LEGL 4900: Test #3
Worker Adjustment, Retraining, and Notification Act (US)
At times requires a company to give 60 days' notice of plans to close a plant with more than 100 employees
Title VII of the Civil Rights Act of 1964
Forbids discrimination on the basis of sex, race, color, religion, or national origin in all areas of the employment relationship
Biofuels
Fuels, such as ethanol or methanol, that are created from the fermentation of plants or plant products.
Nationalization
The taking of an entire industry or a natural resource as part of a plan to restructure the nation's economic system; full compensation is not required by those theories
Cybersquatting
initiated by the "first to file" rule from the UDRP; the registering of a domain name with the intent to profit from the goodwill of a trademark belonging to another
Unitary index adjustment
eliminates problem with profit margin preservation; can be a commonly accepted measure of relative currency value or national inflation; however, indexes are frequently independent of the facts and unreliable, and techniques do not eliminate currency risk
Remediation of wastes
i.e. rendering them harmless to the environment
2 main problem with the Paris Convention
1. The convention does not require any minimum substantive standard of patent protection 2. Its lack of an enforcement mechanism
Prior informed consent (PIC)
A U.N-approved procedure whereby countries exporting pesticides must inform importing countries of actions the exporting countries have taken to restrict the use of pesticides.
The Deferral Principle
A US person is legally separate from any foreign corporation it may own. Thus, while the US person will be subject to tax currently on any income it owns, it will not be taxed immediately on any income earned by the foreign corporation it owns. Instead, tax on this income will be deferred until it is repatriated
Currency swaps
A broad assortment of financial contracts that may be purchased from financial intermediaries to hedge against fluctuation risk
Counterpurchase agreement
A common type of countertrade; involves the sale of goods to a buyer, often a foreign government, which requires as a condition of the sale that the seller buy other goods produced in that country
Tax haven
A country where the effective tax rate on a relevant item of income is very low or zero
Act of State Doctrine
A doctrine providing that the judicial branch of one country will not examine the validity of public acts committed by a recognized foreign government within its own territory.
Aufsichtsrat
A large supervisory board (Germany)
Royalty
A license fee to a foreign company
Utility patent
A patent that protects the functionality of the invention
European Patent Convention
A patentee can obtain protection in all EU countries by filing a single application under this
Countertrade
A popular way to deal with the inability to covert currency (currency inconvertibility) is a reciprocal arrangement between buyer and seller for the sale of goods or services intended to minimize the outflow of foreign exchange from the buyer's country
Expropriation
A taking of an isolated item of property
Franchise tax
A tax levied on the annual receipts of businesses that are organized to limit the personal liability of owners for the privilege of conducting business in the state.
Value-added tax (VAT)
A tax on increased value of the product at each stage of production and distribution rather than just at the point of sale.
Labor Contract Law (China)
Abolished at-will employment and required employers to provide employees with written contracts; an employer cannot terminate an employee for no reason
Community Trademark Regulation
Administered by the EU Intellectual Property Office has allowed a single trademark registration enforceable throughout the EU
United States' Overseas Private Investment Corporation (OPIC)
Aims to promote exports by insuring domestic firms that do business abroad against expropriation, nationalization, revolution, insurrections, and currency inconvertibility
US Worldwide "Tax Credit" System
All income earned anywhere in the world, regardless of source, by US persons is taxable by the US government
Formulary Apportionment Systems
All income earned by a given person is put into a single category. This income is then apportioned between the various nations that have some claim to tax the person on the basis of a predetermined formula that relies on factors such as proportion of sales, assets, or payroll located in a jurisdiction
Friendship, Commerce, and Navigation treaties
Allow a foreign employer to choose its own executives and experts to run its operations in the other signatory nations
Reinsurance treaty
An agreement among insurance companies that spreads the risk among insurance companies that spreads the risk among its members. Under its terms, the lead underwriter can commit the resources of the entire group after negotiating the transaction with the US investor
Paris Agreement
An agreement within the United Nations Framework Convention on Climate Change (UNFCCC) dealing with greenhouse gas emissions mitigation, adaptation, and finance starting in the year 2020.
Profit margin preservation
An approach where the price or payment to the foreign investor will be adjusted periodically to maintain the same profit margin; this can disclose the foreign company's cost structure, information that is highly confidential, because it permits competitors to price effectively against the firm
Franchising
An arrangement in which a supplier (franchiser) grants a dealer (franchisee) the right to sell products in exchange for some type of consideration
Commercial Activity Exception
An exception to FSIA which states that a foreign country is subject to lawsuit in the United States if it engages in commercial activity in the United States or if it carries on such activity outside the United States but causes a direct effect in the United States.
