Updated: Apr 26, 2022
Today is the time when brands, innovation & technology are the main drivers of our economy. There is no dearth of new ideas, especially amongst the youth of today, and this has led to a rapid rise in the level of competition in the market. ‘Startup’ has become the buzzword among millennials & this sector has seen a multi-fold growth in the recent past with many start-ups attracting large investments from a booming investor ecosystem. Similarly, the MSME sector has also been very promising & a large contributor to the GDP & employment of the country. It has provided the much-needed resilience to ward off global economic shocks and adversities. Owing to this, and also due to the Indian Governments push to the Make in India initiative, local businesses have seen a major boom. Hence, consumers have a lot of options they can choose from and not only that, today’s consumers are very well informed due to the advent of the internet. Therefore, it all depends upon the entrepreneurs how they gain an upper edge over their fellow competitors and earn the trust of their customers. May it be established business houses or start-ups, they all have to innovate to survive.
"Innovating anything new brings along with it a feeling of fulfilment, and also an obvious feel of not wanting anyone else to imitate your original idea. That is where the importance of Intellectual Property Rights comes into play in today’s scenario.
WHAT ARE INTELLECTUAL PROPERTY RIGHTS?
Intellectual Property are the intangible assets of a business and are in the form of innovations, inventions, ideas & creations of the human mind - a result of the application of the intellect. The laws which safeguard such original ideas are called Intellectual Property Rights (“IPR”), which gives the creator an exclusive right over the use of his / her own original creations for a certain period of time, to the exclusion of others. IPR allows intellectual property owners alone to benefit from their inventions during this period. The owner of an IPR may – while exercising his/her right – prevent the manufacture, use or sale of a product / service which incorporates his / her IPR and can take legal action in case of any imitation.
TYPES OF INTELLECTUAL PROPERTY RIGHTS
IMPORTANCE OF INTELLECTUAL PROPERTY RIGHTS
Protects the unique idea and creation of a business– Third parties might try to imitate a unique idea or innovation of a business in order to reap profits from it. Securing your idea by applying for IPR registrations can help prevent such imitations & take legal action in case of infringements.
Innovative ideas a means to earning profits – IPR encourages innovation and rewards entrepreneurs. Usually, ideas on their own do not have much market value. However, IPR has a potential to convert innovative ideas into profit making machines. This can be done by licensing, sale or commercialization of IP assets, which can lead to additional income and a flow of royalties to boost the business.
Enhances the market value of the business – Having registered IP assets automatically adds value to the organisation by increasing the goodwill. Goodwill plays a very crucial role at the time of mergers & acquisitions, sale etc.as a higher goodwill implies higher purchase price.
Tackle global challenges by breakthrough solutions – This benefit specifically relates to patents, which encourages the innovator to come up with novel breakthrough solutions, safeguard it by patent registration, then commercialize it & earn royalties.
Raise finance for the business – IP assets can be monetized by licensing or sale, thus helping the business to raise funds. IP assets can also be offered as collateral for acquiring debt financing and also proves valuable at the time of applying for government grants, subsidies, loans etc.
Enhances global business opportunities – Safeguarding IPR increases the productivity and competitiveness of an IP holder in the export market. An IP holder can use their logos or symbols to sell their products to foreign companies, seek franchising agreements with overseas corporations, or export their patented proprietor products.
The above are just a few of the benefits of IPR for a business. The list, however, is quite long and varies from business to business.
IMPORTANCE OF GLOBAL IP
With the advent of technology, businesses today can expand their customer base not only beyond local borders, but also overseas & this gives them an access to an international clientele, which in many businesses is more promising. They have the privilege of the entire world being their potential customers which is a whole new opportunity in its’ own self. Hence inventions are marketed or sold both domestically and internationally and this where the importance of protecting your IPR globally comes into play. There are various laws & conventions which govern international IP and they all focus on maintaining high quality standards in IP laws and bring in as much as uniformity as possible in IP laws across the globe.
From this it can be seen that not only is IPR important domestically, it is of equal importance globally & the impact of IPR on global trade cannot be underestimated. One should not make the mistake of assuming that IP protection is universal and that protection of your IP in one country automatically implies a global protection. It is essential to understand the IP laws & procedures of the countries in which your business shall be present and accordingly safeguard your IP rights.
In conclusion, it would be wise to acknowledge the importance of IPR in today’s businesses. Saving costs by not investing in IP assets today might lead to a very high financial loss at a later stage when more well equipped domestic or foreign entities may run over you owing to their high valuation basis the IP assets they hold.
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