InternationalBusinessEnvironmentLecture3:LegalEnvironmentFacingInternationalBusinessMonday,March16,2015OverviewReview:fundamentalsoflawLegalSystems:Commonlawvs.civillawInternationalarbitrationInternationallegalissues:IPRprotectionSoftwarepiracyInnovationvs.immitationTheQualcommcaseComponentsofmodern

legalsystems

Constitutionallaw(憲法)Criminallaw(刑法)Civilandcommerciallaws(民法與商法)TypesoflegalsystemsCommonlawsystem(判例法系)Civillaworcodelawsystem(成文法系)OthersTheocraticlawsystem(神權法系),customarylaw(習慣法系),mixedsystem(混合系統)Commonlawvs.civillawCommonlawsystem:Basedonjudicialprecedents(判決先例)Anglo-Americanorigin(英美法系)PrevailinginUK,US,India,Austrialia,NewZealand,HongKong(China),etc.CivillaworcodelawBasedonstatutorylaws(法律條文)ContinentalEuropeorigin(大陸法系)PrevailinginGermany,France,Mexico,Japan,etc.70+countriesContractenforcementCommonlaw:contractsshouldbehonoredunlesstheyarepreventedby"actsofGod"(extraordinaryhappeningsofnaturenotreasonablyanticipatedbyeitherparty,likefloods,earthquake,etc.)Civillaw:"ActsofGod"arenotlimitedtoactsofnaturebutareextendedtounforeseeablehumanacts,likelaborstrikes(罷工)andriots(暴亂),etc.CasestudyAcontractwasenteredintodeliveraspecificquantityofcloth(布料).CaseA:anearthquakedestroyedtheclothbeforeitbeingdelivered.CaseB:pipesinthewarehousefrozeandbroke,spillingwaterontheclothanddestroyingit.Question1:werethepartiesabsolved(免除)thedutyofdeliveringtheclothineachcase?AnswertoQuestion1CaseA:Commonlaw&civillaw:yesCaseB:Commonlaw:probablyno,becausethefreezingofthepipeshouldhavebeenexpectedgiventheclimate.Civillaw:probablyyes,duetotheextendeddefinitionof"actofGod"andunpredictability.Question2:considercaseB,ifoneoftheinvolvedpartiesisfromUS,andtheotherfromGermany,whereshouldthedisputeberesolved?Jurisdictioninintl.legaldisputesJurisdiction(管轄權):powerorrightofalegalorpoliticalagencytoexerciseitsauthorityoveraperson,subjectmatter,orterritory.Thegeographicalprincipleofjurisdiction:Thecourtofeitherinvolvedparties'country,ThecourtofthecountrywherethecontractissignedThecourtofthecountrywherethedisputedfacthappenedAllhavejurisdictiononthedispute!Answertothepreviousquestion:USandGermancourtsbothhaverighttoresolvethedisputedcausedbythedestructionofcloth.Question3:whatifthetwocourtsgivecontradictoryverdicts(判決)?AnswertoQuestion3:Suchathingseldomhappens;usually,thefirstcourtwhichacceptedthecasegotthejurisdiction.Ifsuchathingdidhappen,thereisnosolutionunlessthetwocountrieshadsignedaspecialtreatytoresolvesuchconflicts.Implicationforinternationalbusinesspeople:specifythejurisdictioninyourcontractbeforehand!Question4:cross-borderlitigation(起訴)iscomplicated,lengthyandcostly.Isthereanotherwaytosolvedisputesininternationalbusiness?Internationalarbitration(國際仲裁)Themajorityofinternationalcommercialdisputesareresolvedbyarbitration.Theusualarbitrationprocedure:Bothpartiesselectadisinterestedandinformedpartyasreferee.Therefereedeterminesthemeritsofthecaseandmakeajudgementthatbothpartiesagreetohonor.Bothpartiesshouldabidebytheawardsresultingfromthearbitration.Arbitrationclausesarerecognizedbythecourtsandareenforceablebylawinmostcountries(136countriessignedtheUNConventionontheRecognitionandEnforcementofForeignArbitralAwards.)

TribunalsforinternationalarbitrationTheInter-AmericaCommercialArbitrationCommission(21Americancountries)TheCanadian-AmericanCommercialArbitrationCommission(CananaandUS)TheLondonCourtofArbitrationAmericanArbitrationAssociationTheInternationalChamberofCommerce

Intellectualpropertyprotection:

aninterntionallegalissueIntellectuallpropertyrights:therighttocontrolandderivebenefitsfromwriting(copyright),inventions(patents),processes(tradesecrets),andidentifiers(trademarks).Theviolationofintellectualpropertyrightsconsistsofagrowingriskofinternationalbusiness(ex.softwarepiracy).Whatrationaledoyouthinkconsumersinhighpiracyratecountriesusetojustifytheiractions?Similarly,whatideasorconditionsleadconsumersinlowpiracyratecountriestorespectIPRs?Doyouthinkgovernmentsaroundtheworldshouldcooperatetofightsoftwarepiracy?QuestionsEconomictheoryofIPRprotectionPhilippeAghion(1956-):technologicalfrontiertheory(科技前沿理論)Longtermeconomicgrowthisdrivenbytechnologicaladvancement.Therearetwowaysoftechnologicaladvancement:innovation&immitation(創新與模仿)CountriesclosetotheTFneedtoinnovate,andcountriesfarawayfromtheTFcancatchupfastbyimmitating.Therefore,weakIPRprotectionindevelopingcountriesmaybeoutofstrategicconcern.However,asemergingeconomies(likeChina)rapidlyapproachestheTF,theyshouldmakestrategicadjustmentandstrengthenIPRprotectiontopromoteinnovation.IsIPRprotectiontheonlywaytoachieveinnovation?Motivationsforinnovation:Individualistview:personalachievement,materialgainCollectiveview:socialadvancement,status&esteemforinventers(ex.Opensourcemovement,humanrightsconcernsindrugindustry)Example:TheQualcomm(高通)caseSummaryThemobilechipgiantQualcommwasfinedarecordhighamountofRMB6.088biliionbyChineseantitrust(反壟斷)authorities.Qualcommwasaccusedofabusingitsdominantpositioninthemobileindustry:ChargingunfairlyhighlicensingfeesonChinesephonemakersCoercingChinesephonemakerstobuyunnecessarypatentsImpo