Sunday, November 16, 2014

Mitsubishi vs. General Electric (2008)

Mitsubishi Co. logo
Controversy
In 2008, General Electric filed a complaint with the United States International Trade Commission (ITC) (Patenting 8). The purpose of the complaint was to stop Mitsubishi Heavy Industries, Ltd. from importing wind turbines into the United States because General Electric believed that aspects of MHI wind turbines infringed upon three of General Electrical patents (Patenting 9). The three specific patents that General Electric was referring to were U.S. patent No. 7,321,221, U.S. patent No. 5,083,039, and U.S. Patent No. 6,921,985 or turbines maintaining constant operation despite changing wind speeds and lower voltages, and decoupling turbines from the grid in effort to avoid damage during un expected power fluctuations (Quinn 2). After further investigation, a Texas federal judge ruled that Mitsubishi Heavy Industries must pay 170 million dollars to General Electric for infringing upon a General Electric wind turbine patent, a way to keep wind turbines connected to grids during voltage fluctuations without receiving significant damage (Rautenberg 1). The court dismissed Mitsubishi Heavy Industries plea that the patent was invalid because General electric did not disclose material (Rautenberg 1). 

CEO: Shunichi Miyanaga
Stakeholders
Stakeholders are those that have an interest in a company's actions because they are affected by the ups and downs of that company. In this case, the stakeholders are all of the Mitsubishi Heavy Industries employees, companies that purchase the wind turbines produced by Mitsubishi Heavy Industries, and General Electric. Specifically, within Mitsubishi Heavy Industries, the company’s turbine design team is a stakeholder because before the creation and production of a product the product must be reviewed to ensure that the company is not infringing on patent laws. Mitsubishi Heavy Industries’ head executives are at fault for passing the product through. This will affect the entire company because after having to pay 170 million dollars to General Electric, Mitsubishi Heavy Industries stock is affected and employees would have to find a way to make up losses. General Electric is Mitsubishi Heavy Industries competition for the production of wind turbines, therefore if Mitsubishi Heavy Industries is able to produce an equally competitive product General Electric will lose customers, which would lead to fiscal losses.

Chairman board: Hideaki Omiya  
Individualism
Individualism is defined as the habit of being self-independent and self-reliant. The individual theory values the business, the business owner’s choices, and the business profits. The individualism theory looks to maximize profits while remaining inside the constraints of the law. Mitsubishi Heavy Industries decision to go ahead with the production of the wind turbines was done with the hope to maximize the company’s profits. Mitsubishi Heavy Industries broke the law, and went against individualism theory, with the patent infringement, thus the decision of the court was to have Mitsubishi Heavy Industries pay General Electric.

Utilitarianism
The utilitarian ethical theory is founded on being able to predict the consequences of a given outcome. A utilitarian believes that the decision that will generate the greatest benefit to the largest group of people is the ethically correct decision. Mitsubishi Heavy Industries was able to generate some short-term happiness by producing the wind turbines, this short-term happiness stems from the financial boom that is brought about by consumers purchasing the wind turbines. The ensuing multi-million dollar payment tot General Electric lead to a serious financial loss. This loss in no way generates happiness for the company; it does the exact opposite because the company must then find an alternative way to make up for the unexpected financial losses. A utilitarian would consider Mitsubishi Heavy Industries wind turbine production unethical because of the long-term effects that the 170 million dollar payment creates.

Kantianism
Kantianism is based off of four basic principles: one – act rationally – do not act inconsistently in your own actions or consider yourself exempt from rules, two – allow and help people to make rational decisions, three – respect people, their autonomy, and individual needs and differences, four – be motivated by Good Will, seeking to do what is the right because it is right. Kantianism also makes use of the formula of humanity, which has three key components humanity, end, and means. Because of advancements in technology wind turbines across the board are very similar from company to company, which makes patent infringement easy. A Kantian would agree the Mitsubishi Heavy Industries executives acted irrationally. The means, or the financial gains that would come from the turbine production, interfered with the company’s rationality. Mitsubishi Heavy Industries did not adhere to the patent laws and were not motivated by good will; instead Mitsubishi Heavy Industries was motivated by money. A Kantian would view the turbine production at Mitsubishi Heavy Industries as unethical.

