Test Bank for Business Law Today, Comprehensive, 12th Edition, Roger LeRoy Miller
To download the complete and accurate content document, go to: https://testbankbell.com/download/test-bank-for-business-law-today-comprehensive-1 2th-edition-roger-leroy-miller-1/
Chapter 07: Intellectual Property Rights
True / False
1. The need to protect intellectual property is recognized in the U.S. Constitution.
a. True
b. False
ANSWER: True
2. Intellectual property is property resulting from intellectual, creative processes.
a. True
b. False
ANSWER: True
3. Trademark dilution cannot occur online.
a. True
b. False
ANSWER: False
4. The products involved in a trademark dilution suit must be similar.
a. True
b. False
ANSWER: False
5. Once a manufacturer’s trademark is established, another manufacturer may use it without permission.
a. True
b. False
ANSWER: False
6. To succeed in a suit for trademark infringement, the owner must show that the infringer acted intentionally.
a. True
b. False
ANSWER: False
7. A trademark owner that successfully proves infringement can recover the profits that the infringer wrongfully received from the infringement.
a. True
b. False
ANSWER: True
8. Arbitrary and fanciful trademarks are sometimes considered to be the most distinctive trademarks.
a. True
b. False
ANSWER: True
Copyright Cengage Learning. Powered by Cognero. Page 1
Chapter 07: Intellectual Property Rights
9. A descriptive term is protected under trademark law if it acquires a secondary meaning.
a. True
b. False
ANSWER: True
10. Only the federal government provides for the registration of trademarks.
a. True
b. False
ANSWER: False
11. The law does not prohibit the creation or shipment of counterfeit labels unless they are attached to products.
a. True
b. False
ANSWER: False
12. The United States can prosecute foreign counterfeiters under U.S. law.
a. True
b. False
ANSWER: False
13. Service marks are not protected in the same way as trademarks.
a. True
b. False
ANSWER: False
14. A trade name is used to indicate all or part of a business’s name.
a. True
b. False
ANSWER: True
15. An unusual or fanciful trade name is not protected under trademark law.
a. True
b. False
ANSWER: False
16. A licensor who allows a licensee to use a trademark as part of the licensee’s company name must also permit the licensee to use the mark on its products.
a. True
b. False
ANSWER: False
17. A patent applicant must demonstrate that an invention is useful to receive a patent.
Copyright Cengage Learning. Powered by Cognero. Page 2
Chapter 07: Intellectual Property Rights
a. True
b. False
ANSWER: True
18. Certain business processes are patentable.
a. True
b. False
ANSWER: True
19. After a patent is issued, there is a nine-month limit before it can be challenged.
a. True
b. False
ANSWER: False
20. With respect to a patented process, all steps or their equivalent must be copied for infringement to occur.
a. True
b. False
ANSWER: True
21. A license that limits the uses of a patent by the licensee is unlawful.
a. True
b. False
ANSWER: False
22. The registration of a copyright is not evidence that the copyright is valid.
a. True
b. False
ANSWER: False
23. Certain business processes are copyrightable.
a. True
b. False
ANSWER: False
24. A copyright owner who sells a copy of a work retains the right to control the further distribution of that copy.
a. True
b. False
ANSWER: False
25. To obtain copyright protection under federal law, a work must be original.
a. True
Copyright Cengage Learning. Powered by Cognero. Page 3
Name: Class: Date:
Chapter 07: Intellectual Property Rights
b. False
ANSWER: True
26. If a creative work is not copyrightable, other intellectual property law will not protect it.
a. True
b. False
ANSWER: False
27. Works that are copyrightable include product packaging.
a. True
b. False
ANSWER: True
28. An unauthorized reproduction must be exactly the same as the original, and reproduce the original in its entirety, for infringement of copyright to occur.
a. True
b. False
ANSWER: False
29. Some business processes can be protected as trade secrets.
a. True
b. False
ANSWER: True
30. Tapping into a competitor’s computer to obtain confidential business data is not a theft of trade secrets.
a. True
b. False
ANSWER: False
31. Pricing information is not a trade secret.
a. True
b. False
ANSWER: False
32. Information that cannot be patented, copyrighted, or trademarked cannot be protected as a trade secret.
a. True
b. False ANSWER: False
33. The European Union’s copyright rules limit the royalty protection for musicians to ten years.
a. True
b. False
Copyright Cengage Learning. Powered by Cognero. Page 4
Chapter 07: Intellectual Property Rights
ANSWER: False
34. Each member country to the TRIPS agreement must include in its domestic laws broad intellectual property rights and effective remedies for violations.
a. True
b. False
ANSWER: True
35. Under the Madrid Protocol, the fees and procedures for trademark registration vary significantly among individual countries.
a. True
b. False
ANSWER: False
Multiple Choice
36. Greg is marketing manager for Home Stuff LLC. Greg is responsible for branding the company’s products. Aspects of branding that can be trademarked include
a. a catchy phrase, such as “Stuff your home with Home Stuff!”
b. the shape of a container, even if it does not aid in product identification.
c. use of another party’s established trademark, with or without permission.
d. none of the choices.
