Protective and Weak Legal Systems - Essay Example

An overly protective legal regime will limit the social gains from invention by reducing incentives to disseminate its fruits while an overly weak system could reduce innovation by failing to provide an adequate return on investment. Name Professor University Course Date The thin line separating invention and innovation have always been a subject of discussion with regards to legal jurisdiction1. Protective legal regimes initiate equality, fair competition, and ultimate development, which come in the form of social gains. In as much as one might favor the argument, others have criticized protective legal regimes to be closed knit systems that limit growth hence constraining social gains2. In the same spirit, weak systems have been associated to few checks and balances that reduce the return on investment. Indeed, this confusion has led to the development of different policies within diverse nation’s leading to selective development3. The question is whether an overly protective legal regime limits the social gains from the invention by reducing incentive to disseminate its fruits or whether an overly weak system can reduce innovation by dwindling the return on investment. Question 1 According to Czapracka (2009, p. 144), investment choice, and destination should be precise without mistakes. Therefore, any investor intending to venture into foreign markets need to make a lot of important choices before the commencement of the actual process. Importantly, legal and risk factors need to be taken into account during this time. Firstly, it is significant consider the attitude of the government towards foreign investments4. Essentially, this is covered in the rules that govern investment practices and policies in the host country. The other important consideration that goes hand in hand with a government’s attitude is the idea of a company’s historical record. All these draw legal consideration by a host government before approval is given for the commencement of investment. Similarly, it would be prudent of any company to consider various aspects that are streamlined by the host government concerning bureaucracies, hurdles and incentives. In places with stable political environments, the government’s laws and policies are often very accommodative for foreign investors. Therefore, political stability and legal frameworks are interrelated in issues of investment. For instance, in countries with stable and polite government policies, a profitable outcome is usually realized by the companies than in those with stringent and rigid policies towards foreign investors5. In light of this fact, many investors will tend to move to those countries that accommodate their intentions than to those that do not. In the same way, investors need to take consideration of the tax policies and structures in the host country before making the decision to commence activities. Notably, the consideration of legal systems and procedures is important in helping the investor realize and acknowledge the kind of treatment he should expect in the destination country6. Perhaps, a look at many developing countries presents a phenomenon of less stringent government rules. For example, in many of such countries foreign investors occasionally find it difficult to apply their contracts and policies. Clearly, this is because such companies bring in more carefully crafted operational practices that may not necessarily be in use in certain developing countries. Consequently, the fear international investors tend to have in such kinds of countries is the idea of continuous government interference. Despite the fact that trade has been liberalized forms of bias still occur reading investment opportunities in foreign lands. For example, domestic companies are usually given much priority and protection by their government as compared to foreign companies. Therefore, it is imperative for foreign companies to consider this issue in both legal aspects and as a risk of operation7. For instance, Australian foreign investing policy gives investors guidance on factors that should be considered by a foreign investor before commencing business in the country. These factors are based on the consideration of whether they contrast the national interest or not. They include: tax compliance issues, environmental policy and protection, the project’s impact on the economy and community and the general character of the investor8. On the other hand, the level of market attractiveness would define the level of risk for a prospective company. The assessment of this attractiveness is done through consideration of the amount or revenues generated competition potential, company dynamics and whether the reception in the host nation is warm or hostile. Notably, overlooking such an important risk defining factor would mean that a company is likely to run into losses or face opposition from the locals9. Therefore, a careful evaluation of the market potential should be carried out by the investor. In brief, it is mandatory for a prospective company to carry out a careful evaluation of the of all the legal aspects, policies, societal and risk factors and the market factors that are likely to affect them in one way or another once the commencement of operations has taken place. There are various policies that regulate investment in Australia. It is one of the places, which experience enormous economic growth mainly due to foreign investments. However, there is competition for the limited capital in the country to fund development and other growth projects. Such a phenomenon, often tend to slow down the rate of economic growth and investment. Arguably, the best approach is to strengthen the relationship between the government and foreign investors so as to realize a strong capital for economic growth. Through this approach, various investment risks are reduced together with a resultant strong political and investment relationship. Therefore, the main rationale behind investment regulation is evidently the anticipation of greater profits, capital increment, and the creation of more employment opportunities, economic growth, and development. Question 2 The term intellectual property refers to the creations of the human mind including literary works, artistic elements, inventions and designs among others. In many countries around the world, the practice of protecting intellectual property is common. Governments carry out regulations on inventions to protect the ideas of the people as well as enhance positive economic growth that is free from company