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International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 6
1 Instructor’s Manual – Module 6 | Geringer, McNett, Minor, Ball © 2016 by McGraw-Hill Education.
Module 6: Intellectual Property Rights and Other Legal
Forces
Use this Instructor Guide to incorporate the unique content of this product and facilitate your
Face-to-Face, Online, and Hybrid classes. This guide has been designed to be interactive and links
have been created within each title in the Table of Contents to guide you to each section. You
can also link back to the main page by clicking at the button at the bottom of each page.
Here is the Table of Contents highlighting what you’ll be able to find to support you in teaching
this module:
YOUR CONTENT
Summary
Learning Objectives
Key Terms & Key Terms with Definitions
Content Outline
CONNECT TOOLS FOR CLASS P R EPARATION
SmartBook
What is SmartBook?
How Does SmartBook Help You/Students?
How to assign SmartBook to ensure students come to class prepared?
ENGAG EMENT & APPLICATION (F ACE TO FACE & ONLINE & HYBRID)
BOXED TEXT DISCUSSION QUESTIONS WITH SUGGESTED ANSWERS
IB IN PRACTICE
GLOBAL DEBATE
GET THAT JOB! FROM BACKPACK TO BRIEFCASE
Critical Thinking Questions
Global Edge Research Task
MiniCase
Bonus Activities
Video Suggestions
Team Exercises
Supplemental Lecture
Tools & Tricks
Controversial Issues
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 6
2 Instructor’s Manual – Module 6 | Geringer, McNett, Minor, Ball © 2016 by McGraw-Hill Education.
Term Paper or Project Topics
Teaching Suggestions
CONNECT TOOLS FOR ASSESSEMENT OF LEARNING
Interactive Applications
The purpose of this chapter is to alert the students to the size and complexity of legal problems
facing international business. They should be aware that there are potential legal problems
about which they should consult experts. We begin with an overview of the three types of legal
systems, civil, common, and religious. Following a brief review of the rule of law,
LEARNING OBJECTIVES
LO 6-1 Describe the three types of legal systems.
LO 6-2 Describe the rule of law and its sources.
LO 6-3 Discuss the general legal concerns in global business
LO 6-4 Identify methods to protect intellectual property.
LO 6-5 Discuss the standardization of laws among nations.
LO 6-6 Describe the impacts of the national-level legal forces in the areas of
competition, trade, tort, ethics, and accounting.
KEY TERMS AND DEFINITIONS
antitrust (p. 165)
Laws that prevent inappropriately large concentrations of power
and its abuse through price-fixing, market sharing, and monopolies
arbitration (p. 156)
A dispute resolution process agreed to by parties in lieu of going to
court, in which one person or a body makes a binding decision
competition laws (p. 165)
Another term for antitrust law, used by the EU and other countries
copyright (p. 161)
Exclusive legal rights of authors, composers, creators of software,
playwrights, artists, and publishers to publish and dispose of their
work.
extraterritorial application of
A country’s attempt to apply its laws to nonresidents and foreigners,
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Geringer, McNett, Minor, Ball
Instructor Guide to Module 6
3 Instructor’s Manual – Module 6 | Geringer, McNett, Minor, Ball © 2016 by McGraw-Hill Education.
laws (p. 155)
and to activities that take place beyond its borders
Foreign Corrupt Practices Act
(FCPA) (p. 171)
U.S. law that prohibits payments to foreign government officials in
order to receive special treatment
Incoterms (p. 163)
Predefined commercial terms established by the International
Chamber of Commerce
intellectual property (p. 157)
A creative work or invention that is protectable by patents,
trademarks, trade names, copyrights, and trade secrets
litigation (p. 156)
Legal proceeding conducted to determine and enforce particular
legal rights
patent (p. 158)
A government grant giving the inventor of a product or process the
exclusive right to manufacture, exploit, use, and sell that invention
or process
private international law (p. 155)
Law that governs relationships between individuals and companies
that cross international borders
product liability (p. 167)
A standard that holds a company and its officers and directors liable
and possibly subject to fines or imprisonment when their product
causes death, injury, or damage
public international law (p. 155)
Law that governs relationships between governments
strict liability (p. 167)
A standard that holds the designer or manufacturer liable for
damages caused by a product without the need for a plaintiff to
prove negligence in the product’s design or manufacture
tort (p. 167)
An injury inflicted on another person, either intentionally or
negligently
trademark (p. 160)
A shape, color, design, phrase, abbreviation, or sound used by
merchants or manufacturers to designate and differentiate their
products
trade name (p. 160)
A name used by a merchant or manufacturer to designate and
differentiate its products
trade secret (p. 161)
Any information that a business wants to hold confidential
treaty (p. 155)
Agreement between countries, also known as convention, compact,
and protocol
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 6
CONTENT OUTLINE
The following section provides the flow of information using the LEARNING OBJECTIVES as a guide, KEY
TERMS learners will need to take away from the course and a notation of when to use POWERPOINT
SLIDES with LECTURE NOTES to drive home teaching points.
