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TheInternationalLegalEnvironment PlayingBytheRules Chapter7 ChapterLearningObjectives 1 Thefourheritagesoftoday slegalsystems 2 Theimportantfactorsinjurisdictionoflegaldisputes 3 Issuesassociatedwithjurisdictionoflegaldisputesandthevariousmethodsofdisputeresolution 4 Theuniqueproblemsofprotectingintellectualpropertyrightsinternationally Waystoprotectagainstpiracyandcounterfeiting ChapterLearningObjectives 5 Thelegaldifferencesbetweencountriesandhowthedifferencescanaffectinternationalmarketingplans 6 Themanyissuesofevolvingcyberlaw Introduction Nosingle uniforminternationalcommerciallawgoverningforeignbusinesstransactionsexists Internationalmarketersmustcomplywiththelawsofeachcountrywithinwhichitoperate Thelegalsystemsofdifferentcountriesaresodisparateandcomplex Besttogetexpertlegaladvicewhendoingbusinessinanothercountry 1 Commonlaw derivedfromEnglishlawandfoundinEngland theUnitedStates Canada andothercountriesonceunderEnglishinfluence 2 Civilorcodelaw derivedfromRomanlawandfoundinGermany Japan France andinnon Islamicandnon Marxistcountries 3 Islamiclaw derivedfromtheinterpretationoftheKoranandfoundinPakistan Iran SaudiArabia andotherIslamicstates 4 AcommerciallegalsystemintheMarxist socialisteconomiesofRussiaandtherepublicsoftheformerSovietUnion EasternEurope China whoselegalsystemisbasedontheeconomic political andsocialpoliciesofthestate BasesforLegalSystems Thebasesforthemajorityofthelegalsystemsoftheworldinclude CommonandCodeLaw Undercodelaw thelegalsystemisgenerallydividedintothreeseparatecodes 1 Commercialcode 2 Civilcode and 3 Criminalcode Thebasisforcommonlawistradition pastpractices andlegalprecedentssetbythecourtsthroughinterpretationsofstatutes legallegislation andpastrulingsCommonlawseeks interpretationthroughthepastdecisionsofhighercourtswhichinterpretthesamestatutesorapplyestablishedandcustomaryprinciplesoflawtoasimilarsetoffacts Codelawisbasedonanall inclusivesystemofwrittenrules codes oflaw IslamicLaw TheKoranformsthebasisfortheShari ah Islamiclaw ItencompassesreligiousdutiesandobligationsandpatternsofsocialandeconomicbehaviorforallindividualsItincludesissuessuchaspropertyrights economicdecisionmaking andtypesofeconomicfreedomTheoverridingobjectiveoftheIslamicsystemissocialjusticeIslamiclawprohibitsthepaymentofinterestIslamicdoctrineadvocatesrisksharing individuals rightsandduties propertyrights andthesanctityofcontractEmphasisplacedontheethical moral social andreligiousdimensionstoenhanceequalityandfairnessforthegoodofsocietyProhibitsinvestmentinactivitiesthatviolatetheShari ah e g businessdealingwithalcohol gambling andcasinos Marxist SocialistTenets Withthecollapseofcommunism theformereasternbloccountrieshavedevelopedacommerciallegalsystemtoengageininternationalcommerceTheCzechRepublicandPolandrevisedandreinstitutedpre WorldWarIIcommerciallegalcodes Marxist SocialistTenets USSRandChinahavehadtobuildfromscratchanentirecommerciallegalsystemwithrespecttoprivateownership contracts dueprocess andotherlegalmechanismsChinaandRussiadifferasRussiaismovingtowardademocraticsystem whereasChinaisattemptingtoactivateaprivatesectorwithinamulti componentormixedeconomy buttheirlegalsystemsarestillnascent JurisdictioninInternationalLegalDisputes Determiningwhoselegalsystemhasjurisdictionwhenacommercialdisputearisesisanotherproblemofinternationalmarketing TheWorldCourtatTheHagueandtheInternationalCourtofJusticeresolveinternationaldisputesbetweensovereignnationsoftheworldratherthanbetweenprivatecitizens Legaldisputescanariseinthreesituations 1 betweengovernments 2 betweenacompanyandagovernment 3 andbetweentwocompanies JurisdictioninInternationalLegalDisputes TheWorldCourtcanadjudicatedisputesbetweengovernments butdisputesinsituations2and3mustbehandledinthecourtsofthecountryofoneofthepartiesinvolvedorthrougharbitration Wheninternationalcommercialdisputesmustbesettledunderthelawsofoneofthecountriesconcerned theparamountquestioninadisputeis Whichlawgoverns Jurisdictionisgenerallydeterminedinoneofthreeways 1 onthebasisofjurisdictionalclausesincludedincontracts 2 onthebasisofwhereacontractwasenteredinto or 3 onthebasisofwheretheprovisionsofthecontractwereperformed InternationalDisputeResolution Internationaldisputescanberesolvedby Conciliation alsoknownasmediation