Alexander Consulting Enterprise 4/30/2015 Legal Environment of Global Markets

Alexander Consulting Enterprise 4/30/2015 Common Law Code Law Islamic Law Socialist Law Legal Systems in International Markets

Alexander Consulting Enterprise 4/30/2015 Islamic Law and Business Islam is not just religion but source of law, arbiter of social behavior, and guide for politics. Prophet Mohammed transmitted literally the word of god in the Koran: fundamental, immutable source of Islamic doctrine. The words of Mohammed and his life are recorded in the Hadith. Muslims see Islam as continuation of Judeo-Christian tradition. There was always one religion and one god. God sent from time to time prophets: Moses, David, Jesus, and Muhammad. Muhammad is last prophets since all things are now revealed. Mohammed did not leave a male offspring and did not give instructions for his succession ( The Shiite believe he chose Mohammed Ali). His closest companions chose Abu Bakr as Caliph. Mohammed Ali, Mohammed’s son in law was not selected, so he created Shiism. Sharia (path to the source of life) is the code of law based on religious principles regulating commercial, social and political life. In Saudi Arabia, sharia is the only code of law, in Egypt’s constitution sharia is the basis for legislation, in Turkey sharia is excluded from state’s legal and administrative affairs.

Alexander Consulting Enterprise 4/30/2015 Legal Dispute Situations Between Governments Between Companies and Governments Between Companies

Alexander Consulting Enterprise 4/30/2015 Determination of Legal Jurisdiction There is no Supranational System of Laws for Disputes among Companies. Disputes have to be Settled under National Law. Jurisdiction is determined by: - Jurisdictional Clauses Included In Contract - Domicile - ‘purposeful availment’ of doing business in particular country. Ex: shipping goods, signing contract etc.

Alexander Consulting Enterprise 4/30/2015 International Dispute Resolution - Conciliation or Mediation  Not Legally Binding  No Disclosure of Information - Arbitration  Arbitration Centers  Arbitration Clauses  Enforcement of Arbitration - Litigation  Costly  Time Consuming

Alexander Consulting Enterprise 4/30/ What are Intellectual Property Rights? - Intangible Assets - Right to Use and Prevent Others from Using - Source of Competitive Advantage Intellectual Property Rights in Global Markets

Alexander Consulting Enterprise 4/30/ Manifestation of Intellectual Property Rights - Patents - Trade Marks - Industrial Design - Trade Secrets - Copy Rights

Alexander Consulting Enterprise 4/30/ International Protection of Intellectual Property Rights - IPR Regulated by National Law - Bilateral Agreements and International Conventions  WIPO: Surveillance over most Multinational Agreements  Extension of National Treatment to Foreigners  Lack of Enforcement Power - Multilateral Agreements  TRIPS: Multilateral Agreement under WTO Surveillance  Sets Minimum Standards  Extension of Most Favored Nation Treatment to All WTO Members  Provides Enforcement and Dispute Settlement Mechanism

Alexander Consulting Enterprise 4/30/ The Battle Continues - Inefficient Legal Framework for New Technologies  Internet  Biotechnology - Lack of Enforcement  5-8% of all Goods are Counterfeit  U.S. Business Looses $200 Billion Annually  Jobs Lost in U.S.  75% of all Medicines are Counterfeit in India - High Demand for Counterfeit Goods  Price Incentive  “Robin Hood Mentality” - Cultural Differences

Alexander Consulting Enterprise 4/30/2015 Patent Law The United States vs. Japan United StatesJapan Protects individual inventors. Patent applications are secret. Patents granted in up to 24 months. Patents valid for 17 years from date issued. Promotes technology sharing. Patent applications are public. Patents granted in 4 to 6 years. Patents valid 20 years from application date.

Alexander Consulting Enterprise 4/30/ Differences in Underlying Philosophies - Position of Most Developed Nations “Protection of IPR is a means to encourage creative activity, industrialization, investment, and honest trade.” - Position of Many Less Developed Nations: “Intellectual property should be considered the common property of mankind and relevant laws should facilitate access to intellectual property as a development tool rather than place restrictions on it.”

Alexander Consulting Enterprise 4/30/ Potential Functions of IPR Laws  Protection of Consumers from Deception and Confusion  Protection of Companies From Unfair Competition  Incentives for Investments in Research and Development  Encouragement of Direct Investment

Alexander Consulting Enterprise 4/30/ Potential Drivers of Consumer Demand for Pirated Goods* -Economic Factors -Knowledge Societal Consequences -Fear of Legal Prosecution -Access to Pirated Goods -Attitudes Towards Piracy - Social Norms -Culture -Demographics * See: Moores, Trevor, Alexander Nill, and Marcus Rothenberger (2009). “Knowledge of Software Piracy as an Antecedent to Reducing Piracy Behavior”. Journal of Computer Information Systems, 50(1):82-90.

Alexander Consulting Enterprise 4/30/ Traditional Remedies Against Infringements of IPR - Legal Pressure - Diplomatic Pressure - Technological Devices - Awareness Advertising Inform Consumer about Counterfeits - Anti-Counterfeit-Advertising Persuade Consumer not to Buy - Legal Pressure Supply Demand

Alexander Consulting Enterprise 4/30/ Potential Strategic Responses to Piracy* *See: Nill, Alexander and Clifford Shultz (2009). “Global software piracy: Trends and strategic considerations”. Business Horizons, 53(3):