Question

In the competitive software development market, patent protection is imperative for new products. Electronic Solutions Incorporated (ESI), where you work, has spent millions of dollars and many years developing a new software platform. While ESI has been waiting for a patent to be granted, its revenues, profits, and stock prices have slipped to an all-time low because so much time, money, and energy have been devoted to the software development effort.

You, as director of public relations, have been called to a meeting with the company president and members of the executive team. They give you the bad news: The United States Patent and Trademark Office denied ESI's application for patent on the new software platform. The executives at ESI were counting on the new software to restore the company's prestige and save the company from financial ruin. In the meeting, you also learn that this patent was ESI's last hope to avoid bankruptcy. The company attorney explains that ESI might win an appealwith the Patent and Trademark Office, but winning an appeal is a "long shot at best."

After the meeting, Mr. Mateo, the president, asks you to stay. He reminds you that your job is to "make the best of a bad situation." He tells you to write a press release about the situation. He says, "You need to write a press release reassuring employees, shareholders, and the public that everything will be fine. Make sure you include the fact that we are planning an appeal and are confident that the patent will be issued when our appeal is heard. Your responsibility is to get the positive story out there so that ESI does not fall apart."

Questions for Discussion

1. Does Mr. Mateo have the right to ask you to create a misleading press release? Should you write a release according to Mr. Mateo's instructions? Do employees, shareholders, and the public have a right to know what is happening?

2. What are your options? What could you do to try to resolve the situation?

Answer 1

Answer: (1) I do not feel that the instructions given by Mr Mateo have anything unethical or misleading. He is not asking to hide the facts and only saying to create a positive press release which nearly all the companies do in such times in order to avoid unnecessary panic. There are chances that the patent appeal will be heard and things may get back on track. Hence I will write a release as per his instructions as he is not telling to hide any situation but to include some positivity. Shareholders, public and employees have a right to know about what is happening in the company and take a decision accordingly.

(2) In this situation I will attempt to create a balance between positive and negative news. I will mention about the denial of patent to the company and that it may harm the interests of the company. But at the same time I will also mention about the appeal that the company is planning and its possible positive outcomes in the future.