Why is design important? The case of a toymaker
The Indian Toy Industry is dominated by SMEs and micro enterprises even though toy majors such as Fun School and Mattel are also present. The domestic industry has been in existence for over 50 years and has considerable reach through an extensive distribution network. Innovation in the form of IP creation has, however, been extremely poor. With generational change occurring in the industry, businesses have started becoming open to new ideas.
With the liberalization of the economy, since the late 1980s there was a sudden increase in the number of automobiles being offered to Indian consumers. This, in turn, inspired some toy manufacturers to start producing plastic miniatures of automobiles being introduced in the market. Much like MatchBox Cars, these manufacturers faithfully reproduced the shape of every new car they saw on the road. Over the years a large number of models became available and coupled with extensive reach their miniatures were soon available across the length and breadth of the country.
Keeping in mind the low awareness of IP related issues amongst the SME Sector in the country, the Small Industry Development Organization (SIDO) - the SME Development Agency of the country - working under the Ministry of Small Scale Industries had embarked upon a series of workshops and sensitization programmes on IPR for SMEs. One such workshop was devoted exclusively to the toy industry. One of the prominent manufacturers of these miniature cars happened to attend this workshop.
After the workshop, he met some of the Resource Persons and confessed that it was the first time that he understood the implications of IP to his business. He understood that if a design was protected then he, as an entrepreneur, could not escape liability for passing off through the defense of miniaturization. He also understood that he could legally copy the design of certain automobiles by doing so intelligently. For instance, he could do a design search at the design office and determine which designs were over 15 years old and hence no longer protected. He could now also assess which were the designs where protection had not been extended by the company in question beyond the initial 10 years or such cases where a foreign company had never obtained design protection in India. This, itself, gave him a substantial number of models to miniaturize.
In addition, as a canny entrepreneur, he approached one of the car manufacturers and presented 10 pieces of the miniature cars to a senior executive with the suggestion that whenever any potential customer of the car comes for a test drive to the car showroom, his miniature could be offered to the potential customer as a memento from the automobile company. The automobile company thought it was a good idea and today offers this toy miniature to all its potential customers opting for a test drive. In the process, even though the design of the automobile is protected, the fact that the automobile has acquiesced in the reproduction of its registered design protects the SME entrepreneur.
Case study compiled by Pankaj Jain, Director (IPR Cell), Ministry of Small Scale Industries, Government of India (email: firstname.lastname@example.org).