Protection of IP rights in Bangladesh with special reference to SMEs

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Offline roman

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Protection of IP rights in Bangladesh with special reference to SMEs

Intellectual property (IP) refers to ideas of human intellect embodied in physical objects. The ideas coming from both natural and legal persons including SMEs may result in inventions for a product or process in any field of technology and may receive patents. The ideas may come up with shapes and get industrial designs; the ideas as symbols and names may qualify for trademarks; and ideas as literary and artistic works may be endowed with copyrights. Even products originating from a specific geographic place having a reputation attributed to it may obtain geographical indications. All such falls within the ambit of IP amounting to an asset that can create ownership, possession, and transfer rights therein.

SMEs with assets of BDT 5 to 100 million and employing 25-99 workers in the manufacturing sector and with businesses worth BDT 500,000 to 10 million and employing 10 to 25 people in the service sector can develop ideas through R&D or licensing contracts, turn them into an IP asset, and commercialise them through direct sales or licensing. For ensuring proper outcome of an enterprise's huge brainwork, time and investment, enterprises require IP registration so that their fruits are not taken away by competitors. Further, IP creates economic value for a business and adds up to its existing asset. Finally, enterprises can gain competitive advantage through IP in terms of usefulness, attraction, and market superiority. IP can also be used as collateral to secure an enterprise's loan.

IP protection can lower the risks of commercialisation by frightening competitors from using the protected IP. Primarily, protection can keep the IP a secret, not commercially achievable for businesses. There are multiple legislation that protects IP in Bangladesh. They include the Patents and Designs Act 1911, the Trademarks Act 2009, the Geographical Indications of Goods (Registration and Protection) Act 2013, the Copyright Act 2000, and the Plant Varieties Protection Act 2019. Under such legislation, IP registration is mandatory for patents and designs. However, without registration it is difficult to prove infringements and no assignment and licensing of IP is possible as well.

It is said that if four factors - licensing, monetisation, funding, and valuation are present in a jurisdiction, that jurisdiction is fit for IP commercialisation. In Bangladesh, under the legal framework, commercialisation of IP for businesses can occur through licensing or franchising, and monetisation is made by direct sales and licensing royalties. Here some SMEs' start-ups are funded by the government grants, loans, and incentives in some scattered ways but there is no legal framework and practice for funding through venture capital companies, export market development grant, R&D tax incentive, entrepreneurs' programme, crowdfunding and initial public offerings. Further, there exists no such rule or practice here for valuation of IP which is needed for IP assignment and licensing, and which usually determines the valuation through income method based on the amount of financial income generated therefrom, market method based on the actual price paid in a similar case, and cost method based on the cost of a comparable or exact IP asset.

IP in Bangladesh faces several challenges for ensuring its proper protection. Currently, there is no framework legislation for supporting innovations and technology transfers. Even in the existing legislation there are ambiguities hindering the IP implementation. Further, there is no specialised court to deal with IP matters, which is necessary considering the complexities of IP. Also, no uniform appellate authority is in operation, which could be resorted in case a registration application is refused. It is submitted that the IP offices are centralised which in turn impacts people's access to IP protection. The lack of IP academy, institute or centre has a profound impact on the development of IP jurisprudence in Bangladesh. Consequently, there is a lack of awareness regarding IP amongst officials, judges, law enforcing agencies, researchers, industries, media, and the public.

Structural changes are required for addressing these challenges. First and foremost new legislation has to be enacted, which include inter alia, the Patents Act introducing petty patent, compulsory licensing provision for pending patents and TRIPS transition benefits, the Designs Act to comply with the TRIPS Agreement and an Innovation Act to establish Technology Transfer Offices that can enrich linking between academia and industry, especially SMEs; to establish R&D wing for industries, to provide funding rules for R&D and to facilitate IP commercialisation etc. The existing legislation should be amended to establish IP Court or Commercial Courts. Although establishing a separate IP Court could be hard financially, establishing Commercial Courts dealing with business matters as well as IP could be established. The Plants Varieties Protection Act 2019 by entering effect will prevent seeds from being patented that can ensure farmers reusing them. IP offices should be decentralised to ensure proper public access. The text of the legislation is to be simplified so that law enforcers and public can easily understand the law and ensure proper IP protection. Awareness regarding IP protection should also be raised through seminars, workshops, and conferences. Law schools can open IP Law Centres/Clinics to help commercialising, registering, and protecting IP, and provide training on IP to industries, especially SMEs by involving the academia, lawyers, judges, IP officials, and law enforcing agencies.

IP protection is not only a matter of concern for the rights-holder but also for the society and the country at large. It provides incentives for innovators and businesses to invest for better innovations and technologies. In the manufacturing sector, IP protection will help businesses grow. This in turn will help the country with the economic development. Its proper protection ensures higher foreign investments as foreign investors will be assured of the protection. For SMEs, especially in the manufacturing sector, IP protection will ensure big businesses are not able to unjustly expropriate their IPs. It also ensures better competition as it will encourage better innovations than existing ones.

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

« Last Edit: April 27, 2021, 02:21:48 PM by roman »
Md. Rokanuzzaman Roman
Assistant Registrar &
SA to Honorable Chairman, BoT
Daffodil International University