disagreements. Specifically, the Australian Government agencies are solely responsible for managing and protecting the intellectual property in the country. In fact, the government itself is a significant player in the development and progress of intellectual property. The government does this through various in health, science, information technology, education, arts and other sectors. The government has set up Intellectual Property Principles that all agencies have to comply with. They are enshrined in a policy document known as the Financial Management and Accountability Act 199710. However, the recognition that intellectual property rights are significant in protecting the ideas of individuals has ensured a higher level of protection to the actual inventions. These rights come in various forms with some requiring registration while others do not. Importantly though, intellectual property need to be regulated since they are representative of the ownership rights similar to ones found in physical property. Therefore, they are more of an individual’s making and thus require protection and regulation in order to avoid cases of copyright11. The regulation also helps to keep the invention in specifically designated areas. Nevertheless, the government is not the only party that can carry out regulation on intellectual property. The individual also needs to play an important role in ensuring that his idea is protected. In so doing, an aspect of regulation results in the sense that the idea cannot easily be passed to another individual without informed consent and permission. Therefore, the essence of regulation of intellectual property ensures that the idea remains with a specified domain12. For instance, if a certain idea is Australian, they would want to protect it until such a time when it has prospered in the country before it can be tried elsewhere. Similarly, the rate of investment in every country ought to regulate in line with the capacity of that country to manage foreign investments. In light of this fact, a country would only allow investments into a country if it deems them profitable to the economy of the country. Essentially, this happens only to companies that have met all the requirements of the host nation. Regulation is fundamental for ensuring that all the activities of the company not only comply with the policies but also result in a reasonable revenue generation for the country13. However, it is important to note that an inventor of any idea is never solely the owner as ownership can be transferred to another party as long as there are proper and acceptable contractual agreements. The regulation of intellectual property, as well as inventions in a country, is often credited with the creation of an efficiently running economic and investment system. Conversely, this practice can sometimes cause significant declines in the rates of production and establishing of new firms. The reason is that the longer the period is of idea acceptance, the lesser relevant it many turn out to be especially due to the advancement in technology. Therefore, this practice has a greater extent of negative influence to companies intending to invest new ideas in a country for the first time and those awaiting approval for certain improvements into their operations. Question 3 TRIPS refer to an abbreviation for Trade Relate Aspects of Intellectual Property Rights while TRIMS is an abbreviation for Trade-Related Investment Measure. These two terms are used in international business to illustrate the meanings enshrined in their definitions. TRIPS and TRIMS came into be through the introduction of minimum principles for the protection of intellectual property rights into bilateral trade law14. In specific, Australia-based her interest about the TRIPS Agreement through the mediation by the World Trade Organization. Ideally, TRIPS and TRIMS assist in regulating a mutual expectation with regards to the protection of human inventions. The significance of TRIPS and TRIMS cannot be downplayed since it has helped in many countries around the world. For instance, in Australia practices third party rights in an attempt to create a balance between policies and intellectual policies. Specifically, TRIPS help control laws and policies at the domestic level by ensuring that trade policies are in line with conditions set out by the World Trade Organization (WTO). The agreement crafted by WTO introduced an intellectual property law into the multinational trade arena. Arguably, the most important part TRIPS play is the mandatory requirement by all WTO to make provisions of copyright rights. Furthermore, TRIPS compel nations to make specifications on various procedures to be followed, their possible remedies and dispute resolution measures15. Essentially, both ensure there is adequate protection of intellectual property rights and that they are in line with objectives that promote technological innovation in the country. Perhaps, the best credit that can be given to TRIMS and TRIPS is the facilitation of free trade amongst countries. The free trade ensures that countries can exchange ideas concerning international trade. Therefore, through these actions both TRIMS and TRIPS help to discipline the laws and policies of countries at domestic level. Evidently, they play a very important role in liberalizing international trade. The reason is that they act as protection of the intellectual property rights. TRIPS and TIMS are essential to any nation that intends to participate in the global trade arena. The WTO has been on the forefront in trying to create an understanding of these facts of international trade among countries16. The member states of the WTO are ideally the single most advantageous in regards to international trade since they have a lot to enjoy. The reason is that the WTO through its TRIMS and TRIPS has set out strategies to guide global trade in a way that ensures both parties in the trade process have something to enjoy devoid of exploitations. The action by WTO to incorporate TRIMS and TRIPS have since their inception defined the world of international trade. In fact, the main aim as to why the WTO was created was to facilitate a smoother environment through which trade would take place across international borders with maximum profits and fewer conflicts for the nations involved. Therefore, the organization’s main objective has always been the liberalization of international trade. Through the TRIMS and TRIPS, the WTO has achieved a lot and is credited with increased trade in the developed world and developing world. For instance, since the