Neem Case

FACTS OF THE CASE

  • Neem considered sacred by Hindus and Muslims 
  • 14 million neem trees in India
    • Used widely across India
    • Neem industry employs a large population of poor people in India
  • Neems can be used for medicinal purposes, food production, toiletries, fuel, and pesticides
  • Chetan runs a family-owned business of neem products
    • His family has run the business for the last 7 years
  • Tom has a patent on the pesticide formula, he is the director of Oregon Organic Pesticide Services (OOPS)
  • Tom’s business became immediately successful and OOPS is now working towards moving worldwide
    • OOPS will be able to sell the neem products for a lower price than Chetan
  • Tom open to collaboration if it would help him make more money
  • Chetan met with Tom several times

 

Ethical Question: What rights does Chetan have to the Neem seed extract and is it ethical for the US company to uphold their patent rights? 

 

Who has the rights to the seeds and the pesticides? Indigenous knowledge

 

STAKEHOLDERS AND MOTIVATIONS

 

  1. O.O.P.S.
    1. Incentive to make money and be successful
    2. Could earn a greater profit by demanding royalties from Chetan
    3. Want to bring in an income for the Oregon Organic Pesticides Services
  2. Tom Johnson 
    1. Currently has a patent of the pesticide recipe
    2. Wants to make money off the pesticide that he created
  3. Chetan
    1. His family has been running the business for 7 generations
    2. Has been using the neem tree to produce products for generations
  4. Chetan’s Employees
    1. Want to keep their jobs and provide for their families
  5. Corporate investors in the US
    1. Want a return on investment 
  6. Other small businesses that make neem-based insecticides
    1. They would suffer from the larger US monopolizing the market
    2. They would also have to pay a royalty
    3. Plant is native to India and sacred

 

POTENTIAL SOLUTIONS

 

  1. Continue as normal 
    1. Pro:
      1. Has nothing to do 
      2. Sees no immediate change 
    2. Con:
      1. Risks losing company
      2. Cannot really challenge the rival company in the future

 

  1. Chetan partners with the O.O.P.S if possible
    1. Pro:
      1. Will be able to continue operations
      2. Might be able to reach  more markets
      3. Would have influence in the other company
    2. Cons:
      1. They might say no
      2. Might see an initial decline in profits 
      3. Could be betrayed by the other company
  2. Stop selling pesticides
    1. Pro:
      1. Will be in an entirely different market 
      2. Will not have to compete with the other company
    2. Con:
      1. Will lose large part of sales

 

  1. Based on past rejections of patents, Chetan should fight the patent.
    1. Pro:
      1. Could force the rival company to not patent the pesticides 
    2. Con:
      1. Would not stop the company from selling the pesticide under an unpatented label
      2. Would cost a lot of money

 

Seek Outside Guidance:

https://sites.psu.edu/senhese/2016/10/24/case-study-7-intellectual-property/

 

https://www.neemfoundation.org/about-neem/patent-on-neem/

 

BEST SOLUTION/IMPACT:

I believe the best option is number two. Chetan should attempt to partner with the other company. I believe that this is the best solution because Chetan has valuable on the ground partners and practical knowledge that would be beneficial to the company if they decided  to work with him. This would allow Chetan to expand his operations while maintaining the integrity of his current company. Additionally, he would be further protected by outside competition as he now has this larger corporation at his side.

 

This solution would also be incredibly beneficial to the company because, as was previously stated, Chetan has a wealth of knowledge about operating in country that would help the growth of the operation for the corporation. This would likely increase profits for the corporation and also allow for them to develop goodwill with the community and internationally as it would be seen as the ethical thing to do. In this case people in the country would be more likely to buy from them if they knew the corporation was working with a local business, and investors abroad would see the venture as ethical and sustainable.

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