Many issues in e-business are similar to those facing brick-and-mortar businesses. At the same time, e-businesses, especially small and medium e-companies, experience greater legal, ethical, and political pressures. The issues of intellectual property in e-business are, probably, the most pressing, and not all SMEs have the capacity, power, and resources to cope with these challenges. This is probably why more writers are trying to draw public attention to the intellectual property controversies surrounding e-business.
In their article, Sukumar and Edgar (2009) provide a detailed review of the major risks facing SMEs in e-business. These risks also include intellectual property and copyright violations. According to the researchers, electronic business is an ever-expanding phenomenon, and it deeply affects all spheres of the economic and social life (Sukumar & Edgar, 2009). Still, not all researchers and entrepreneurs realize the legal and ethical complexity of e-business, and not everyone understands how dangerous intellectual property problems can be to e-businesses. Sukumar and Edgar (2009) describe intellectual property as a policy risk affecting all electronic businesses. This risk is not unique to e-business, but its significance has increased with the rapid proliferation of various technologies. Apparently, e-businesses are much more vulnerable to intellectual property problems than brick-and-mortar enterprises.
Sukumar and Edgar (2009) interviewed several e-business owners to understand their perceptions of business risks. The researchers discovered that SMEs working in the electronic sphere were mostly apprehensive of the existing laws and, at the same time, realized the scope of the intellectual property dangers facing them. Most SMEs choosing e-business as the main field of operation fail to safeguard themselves from the intellectual property risks, either because they lack further legal knowledge or do not have the legal and professional support needed in such situations (Sukumar & Edgar, 2009). In most cases, e-SMEs lack financial resources to obtain the basic legal support and do not have sufficient knowledge and opportunities to develop effective protective mechanisms against the loss of intellectual property (Sukumar & Edgar, 2009). Coupled with these are the problems with reputation, privacy, and consumer relationships. Not all consumers are confident that they can trust their private information to e-businesses and engage in online business transactions, even if the latter are safe, secure, and profitable (Sukumar & Edgar, 2009). “Stakeholders feel that any lapses in online security will ultimately affect the reputation and online confidence of customers” (Sukumar & Edgar, 2009, p.10). The lack of effective leadership and public acceptance hinders the development of e-business, and SMEs experience difficulties generating vital financial and technical resources to secure themselves from privacy and intellectual property troubles.
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The authors of the article raise essential issues that impact the entire field of electronic business, especially small and medium enterprises. Splinder and Borner (2002) suggest that no international copyright currently exists that could automatically protect electronic SMEs from intellectual property violations and losses. Moreover, even in the presence of the laws and regulations intended to govern e-business relations, the latter may not have sufficient knowledge and legal awareness to manage their intellectual property risks. Given the growing importance of e-business and its future potentials, intellectual property protection should become the government’s top priority. SMEs operating in the online world require greater support and assistance in their striving to become more profitable and secure for their customers.
Intellectual property issues pressure e-businesses. Small and medium e-enterprises are particularly susceptible to these risks. Intellectual property problems have profound implications for efficiency, profitability, privacy, ethics, and legal compliance in e-business. Since most SMEs do not have enough support to pursue their strategic objectives, they will require more assistance to protect their intellectual property and, as a result, become more profitable and effective.