ANSWER: a
37. Without permission, Race Runners Inc. uses a trademark that is similar to the registered mark of Swiftfoot, Inc. This use of the mark constitutes trademark dilution
a. if consumers are confused.
b. all of the choices.
c. only if the two companies’ products are similar.
d. if the use diminishes the distinctive quality of the mark.
ANSWER: d
38. Brewed Beans Inc. makes and sells “CoCoCafe,” a chocolate-flavored coffee. Darkroast Inc. later markets a similar drink under the name “KoKoKafe.” This is most likely
a. copyright infringement.
b. patent infringement.
c. trademark infringement.
d. none of the choices.
ANSWER: c
39. Sea Coast Café uses the trademark of Tacos del Mar without permission. This use of the mark is actionable as trademark infringement
Copyright Cengage Learning. Powered by Cognero. Page 5
Chapter 07: Intellectual Property Rights
a. if consumers are confused.
b. all of the choices.
c. only if the two companies’ products are similar.
d. if the use diminishes the distinctive quality of the mark.
ANSWER: a
40. Phoenix Inc. is a publisher. Phoenix uses a logo featuring a bird rising from a flame to identify its publications. The publications are printed in a unique process that includes a 3-D printer. Phoenix could most likely obtain trademark protection for its
a. logo.
b. publications.
c. printing process.
d. printer.
ANSWER: a
41. Don One decides to use his personal name for a line of clothing he is developing. In this circumstance, Don One will receive trademark protection under the law when
a. Don begins to market his line of clothing.
b. customers begin to associate the name with the source of the product.
c. Don begins to make his line of clothing.
d. all of the choices.
ANSWER: b
42. Organos Ltd. traffics in nutritional supplements that are marketed as genuine, trademark-branded products when in fact they are counterfeit. This is a crime
a. only if the counterfeits have negative effects on legitimate businesses.
b. only if the counterfeits present serious public health risks.
c. under all circumstances.
d. under no circumstances.
ANSWER: c
43. Berry Good LLC registers its trademark with the U.S. Patent and Trademark Office, and uses it to market a distinctive line of ice cream products. Crabapple Inc. uses the mark without Berry’s consent to sell imitation frozen desserts. Berry has a cause of action against
a. Crabapple.
b. the U.S. Patent and Trademark Office.
c. consumers who buy Crabapple’s desserts.
d. all of the choices.
ANSWER: a
44. Graphix S.A. traffics in labels that bear counterfeit trademarks. This is a crime
a. only if the labels have negative effects on legitimate businesses.
Copyright Cengage Learning. Powered by Cognero. Page 6
Chapter 07: Intellectual Property Rights
b. only if the labels are attached to counterfeit goods.
c. under all circumstances.
d. under no circumstances.
ANSWER: c
45. Gargantua Equipment Corporation registers its trademark as provided by federal law. This registration gives notice that the mark belongs exclusively to Gargantua. This notice is
a. national.
b. limited to Gargantua’s home state.
c. limited to Gargantua’s market.
d. limited to those who have actual notice of it.
ANSWER: a
46. Wendy works as a weather announcer for a TV station under the character name Weather Wendy. Wendy can register her name as
a. none of the choices.
b. a trade secret.
c. a service mark.
d. a trade name.
ANSWER: c
47. Galaxy Research Inc. uses a mark associated with its name to distinguish its services from those of other tech firms. This mark is
a. none of the choices.
b. a trade secret.
c. a service mark.
d. a trade name.
ANSWER: c
48. Chris operates the Devil’s Brew chain of coffee stands. “Devil’s Brew” is
a. none of the choices.
b. a trade secret.
c. a service mark.
d. a trade name.
ANSWER: d
49. Salty Snacks Inc. markets a fish-shaped cracker. When Tasty Tidbits Inc. begins to sell a similar product, Salty files a suit against Tasty, alleging infringement and claiming that consumers are likely to be confused. The court will most likely
a. rule in the plaintiff’s favor.
b. dismiss the suit.
