Part 1: Ethical Decision-Making
Azadirchta indica (Neem), a tree indigenous to India is considered sacred by Hindus as well as Muslims. The 14 million trees in India have been used extensively over the past 2,000 years for medicinal purposes, food production, toiletries, fuel, and pesticides. Neem products, especially pesticides, are used widely across India and the industry as a whole employs over 100,000 of the poorest people. Chetan lives in Agra, India and operates a small business of neem tree products including pesticides, skin creams, contraceptives, lamp oil and many other products. Chetan’s family has owned this business for the last seven generations and after completion of his high school education, he took over the reins. The business employs 60 people in different functions; mostly manufacturing but also scientific analysis, quality control and sales. Despite being familiar with over 200 applications of the tree and its derivatives, Chetan does not know the exact name of the neem seed extract, Azadirachtin.  Ten years ago, Tom Johnson, the Director of Oregon Organic Pesticide Services (OOPS) travelled to India on vacation and discovered the neem seeds’ use as a potent pesticide. After importing neem seeds to his factory in the USA and experimentation, he developed a formula for an organic pesticide based on the seeds. His company invested $5 million to conduct extensive safety and performance tests over the next decade. Finally, after securing the necessary clearances required by the EPA, Tom received a patent for the pesticide formula and brought the product to market. The product was an instant success with a net profit of $12.5 million in the first year. OOPS now wants to set up a subsidiary business in the rapidly emerging market of India. They have the worldwide patent and financial capital to manufacture and sell the product on a large scale. With economies of scale, OOPS will be able to sell the product at a lower price that Chetan’s business. People are likely to prefer buying products from US companies over small Indian cottage industries, thus further affecting Chetan’s business. Based on their patent, OOPS is demanding a royalty from Chetan’s business and other small industries that make neem-based insecticides.  What rights does Chetan have and is it ethical for the US company to uphold their patent rights? 
 

To be able to fully analyze what rights Chetan has and what he can do moving forward, we must establish the facts of the 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
• Based on their patent, OOPS is demanding a royalty from other small industries that make neem-based products
  • this would include Chetan’s business

It is also helpful to define the actual ethical question at hand:

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?

Moving forward, we must also analyze the key stakeholders and their motivations in this ethical dilemma:

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.  Seems to have very selfish personal motivations
3. Chetan
   1. Professionally wants to be able to provide for himself, his family, and provide jobs for the local community
   2. This also a very personal issue for Chetan
      1. the business has been in his family for 7 generations
      2. the people of the community are relying on his to provide them with jobs
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

Based on the information above, a few different pathways of solutions can be explored:

1. Chetan corners the market for other neem-based products that are not pesticides
   1. Pros
      1. Chetan would be targeting some of the market that OOPS does not have control over
      2. There would still be a large market for non-pesticide neem-based products (skin cream, contraceptives, etc.)
      3. Chetan’s business would still be successful
      4. OOPS would also still be able to be successful
   2. Cons
      1. Chetan is still losing a lot of his clientele that used to buy pesticides from him
      2. Chetan and other small businesses would still have to pay the royalty
2. Chetan fights the patent
   1. Pros
      1. If all goes well, Chetan and all other small business will be able to compete fairly in the market
      2. Chetan’s business will still be able to run
      3. The royalty will no longer be a thing
   2. Cons
      1. Long and costly process
      2. There is no guarantee that the government will revoke the patent
3. Because a patent is only viable for a specific formula/ singular way of making something, Chetan could create a better formula and get a patent for that
   1. Pros
      1. Chetan will then have rights over the neem-based insecticide
      2. In addition to Chetan, other small business will be able to function without the unfair competition with a large American company
      3. No one would have to pay a royalty
   2. Cons
      1. Chetan will have to come up with a better/ new way of developing and creating neem insecticide which could be challenging
      2. Now that Chetan has the patent, other small business would be at a disadvantage.

After weighing the pros and cons of all the solutions, I believe solution number 2 is the best. Chetan does have a lot of rights that he should be fighting to protect, for not only himself but other small neem businesses. After seeking additional assistance online and doing some research on patents like this in the past, many have been rejecting because you cannot patent a naturally occurring genetic material. For example, after looking at the rules for plant patents in the US, plant patents will only be given to a person who “invented or discovered and asexually reproduced a distinct and new variety of plant, other than a tuber propagated plant or a plant found in an uncultivated state”. The neem plant does not fall into this category at all. In addition to this, there are so many pros if Chetan fights the patent. He will be saving his small business, but also the businesses of so many other local neem sellers. There will be no royalty and no company would ever be able to do this in the future if Chetan fights it now. Of course with any solution there are cons. To begin, fighting a patent is a a lengthy and expensive process. Hopefully, this could be handled by having all of the other local neem sellers pitch in to support Chetan on this crusade. Also, economically, although Chetan will be paying a lot of money for this upfront, it will be well made up for when he is able to actually run his business and not have to shut it down. Although there is no gaurantee that the patent will be revoked, chances are high that the Indian government would want to support local businesses and economies over an American company and this could sway them.

