International Business Chapters 7 and 8 Foreign Exchange, International Finance, and Legal Agreements Around the World

CH. 7 - MONEY What is money? Money – anything people will accept for the exchange of goods and services Serves three main purposes: Medium of exchange – makes business transactions easier Measure of value Store of value – can be saved for future spending

FOREIGN EXCHANGE Foreign exchange – process of converting the currency of one country into the currency of another country Exchange rate – amount of currency of one country that can be traded for one unit of currency of another country

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FOREIGN EXCHANGE ACTIVITIES Soft currency (weak) – a currency that is not easy to exchange for other currencies Typically from developing economies Hard currency (strong) – monetary unit that is freely converted into other currencies Examples include: Japanese yen, Canadian dollar, the Euro, and U.S. dollar

CHANGING EXCHANGE RATES Floating exchange rate – a system in which currency values are based on supply and demand Foreign exchange market – the network of banks and other financial institutions that buy and sell different currencies Currency option – contract a person or company buys that allows the buyer the option to purchase a foreign currency sometime in the future at today’s rate

INTERNATIONAL FINANCIAL AGENCIES The World Bank – bank whose major function is to provide economic assistance to less developed countries International Monetary Fund (IMF) – agency that helps to promote economic cooperation by maintaining an orderly system of world trade and exchange rates

CURRENCY CHECK Find 5 currencies besides those listed in the Family Feud Report out to your tables what the currency is called and which country uses it

CH. 8 – PROPERTY RIGHTS & RESPONSIBILITIES Property – everything that can be owned Three main categories: Real property – land or anything built or attached to land Personal property – tangible, but does not have a permanent location Intellectual property – based on ideas (such as patented inventions, trademarks, copyrights, etc.)

PICK 6 Select 6 items you consider your property. Classify each as either real, personal, or intellectual.

PROPERTY LAW Property rights – exclusive rights to possess and use property and its profits, to exclude everyone else from interfering with it, and to dispose of it in any legal way Intellectual property – technical knowledge or creative work that an individual or company has developed World Intellectual Property Organization (WIPO) – agency that coordinates various international treaties designed to protect patents, trademarks, copyrights, and other intellectual property Part of the United Nations Over 170 nation members

INTELLECTUAL PROPERTY TYPES Patent – Exclusive right of an inventor to make, sell, and use a product or process To be protected, a product or process must be new and useful Once the patent expires in the U.S., it cannot be renewed unless a new improvement or design is incorporated Limited time: ranging from 5 – 20 years (depending on country) Company must apply for patent rights in EACH country Patent Cooperation Treaty – more than 40 countries that allow one single application for patent coverage

EXAMPLE PATENTS iPhone Quadcopter drone Electronic device Product Patent name iPhone Quadcopter drone Electronic device Omni-directional, vertical-lift, helicopter drone

INTELLECTUAL PROPERTY TYPES Trademarks – a distinctive name, symbol, word, picture, or combination of these that is used by a business to identify its services or products ® - represent a registered trademark in the U.S. To remain protected, it must be in continual use and must continue to be identified with the original business Once the term becomes accepted to mean all things of that kind, it is no longer protected Ex:// T-shirt, Aspirin, App store, Zipper Covered by several international agreements: Paris Convention of Industrial Property Madrid Agreement of 1891 European Union

FIND AND SEEK Using your own personal property and items located around the room, locate 5 registered trademarks.

INTELLECTUAL PROPERTY TYPES Copyright – legal right that protects the original works of authors, music composers, playwrights, artists, and publishers Originator has exclusive rights to publish, sell, and exhibit their creative work for their lifetime PLUS 70 years. Must be an original and fixed expression © - symbol that represents a copyright notice and must be followed by the name of the copyright owner and date of publication

ILLEGAL USAGE Counterfeit – made in exact imitation of something valuable or important with the intent to deceive or defraud Piracy – illegal use of intellectual property

RESOLVING LEGAL DIFFERENCES – WITHOUT COURT ACTION Mediation – dispute resolution method that makes use of a neutral third party, or mediator, who offers a non-binding decision Arbitration – method of conflict resolution that uses a neutral third party to make a binding decision

RESOLVING LEGAL DIFFERENCES – USING COURT ACTION Litigation – lawsuit brought about to enforce the rights of a person or an organization or to seek a remedy to the violation of their rights Class-action suit – several parties (individuals or organizations) take legal action as a group International Court of Justice – court that settles disputes between nations when both nations request that it do so and also advises the United Nations on matters of international law

LOGO CHALLENGES