International legal environment playing by rules

THESIS DEFENSE PRESENTATION TEMPLATE

Lecturer:

Ilhamova Z.P

It originates from English law and operates in England, the United States, Canada, and other countries that have historically been under England’s influence.

It is based on Roman law and is applied in Germany, Japan, France, as well as in non-Islamic and non-Marxist countries.

It is based on the interpretation of the Qur’an and operates in Pakistan, Iran, Saudi Arabia, and other Islamic countries.

It developed in Russia, the former Soviet Union republics, Eastern Europe, China, and other Marxist–socialist states, in which the legal system is subordinated to the state’s economic, political, and social policy.

Common law)

The basis of common law consists of traditions, prior practices, and legal precedents formed by courts through the interpretation of laws, regulatory legal acts, and previous decisions. Common law seeks “interpretation through previous decisions of higher-instance courts that have interpreted or established the same laws for similar facts and have applied established and customary legal principles.”

• In common law, the law does not write everything in advance in a book.
• Courts make decisions by looking at previous cases (precedents).

In the United States, a contract may not be written as a formal document. If it is possible to prove through email and an invoice that the parties have agreed, the court will recognize it as “a contract.”

Code law

Codified law, by contrast, is based on a complete system of written legal rules (codes). In a codified law system, the legal system is usually divided into three separate codes: commercial, civil, and criminal codes.

• In this system, everything is written in codes: the Civil Code, the Commercial Code, and the Criminal Code.
• What is written in the law is what is applied.
• Germany, France, Japan, Italy, Uzbekistan.

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In Germany, a contract:

must be in written form,

must be notarized,

must be registered.

Contract performance (enforcement) from the perspectives of common law and codified law

• Fundamental differences between the two systems can also create problems in contract performance. Under common law in the United States, impossibility of performance does not always release a party from contractual obligations, unless performance has become impossible solely due to an extraordinary natural event that the parties did not foresee in advance—an “act of God.” Floods, lightning, earthquakes, and similar events usually fall into this category. In codified law, however, the concept of an “act of God” is not limited only to natural events; it also includes circumstances that arise as a result of forces of nature or unforeseen human actions that prevent performance. This includes strikes and disturbances.
• Consider the following situations. A contract is concluded to deliver a certain quantity of fabric. In the first situation, before delivery, the fabric is completely destroyed due to an earthquake, and performance of the contract becomes impossible. In the second situation, the pipes in the sprinkler system in the warehouse where the fabric was stored freeze and burst, water spills, and as a result the fabric becomes unusable. In both situations, the goods are lost and delivery is not made. In these situations, are the parties released from their obligations due to impossibility of performance? The answer depends on the legal system being applied. In the first situation, an earthquake is recognized as an “act of God” in both common law and codified law, and it releases the party from the contractual obligation. In the second situation, courts in common law countries may not recognize the bursting of pipes as an “act of God” if freezing could have been expected in the climatic conditions. Therefore, impossibility of delivery may not automatically release the party from the obligation to perform the contract. In codified law countries, because the scope of impossibility is broader, such a situation may be assessed as an “act of God” and may release the party from the obligation to perform the contract.

Islam law

The basis of Islamic law (Sharia) rests on the interpretation of the Qur’an. It covers religious obligations and duties, as well as secular legal aspects that regulate human activity. In a broad sense, Islamic law is a complete system that sets a clear model of social and economic behavior for all individuals. It includes issues of property rights, economic decision-making, and economic freedom. The main goal of the Islamic system is to ensure social justice.

• One of the distinctive features of Islamic law is the prohibition of paying and receiving interest. According to Islamic contract law, any transaction must be free from riba. Riba is defined as an unlawful excess gain taken in return for delay—that is, interest or usury.
• Another principle of Islamic law is the prohibition of investing in activities that are contrary to Sharia. For example, investing in businesses related to alcoholic beverages, gambling, and casino activities is prohibited.

Mortgage transactions for real estate are difficult, because paying interest is prohibited. Therefore, real estate buyers use a financier: the financier buys the property and then resells it on the condition of repayment of the principal. Instead of charging interest, the financier sells the property at a higher price, or buys and sells it at that price and receives additional payments that replace interest. Among other forms of financial transactions in accordance with Islamic law, trade with a markup (murabaha) and leasing (ijara) are used most often.

A commercial–legal system characteristic of Marxist–socialist economies.

According to Marxist–socialist principles, law is strictly subordinated to existing economic conditions. Therefore, basic concepts such as private property, contracts, the legal process, and other legal mechanisms had to be redesigned.

• Laws exist, but they are unclear.
• Judicial independence is low.
• Enforcement is weak.

Risk for marketing: permission today, prohibition tomorrow; court decisions are unpredictable.

• One of the criteria for measuring the importance of the legal system in a country is the number of lawyers per capita.

Lawyers per 100,000 People in Selected Countries

• China’s legal system in fact has only about a 30-year history; while the country had 3,000 lawyers in the 1980s, their number has now reached approximately 620,000 (2022). The number of law schools, which was only 8 in 1976, has now grown to nearly 600.
• Japan’s legal system is comparatively much more developed. Nevertheless, as Japan’s economy becomes increasingly integrated into the global market, the demand for lawyers is rising sharply. Currently, Japan has approximately 42,000 lawyers.

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• Let’s say legal disputes arise at the international level—how do you think they are resolved?

2. Key factors that determine jurisdiction in legal disputes

Legal disputes can arise in three situations:

• between governments,
• between a company and a government,
• between two companies.

International courts, such as the International Court of Justice (ICJ), which is the principal judicial organ of the United Nations, can hear disputes between governments, whereas the other two situations must be resolved either in the courts of one party’s country or through arbitration.

When international commercial disputes must be resolved on the basis of the laws of one of the participating countries, the most important question in the dispute is: which law applies?

