Legal Frame-Work for IB

8/14/2019 Legal Frame-Work for IB

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Presented by: Vaishali SharmaLecturer MBA IBE


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Laws of the land directly affect the IB wherever theyoperate .Therefore IB managers should be aware ofthe legal systems the laws that are in force invarious foreign countries in addition to their Home

country as well as Host country.


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CommonLaws

TheocraticLaws

Civil Laws


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Originated in England & therefore known as EnglishLaw.

Traditions , customs, culture , precedent & usageare the bases for common law. Courts interpret thelaw according to the situations & incidents .Theselaws are in force in various countries. Such as

USAHONG KONG

UK


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Common law is based on Tradition and Precedents.

Tradition is the legal history of a country.Precedents are the decisions made in previous

cases by judges.

A judgment given in particular case becomes theprecedent to be followed in similar cases in thefuture.

The system is Hierarchical the decisions of thehigher court must be followed by the lower court.


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Civil law is older than the common law andoriginated in ancient Rome. Over 80 Countriesincluding

This systems is also known as CODIFIED LAW isbased on the detailed set of law organised intocodes.

The judges relied on the these detailed codes ,rather than on tradition , precedent , customs.

GERMANY FRANCE JAPAN RUSSIA


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Civil law is based on how the law is applied tofacts.


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It is based on religious.Most widely practicedtheocratic law system isIslamic law found inMuslim countries whichaccount for about 25% of

the world populationHindu law and Jewish lawwere in vogue up to 20thcentury.

Islamic law is known asSharis (Gods rules) & isbased on the

Holy Kuran

The Sunnah the decisionsor sayings of ProphetMohammed

The writings of Islamicscholars who devise rulesby analogy from theprinciples establishes in theKoran and the Sunnah

The consensus of Muslimscountries legalcommunities.


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Muslims countries is the blend of the Islamic lawsand a Common or Civil system.

Islamic law is more a moral code than a

Commercial wiew

Islamic law prohbits taking and giving of interest .


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National laws affect all local business activities

National laws affect cross border activities

International treaties and conventions may governsome cross border transactions.


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Starting a

Business

Entering and

enforcing

contracts

Hiring and

firing local

workers

Closing down

the business


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AUSTRALIA COMMON(ENGLISH)

2 2 402

CANADA COMMON(ENGLISH)

2 3 127

CHINA CIVIL(GERMAN) 11 46 135

GERMANY CIVIL(GERMAN)

9 45 1,341

FRANCE CIVIL

(FRENCH)

10 53 663

INDIA COMMON(ENGLISH)

10 88 239

JAPAN CIVIL

(GERMAN)

11 31 3,518


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11 320 1,623


17 425 6,065

CHINA CIVIL

(GERMAN)

20 180 268

GERMANY CIVIL(GERMAN)

22 154 1,483

FRANCE CIVIL

(FRENCH)

21 210 896


22 365 444

JAPAN CIVIL(GERMAN)

16 60 2,223


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365 18


292 4

CHINA CIVIL (GERMAN) 946 18

GERMANY CIVIL (GERMAN) 437 8

FRANCE CIVIL (FRENCH) 876 18


4,123 8

JAPAN CIVIL (GERMAN) 216 4


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Intellectual property rights is a legal concept that confersrights to owners and creators of the work, for theirintellectual creativity.

Such rights can be granted for areas related to literature,

music, invention etc, which are used in the businesspractices. In general, the intellectual property law offersexclusionary rights to the creator or inventor against anymisappropriation or use of work without his/her priorknowledge.

Intellectual property law establishes an equilibrium bygranting rights for limited duration of time.


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The WIPO convention lays down following list of the activities orwork which are covered by the intellectual property rights -Industrial designs

Scientific discoveries

Protection against unfair competition Literary, artistic and scientific works Inventions in all fields of human endeavor Performances of performing artists, phonograms and broadcasts Trademarks, service marks and commercial names and

designations

All other rights resulting from intellectual activity in theindustrial, scientific, literary or artistic fields


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Copyright, one of theform of intellectualproperty right, offers

exclusive rights forprotecting theauthorship of original& creative work likedramatic, musical

and literary in nature.Symbolized as ""

A patent is termedas the exclusionaryrights given by the

government or theauthorizedauthority to itsinventor for a

particular durationof time, in respectof his invention.
http://www.indianindustry.com/intellectual-property-rights/patent.htmlhttp://www.indianindustry.com/intellectual-property-rights/copyright.html


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The trademark or trade mark,symbolized as the and ,is the distinctive sign orindication which is used forsignifying some kind ofgoods or/and services and is

distinctively used across thebusiness organization or byan individual for identifyingand uniquely classifying thesource or their productsand/or services amongconsumers and making adistinction of its products orservices from the otherentities.

