There are several advantages of submitting contracts disputes to arbitration rather than pursuit of litigation in courts. One major advantage of arbitration over litigation in court is that it is time efficient (Freeman, web). Under normal circumstances, the speed by which disputes are solved through arbitration is much great than through litigation. In addition, crowded courts may result in disputes taking several years in courts, and hence litigation might not be the best way of solving contracts disputes that may require urgency.
Another advantage of arbitration over litigation is that normally it tends to be less formal and friendly compared to normal courtroom litigations that are usually more adversarial (Freeman, web). This advantage may be meaningful if the involved parties in the contract disputes need to maintain a good relationship for a given business objective. Therefore in solving contract disputes where maintaining relationships matters, arbitration is the best way.
In cases where confidentiality is key, arbitration is more advantageous compared to litigation in courts (Freeman, web). Unlike in courts where hearings are open to the public and therefore no confidentiality, “in arbitration there is no public hearing” (Freeman, web) and therefore arbitration provides a better way of handling contracts disputes that may need confidentiality. For instance, companies that may be affected by the public opinion are likely to opt for arbitration in solving their contract disputes.
Question 2- What are the primary types of intellectual property. Why do companies concern themselves with intellectual property issues?
The understanding of the intellectual property issues is a matter of serious concern to companies for a number of valid reasons. The major reason why companies are concerned with issues of intellectual property is to protect them from unnecessary and unfair competition that results from companies pirating or copying ideas from others. The issues of intellectual property can also result in huge losses over legal issues.
The primary types of intellectual property include copyrights, which protects the original works of authorship, such as songs, artistic works, literature, and software (Clarke, web). The copyright holder has full authority to reproduce and issue the works. There are also patents, which grant rights to the inventor to make and prohibit others from selling or producing the invention. The three types of patents include plant, design, and utility. Utility patent covers useful non-obvious inventions whereas a design patent gives cover to a new, ornamental, and original design for manufacture (Clarke, web). Finally, plant patents cover new varieties of asexually produced plants, which can last up to twenty years.
Moreover, trademark is another primary intellectual property that refers to symbols, phrases, and words that set apart the source of particular products from other sources (Clarke, web). For example, Nike sports wear refers to sport wears designs made by Nike. Trademarks like any other intellectual property rights require registration with the responsible authorities. A trade secret is another intellectual property that refers to a particular method, device, process, or information that various companies keep a secret for the sake of advantage over potential competitors (Clarke, web). A good example of a trade secret is a computer algorithm, unlike other intellectual property, an individual cannot register protection for a trade secret.
Question 3- Why are tariffs an obstacle to international trade? Provide several examples.
Tariffs refer to taxation on import goods and services that is usually collected by the federal government. With a major aim of limiting imports and collecting revenues, tariffs raise the prices of imported goods to the final consumer. Although governments argue that tariffs protect the local industries, tariffs, also known as import duties, are obstacles to international trade in various ways.
Tariffs generally raise the prices of goods to the ultimate consumers and when the tariffs are high, there is a possibility that most people will not spend on the imported products but rather on the substitute available in the market at a relatively low price (Schularick and Solomos 50). This implies that the country that is exporting may not experience high growth rate on exports, therefore limiting trade. For example, in the United States, tariffs on China’s imported auto spare parts are quite high making the price for such vehicles to be relatively high. Therefore, it is an obstacle in international trade in this industry between China and US.
High tariff is also an obstacle to international trade, as it can easily lead to international trade wars. For example, the United States high tariffs on imported auto spare parts have led to trade wars between the country and other exporting countries (Schularick and Solomos 52). In addition, it is believed that the high tariffs on auto spare parts have deterred other several trade agreements between US and other European nations. Successful international trade can only happen if both the countries involved export and import without the trade wars and barriers resulting from tariffs and other trade barriers.
Clarke, Peter. “What Is Intellectual Property?” Legal Match. 2014. Web.
Freeman, Alan. “Seven Factors to Consider Before You Draft A Mandatory Arbitration Clause”. Litigation; Arbitration V. Litigation. Inside Counsel. 2012. Web.
Schularick, Moritz, & Solomos Solomou. “Tariffs and Economic Growth in the First Era of Globalization.” Journal of Economic Growth 16.1 (2011): 33-70. ProQuest. Web. 13 Jan. 2015.