The International Legal Environment Chapter 7 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Chapter Outline • Basis for legal systems • Common and code law • Other systems: Marxist, Islamic • Jurisdiction in international legal disputes • International dispute resolution • Conciliation, arbitration, litigation • Intellectual Property rights • Counterfitting/Piracy Inadequate protection • Prior use vs registration International conven’s • Commercial law within countries • Marketing laws, green market legislation, antitrust • US Laws with extraterritorial application • Cyberlaw: unresolved issues • Cybersquatters, taxes, jurisdiction • Basis for legal systems • Common and code law • Other systems: Marxist, Islamic • Jurisdiction in international legal disputes • International dispute resolution • Conciliation, arbitration, litigation • Intellectual Property rights • Counterfitting/Piracy Inadequate protection • Prior use vs registration International conven’s • Commercial law within countries • Marketing laws, green market legislation, antitrust • US Laws with extraterritorial application • Cyberlaw: unresolved issues • Cybersquatters, taxes, jurisdiction McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Wal-mart’s Pajama Caper • US embargo forbidding US Businesses to trade with Cuba • Wal-mart selling Cuban-made pajamas in Canada • Conflict between US and Canadian law • US $ 1,0m vs CDN $ 1,2 m fines • Wal-mart resumed selling the pajamas • Wal-mart settled with US govt. Issue of extraterritoriality not resolved Issue of extraterritoriality not resolved Chapter Learning Objectives 1. The four heritages of today’s legal systems 1. The four heritages of today’s legal systems 2. The important factors in jurisdiction of legal disputes 2. The important factors in jurisdiction of legal disputes 3. Issues associated with jurisdiction of legal disputes and the various methods of dispute resolution 3. Issues associated with jurisdiction of legal disputes and the various methods of dispute resolution 4. The unique problems of protecting intellectual property rights internationally. Ways to protect against piracy and counterfeiting 4. The unique problems of protecting intellectual property rights internationally. Ways to protect against piracy and counterfeiting Chapter Learning Objectives 5. The legal differences between countries and how the differences can affect international marketing plans 5. The legal differences between countries and how the differences can affect international marketing plans 6. The different ways U.S. laws can be applied to U.S. companies operating outside the U.S. 6. The different ways U.S. laws can be applied to U.S. companies operating outside the U.S. 7. The many issues of evolving cyberlaw 7. The many issues of evolving cyberlaw Introduction 1. No single, uniform international commercial law governing foreign business transactions exists 1. No single, uniform international commercial law governing foreign business transactions exists 2. International marketers must comply with the laws of each country within which they operate 2. International marketers must comply with the laws of each country within which they operate 3. The legal systems of different countries are disparate and complex 3. The legal systems of different countries are disparate and complex 4. Best to get expert legal advice when doing business in another country 4. Best to get expert legal advice when doing business in another country (1) Common law, derived from English law and found in England, the United States, Canada, and other countries once under English influence (2) Civil or code law, derived from Roman law and found in France, Germany, most of Europe, Japan and in non-Islamic and non- Marxist countries (3) Islamic law, derived from the interpretation of the Koran and found in Pakistan, Iran, Saudi Arabia, and other Islamic states (4) A commercial legal system in the Marxist- socialist economies of Russia and the republics of the former Soviet Union, Eastern Europe, China, whose legal system is based on the economic, political, and social policies of the state Prevailing World Legal Systems The bases for the majority of the legal systems of the world include: The bases for the majority of the legal systems of the world include: Common and Code Law Under code law, the legal system is generally divided into three separate codes: (1) Commercial code (2) Civil code, and (3) Criminal code Under code law, the legal system is generally divided into three separate codes: (1) Commercial code (2) Civil code, and (3) Criminal code • The basis for common law is tradition, past practices and legal precedents set by the courts through interpretations of statutes, legal legislation, and past rulings • Common law seeks “interpretation through the past decisions of higher courts which interpret the same statutes or apply established and customary principles of law to a similar set of facts” • Code law is based on an all-inclusive system of written rules (codes) of law Islamic Law • The Koran forms the basis for the Shari’ah (Islamic law) • It encompasses religious duties and obligations and patterns of social and economic behavior for all individuals • It includes issues such as property rights, economic decision making, and types of economic freedom • The overriding objective of the Islamic system is social justice • Islamic law prohibits the payment of interest • Islamic doctrine advocates risk sharing, individuals’ rights and duties, property rights, and the sanctity of contract • Emphasis placed on the ethical, moral, social, and religious dimensions to enhance equality and fairness for the good of society • Prohibits investment in activities that violate the Shari’ah, e.g., business dealing with alcohol, gambling, and casinos Marxist-Socialist Tenets • With the collapse of communism, most of the former eastern bloc countries are developing a commercial legal system in conformance with EU practice to engage in international commerce • Russia is a case apart • The Czech Republic and Poland revised and reinstituted pre–World War II commercial legal codes