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1、 I n t e r n a t i o n a l M a r k e t i n gThe International Legal Environment:Playing by the RulesChapter 71 4 t h E d i t i o nP h i l i p R. C a t e o r aM a r y C. G i l l yJ o h n L . G r a h a mMcGraw-Hill/IrwinInternational Marketing 14/eCopyright 2009 by The McGraw-Hill Companies, Inc. All
2、rights reserved.7-2What Should You Learn? The four heritages of todays legal systems The important factors in jurisdiction of legal disputes Issues associated with jurisdiction of legal disputes and the various methods of dispute resolution The unique problems of protecting intellectual property rig
3、hts internationally7-3What Should You Learn? How to protect against piracy and counterfeiting The legal differences between countries and how the differences can affect international marketing plans The different ways U.S. laws can be applied to U.S. companies operating outside the United States The
4、 many issues of evolving cyberlaw7-4Global PerspectiveThe Pajama Caper No single, uniform international commercial law governs foreign business transactions The international marketer must pay particular attention to the laws of each country Laws governing business activities within and between coun
5、tries An integral part of the legal environment of international business Securing expert legal advice is a wise decision The foundation of a legal system Profoundly affects how the law is written, interpreted, and adjudicated7-5Bases for Legal Systems Four heritages form the basis for the majority
6、of the legal systems of the world Common law Civil or code law Islamic law Marxist-socialist tenets Even though a countrys laws may be based on the doctrine of one of the four legal systems its individual interpretation may vary significantly7-6Lawyers per 100,000 People in Selected CountriesExhibit
7、 7.17-7Common and Code Law Common law Seeks interpretation through the past decisions of higher courts which interpret the same statues Applies established and customary law principles to a similar set of facts Are recognized as not being all-inclusive Ownership is established by use Code law Legal
8、system is generally divided into three separate codesCommercial CivilCriminal Ownership is determined by registration Considered complete as a result of catchall provisions found in most code-law systems7-8Islamic Law The basis for Islamic law is interpretation of the Koran Islamic law defines a com
9、plete system that prescribes specific patterns of social and economic behavior for all individuals Property rights Economic decision making Types of economic freedom Among the unique aspects of Islamic law is the prohibition against the payment of interest The Islamic system Places emphasis on the e
10、thical, moral, social, and religious dimensions to enhance equality and fairness for the good of society7-9Marxist-Socialist Tenets Socialist countries are now more directly involved in trade with non-Marxist countries Necessitated the development a commercial legal system that allowed engagement in
11、 active international commerce Pattern for development varies among countries Each has a different background Development of market-driven economies at different stages Premise is that law is strictly subordinate to prevailing economic conditions Fundamental propositions as private ownership, contra
12、cts, due process, and other legal mechanisms have had to be developed7-10Jurisdiction in International Legal Disputes No judicial body exists to deal with legal commercial problems arising between citizens of different countries Legal disputes can arise in three situationsBetween governmentsBetween
13、a company and a governmentBetween two companies Jurisdiction is generally determined on the basis of: Jurisdictional clauses included in contracts Where a contract was entered into Where the provisions of the contract were performed Most clear-cut decisions can be made: When contracts or legal docum
14、ents supporting a business transaction include a jurisdictional clause7-11International Dispute Resolution Conciliation Conciliation is a nonbinding agreement between parties to resolve disputes by asking a third party to mediate differences Sessions are private All conferences between parties and t
15、he mediator are confidential Although conciliation may be the friendly route to resolving disputes It is not legally binding An arbitration clause should be included in all conciliation agreements7-12International Dispute Resolution Arbitration Conducted under the auspices more formal domestic and i
16、nternational arbitration groups Organized specifically to facilitate the resolution of commercial disputes The popularity of arbitration has led to a proliferation of arbitral centers Established by countries, organizations, and institutionsInter-American Commercial Arbitration CommissionCanadian-Am
17、erican Commercial Arbitration Commission (for disputes between Canadian and U.S. businesses)London Court of Arbitration (decisions are enforceable under English law and English courts)American Arbitration AssociationInternational Chamber of Commerce (select Arbitration)7-13International Dispute Reso
18、lution Arbitration Contracts and other legal documents should include clauses specifying the use of arbitration to settle disputes Arbitration clauses require agreement on two counts To arbitrate in the case of a dispute according to the rules and procedures of some arbitration tribunal To abide by
