IP for Small Enterprises

Micro, Small and Medium enterprises are independently owned businesses set up with the objective of making reasonable profit on the investment made. Generally, SMEs are defined on the basis of one or more quantitative parameters such as number of persons employed, the annual turn over, or the level of their investment. SMEs are an extremely diverse and heterogeneous group with a very wide range of needs and concerns. Their intellectual property needs and concerns are, therefore, dependent on the nature and scale of their operations and on their relationships with other entities and enterprises. They could help promote innovative new technologies, managerial growth and competitiveness as also, equally, the absorption of technological innovations and exploitation of indigenous research findings. All Governments have placed SMEs high on their list of priorities, and generally provide numerous SME support services.

Creating IP Culture in SMEs

Governments are encouraging and facilitating the SMEs to make specific use of the Intellectual Property (IP) system to improve their competitiveness in the domestic and global market place. The IP system provides the mechanism to prevent those who do not have the right over protected new or original knowledge and technology, from using it without prior authorization of its owner(s) thereby preventing ‘free riding’. IP system provides the basis for greater security in developing trust worthy business and customer relationship of all kinds, including the provision of documentary evidence needed for resolution of disputes in a fair and transparent manner based on the rule of law. Intellectual Property Rights can play a major role in the following areas for increasing the competitiveness of SMEs: 

Acquisition and exploitation of technological innovation
Preventing competitors from copying or closely imitating a company’s products
Obtaining access to new markets
Acquiring venture capital and enhancing access to finance
Enhancing the market value of a company
Avoiding wasteful investment in R&D and Marketing
Creating a corporate identity

Most studies undertaken, be they in developed or in developing countries, show that SMEs in general are not well informed about the potential benefits of using Intellectual Property assets in their business strategy.

IP Strategy for SMEs

IP Strategy of an SME should at least consider the policies on acquisition, exploitation, monitoring and enforcement of Intellectual Property. IP audit is essential to capitalise on the potential benefits of SMEs IP assets. Preparing a business strategy and plan is a key step and integrating the IP strategy and plan into the business strategy and plan is something that must be exercised at the outset. The IP strategy of SMEs should take a holistic approach to the different types of IP assets. Creating an IP culture in an SME is a first step, which begins by creating and implementing an action plan for protecting its business secrets that provide it an edge over its competitors. It is important that the immense value of technical, business and legal information contained in a patent documents be appreciated since access to and proper use of patent information has great potential benefits for an SME. Improved Intellectual Property asset management by the SMEs essentially means that SMEs consciously plan and strive to get the best result out of their IP assets in line with their business objectives. Identification of IP assets is a first step. Protection is the next, and management the last one, to effectively manage IP assets. SMEs should also learn to use the IP system specially the technical information disclosed in patent documents. Further, they need to learn the use of IP system for developing advertising and marketing proficiencies. SMEs not only need access to markets but also suitable network partners and joint ventures, management skills and credit guarantees. It is advisable to decide on foreign filing only after considering the likely demand, licensing possibilities, and enforcement difficulties but this decision should be made as early as possible. Thus, making technocrats and staff of SME aware and informed of the costs and benefits of the use of IP system, and through it, of protection of new and original ideas, is essential for reaping the benefits of improved product quality, in an increasingly competitive market place and in a knowledge-driven global economy. 

Role of Intermediaries for SMEs

In order to bridge the innovation and technology gap, better access to financing, information and services that facilitates the innovation process has to be provided to SMEs through intermediaries. An intermediary can do a practically good job of disseminating innovation and technology to its SME clients.

Fostering Cooperation amongst SMEs

It is important that linkages are encouraged and strengthened between SMEs, R&D institutions, as well as Universities and the Government Institutions supporting the development of SMEs sector. Creation of practical national guide for teaching and training entrepreneur, is another area that requires special attention. In the national programmes on Intellectual Property for SMEs, priority should be given to development of high technology sector such as Biotechnology, Micro technology, Nano technology, etc. It would be advisable for national Ministries concerned to systematically assess the true IP related demands and needs of the SMEs by undertaking in-depth studies on a periodic but regular basis, of the situation concerning challenges faced by the SMEs in their access to, and use of IP system. This analysis necessarily has to be done on a sectoral basis, in view of heterogeneity of the SMEs of different sectors. Apart from governmental initiatives at supra national, national, regional, local and municipal levels, a number of initiatives by non-governmental and the civil society organizations are noteworthy. 

International Cooperation among SMEs

International Cooperation in the SME sector in each of the G-15 countries has been growing steadily. SMEs in developing countries need to cooperate with each other and set up joint projects in order to achieve excellence and to increase their share in the world trade following the Uruguay Round. South-South Cooperation was needed to expand trade amongst developing countries. The possibility of exploiting e-commerce as a means of enhancing competitiveness also needs to be explored. The Asia-Africa Investment and Technology Promotion Centre has been set up to enhance business cooperation between Asian and African countries. WIPO has also taken a commendable initiative to include proposals on IP Protection amongst SMEs in the WIPO’s agenda. WIPO has set up a comprehensive and very user friendly Website on IP for SMEs in six languages (English, French, Spanish, Arabic, Chinese and Russian). The WIPO SMEs division intends to focus on the cultural industries as well as on the IP needs of SMEs in specific sectors such as agriculture, biotechnology, handicrafts, machine tools, software etc.