The International Legal Environment:

Playing by the Rules

BASES FOR LEGAL SYSTEMS

Four heritages form the basis for the majority of the legal
systems of the world
• Common law
• Civil or code law
• Islamic law
• Marxist-socialist tenets
COMMON LAW
Common law is a series of unwritten laws based on past precedent. Courts
create common law by trying different types of cases and establishing a
precedent for rulings in such cases.
CIVIL AND CODE LAW
Civil law deals with behavior that constitutes an injury to an
individual or other private party, such as a corporation.

Examples are defamation (including libel and slander), breach of

contract, negligence resulting in injury or death, and property
damage.
ISLAMIC LAW:

Islamic law defines a complete system that prescribes

specific patterns of social and economic behavior for all
individuals.

The Islamic system Places emphasis on the ethical, moral,

social, and religious dimensions to enhance equality and
fairness for the good of society
JURISDICATION IN INTERNATIONAL LEGAL DISPUTES

No judicial body exists to deal with legal commercial problems

arising between citizens with legal commercial.

Legal disputes can rise in three situations

• Between governments
• Between a company and a government
• Between two companies
 Litigation
• The best advice is to seek settlement
• Deterrents to litigation
• Fear of creating a poor image and damaging public relations
• Fear of unfair treatment in a foreign court
• Difficulty in collecting a judgment that may otherwise have been
collected in a mutually agreed settlement through arbitration
• The relatively high cost and time required when bringing legal action
• Loss of confidentiality
 Protection of Intellectual Property Rights

• What is intellectual property?

• Companies spend millions of dollars establishing brand names or
trademarks to symbolize quality and design and to entice customers
• Millions are spent on research to develop products, processes,
designs, and formulas
• Intellectual or industrial properties are among the most valuable assets
• New technologies developed to prevent piracy and counterfeiting
 Counterfeiting and Piracy
• Lost sales from the unauthorized use of U.S. patents, trademarks, and
copyrights
• Amount to more than $100 billion annually
• The piracy industry has grown so sophisticated
• Many counterfeit goods are indistinguishable from original
• Piracy actually can replace some companies products on a grand
scale
i.e Microsoft Windows
 Inadequate Protection

• Failing to adequately protect intellectual property rights can lead to the

legal loss of rights in potentially profitable markets
• There have been many cases where companies have legally lost the rights to
trademarks and have had to buy back these rights or pay royalties for their
use
• Many businesses fail to take proper steps to legally protect their intellectual
property
 International Conventions

• Three major international conventions

• Paris Convention for the Protection of Industrial Property
• Inter-American Convention
• Madrid Arrangement
World Intellectual Property Organization (WIPO)
Responsible for the promotion of the protection of intellectual property and for the administration
of the various multilateral treaties through cooperation among its member states
• Patent Cooperation Treaty (PCT)
• European Patent Convention (EPC)
• The Trade-Related Aspects of Intellectual Property Rights (TRIPs)
 Marketing Laws
All countries have laws regulating marketing activities
• Promotion
• Product development
• Labeling
• Pricing
• Channels of distribution
Discrepancies across markets cause problems for trade negotiators – particularly for
managers and their firms
• Some countries only have a few marketing laws with lax enforcement
• Others have detailed, complicated rules that are stringently enforced