Chapter 7

Question 1

What are the four types of legal systems?

Answer 1

Common Law
Civil or Code Law
Islamic Law
Socialist Law

Question 2

Common Law

Answer 2

Derived from English Law
Found in England, US, Canada
Based on past practices and precedents
Seeks interpretation through the past decisions
Common law is recognized as not being all-inclusive, whereas code law is considered complete as a result of catchall provisions found in most code-law systems.

Question 3

Civil or Code Law

Answer 3

Derived from old Roman law
All-inclusive system of written rules (codes)
Found in most European countries and Japan
Common law countries are now adding some code law
Under code law the legal system is generally divided into three separate codes:
Commercial – e.g. Uniform Commercial code in the U.S.
Civil
Criminal

Question 4

Islamic Law

Answer 4

Practiced in some Islamic countries
Based on the interpretation of the Koran on property rights, economic decisions and social life
The Banking System without interest payments
Ban on investments in alcohol, gambling
The Islamic system places emphasis on the ethical, moral, social, and religious dimensions to enhance equality and fairness for the good of society.

Question 5

Socialist Law

Answer 5

Property ownership
Privatization
Assessing Value of Property
Need for a new Commercial Code
Vaguely written laws a problem

Question 6

What are two examples of International Dispute Resolution?

Answer 6

Conciliation

Arbitration

Question 7

Conciliation

Answer 7

Conciliation is a nonbinding agreement between parties to resolve disputes by asking a third party to mediate differences.
Conciliation sessions are private and all conferences between parties and the mediator are confidential.
Not legally binding; thus an arbitration clause should be included in all conciliation agreements.

Question 8

Arbitration

Answer 8

If conciliation doesn’t work, arbitration is the next step. Arbitration > Litigation. Procedure includes for the parties involved to select a disinterested and informed party as referees to determine the merits of the case and make a judgement that both parties agree to honor.

In most countries, formal arbitration is enforceable under the law.

Arbitration Centers - e.g. The International Chamber of Commerce Court of

Question 9

Why does litigation suck?

Answer 9

Fear of creating a poor image and damaging public relations
Fear of unfair treatment in a foreign court
Difficulty in collecting a judgment
The relatively high cost and time required when bringing legal action
Loss of confidentiality

Question 10

PIRACY

Answer 10

could literally be any good, difficult to pinpoint.

Lost sales from the unauthorized use of U.S. patents, trademarks, and copyrights amount to more than $100 billion annually.

Question 11

PRIOR USE

Answer 11

In US, a common-law country, ownership of IP rights is established by prior use—whoever can establish first use is typically considered the rightful owner

Question 12

REGISTRATION

Answer 12

In many code law countries, ownership is established by registration which is the first to register a trademark or property right is considered the rightful owner.

Question 13

Marketing Laws Within Countries include

Answer 13

Packaging, labeling, promotion, pricing, distribution channels

Some places have prohibitions, strict rules , lax rules

For example, in the US it is illegal to sell human organs or in Lithuania, you can’t sell energy drinks to minors

Question 14

INTERNATIONAL CONVENTIONS

Answer 14

Many countries participate in IC designed for mutual recognition and protection of intellectual property rights.

The Paris Convention for the Protection of Industrial Property, commonly referred to as the Paris Convention, includes the United States and 100 other countries

The Inter-American Convention includes most of the Latin American nations and the United States

The Madrid Agreement includes 26 European counties

Question 15

What are US Laws that apply in host countries?

Answer 15

Foreign Corrupt Practices Act
National Security Laws
Antitrust Laws
Antiboycott Law
Extraterritoriality of US Laws

Question 16

Cybersquatters

Answer 16

They buy and register descriptive nouns, geographic names, names of ethnic groups and pharmaceuticals and hold them until they can be sold at an inflated price.

Question 17

Green Marketing Legislation

Answer 17

Global concern for the environment translates into green marketing laws focused on environmentally friendly products and product packaging and its effect on solid waste management.

Germany - three phases - strict laws for packaging

Question 18

What are the three types of commercial law within countries?

Answer 18

Marketing Laws
Green Marketing Legislation
Foreign Countries Antitrust Law

Question 19

Foreign Corrupt Practices Act

Answer 19

FCPA makes it illegal for companies to pay bribes to foreign officials, candidates, or political parties. Bribery which can range from lubrication to extortion is a common business practice in many countries , even though illegal.

The corporate officer’s liability was changed from having reason to know that illegal payments were made to knowing of or authorizing illegal payments.

Question 20

US Antitrust Laws

Answer 20

Protect American consumers by ensuring that they benefit from products and ideas produced by foreign competitors as well as domestic competitors. Competition is important when imports are/could be a major source of product or when a single firm dominates an industry.

Protect American export and investment opportunities against any privately imposed restrictions. The concern is that all US based firms engaged in the export of goods, services, or capital should be allowed to compete on merit and not be shut out by restrictions imposed by bigger or less principled competitors.

Question 21

Antiboycott Laws

Answer 21

US companies are forbidden to participate in any unauthorized foreign boycott and they are required to report any request to cooperate with a boycott.

This was a response to the Arab League boycott of Israeli businesses. When companies do not comply with the Arab League’s boycott directives, their names are places on a blacklist, and they are excluded from trade with members of the Arab League. US is caught in the middle.

Question 22

Extraterritoriality of US Laws

Answer 22

Foreign governments fear the influence of American government policy on their economies through US multinationals.

Basically the application of US laws…

If the US government encourages US firms to become multinational, then the government needs to make provisions for the resolution of differences when conflict arises between US law and host-government laws.

Question 23

National Security Laws

Answer 23

American firms, their foreign subsidiaries, or foreign firms that are licenses of US technology cannot sell products to a country in which the sale is considered by the US government to affect national security. Responsibility extends to the destination of the product.

Exports are controlled for the protection and promotion of human rights as a means of enforcing foreign policy because of national shortages, to control technology, etc for the US gov to protect its best interests.