Virtue Theory
General Electric Co. logo
There are four primary virtues are courage, justice, temperance, and honesty. Mitsubishi Heavy Industries employees did not act with courage. Mitsubishi Heavy Industries took the easy road and decided to steal the ideas for wind turbine design from general electric. The MHI design team must be more aware of patent laws, and those that see a possible problem should have the courage to stand up against those actions. Mitsubishi Heavy Industries employees did not act honestly by passing the wind turbine design through production, the higher ups expect that the designers would have followed regulations before the turbines design was finalized. Mitsubishi Heavy Industries did not act justly because it would be hard work to design an innovative design, and last work to steal. By not fulfilling the four basic principles of virtue theory, this case would be considered unethical.

Conclusion

After a brief review of the standpoint of each of the four theories, the actions of Mitsubishi Heavy Industries would be deemed unethical. Mitsubishi Heavy Industries could have prevented the 170 million dollar payment to General electric by being stricter with the turbine designers to ensure no patents were infringed upon. Mitsubishi Heavy Industries executives should have set up checkpoints in the design process that could weed out designs that could be considered for patent infringements.

References


“Brand Message.” Mitsubishi Heavy Industries, Ltd. Global Website. Mitsubishi Heavy Industries, 31 March 2014. Web. 03 October 2014. <http://www.mhi-global.com/company/brand/index.html>

 “Corporate Overview.” Mitsubishi Heavy Industries, Ltd. Global Website. Mitsubishi Heavy Industries, 31 March 2014. Web. 03 October 2014. < http://www.mhi-global.com/company/aboutmhi/outline/contents/index.html>

Decker, Susan. “GE Wins Wind-Turbine Patent Case brought by Mitsubishi Heavy.” Bloomberg. Bloomberg, 06 July 2012. Web. 03 October 2014. < http://www.bloomberg.com/news/2012-07-06/ge-wins-patent-case-brought-by-mitsubishi-heavy-over-turbines.html >

“Dividends.” Mitsubishi Heavy Industries, Ltd. Global Website. Mitsubishi Heavy Industries, 27 June 2014. Web. 03 October 2014. < http://www.mhi-global.com/finance/stock/allotment/index.html>

“Fact Sheet.” General Electric. General Electric, 01 December 2013. Web. 03 October 2014. <http://www.ge.com/about-us/fact-sheet >

“Patenting the Winds of Innovation.” Wind Systems Magazine. Media Solutions inc. 01 April 2012. Web. 03 October 2014.<http://www.windsystemsmag.com/article/detail/356/patenting-the-winds-of-innovation>

“Photographs of the Board Members.” Mitsubishi Heavy Industries, Ltd. Global Website.             Mitsubishi Heavy Industries, 26 Jun3 2014. Web. 03 October 2014. <http://www.mhi-global.com/company/aboutmhi/officers/photo.html#line01>

“Privacy Policy.” Mitsubishi Heavy Industries, Ltd. Global Website. Mitsubishi Heavy Industries, 01 October 2013. Web. 03 October 2014. < http://www.mhi-mme.com/privacy.html >

Quinn, Gene. “GE Wins at Federal Circuit in Mitsubishi Wind Turbine Case.”                               IPWatchdog. IPWatchdog, 09 July 2012. Web. 03 October 2014 <http://www.ipwatchdog.com/2012/07/09/ge-wins-at-federal-circuit-in-mitsubishi-  wind-turbine-case/id=26243/>

Rautenberg, Katherine. Davis, Jess. “Mitsubishi Can’t Knock Out $170 Wind Patent Judgement.” Law 360. Portfolio Media Inc., 29 May 2013. Web. 03 October 2014. <http://www.law360.com/articles/445617/mitsubishi-can-t-knock-out-170m-wind-patent-judgment>

Watanabe, Chisaki. “Mitsubishi Heavy, GE Settle Wind Patent Infringement Cases.”Bloomberg. Bloomberg, 13 December 2013. Web. 03 October 2014. <http://www.bloomberg.com/news/2013-12-16/mitsubishi-heavy-ge-settle-wind-patent-infringement-cases.html >

“Wind Turbines.” General Electric. General Electric, 01 January 2014. Web. 03 October   2014. <http://www.ge-energy.com/wind>

“Wind Turbine Generators.” Mitsubishi Heavy Industries, Ltd. Global Website. Mitsubishi Heavy Industries, 31 March 2014. Web. 03 October 2014. <http://www.mhi-global.com/products/category/wind_turbine_generators.html>

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