It can be unlawful for another business to use your intellectual property without your permission. These include your copyright, patent or trademark. If you discover this is happening, you should act quickly, as their action can negatively impact your business.
Here are three ways intellectual property (IP ) infringement can affect your business:
1. Loss of sales
Another business using your logo, name, design or any other element that symbolizes your company can lead to confusion among consumers. Your customers may believe they are purchasing your product or service when they are not, translating to a loss of sales. With time, you may lose considerable profits and revenue. Thus, it’s vital to always be on the lookout to identify when someone unauthorized uses your IP to protect yourself.
Cases of companies cutting costs because of reduced revenue stemming from IP infringement have been reported. For instance, a company may need to let go of employees. Additionally, it’s not uncommon for small businesses to go out of business due to a lack of resources to stay afloat when dealing with the aftermath of IP infringement.
2. Loss of competitive advantage
When you offer quality products or services, you have a competitive advantage in your industry. Consumers recognize your business. However, if competitors replicate your products or services, you may lose market share.
3. Damaged reputation
Many businesses that illegally use others’ IP make or offer low-quality products/services, selling them at lower prices. If a customer mistakenly purchases from such a company, they may lose trust in the legitimate brand. Thus, intellectual property infringement can harm your reputation, which can lead to loss of revenue.
IP infringement can result in costly consequences. Legal guidance can help you protect your IP from the word go and understand what to do if someone infringes it.