X-IT and Kidde Case Study
Karishma Patel
Professor Ellen Thomas
MGMT 480 450
29 June 2014
X-IT and Kidde Case 1. X-IT had a dominant ladder design which gave them a first-mover advantage. While they were not the first to invest in the fire safety/escape industry their focus and design outshined the rest at first. They fairly quickly grew a reputation for themselves and caught the attention of large retailers. X-IT also managed to fall into Kidde’s scope. Kidde was an already successful company that carried various other fire safety products. 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 Kidde. Kidde, 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 Kidde. 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 Kidde 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. Although Kidde 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
Professor Ellen Thomas
MGMT 480 450
29 June 2014
X-IT and Kidde Case 1. X-IT had a dominant ladder design which gave them a first-mover advantage. While they were not the first to invest in the fire safety/escape industry their focus and design outshined the rest at first. They fairly quickly grew a reputation for themselves and caught the attention of large retailers. X-IT also managed to fall into Kidde’s scope. Kidde was an already successful company that carried various other fire safety products. 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 Kidde. Kidde, 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 Kidde. 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 Kidde 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. Although Kidde 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