Multilateral Investment Guarantee Agency (MIGA)
An independent affiliate of the World Bank, MIGA issues insurance guarantees to protect foreign investors from losses relating to currency transfer restrictions, expropriation, war, civil disturbance, and breach of contract
Political risk analysis
Another form of proactive management: the enterprise retains a firm or its own personnel to analyze a host country's risk of nationalization/expropriation, as it would study any other business problem
Sanders Amendment (US 1997)
Bans the import of any product made by forced child labor
Privatization
Can be accomplished by the outright sale of assets or ownership interests in a state-owned enterprise being sold to private investors, by granting concessions that allow private private entities to operate and derive a profit from state-owned infrastructure, through the widespread issuance of vouchers representing a right to profits to all citizens, or simply by allowing new private businesses to form in a sector formerly reserved to the government
Currency exchange rights
Can help solve the inconvertibility problem for the foreign investor; preferential access to hard currency through negotiation
Passive investment
Can involve either a passive debt investment - making a loan to a foreign business - or a passive equity investment - purchasing an equity interest in the foreign business as a portfolio investment that does not allow for control of the business
Fair, reasonable, and nondiscriminatory (FRAND)
Can significantly reduce the risk of patent "hold-up" and the perceived advantages of litigation (e.g. keeping competitors out of the marketplace)
Hukou
China's registration system that tracks demographic data and limits where Chinese can live.
Tied-purchase clauses
Clauses that require the franchisee to buy certain goods from the franchiser; such provisions are sometimes difficult to justify on quay control grounds
Kyoto Protocol
Controlling global warming by setting greenhouse gas emissions targets for developed countries
Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES)
Created a system for identifying and listing endangered and. threatened species. It forbids the import or export of such species unless a "scientific authority" finds that the import or export will not aggravate the species' situation
Agreement Relating to Community Patents
Created a unitary system for the application and grant of European patents and a uniform system for the resolution of litigation concerning patent infringement (extension to European Patent Convention)
Soft currency
Currency that is not freely exchangeable for currencies of other nations
Berne Convention
Deals with the granting of copyrights among signatory nations; signatories agree to grant national treatment to copyright holders from other signatories automatically from the moment of creation rather than the time of filing
Copyright Term Extension Act of 1998 (Mickey Mouse Act)
Delayed the date at which all copyrighted works would enter the public domain (70 years after the author's death or in the case of a corporate author, 95 years from publication)
Soft blockages
Delays in processing conversion requests by the local authorities
Betriebsrat
Each place of business with more than five employees must have this worker's council to represent that plant's interest (German Approach)
Geneva Act
Establishes a single standard application and single design patent filing process
ADEA (Age Discrimination in Employment Act)
Prohibits age-based employment discrimination against employees who are at least 40 years of age
Toxic Substances Control Act
Imposes reporting and record-keeping requirements on all chemical substances
Paris Convention (Convention for the Protection of Industrial Property)
Guarantees the in each signatory country, foreign trademark and patent applications from other signatory countries will receive the same treatment and priority as those from domestic applicants
Patent Law Treaties Implementation Act (PLTIA)
Harmoizes US law for design patents with the Geneva Act
Bad faith
Intentional wrongful behavior; in UDRP - now includes some negligence without a finding of intent
Foreign direct investment (FDI)
Investor owns and actively controls the productive assets of ongoing business concerns in a foreign country
Inconvertability/nontransfer policy
Investors can purchase these policies to ensure against hard blockages. For a somewhat higher fee, a businessperson may purchase a policy that also protects against soft blockages; this is a type of political risk insurance
Grant back
Licensor may seek this to itself of ownership in or at least the right to use - often without compensation - such new technology; happens when reasoning that the licensee would not have had the opportunity to develop these useful technologies without the know-how supplied by the licensor
License
Limited permission to use the US firm's trademarks, copyrights, or know-how in making products for sale in the vicinity of the foreign company's country
Foreign Tax Credit
Limits US worldwide taxation by offering a dollar-for-dollar tax credit for foreign income taxes paid on foreign source income
Calvo Doctrine
Maintained that a sovereign nation should be free to determine compensation for a taking in accordance with its own domestic law
Vorstand
Management board (Germany)
Traditional theory
Prohibits all takings of foreign property; Grotius' fundamental principle was that foreign investors - unlike local merchants - should be exempt from the sovereign's condemnation rights
American with Disabilities Act (ADA)
Prohibits employment discrimination against people with disabilities
Hard blockages
Occur when the foreign government passes a law that prevents conversion or transfer
Circle of Poison
