Identify the intellectual property implications in this scenario.
In most cases, intellectual property is an original creation of the human mind. According to Bhattacharya & Saha (2011), such productions may include literary, artistic, scientific, or technical creation . Intellectual property rights (IPR), at the same time, imply the legal rights given to the creator or inventor to safeguard his or her creation or invention for a particular time period (Bhattacharya & Saha, 2011). These legal rights allow the creator or inventor to utilize his creation for a specific period. It also safeguards the knowledge from unlawful utilization since releasing new technology or drugs on the market is costly. All in all, obtaining an IPR is essential as it helps in the economic development of a nation by encouraging healthy competition as well as commercial and industrial growth.
Bhattacharya & Saha (2011) note that IPR improves the advancement of technology in several ways. First, issues such as piracy, infringement, as well as unauthorized use can be easily handled . Second, it provides vast information to the public because all IP forms are available to the public except in situations of trade secrets. Patents are essentially safeguarded as intellectual property. In other words, a patent is a recognition of the IP form attached in the invention . They are usually given for a creation that satisfies the criteria for non-obviousness, universal novelty, as well as commercial or industrial application (Bhattacharya & Saha, 2011). The primary rationale behind obtaining a patent for an invention is to make money via exclusivity. In this regard, the one who has a patent can decide to exercise his exclusivity either by licensing the creation to someone else or by marketing the product himself.
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In the scenario, Beta, Inc. copies Acme’s, Inc. drug that will provide immortality to all and releases it on the market even though Acme, INC obtained a patent on the drug . By receiving a patent on the drug , Acme, Inc. has intellectual property rights on the drug . Therefore, the company’s invention is protected for a specific period indicating that Acme, Inc. has exclusive rights to the drug. Mondal & Pingali (2017) demonstrate that a patent is given to enable the creator to gain reasonable profits. At the same time, competition is free to enter the market the moment the patent has expired. Therefore, in the scenario, Beta, Inc. violated Acme’s, Inc. intellectual property rights when it released its drug onto the market before Acme’s Inc. patent had expired.
Ideally, pharmaceuticals innovations are considered to be a risky and expensive investment, and that is why pharmaceutical industries obtain intellectual property rights to safeguard the invention (Mondal & Pingali, 2017). Even though the President of Acme publicly said that he had no intentions to sell the drug, Beta had no right to mimic and sell the drug themselves since another company had the intellectual property rights to the drug. For the most part, when an organization is given a patent for a product, the corporate puts in place monopoly pricing and accumulates profits in that period. As a result, since Acme has a patent for the drug, the company has a right to employ monopoly pricing and gain earnings until its patent expires. Thus, Beta could have waited until the patent expires to create and market the drug.
Discuss how alternative dispute resolution applies.
According to Smith (2009), patent conflicts generally generate where a third party supposedly violates the monopoly right of one who holds a patent, even though other disagreements such as those consisting of licensing agreements can also arise. In most cases of patent disputes, the courts are usually involved where they decide on technical queries of law and fact with regards to claims of supposed patent violations. Often, this needs a suitable means to decipher the patent claims. Litigation, in general, is often a complicated procedure which contributes to the regularly lengthy as well as the expensive process of litigation (Smith, 2009).
Generally speaking, Alternative Dispute Resolution consists of several flexible procedures for resolving conflicts. It is usually created to resolve disputes faster and at a lower cost than traditional litigation. More so, it settles disputes more informally than litigation. Emini (2017) indicates that arbitration is an alternative dispute resolution in patent infringements. It grants a process of dispute resolution that minimizes costs, time, and public knowledge while issuing a binding and informed decision on the values. Arbitration, in essence, refers to a contractual agreement between parties that agree to bring conflicts before an arbitrator (Emini, 2017). That is to say, in arbitration , there is a neutral third party who decides after hearing the arguments of both parties involved in the dispute; therefore, both parties are given a chance to state their position. Often, arbitration can be tailored to meet the needs of the parties involved in the dispute.
For the most part, the arbitration proceeding is private, and the resulting award is final, and it cannot be appealed later. The award is usually binding except in cases where the disputing parties agree to late award modifications if there is a declaration that the patent is invalid or cannot be enforced in the future. It is vital to note that the arbitral award can be non-binding or binding on the conflicting parties and is typically granted without a written point of view stating the reason for the award. Generally, patent arbitration saves time and decreases costs, henceforth enabling a more significant return on R&D and patent protection during its restricted monopoly term (Emini, 2017). Also, it protects the parties in the pharmaceutical industries from scrutiny from the public while, at the same time, maintaining their license agreements, commercial relationships, as well as sensitive information.
Patent mediation is also considered to be an Alternative Dispute Resolution. It is generally assisted communications for agreement and is based on informed consent of the disputing parties. This process is informal and flexible; thus allowing mutually beneficial solutions. Also, it is the most commonly utilized ADR process (Smith, 2009). Herein, a third party mediator meets either jointly or separately with the conflicting parties and hears both sides of the dispute and aid the parties in attaining a non-binding resolution.
