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How do international contracts and laws apply?

Mountain View, CA |

If I work with a foreign company and develop a contract, which country's laws prevail (do both country's laws apply)? I understand jurisdiction can be specified, but that doesn't make anything enforceable in the other country correct? If I obtain copyrights from a company in India, am I really just obtaining copyrights for the U.S or do I need to understand India and international laws to determine who owns rights and where? Lastly, what happens if I acquire rights that the company did not own in the first place?

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Attorney answers 7

Posted

The fact that you are asking about questions of what lawyers call "conflict of laws" or "private international law" signals the need for competent counsel. Consider that the majority of lawyers have not studied and cannot advise you about this subject competently. Your county bar association may be able to refer you to someone appropriate.

But a few general principles may help. Competent lawyers drafting contracts between parties domiciled in different jurisdictions include forum selection clauses and choice-of-law provisions in their contracts. Whenever the law of more than one jurisdiction might apply, it is a safe bet that the law of one jurisdiction is more favorable to one of the parties' interests. It's the lawyer's job to look that up and advise you. Add to the mix that you are plainly asking about the law applicable to intellectual property owned by someone else, and it becomes clear that this is not something you should be handling on your own without competent legal advice. Go get it.

Neither is what I've written here legal advice; it's just point out to you some general principles. I don't practice law in California or hold licensure there. Consult local counsel if you need legal advice. I practice in Vermont ONLY.

Posted

These are complicated questions and there is not a lot of information to go on. However, in your agreement you will want to state the governing law, venue, and language. Yes, this will be enforceable, especially if you use an International Tribunal as the governing authority. If you are acquiring copyrights and other Intellectual Property rights, the terms in the agreement should include a warranty of title to such IP and an indemnification by the party to you in the event they did not have the right to sell to you and you are later sued. In addition, if you want worldwide rights, you should also specify such in the Agreement. If you are concerned about their ability to pay damages if they are awarded in court, you should also make sure that they have insurance or leave funds in an escrow account. Do your due diligence and make sure that their warranties are accurate and review all documentation showing their ownership of the IP that you hope to acquire.

Our replies to Avvo questions should not be considered specific legal advice to any individual, and no attorney-client relationship is formed with you. Our aim is to provide general principles that may be useful to the Avvo community as a whole. You should seek individual legal advice pertaining to your specific factual situation, and the laws applicable to your jurisdiction.

Posted

International contracts can be regulated by various layers of rules: treaties, national laws or models. It is paramount to avoid self-help. The international arena is extremely complex and if you do not have a strong document with secure remedies, the possibilities of protecting your interests will disappear instantly. Obtaining copyrights through an agreement implies that you need to know exactly the basic terms of the agreement. What are you bargaining for? It seems that this is not clear to you regardless any applicable law. Of course you need to understand foreign law, international law and domestic law. For this there are international firms doing this work for you. As for your last question, the entity signing the contract will be in charge of using the rights. Lastly, corporate and international tax are natural consequences of this scenario. Please consider seriously to work with an international attorney to save money now. Best,

This reply is offered for educational purpose only. You should seek the advice of an attorney. The response given is not intended to create, nor does it create an ongoing duty to respond to questions. The response does not form an attorney-client relationship, nor is it intended to be anything other than an educated opinion of the author. It should not be relied upon as legal advice. The response given is based upon the limited facts provided by the undisclosed individual asking the question. To the extent additional or different facts exist, the response might possibly change. Attorney is licensed to practice law only in the State of New York. Responses are based solely on New York Law unless stated otherwise. Pursuant to Internal Revenue Service guidance, be advised that any federal tax advice contained in this written or electronic communication is not intended or written to be used and it cannot be used by any person or entity for the purpose of (i) avoiding any tax penalties that may be imposed by the Internal Revenue Service or any other U.S. Federal taxing authority or agency or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

Posted

If I work with a foreign company and develop a contract, which country's laws prevail (do both country's laws apply)? Impossible to answer without a lot more facts and a lot of research. Which is why it is almost always a good idea to specify.

I understand jurisdiction can be specified, but that doesn't make anything enforceable in the other country correct? Not necessarily true. If I am a US employer and I hire a US citizen to work in my company in Seattle and I say that all disputes will be resolved in Iraq, no court would ever enforce that.

If I obtain copyrights from a company in India, am I really just obtaining copyrights for the U.S or do I need to understand India and international laws to determine who owns rights and where? You can only obtain whatever rights the other party actually owns. No more.

Lastly, what happens if I acquire rights that the company did not own in the first place? You have nothing. Just as I can't transfer ownership rights to you in a car that belongs to someone else, nobody can transfer IP rights to you that they do not own.

Posted

Great answers from my colleagues.

Put another way, you need some experienced legal counsel in international IP and local contract transactions, not by yourself, not with a sincere legal beginner.

The above is general legal and business analysis. It is not "legal advice" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also avvo.com terms and conditions item 9, incorporated as if it was reprinted here.

Posted

I agree with my colleagues. The basic info for you is that an experienced international lawyer that understands the differences between different legal systems must advice you.

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Posted

Other issues to consider in any international transaction, not directly related to your question, but potentially critical, are laws governing exports and imports (including export and import of intellectual property), foreign investments, and the like. An example of the questions to ask to determine if you may need legal advice from an attorney with expertise in these areas: does the transaction involve the import or export of any products or services -- including cross-border transfer by electronic means (e-mail, phone call, fax, etc.) of technology or other information? Does it involve transfer of goods, services or information from the national of one country to the national of another? (It may seem odd at first glance, but even telephone calls to a person in the United States from another person in the United States have been found to violate export control regulations!) If the answer to any of the foregoing questions is "yes" or "maybe," the next question to ask is whether the goods, services, information, or technology are able to be used exclusively in commercial (i.e., non-military) applications , or whether they might have (with or without modification) a military appliation. (The answer to this "dual use" question is sometimes quite difficult.) In any international contract, regardless of the subject matter, it is also important to make sure that no party is a national of (or has certain other ties to) an emargoed country or a prohibited individual. This is a sample of the type of questions to ask relating to export controls, by no means exhaustive. In the United States, there are several agencies operating under separate regulations pursuant to various statutes governing exports and foreign investments. You may have no exposure at all under export controls. But it's important to consider the possibility at the outset because of the significant liability, civil and criminal, for violations. Imports into the United States are for the most part regulated by the U.S. Customs and Border Patrol. Issues that frequently arise pertain not only to issues of national security but to intellectual property (which may an issue in the contract referred to in your question), tariff classification, rates of duty, country of origin marking, and many others.
-- Roger Banks
Washington, DC

Roger Banks

Roger Banks

Posted

P.S. I somehow managed to post the rough draft of my answer, rather than an edited version with corrections to spelling and other minor changes. I would delete and resubmit, but, unless I'm mistaken, this interface does not allow one to delete posts. In any case, my revisions made no change to the substance of the answer. I may try to post the corrected version as a "legal guide" to mollify my perfectionist tendencies!

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