formation of WTO there has been a consistent increase in trade between the European countries and the African member states. Similarly, the United States, the Americas and even the Caribbean have had a good trade relationship. These can be credited to the existence of TRIMS and TRIPS, which have define the scopes through which trade is supposed to occur. Arguably, TRIMS and TRIPS are also the two most important components of international trade that have helped regulate the way trade occurs especially in cross borders. Before the WTO was formed, other powerful nations would use their bargaining power to influence the result and direction of trade. However, since then formation of WTO a clearly set out policy, mechanism has been created to guide trade among world nations especially those that are member states. For this reason, it is the WTO that has defined the modern day international trade. Owing to the fact that WTO has set out policies regarding international trade, they often synchronize their policies with a country’s business policies to create a balance in the trade process not harmful to the host nation17. Through this approach, TRIMS and TRIPS are able to influence various laws and policies at the domestic level. In so doing, then policies are standardized to a level which can be accommodated not only by the country itself but also by other countries willing to involve in international trade with it18. Question 4 The Appellate Body is a dispute resolution organ of the World Trade Organization under Article 17 of the Rules and Procedures Governing the Settlement of Disputes19. The body is composed of seven and headquartered in Geneva, Switzerland. The appellate body set up a panel to discuss the measures to discuss the measures affecting the protection of intellectual property rights dispute DS362. The claims that were presented before the panel included: China has failed to grant Chinese officers the necessary authority for disposal of counterfeit and pirated imports; China denies immediate and automatic copyright protection to particular work and China’s criminal laws allow commercial-scale counterfeiting and piracy20. The panel came up with a conclusion that Copyright law in China is inconsistent with the country’s obligations. The panel recognized Article 59 of the TRIPS Agreement was not applicable to the measures set aside regarding goods destined for exportation21. Consequently, it also recognized that customs measures are contradictory to the provisions in Article 59 of the TRIPS Agreement22. The reason was that it accommodates the principle in the fourth sentence of Article 46 of the TRIPS Agreement. Most importantly, it recognized that the United States has not recognized that the criminal thresholds manifested are inconsistent with China’s obligations as enshrined in the first sentence of Article 61 of the same agreement. Action was taken by the panel, which comprised the exercising of judicial economy in line with the claim laid under Article 5(2) of the Berne Convention of 1971. These claims were incorporated into the TRIPS Agreement with great respect to the copyright law. There was a general agreement by the panel that the extent of the copyright law, as well as the custom measures, were inconsistent with the TRIPS Agreement. A meeting would later be held which ensured the adoption of the panel report on 200923. Interestingly, China accepted to adopt the recommendations of the panel together with its rulings as long as there was a reasonable time for them to do so. In solidarity, China and the United States agreed on an ample time of twelve months to carry out the implementations. The Chinese were able to revise their Regulations for Custom Protection of Intellectual Property Rights by 17th March 2010. Nevertheless, these efforts by China still did not with ogre well with the United States. They claimed that there was little evidence that China had indeed implemented the recommendations and rulings fully24. Clearly, the above measures were carried out in a bid to recognize the hurdles to the protection of intellectual property rights. For instance, when counterfeit products are seized and the infringing marks removed, TRIPS Agreement would still compel the Customs officials to subject their authority and keep the goods from returning to channels of trade25. However, China at the time was not so in agreement with certain World Trade Organization principles. For instance, her limiting scope into the enforcement strategies was not in agreement with the Part Three of the TRIPS Agreement. China had a defense mechanism that eventually did not work out well for them as they had to heed to the requirements reached upon by the panel. Their argument was that it is only the National People’s Congress, which could exercise the highest level of power in the People’s Republic of China. Therefore, it was the only state organ, which could make and put to practice laws and administrative regulations in China26. The decision by the WTO may not only have provided a good platform for China and other member states the ability to carry out trade in line with the TRIPS Agreement but also build trust in trade among them. Nevertheless, the main aim of compliance with the TRIPS Agreement was boosted by the endeavors of the WTO that demonstrated a desire for a smoothly running international trade27. In essence, the TRIPS Agreement advocates for international rules for the ease of use, scope, and use of intellectual property rights together with dispute resolution and settlement. Therefore, a clear operational balance should be created to ease the tension that may exist between the trades that involves international borders. Debatably, China’s IPR system has failed as compared to other principles in Article 41 of the TRIPS Agreement. Even though this is the situation, China has tried to rectify it by creating a moiré transparent trading environment that is a requirement under the same agreement. A protocol was drawn up which compelled China to submit annual reviews of the implementation of WTO commitments for a period of eight years28. Chinese Council for Trade-Related Aspects of Intellectual Property Rights was the main source of information that was required for the protocol. As a result, China achieved great milestones especially in matters of international trade and protection of intellectual property. For instance, on 24th October of 2005, they provided what would later be known as a white paper. Notably, this paper was a great achievement and progress in China’s endeavor of protecting intellectual property rights29. Since