Module 6: Intellectual Property Rights and Legal Forces PDF

Because learning changes everything. ® Module 6 Intellectual Property Rights and Other Legal Forces © 2023 McGraw Hill, LLC. All ri...

Because learning changes everything. ® Module 6 Intellectual Property Rights and Other Legal Forces © 2023 McGraw Hill, LLC. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill, LLC.  Learning Objectives 6-1 Describe the three types of legal systems. 6-2 Describe the rule of law and its sources. 6-3 Discuss the general legal concerns in global business. 6-4 Identify methods to protect intellectual property. 6-5 Discuss the standardization of laws among nations. 6-6 Describe the impacts of the national-level legal forces in the areas of competition, trade, tort, ethics, and accounting. © McGraw Hill, LLC 2  Are the Drugs You Take Safe? The Worldwide Threat of Counterfeit Pharmaceuticals Counterfeit drugs represent an industry that is growing rapidly in both size and in its worldwide risk to public health. It is estimated that one million patients die each year from counterfeit pharmaceuticals. About one-third of all nations lack effective drug regulation and nearly 95 percent of online pharmacies fail to meet legal and industry standards. Public- and private-sector organizations are in the fight against these counterfeit drugs. Initiatives include the “mass serialization” of each drug package. © McGraw Hill, LLC 3  Types of Legal Systems 1 Civil Law. The civil law approach is based on codification, a systematic collection of laws designed to cover all areas of concern. Derived from ancient Roman law and influenced by religious law. The most widespread system globally. © McGraw Hill, LLC 4  Types of Legal Systems 2 Common Law. Relies on previous court decisions and interprets statutes and regulations. Relationship between judicial decisions and statutes can be complex due to precedents. More adversarial, but more flexible, than civil law systems. © McGraw Hill, LLC 5  Types of Legal Systems 3 Principles of Common Law Systems. 1. The rights of the individual exist alongside those of the state. 2. The trial is adversarial. 3. The defendant is presumed innocent until proven guilty. 4. Case law develops through judgments and precedents. 5. Case law co-exists with statute law and—in most cases—a constitution. 6. Crimes are punished and civil wrongs are rectified by compensation. © McGraw Hill, LLC 6  Types of Legal Systems 4 Religious Law. Religious document or source is the basis of the legal system. Some religious law prohibits charging interest. © McGraw Hill, LLC 7  Legal Systems Add caption when available. Add caption when available. © McGraw Hill, LLC Sources: CHAIDEER MAHYUDDIN/AFP via Getty Images; Images & Stories/Alamy 8  International Legal Forces 1 Rule of Law. Countries based on the rule of law encourage foreign investment. These countries tend to protect human rights of citizens, an increasing global concern. © McGraw Hill, LLC 9  Figure 6.1 Rule of Law Map, 2020 Access the text alternative for slide images. © McGraw Hill, LLC Source: “Rule of Law Index,” World Justice Project, 2020. Copyright © 2020 by World Justice Projects. 10  International Legal Forces 2 What Is International Law? Public international law governs relationships between governments. Private international law governs relationships between individuals and companies that cross international borders. © McGraw Hill, LLC 11  International Legal Forces 3 Sources of International Law. Treaties are agreements between countries. Also called conventions, covenants, compacts, or protocols. Customary international law. © McGraw Hill, LLC 12  General Legal Concerns in Global Business 1 Extraterritoriality. A country’s attempt to apply its laws to nonresidents and foreigners, and to activities that take place beyond its borders. Tax, employment, antitrust, environmental laws. © McGraw Hill, LLC 13  General Legal Concerns in Global Business 2 Performance of Contracts. No worldwide court has power to enforce its decrees. UN International Court of Justice relies on voluntary compliance. UN Convention on the International Sale of Goods (CISG). Arbitration resolution process instead of going to court. Quicker, less expensive, and more private. International Court of Arbitration of the International Chamber of Commerce. World Intellectual Property Organization (WIPO) Arbitration and Mediation Center. © McGraw Hill, LLC 14  Critical Thinking Question Since there is no international police or military force to back up international law, does it have any power? Why or why not? © McGraw Hill, LLC 15  General Legal Concerns in Global Business 3 Litigation. Legal proceeding conducted to determine and enforce particular legal rights. Can be complicated and expensive. Discovery process used to find facts relevant to litigation. Cross-border litigation prompts question of which law should apply. Choice-of-law or choice-of-forum. © McGraw Hill, LLC 16  Intellectual Property Rights 1 Intellectual Property. A creative work or invention that is protectable by patents, trademarks, trade names, copyrights, and trade secrets. TRIPS and WIPO work to standardize system. © McGraw Hill, LLC 17  Intellectual Property Rights 2 Patents. A government grant giving the inventor of a product or process the exclusive right to manufacture, exploit, use, and sell that invention or process. Country-specific laws vary widely. Patent trolls and pirates challenge the patent system. © McGraw Hill, LLC 18  Figure 6.2 Intellectual Property Protection Rankings for Selected Countries, 2020 Source: Global Innovation Policy Center, Art of the Possible: U.S. Chamber International IP Index, 8th edition, 2020, U.S. Chamber of Commerce, https://www.theglobalipcenter.com, accessed January 2, 2021. Access the text alternative for slide images. © McGraw Hill, LLC 19  Intellectual Property Rights 3 Trademarks. A shape, color, design, phrase, abbreviation, or sound used by merchants or manufacturers to designate and differentiate their products. Vary from country to country. Madrid Agreement of 1891 administered by W IPO. © McGraw Hill, LLC 20  Trademarks Reserved for Company’s Sole Use The distinctive Burberry Plaid is trademark-protected. © McGraw Hill, LLC ©Markos Dolopokos/Alamy Stock Photo 21  Intellectual Property Rights 4 Trade Names. A name used by a merchant or manufacturer to designate and differentiate its products. Protected by WIPO and TRIPS. Taco Bell and Pizza Hut are trade names for Yum! Brands, Inc. © McGraw Hill, LLC 22  Intellectual Property Rights 5 Copyrights. Exclusive legal rights of authors, composers, creators of software, playwrights, artists, and publishers to publish and dispose of their work. Protects tangible property. 