19、the awards resulting from the arbitration7-14International Dispute Resolution 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
20、 otherwise have been collected in a mutually agreed settlement through arbitration The relatively high cost and time required when bringing legal action Loss of confidentiality7-15Protection of Intellectual Property Rights A Special Problem Companies spend millions of dollars establishing brand name
21、s or trademarks To symbolize quality and design 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 piracy7-16Counterfeiting and Piracy
22、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 serve come companies Microsoft Counterfeit pharmace
23、uticals 2% of the $327 billion worth of drugs sold each year7-17Piracy Rates for Computer Software Top and Bottom 20Exhibit 7.27-18Inadequate Protection Failing to adequately protect intellectual property rights can lead to the legal loss of rights in potentially profitable markets There have been m
24、any cases where companies have legally lost the rights to trademarks and have had to buy back these rights or pay royalties for their use McDonalds in Japan Many businesses fail to take proper steps to legally protect their intellectual property7-19Prior Use Versus Registration Prior Use whoever can
25、 establish first use is typically considered the rightful owner Registration the first to register a trademark or other property right is considered the rightful owner A company that believes it can always establish ownership in another country by proving it used the trademark or brand name first is
26、 wrong and risks the loss of these assets It is best to protect intellectual property rights through registration7-20International Conventions Three major international conventions Paris Convention for the Protection of Industrial Property Inter-American Convention Madrid Arrangement World Intellect
27、ual 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 Asp
28、ects of Intellectual Property Rights (TRIPs)7-21Marketing 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 U
29、.S. does not allow the buying or selling of human organs Some countries only have a few marketing laws with lax enforcement Others have detailed, complicated rules that are stringently enforced7-22Marketing Laws There often are vast differences in enforcement and interpretation among countries havin
30、g laws covering the same activities Laws governing sales promotions in the European community Censorship of advertising is a constant concern For many U.S. products with markets in Europe, meeting EU standards is less expensive than designing products especially for Europe7-23Green Marketing Legisla
31、tion Green marketing laws Focus on environmentally friendly products and Focus on product packaging and its effect on solid waste management Antitrust For better part of the 20th century antitrust laws Nonexistent Not enforced in most of the worlds countries U.S. was exception EU has dealt severe pe
32、nalties for antimonopoly, price discrimination, supply restrictions, and full-line forcing 7-24Green Marketing Legislation The U.S. intervenes when non-U.S. companies attempt to acquire American companies At times, companies are subject to antitrust charges in more than one country Nestles proposed
33、acquisition of Dreyers Grand Ice Cream Microsoft Enforcement of antitrust in Europe almost nonexistent until the early stages of EU established legislation7-25U.S. Laws Apply in Host Countries Foreign Corrupt Practices Act Makes it illegal for companies to pay bribes to foreign officials, candidates
34、, or political parties National security laws Prohibit a U.S. company, its subsidiaries, joint ventures, or licensees to sell controlled products without special permission from the U.S. Antitrust laws Enforcement has two purposes in international commerceProtect American consumersProtect American e
35、xports and investments against any private restrictions The question of jurisdiction and how U.S. antitrust laws applySections I and II of the Sherman Act7-26U.S. Laws Apply in Host Countries Antiboycott law U.S. companies are forbidden to participate in any unauthorized foreign boycott Required to
36、report any request to cooperate with a boycott Extraterritoriality of U.S. laws Especially important to U.S. multinational firms Foreign governments fear the influence of American government policy on their economies through U.S. multinationalsWhen U.S. laws conflict with those of host countryWhen U
37、.S. Justice Department restricts of forbids ventures because of anticompetitive effects7-27Cyberlaw Unresolved Issues Domain names and cybersquatters Cybersquatters (CSQs) buy and register descriptive nouns, geographic names, and names of ethnic groups and pharmaceutical substances, and other simila
38、r descriptors and hold them until they can be sold at an inflated price Other cybersquatting abuses that can pose a serious threat to business include parody sites, protest sites, and hate sites The Internet is not a libel-free zone Lawsuits involving libel, defamation, and product liability cause companies to voluntarily restrict their Web sites to selected countries7-28Cyberlaw Unresolved Issues Taxes In the past, a company was deemed to have a taxable presence
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