International marketing strategy and theory ch05

Chapter 5

Legal Environment


Chapter Outline
 Multiplicity

of Legal Environments
 Legal Systems
 Jurisdiction and Extraterritoriality
 Legal Form of Organization
 Branch vs. Subsidiary
 Litigation vs. Arbitration


Chapter Outline
 Bribery

- Legal Dimension
- Ethical Dimension
 Intellectual Property
- Categories of Intellectual Property
- Legal Rights and Requirements


Legal Systems
 Common
–
–

Relying on precedents and conventions
E.g., USA, UK, Canada, India

 Statute
–
–
–

law system

law system

Code or civil law system
Main rules of law embodied in legislative codes
Japan and most continental European countries


Jurisdiction
 territorial

range of authority
 a court's legal power to hear a case


Extraterritoriality
a

country's or court's application of national
laws beyond its border
–

–

E.g., USA and Foreign Corrupt Practices Act
E.g., Belgium’s universal jurisdiction


How to Settle Commercial Disputes
 Negotiation
 Arbitration
 Litigation


Bribery: Legal Dimension
 Foreign

Corrupt Practices Act (FCPA)
 OECD Convention on Combating Bribery of
Foreign Public Officials in International
Business Transactions


Foreign Corrupt Practices Act
(FCPA)
Bribery is "the use of interstate commerce to offer, pay,
promise to pay, or authorize giving anything of value to
influence an act or decision by a foreign government,
politician, or political party to assist in obtaining,
retaining, or directing business to any person."
 Types of Payment
- Permissible: expediting payments to low-level officials

who exercise only "ministerial" or "clerical" functions
- Illegal: payments to an official exercising discretionary
authority



Bribery: Ethical Dimension
 Morality

as a function of culture
 Corporate strategies
–
–
–

Codes of conduct
Sensitization of ethics in managers through training
and education
Ethics audit


Transparency International
 Corruption

Perceptions Index (CPI)
 Bribe Payers Index (BPI)


Intellectual Property
"creations of the mind: inventions, literary and artistic

works, and symbols, names, images, and designs used
in commerce"
 Trademark
 Copyright
 Patent
–
–



Functional patent
Design patent

Trade Secret


Intellectual Property








-

Trademark
symbol, word, or thing used to identify a product made or
marketed by a particular firm

Copyright
protection given to an author or artist for literary, musical,
dramatic, and artistic works
Patent
invention of a scientific or technical nature
Trade secret
know-how that is kept secret within a particular business
e.g., manufacturing methods, formulas, plans