LO 6-1
Describe the three types of legal systems
• Civil law—application of system of laws—search for
truth
• Common law—adversarial, defendant presumed
innocent, has to be proven guilty
• Religious law—sourced in religious documents
Key Terms:
Lecture Outline and Notes:
I. Civil law
A. Based on codification, derived from ancient Roman law, most widespread
B. Napoleonic law (France), German civil law
C. Court not a forum; judge questions parties to establish truth, then law applied
II. Common law
A. Relies on previous court decisions and interprets statutes and regulations
B. Law evolving, precedents play an important role
C. Court is adversarial (England, former colonies) and defendant presumed innocent until proven
guilty
III. Religious law
A. Religious document or source the basis of law
B. Shariah in some Moslem countries; Halakha informs law of Israel
C. Combination of religious law and another system may be followed (Pakistan, Thailand)
LO 6-2
Describe the rule of law and its sources
• Rule of law
o Laws followed, courts fair
o Creates stability for business
• International law
o Rules nations agree to follow across borders
o Public (between gov’ts) and private (individuals)
• Sources of international law
Key Terms:
• Public international
law
• Private international
law
• treaty
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Instructor Guide to Module 6
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o Agreements between nations, often via UN
o Includes treaties, covenants, compacts, customs
Lecture Outline and Notes:
I. Rule of law
A. Laws followed, court rulings fair; alternative to decisions made by ruling elite/political
dictatorship
B. Hong Kong vs. Shanghai
1. HK has advantage due to reliability of legal system
2. World bank Index scores China 40, HK 90
II. International law
A. Rules nations have agreed to follow
B. Creates stability for relationships that span legal systems
1. Public—between nations (ex. Rights of nations, diplomatic relations)
2. Private—between individuals or firms ( ex: international contract)
III. Sources of international law
IV. Treaties between nations
1. Bilateral and multilateral
2. Include compacts, conventions, protocols, and customs
3. Many sponsored by UN; WTO also active in this area
LO 6-3
Discuss the general legal concerns in global business
• Extraterritoriality
• Performance of contracts
o UN solutions
o arbitration
• Litigation
o Determining jurisdiction
o Bhopal example
Key Terms:
• Extraterritorial
application of laws
• Arbitration
• litigation
Lecture Outline and Notes:
I. Extraterritoriality
A. This application of law beyond geographic borders and to non-residents outside of country
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 6
6 Instructor’s Manual – Module 6 | Geringer, McNett, Minor, Ball © 2016 by McGraw-Hill Education.
C. Problematic when conflicts between home and host country law
II. Performance of contracts
A. Dispute resolution and decisions by international forums can not be enforced
B. UN solutions available
1. UN Convention on the international Sale of Goods (CISG) specifies rights of seller
and buyer
2. Most countries have ratified—applied automatically
C. Arbitration
1. Alternative favored by many outside U.S., who dislike U.S. court system
2. Quicker, less expensive, and more private than litigation
III. Litigation
A. Litigation can be complicated and expensive
1. U.S. discovery process (sharing of facts) may be seen as intrusive
2. It is public, costly, and lengthy
B. Establishing jurisdiction can be difficult
1. Bhopal example
2. Choice of law and choice of forum clauses in contract are helpful
LO 6-4
Identify methods to protect intellectual property
• What are intellectual property rights?
• Types of IP
o patent
o trademark
o trade name
o copyright
o trade secret
Key Terms:
• intellectual property
(IP)
• patent
• trade mark
• trade name
• copyright
• trade secret
I. What are intellectual property rights?
A. Intellectual property is creative work, and their rights are their legal protection
1. Agreed to by international treaties
2. WTO’s Trade-Related Aspects of Intellectual Property Rights (TRIPS);
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Geringer, McNett, Minor, Ball
Instructor Guide to Module 6
B. Types of protection
1. Patent—country-specific, with different approaches to protection
a. Global Intellectual Property Center of U.S. Chamber of Commerce has
developed IP Index to measure country-based progress (Fig. 6.2)
b. UN efforts to reduce lengthy patents, esp. in pharmaceuticals
c. Patent trolls and pirates attempt to steal patent rights
2. Trademarks—mark that is reserved for company’s sole use
d. Protection’s length varies by country, usu 10-20 yrs. + renewals
e. Madrid Agreement, administered by WIPO
f. Standardized within EU
3. Trade names—used to identify and differentiate products
g. Protected under WIPO, TRIPS
h. Burberry plaid, Dove, Fairy Liquid
4. Copyrights—exclusive legal rights of authors, composers
i. New area is computer software and Internet-based distribution
j. Napster’s successful Metallica challenge
5. Trade secrets
k. Any information not generally known to the public that a businesses
wishes to keep confidential
l. Most common type of IP protection
m. Advantages: no public filing that shares innovation with the
LO 6-5
Discuss the standardization of laws among countries.