Trade secret points towards aformula, pattern, anyinstrument, design which iskept confidential andthrough which any businessor trade can edge over itsrival and can enjoy economicgain. Trade secrets can beanything from a chemicalcompound, manufacturingprocess, design or preservingmaterials or even a list ofconsumers or clients. It is also

known as "confidentialinformation" or "classifiedinformation".
http://www.indianindustry.com/intellectual-property-rights/trade-secrets.htmlhttp://www.indianindustry.com/intellectual-property-rights/trade-secrets.htmlhttp://www.indianindustry.com/intellectual-property-rights/trade-secrets.htmlhttp://www.indianindustry.com/intellectual-property-rights/trademark.html


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The utility model is the intellectual property right forprotecting the inventions. It is somehow described asthe statutory monopoly which is bestow upon for thefixed duration of time in exchange to the inventor forthe offering of the sufficient teaching of the invention

and permitting the other person, possessing theordinary skills of the relevant art, of performing theinvention
http://www.indianindustry.com/intellectual-property-rights/utility-model.htmlhttp://www.indianindustry.com/intellectual-property-rights/utility-model.html


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Geographical Indication (GI) signifies to the name or sign,used in reference to the products which are corresponding tothe particular geographical area or somewhat related to theorigin like town, region or nation. Thus GI grants the rights toits holder which acts as the certification mark and shows that

the specified product consists of the some qualities and isenjoying good reputation due to its origin from the specifiedgeographical location

39 Geographical Indications products have been registered

since September, 2003. These include Darjeeling Tea,Chanderi Saree, Pochanpally Ikat, Solapur Chaddar, MysoreSilk, Kullu Shawl, Bidriware, etc.


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Industrial design rights are defined as the part of theintellectual property rights which confers the rights ofexclusivity to the visual designs of objects which aregenerally not popular utilitarian. It safeguards theappearance, style, design of the industrial object such

as spare parts, textiles, furniture


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A UN agency, namely, World Intellectual Property Organization

(WIPO) based in Geneva administers treaties in the field ofintellectual property. India is a member of WIPO.

Department of Industrial Policy & Promotion is the nodalDepartment in the Government of India for all mattersconcerning WIPO.

India is also member of 2 major treaties, namely, ParisConvention for the Protection of Industrial Property (relating topatents, trademarks, designs, etc.) of 1883 and the BerneConvention for the Protection of Literary and Artistic Works

(relating to copyright) of 1886. Apart from these, India is also amember of the Patent Cooperation Treaty (PCT) which facilitatesobtaining of patents in several countries by filing a singleapplication.
http://www.wipo.int/http://www.wipo.int/


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India is also a member of the World Trade Organization(WTO).

The WTO agreement, inter-alia, contains an agreement on IP,namely, the Agreement on Trade Related Aspects ofIntellectual Property (TRIPS).

This Agreement made protection of intellectual property anenforceable obligation of the Member States. TRIPSAgreement sets out minimum standards of intellectualproperty protection for Member States.

India has complied with the obligations contained in the TRIPSAgreement and amended/enacted IP laws.


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A growing risk of IB is the violation of IPR. Forpopular products , like Music , software andMovies , there are often more counterfeit productsthan genuine ones in the market.

On April 26, 2007, World Intellectual Property Day,a total of 120,000 illegal discs were destroyed in apublic show in China


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Products must adhere to certain safety standardsas prescribed by product safety laws. Firms and itsexecutives hold responsibility under productliability when injury , death or damage is caused by

usage or consumption of a product . These lawsand standards are more comprehensive in the USAcompared to other countries


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Labor legislation are enacted in various countries ,mostly based on the resolutions of theInternational labour Organization .

These legislation prescribe the minimum wages ,trade unions activities , employee-employerrelations , collective negotiations , recruitment &employment practices , stipulating regarding

working conditions , employee benefits regulations& modalities of prevention & settlement ofindustrial disputes


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Nike a sub-contracted its manufacturing operations inVietnam . The operations employed 25,000 employees andmost of them are young women. Their wages as low as $40 amonth and the working conditions in the factories were quiteinferior .Nike practices were widely criticized by Media.Consequently , Nike hired Andrew young former US

Ambassador to UN enquire into the working conditions ofemployees and present a report Mr. Young did not conductdetailed study but reported that Nike was doing good job intreating the workers . Mr Young was criticized widely for hisimproper reporting . Then Nike joined a task force includingindustry leaders , HR groups that resulted in reaching an

accord for payment of local minimum wages in foreignfactories and establishment of Fair labour Association tomonitor the wages and the working conditions .


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Later , Nike announced a no of initiatives and incentives toemployees working with its contractors . It was widelycriticised that the Fair Labour association was not anindependent body & the labour practices in Nike were unfaireven during 2001.


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The Chinese manufacturers are slowly making inroads inthe Indian market. Like some other consumer products,the Indian toys are now out from the shelves ofshopkeepers. The inexpensive Chinese toys have replacedthem fully. The Indian middle class, which used to thinkLeo and other branded toys out of their range, are nowbuying these Chinese toys. The wholesaler and retailershere claim that at least 80 per cent of the toys market hasbeen taken over by the Chinese producers. They say theIndian manufacturers who initially tried to face them bylowering their price and focusing on quality, are now

selling the Chinese toys themselves. A large number ofIndian manufacturers have already closed their units.

Mr Rajiv Kumar Kurera of Jagdamba Traders, said, TheChinese are offering a large variety of battery operatedtoys at less than half the price of Indian toys. One couldpurchase a big toy car Next Power for just Rs 80 thatwould not be available for even Rs 250 from the localmanufacturers. A simple mobile toy which would be soldby Indian manufacturer for Rs 20 to Rs 25 per piece wouldbe sold for just Rs 10 to Rs 12 by their Chinese

counterparts


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In general copyrights are protected for literary &artistic works extending 70 years after the authorsdeath.

Trademarks can be protected indefinitely if theycontinue to be distinctive .

Inventions , Industrial designs & trade secrets are

protected through patents for a finite period ,usually 20 years


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Govt. could deny patent protection on certaingrounds (public order or morality) or for certaininventions (surgical methods )

If the patent holder abused the rights granted bythe patent ( such as refusing to supply the productin the market ) the Govt could under prescribedconditions , issue compulsory licenses that allowedcompetitors to produce the product.


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Documents

Legal Frame-Work for IB