this time, china has been at the forefront of trying to accomplish the demands of the panel report. China and the United States began joint talks in 2006 to develop an action plan aimed at improving the transparency of intellectual property rights enforcement. Consequently, such commitments and individual endeavors guarantee states the power to invoke the system by the WTO30. For instance, it is clear from the Chinese situation that the United States was able to use their power to question the commitment level of China. In fact, the United States even rallied other nations behind her to help push China into accepting the demands of the TRIPS Agreement. Improvements have since been realized in many WTO member states with regards to the protection of intellectual property31. Despite, all the achievements made so far regarding intellectual property rights, China is still one of the main nations involved in the piracy of intellectual property. The main ideology suggested by WTO member states of Japan, the European Union, and the United States is the idea of encouraging home-grown innovations and granting them protection. Other nations have since encouraged China through the National Intellectual Property Strategy to be an innovative country by rolling out a plan for promoting the wider capacity of the nation32. These may include but not limited to issues of capacity in creation, protection, utilization, and administration of intellectual property. Considering the fact that some nations do not feel independently responsible for the requirements set out by the TRIPS Agreement, it is clear that some Member States may use this as a leeway to invoke the system. Notably, this is possible since the WTO Member States are of different economic capacities and thus may feel affected by the practice of another especially when it fails to adhere to the provisions of the agreement33. Therefore, the decision by the Chinese Appellate Body is not a sole hindrance towards invoking of unwelcoming practices. Question 5 Xuan (2013, p. 139) notes that TRIPS are very important for the developed nations and the developing ones alike. However, both have various considerations and concerns towards TRIPS. The reason is the fact that they have different economic issues and standards especially regarding international trade. Therefore, TRIPS discourse is met by contrasting concerns between the developed and developing nations. Nevertheless, they are mandatory to all, member states of the World Trade Organization34. Significantly, the scope of TRIPS is widely recognized by both and as long as it meets the objectives intended then it has to be implemented irrespective of whether there is a varying capacity of realization among countries. Perhaps, members from the developed world are less affected by the TRIPS discourse as major trade and patent laws are well established in their countries35. On the other hand, the developing world still does not have very stringent measures that govern TRIPS. In such countries, it may be difficult to protect the intellectual property and the continuous ability of humans to find value out of their innovations. Therefore, the question of a balance of interest still dominates much of the developing world’s agenda towards the protection of their innovative rights. The greatest concerns in the developing countries include the sustainability of international standards set, whether individual interests are accommodated in set out procedures, the existing cots of knowledge production, accessibility of appropriate technology and the purchasing power36. On the other hand, the developed countries are less concerned with most of the priority ideologies in the developing nations. Perhaps, their greatest concern is in the security and protection of their intellectual property rights. Notably, even the WTO has since come to the realization that its member states face a lot of differences as regard TRIPS. However, there is some leeway, which exists in the form adopting general concepts among the countries37. More recently, the WTO adopted a general approach aimed at bridging the gap that exists between the developed and developing countries. The approach included the use of a criterion that recognizes invention as significant in its country of origin, what the associated patents ought to confer and the exceptions to licensing ad authorization. The difficulty in compliance by developing countries is eminent, and the WTO sets up a dispute resolution system to iron out issues of concern in such countries38. As much as the TRIPS issue has spread across many countries, it is clear that developing countries have many other challenges that hinder their commitment to the provisions set even if they were willing to do the same39. Therefore, the beast approach that the WTO adopts to cater for this difference is the incorporation of uniform standards in a multilateral perspective. Similarly, a balance to the national interests with regards to developmental capabilities is another approach that helps eliminate the differences between the two sectors of the economy (Xuan, 2013, p. 149)40. Through this practice, TRIPS help strike a balance between the two blocks and help in creating an understanding amid the trade requirements. For instance, the United States need the implementation of IP rights protection in less developed nations to a level that is available in their own country41. Particularly, the WTO through TRIPS helps in the realization of a balance between the two blocks by compelling its members to enter into mutually advantageous arrangements aimed at sustainable reduction of tariffs. These include trade barriers and the abolition of discriminative treatments that are likely to occur between different nations. Through this, the WTO creates a platform of fair and equitable practice among nations that in turn results to smooth international trade42. Therefore, it is clear that the WTO in its attempt to accomplish TRIPS helps trade grow between nations irrespective of whether they are developed or developing. In sum, this essay has recognized a lot of issues that interplay in the international trade arena. Similarly, laws and regulations have been found to be a significant foundation for the smooth existence of trade among the world’s countries. Notably, it recognizes that an overly protective regime tends t limit the social gains resulting from the invention in a country. On the other hand, it is clear that a weak system also tends to reduce the value of intellectual property as it accounts for very limited return on investment. Read More