INTELLECTUAL PROPERTY PRIORITIES 1
INTELLECTUAL PROPERTY PRIORITIES
Melissa Ruk
School of Business, Liberty University
BUSI561 Legal Issues in Business
Professor Matthew Martin
November 26, 2022
Author Note:
Melissa Ruk
I have no known conflict of interest to disclose.
Correspondence concerning this article should be addressed to Melissa Ruk.
Email: maruk@liberty.edu
INTELLECTUAL PROPERTY PRIORITIES 2
In today’s business world, intellectual property (IP) plays a significant role in innovation
and is a crucial driver of economic growth (Williams, 2013). According to Williams, intellectual
property plays a significant role in what companies bring to the marketplace and what has been
deemed a valuable non-replaceable asset for a company’s balance sheet. Intellectual property
refers to the creation of intangible assets owned and legally protected by law (Fisher, 2001).
According to Fisher, intellectual property is the concept that intangible products created by the
human intellect merit the same protective and legal rights applied to tangible assets. Assets
considered intellectual property are inventions, literary works of art, logos, symbols, or names.
There are four primary IP forms: patents, trademarks, copyrights, and trade secrets (Poticha &
Duncan, 2019). Each of these four categories has unique features, what rights are covered, how
long the rights last, and how the rights can be enforced.
How should a for-profit corporation balance its business needs with the needs of its
customers?
The goal of any for-profit corporation is to earn profits through its operations. It is
usually concerned with its interests, such as creating value and returning value to its shareholders
and investors (Brealey et al., 2020). Even though the primary focus of a corporation is the
stakeholders’ interests, there has been an increased need for corporations to balance their
business needs and the needs of their customers. In the modern business world, there has been an
acceptance that shareholders are no longer the only stakeholders for companies; customers,
employees, and even vendors have emerged as significant stakeholders for for-profit
corporations (Swanepoel, 2017). Customers are the most important group of these new
stakeholders, as customers are needed for any company to reach its financial goals. When
satisfied, customers can be transformed into loyal customers who are likely to make repeat
INTELLECTUAL PROPERTY PRIORITIES 3
purchases and recommend the company to a friend. When a company focuses on the customer,
they have a higher chance of converting one-time customers to loyal customers, equating to
positive growth for the company. Because any for-profit corporation’s primary goal is to
maximize profits, it must accept customers as a stakeholder and understand their needs, tastes,
preferences, and complaints to generate more profits (Mills et al., 2016). Because the customer
plays a vital role in the success of a for-profit corporation, corporations have a responsibility to
their shareholders to find ways to balance their business needs, and the customer needs because,
without customers, a corporation cannot achieve its goals.
Lives depend on products created by some companies. Do these companies have a greater
responsibility to work towards benefitting the consumer more than themselves?
Pharmaceutical companies rely on intellectual property laws, such as patents, to recoup
the high costs associated with the research and development of new drugs and therapeutics
(Gøtzsche, 2018). Pharmaceutical patents cover a wide variety of intellectual property, from
chemical compounds to drug development methods allowing the company that holds the parent
to have exclusive rights to make, use and sell the drug for 20+ years without competition from
other companies (Salib, 2022). This allows the pharmaceutical company to set the drug price. As
with all companies, pharmaceutical companies are in the business of making a profit. Research
and development can be very costly for both the company and the shareholder, which means the
company is responsible for recovering these costs and generating a profit when a new drug is
brought to market (Gøtzsche, 2018). Nevertheless, ethical issues have arisen over the years
because pharmaceutical companies set their drug prices so high that customers can no longer
afford them and must pass on taking lifesaving drugs. When this happens, pharmaceutical
INTELLECTUAL PROPERTY PRIORITIES 4
companies are no longer worried about the needs of their customer and only care about their
personal needs.
