Legal Difficulties Faced by any US Based Multinational Corporation - Essay Example

Week 5 summary Introduction This is a summary of week 5 discussions of torts that could potentially impact on a workplace. It also describes legal difficulties faced by any US based Multinational Corporation in abroad and strategies of protecting intellectual property of a business in the global business environment. No matter whether it is a small or large product, there would be some manufacturing defects and it may cause injuries or liabilities either to the customer or third parties. Torts in the work place and lawsuits pertaining to the same seem to be never ending issues. In the global market, it is heartbreaking for an exporting and manufacturing business when its patent, trade mark, brand name and even business plans are copied by some businesses in other countries and as a result it loses the benefits that they aim at. Many businesses are not careful in protecting its intellectual properties. This summary points out some strategies that a business can use to protect its intellectual properties in order to keep patent and trade mark unique. Torts in the Workplace A tort has been defined as a wrongful act against an individual or body corporate and his, her or its property which gives rise to a civil claim (David Kelly, Ann E. M. Holmes, Ruth Hayward--). A broad area of tort law has been developed regarding the responsibility of employer towards employees and third parties who are affected by employee’s doings while they are in the workplace. Negligence is an important tort because it is constantly growing in the social and economic change. It has been stated in the participation by Michael Seymour that ‘a tort is defined as a negligent or intentional civil wrong not arising out of a contract or statute’. A tort may injure someone in the workplace or not due to employee’s actions and for which the injured party may sue the wrongdoer for damages. So, the main object of the tort of negligence is to provide compensation to the injured person. Torts that can impact a workplace include negligence, false imprisonment assault, battery, inertial misrepresentation, and malicious prosecution. Negligence from the part of a manufacturer, for example some manufacturers of China as it being discussed every where, will cause serious issues and noises both inside and outside the manufacturer. As a manufacturer, it must necessarily ensure that the product is safe and it is up to the level promised to the public. There are products defectively designed by manufacturers that cause either injuries or even dissatisfaction of the ultimate consumers. In the case, consumers have the right to implement any consequences. When the manufacture himself found out the defect and ignored the fact and finally it injured the customer, he has right to sue for negligence. Misrepresentation and negligent hiring are some other examples of workplace torts. When an employer has misrepresented some thing to a potential employee in the course of hiring practice, it can cause serious liabilities. Some time the employer misrepresents by enticing the employee to quit his old job with the promise of part ownership, or higher pay and later on it will be denied. Employers face liability to the job seekers if they are ‘screened’ based on certain factors like sex and mental impairments. Same way, asking about job seeker’s arrest or otherwise crime history also may unfairly implicate some classes. But, on the other hand, if the employer does not screen carefully, it may in future cause liability to third parties, like robbing a third person while he is shopping. When an employee works under an employer, the employer is responsible and he is held accountable for the acts of employee with respect to third parties, because the injured third party can sue either the employer or employee. Generally, the employer is not accountable for injuries to third parties caused by employees while they are outside the work place and for the injuries or liabilities caused by intentional torts committed by an employee. Liabilities due to product defects Harley Davidson motors and its defects are subjected to the discussion on defectively designed or manufactured product. Harley Davidson was sued because the rider was drunk and therefore he involved in the accident. Some plaintiffs have alleged that Harley Davidson has diminished in its value or is not up to the proposed and advertised quality and hence negligence, product liability, fraud and deceptive trade practices are to be compensated. Even though the arguments were dismissed by the court, it is imperative for a large corporation to take measures to protect from all these kinds of lawsuits. If the product is defective at the time of commercial sale or at the time of distribution through wholesalers and retailers, and the defect could cause harm to the concerned party, the product seller or manufacturer is held liable for the harm. As already mentioned in the discussion/participation, drugs, toys, food and many other kinds of products coming from China are very low in quality. Most Chinese manufactures emphasis to increase production and maximize profit by decreasing costs and it as a result decrease the quality of goods. It is nothing less than serious ‘negligence’. These torts can bring many lawsuits. Here, every one in the distribution channel is held liable for the liability caused by defectively manufactured product. According to the law, a seller of a defective product which caused harm is jointly liable with other parties who bear legal responsibility for causing the harm. Legal problems faced by US multinationals The host nations of a US based multinational corporation always apply their own unfair trading or competition laws, product liability rules, securities principles, labour and employment laws and tax and accounting standards. It aims at making the multinational responsible for the conduct of local subsidiary firm. Some countries apply national laws focusing on foreign business. Some time international investors who seek to establish foreign operation may be restricted in the types of businesses that they can invest. Foreign investment is restricted to only some economic sectors. Some nations apply that foreigners’ business must have some extent of local participation and it must disclose its activities to the general public. Protecting intellectual property Intellectual property protection is very important to any business and it is critical to fostering innovation. Intellectual property refers to creations of mind such as literary and article works, inventions, symbols, names and images that are used in business uniquely. It includes copyright, patent and trade mark. If these are not protected globally, the business cannot gain the full benefits of their creative works. It is painful that every endeavors that a business has been working creatively to develop and improve further through its unique brand name, business plan and strategy, images, trade mark and patent have been stolen by other businesses. Some of the US based businesses and exporting manufacturers are not aware of piracy, counterfeiting and theft of their patent or trademark in other countries. It was reported that the brand name, products, packaging style and business plans of some US companies have been copied by some businesses abroad. For this reason, it is recommended that businesses must seek trademark and patent protection in their concerned foreign market ahead of exporting to such markets. Prior the innovation of trade mark or patent, it is to be considered that only a concrete embodiment of an invention is patentable. The creative model needs to be tested in the global environment. More over, it must be distinct and different from the existing models or marks. That idea or creative work even should not be published earlier either in a newspaper or in websites. Finding an expert and experienced attorney who has specialized in protecting intellectual properly and seeking his advices will help in protecting intellectual property. By conducting timely market research to find out whether any similar creativity exists or not also will help to make the patent unique. US companies have the option to sue the infringing company in US court. A treaty with the relevant country allowing such enforcement will be required by US court judgment. Foreign courts may be unwilling to enforce foreign judgment against home defendants. Though there are treaties, it may not be adequate as they often fail to provide complete protection. The US based company, whose intellectual property has been infringed, can also go to sue in foreign court itself under the intellectual protection laws of a particular country where the infringement occurred. If a business has some creativity that needs to be patentable, it should be very careful not to disclose the idea elsewhere until it takes patent application. According to US law, a business has just one year from the date to file the first applications for patent. After that time, the business not only will lose the right to secure a US patent application but also will lose the right to protect patent in a number of foreign markets. Conclusion Different consumer and other goods coming from China and some other countries show that when a manufacturer emphasizes on maximizing the production and increasing the profit, the quality diminishes and the value or utility expected by the customer from such product may not be there. It is negligence from the part of manufacturer and it brings many lawsuits. According to the law, not only the producers, but middlemen in the distribution of such products are also held accountable for such torts. Large corporations like Harley Davidson need to take measures to protect themselves from playful lawsuits. This summary provides a detailed discussion based on different kinds of torts likely to occur in the workplace and legal strategies that a business can take to protect its intellectual properties. CONNIE JOHNSON References Bouchoux D E. (2001), Protecting Your Companys Intellectual Property: A Practical Guide to Trademarks, Copyrights, Patents & Trade Secrets, AMACOM Div American Mgmt assn Emerson RW & Robert W (2003), Business Law, Barrons Educational Series Kelley D, Holmes A & Hayward R (2005), Business Law Fifth Edition, Routledge Cavendish Read More