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