Case in International Business Law Research Proposal

Pages: 3 (1110 words)  ·  Style: MLA  ·  Bibliography Sources: 3  ·  File: .docx  ·  Level: College Senior  ·  Topic: Business - Law

International Business Law

EnergyTech, Sonatrach, and others wish to enter into a joint venture (Sonaventure) for the construction of a pipeline that will transport liquefied natural gas from Sonatrach's refineries in Algeria through Tunisia, Libya, Egypt, and Jordan into Syria. Sonaventure will contract with local construction firms to assemble the sections of the pipeline.

EnergyTech's contribution will be a license of the Technology to Sonaventure, and EnergyTech will receive 10% of Sonaventure's annual profits, rather than a royalty. Preliminary negotiations will cover the establishment and terms of the JV as well as the licensing of the Technology.

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The primary risk that is being taken by EnergyTech is the concern that its technology will be taken and used by another party. The use of subcontractors exacerbates that risk, because it increases the number of entities who will have access to the Technology, while, at the same time, decreasing the likelihood of a successful recovery from any one source if the technology was misappropriated. Therefore, the licensing agreement must look at the following factors: the definition of the use of the IPR under the license, whether such use is exclusive or non-exclusive, geographic limitations, application, quantity, confidentiality concerns, and derivate works or improvements. Another issue is that EnergyTech will not be taking a royalty, but will instead be entitled to a share of annual profits, which can make EnergyTech vulnerable to questionable accounting practices. An additional concern is that there are so many different countries involved in the transaction, which means that the laws of each of these different countries could potentially apply to any issues that may arise. Because the countries involved are in a terrorist-heavy area of the world and the agreement involves oil and gas, there also needs to be an awareness of possible terrorist interference in the project. Finally, there needs to be an awareness of possible application of Title VII to Sonaventure employees.

TOPIC: Research Proposal on Case in International Business Law Assignment

Reasoning/Analysis/Conclusions: The license must be narrowly construed to only allow the joint venture to use it for the construction of the pipeline in question and to prohibit any member of the JV from using it for their own purposes, moreover because most of the involved countries are not members of WTO, EnergyTech needs to take substantial steps to protect its IP before entering into the agreement. Local laws can prevent, restrict, or alter licensing agreements, therefore EnergyTech needs to engage local counsel in each country to determine licensing rights, as well as insert a provision that Sonaventure is responsible for any licensing breaches, whether committed by Sonaventure or one of its subcontractors.

To protect EnergyTech's profit-sharing, the agreement would have to require the company to submit to International Accounting Standards, and to allow EnergyTech to hire an accountant to audit the books on a regular basis. This would prevent Sonaventure from creative accounting practices that would demonstrate no profit, thus depriving EnergyTech of its benefit of the bargain.

Choice of law and choice of forum provisions will be crucial parts of the contract, because of the involvement of so many different companies in so many different companies.

Because choice of law and choice of forum customs would not normally suggest the application of U.S. law in a contract dispute, it is essential that a U.S. choice of law clause be made a part of the parties' agreement. However, because… [END OF PREVIEW] . . . READ MORE

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APA Style

Case in International Business Law.  (2008, August 18).  Retrieved September 18, 2021, from https://www.essaytown.com/subjects/paper/case-international-business-law/79226

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"Case in International Business Law."  18 August 2008.  Web.  18 September 2021. <https://www.essaytown.com/subjects/paper/case-international-business-law/79226>.

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"Case in International Business Law."  Essaytown.com.  August 18, 2008.  Accessed September 18, 2021.
https://www.essaytown.com/subjects/paper/case-international-business-law/79226.