Globalization of LawFrank L. Steeves

Executive Vice President,

General Counsel and Secretary

Emerson Electric Co.

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Civil Law,Common LawCivil and Common LawSharia Law

Haven’t common law precedents been bouncing back and forth across borders since Britain’s

colonial days and haven’t inter-state trade agreements existed for centuries?

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International Law

– Agreements between sovereign nations

– Little effective enforcement powers

– Strengthens and legitimizes national boundaries

Globalization of Law

– Parallel development of internal substantive laws to address issues common in and between all countries.

– Voluntary recognition of frameworks for global business that are created by non-governmental entities

– Serves to minimize boundaries between sovereign nations

International Legal Commentators

● Studying the effects of globalization of law as an “inexorable phenomenon.”

● Economic globalization is an acknowledged truth, but applied to law, the phenomenon and its effects are less well-documented.

● If a trend exists, how is it affecting the practice?

● Justis conducted a world-wide comparative study of cases and statutes which showed globalization is sweeping across jurisdictions and is significantly affecting the law practice.

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Collapse of the Berlin Wall – 11-9-89

“The walls came down, and the windows went up”

Netscape – 8-9-95

The internet became a communication tool that everyone could use

Workflow Software

Standards and technologies that allow work to flow across geographic boundaries

The ability of machines to talk to other machines with no humans involved

● Community Created Information on the internet

● Direct information sharing no longer constrained by geography

● Off-shoring

● Supply-Chain Collaborations

● In-sourcing – Ability to perform off-shore tasks in-house

● Search engines – creating common research results

● File sharing, internet phone service, videoconferencing, wireless devices, and advances in computers and computer graphics

– Faster

– Cost effective

– Data is easier to work with

– Can be used almost anywhere

Kissinger visits China, July 1971

Nixon visits China, February 1972

Americans have commercial access to 1,000,000,000 people

Today, the bronze-colored busts of the U.S. presidents for sale in the Smithsonian’s National Museum of American History are made in China

The “Stone of Hope” statue of Dr. Martin Luther King in Washington D.C. was sculpted in China, by a Chinese sculptor, out of Chinese granite, and shipped to the United States where it was assembled by Chinese workers

I. States Joining a Legal Framework

II. Adoption

III. Conduct of Individuals

Globalization Occurs in Three Ways

Hague Conventions

United Nations

Adoption of Foreign Codes

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Mission of the Hague Conference

To be a forum for the Member States for the development and implementation of common rules of private international law in order to co-ordinate the relationships between different private law systems in international situations.

To promote international judicial and administrative co-operation in the fields of protection of the family and children, civil procedure and commercial law.

To provide high-standard legal services and technical assistance for the benefit of Member States.

To provide high-quality and accessible information to Member States and States Parties to Hague Conventions, their government officials, judiciary, practitioners and the public in general.

Hague Conventions

● International commercial and finance law

● International legal cooperation and litigation

● International protection of children, family and property

● Civil Procedure, Service of Process, Enforcement of Judgments

● Sales, Sales Contracts

● Convention for the Uniform Law on the Formation of Contracts for the International Sale of Goods

Before 1945● Convention of 12 June 1902 relating to the settlement of the conflict of the

laws concerning marriage

● Convention of 12 June 1902 relating to the settlement of the conflict of laws and jurisdictions as regards to divorce and separation

● Convention of 12 June 1902 relating to the settlement of guardianship of minors

● Convention of 17 July 1905 relating to civil procedure

● Convention of 17 July 1905 relating to conflicts of laws with regard to the effects of marriage on the rights and duties of the spouses in their personal relationship and with regard to their estates

● Convention of 17 July 1905 relating to deprivation of civil rights and similar measures of protection

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After 1945 ……..

● Convention of 1 March 1954 on civil procedure

● Convention of 15 June 1955 on the law applicable to international sales of goods

● Convention of 15 April 1958 on the law governing transfer of title in international sales of goods

● Convention of 15 April 1958 on the jurisdiction of the selected forum in the case of international sales of goods

● Convention of 15 June 1955 relating to the settlement of the conflicts between the law of nationality and the law of domicile

● Convention of 1 June 1956 concerning the recognition of the legal personality of foreign companies, associations and institutions

● Convention of 24 October 1956 on the law applicable to maintenance obligations towards children

● Convention of 15 April 1958 concerning the recognition and enforcement of decisions relating to maintenance obligations towards children

● Convention of 5 October 1961 concerning the powers of authorities to protect minors

● Convention of 5 October 1961 on the Conflicts of Laws relating to the Form of Testamentary Dispositions

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More …………● Convention of 5 October 1961 Abolishing the Requirement of Legalization for

Foreign Public Documents

● Convention of 15 November 1965 on Jurisdiction, Applicable Law and Recognition of Decrees Relating to Adoptions

