words, phrases, symbols, and designs. Examples of intellectual property rights include trademark, copyright and patent.

US criticism & India’s stand on IPR law enforcement. Why is this relevant to you?

The US has criticized India, saying it doesn’t have adequate protection for intellectual property rights (IPR), hinting at the recent Supreme Court decision denying a patent to a Swiss pharmaceutical giant.

It has also accused India of not allowing foreign direct investment (FDI) in crucial sectors.

In the report, 2013 National Trade Estimate Report on Foreign Trade Barriers, issued by the office of the United States Trade Representative (USTR), the US accused India of lacking “effective protection against unfair commercial use of undisclosed tests and other data generated to obtain marketing approval for pharmaceutical and agrochemical products.”

Refuting the claims, the commerce ministry said India’s IPR laws were in consonance with its obligations under the TRIPS agreement under the World Trade Organization (WTO).

“The recent decision of the Supreme Court rejecting the patent plea in the Novartis case has reiterated that India’s interpretation of Section 3(d) of the Indian Patent Act has balanced its public health interests with that of innovation. Further, the granting of a compulsory license to Natco in the case of the Nexavar drug is an indication that India believes its actions are in consonance with the flexibility the TRIPS agreement offers,” a senior commerce ministry official said.

The US government shares concerns of US industry regarding Indian policies affecting investment and innovation. These include localization measures which give preferential treatment to products manufactured in India or those which use domestically developed intellectual property, as well as insufficient protection and enforcement for intellectual property rights, and also unpredictability and inadequate transparency in the tax and regulatory environments. The goal of $100 billion in bilateral goods and services trade is already well within reach.

The main problem is that Small Business owners are not AWARE!!

Many small players refrain from seeking patents owing to limited financial resources. But if they do a cost-benefit analysis they will find that it yields lucrative returns.

The patent laws came into full force in India after 2005. All states in India now have patent facilitation centers and SMEs should consult them to find out how they can benefit from them, he said.

The Federation of Indian Micro, Small and Medium Enterprises (FISME) has also set up intellectual property facilitation centers in Delhi, Bangalore and Hyderabad.

The National Manufacturing Competitiveness Council has a program to enhance the competitiveness of the SME sector, and building SMEs’ awareness on IPRs is one of the components of this agenda

The IP facilitation centers specifically aim to build greater awareness among SMEs about IPR issues and provide insights to them on the creation, ownership and protection of intellectual property.

India is growing!

In the past decade alone, India’s GDP has nearly quadrupled. India is one of the ten largest economies in the world, already home to eight companies that are included in the Global 500. India sends some of its best and brightest to top research institutions around the world. More than 100,000 students from India contribute brainpower and a unique discipline of learning to US colleges and universities each year. And India is host to seven Nobel Laureates, five of those in STEM subjects (science, technology, engineering and mathematics). It is no surprise that in 2008 India joined a very exclusive ‘club’ with the successful moon launch of Chandrayaan. Until then, only six other nations on the planet had ever entered into lunar orbit.

These are stark reminders that underscore how India’s progress must be accelerated.

BUT; Protect What You Produce (PWYP)

There are grave concerns about intellectual property protection in India. The need for innovation is essential to the well-being of every nation. The ability of a country to sustain its economic growth, increase the standard of living of its citizens, and improve human health depends directly upon successful development and access to new products, processes, and services. But to do that, innovators in areas such as pharmaceuticals, information technology, and clean energy need assurance that their ideas and discoveries will be protected and rewarded.

The more we can work together to ensure an environment that appreciates and respects intellectual property rights, the more we all will prosper. Silicon Valley in the United States is an example to the world. The dozen equally impressive Silicon Valleys in India need to blaze a similar path of innovation. We are in this together, and the world is one.



October 13, 2015

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