ETH 321 Week 5
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ETH321Week5SecuritiesandInternationalRegulatoryAgencies1.pptxScenario
You are the CEO of Bonner, a U.S.-based farm equipment corporation. Bonner recently announced the release of an innovative new tractor with technology based on a patented invention developed by Bonner's engineers. Bonner's vice president, who is aware of the upcoming product offering, bought 100,000 shares of Bonner stock prior to the announcement. You found out about the vice president's stock purchase on the day of the announcement.
One week after the announcement, Bonner received a letter from a German farm equipment corporation, accusing Bonner of patent infringement based on the new tractor's technology.
Bonner's board of directors asked you to assess the vice president's liability for the stock purchase and the company's options for resolving the German corporation's patent infringement claim.
Compare the resolution of the patent dispute in a U.S. court with the resolution of the dispute using the World Intellectual Property Organization's (WIPO) dispute resolution program
Patent dispute in US courts
Very slow, judges must be educated causing it to take more time, and court litigation often gets appealed to a higher court causing more time and money.
WIPO
Fast, reduced fees, Expertise available, flexibility, confidentiality, and the possibility of a continued business relationship.
According to “WIPO” (n.d.), “WIPO Expedited Arbritration provides a reduced time frame and fee structure in cases that are less complex and modest in dispute value” (para.2).
2
Assess the liability of Bonner's vice president for purchasing the corporation's stock prior to the announcement of the new tractor.
What is Insider Training?
What are the liabilities for Insider Trading?
Insider Trading defined is According to “Dictionary.com” (2019), “the illegal buying and selling of securities by persons acting on privileged information” (para. 1).
The liabilities of insider trading are civil and criminal fines and/or a prison sentence.
3
Assess whether Bonner has any legal or ethical duties to disclose the stock purchase, and if so, to whom?
Bonner Corporation has both legal and ethical duties to disclose this stock purchase immediately to the Board of directors and to the public.
4
risk management procedures
Implement and distribute a insider trading policy.
Educate all associates on the insider trading policy.
Provide information on all items that can not be traded.
Require permission from the legal department or someone that is responsible for ensuring that all trading is done right.
Conduct regular inspections/audits to ensure there is no insider trading taking place.
Restrict trading around questionable time frames like the launch of a new product or when earning reports come out.
Implement technology/trading software that can monitor all trading that happens within the company.
5
Conclusion
Compared the resolution of the patent dispute in a U.S. court with the resolution of the dispute using the World Intellectual Property Organization's (WIPO) dispute resolution program. Search the internet to review WIPO's dispute resolution program. (Information about WIPO's dispute resolution program may be located on their website by searching the Internet for WIPO).
Assessed the liability of Bonner's vice president for purchasing the corporation's stock prior to the announcement of the new tractor.
Assessed whether Bonner has any legal or ethical duties to disclose the stock purchase, and if so, to whom?
Discussed risk management procedures Bonner can adopt to avoid or reduce situations like these from happening in the future.
