Preview Extract
CHAPTER 28-INTELLECTUAL PROPERTY
TRUE/FALSE
1. A patent is available for an idea as well as a tangible application.
Answer: False
2. A copyright is valid for 28 years after it is obtained and can be renewed for another 28
years.
Answer: False
3. Provisional patents are good for one year.
Answer: True
4. A design patent protects the appearance of an item and is valid for 14 years.
Answer: True
5. Martina developed a new type of apple tree which could be reproduced through grafting.
She cannot protect her rights in this tree by obtaining a plant patent since the tree cannot be
reproduced by planting its seeds.
Answer: False
6. In a recent case, In re Nuijten, the U.S. appeals court ruled that a method of encoding
additional information on electronic signals emitted from digital audio files was not
patentable because, although useful, the method was not a mechanical, electrical, or chemical
invention, a process, a machine, or the composition of matter.
Answer: True
7. Unlike with patents, the ideas underlying copyrighted material need not be novel.
Answer: True
8. Under the "fair use doctrine," instructors cannot be liable for copyright violations.
Answer: False
9. Southern Bar-B-Q owns a special, secret recipe for sauce which it guards because it gives
the restaurant a competitive advantage. If Mort willfully misappropriates the recipe, a court
may hold him liable to Southern for double damages.
Answer: True
10. The name “Johnson Garage Doors” cannot be a trademark because a surname is already
being used and other people have the right to continue to use the name.
Answer: False
11. The Supreme Court has held that parody of copyrighted material is a per se violation of
copyright law.
Answer: False
12. Christy and Sylvester trade movies by downloading each other’s movie files. If the
copyrighted material has a retail value greater than $1,000, Christy and Sylvester are subject
to criminal penalties under the No Electronic Theft Act, even if they had no profit motive in
reproducing the movies.
Answer: True
13. If a trademarked name acquires a generic meaning, the owner of the trademark loses
protection.
Answer: True
14. In hopes of speeding up the approval process and making it more accurate, the Patent and
Trademark Office has begun a pilot program which allows anyone to participate in the patent
approval process.
Answer: True
15. A color cannot be trademarked since it cannot be kept from use by other businesses.
Answer: False
MULTIPLE CHOICE
1. The requirements for a patent include all EXCEPT:
a. the invention must be novel.
b. the invention must be nonobvious.
c. the invention must be commercially valuable.
d. the invention must be useful.
Answer: C
2. The advantages of trademark registration include all EXCEPT:
a. potential damages are higher.
b. after five years the mark becomes almost impossible to challenge.
c. it allows the trademark owner to use the TM symbol to put others on notice of the
protection.
d. the mark is valid nationally.
Answer: C
3. Which of the following is correct?
a. A copyright can be renewed once it expires.
b. A patent can be renewed once it expires.
c. A trademark can be renewed as long as the mark is still in use.
d. None of the above.
Answer: C
4. In order for a copyright holder to collect money damages from a person who used
copyrighted material, it must be proven that:
a. the infringement was intentional.
b. the copyright holder sustained more than $500 in actual damages.
c. the copyrighted material contained the copyright symbol, name of the copyright holder,
and the year of copyright.
d. None of the above.
Answer: D
5. Janice wrote a song called "Feelings of Love." She wrote the piano score and lyrics for a
class she was taking at college and turned it into her professor.
a. Janice's song was automatically copyrighted when she wrote it down on paper.
b. If Janice wishes to enforce her copyright, she must first register her song with the
Copyright Office.
c. Both of the above are correct.
d. Neither a nor b.
Answer: C
6. The Basic Books, Inc. v. Kinko's Graphic Corp. case held:
a. professors could print and sell lengthy course packets of copyrighted material under the
"fair use" doctrine.
b. professors could not print and sell lengthy course packets of copyrighted material under the
"fair use" doctrine.
c. professors could not use commercial printing companies under the "fair use" doctrine.
d. None of the above.
