Skip to main content
Markkula Center for Applied Ethics

Silicon Valley Business Ethics Cases

Unchartered Territory

When Innovation Outpaces Regulation

Do firm's have an obligation to self-regulate?

David Johnson holds a major leadership position within an established biotechnology firm. The firm has successfully pursued wildly innovative research utilizing DNA that has pushed the boundaries of science. Many potential clients – from universities and medical centers to private institutions – expressed a strong interest in the company's technology. Knowing that this technology was both powerful and relatively unregulated by the government, both Johnson and the company were keen to monitor who they sold their products to.

The company's solution was to investigate potential clients and only sell to those who demonstrated “bona fide use,” i.e. a legitimate use that would be carried out in good faith. However, determining what was and was not bona fide use proved to be tricky. Some researchers wanted to use the technology to investigate the genes of specific ethnic groups in order to understand common genetic diseases within that group. While this particular project was intended to benefit people, the company was concerned about how that information could potentially be used in the future, not to mention the company's culpability for that use given that its technology was used in the research.

The company was concerned that the kind of information the potential customer would have access to could be used to discriminate against people with certain genetic markers, particularly by insurance companies looking to increase rates for clients at a higher risk for illness. At the same time, the investors of the biotech firm expect a return, given the high costs of research and development as well as the amount of risk they took on funding the project.

Does the firm have an obligation to self-regulate their product? Are their “bona-fide use” standards sufficient?

business, case