BYD is also vicariously liable for the trade secret infringement as it has the right and ability to supervise the infringing activity and it also has a direct financial interest in that activity. In fact, BYD has been constantly and intentionally stealing trade secret from Foxconn through employee networks. Such deliberate act of theft gives rise to legal and ethical issues that can be prosecuted under criminal offence. Secondly, BYD has used unethical learning by hiring recruitment strategy to solicit Foxconn’s key employees to work for BYD thereby gaining expertise and know-how to compete successfully in the industry.
These key employees can be held liable to Foxconn for breach of fiduciary duty and fraud and BYD’s unethical actions of inducing those key employees to violate their confidentiality agreement can give rise to lawsuits of tortious interference with contract. However, because the Chinese legal and political systems are ineffective and inefficient in enforcing the intellectual property law or other corporate law, the offender flourishes and the victim suffers unfairly. The issues in the Foxconn case are complex because of the business, political, and legal issues intertwined in them.
Two major business issues identified in the Foxconn case involved leadership styles adopted by top management and severe competition of market share in the high tech industry. Firstly, the founder of Foxconn, Terry Guo, adopted the authoritative management style to control his business and employees. Guo’s strict work codes for his employees, tight cost control policy, rank-conscious environment, and the unyielding approach to the media have caused some resentment both within the organization and in the EMS industry.
The Term Paper on Business Industry Analysis
Industry and Competition Several large companies have focused on the multi-occupant vehicle market, specifically school bus production, in North America. Competitors within the school bus manufacturing industry consist of the Henlys Group PLC, a British based company, and two U.S. bus companies, Collins Industries Inc. and Navistar International. Henlys consists of Blue Bird Corporation, Prevost ...
Because of this, the EMS industry welcomes BYD to “counterbalance Foxconn’s market power”. Intentional theft of trade secrets by Foxconn employees demonstrates corporate sabotage, a way for Foxconn employees to vent their resentment to the unfair personnel treatment of local as compared to the Taiwanese managers. Foxconn’s authoritative leadership style is not suitable in the EMS industry as it leaves the organization vulnerable to unhappy employees sabotaging the employer and allowing market challenger, BYD, to attack its weak area.
Perhaps if Guo adopt a participative management style and create a friendly working environment, the employees will feel loyal to the organization and work towards the overall goal of the company than to sabotage the employer. Secondly, in order to compete with the big player, BYD “tapped the knowledge resources readily available in the marketplace” and innovate using non-patented technologies to become one of the largest low-end mobile phone manufacturer.
BYD has been pursuing unscrupulous competition such as theft of trade secret, tactful copying of technology, and hiring away Foxconn’s key employees who have access to the company’s confidential information. BYD use the strategy of learning by hiring and intentional interference with contract to create unfair competition and gain competitive advantage over Foxconn. This is a serious business concern because while competition is inevitable in the business world, unscrupulous competition such as that of BYD corrupts the market place and breeds more offenders especially with the legal system not functioning properly.
An ethical employer would have the obligation to inform employees to refrain from unauthorized use of proprietary information of the former employer; however BYD’s hiring practice was absolutely immoral with the intention to fraud the system. BYD’s illicit use of intellectual property driven by high profits and ignoring the legal aspects can lend them to crippling lawsuits. From the Foxconn case, there are some legal management insights that global business needs to consider.
The Term Paper on Property Rights Of Women In Nineteenth-Century England
The property rights of women during most of the nineteenth century were dependent upon their marital status. Once women married, their property rights were governed by English common law, which required that the property women took into a marriage, or acquired subsequently, be legally absorbed by their husbands. Furthermore, married women could not make wills or dispose of any property without ...
Firstly, trade secrets and intellectual properties are intangible assets which give the organization the competitive advantage. There is a need to protect these assets. Trade secrets can be protected through contractual measures by incorporating the confidentiality, non-compete, and non-solicitation agreements in the employment contract and include a payment of money in exchange for the promise. Also, organization needs to properly document and discuss trade secret policy with employees and contractors who have access to this information.
Secondly, management must secure and maintain enforceable rights that will prevent competitor from adopting the intellectual property. Steps to protect intellectual property include engaging a good patent attorney to help develop and implement a strategy for building intellectual property and using intellectual property rights to protect the business. Thirdly, management needs to understand the Chinese political and legal system before investing in that geographic region. The Chinese legal system is inefficient in implementing the intellectual property rights law.
There are inconsistent and unclear administrative and court practices which makes it a difficult and unsafe environment for original creator of IP to operate their business in that region. Often lawsuits are time consuming and financially demanding for the parties involved. One of the key “take-away’ for managers is to understand that failure to comply with the law can result in vexing lawsuits, devastating fines, and imprisonment for individuals involved. Entrepreneurs need to be legally astute to understand and manage legal risk and use legal tools like contractual agreements and IP protections to increase the success of the business.
The Essay on Legal Protections Of Intellectual Property
They are different types of and legal protections of intellectual property. There are Copyrights, Patents, Trademarks, and Trade Secrets. Copyrights protect original works of authorship, such as literature, music, artistic works, and computer software, for example plagiarism, or use of music with in a game or music without the owner’s permission. As the holder of a copyright you have the exclusive ...
Illicit use of intellectual property is a political phenomenon; in most cases the government lack consistent enforcement of the law and court officials takes things to their own hands. The battle over intellectual property has become an important global economic conflict. The countries where most intellectual property owners reside and where most brand revenue is generated argue that protecting ownership is important to ensure their competitive advantage. The Chinese government has taken steps to stop the illicit use of intellectual property but the progress is discouraging as can be demonstrated in the Foxconn vs BYD case.
