What is the Importance of Intellectual Property for Business?
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Do you want to set your business adventure apart from your rivals? For companies, it’s significant to establish the right of ownership and prevent counterfeiting. That’s where the importance of intellectual property comes into play. These valuable assets give you a brand identity and differentiate your unique products from others. Through trademarks, copyrights, patents, and intangible creations, companies mitigate the unauthorized use of their services. It enhances their immense value and authenticity in the market.
Before diving into the importance of intellectual property, we need to understand what it is and how it can benefit your business.
What Is Intellectual Property in Business?
Intellectual property (IP) refers to proprietary assets that give you protection rights that deter others from using your inventions. It encompasses trademarks, trade secrets, exclusive copyrights, patents, and other intellectual creations. Businesses use these signs or labels to safeguard their artistic works, architectural designs, original literary, and other innovations from infringement. So, the importance of intellectual property cannot be overlooked.
Whether you are an entrepreneur or a large-scale company, you need to deploy the value of intellectual property to maintain your business foundation.
Why is Intellectual property Important to Business?
IP is the backbone of modern business society. By enforcing protection rights, you can shield your business operations legally from other market players. Let’s get into the importance of intellectual property for businesses.
Gain Revenue Streams
Intellectual property is the fountain of revenue generation for businesses. By the acquisition of patents, copyrights, or trademarks, a company can accelerate its financial position. Research shows that 31.1% of businesses have increased revenues from IP ownership. To give you an idea, a business that owns a patent for a technology can license it to other companies for use by charging a fee. Thus, the firms can earn profits and royalties by selling or licensing the IP rights.
Boosts Legal Protection
The value of intellectual property debunks from the fact that it provides companies with a legal defense for their proprietary assets. IP laws allow corporations the ability to enforce their legitimate rights. For example, if someone encroaches on your business copyright or trademark, you can take legal action and seek damage from the potential infringers. Thus, this legit recourse protects the exclusive rights of the companies.
Get Competitive Advantage
Every business has a yen to set itself apart from its competitors. IP rights are an effective way to stand out your unique products or services in a competitive market. Let’s say a pharmaceutical company produces a new drug and then patents it. It hinders rivals from manufacturing the same product without the company’s permission. Thus, leveraging these intangible creations gives companies a monopoly in the business society and a competitive edge.
Improves Brand Authenticity
Research shows that 86% of consumers prefer an authentic brand image. By using copyrights, trade secrets, or patents, you can gain the customer’s trust and build brand authenticity. IP rights allow you to protect your business identity and ameliorate your customer base. For example, Apple is a renowned brand in the technology industry. The company has registered many trademarks, copyrights, and patents to establish its unique identity. These IP rights help Apple to become an industry leader in the technical world.
Access to Financing & Tax incentives
When it comes to the importance of intellectual property, tax reductions are a plus. The proprietary assets help companies to alleviate their tax liability. In many countries, tax incentives are available for businesses that own and use patents or copyrights. By acquisition of these rights, the firms can mollify their tax bills and keep more of their gains.
Intellectual property can also help holdings secure financing. Banks and other investors are often more willing to lend money to companies that own IP. Thus, it makes it accessible for companies to get extra financing for expansion.
Intellectual Property Business Examples
- Tesla, Inc. protects its technological advancements, such as electric cars, by leveraging patents. It gives the company ownership that impedes rivals from using the same technology without consent.
- Coca-Cola Company uses a trademark for its brand logo to differentiate itself in the soft drink industry. Also, the company holds trade secrets for its product formula, which gives it a competitive edge in the market.
Conclusion
In a nutshell, intellectual property plays a crucial part in shaping the economic world we live in today. Businesses that acknowledge IP can benefit from exclusivity and business differentiation. In today’s marketplace, where revolution drives growth, firms must recognize the importance of intellectual property to protect their corporate assets.