Copyright Cengage Learning. Powered by Cognero. Page 7
Chapter 07: Intellectual Property Rights
c. order both parties to redesign their respective products.
d. order both parties to destroy all remaining fish-shaped crackers.
ANSWER: a
50. Obtaining a court order to close down the domain name of a website is an effective tool that U.S. officials use to combat online sales of
a. licenses.
b. counterfeit goods.
c. competing products.
d. trademarks.
ANSWER: b
51. Apex Electrical Inc. agrees to allow Apex Foundations LLC to use the owner’s trademark “Apex” as part of its company name but not otherwise. The domain name apex.com can be used online by
a. Apex Electrical only.
b. both businesses but no others.
c. neither business.
d. both businesses and any others that own the mark.
ANSWER: a
52. Pseudo Drugs Inc. is convicted of trafficking in counterfeit prescription drugs. As a penalty, the company may be ordered to pay restitution to the trademark holders in an amount equal to
a. their lost net profits.
b. the retail prices of the genuine drugs.
c. Pseudo’s profits from the sale of the counterfeit drugs.
d. the retail prices of the counterfeit drugs.
ANSWER: a
53. Serena invents a new, unique, long-life battery. A grant from the government that gives Serena the exclusive right to make and sell the battery for a certain period of time is
a. a patent.
b. a trademark.
c. a copyright.
d. a trade secret.
ANSWER: a
54. O-Ring Corporation allows Piston Company to incorporate O-Ring’s patented fuel-injection system into Piston’s product. This is
a. a license.
b. copyright infringement.
c. trademark infringement.
Copyright Cengage Learning. Powered by Cognero. Page 8
Chapter 07: Intellectual Property Rights
d. patent infringement.
ANSWER: a
55. Ruby invents a new type of pillow and obtains a patent for it. Sleep-Time Inc. believes that Ruby’s pillow infringes on one of Sleep-Time’s previously patented products. Sleep-Time must file a challenge to Ruby’s patent within
a. nine months.
b. twenty years.
c. the life of the inventor plus seventy years.
d. no specific time.
ANSWER: a
56. GoodGro Inc. makes genetically modified seeds that are identical to Harvest Corporation’s patented seeds, without Harvest’s permission. This is most likely
a. copyright infringement.
b. patent infringement.
c. trademark infringement.
d. none of the choices.
ANSWER: b
57. Works that are copyrightable include
a. books.
b. music videos.
c. product packaging.
d. all of the choices
ANSWER: d
58. To be protected under the Copyright Act, a work must be
a. an inseparable idea and expression.
b. original and fixed in a durable medium.
c. a concept, principle, or discovery.
d. none of the choices.
ANSWER: b
59. Stig creates unique graphic works that feature characters of his own imagination. Copyright protection for Stig’s work is
a. not possible.
b. automatic.
c. available only on registration with the U.S. Copyright Office.
d. enforceable only if Stig places a circled “c” on the work.
ANSWER: b
Copyright Cengage Learning. Powered by Cognero. Page 9
Chapter 07: Intellectual Property Rights
60. Without the permission of the copyright owner, Faye copies the literary expression of Game of Thrones, changes the names of the main characters, and publishes the result as her own work. This is
a. copyright infringement.
b. a “fair use.”
c. a legitimate creative act.
d. none of the choices.
ANSWER: a
61. Bette choreographs a dance to accompany City Orchestra’s performance of a medley of movie scores. Dian, a dance instructor, distributes copies of a short portion of the choreography to her students. This is most likely
a. copyright infringement.
b. a “fair use.”
c. legal only on a payment of royalties to Bette.
d. legal only on a payment of royalties to City Orchestra.
ANSWER: b
62. Leigh buys Masters of Business, a copyrighted book. Under the first sale doctrine, Leigh can legally
a. sell the book to another person.
b. republish the book as his own work.
c. control the distribution of other copies of the book.
d. none of the choices.
ANSWER: a
63. Prognosis Inc. owns a brain-computer interface that enables physicians to diagnose and treat some diseases quickly and accurately. Federal copyright protection extends to
a. the general appearance of the app.
b. the parts of the app that can be read by computers.
c. the command structure of the app.
d. all of the choices.
ANSWER: b
64. Predictive Data LLC makes and sells software that enables a business to target its advertising precisely. The company could successfully bring an action for copyright infringement against a competitor who copies
a. the screen displays of the software.
b. the parts of the software that can be read by humans.
c. the menus of the software.
d. any of the choices.
