Intellectual Property Case

Background: E-kin has identified a process for creating customer-designed team and individual sportswear over the Internet. No other company is currently providing this service and the management team agrees that introducing this service will give E-kin a temporary competitive niche in the marketplace. Utilizing existing technology, E-kin has designed a process whereby customers can use point-and-click technology and a variety of independent image sources (websites) to design shirt logos and designs on-line. These designs are transferred to a wide line of clothing stock options and delivered via common carrier.

Although there are no new technologies being used the process itself is currently unique. Noah is aware that many new e-commerce companies have submitted their unique Internet processes for Patent protection and has encouraged E-kin to do the same.

Issue 1:

E-kin’s Sales and Marketing Director, Ken E Sellit, is convinced that capturing and protecting this niche market could be paramount to the growth and success of the company and has been lobbying the rest of the management team to agree. Slim (CEO) agrees that it makes economic sense to take advantage of the current competitive landscape and lock in this potential niche but is bothered by feelings of what he describes as "taking credit for other peoples’ ideas". His feeling is that all E-kin has done is utilize technologies previously developed. The only original idea he feels belongs to E-kin is the particular way these ideas have been brought together. He realizes that even if he applies for a patent there is no guarantee of approval. Furthermore, Slim is concerned that if E-kin applies for the patent it could damage the company’s relationship with several key clothing suppliers and attach a negative overall image to the company as being opportunistic. He also knows that the shareholders of the Company will expect him to do everything reasonable to enhance the long-term value of the company and niche markets such as this could make the difference in being successful over the long-term. Slim has the final word on whether to pursue the patent but is not sure if the economic factors outweigh the ethical apprehension he is feeling. He has mentioned his concerns to the various members of the management team and knows some of them share his apprehension although he is not sure how strongly. Either way he decides he knows there will be some disappointment.

Questions:

  1. Are Slim’s apprehensions justified? Explain.
  2. What would you do? Why? Is there a difference between what you would do and what you should do? If so, what?
  3. Slim decides not to apply for the patent. Assuming you are Slim, write a letter to the shareholders justifying your decision.

Issue 2:

Noah has pointed out that by allowing customers to create their own logos and designs electronically there could be situations where a customer-design mimics or infringes upon established trade marks or copyrights.

Questions for discussion:

  1. Who has the legal responsibility for monitoring this or making decisions on potential copyright infringements? Who has the ethical responsibility? What is the difference? Why?
  2. Should E-kin review and approve each design prior to accepting? Why or why not?
  3. Noah has proposed that E-kin use disclaimers to minimize its responsibility. How will the use of disclaimers impact E-kin’s ethical responsibility?
  4. What is the relationship between intellectual property and ethics in e-commerce?

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E-Kin1: A Case Study
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