© Dec 15, 2020 OpenStax. Think of examples for each scenario. His coverage of Silicon Valley-based startup companies could help ensure the successful launch of a new business or product. The law is typically indebted to tradition and precedent, and compelling reasons are needed to support any change. To make amends to customers and clients in the aftermath of the hack, the company offered free credit monitoring and identity-theft protection. Intellectual property (IP) rights are created by federal law and protect small businesses from problems such as this. }); EVENTS At the same time, the challenge to meet these expectations can create temptations and ethical pressures as entrepreneurs make a variety of decisions. This also means that the organization, as a total system, provides consistent, meaningful, and timely consequences for unethical behavior and irresponsible actions. In today’s environment, it’s a must that you have guidelines in place as to what constitutes workplace harassment, discrimination, and bullying. The company’s shares fell nearly 14 percent after the announcement, but few expect Equifax managers to be held liable for their mistakes, face any regulatory discipline, or pay any penalties for profiting from their actions. Arrington became the go-to source for tech enthusiasts and investors. Less formally, the development of a culture of creativity and innovation is one of the most important responsibilities of an entrepreneur. Without such protection, any competitor can legally, even if not ethically, copy the invention, put their own name or company brand on it, and sell it as if it were their own. However, he viewed his position as responsible behavior that served the best interests of his company and his shareholders. playerId: '7a99bbff-ee60-489a-b377-212102e8a9a1' Unfortunately, ignorance of the law here can be a costly mistake. A design patent protects the ornamental aspects of a product idea. IP law also helps establish brand awareness and secure secondary revenue streams. However, these concepts are not interchangeable and call for different standards of behavior. If you are in the midst of a startup, chances are you are moving quickly. These responsibilities include understanding, differentiating between, and dealing with the different types and technical aspects of a firm’s IP. OpenStax is part of Rice University, which is a 501(c)(3) nonprofit. Some professions, such as medicine and the law, have traditional and established codes of ethics. Copyrights and trademarks are also protected IP (Figure 3.4). Small businesses sometimes ask too much of their employees without noticing. Intellectual property (IP) is the output or result of the creative work of one or more individuals to turn a unique idea into a practical and value-added product/service; this manifestation of original ideas is legally protected. A conscious or deliberate attempt to avoid, ignore, or marginalize that which is rightfully due an employer by addressing other interests would be a conflict of interest. This protection is afforded because a continuous stream of innovations can be a major source of revenue for a firm as well as a vehicle for developing a sustained competitive advantage. In addition to the marketing, financial, human resources and other challenges small-business owners face, legal and ethical issues of operating a business loom as another stumbling block. Keep your business finances separate from your personal finances. But it is more than just consistency of character. • Ethics refers to standards of behavior that tell us how human beings ought to act in many situations in which they find themselves as parents, children, friends, business people, professionals etc. Success may lie in knowing the profit we make does not come from shortchanging others. Legal Issues in Entrepreneurship. Being a good entrepreneur takes more than a creative idea and a superior work ethic. How important an attribute is income, and at what point would a higher income override for you the nonmonetary benefits of the lower-compensated opportunity? The progress made in social entrepreneurship research has not been matched by a robust analysis from the ethics perspective (Cornelius et al. Legal Issues in Entrepreneurship Legal risks faced by entrepreneurs. Examples include the design of a new font, a soft drink bottle, or the design features of Apple’s iPhone. The easy fix is to not commingle, but at every step you should seek the advice of an experienced accountant. The story of Nikola Tesla—a Serbian-American inventor, engineer, and physicist—offers a cautionary tale for why entrepreneurs need to be attuned to both the technical aspects of a venture’s IP and its culture of creativity. Contracts can be formal or informal agreements. Finally, there is a special category of IP known as a trade secret. are licensed under a, Ethical and Legal Issues in Entrepreneurship, Frameworks to Inform Your Entrepreneurial Path, The Ethical and Social Responsibilities of Entrepreneurs, Corporate Social Responsibility and Social Entrepreneurship, Developing a Workplace Culture of Ethical Excellence and Accountability, Creativity, Innovation, and Invention: How They Differ, Developing Ideas, Innovations, and Inventions, Researching Potential Business Opportunities, Problem Solving and Need Recognition Techniques, Problem Solving to Find Entrepreneurial Solutions, Telling Your Entrepreneurial Story and Pitching the Idea, Clarifying Your Vision, Mission, and Goals, Developing Pitches for Various Audiences and Goals, Protecting Your Idea and Polishing the Pitch through Feedback, Entrepreneurial Marketing and the Marketing Mix, Market Research, Market Opportunity Recognition, and Target Market, Marketing Techniques and Tools for Entrepreneurs, Marketing Strategy and the Marketing Plan, Overview of Entrepreneurial Finance and Accounting Strategies, Developing Startup Financial Statements and Projections, Launching the Imperfect Business: Lean Startup, Why Early Failure Can Lead to Success Later, The Challenging Truth about Business Ownership, Managing, Following, and Adjusting the Initial Plan, Avoiding the “Field of Dreams” Approach, Business Structure Options: Legal, Tax, and Risk Issues, Business Structures: Overview of Legal and Tax Considerations, Additional Considerations: Capital Acquisition, Business Domicile, and Technology, Using the PEST Framework to Assess Resource Needs, Managing Resources over the Venture Life Cycle, Making Difficult Business Decisions in Response to Challenges, Now What?