In most cases, the process of mediation is private and confidential unless the parties involved in the dispute agree otherwise. Also, no transcript of the proceeding is issued . The mediator and the parties may give a written notice prior to a written settlement of the agreement is put in place to pull out from the mediation. Typically, a prosperous mediation leads to a party-created compromise to resolve the conflict or a mutual understanding as to another step to resolve the dispute , such as litigation or arbitration. Overall, mediation is advantageous as it saves time and money, there is less risk of invalidation of the patent , it is confidential, and it avoids the discovery process (Smith, 2009).
Identify the ethical dilemma faced by Acme, and the dilemma faced by Beta. Use two theories of ethical thoughts to discuss the recommended course of action by both companies.
Acme, Inc. is facing an ethical dilemma of whether to take legal action on Beta, Inc. because Beta infringed Acme’s property rights on a drug that will provide immortality to all. Beta copied and marketed Acme’ drug even though Acme has a patent to the drug. However, Acme’s president openly declared that he had no intentions to sell the drug even though the pharmaceutical industry emphasizes on the importance of liberties such as a person’s right to health. Also, although, Beta released the drug onto the market, the corporation does not make any profit on the sale of the drug. However, it only charges enough to take care of the manufacturing costs.
Beta, Inc. on the other hand, faces an ethical dilemma of copying and marketing Acme’s drug even though Acme had received a patent for the drug. By having a patent , Acme has the right to control the production and sale of the drug until the patent expires. It is unethical for a company to copy a pharmaceutical product prior to the patent expiry. Therefore, in the scenario, Beta faces an ethical dilemma of upholding Acme’s intellectual property rights and the interests of the public in healthcare, even though Acme had no intentions of marketing the drug.
According to Mandal, Ponnambath, & Parija (2016), utilitarian ethical theory indicates that decisions are made by the most considerable amount of benefit received by the highest number of people. In other words, following utilitarianism, a decision is viewed as morally right if it results in better consequences. Herein, the results generally determine the ethicality of an intervention. It is vital to note that this approach can harm some people while, at the same time, the overall results are a maximum benefit.
In contrast to utilitarianism, deontology theory emphasizes the ethics of duty. All individuals have specific obligations. In this case, the morality of action dramatically relies on the action nature. That is, harm is not acceptable regardless of its aftermath (Mandall, Ponnambath, & Parija, 2016). Herein, the choices may be suitable for a person but do not fundamentally produce a good outcome for the society as a whole. In deontology approach, individuals must observe their duties regardless of their aftermath; hence an action is viewed as morally right if it honors a particular obligation.
From both the utilitarian and deontological perspective, the recommended course of action for Acme and Beta companies in the scenario is to engage in alternative dispute resolution. First, Acme should agree to market the drug as fundamental liberties such as a person’s right to health supersede intellectual property rights. The main aim of pharmaceutical companies should be to maintain the interests of the public in healthcare. Therefore, according to the utilitarian approach, refusing to market a drug that can help many people is not ethical as the action fails to bring the most significant amount of benefit to the highest number of people. As a result, Acme should agree to market the drug since it has a patent for the drug.
From a deontological perspective, Beta should not have copied and released the drug into the market irrespective of whether it is not profiting from the drug. The deontological approach argues that a person should observe his or her duty regardless of the aftermath. In the scenario, Beta must respect Acme’s intellectual property rights to the drug because that is the law. Therefore, the recommended course of action for Beta Inc. is to stop re-creating Acme’s drug and selling it. Instead, the company should wait for the patent to expire for it to start manufacturing and selling the drug.
Conclusion
As previously mentioned, intellectual property rights are designed to protect an individual’s invention or creation. Patents generally grant an inventor exclusive rights to the invention, hence the competition is not allowed to copy the invention unless the patent expires. The pharmaceutical industry, as seen in the scenario, faces various ethical dilemmas in regards to intellectual property rights. Therefore, gaining knowledge on intellectual property and ethics is imperative in providing solutions to the dilemmas .
References
Bhattacharya, S., & Saha, C. (2011). Intellectual property rights: An overview and implications in pharmaceutical industry. Journal of Advanced Pharmaceutical Technology & Research, 2 (2), 88. doi:10.4103/2231-4040.82952
Emini, A. (2017). Patent Arbitration: The Underutilized process for Resolving International Patent Disputes in the Pharmaceutical and Biotechnology Industries. Arbitration Law Review, 9 (10), 1-24. Retrieved from http://elibrary.law.psu.edu/arbitrationlawreview
Mandal, J., Ponnambath, D., & Parija, S. (2016). Utilitarian and deontological ethics in medicine. Tropical Parasitology, 6 (1), 5. doi:10.4103/2229-5070.175024
Mondal, S. S., & Pingali, V. (2017). Competition and Intellectual Property Policies in the Indian Pharmaceutical Sector. Vikalpa, 42 (2), 61-79. doi:10.1177/0256090917704561
Smith, M. (2009). Mediation as an alternative to litigation in patent infringement disputes. ADR Bulletin, 11 (6), 1-8. Retrieved November, from http://e publications.bond .edu.au/adr/vol11/iss6/1
