Markkula Center of Applied Ethics

The Case of the X979 Jumpstart

By Peter A. Facione

Who owns ideas? That question comes up again and again in the start-up environment. This fictional case study asks us to consider the ethical boundaries involved in intellectual property.

The computer market was ready for a new chip. That had been Knoll Tings’ assessment two years ago when he joined forces with John Callender, a genius engineer who had left Silicon Industries after the wafer-making giant declined to pursue his idea for a faster chip. Tings, who had 15 years experience as a marketing executive in technology, helped Callender obtain venture funding. Together, they had set up Millbrae Technologies to develop X979, Callender’s brainchild. Now CEO of the company, Tings had to get his product off the ground within the next few months or Millbrae Technologies would be in serious trouble. But the project was behind schedule due to technical glitches Callender had said "weren't supposed to happen."

Tings was beginning to wonder whether Callender was just not smart enough to bring his project to fruition. Or was it something else? Tings suspected that San Bruno Instruments, the chief competitor of Silicon Industries, was also working on a faster chip. It had to be. The timing was right. For a crazy moment, Tings actually wondered whether someone on the Millbrae Tech payroll might also be working for the San Bruno firm. Deliberate sabotage? No, that's not likely. His employees have more loyalty than that. Millbrae Tech is a family. He takes care of his people and they know it.

Thinking about the folks at San Bruno Instruments gave Tings an idea. He picked up the phone and called the CFO of the company, Susan Finn. The third member of the founding team, Finn was chief financial officer and, as is so often the case in a start-up, also a sort of chief cook and bottle washer. The company was too young for an HR director, but Finn had helped with some key hires.

"Susan," Tings told her earnestly, "we really need to jumpstart the X979 project. I’m seriously beginning to wonder if John is up to the job. We need a new pair of eyes in that lab, someone who can think outside the box, see what everyone else is missing. We have to get this project back on track."

Finn, who had also been worrying about the delays, responded, "I'm thinking a senior-level scientist or development expert, someone who knows our industry, our kinds of products, our markets…."

"Yes, you have the idea, Susan. We don't have any time to waste on this one. In fact, I was thinking, Susan, maybe you should target one of the senior R&D people at San Bruno Instruments. They have a chip design skunk works. Find out who their top people are there, and see if one of them is interested in making a lucrative career move."

Spring 2001

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