● Convention of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters

● Convention of 25 November 1965 on the Choice of Courts

● Convention of 1 February 1971 on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters

● Supplementary Protocol of 1 February 1971 to the Convention on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters

● Convention of 1 June 1970 on the Recognition of Divorces and Legal Separations

● Convention of 4 May 1971 on the Law Applicable to Traffic Accidents

● Convention of 18 March 1970 on the Taking of Evidence Abroad in Civil or Commercial Matters

● Convention of 2 October 1973 concerning the International Administration of the Estates of Deceased Persons

● Convention of 2 October 1973 on the Law Applicable to Products Liability

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And More ……..● Convention of 2 October 1973 on the Recognition and Enforcement of Decisions

relating to Maintenance Obligations

● Convention of 2 October 1973 on the Law Applicable to Maintenance Obligations

● Convention of 14 March 1978 on the Law Applicable to Matrimonial Property Regimes

● Convention of 14 March 1978 on Celebration and Recognition of the Validity of Marriages

● Convention of 14 March 1978 on the Law Applicable to Agency

● Convention of 25 October 1980 on the Civil Aspects of International Child Abduction

● Convention of 25 October 1980 on International Access to Justice

● Convention of 1 July 1985 on the Law Applicable to Trusts and on their Recognition

● Convention of 22 December 1986 on the Law Applicable to Contracts for the International Sale of Goods

● Convention of 1 August 1989 on the Law Applicable to Succession to the Estates of Deceased Persons

● Convention of 29 May 1993 on Protection of Children and Co-operation in respect of Inter-country Adoption

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Even More ………● Convention of 19 October 1996 on Jurisdiction, Applicable Law, Recognition,

Enforcement and Co-operation in respect of Parental Responsibility and Measures for the Protection of Children

● Convention of 13 January 2000 on the International Protection of Adults

● Convention of 5 July 2006 on the Law Applicable to Certain Rights in respect of Securities held with an Intermediary

● Convention of 30 June 2005 on Choice of Court Agreements

● Convention of 23 November 2007 on International Recovery of Child Support and Other Forms of Family Maintenance

● Protocol of 23 November 2007 on the Law Applicable to Maintenance Obligations

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Adopted in 1980 at Vienna Convention for the International Sale of Goods

Binding on all international sales agreements in ratifying countries unless the parties expressly disclaim its application

Developed by the United Nations Commission on International Trade Law

Noted for its simplicity and its unified code of rules

Supersedes domestic trade laws

Flexible in allowing Contracting States the option of taking exception to some specified articles

Applies only to commercial sales

Ratified by 77 countries, including China, France, Germany, Japan, Peru, Turkey and the United States (in 1988)

United Nations Global Convention on the Recognitionand Enforcement of Foreign Arbitral Awards Laws

● The “New York” Convention

● Common legislative standards for the recognition and enforcement of foreign arbitration agreements

● 16 signatories including Brazil, China, England, France, Germany, Hong Kong, India, Japan, USA and United Arab Emirates

● A “foreign arbitral award” is “commercial” and involves

● At least one party that is not a U.S. entity; or

● Property located outside of the U.S.; or

● Has a provision for enforcement outside the U.S; or

● Some other reasonable relationship with one or more foreign states

New York Convention Enforcement● Requires each signatory country to enforce foreign arbitral

awards issued by another signatory country unless recognition or enforcement would be contrary to the public policy of that country

● Recognizes awards by:

International Chamber of Commerce (Paris)

– AAA International Centre for Dispute Resolution (ICDR)

– London Court of International Arbitration

– Japan Commercial Arbitration Association

– Chinese International Economic and Trade Arbitration Commission - Chinese counterpart to the Vienna International Arbitral Center

Unified procedure for filing patent applications in each contracting state

Signed 7-19-70

In force beginning 1-24-78

144 Contracting states

– Members of the Paris Convention for the Protection of Industrial Property

– Formed the International Patent Cooperation Union

Don't worry about what anybody else is going to do…

…the best way to predict the future is to invent it.

- Alan Kay in 1971

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Global Intellectual Property Protection for a Single Product

● Trademarks– Evolution Excel™

– Grind More Hear Less™

● Patents– Equipment, methods, processes

– Design patents/registrations protect unique appearance

– Distinctive trade dress

● Copyrights– Drawings

– Embedded software

– Advertising materials

– Websites

● Trade Secrets– Confidential technical and business

information

– Algorithms and methods not covered by patents

– Tolerances and tooling

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II. Adoption and Modeling

● A concept of “Justice” crosses all boundaries, making one jurisdiction open to the idea of using the laws of another

● As countries or businesses enter the global economy, they look to those already taking part in the global economy for examples of the rules that lead to success

● Examples:

– Covenants not to Compete

– Treatment of Indemnity Agreements

– Forum and law selection clauses

● United States Federal Law 1977

– Accounting transparency requirements

– Addresses bribery of foreign officials

– Any U.S. or foreign corporation that has securities registered, or that is required to file reports under the Securities Exchange Act of 1934 is subject to the FCPA

● Not global by design, but there is global reach and effect

● How other countries see enforcement by U.S. Department of Justice:

– When asked which agency regulates corrupt practices in his country, a Chinese executive responded “The U.S. Department of Justice.”