In this case, it is usually determined on three bases:

1. on the basis of jurisdiction clauses included in the contract;

2. depending on where the contract was concluded;

3. depending on where the contract terms were performed.

The most optimal solution is a clause like the following, which determines jurisdiction when a dispute arises:“The parties agree that this agreement is concluded in the State of Oregon, United States, and that any matter related to this agreement shall be governed by the laws of the State of Oregon, United States.”

Conciliation (also called mediation) is a non-binding agreement achieved by involving a third party to reconcile differences in order to resolve disputes between the parties. The mediator’s task is to listen carefully to each party, explore, clarify, and discuss various practical solution options, with the goal of helping the parties reach an agreement.

It is considered effective in resolving disputes with Chinese business partners, because they view conciliation (mediation) as less threatening than arbitration. Chinese people believe that when disputes arise, the problem should first be resolved through informal, friendly negotiations; if this does not produce results, conciliation is used. Some Chinese companies may even avoid doing business with companies that take a dispute to arbitration as a first step.

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In a typical arbitration process, the parties select an impartial and knowledgeable person or persons as arbitrator(s) to evaluate the merits of the case and render a decision, and both parties agree to comply with that decision.

Some of the most active arbitration organizations include the following:

Inter-American Commercial Arbitration Commission

Canada–U.S. Commercial Arbitration Commission (for disputes between Canadian and U.S. companies)

London Court of Arbitration (decisions are enforced under English law and by English courts)

American Arbitration Association (www.adr.org/)

International Chamber of Commerce (www.iccwbo.org/; Arbitration section)

Ways to resolve legal disputes

Distinctive challenges of protecting intellectual property rights at the international level

The importance of intellectual property

Intellectual property rights are rights that allow an idea, invention, design, brand, work, or technology to be used only with the owner’s permission.

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Even the strongest brands, valued at billions of dollars, are not protected from intellectual property theft.

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Although brand names may be worth billions of dollars, they frequently face intellectual property rights violations due to counterfeiting and piracy.

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https://www.rankingthebrands.com/The-Brand-Rankings.aspx?ranking

2025

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According to estimates, more than 10 million counterfeit Swiss watches carrying famous brand names such as Cartier and Rolex are sold each year, generating at least USD 500 million in illegal profit. Although it is difficult to calculate precisely, the volume of sales lost due to unauthorized use of U.S. patents, trademarks, and copyrights exceeds USD 300 billion per year. This is equivalent to the loss of more than two million jobs.

Products distributed through counterfeiting and piracy cover a very wide range: clothing, automobile spare parts, agricultural chemicals, pharmaceuticals, books (yes, even books like the management book you are reading now), records, films, computer software, mobile phones, infant formula, and so on.

Counterfeiting and Piracy

Counterfeit medicines are the most dangerous problem. Counterfeiting in the pharmaceutical sector is not only an economic issue, but also dangerous for human life. Approximately 2% of medicines sold worldwide are counterfeit. In some countries, this figure reaches up to 60%. Example: in Colombia, counterfeit tablets were found to contain cement, floor wax, and toxic dyes.

Coach

A South Korean company legally used the Coach brand on bags and leather goods. This company was the first to register the Coach trademark and has the legal right to use this mark in Korea. As a result, it is possible to buy a Coach-branded briefcase in South Korea for $135, almost identical to the product in the United States, where it costs $320. A U.S. lawyer working with the South Korean firm noted that he has seen several cases in which a foreign company comes to Korea and begins informal negotiations with a Korean company about distribution or licensing agreements, but in the meantime the Korean company registers the trademark in its own name. Later, the Korean company uses this registration as leverage in negotiations, or, if negotiations break down, resells the trademark back to the company.

Prior Use versus Registration)

In the United States, a common law country, ownership of intellectual property rights is determined through prior use—that is, the person who can prove first use is usually considered the legal owner. However, in many codified law countries, ownership is determined not by prior use but by registration—the person who first registers a trademark or other property right is considered the legal owner.

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For example, in Jordan, a trademark belongs to whoever first registers it in Jordan. Therefore, in Jordan, “McDonald’s” restaurants, “Microsoft” software, and “Safeway” grocery stores may legally belong to Jordanians.

Nike

After a long legal dispute that went all the way to the Spanish Supreme Court, Nike lost the right to use the “Nike” brand name for sportswear in Spain. Spain’s Cidesport company had been using the name Nike on sportswear since 1932, and Nike (U.S.) went to court to stop the sale of sportswear under the Nike name. Because Cidesport did not sell shoes under the Nike mark, Nike (U.S.) can continue selling its branded athletic shoes in Spain. A company that thinks it can always establish ownership simply by proving that it was the first to use a trademark or brand name in another country is mistaken and increases the risk of losing these assets.

Problems of re-registration

Latvia and Lithuania allow the re-registration of trademarks and brand names. A cosmetics manufacturer registered the Nivea and Niveja cosmetic brands in the former Soviet Union in 1986 and in Latvia in 1992, but a Latvian firm had been producing and selling a skin cream under the name Niveja since 1964. Neither the Soviet nor the Latvian authorities informed either firm about this. Applicants must independently obtain information in advance about previously registered similar marks. The case is being taken to the Latvian Supreme Court. Protecting IP rights through registration is the most appropriate approach. Several international conventions allow simultaneous registration in member countries.

International Conventions

• Many countries participate in international conventions aimed at mutual recognition and protection of intellectual property rights. There are three main international conventions:
• Paris Convention for the Protection of Industrial Property (Paris Convention) — includes the United States and another 100 countries.
• Inter-American Convention — includes many Latin American countries and the United States.
• Madrid Arrangement — established the Bureau for the International Registration of Trademarks and covers 26 European countries.

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