Answer: B
7. The Good Housekeeping Seal of Approval is an example of a:
a. trademark.
b. service mark.
c. collective mark.
d. certification mark.
Answer: D
8. Which of the following words could be registered as a trademark?
a. Crunchy peanut butter.
b. Low-fat peanut butter.
c. Green peas.
d. yStar peanuts.
Answer: D
9. Intellectual property:
a. producers are likely to be adequately paid in the free market.
b. production is not subsidized by the government.
c. typically is expensive to produce but cheap to reproduce and transmit.
d. typically is expensive to produce, copy, and transmit.
Answer: C
10. Richard wrote a song called "College Days." He copyrighted the composition and had it
professionally printed. A couple years later he was attending a business meeting about 1500
miles from his home. While sitting in a nightclub, he heard a small local band perform a song
called "College Memories." The music and words were extremely similar to his song. The
composer of "College Memories" claims he never heard of Richard's song and that she is
offended he would accuse her of stealing his work. If Richard wishes to sue for copyright
infringement, he must prove:
a. only that his song and the infringer's song are substantially the same.
b. that his work was original, and the infringer actually copied his work or that the infringer
had access to his song and that the two works are substantially the same.
c. that he sustained money damages as a result of the infringement.
d. that he registered the song for a copyright.
Answer: B
11. If Cub Cadet wins a trademark infringement suit by proving the defendant’s trademark,
Kub Kadet, is likely to deceive customers about who made the goods, Cub Cadet is entitled
to:
a. up to three times actual damages.
b. an injunction to prevent further infringement.
c. any profits Kub Kadet made on its infringing product.
d. All of the above.
Answer: D
12. AVCO used a famous registered trademark of BNC, Inc. in a manner that reduced its
value. This is a violation of the:
a. Federal Fair Use Act.
b. Federal Trademark Dilution Act.
c. Federal Trade Protection Act.
d. Cleveland/Myer Act.
Answer: B
13. What is the name of the treaty that allows American patents to be recognized and
enforced in member countries?
a. The Paris Convention for the Protection of Industrial Property.
b. The International Treaty of Trademarks and Patents.
c. The World Agreement of London.
d. The Berne Convention.
Answer: A
14. Jack goes to Fast Copy Center and pays to have 40 copies of a textbook made. Jack then
sells the photocopied versions of the book to fellow students for $60 a copy (as opposed to
the $95 textbook price). The textbook author learns of this and sues Jack and the copy center.
Which statement is correct?
a. Jack and the copy center are both liable to the author.
b. Jack is liable to the author but the copy center is not.
c. The copy center is liable to the author but Jack is not.
d. Neither the copy center nor Jack is liable to the author.
Answer: A
15. A college professor copies seven chapters from a book called "How to Get Better
Grades—A Creative Approach to College Success!" There are ten chapters in the book. She
incorporates this material into a packet of material that is printed in her college's copy center.
The packet is then placed in the local book store and is placed on the required materials list
for students to purchase. The author of the book on getting better grades believes the
professor has violated his copyright.
a. The author is right. The professor should not have copied the chapters and placed them for
sale in the bookstore.
b. The author is technically correct. However, even though an infringement occurred, he
cannot sue the professor since educational personnel are exempt from liability under
copyright law.
c. The author is not correct. Under the "fair use doctrine" a college professor can copy
material and distribute it to students for educational purposes.
d. The author is not correct. It does not appear that the professor actually made any money
from the alleged copyright infringement.
Answer: A
16. Monic, a college professor, makes 30 photocopies of a magazine article and passes the
article out to her students. The students are assigned to read the article and write an opinion
paper about it. Has Monic violated copyright law?
a. Yes. Though the author will probably not enforce his or her rights under this situation,
Monic has technically violated federal copyright law.
b. Yes. Though educators have a right under the "fair use doctrine" to make limited use of
copyrighted materials, Monic violated the law when she made photocopies of an entire article
and distributed them to her students.
c. No. Monic has acted within the fair use doctrine.
d. No, as up to 50 photocopies of articles are always permissible.
