IP and SMEs: Taking your ideas to the market

Intellectual property (IP)—evolving as an idea from the human intellect and embodied in a physical object—becomes a non-physical asset either for an individual or a company including a small and medium-sized enterprise (SME) by generating a quantifiable figure of economic benefits to it and also by increasing the value of other assets with which it is attached. In Bangladesh, an SME is an enterprise which may employ up to 300 people and invest a capital of not more than Tk 50 crore and which deals in manufacturing and service-oriented businesses. In fact, SMEs account for about 7.8 million trading entities, i.e. more than 99 percent of the country's total businesses, and contribute about 25 percent to GDP. With the manpower and capital, an SME may develop certain ideas of doing business, manufacturing things, or providing services. Each of these ideas comes from the human brain and turns into a property—an intellectual property on their embodiment in physical objects. Consequently, they give rise to the right to own, possess, and transfer the IP, have a monetary value, and add up to the enterprise's wealth.

An SME may have different types of IP rights including patents, designs, trademarks, geographical indications (GI) and copyrights. It can hold these rights upon inventions from its own research and development (R&D) or upon licensing contracts that enable it to value-add to licensed technologies. When the R&D wing of an enterprise says it has an idea, the idea can result in an invention of a product or a process out of which a given product may be manufactured in a different way, and can be owned with a patent right. Again, the idea of an enterprise can result in a shape of a product that can be owned with a design right. Furthermore, an enterprise's idea of publishing a textbook, composing a lyric, drawing, or painting an artwork, can result in a literary and artistic work and can be owned with a copyright. Such a product or process, or a design or a literary and artistic work or a service that is commercialised in the market with a trade name or brand name, set up, trade-dress, logo, symbol and so on, can be owned with a trademark right, or a product that comes from a geographical location having a reputation attributed to it and is traded in the market, can be owned with a community right of GI.

To protect IP rights for its products or services, an SME is required to fulfil certain conditions. For example, if an SME does have an invention for a product or a process, it must register the same with the Department of Patents, Designs and Trademarks (DPDT) for a patent by showing the novelty, non-obviousness, and industrial application. In case of a shortage in any of the criteria, it cannot register the product or process, although in some parts of the world its product or process can be registered for a petty patent or utility model protection. Under the current IP regime, a patent lasts for 16 years. Moreover, without registration, an SME cannot go to the court which is the Court of District Judge burdened with all forms of IP suits to prevent others from copying its product or process or claim compensation and other related remedies. It also cannot assign or license the patent right to others with registration.

An SME must also register any shape, pattern or ornament applied to any product with the DPDT for a design by showing the representation (meaning shape or surface of the article, lines or colour), the statement of novelty (meaning invention in the shape must be new) and the definition of the article (meaning identification of the article to which the design is to be applied). The initial term of registration is five years, and it is renewable for the next two terms of each five years. Without registration, the design right cannot be protected, assigned, or licensed.

In the case of a product or service traded in the market with a recognisable sign, design, or expression which identifies products or services of a particular SME source from those of others, the SME can register it with the DPDT for a trademark by fulfilling the requirements of distinctiveness and absence of possible harmful effects for the trademark registration. The initial term of registration is seven years, and it is renewable for 10 years each time after the end of the previous duration. However, if a trademark is not registered for its being descriptive or generic in nature, it can be protected without registration. In that case the SME will have to produce evidence in proving the infringements. Further, without registration, the trademark right cannot be assigned or licensed.

In the case of GI products, an SME can register itself with the DPDT as a registered user to trade in the GI goods with their respective trade-names. The initial term of registration is five years, and it is renewable for three years each time after the expiry of the last term. Without registration, a GI can be protected but registration in the country of origin entitles the SME to register it beyond the country. In the case of a literary and artistic work, an SME can register it with the Copyright Office for the copyright to ensure especially the economic right arising therefrom either as a rights-holder, creator, licensee, or a producer, broadcaster and performing house. An SME's copyright lasts for 60 years even without registration but upon fixation. However, without registration, a copyright cannot be assigned or licensed.

So, an SME's products or services can create economic benefits to it and value-add to its existing assets if they are endowed with IP rights and secured upon registration.

Dr Mohammad Towhidul Islam is a Professor of Law at the University of Dhaka.