• Many attempts to standardize laws
o Incoterms, documentary credits, tax
conventions, international commercial
o work as a model
Key Terms:
• Incoterms
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Geringer, McNett, Minor, Ball
Instructor Guide to Module 6
8 Instructor’s Manual – Module 6 | Geringer, McNett, Minor, Ball © 2016 by McGraw-Hill Education.
Lecture Outline and Notes:
I. Standardization of specific laws related to business practice would be positive for business
A. Business flows better when there is standardization of laws or harmonization.
B. Many initiatives, some successful
1. Incoterms, developed by the International Chamber of Commerce, are almost
universally accepted (Table 6.2)
2. Practice on Documentary Credits is also well-accepted
3. Similar tax law in U.S. and EU
4. International commercial arbitration is widely accepted among most nations, along
with enforcement of awards
5. UN Convention on the International Sale of Goods (CISG) and other UN-negotiated
agreements have led to some harmonization
LO 6-6
Describe the impacts of the national-level legal forces in the
areas of competition, trade, tort, ethics, and accounting.
• Competition laws
• Trade obstacles
• Tort law
• Misc. laws
• Foreign Corrupt Practices Act
• Accounting law
Key Terms:
• competition laws
• antitrust laws
• tort
• product liability
• strict liability
I. Specific national legal forces
A. Tremendous variation
B. Local counsel may be costly, but necessary (Disney in Paris)
C. Competition laws or antitrust laws
1. To prevent price fixing, market sharing, and monopolies
2. In U.S. per se concept—activities illegal, regardless of effect (injury)
3. Legal cartels in EU (no consumer harm) illegal in U.S.
4. U.S. law regards consumers first; EU looks to rivals’ objections
5. Japanese antitrust law modeled on U.S.; cultural value of harmony influences its
application
6. U.S. tries to impose its antitrust law extraterritorially. Many issues result
D. Trade obstacles via law
1. They have financial, political and legal impacts
2. Standards, language (France), high tariffs, long quarantines
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 6
9 Instructor’s Manual – Module 6 | Geringer, McNett, Minor, Ball © 2016 by McGraw-Hill Education.
3. U.S. uses tariffs, quotas, “voluntary” trade agreements to control imports
E. Tort laws
1. In U.S. such personal harms/damages may result in large money awards, unlike in
other countries.
2. Product liability in U.S. involves responsibility of corp. officers in U.S., resulting in
high liability insurance.
3. Strict liability concept holds company responsible for harm, even when no
negligence in design/manufacture.
4. In liability cases, non-U.S. courts do not award punitive damages.
5. In Japan, with limited discovery, liability plaintiff must prove design/manufacturing
negligence
6. In U.S., lawyers take cases on contingency-fee basis. Outside U.S., losing plaintiff
may be assessed defendant’s legal costs.
F. Misc. laws
1. Know the local law so it doesn’t surprise you.
2. Law of home country plays no role in foreigner’s arrest.
G. Foreign Corrupt Practices Act
1. Prohibits bribes to gov’t. officials and transparency in accounting transactions
2. Elevates ethical standards in international business (See Table 6.4)
3. May create comparative dis-advantage for U.S. companies
4. Does not prohibit grease.
5. Has set the model for OECD, UN, EU and UK anti-bribery efforts and legislation
6.
H. Accounting law
1. Sarbanes-Oxley Act (SOX) in response to world-wide scandals, sets higher
standards for boards, management, and accounting firms.
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 6
10 Instructor’s Manual – Module 6 | Geringer, McNett, Minor, Ball © 2016 by McGraw-Hill Education.
CONNECT TOOLS FOR CLASS PREPARATION
SmartBook
What is SmartBook?
SmartBook is a digital version of your course textbook. It contains the same content within the
textbook, but unlike a typical eBook, SmartBook actively tailors that content to your individual
needs as a student. SmartBook can be accessed online through your laptop, tablet or
smartphone and is also accessible when you’re offline!
How Does SmartBook Help You/Students?
• Assignable – assigning students their reading and studying their textbook content
ensures they are coming to class prepared.
• Proven to help students get a better grade. Studies show SmartBook technology can help
increase grades by a full letter.
• Save time. Study smarter. SmartBook makes sure students focus on the things you don’t
know so they can prioritize your study time wisely.
• No more cramming. SmartBook helps learners retain key concepts so you can learn—not
memorize.
• Accessible on the go. Use SmartBook on your laptop, tablet or smartphone–online or
offline–via your browser or mobile app.
• Results in real time. Track student progress–and prevents them from wait for midterms
or finals. Know how well you understand the material now.
How to assign SmartBook to ensure students come to class prepared?
• On the Connect course homepage click “add assignment” > LearnSmart > Select the
chapter
• Decide what content you’d like your students to study, and how much time you’d like
students to spend on their work. Start by narrowing down the content prior adjusting the
slider bar. – Many instructors find it useful to limit the assignment to a maximum of 45
minutes.
• Assign points to the assignment. Instructors have found that if they give the
LearnSmart/SmartBook assignment a minimum of 10% of the course grade that students
are more likely to complete the assignment.
• The entire LearnSmart/SmartBook module is available to your student at all times,
however, assigning it will prompt students to try it. You are required to select a due date
for this assignment, however, this will not prevent the student from access to the tool; it
is designed to show you that the student has taken the LearnSmart/SmartBook
