2. Legal Systems, Issues and Property Rights (Ch. 4.2)

3. Morning Joke!!!!!!!!!!!!!!!11 No wonder they can’t find Bin Laden!!

4. Legal Systems International Law : based on legal principles of western culture. Countries are different, some more similar than others. Degree of independence from judiciary and political varies greatly among countries. 3 major systems: common, civil and theocratic.

5. 1) Civil Law A system based on a detailed set of laws organized into a legal code. How the law is applied to the facts. A system based on a detailed set of laws organized into a legal code. How the law is applied to the facts. Ex) Germany, France, Japan Ex) Germany, France, Japan A civil law country:contracts are short/less specific b/c many issues a common law contract would cover are included in the civil code. A civil law country:contracts are short/less specific b/c many issues a common law contract would cover are included in the civil code. Less confrontational Less confrontational U.S. law firms meet great resistance in these countries b/c of competitive approach U.S. law firms meet great resistance in these countries b/c of competitive approach

6. A system based on tradition, precedent, custom and usage, and interpretation by the courts. Ex) Britain, Canada, U.S.A Common law country: contracts are very long and detailed, with all details spelled out fully. Why? Important for business manager to know which system is in place in the foreign country. 2) Common Law

7. 3) Theocratic Law Theocratic Law: based on religious doctrine. Theocratic Law: based on religious doctrine. Misinterpretation, bias, political agendas. Misinterpretation, bias, political agendas. Ex) The Koran, Islamic Law governs all aspects of life including economics and business. Ex) The Koran, Islamic Law governs all aspects of life including economics and business.

8. Liability A broad legal term including responsibility, duty, and obligation which can relate to debt, loss, or burden. Liability for debt can include wages owed to employees, taxes owed to government, loans owed to banks. Safe working environment? Product liability is the specific responsibility that both manufacturers and sellers have for the safety of their products. Negligence is the failure of a responsible party to follow standards of due care. Both are difficult to prove!

9. Property Rights The exclusive rights to possess and use property and its profits, to exclude anyone else from interfering with it, and to dispose of it in a legal way. The exclusive rights to possess and use property and its profits, to exclude anyone else from interfering with it, and to dispose of it in a legal way. Major aspect of democracy! Major aspect of democracy! A company’s property is protected in most countries. A company’s property is protected in most countries. Communism, Developing countries? Communism, Developing countries? Ex) China, new law in 1982 protecting all foreign patents, trademarks, land, assets to solidify China in the world marketplace. Ex) China, new law in 1982 protecting all foreign patents, trademarks, land, assets to solidify China in the world marketplace. Why would China make this law? Why would China make this law?

10. Intellectual Property The technical knowledge or creative work that an individual or company has developed. The technical knowledge or creative work that an individual or company has developed. Ex’s) Books, Music, Inventions, and Computer Software Ex’s) Books, Music, Inventions, and Computer Software Dishonest competitors can steal knowledge to make similar products if rights are not protected. Dishonest competitors can steal knowledge to make similar products if rights are not protected. Ex) Apple and Microsoft Ex) Apple and Microsoft Patent is the grant of an exclusive right of an inventor to make, sell, and use a product or process. Often 10 yrs! Patent is the grant of an exclusive right of an inventor to make, sell, and use a product or process. Often 10 yrs! WIPO and Piracy? WIPO and Piracy? Ex) Fonar vs. GE / Hitachi Ex) Fonar vs. GE / Hitachi

11. Licensing Owners allow other organizations to use their idea for a fee (royalty) Owners allow other organizations to use their idea for a fee (royalty) A fixed sum or variable depending on sales. A fixed sum or variable depending on sales. Similar to franchising chains. Similar to franchising chains. Ex1) Coke licenses its formula to local bottlers in over 200 countries. Ex1) Coke licenses its formula to local bottlers in over 200 countries. Ex2) Disney licenses its characters to toy and watch makers Ex2) Disney licenses its characters to toy and watch makers Do patents offer full security? Do patents offer full security?

12. Some “Good Humoured” Lawyer Jokes Q: What's the difference between a dead dog in the road and a dead lawyer in the road? Q: What's the difference between a dead dog in the road and a dead lawyer in the road? A: There are skid marks in front of the dog. A: There are skid marks in front of the dog. Q: What do you have when a lawyer is buried up to his neck in sand? Q: What do you have when a lawyer is buried up to his neck in sand? A: Not enough sand. A: Not enough sand. Q: Do you know how to save a drowning lawyer? Q: Do you know how to save a drowning lawyer? A1: Take your foot off his head. A1: Take your foot off his head. A2: No? Good! A2: No? Good!

13. Property Rights Trademarks: a distinctive name, symbol, word or picture that is used by a business to identify its services or products. Trademarks: a distinctive name, symbol, word or picture that is used by a business to identify its services or products. Ex) The swoosh (Nike) Copyrights : a legal right that protects the original works of authors, composers, publishers, etc. Lasts a lifetime + 70yrs. Copyrights : a legal right that protects the original works of authors, composers, publishers, etc. Lasts a lifetime + 70yrs. International copyright convention est. 1955, 65 members, each country offers foreign and domestic protection International copyright convention est. 1955, 65 members, each country offers foreign and domestic protection

14. Contract Law A legally enforceable agreement b/w 2 or more persons either to do or not to do something. Basis of all business relationships. 4 essential components to be valid. 1) Capacity: competent, legal age, mentally ok 2) Mutual Agreement: party #1 offers valid terms, party #2 accepts terms 3) Consideration: something of value must be given by both parties. Goods vs. Money 4) Legal Purpose: in agreement with law, often international law!

15. Mediation A conflict resolution method that makes use of a neutral third party called a mediator. Often an expert or attorney in the disputed matter who makes suggestions to resolve dispute. Both parties involved must compromise. Ex) In China, 90% of all civil disputes resolved through mediation.

16. Arbitration Method of conflict resolution that uses a neutral 3 rd party to make a binding decision. Both parties provide evidence and plea their case. Arbitrator is like a private judge. A fast and economical method of resolving IB disputes. Ex’s)

17. Litigation A lawsuit which enforces the rights of a person or an organization. Seeks a remedy to the violation of their rights. 3 rd form of conflict resolution! Separate rules for criminal and civil cases. Countries vary greatly with procedure and rules. IB disputes are settled in host country’s court system. Gov’t can violate terms of a contract with a foreign company. Ex) Cipro

18. Some More“Good Humoured” Lawyer Jokes Q: What's the difference between a lawyer and a bucket of $%!*? Q: What's the difference between a lawyer and a bucket of $%!*? A: The bucket. A: The bucket. Q: How do you get a lawyer out of a tree? Q: How do you get a lawyer out of a tree? A: Cut the rope A: Cut the rope Q: What can a goose do, a duck can't, and a lawyer should? Q: What can a goose do, a duck can't, and a lawyer should? A: Stick his bill up his @$$. A: Stick his bill up his @$$. Q: How can you tell when a lawyer is lying? Q: How can you tell when a lawyer is lying? A: Her lips are moving. A: Her lips are moving.

19. Work To Do! With a partner, write a word processed half page summary on whether uploading music online is wrong or justified? Use correct terminology, and research should be done to support and enhance your argument! With a partner, write a word processed half page summary on whether uploading music online is wrong or justified? Use correct terminology, and research should be done to support and enhance your argument!