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Principles of Marketing

10.6 Ethical Considerations in New Product Development

Principles of Marketing10.6 Ethical Considerations in New Product Development

10.6 Ethical Considerations in New Product Development

Learning Outcomes

By the end of this section, you will be able to:

  • 1 Discuss violations of patents, trademarks, and/or copyrights.
  • 2 Describe ways to exercise due care in product development.

Violations of Patents, Trademarks, and/or Copyrights

Before we proceed with a discussion of the areas of concern with respect to patents, trademarks, and copyrights in new product development, it would probably be helpful to have some definitions. Patents secure the right to exclude others from making, using, or offering for sale the invention you’ve developed. As a general rule, US patents last 20 years from when the application is filed with the US Patent Office. Copyrights are original works of authorship that include software, songs, television shows, and motion pictures. Trademarks are words or symbols legally registered or established by use as representing a company or product. Collectively, these terms are referred to as intellectual property (IP).

You may think that intellectual property infringements are uncommon or, at least, limited to new product development by smaller companies, but nothing could be further from the truth. Patent lawsuits and ever-increasing scrutiny for anticompetitive behavior have cost “Big Tech” companies like Apple, Microsoft, and Google hundreds of millions of dollars.

For example, in March 2021, a jury ruled against Apple for patent infringement and ordered it to pay over $300 million to Personalized Media Communications LLC. That same year, a judge ruled that Google had infringed on five patents owned by Sonos, and if the ruling is upheld, it may result in the ban of imports of products like Google Home and Pixel smartphones.47

Intellectual property infringement can have serious consequences in terms of both monetary fines and, of course, the reputation of the company. Penalties can include civil damages, lost profits, injunctions, payment of the other damaged party’s attorneys’ fees, and even felony charges with prison time.48

Methods of Exercising Due Care During Product Development

Intellectual property rights add immense value to a company’s assets. Imagine having a product team invest time, energy, and money developing and then launching a new product only to discover that the company’s intellectual property rights aren’t protected or—worse yet—that the product team has infringed on another company’s intellectual property rights. That’s why it’s important in the product development stage to do three things:

  • Conduct a Trademark Search: It’s critical to know whether anyone else is already using the mark before time and resources are invested into developing a name and market recognition. For example, Takeda Pharmaceuticals was required to change the name of its antidepressant drug Brintellix to Trintellix because of consumer confusion between Brintellix and an anti-blood-clotting drug named Brilinta.49
  • File a Trademark Application: Filing a trademark application provides the company with a bona fide statement of intention to use the mark within six months of the application.
  • Conduct a Patent Search: If the product relates to a technological or scientific invention, the company should also conduct a patent search. As noted above, the patent excludes others from making, using, or selling a claimed invention for 20 years.50

Another issue that you may hear a lot about is the control or lack of control users have over their personal data. Companies that collect personal data have to carefully (and ethically) consider what information is embedded in systems design, how much data is really needed from users, where that data will be stored, and when and how it will be disposed of after use.51

Companies with a Conscience

Meta

Figure 10.10 Meta is taking steps to better address ethical issues regarding users’ personal data. (credit: “The Art of Facebook” by mkhmarketing.wordpress.com/about/flickr, CC BY 2.0)

Meta (formerly Facebook) has come under fire for several reasons recently, including a scandal that involved a whistleblower (see Figure 10.10). This person revealed that the tech giant “chooses profits over safety” when they released internal research and documents and testified before the United States Senate.52

However, the company took steps to ensure ethics in its new product development by hiring Zvika Krieger to its Responsible Innovation Team (RIT). Although the team had been in existence for some time, it’s growing in size with the emergence of new ethical issues. Krieger’s role focused on ethical issues in both the engineering and the design processes. For example, the RIT was involved in the decision to disallow filtering dating app results by race.

The RIT focused on the design and development stage of product development with the specific role of identifying ethical issues. Krieger departed Meta, and the RIT was dissolved in 2022; most members moved into other areas of the company, where they may be able to influence decisions more directly.

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