Answer: C
17. Ernest invents a novel, useful, nonobvious product. He:
a. must apply for a patent within one year of selling the product commercially.
b. is entitled to a patent over someone else who invents the same product if he is the first to
file an application.
c. may receive patent protection for two years by filing a simpler, shorter, cheaper provisional
patent application while he is working on his complex, regular patent application.
d. may sell his product for up to five years to see how well it sells before going through the
complex process of filing a patent application with the PTO Office.
Answer: A
18. James and his band played a very familiar song. However, they made up different words
for the song that were intended to be funny. James's version of the popular song with different
words is known as:
a. a "knock off."
b. a parody.
c. a "mockarama."
d. a "link."
Answer: B
19. Jason and Stacey go to the movie theater and decide to use a camcorder to film the show
so they can watch it again with their friends later at home. They have:
a. made an ethical, legal, wise economic decision since the cost of viewing the movie in the
theater again is too high for their limited budget.
b. violated the Family Entertainment and Copyright Act, and committed a criminal offense.
c. violated the No Electronic Theft Act.
d. committed an ethical but illegal act by violating the Digital Millennium Copyright Act.
Answer: B
20. International copyright protection:
a. is automatic for works created in member countries of the Berne Convention.
b. is granted for the life of the author plus 70 years under the Berne Convention.
c. is not yet available for computer programs.
d. lacks any enforcement capability for overseas infringement of works authored in the
United States.
Answer: A
21. McDonald's famous golden arches and other marks used by the company illustrate a:
a. suggestive mark.
b. service mark.
c. certification mark.
d. collective mark.
Answer: B
22. Victoria registered a trademark under the Lanham Act. Six years later Don noticed
Victoria's trademark and filed a lawsuit to enjoin her from using it. He proved he had
registered the mark in several states more than ten years before Victoria obtained her
trademark. Will Don prevail?
a. Yes. Victoria should have conducted a better search of trademarks registered under state
laws.
b. Yes. Federal law specifically states a federal trademark is not valid for any lawful owner of
the same mark under state law.
c. No. Don will not prevail and Victoria can continue to use the mark because of the time
involved.
d. None of the above.
Answer: C
23. Which of the following started out as a trademark name?
a. Zipper.
b. Linoleum.
c. Nylon.
d. All the above.
Answer: D
24. A company's trade secret lasts for:
a. 20 years after the application is filed.
b. 70 years after the death of the creator.
c. 10 years, but it can be renewed for an unlimited number of terms as long as it is used.
d. as long as it is kept confidential.
Answer: D
25. A trademark lasts for:
a. 20 years after the application is filed.
b. 70 years after the death of the creator.
c. 10 years, but it can be renewed for an unlimited number of terms as long as it is used.
d. as long as it is kept confidential.
Answer: C
ESSAY
1. Rick wrote a song entitled "Wonderful." At the bottom of the first page of music he wrote
"© 1990 by Rick Reed." Four months later a local band was playing his song at a bar. Rick
felt that the bar was an inappropriate setting for his music. What is his remedy?
Answer: Musical works are protected by the Copyright Act. Thus, as a creator of the song,
Rick has the benefit of copyright protection. Moreover, Rick has provided public notice of his
copyright by indicating the copyright symbol, the date, and his name on the music. If he has
registered the copyright with the Library of Congress, Rick's recourse is to bring an action for
copyright infringement against the band for using the music without permission. Rick will be
entitled to an injunction ordering the band to refrain from playing his song and possibly
damages and profits earned by the band's use of the song. Penalties for intentional copyright
infringement are heavier than for unintentional violations, and the presence of a copyright
notice is evidence that the infringer's actions were intentional.
2. Explain what a domain name is. Discuss if and how a domain name can be registered as a
trademark or if a trademark can be registered as a domain name.
