chapter 7 The international legal environment (True or False)

Islamic law defines a complete system that prescribes specific patterns of social and economic behavior for all individuals.

True

Legal ownership in one country does not necessarily mean ownership in other countries.

True

One of the deterrents to litigation with respect to disputes in the international business arena is the fear of creating a poor image and damaging public relations.

True

Steps are being taken in common-law countries to codify commercial law even though the primary basis of commercial law is common law, that is, precedents set by court decisions.

True

When dealing with foreign countries, a marketer should refer to "international commercial law" for guidance.

False- Because there is no "international commercial law," the foreign marketer must look to the legal system of each country involved—the laws of the home country, the laws of the countries within which business is conducted, or both.

The sole requirement of an arbitration clause is that the parties agree to abide by the awards resulting from the process of arbitration.

False-Although an arbitration clause in a contract can avert problems, sometimes enforcing arbitration agreements can be difficult. Arbitration clauses require agreement on two counts: (1) The parties agree to arbitrate in the case of a dispute according to the rules and procedures of some arbitration tribunal and (2) they agree to abide by the awards resulting from the arbitration.

Code law prohibits the receipt and payment of interest on loans.

False-Among the unique aspects of Islamic law is the prohibition against the payment of interest. The Islamic law of contracts states that any given transaction should be devoid of riba, which is defined as unlawful advantage by way of excess of deferment, that is, interest or usury.

Common law is based on an all-inclusive system of written rules of law.

False-Code law is based on an all-inclusive system of written rules (codes) of law.

The form of law found in the United States and England is classified as civil or code law.

False-Common law is derived from English law and found in England, the United States, Canada, and other countries once under English influence.

Global concern for the environment is limited to industrial pollution, hazardous waste disposal, and rampant deforestation and excludes issues that focus directly on consumer products.

False-Global concern for the environment extends beyond industrial pollution, hazardous waste disposal, and rampant deforestation to include issues that focus directly on consumer products. Green marketing laws focus on environmentally friendly products and product packaging and its effect on solid waste management.

If conciliation is not used to settle a difference in an international business dispute or an agreement cannot be reached, the next step is litigation.

False-If conciliation is not used or an agreement cannot be reached, the next step is arbitration.

The shipping companies collect taxes for products that are sold by a company through the Internet to customers outside its home country.

False-In "brick-and mortar" sales, the retailer collects taxes, but with the Internet site in one country and the customer in another, the issue of tax collection becomes complex. One proposal was to have shipping companies such as FedEx or credit card companies collect—obviously, neither party is receiving this suggestion enthusiastically.

The ownership of intellectual property rights in United States, a common-law country, is established by registration rather than by prior use.

False-In the United States, a common-law country, ownership of IP rights is established by prior use—whoever can establish first use is typically considered the rightful owner. In many code- law countries, however, ownership is established by registration rather than by prior use—the first to register a trademark or other property right is considered the rightful owner.

Moving their businesses outside the political boundaries of the home country exempts the companies from the home-country laws.

False-Leaving the political boundaries of a home country does not exempt a business from home- country laws.

The World Court can settle disputes between a company and a government.

False-Legal disputes can arise in three situations: between governments, between a company and a government, and between two companies. The World Court can adjudicate disputes between governments, whereas the other two situations must be handled in the courts of the country of one of the parties involved or through arbitration.

Disputes relating to commercial transactions must be settled in courts and cannot be settled informally.

False-Most disputes that arise in commercial transactions are settled informally. When resolution is not forthcoming however, conciliation can be an important first step in settling a dispute.

In the United States, a patent reverts to public domain if it is not produced within a specified period.

False-Once a trademark, patent, or other intellectual property right is registered, most countries require that these rights be used and properly policed. The United States is one of the few countries in which an individual can hold a patent without the patented entity being manufactured and sold throughout the duration of the patent period.

The Informed Consumer Standard is used in the consumer protection courts in Canada and it places the onus of making the right decisions on the buyer who is expected to have substantial knowledge of the industry and its products.

False-The Canadian courts are expected to apply the "credulous person standard," which means that if any reasonable person could possibly misunderstand the representation, the representation is misleading.

The General Agreement on Tariffs and Trade is the most comprehensive multilateral agreement on intellectual property to date.

False-The Trade-Related Aspects of Intellectual Property Rights (TRIPs) agreement, a major provision of the World Trade Organization, is the most comprehensive multilateral agreement on intellectual property to date.

The statements made by the parties during conciliation may be used as evidence in the subsequent litigation.

False-Unlike arbitration and litigation, conciliation sessions are private, and all conferences between parties and the mediator are confidential; the statements made by the parties may not be disclosed or used as evidence in any subsequent litigation or arbitration.

Antitrust laws were not enforced in the United States for the better part of the twentieth century.

False-With the exception of the United States, antitrust laws were either nonexistent or not enforced in most of the world's countries for the better part of the twentieth century. However, the European Union, Japan, and many other countries have begun to actively enforce their antitrust laws, patterned after those in the United States.

In many code-law countries, ownership of intellectual property rights is established by registration rather than by prior use.

True

A certain level of piracy is beneficial for some companies as it provides an unplanned product trial.

True

Charging what the market will bear is a suggested strategy for IP-rich firms to make money in China.

True

Cybersquatters buy and register descriptive nouns, geographic names, names of ethnic groups and pharmaceutical substances, and other similar descriptors and hold them until they can be sold at an inflated price.

True

Firms that have been penalized for bribing by the Foreign Corrupt Practices Act (FCPA) can reduce the penalties by helping in investigations.

True

In Marxist-socialist societies, law is strictly subordinate to prevailing economic conditions.

True

The form of law found in Germany, France, and Japan is called civil or code law.

True

The laws regulating direct selling in China are unusually detailed compared to others around the world.

True

The responsibility of determining if a license is required rests with the exporter.

True