FCPA is Global by Adoption When passed in 1977, the FCPA was the first-ever domestic statute

governing the conduct of domestic companies in its direct and indirect interactions with “foreign officials” in foreign markets.

38 countries adopted similar laws – countries that account for two-thirds of the world’s exports and ninety percent of foreign direct investment.

China, India, Indonesia, and Russia are in the process of adopting “FCPA-like” laws.

2005 China began aggressive anti-corruption enforcement - 3,000 government officials have been removed from office.

In 2012, 1,000 Chinese officials have been convicted punished and 13,000 cases involving 15,000 government and non-government individuals have been brought

2010 United Kingdom Anti-Bribery Act extends to subsidiaries

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Adoption of Wisconsin Law?

Common Themes

● To be enforceable in the State of Wisconsin, a non-compete agreement must be “reasonably necessary for the protection of an employer and reasonable in duration and geographical area.”

● To be enforceable in China, a non-compete agreement must be “reasonably necessary for the protection of the employer and be reasonable in duration and geographical area.”

● In China, if an employee violates the terms of the non-compete agreement, the employee can be held liable for breach of contract and have to pay damages to the employer.

● In Wisconsin, if an employee violates the terms of the non-compete agreement, the employee can be held liable for a breach of contract and have to pay damages to the employer.

● In both jurisdictions, injunctive relief is available.

Small Differences in Details

● In China, if a non-compete agreement requires an employee to stay out of an industry, the former employer must pay the employee during that time

● In Wisconsin, the former employer does not need to pay the former employee during the non-compete period

BUT…China law has become a subset of global law of which

Wisconsin, Viet Nam, the UK, Texas, New York, France and share common themes.

The law of Wisconsin is much closer to the law of China than it is to the law of California!!

III. Individual Globalization

● Contract Law

– Parties craft own contract language as private law

– Parties create their own system of dispute resolution

– Parties use contract language that has been used successfully in the past by them or by others

– Private agreements take on uniformity that becomes the global standard

● Takes the form of Euopean and American Commercial law

– They have a strong position in global markets

– They use contracts routinely

– They have well-developed commercial law

– Much global business is done in English

International Corporations● Companies with significant market share can demand that

others follow their rules

– Wal-Mart

● If you want your products on the shelves of Wal-Mart, you must follow their rules

● Wal-Mart’s suppliers have been forced to get serious about pollution - if you’re over the compliance level, Wal-Mart won’t do business with you

● Wal-Mart is either trying to bring others up to government standards or dictating its own code of social responsibility.

– Apple

● If you don’t agree to the Apple license terms, you can’t use your iPod or iPad

Regulatory Agencies and Law Enforcement

● Regulatory agencies often act independently of their governments in areas extending from financial and securities to environment and health.

● Trend towards cooperation between regulatory agencies of different countries to secure compliance with common rules.

● Regulatory cooperation differs significantly from the classical model of international organizations.

● International regulatory cooperation reflects new modes of global law-making and enforcement.

● It is easier to conduct business with parties in other countries than ever before

– Where laws are globalized, the cost of compliance drops

– The certainty of enforceability and remedies increases

– Parties are able to predict results in common fact situations

– Rapid exchange of contracting ideas produces lower transactional costs

– Decreased concern over cultural issues

– Increased attention to best solutions for dispute resolution

Technology will continue to move ahead

– More people will have access to technology

– Technology will be less expensive

– Technology will be faster

The global connection will become stronger

As the global economy grows, the need for global laws will increase

– As more relationships involve more countries, each will contribute something to the evolution of global law

– With each successful transaction, parties will have more faith in the ability of global law to protect their interests and resolve their disputes

● Free-market capitalism already has expanded beyond historical boundaries and is increasing

● Globalization will proceed as free-market capitalism extends its reach across the globe

● Once global laws are accepted, they will be amended and expanded to fill the changing needs of the changing market

● Any company that wants to compete in the global economy will be working with an expansion of global substantive laws.

So, What is Your Future?Great and Unprecedented Opportunity

Unlimited Variety of Jobs

Geography Has a Diminished Relevance

Status Symbols Have a Diminished Relevance

“50 Shades of Grey” Lessons

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Future Belongs to Those:

- Who see the Connections and the Solutions

- Have Courage to Shed Preconceived Notions of the Practice

- Who Understand That Their Knowledge has World-Wide application

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