isanonbindingagreementbetweenpartiestoresolvedisputesbyaskingathirdpartytomediatedifferencesConciliationsessionsareprivateandallconferencesbetweenpartiesandthemediatorareconfidentialThearbitrationprocedurecallsforthepartiesinvolvedtoselectadisinterestedandinformedpartyorpartiesasrefereetodeterminethemeritsofthecaseandmakeajudgmentthatbothpartiesagreetohonorInmostcountries decisionsreachedinformalarbitrationareenforceableunderthelawLitigationdealswithfilingalawsuittosettlecommercialdisputesLawsuitsshouldbeavoidedformanyreasonsincludingcost frustratingdelays andextendedaggravation andfearofcreatingapoorimage damagingpublicrelations fearofunfairtreatmentinaforeigncourt MarketingLaws Whendoingbusinessinmorethanonecountry afirmmustcomplywithdifferentmarketinglawsAllcountrieshavelawsregulatingmarketingactivitiesinpromotion productdevelopment labeling pricing anddistributionchannelsInAustria premiumoffers freegifts orcouponsareconsideredascashdiscountsandareprohibitedPremiumoffersinFinlandareallowedaslongasthewordfreeisnotusedFrenchlawpermitssalesonlytwiceayear inJanuaryandAugust IntellectualPropertyRights CounterfeitingandPiracy FirmsspendmillionsofdollarsestablishingbrandnamesortrademarkstosymbolizequalityanddesignonlytobecounterfeitedandpiratedPiracyandcounterfeitingleadstolostsalesfromtheunauthorizeduseofU S patents trademarks andcopyrightswhichamounttoabout 60billionannuallyaswellaslostjobsCounterfeitedpharmaceuticaldrugscanalsoleaddeathandbadpublicityThereisinadequateprotectionfromproductsbeingcounterfeitedorpiratedasmanycountriesdonotrecognizetrademarksandpatentsregisteredinothercountries IntellectualPropertyRights CounterfeitingandPiracy IntheUnitedStates acommon lawcountry ownershipofintellectualpropertyrightsisestablishedbyprioruseInmanycode lawcountries ownershipisestablishedbyregistrationratherthanbyprioruseForexample atrademarkinJordanbelongstowhoeverregistersitfirstinJordansothereare McDonald s restaurants Microsoft software and Safeway groceriesalllegallybelongingtoaJordanian InternationalConventions Thethreemajorinternationalconventionsinclude TheParisConventionfortheProtectionofIndustrialProperty commonlyreferredtoastheParisConvention includestheUnitedStatesand100othercountriesTheInter AmericanConventionincludesmostoftheLatinAmericannationsandtheUnitedStates TheMadridArrangement whichestablishedtheBureauforInternationalRegistrationofTrademarks includes26Europeancountries Manycountriesparticipateininternationalconventionsdesignedformutualrecognitionandprotectionofintellectualpropertyrights PatentLaw TheU S versusJapan Operatesunder firsttoinvent rule Operatesunder firsttoregister rule Protectsindividualinventors Promotestechnologysharing Patentapplicationssecret Patentapplicationspublic Patentsgrantedinupto24months Patentsgrantedin4to6years Patentsvalidfor17yearsfrom Patentsvalid20yearsfromapplicationdateissued GreenMarketingLegislationandAntitrustIssues Multinationalcorporationsalsolawsonenvironmentalissuessuchasindustrialpollution hazardouswastedisposal andrampantdeforestationGreenmarketinglawsfocusonenvironmentallyfriendlyproductsandonproductpackaginganditseffectonsolidwastemanagementGermanyhaspassedthemoststringentgreenmarketinglawsthatregulatethemanagementandrecyclingofpackagingwasteTheEuropeanCommunity Japan andmanyothercountrieshavebeguntoactivelyenforcetheirantitrustlawspatternedafterthoseintheUnitedStatesAntimonopoly pricediscrimination supplyrestrictions andfull lineforcingareareaswhichleadtolesscompetitionandhigherpricesforconsumers U S LawsApplyinHostCountries Leavingtheboundariesofahomecountrydoesnotexemptabusinessfromhome countrylawsWhatisillegalforanAmericanbusinessathomecanalsobe illegalbyU S lawinforeignjurisdictionsforthefirm itssubsidiaries andlicenseesofU S technology U S Lawsthatapplyinhostcountriesinclude 1 ForeignCorruptPracticesAct FCPA 2 NationalSecurityLaws 3 AntitrustLaws U S LawsApplyinHostCountries TheFCPAmakesitillegalforcompaniestopaybribestoforeignofficials candidates orpoliticalpartiesStiffpenaltiescanbeassessedagainstcompanyofficialsfoundguiltyofpayingabribe 1 ForeignCorruptPracticesAct FCPA 2 NationalSecurityLaws 3 AntitrustLaws U S firms theirforeignsubsidiaries orforeignfirmsthatarelicenseesofU S technologycannotsellaproducttoacountrywhichcouldaffectnationalsecurityoftheU S Thecontrolofthesaleofgoodsthathaveastrategicandmilitaryvaluewasprohibitedtocommunistcountriesthatwereviewedasmajorthreat
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