MSMEs are among the most consistent sources of new products, brands and creative concepts in India, and among the least likely to protect any of it. The reasons given are cost and complexity — and both are more tractable than most business owners assume.
The problem
The Chairman of the Engineering Export Promotion Council put it directly: micro, small and medium enterprises are important assets to the country’s economy, yet lose out when it comes to protecting and managing their creations.
Any MSME is likely to hold some intellectual property — a trademark, a design, a trade secret. Some rights matter more than others depending on the business.
Trademarks are often the most valuable IP asset an MSME holds. A trademark distinguishes the goods and services of the person producing them, giving a unique identity to the producer or service provider — and, over time and with credibility earned through the products, financial leverage.
Designs matter for a large number of MSMEs whose business models depend on them. A textile business producing new, original prints unavailable elsewhere holds exactly the kind of IP that design registration exists for.
Where to learn
Several institutions run IP awareness programmes for MSMEs — the National Institute for Micro, Small and Medium Enterprises, the National Institute of Intellectual Property Management, the Intellectual Property Facilitation Centres (IPFC), and the Confederation of Indian Industry. Between them they offer seminars, workshops, short and long-term training, and facilitation centres.
Why a framework matters
New products, brands and creative concepts emerge constantly, and a great deal of it originates with MSMEs. Without awareness of the protection available, there is a real risk of losing it to larger players who are more familiar with IP and its benefits, and who will not shy from exploiting the gap.
A proper IP management framework does two things:
- it protects the innovation, invention or work; and
- it improves the business in the eyes of investors. This is the point most often missed. In an acquisition or merger, intellectual property can raise the valuation of the enterprise substantially. Strategic use of IP assets enhances competitiveness — and like physical assets, IP assets must be maintained, valued and accounted for once acquired.
The present position
MSMEs contribute around 45% of India’s overall shipments and about 50% of the manufacturing sector, making them a powerful engine of growth. That makes IP awareness among them a matter of some consequence.
The obstacles are consistent: the cost of obtaining and enforcing IP rights, and a perception that the IP system is complex and comprehensible only to specialists.
Both are addressable, and worth stating concretely:
- Fee concessions are substantial. MSMEs and startups pay the lowest tier of official fees for both trademarks and patents — a fraction of what larger entities pay. Note that the MSME definition was revised in 2020 to a composite criterion combining investment and turnover, so eligibility should be checked against the current thresholds rather than older ones.
- Government schemes subsidise filing costs, including for international applications, through MSME and Startup India programmes.
- The process itself has simplified. The Trade Marks Rules, 2017 cut the number of forms from 74 to eight, and e-filing costs 10% less than physical filing.
The scenario is evolving, with more MSMEs taking an interest in IP and understanding its significance. It should not be long before a larger share appreciate how inseparable IP is from their businesses.
The takeaways
- Trademarks and designs are usually the relevant rights for an MSME.
- IP raises valuation in mergers, acquisitions and funding rounds.
- MSMEs pay the lowest fee tier — check eligibility against the 2020 definition.
- Awareness, not cost, is the real barrier — the concessions already exist.
Frequently asked questions
Which IP rights matter most to an MSME? Usually trademarks, which carry brand identity and accumulate value, and designs where the business depends on appearance — as in textiles and consumer goods.
Do MSMEs pay lower official fees in India? Yes — MSMEs and startups qualify for the lowest fee tier for trademarks and patents, subject to the current eligibility definitions.
How does IP affect business valuation? Registered IP can substantially raise the value of an enterprise in a merger, acquisition or funding round, where it is treated as an identifiable asset.
Where can an MSME learn about IP? Through awareness programmes run by NI-MSME, the National Institute of Intellectual Property Management, IP Facilitation Centres and industry bodies such as the CII.