IP Strategies of MSMEs in the Automobile Industry

Intellectual property rights play a crucial role in businesses, fostering their tradition of innovating in the market. When we address the Micro, Small, and medium Enterprises (MSMEs), their competition increases when protection of its IPRs like trademarks, copyrights, patents, geographical indication, and industrial designs come into the picture. Earlier, the tradition followed by the MSMEs was mainly only restricted to the creation and protection of tangible assets, including land, equipment, and office supplies, as well as the revenue and whatever profit is received by them, thereby boosting their value and goodwill in the society and among other businesses in the given industry. Nevertheless, when considering the global experience, MSMEs surpass multinational companies (MNCs) among large entities through investments in creating and protecting IPRs and related IPs.

MSME has become one of the largest sectors and contributors to the Indian Economy, but there is still a lack of awareness about the IPRs in this sector. But, having monopolies worldwide, either through the integration of businesses or through intellectual property rights, escalates the MSMEs’ revenue and profit. The MSMEs look at the IPRs nowadays as legal monopoly investments, which help them become ahead in the competition amongst the other prominent industries in the automobile field since IPRs are the negative rights that sheerly restrain others from practicing or using that IPR and infringing them. Thus, that is why the MSMEs in the automobile sector are capable and see it essential to have one or more IPRs in their portfolio, whether it be the product, i.e., the car parts or products or the process or model that car or vehicle has. For instance, when Google acquired Motorola for around $ 12.5 billion, it was majorly because of Motorola’s patent portfolio, which consisted of approximately 24,500 patents. However, Google preserved the portfolio and sold the brand and the other physical assets to Lenovo for $ 3 billion. This is how, with a suitable IP portfolio, the MSMEs can generate revenue and goodwill in front of giant entities and gain a monopoly in the competition.

The second way the MSMEs are preserved or retained in the market is through registered and enforceable trademarks created and protected by the MSME. Since every business-like automotive business now has a brand or a trade line, it distinguishes them from the other entities having large establishments in the market and also creates goodwill among the customers. Thus, the MSMEs go with the registration of these trademarks and trade lines by preparing a good IP portfolio for it to get registered, in turn providing them the monopoly among the competitors, restricting them from using their trademarks, tradenames, and tradelines, gaining exclusivity in the market of their own attaching the goodwill, quality of the product and the services provided.

Another asset to the MSMEs in the Intellectual property field that can be easily acquired is that of industrial design, which they use to gain a monopoly. Since they are established at a lower level than the big giants, they have a lot to explore and can come up with good creativity in the market; they go with the IP asset relating to Industrial Design, gaining protection over shapes, the designs, and even on the automotive parts they use in the product they are about to launch. Industrial design protection used by the MSMEs is focused on the major aesthetics of the model they are launching and the modifications they bring in from time to time, for example, the new design of any hatch-back car or sedan, etc. Thus, as the new product/car is about to enter the market, MSMEs go for design protection so that the peers/ already established companies with good R&D departments or resources do not copy them.

Even the MSMEs involved in the manufacturing of the automobile industries go for having patent protection as well. This is because this type of monopoly puts the entity ahead in the competition by stopping others from using that patented product in the other market players, thereby increasing the value of the product and opening a new route for the MSME to go for another potential revenue vertical through licensing of that patented product. Another strategy that the MSMEs use while forming their IP portfolio is that of copyright protection. But this is majorly done by the MSMEs involved in artistic work like that of books, photographs, or music and not by the automobile industries.

So, while considering the abovementioned IP assets, i.e., trademark, patent, or industrial design, all these can also be acquired by any MSME through licensing, but for that, the entity needs to have good funds and resources; otherwise, the entity can get collapsed, and for that, a good portfolio has to be maintained to understand the potential market and the competitors for their growth and maintenance of goodwill amongst the target customers. So, for expansion, it is essential for Indian MSMEs to look into it properly and acquire the demanded assets from the market. This acquisition helps the MSME achieve monopoly rights in that very trade business. However, the only challenge that MSMEs face is that of the IP valuation, which they do before commercializing the product in the market because it requires a well-trained and recognized IP valuer with sound financial and IP aspects. Since MSMEs need more funds, resources, experts, and departments. Thus, portfolio management is essential for them other than the acquisition mandate.

In the present scenario, in the age of growing entrepreneurship, MSMEs are joining and producing a lot in the IP revolution. We can see that 1–3-year-old start-ups are also obtaining high value, which started from no office or land or machinery or resources but are now in such a position that they have an impact over the customers not less than the businesses established from generations having investors, resources, and goodwill in the market, indeed based on gaining monopolies over intellectual property in the patents, trademarks, and design criterion. This eventually leads them to a new future and makes the economy more robust by generating new creations and advanced technologies, thus empowering competition.

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