ANSWER: b
65. Paving Corporation taps into the computer network of Roadwork Inc., a competitor, and downloads confidential business data without Roadwork’s knowledge or authorization. This is most likely
a. copyright infringement.
Copyright Cengage Learning. Powered by Cognero. Page 10
Chapter 07: Intellectual Property Rights
b. patent infringement.
c. trademark infringement.
d. a theft of trade secrets.
ANSWER: d
66. Information that may be protected as trade secrets includes
a. customer lists.
b. pricing information.
c. marketing techniques.
d. all of the choices
ANSWER: d
67. Like most successful companies, Phones Inc. has trade secrets. The law protects those secrets if the information is
a. not revealed to outside parties.
b. cataloged by the company as “confidential.”
c. useful and is in fact used by the company.
d. of value to a competitor.
ANSWER: d
68. The idea for “Price & Profit,” an app that businesses can use to track their revenue, profit, and payroll, is protected by
a. copyright law.
b. patent law.
c. none of the choices.
d. trade secrets law.
ANSWER: c
69. France and the United States are signatories of the Berne Convention. Alain, a citizen of France, publishes a book first in France and then in the United States. Alain’s copyright must be recognized by
a. France only.
b. France and the United States only.
c. all of the signatories of the Berne Convention.
d. none of the choices.
ANSWER: c
70. United Inc., a U.S. film production company, files a suit against Video Ltd., a Mexican production firm, for infringement of intellectual property rights under Mexico’s national laws. Both the U.S. and Mexico are signatories of the TRIPS agreement, under which United is entitled to
a. more protection under Mexican law than Video.
b. the same rights and protection under Mexican law as Video.
Copyright Cengage Learning. Powered by Cognero. Page 11
Chapter 07: Intellectual Property Rights
c. fewer rights under Mexican law than Video.
d. none of the choices.
ANSWER: b
Essay
71. Alpha Inc. announces a new computer operating system to be marketed under the name McSoftware. McDonald’s Corp. asserts that the use of this name infringes on the McDonald’s family of trademarks characterized by the prefix “Mc” attached to a generic term. Alpha responds that “Mc” has come into generic use as a prefix and therefore McDonald’s has no trademark rights to the prefix. Alpha files an action, seeking a judgment that the mark McSoftware does not infringe on McDonald’s trademarks. What factors will the court consider in deciding this issue? What will be the probable outcome of the case? Explain.
ANSWER: The most important factor in the court’s consideration of this issue would probably be the likelihood of confusion if Alpha used the “Mc” prefix. The court might conclude that “Mc” had not come into generic use and reason that consumer confusion was likely if the “McSoftware” name were used. The court might note that McDonald’s is the largest single-brand advertiser in the United States. Most Americans are familiar with its logo and its various “Mc” products, and many would be led to believe that McSoftware was affiliated with McDonald’s.
To the court, Alpha’s use of the name McSoftware would likely appear to be a deliberate attempt to benefit by the goodwill and reputation of McDonald’s, and permanently enjoin Alpha from using the name.
72. College Copy Shop (CCS) compiles, copies, and sells reading materials to students on the instructions of their professors, who indicate which parts of certain publications to include. These include texts published by Deep Topics, Inc. CCS does not obtain the permission of Deep Topics, or any of the other original publishers of the copied materials, and does not pay royalties on the sales of the compilations. Deep Topics and others file a suit against CCS, alleging infringement of the plaintiffs’ intellectual property rights. Which type of intellectual property is involved in this situation? What is CCS’s likely defense? How is a court most likely to rule? Explain.
ANSWER: The intellectual property at issue in this situation is copyright specifically, of course, the copyrights of the publishers of the materials that CCS copies and sells without permission. CCS is likely to assert the “fair use” doctrine in its defense. This doctrine includes exceptions to the general requirement that an owner’s permission be obtained before copyrighted material can be copied. CCS is probably likely to argue that its compilations are excepted because they are dedicated to “educational” uses. A court is most likely to conclude, however, that the copying and selling of the materials is not a fair use, because CCS profits from their sale, which undercuts the potential market for the copyrighted publications from which the copies are made. In determining fair use, a court considers four factors: the purpose and character of the use, the nature of the copyrighted work, the amount and substantiality of the portion used in relation to the copyrighted work as a whole, and the effect of the use on the potential market for or value of the copyrighted work. In this situation, the fourth factor is most significant and supports the conclusion that CCS’s use of the materials is not a fair use.
Copyright Cengage Learning. Powered by Cognero. Page 12