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International Licensing Agreements
• International licensing agreements: contracts by which the holder of intellectual property will grant certain rights in that property to a foreign firm to use for a period of time under certain conditions in return for a licensing fee • How does this work as a business model? • Technology transfer: exchange of technology and know how between firms in different countries through licensing
– Copyrights: legal rights to an artistic or written work – Trademarks: the legal right to use a name or symbol; that identifies a firm or its product – Patents: governmental grants to inventors assuring them of the legal right to produce, use and sell their invention for a period of years
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Trade: exporting
• Direct: often use foreign sales agents • Indirect: use export trading companies
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Intellectual Property and Licensing
• Definitions
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Legal and Political Issues in Technology Transfer Agreements
• Regulated by some governments
– generally in Asia, Latin America, and the Middle East – terms restricted to benefit the developing country
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Trade
• Boycott: a refusal to do business with certain firms on political or other grounds
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Trade: trade in services
• Travel, banking, insurance and securities, professional services (law & architecture)
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Trade: Government rols over trade
Tariffs: import duties or taxes imposed on goods entering the customs territory of a nation Why impose? revenue collection, protection of domestic industry, political control
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Pro Golf Case (cont.)
• Progolf terminated the agreement. Pro Golf learned that they had not properly registered their trademark in Japan. FFA sued for breach of contract and Pro Golf counterclaimed for royalties. • Holding: Pro Golf was permitted to terminate its Japanese sales agency with FFA because it was terminable at will.
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Protecting Intellectual Property is a key issue for your business
• Inventory and secure your intellectual property as you would a building • Difficult, Why? • What is piracy?
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Franchising as a form of Licensing
• Holding: After much legal maneuvering on two continents, McDonald’s was able to terminate the franchise. Dayan was able to continue his restaurants under a different name. • What is the impact of this on the franchiser?
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Franchising as a form of Licensing
• Raymond Dayan v. McDonald’s • Facts: Dayan had franchise to operate McDonald’s in Paris. There was a serious problem with QSC (quality, service and cleanliness standards). McDonald’s wanted to terminate the franchise but Dayan objected.
International Business Law
1
Introduction to International Business Law
Chapter 1
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Forms of International Business
• Trade • International licensing of technology and intellectual property (trademarks, patents and copyrights) • Foreign direct investment
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Pro Golf Case (cont.)
• However Pro Golf was not entitled to royalties because they had not perfected their rights to the trademark under Japanese law.
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In re Union Carbide Gas Plant Disaster
• UC India Limited incorporated under the laws of India. 51% owned by UCC , 22% owned by the Indian government, the rest owned by Indian citizens. 1984 gas leaked from the plant. Over 2000 individuals died. Indian government passed the Gas Leak Disaster Act giving the government the exclusive right
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Trade: Government controls
• Non-tariff Barriers: all barriers to importing or exporting other than tariffs ex. product standards • Quota: restriction imposed by law on the numbers or quantities of goods or of a particular type of good • Embargo: a total or near total ban on trade with a particular country e.g. used against Iraq in 1990
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Pro Golf Case
• First Flight v. Pro Golf, • Facts: Pro Golf negotiated with Wynn to act as sales representative in Japan. Wynn incorporated FFA in Japan. Pro Golf entered into an agreement where FFA could use First Flight trademark. FFA tried to sublicense the trademark.
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In re Union Carbide Gas Plant Disaster
• No, on the basis of Forum NonConveniens (inconvenient forum) the court found that UCC had limited participation in the project. Most of the witnesses and documents were in India. The Ct. of Appeals upheld the District Court. However, the UCC agreed to submit to the Indian court’s jurisdiction.