• Ownership of intellectual property based on registration
• Agreements not enforceable unless properly notarized or registered
• Acts of God interpreted as unforeseeable occurrences of nature and human acts
Counterfeiting and Piracy
• Occurs in a range of industries • Costs companies billions of dollars in lost revenue
• Counterfeit pharmaceuticals most dire; can cause death
• Among most valuable assets to a company • Companies spend millions of dollars on establishing property
rights
Protection of Intellectual Property Rights: A Special Problem 2 of 6
Bases for Legal Systems 5 of 5
Islamic Law
• Based on interpretation of the Koran • Prescribes specific patterns of social and economic
behavior for all people
• Important to comply with the laws in each country in which the multinational corporation operates
Bases for Legal Systems 1 of 5
Four heritages of today’s legal systems
Chapter 7
The International Legal Environment: Playing By the Rules
Learning Objectives 1 of 2
7-1 The four heritages of today’s legal systems 7-2 The important factors in the jurisdiction of legal
Bases for Legal Systems 4 of 5
Common Law
• Based on tradition
• Not all-inclusive
• Ownership of intellectual property based on use
• Agreements binding as long as proof of agreement is established
7-8 The different ways U.S. laws can be applied to U.S. companies operating outside the United States
7-9 The steps necessary to move goods across country borders
disputes 7-3 The various methods of dispute resolution 7-4 The unique problems of protecting intellectual
property rights internationally 7-5 How to protect against piracy and counterfeiting
Introduction
Foreign Business Transaction Law
• No uniform international commercial law exists
• Legal systems in different countries are both disparate and complex
mutually agreed settlement through arbitration • Expensive and requires a lot of time • Loss of confidentiality
Protection of Intellectual Property Rights: A Special Problem 1 of 6
• Based on all-inclusive system of written rules of law
• 3 main codes: commercial, civil, and criminal • All laws are codified, but broad interpretations are possible
• Many arbitral centers each with standardized procedures • Arbitration clauses require agreement on two counts
• Parties agree to rules and procedures of some arbitration tribunal • Parties agree to abide by the awards resulting from the arbitration • Legally binding in most countries
• Not legally binding
International Dispute Resolution 2 of 3
Arbitration
• Disinterested a referee
• Determine the merits of the case • Make judgment both parties in conflict can honor
• Collusion between manufacturer and illegitimate sellers
• Prohibits investment in activities that violate Islamic Law
Jurisdiction in International Disputes 1 of 2
Legal disputes can arise in three situations
Bases for Legal Systems 2 of 5
Common Law
• Derived from English law
• Found in England, U.S., Canada, and other countries once under English control
• Based on tradition, practices, precedents
1. Common law 2. Civil or code law 3. Islamic law 4. Commercial legal system
Interpretation of system varies by country Importance of law also varies
• Number of attorneys per capita
Intellectual Property
• Global brand names and trademarks
• Used to symbolize quality of product or company • Entices consumers to buy good or service
• Important to protect
Learning Objectives 2 of 2
7-6 The many issues of evolving cyberlaw
7-7 The legal differences between countries and how those differences can affect international marketing plans
1. Between governments 2. Between a company and government 3. Between two companies
Situation 1: Resolved by The World Court at the Hague Situations 2 and 3: Handled by a court in one of the countries involved or through arbitration
• Set by past courts’ interpretations of statutes, legal legislation, and rulings
Bases for Legal Systems 3 of 5
Code Law
• Derived from Roman law
• Found in Germany, Japan, France
• Acts of God interpreted as unforeseeable occurrences of nature
Code Law
• Based on system of written rules
• Catchall provisions with broad interpretations possible