Answer: A domain name is an Internet address, and about 50 million have been registered.
The Patent and Trademark Office will issue a trademark of a domain name only for services
offered via the Internet. It will not trademark a domain name that is merely an address that
does not identify the service provided. Management of the Internet, as well as allocation of
domain names, is in the hands of a private, nonprofit, international organization, the Internet
Corporation for Assigned Names and Numbers (ICANN). To bring a case under the ICANN
policy, the plaintiff must allege that the domain name creates confusion because it is similar
to a registered trademark, the defendant has no legitimate reason to use the domain name, and
the respondent registered the domain name in bad faith. If the plaintiff wins, it is entitled to
either take over the domain name or cancel it.
3. Identify the main provisions of the Digital Millennium Copyright Act and two arguments
opponents of the Act raise.
Answer: The Digital Millennium Copyright Act (DMCA) was passed to protect legitimate
businesses from copyright pirates. The Act provides that: (a) it is illegal to delete copyright
information, such as the name of the author or the title of the article, or to distribute false
copyright information; (b) it is illegal to circumvent encryption or scrambling devices that
protect copyrighted works; and (c) it is illegal to distribute tools and technologies used to
circumvent encryption devices. Opponents of the Act allege that it interferes with legal
activities, such as the copying of copy-protected CDs under the fair use doctrine. Also,
opponents allege that the DMCA interferes with legitimate scientific research.
4. List the four different types of "marks" that can be protected under trademark law. Explain
how each mark is used.
Answer: A trademark is any combination of words and symbols that a business uses to
identify its products and services and distinguish them from others. Trademarks are important
to both businesses and consumers. Often, the terms "trademark" or "mark" are used to refer to
both trademarks and service marks. Technically, though, a trademark is affixed to goods in
interstate commerce A service mark identifies services, not products. For example, Burger
King is a service mark. Certification marks are words or symbols used by a person or
organization to verify that certain products or services produced by others meet certain
standards. An example of a certification mark would be the Good Housekeeping Seal of
Approval. A collective mark is used to identify a group, such as the Rotary or Boy Scouts.
5. Briefly discuss a patent, copyright, and trademark.
Answer: Patent – Patent is a federal right of exclusive use which may be granted to inventors.
Patents may be of three types: utility, design, and plant. Utility patents may protect processes,
machines, or compositions of matter. Patentable creations must be novel, nonobvious, and
useful. A patent gives the owner the exclusive right to make, use, license, sell, or assign the
patent for a period of 20 years from the date of filing the application for the patent (14 years
from the date of issuance for a design patent).
Copyright – Copyright is a federal right which protects artistic or literary works including
literature, music, plays, photographs, motion pictures, recordings, and to some extent
computer programs. Copyright protects the particular tangible expression of an idea, but not
the underlying idea or method of operation. The federal act allows copyright without
registration but will limit recourse if the work was not registered. The duration of copyright is
the life of the author plus 70 years. For a corporate owner, copyright lasts 95 years from
publication or 120 years from creation.
Trademark – A trademark is a "mark," or a combination of words and symbols, used in
conjunction with a trade or business which distinguishes that trade or business and the goods
or services thereof from those of others. The trademark is valid for ten years, but can be
renewed for an unlimited number of terms as long as the mark is still being used. If the mark
or name becomes a generic term, trademark protection of the mark or name is lost.
6. Derrick buys a CD, but after listening to it, decides he doesn’t like the music. May he
legally sell the CD to someone else? If he thinks his cousin would enjoy the music, may he
legally copy the CD for her?
Answer: Under the first sale doctrine, Derrick has the legal right to sell the CD or otherwise
dispose of it. However, the first sale doctrine does not allow the owner to make a copy of a
copyrighted work. Copying and giving away a copy of the CD would be unfair to the owner
of the copyright, who would not receive compensation for the intellectual property rights.
Test Bank For Introduction to Business Law
Jeffrey F. Beatty, Susan S. Samuelson
9781133188155
