Home Blog “Role of SME’s in Intellectual Property Arena”

Role of SME’s in Intellectual Property Arena”

                                                                                           By Kritika Mishra[1]


“A for Small and Medium Scale Enterprises (SMEs) is a support for robust economy. Developing Nations, Developing Economy is not a title that must be permanently a nation’s inheritance. Aries!  All developing countries of the globe.”

          __Enterprise Waves Africa


Today’s era is considered to be the age of science and technology and in fact the domain of intellect. The ability to convert this knowledge into innovation and to gain fortune has been seen since several decades. And when these innovations are legally protected under the frame work of intellectual property rights, it becomes capital for business. Thus, it seems right to coin intellectual property as a powerful tool to gain wealth and therefore a way to national economy and not merely a legal concept.

India being the fastest growing economy in the world, the influences of liberalization, privatization and globalization has brought a significant change in the industrial sectors which directly made an impact on Indian economy. Thus, it was felt the emergence of all sizes and forms of enterprises with sufficient policies to execute them throughout the country.

A rapid growing country like India is predominantly identified by the propagation of many Small and Medium size Enterprises (SMEs). The small and medium enterprises are the backbone of any developing nation and it has so been emerged as an important sector for the Indian economy. A significant growth has been seen in the production of employment with approx 450 million people with 70% of workforce across the nation in last few decades. Hence there was a dire need of a friendly policy in the country to execute such enterprises and in 2006 an Act was passed the parliament of India namely Micro, Small and Medium Enterprises Development Act, 2006.

Section 7 of the Act, 2006 defines Small and Medium Enterprises based on the size of investment in the sector. The doorstep for investment in Small Enterprises ranges between 10 million to 100 million with the annual turnover ranges between 50 million to 500 million. In case of Medium Enterprises, the doorstep for investment ranges between 100 million to 500 million with the annual turnover ranges between 500 million to 1 billion. The act does not impose any restriction on the type and nature of such enterprise therefore found in both Manufacturing and Service sectors.

However the Act of 2006 failed to achieve its goal as there were so many drawbacks such as physical infrastructural bottlenecks, absences of formalization, technological adoptions lack of access to credit, delay in payment etc.  The ministry of Micro, Small and Medium Development Enterprises realized that these drawbacks are hampering the development of business environment therefore to provide smooth business the government introduced new standard from July 2020 for classification of Small and Medium Enterprises based on which will be useful for MSMEs. Now the investment for small enterprises up to 100 million and the annual turnover shall not exceed 500 million. The Medium sized enterprises up to 500 million with annual turnover shall not exceed 2.5 billion.

 However the main challenge that most of the small and medium sized enterprises face is that of the marketing of their product or service. Here the IP plays the key role by safeguarding the interest of SMEs by providing certain rights such as patent, trademark, copyrights, industrial design, geographical indication etc. IP provides exclusive right to make, use, distribute, and sell to their IP owner and also initiate legal action on the infringement of their right.

Small and Medium -sized enterprises being the focal point of technological creativity, in the long run toss growth by highlighting the innovation and giving recognition at an local, national and international platform. Hence, every SMEs must realize the maximum value of their innovation and recognize their IP under Intellectual Property Right. This will boost the innovation towards the commercialization, which automatically will raise the living standard and ultimately pave a way to national economy. Thus IP is an essential link between innovation and commercialization. 

It is often seen that SMEs face very high risk as there is a lack of expertise in IP management.  Here at this stage an absolute understanding IP management is crucial for all the SMEs to sustain and promote development. IP provides exclusivity over their product or service and such exclusivity control their exploitation.  For an example SMEs need understand the importance of Patent information including the access and manage and then control their business.

With the advancement of internet, more than 300 million end users of internet are directly co-connected to growth of SMEs. A popular demography in business is that intellectual property construct up to 50 to 70% of overall value in an enterprise. In recent times, a rapid growth of innovation constructs small and medium sized businesses and today SMEs has established a large number of businesses across the nation.  India has emerged as fourth largest economy in the world map over the past decade and the role of SMEs is remarkable on the establishment of socio-economic development. Today this sector contributes about 37.54% of country’s GDP including 7% of manufacturing segment and 30.50% of services. A research made by Satitsta Research Department claims that over 110 million Indian were employed in micro, small and medium sized enterprises across the nation by financial year 2020. The above stated achievements have been made possible mainly due to the awareness of intellectual property right.



  1. Ministry of MSMEs, 2006
  2. India, IPR And Its Influence, Singh & Associates by Aayush Sharma and Priyanka  Rastogi ,Sep 11, 2013
  3. The Indian SME survey, Firstbiz-Greyhond, 2014-15
  4. Satista Research Department, Number of employees at MSMs, in India, Mar 19, 2021


[1]Assistant Prof. of Law at Kalinga University, Raipur (CG) Contact: 7999161710, Email- kritikamishra.hnlu@

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