X-IT and Kidde Case Study
They depicted an interest in purchasing X-IT; more particularly just intellectual property of their ladder design and X-IT was not closed to the idea. A fear that most companies hold when collaborating with another is of protecting their proprietary technologies. X-IT had this fear as well and applied for a patent. Unfortunately, due to a lack of money and in turn a lack of knowledge power, they were unable to protect their innovation from Kidded. Kidded, with the help of an unethical attorney, worked around X-IT’s still processing patent to “legally’ create a similar ladder.
Nonetheless, X-IT does hold a fair amount of ammunition against Kidded. Copyright infringement and the breach of confidentiality agreements are the strongest legal claims that X-IT has. Within the confidentiality agreement between these two companies, it clearly states that Kidded would only use the pending patent information to analyze the potential transaction (purchasing X-IT). Additionally, it was agreed upon that the patent information would be kept limited to individuals involved in the transaction and that if X-IT requested the information back, it would have to be returned.
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Although Kidded had agreed to use X-IT’s patent information only to evaluate, they used it for another purpose altogether. With the aid of an outside attorney, they utilized the information to make a change in the ladder’s design that could possibly provide Just enough Justification to prove that they were not infringing. In fact, if X-IT had the funds they most likely would have won a case against Kidded. The copyright infringement by Kidded was impossible to miss and, if taken to court, would weigh heavily.
At the Hardware Show, Kidded not only displayed but also presented their version of X-IT’s ladder to numerous retail representatives (eye-witnesses). The convicting evidence here is that Kidded failed to change the retail box design which evicted Debonairness nephew and sister-in-law. Possibly, this was a way to trick consumers into thinking that it was the same product X-IT was selling. 2. Even though suing Kidded seems like the ethical step to take, there are pros and cons to such action. A pro of suing Kidded is that X-IT has a sufficient amount of documentation and strong testimonies which would likely lead to a win.
They could request for eyewitnesses from the Hardware Show to appear in court and testify. This would set a strong basis for and argument that Kidded committed multiple intellectual property infringements against them. In addition, presenting the confidentiality agreement with signatures would lock Kiddies into involvement. Coupling all documentation, witnesses, and claims together would provide enough credence for X-IT to walk away as winners in this case. When their intellectual property was stolen, X-IT was in an unhealthy financial situation.
If they had went forth with a case, the influx of funds for the damages caused by Kidded to X-IT could have kept the company better afloat and further away from bankruptcy. Ultimately, if the case opened, X-IT may have the opportunity to win and grow their business further. A win would mean that they do not have to sacrifice the innovation they created. However, the major con is what kept X-IT from suing Kidded originally. Opening a case is very costly and would require for X-IT to pay ridiculous legal fees. According to the article, Kidded had over $2 billion in revenues.
They could very easily hire more qualified representatives and pay all other fees. X-IT is cash strapped and could be overrun if they can’t acquire the necessary funding. In addition, Kidded would most likely continue its regular business operations as they dealt with their legal matter on the side. On the other hand, X-IT would have to halt production and focus their funds on resolving the case first. In the end, if Kidded wins the case, X-IT would almost definitely go into bankruptcy and lose any sight of their innovation. 3.
If I were Aledo Debarring I would do anything I could to save my business and my innovation. As a first step, I would contact a decent attorney to acquire an analysis of my case. Under full confidentiality, I would share documentation to see if there is any precedence for the problem I am facing. If the attorney seems confident that X-IT has a good chance of winning, I would go forth with my claims. I would take an unorthodox route and ask for help from the general public. On a whole, Americans are not big fans of large corporations.
I would go public with X-IT’s story on various news channels and asks for donations. X-IT represents the “American dream” of a small successful business and I think people would flock to support it. The fact that X- IT is in danger of being bulldozed by a larger company and they can’t fight back would rally the general American public support. In addition to public support, I would organize a meeting with the investors and board of directors at X-IT. Side’s sales would take a blow if the public supported X-IT but the true funds to fight this battle would come from this meeting.
I would present all the information and even provide them with the attorneys thoughts to garner support and reach an agreement on the course of action to be taken. A case could be made that the lawsuit, although risky, offered an opportunity of winning. X-IT would be able to punish Kidded for intellectual property infringement. The investors might be willing to support it because of the company’s potential. Much like Amazon’s stock holders they may iced to invest for long-term future gains. If I were to lose the case but somehow avoid bankruptcy, I would simply move ahead with my business.
I would learn from my experience and walk on with a better understanding on how to protect my company’s innovations. I would make the investment and hire a person or small team to monitor dealings with other companies. They would be qualified and would have a better understanding of when, what, and how to disclose company information. 4. There is not a doubt that both Kidded and Slavonic acted unethically in this matter. Kidded was shady from the start with their actions. From the time they showed interest within X-IT they had bad intentions.
At a point in the article, it even stated that Harper, although still desiring to purchase the company, would be Just as happy if Kidded acquired X-IT’s ladder innovation in itself. They had recognized it as a dominant design and wanted it any way possible. After having their offer denied, they continued to pursue the design. They even had a Chinese factory recreate the product to the best of their ability, with intentions to override X-IT. Slavonic, much like Kidded had given his word to be a fair middleman and keep all information confidential, which he absolutely did not.
When he was approached about the situation after-hand by Vive at a meeting he denied being at fault and claimed that X-IT knew all along that he was supporting Kidded. This is obvious proof that Slavonic was a corrupt attorney who was likely paid out by Kidded. This entire case is an unfortunate one. X-IT was a very innovative business with a bright future but couldn’t hold their ground due to a lack of money. Kidded was experienced and took advantage of the fact that X-IT did not have a strong team or sense of business practices yet.