Limitations Of Intellectual Property Rights

1762 Words Sep 5th, 2015 8 Pages
Weaknesses
Intellectual property rights: According to a Nasdaq report by Trefis, many of the specialty fabrics used in Under Armour 's products are technically advanced textile products developed by third parties. The technology and materials used by the company are not unique to it. Additionally, the company does not own any process or fabric patents; instead, its suppliers mainly hold these patents. With that, the quality suppliers of Under Armour can freely supply other competitive organizations with the same materials. This could create a potential problem in the future because Under Armour could lose its business with the suppliers; the suppliers might see it more profitable to stop supplying Under Armour and instead continue business with Under Armour competitors who might be offering higher prices for materials. On another note, larger competitors such as Nike have started producing products using similar technologies. These competitors can easily out-price and out-sell Under Armour 's products due to their greater economies of scale (Trefis, 2014). Additionally, laws in the foreign countries do not always match with the patent laws in the United States. This potentially creates issues because foreign companies can take and reproduce the intellectual property of Under Armour without any repercussions.
Foreign supply and manufacturing: With the volatility in foreign markets these days, it has become more of a liability to have suppliers outside of the United…
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