2019 Directive on Copyright in the Digital Single Market. © McGraw Hill, LLC 23  Intellectual Property Rights 6 Trade Secrets. Any information that a business wants to hold confidential. Includes formulas, processes, patterns, designs. Most common type of IP protection. © McGraw Hill, LLC 24  Standardizing Laws Around the World Incoterms. Predefined commercial terms established by the International Chamber of Commerce. FAS (free alongside ship-port of call). CIF (cost, insurance, freight-foreign port). CFR (cost and freight-foreign port). © McGraw Hill, LLC 25  Some Specific National Legal Forces 1 Competition Laws. Another term for antitrust law, used by the EU and other countries. Antitrust laws prevent inappropriately large concentrations of power and its abuse through price-fixing, market sharing, and monopolies. U.S. law includes per se concept. U.S. versus. Japan trust-busting. © McGraw Hill, LLC 26  Some Specific National Legal Forces 2 Trade Obstacles. Includes political, financial, and legal obstacles. Packaging and language requirements. Tariffs, quotas, voluntary export restraints (VERs). © McGraw Hill, LLC 27  Some Specific National Legal Forces 3 Tort Law. Tort is an injury inflicted on another person, either intentionally or negligently. Product liability standards hold a company and its officers and directors liable and possibly subject to fines or imprisonment when their product causes death, injury, or damage. Strict liability standards hold the designer or manufacturer liable for damages caused by a product without the need for a plaintiff to prove negligence in the product’s design or manufacture. © McGraw Hill, LLC 28  Some Specific National Legal Forces 4 Miscellaneous Laws. Employees working abroad must be alert to local laws. Legal penalties may be harsh. Law of home country plays no part in a foreigner’s arrest. © McGraw Hill, LLC 29  Global Debate This debate centers around the question of whether U.S. dolphin-safe tuna labeling presents a threat to national sovereignty. In 2011, a WTO panel said labeling requirements violated international trade rules by being more restrictive than necessary. 1. Do you think the WTO should be able to prohibit labeling that provides information of potential value to consumers? 2. Should the W TO ensure that the science behind local laws and regulations is sound and not a cover for protectionism? © McGraw Hill, LLC 30  Some Specific National Legal Forces 5 Foreign Corrupt Practices Act (FCPA). U.S. law prohibits payments to foreign government officials in order to receive special treatment. Facilitating payments are allowed. New agreements include UNCAC signed in 2020. © McGraw Hill, LLC 31  Table 6.4 Rankings on Corruption Perception Index for Selected Countries 2002 to 2017 1 Country 2019 2014 2009 2004 1999 New Zealand 1 2 1 2 3 Denmark 1 1 2 3 1 Finland 3 3 6 1 2 Singapore 4 7 3 5 7 Switzerland 4 5 5 7 9 Germany 9 12 14 15 14 Australia 12 11 8 9 12 Canada 12 10 8 12 5 United Kingdom 12 14 17 11 13 Japan 20 15 17 24 25 © McGraw Hill, LLC 32  Table 6.4 Rankings on Corruption Perception Index for Selected Countries 2002 to 2017 2 Country 2019 2014 2009 2004 1999 France 23 27 24 22 22 United States 23 17 19 17 18 Spain 30 38 32 22 22 South Korea 39 44 39 47 50 Italy 51 69 63 42 38 South Africa 70 67 55 44 34 China 80 100 79 71 58 India 80 85 84 90 72 Brazil 106 69 75 59 45 Mexico 130 103 89 64 58 Russia 137 136 146 90 82 Nigeria 146 136 130 144 98 © McGraw Hill, LLC 33  Some Specific National Legal Forces 6 Accounting Law. Crisis of confidence: investors wary after worldwide financial scandals. Sarbanes-Oxley Act (SOX) in response to world-wide scandals, sets higher standards for boards, management, and accounting firms. © McGraw Hill, LLC 34  Get That Job! From Backpack to Briefcase Mackenzie Perry studied abroad in London, and learned about the culture and structure of government. She gives advice on making the most of international immersions. If you chose to work abroad, what country would you choose and why? © McGraw Hill, LLC 35  MiniCase The minicase “Determining Country of Jurisdiction for International Business Disputes” explores a situation in which a California company has always based litigation efforts on California law, but a new foreign customer is objecting to this practice. 1. You are the CEO of the California company, and you very much want this large export order. You are pleased with the service your law firm has provided, but you know it has no international experience. What are the various forms of dispute resolution available to your California company? What are the advantages and disadvantages of each for your company? 2. You must decide whether to use only California law for settling litigation or to allow the foreign customer’s home nation as the venue for litigation. Would your decision be different if the customer were from China? From Russia? From the United Kingdom? Why or why not? © McGraw Hill, LLC 36  Because learning changes everything. ® www.mheducation.com © 2023 McGraw Hill, LLC. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill, LLC.