There’s a special significance we attach to handmade products and crafts. Soaps, house decor, jewellery and cakes – seemingly ordinary items that once hand made or customized somehow acquire an air of the exquisite. ‘Handmade’ and ‘small business’ is often synonymous with each other, implying that budgets are tight and deadlines, nauseating. So in an effort to make things simpler, here’s some legal information that might come in handy for any artists dealing with the creation of handmade crafts and products.
A big thank you to all the artists who contributed their pictures towards illustrating this post. All pictures featured here have been done so with the artist’s permission and are images of their original handcrafted work. Please do click the picture/caption links to redirect yourselves to the artist’s page to learn more about the amazing work they do.
Handmade products can include a range of articles and crafts but they often have the following characteristics in common:
(1) they are largely made by the artist themselves – even if there is some use of an external mechanical aid, the artist’s creative contribution still forms a large part of the product’s identity
(2) because of the fact that they are handmade, no two products will ever be completely identical thereby making each piece unique in some way or the other
(3) many handmade products tend to use sustainable and eco-friendly materials
How important is legal stuff to my business?
This is an interesting question to answer – the kind of laws and legal provisions affecting your business really depends on the (1) nature of your business and the (2) product or allied service you provide. For instance, if you and your colleagues specialize in creating hand made jewellery, the sales revenue of which is largely redirected towards supporting a charitable organization or trust you’ve created, then a different set of laws may govern various aspects of your business including things like taxation and transfer/sale of property. An understanding of what laws are relevant to you can help you determine the manner in which you can run your business, protect your branding and of course, protect your work against tangible and intangible theft. Just remember – you don’t have to be a large scale business to appreciate and use the law as a tool to protect your business and your art.
Do I really need to think about registering my business?
Thanks to easy access to the Internet and social media platforms, starting a business has never been this simple. Running it – that’s a whole different story. If you’re working on your own or you’re the sole head of your business, then inspite of the lack of a formal registration, you will be considered a Sole proprietor in the eyes of the law. This very plainly means that you are the go-to person for any queries regarding your business and that you are completely responsible for the business, debts and your employees’ (if you have any) welfare. If your business has been co-founded and is co-owned by another person or more, you may want to explore registration arrangements such as that of a Partnership in order to avail benefits that might be best suited to your venture in terms of better tax strategies and shared liability.
Whatever you choose to call or register yourself, it’s good to make sure you have some basic documentation ready with you. The kind of documentation you need will depend on the nature of your business, the strength of your staff and the State you’re operating out of (this is true whether you’re in India or elsewhere). All these factors will determine whether you need a PAN card (which you will anyway because you have to file your tax returns), TAN number (in case you are collecting taxes from your customers), VAT and Service Tax registration, Professional Tax and employee insurances. If you’re primarily operating from an online store, then there are added regulations to look into that are relevant to e-commerce sites.
I heard about Intellectual Property Rights – how are they relevant to the handmade article business?
Various aspects of your business and creative projects ought to be protected through different legal measures. Intellectual Property Rights or IPR are of particular concern to artists because that’s really what their work might best be classified under. Here’s the basic low down on what rights might be relevant to you as an artist specializing in hand made products:
(a) Copyright and Design Rights: These rights are legal measures meant to help you protect the overall design, appearance and structure of your product. Examples include, the ornamentation detail on your house décor product, the embroidered or knit pattern of your product, the artistic imagery created on your jewellery. Essentially, anything that is relevant to ornamentation and appearance.
(b) Trademark: This is what protects your branding. Although a logo might be individually copyrighted as an artistic design, the commercial use and associated implications are protected via trademark registration. Trademarks can be the word alone or a combination of word and symbol/logo.
(c) Geographical Indication: This right is basically a mark that links the product to its place of origin thereby establishing its authenticity. For example, the Channapatna toys from the town of Channapatna in Rural Karnataka, India.
(d) Patents: This right allows you to protect the functional aspects of your craft piece. For instance, if you create an innovative bag then the aesthetic appearance would be protected under copyright, while the structure of the bag itself would be eligible for patent protection. It’s important to note that patents come into play only when the product’s functional features are unique and novel.
(e) Trade Secrets: This right allows you to keep certain information regarding your craft and creative techniques, confidential and private. A good example would be a particular weaving pattern you might employ in your bag or jewellery. The key to trade secrets is ensuring that you do all you can to ensure that the sensitive information is kept under wraps. In addition, this also means that you can get others working with you to guarantee their confidentiality with respect to the project they are working with you on.
Would you like to learn more about how copyright law, trademark law and trade secrets can help you protect your business with handmade products? What can you do to prevent plagiarism from a community perspective? Don’t forget to check out Part 2 of this post.