In this solution, the stakeholders of Chetan, his employees, and other small investors would benefit greatly. All of their personal and professional goals would be met because the business would be able to function on the same level if not a higher level. As for OOPS and Tom Johnson, their personal and professional goals would not be met because they were taking rights away from the original neem sellers.

In terms of the impact of the solution, this solution would cause minimal impact on the community which would be ideal. Socially, the dynamic between the neem-businesses and the community would be maintained. This solution would also be maximally beneficial to the environment because if OOPS were to dominate the neem industry, it would most likely destroy and diminish the amount of neem available. Large factories and farms would definitely be put in place, which of course, would be environmentally detrimental.

Overall, this is the best solution so that Chetan and his fellow neem business men get the rights they deserve.

Part 2: Grassroots Diplomacy

Six months after launch, OOPS is crushing the Indian market. OOPS now has over 20 different neem-based products being sold through partnerships with supermarket chains. The most successful product is a neem-based soap. Ironically, the paper wrapper for OOPS’ neem soap features a photo of Tom Johnson. Chetan’s soap wrapper featured a photo of his great-grandfather, a local legend who founded the business over a century back. Chetan met with Tom Johnson several times to urge him to move out of the market or find a way to collaborate. Tom refused to abandon the market but was open to a collaboration if it would help him make more money. 
 
Chetan’s business is suffering and he will likely have to lay off half of his staff at the end of the month. These employees (and their ancestors) have been working with Chetan and his family for generations. While Chetan’s family is financially well-off with highly diversified investments and will not suffer as much with the declining business, Chetan is incredibly sad to bid adieu to his employees. To make things worse, Chetan’s employees saw him meet with Tom Johnson several times and believe that he has cut some kind of a deal with OOPS. They feel cheated and abandoned by the very man who is supposed to look out for them. Some employees have resigned to their fate, some are confident that Chetan will find a way out, and some want to physically beat him up.

 If you were Chetan, what would you do next?

We can reevaluate and add to our list of facts based on this new information:

FACTS OF THE CASE

• OOPS is dominating the Indian market and now sells a variety of neem products
• the paper wrapper is of Tom Johnson’s face, while the wrapper of Chetan’s products is a picture of his popular great-grandfather
• Tom is not willing to leave the market, but is willing to work with Chetan if it would help make OOPS more money
• Chetan’s business is in rapid decline
  • he will have to lay off staff
  • his staff is angry at Chetan for even meeting with Tom Johnson because they feel cheated and abandoned

The main question at hand is what should Chetan do to save his business while also appeasing his employees?

Next, we can evaluate the major stakeholders and their motivations, which are pretty much identical to the ones from Part 1:

STAKEHOLDERS AND MOTIVATIONS

1. O.O.P.S.
   1. Incentive to make money and be successful
   2. Want to bring in an income for the Oregon Organic Pesticides Services
   3. little motivation or care for Chetan and local neem farmers
2. Tom Johnson
   1. Currently has a patent of the pesticide recipe
   2. Wants to make money off the pesticide that he created
   3. little motivation or care for Chetan and local neem farmers
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
   3. wants to support his community and make his loyal workers happy
4. Chetan’s Employees
   1. Want to keep their jobs and provide for their families
   2. Are mad at Chetan for talking to Tom Johnson
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

Based on the established facts and information regarding the progression of this situation, the best solution would to have Chetan propose a beneficially partnership to Tom Johnson. Chetan could suggest to Tom that he would allow Tom to use his grandfather’s picture on the OOPS’ soap wrapper. This would give the OOPS name a lot more respect to the local people. Seeing a well respected face would motivate people to buy that product because they know and trust Chetan’s grandfather. Tom Johnson would make more money from this and Chetan would have a partnership that would bring in money for himself. Additionally, he could leverage this deal so that maybe Chetan will become head of marketing for the product and will be able to employ the workers he has now.

The short term implications of this would be that Chetan and his employees may be a little upset in the befginning because they would have to make lots of sacrifices instead of having their business go back to normal. Tom Johnson may also be very skeptical of having Chetan in his business. However, after these initial tensions simmer down, the long term implications would be very positive. Chetan would have a steady flow of money and would be able to pay his employees. Tom Johnson would get more business and more money.

This solution is incredibly appropriate for the culture because trust goes such a long way in a lot of other countries. The solution of putting a trusted elder’s face on the packaging directly targets that sense of trust in the customers.

In this solution, both Tom and Chetan are able to save face. Although the employees may see Chetan in a more negative light at first, they will soon learn that he made this partnership so that they would not lose their jobs in the end. Tom’s face is saved because he will look a lot more caring and compassionate to the communities in India that he is targeting.

This solution is much better than Chetan giving up hope and having himself and his employees suffer in the end. Although they cannot retain the perfect original business they had in the beginning, this is the best solution for the situation they are in.

Overall, this solution would be maximally beneficial.