Occurs when US-banned pesticides are exported to developing nations and are used on crops, which are then exported back to the US. These pesticides then reenter the US as residues on food products imported from countries such as Mexico, Chile, and China
Genetically modified organisms (GMO)
Organisms that have been genetically altered
Right of priority
Paris Convention gives a patent holder in any signatory country this; the convention provides that the date of an applicant's foreign application is deemed to be the same as the date of the applicant's original application on the same invention so long as the foreign application was filed before the first anniversary of the original application
Equal Employment Opportunity Law
Prohibits gender discrimination in employment
North American Commission for Environmental Cooperation (CEC)
Part of NAFTA; Determines whether any party to NAFTA has shown a "persistent pattern of failure" to "effectively enforce its environmental law"; indicates these findings in Factual Records
Priority claim
Patent Cooperation Treaty gives the application this on that invention in all signatory states; with this, the applicant business has up to 30 months after filing to begin the administrative processing (prosecution) of the application in the countries in which it wishes to obtain protection; allows applicant to lock in an applicant to lock in an application date while giving it time to raise capital on the basis of the patent filing
Design patents
Patents protecting ornamental features of an article of manufacture
Foreign compulsion defense
Permits US firms flexibility when the enforcement of US employment law overseas would result in a violation of foreign law; does not apply to foreign employers who are charged with employment discrimination in the US
Modern-traditional theory
Permits takings but imposes certain requirements on the nation exercising its takings power. This theory recognizes the sovereign's right to nationalize foreign-owned property (exercise eminent domain) Exercise of that right must be: 1. for a public purpose 2. nondiscriminatory (not directed against a specific foreign person) 3. accompanied by prompt, adequate, and effective compensation
Montreal Protocol
Phase out of ozone depleting substances.
Insurance syndicates
Pools of money provided by investors to insure specific projects
Transfer pricing
Problem that occurs because a large portion of international trade occurs between related parties - like a subsidiary or joint venture - that are free to fix prices to one another because market forces do not discipline the prices
Section 337 of the Tariff Act (US)
Prohibits the importation of articles that infringe a US patent, trademark, or copyright
Export credit agencies
Promote investment from their own countries
Convention on the Settlement of Investment Disputes Between States and Nationals of Other States
Provides a forum and a set of rules for the arbitration of disputes between the signatory countries and their citizens. Both the citizen and the host country agree that the Convention governs and that all disputes will be resolved by the ICSID
Trademark Regulation
Provides a unified enforcement authority, the Office for Harmonization in the International Market (trademarks)
Bona fide occupational qualification defense (BFOQ)
Provides that an employer may engage in discrimination if it is "reasonably necessary to the normal operation of the particular business or enterprise"
Basel Convention on Transboundary Movements of Hazardous Wastes and Their Disposal
Regulates the transport of wastes that display certain hazardous characteristics, such as flammability or toxicity
The "Double Irish" or the "Dutch Sandwich"
Related tax-planning techniques that US multinationals use if they have significant income from non-US intellectual property rights Double Irish - the taxpayer forms two Irish corporations Dutch Sandwich - Ireland exempts certain payments to the Netherlands from withholding taxes, this transfer is used to avoid taxes
European Union Trademark (EUTM)
Replaced the community trademark; now cover only the "literal meaning" of the goods and services listed in their identifications, which means that the mark owner has to limit use of the mark to specific items (unlike the US)
Sarbanes-Oxley Act (SOX)
Requires companies to review internal control and take responsibility for the accuracy and completeness of their financial reports.
GATT Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)
Requires signatories to adopt intellectual property laws that approximate those of Europe and North America and has created a system to enforce them Requires every member of WTO to bide by Paris and Berne Conventions an apply treaties' national treatment requirements so that all foreign IPR owners receive the same protection pursuant to the Berne Convention 50 year copyright protection; min. 20 year protection for patents Sets minimum standards of intellectual property protection Requires signatory countries to ensure that enforcement procedures are available under their laws to permit effective action against infringement of IPR covered by agreement
Federal Insecticide, Fungicide, and Rodenticide Act (FIRA)
Requires that before a US seller can export pesticides that are not registered for use in the US, it must obtain the PIC of the purchaser and give notice to the appropriate official in the receiving country
Resource Conservation and Recovery Act (RCRA)
Requires that the exporter provide notice to the EPA of any forthcoming shipment of hazardous waste. Then, the government of the receiving country must expressly accept the shipment and provide written notice to the EPA of that consent
Intellectual Property Rights (IPRs)
Rights associated with the ownership of intellectual property. IPRs primarily include rights associated with (1) patents, (2) copyrights, and (3) trademarks.
