International Law Chapter 1

California Stove Company (CSC) owns a patent on special technology for making its stoves sold in the United States. CSC decides to license its patented technology to Ecuador United (EU) in that country which also makes appliances. EU will use CSC technology to make the stoves and sell them to customers all over Chile for any price it determines. Under the licensing arrangement, EU pays to CSC an up-front fee of $50,000 for entering into this arrangement. For one year per their license agreement, CSC will receive a 10% royalty on sales revenue generated by EU from sales of its stoves made under the agreement. Over the course of that year, EU sells stoves having a total sales price of $1,000,000 (exclusive of sales taxes) and actually collects $800,000 of that amount from its customers. At the end of the year, EU will have paid CSC in total consideration under their arrangement the amount of:

$130,000

Texas Shoe Company in Dallas manufacturers footwear there. It enters into a two-year contract to sell its boots to Barunia, an Asian nation that uses the boots for its military. The sales price of each pair of boots, as of the June 1, 2016, date of the contract, is fixed for the duration of the contract at 13.00 Baruns which is equal to $10.00 USD at that time. On June 1, 2017 at then current exchange rates $10.00 USD equals 15.00 Baruns. As of the date whose economic interests have been most negatively affected by ABC Company agreeing to accept payments in Baurns?

Barunia

A document prepared by a manufacturer or exporter/shippers attesting to the geographic place (nation) where goods were made is called

Certificate of origin

ABC Company in Memphis makes motorcycles at its plant there. It is considering the benefits of selling its motorcycles in the market of motorcycle riders in Brazil (estimated to be 5,000,000 new potential customers). Which is the LEAST risky way it can enter the Brazilian motor cycle rider market?

Entering into a foreign sales distribution agreement with a local owner of stores selling motorcycles.

what is a type of currency risk related to fluctuations in relative value of two currencies when buyer and seller are in different countries?

Exchange rate risk

the shipment of goods out of a country and the rendering of services to a buyer located in a foreign country is called

Exporting

John wants to go into business as an international trading company like the famous Japanese trading companies. He wants to bring together several US companies that make sporting goods and exports their products to Mexico, with the power to determine which products are sold in what areas in Mexico and the prices to be charged to Mexican buyers. What are special US law uses he may need to be made aware of in his efforts?

If anti-trust law prohibits these activities in Mexico just as US law may do so inside US

Company A owns intellectual property (IP) and agrees in writing to let Company B use that property for a specified purpose only. Company A and Company B are (in order):

Licensor & Licensee

Venezuela provides a recent example of a host state attempting to restructure its economy by transferring foreign investors assets to itself. This is called:

Nationalization

In an export / import transaction the most common concern of the seller (particularly when not sure of the buyer's organization statutes and stability) is:

Payment or credit risk

Currency controls in a host state may restrict or prohibit the foreign investor from:

Repatriating profits to home state

The most important international IP organization fostering government cooperation in developing IP policies and laws and assisting in the resolution of disputes via arbitration is:

World Intellectual Property Organization

Idaho Battery Inc. (IB) makes millions of batteries for generating power for a variety of small consumer items. All batteries are manufactured in Boise, Idaho. It enters into a contract with Juno of Rome, an Italian company owning many department and equipment stores in Italy, whereby Juno sells the batteries made by Idaho Battery to Juno's many customers at store locations. So Juno is a:

foreign sales distributor of IB products and does obtain title to the IB product before they are resold

A foreign entity organized under the laws of the host state but owned and controlled by the parent corporation in the home country of the investor is a

foreign subsidiary

ABC Company owns and manufacturers appliances from its plant in Arlington, VA. It decides to open a new operation in Chile under Chilean law making appliances and selects William to be its local partner in Chile. William invests 20% of his money of total startup costs for the Chilean entity, which is called a:

joint-venture

Non-tariff barriers to foreign trade include ________, which are used to quantitatively restrict the number of defined items that can enter into a country:

quotas