One example of the lack of balance between corporate and customer needs is Martin
Shkreli, a former pharmaceutical executive of Turing Pharmaceuticals. While with the company,
Shkreli decided to increase the price of Daraprim from $13.50 per pill to $750 (Torchinsky,
2022). Daraprim is a life-saving drug for AIDS patients and other patients with suppressed
immune systems. Shkreli achieved the change in price because Turing Pharmaceuticals held the
manufacturing license for the drug, which enabled them to control the cost of the drug in the
marketplace. Shkreli took advantage of patent laws to benefit himself financially without caring
how his actions would affect the customer, the company, or the investor. Patients who took the
drug were left with two decisions after Shkreli raised the prices. Either come up with the money
so the patient could take the life-saving drug or pass on the drug knowing their life will end and
hope that more affordable drugs would work. In the end, Shkreli was convicted of several counts
of fraud, spent time in jail, and lost the wealth associated with his unethical actions. Cases like
Shkreli have brought attention to the connection between pharmaceutical companies and their
abuse of intellectual property patent laws. While there is an understanding of pharmaceutical
companies needed to recover the costs associated with developing new medications, there is a
fine line between them profiting because of a patent and abusing a patent. The Bible states, “Do
not be deceived: God is not mocked, for whatever one sows, that will he also reap” (English
Standard Version, 2016, Galatians 6:7). In the case of Shkreli, he took advantage of sick
individuals who needed the life-saving drug. He put profits above everything else. He not only
harmed the customer but also harmed the shareholders. In the end, no one benefited from the
development of an important invention. In these instances, pharmaceutical companies must
INTELLECTUAL PROPERTY PRIORITIES 5
balance creating a profit for their shareholders while offering affordable products to the
customer.
Look at the issue from a Biblical worldview. How would you respond if you were running
such a company?
When used correctly, a patent can protect the ownership of the invention and allow the
owner to generate revenue from their idea. When used for financial gain only, a patent can be
abused by the holder for unethical gains. If I were a pharmaceutical executive, I would
understand there are times when a for-profit corporation needs to sacrifice generating a
significant profit for the shareholders for the customer’s needs. Corporations must understand
that there is more to life than generating the most significant profit for their shareholders. The
Bible states, “No one can serve two masters, for either he will hate the one and love the other,
or he will be devoted to the one and despise the other. You cannot serve God and money”
(English Standard Version, 2016, Matthew 6:24). As an executive, I understand I cannot
serve both money and God. When we live a life serving God, we can flourish. All those
involved can flourish and achieve a benefit in life. The Bible also states, “Whoever walks in
integrity walks securely, but he who makes his ways crooked will be found out” (English
Standard Version, 2016, Proverbs 10:9). While I believe that companies should be able to
make a profit, they should act with integrity, and not be greedy if the opportunity arises. I
would not be able to do what Shkreli did. I would set a fair price that allowed the company to
recover the cost associated with developing a drug and ensure the cost was affordable for the
consumer. I would not want consumers to go without a life-saving drug because I was putting
the needs of the company over the needs of the customer. I would work to find a way to
balance the needs of both my shareholders and the consumer.
INTELLECTUAL PROPERTY PRIORITIES 6
References
Brealey, R. A., Myers, S. C., & Marcus, A. J. (2020). Fundamentals of corporate finance with
Connect (10th ed.). Boston, MA: McGraw-Hill.
English Standard Version Bible. (2016). Retrieved from
https://www.biblegateway.com/versions/English-Standard-Version-ESV-Bible
Fisher, W. (2001). Theories of intellectual property. Cambridge: Cambridge.
Gøtzsche, P. C. (2018). Patients not patents: Drug Research and Development as a public
enterprise. European Journal of Clinical Investigation, 48(2).
https://doi.org/10.1111/eci.12875
Mills, R., Newnes, L. B., & Nassehi, A. (2016). Balancing global customer needs and
profitability using a novel business model for New Model Programmes in the automotive
industry. Procedia CIRP, 52, 56–61. https://doi.org/10.1016/j.procir.2016.08.004
Poticha, D., & Duncan, M. W. (2019). Intellectual property—The foundation of innovation: A
scientist's guide to intellectual property. Journal of Mass Spectrometry., 54(3), 288-
300. https://doi.org/10.1002/jms.4331
Salib, V. (2022, August 11). How pharmaceutical patents contribute to increased drug costs.
PharmaNewsIntelligence. Retrieved November 26, 2022, from
https://pharmanewsintel.com/features/how-pharmaceutical-patents-contribute-to-
increased-drug-costs
Swanepoel, S. (2019, June 27). 3 simple things you must do to create a rock-solid business plan.
SMALL BUSINESS CEO. Retrieved November 26, 2022, from
https://www.smbceo.com/2017/09/27/3-simple-things-you-must-do-to-create-a-rock-
solid-business-plan/
INTELLECTUAL PROPERTY PRIORITIES 7
Torchinsky, R. (2022, May 19). 'pharma bro' Martin Shkreli has been released from prison.
NPR. Retrieved November 26, 2022, from
https://www.npr.org/2022/05/19/1100019063/pharma-bro-martin-shkreli-been-released-
from-prison#:~:text=While%20he%20was%20head%20of,%2413.50%20per%20pill
%20to%20%24750.
Williams, H. L. (2013). Intellectual property rights and innovation: Evidence from the human
genome. The Journal of Political Economy, 121(1), 1-27. https://doi.org/10.1086/669706
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