Uniform Domain Name Dispute Resolution Policy (UDRP)
Set forth general "first to file" rules for domain names, but excepted bad-faith filings
Climate change
Significant, long-lasting changes in weather patterns
Clause compromissoire
Submits the specific dispute at issue to arbitration
Patent Cooperation Treaty (PCT) 1970
Supplemented the Paris Convention by establishing a centralized utility patent application process
Private political risk insurance
The US investor engages a broker for a specific transaction. In turn, the broker negotiates terms with heads of syndicates specializing in political risk insurance. The syndicate heads then obtain commitments from other syndicates in order to spread the risk exposure
Barter
The direct exchange of goods for goods (or services)
Creeping expropriation
The effect of laws and regulations that subject the investor to discriminatory taxes, legislative controls over management of the firm, price controls, forced employment of nationals, license cancellation, and restrictions on currency convertibility
Trade creditors
The entities that sell supplies or services to the venture
Copyrights
The exclusive legal rights of authors, composers, playwrights, artists, and publishers to publish and disperse their work as they see fit
Gray market/parallel trade
The importation of merchandise produced and sold abroad then imported back into the US for sale in competition with the US trademark owner
Informal consortia/parallel exchange
The investors - all committed to the local inconvertibility risk - spread that risk over a larger group, with the hope of reducing the vagaries of local bureaucracy
Fluctuation risk
The possibility that the currency of the country in which the US investor has put its money will devalue against the US dollar
Currency risk
The potential for loss associated with fluctuations in the foreign exchange market Two types: fluctuation risk and inconvertibility risk
Gray market goods/parallel imports
The products imported back into US for sale in competition with the US trademark owner
Buy-back agreement
The provider of the equipment or technology used in manufacturing will receive, as its payment, a portion of the goods manufactured by the supplier's equipment or the factory in which the equipment is installed
Political risk
The risk that profits will be affected by changes in the host country's political structure or instability
Inconvertibility risk
The risk that the government of a country with "soft currency" will hinder the US entrepreneur from trading the foreign currency back into US dollars
Language politics
The situation, found in regions of a few countries, where laws require that companies conduct business in a certain language
The State Sponsor of Terrorism Exception
This exception requires a plaintiff must seek money damages for personal death/injury resulting from an act of terrorism, plaintiff must be a US national when act of terrorism occurs, the defendant sovereign nation must be designated a "state sponsor of terrorism" by the State Department at time the act occurs, if the terrorism occurred in the defendant state's territory, the plaintiff must have first tried to seek international arbitration
Net book value
This value reflects the tax-related depreciated cost of assets without regard to whether there has in fact been true depreciation in value
Geographical limitations
Type of IPR restriction; E.g. a licensor of a "name brand" doll may limit the licensee's sale of that doll within a specific nation
Field of use limitations
Type of IPR restriction; restrict the applications for which the licensee may employ the IPR
Output or customer restrictions
Type of IPR restrictions; especially if the licensor plans to use the licensee as a source of products for the licensor's own distribution requirements
Prior-approval schemes
Type of regulatory scheme; indicative of a relatively protectionist government policy
Notification-registration schemes
Type of regulatory scheme; more open to technological transfer
Foreign Sovereign Immunities Act
Under this act, foreign states are generally immune from the jurisdiction of US courts, except for 7 exceptions: 1. The foreign state waives immunity 2. the state's action constitutes "commercial activity" carried on by the state 3. rights in property are taken in violation of international law 4. rights in property are acquired through inheritance/gifts in the US 5. the suit involves noncommercial torts within the US 6. the suit involves maritime lens based on the foreign state's "commercial activity" 7. the suit involves certain types of counterclaims and the foreign state instituted the lawsuit against a US citizen
Doha Declaration
WTO statement stating that TRIPS can and should be interpreted in light of the goal to promote access for medicine for all
Biopiracy
When corporations extract plants and animals indigenous to the emerging nation for research (with the help of local knowledge), alter the plant or animal (such as through genetic engineering), and then obtain patents related to this research without providing the host country with compensation or affordable access to the inventions
Exclusive rights
When exploitation of the licensed IPR requires significant financial or other resources of the licensee, it will often demand this in the IPR within some geographic area in order to enhance its chances of earning an adequate return on its investment
Repatriated
When income is paid out to the US person, typically in the form of a dividend (when foreign income can be taxed under the Deferral Principle)
Geographic indications
Where a product, particularly a wine of liquor, is marketed by a reference to a geographic region (ex. Champagne)
Double taxation
Where the same item of income is taxed by two different tax authorities
