Mmm343 Business Ethics | Method Assessment Answers

The purpose of this assignment is to analyze the effect of domestic and international regulatory agencies and court systems on business transactions and dispute resolution.

Read the following scenario:

You are the CEO of Bonner, a U.S.-based farm equipment corporation. Bonner recently announced the release of an innovative new tractor with technology based on a patented invention developed by Bonner's engineers. Bonner's vice president, who is aware of the upcoming product offering, bought 100,000 shares of Bonner stock prior to the announcement. You found out about the vice president's stock purchase on the day of the announcement.

Answer:

To: The Board of Directors of Bonner

From: The CEO of Bonner

Subject: Patent Infringement

Date: 28/06/2018

This memo is prepared to assess the impact of domestic and global regulatory agencies and court systems on dispute resolution and business transactions of Bonner. The patent dispute that has occurred with the German firm has been discussed briefly in this memo to know whether any breach of law is made by Bonner. This requires consideration of a variety of factors that might help in settling the dispute taken place. Hence, the following factors are considered for discussion:

Reason that Bonner is the owner of the invention and intellectual property rights:

 Bonner is considered as the owner of the invention depending on a patent developed on the part of the business owners. In the words of Chen (2016), intellectual property rights are the rights that an individual or an organization holds to enjoy exclusive rights in using owns plans, ideas or intangible assets without concern for competition for a limited timeframe. A court via lawsuit might enforce such rights. The rationale for intellectual property is to promote innovation without worrying about competition that a rival might steal the idea or take credit for the same. In case of Bonner, it has a particular rationale for intellectual property rights. Recently, Bonner has declared the launch of a new tractor with technology developed on patent invention established on the part of the managers of the organization (Spulber, 2018).

Method of dispute resolution:

“German Farm Equipment Corporation” accused Bonner of patent infringement by sending a letter to the latter organization. The dispute resolution should be held in a court in US due to a certain reason. Bonner has declared the launch of a new tractor with technology developed on patent invention established on the part of the managers of the organization. In order to resolve this dispute, litigation is deemed to be the most effective strategy. It is necessary for the German firm to provide adequate and detailed evidences to the judge, which would validate the fact that Bonner conducted patent infringement (Holbrook, 2015). The letter provided by the German firm did not contain detailed evidences to prove that Bonner is guilty of patent infringement.

Liability of the Vice President of Bonner:

In this case, Bonner could be accused as liable for insider trading. As commented by Holbrook & Osborn (2014), insider trading could be considered as purchasing or selling of a stock by an individual having access to material non-public information regarding the security. This type of trading could be legal or illegal based on time insider trading is made. If the material information is not disclosed to the public, insider trading would be illegal. Despite the fact that the Vice President of Bonner is aware of the new product offering, the individual purchased 100,000 shares of Bonner before the declaration.

Legal or ethical duties in disclosing stock purchase to the necessary users:

Bonner is obliged to perform ethical and legal fiduciary duties for disclosing the share purchase to the board of directors. This is because the insider needs to perform a fiduciary duty of absolute good faith and entire loyalty to the organization. In other words, the individual needs to act that best suits the requirements of the organization. The individual is not entitled to make personal profits at the cost of the entity other than the contractual salary provided by the same. In addition, the organization has legal and ethical duties in order to disclose all information to the public (Shapiro, 2016). The ethical duties of Bonner include relevant disclosures to the public, as it would help them in analyzing the actual financial condition of the organization in the US market.   

Risk management procedures for Bonner:

Based on the provided evaluation, Bonner needs to take into consideration certain risk management strategies, which are enumerated briefly as follows:

• The organization could enforce program of monthly education for their staffs related to insider trading so that situations like above-mentioned one could be avoided or minimized.
• It could think of appointing compliance officers for ensuring that the employees of the organization are adhering to regulatory compliance. This could be carried out by monitoring the staffs along with reinforcing the company policy related to insider trading (Mueller, 2015).
• Bonner could enforce a code of ethics and it would be mandatory for all the staffs working in the organization to comply with the same. Hence, this would prohibit the staffs to adopt any unscrupulous practices for their personal benefits

References:

Chen, F. C. (2016). Divided infringement in the limelight of the patent battle field. Trends in biotechnology, 34(10), 771-773.

Holbrook, T. R. (2015). The Supreme Court's Quiet Revolution in Induced Patent Infringement. Notre Dame L. Rev., 91, 1007.

Holbrook, T. R., & Osborn, L. S. (2014). Digital patent infringement in an era of 3D printing. UCDL Rev., 48, 1319.

Mueller, J. (2015). Remedies for Patent Infringement: Enhanced Damages and Willful Patent Infringement.

Shapiro, C. (2016). Patent remedies. American Economic Review, 106(5), 198-202.

Spulber, D. F. (2018). Finding Reasonable Royalty Damages: A Contract Approach to Patent Infringement.