Business Law: Chapter 8

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1. 
U.S. Constitution
 
Article 1,
"To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries."
 
2. 
Why has intellectual property become so important?
 
The value of many corporations is based primarily on I.P.
 
3. 
Original, Inc. sells its product under the name "Phido." Quik Corporation begins to market a similar product under the name "Fido." This is most likely

A. a theft of trade secrets
B. copyright infringement
C. patent infringement
D. trademark infringement
 
D. trademark infringement
 
4. 
Trademark
 
Any distinctive word, name, symbol, or device (image or appearance), or combination that an entity uses to distinguish its goods or services from those of others. The owner has exclusive right to use that mark or trade dress.
 
5. 
Trademark: How acquired
 
-At common law, ownership created by use of the mark
-Registration with the appropriate federal or state office gives notice and is permitted if the mark is currently in use or will be within the nex six months
 
6. 
Trademark: Duration
 
-Unlimited as long as product is still in use
-To continue, renew registration between the fifth and sixth years, and every ten years after that
 
7. 
Trademark: Remedy for Infringement
 
-Injunction prohibiting the future use of the mark
-Actual damages plus profits received by the aprty who infringed (can be increased under the Lanham Act)
-Destruction of articles that infringed
-Plus costs and attorney's fees
 
8. 
Trademark: Remedy for Infringement
 
-Injunction prohibiting the future use of the mark
-Actual damages plus profits received by the aprty who infringed (can be increased under the Lanham Act)
-Destruction of articles that infringed
-Plus costs and attorney's fees
 
9. 
Trademarks and Related Property: Goal
 
-Distinguish product/service from goods of other manufacturers and merchants
-Avoid consumer confusion
 
10. 
Statutory Protection of Trademarks: Lanham Trademark Act (1946)
 
-Enacted to protect companies from losing business to rival companies that use confusingly similar trademarks
-Test: likeliehood of confusion
 
11. 
True/False
A dilution cause of action requires proof that consumers are likely to be confused by a connection between a trademark and its unauthorized use.
 
False: keyword, requires
 
12. 
Statutory Protection of Trademarks: Federal Trademark Dilution Act (1995)
 
-Creates cause of action regardless of competition or confusion based on a "similar" mark
-Test: junior user's mark must actually reduce value of famous mark or lesson its capacity to identify goods
 
13. 
Distinctiveness of Mark
 
-Trademark must be sufficiently distinct
-'Strong' Marks: fanciful, arbitrary, suggestive
-English Leather, Dairy Queen, Xerox, Apple
-Secondary Meaning: personal names, descriptive and geographic terms do not typically receive protection...until/unless they receive secondary meaning
-London Fog
-Generic terms receive no protection unless acquire generic use
-escalator, aspirin, trampoline, raisin bran, nylon, corn flakes, linoleum, thermos
 
14. 
Aspirin, thermos, escalator, and nylon are all examples of:

A. imported products not subject to U.S. trademark laws
B. words that originated as trademarks, but that are now generic names
C. products invented before 1901, and not eligible for trademark protection
 
B. words that originated as trademarks, but that are now generic names
 
15. 
Trade Dress
 
-Refers to the image and overall appearance of the product or service
-Same protection as a trademark
-Issue is consumer confusion
 
16. 
Service Marks
 
-Similar to trademark but used to distinguish services of one person/company from another
-"Fly the Friendly Skies" (United)
 
17. 
Trade Name
 
A name of a business or one of its products which, by use of the name and public reputation, identifies the product as that of the business
-Applies to companies, whereas trademarks apply to products.
-Protected by common law
-Can be registered if also the name of the company's trademarked products
 
18. 
USA Transport Company uses a mark associated with its name to distinguish its services from those of other transport firms. In this context, what may seem like a trade name is also

A. a trade mark
B. a service mark
C. trade dress
 
B. a service mark
 
19. 
Counterfeit Goods
 
-Stop Counterfeitin in Manufactured Goods Act
-Makes it a crime to: traffic intentionally in counterfeit goods; knowingly use counterfeit make in connection with goods
 
20. 
Cyber Marks: Cybersquatting
 
When someone registers a domain name that is the same as or is confusingly similar to the trademark of another entitiy
 
21. 
Cyber Marks: Anti-Cybersquatting Cosumer Protection Act (1999)
 
-Amended the Lanham Act to make illegal to register or use a domain name that is confusingly similar to the trademark of another or to act with a bad faith intent
 
22. 
Problems of cybersquatting
 
-More top level domain names available
-More domain name registrars
-More companies registering
-Typosquatting
 
23. 
Cyber Marks: Licensing
 
-Allows Use of trademark
-And other intellectual property
-Often result of dispute
 
24. 
"Obama Signs Patent Overhaul Bill," npr.org, Sept. 16, 2011
 
-Changes our system to a first to file
-first to file, gets patent
-not the person to invent it
-that is the standard in most of the world
 
25. 
Patent
 
A grant from the government that gives an inventor exclusive rights to an invention
 
26. 
Patent: How to acquire
 
By filing a patent application with the U.S. Patent and Trademark Office and receiving its approval
 
27. 
Patent: Duration
 
Twenty years from the date of the application; for design patents, 14 years
 
28. 
Patent: Remedy for Infringement
 
Monetary damages, including royalties and lost profits, plus attorneys' fees. Damages may be tripled for intentional infringement
 
29. 
Patents: Public Policy
 
-The patent system is a deal between the US and inventors
-Inventors agree to disclose their inventions, thereby benefiting the economy and scoiety in general
-The quid pro quo is a government-granted monopoly with respect to the invention for a limited period of time
 
30. 
Patents: In order to be considered
 
Must prove that the invention, discovery, process, or design is:
-novel
-useful
-not obvious
 
31. 
Examples of Patents for Business Processes
 
-Priceline.com: auction system
-About.com: data mining system
-Amazon.com: one-click ordering system
 
32. 
Patent Infringement
 
-Litigation expensive
-Often results in licensing/royalties
 
33. 
-Max plots a new Batman adventure and carefully and skillfully imitates the art of DC Comics to create an authentic-looking Batman comic
-Max is not affiliated with the owners of the copyright to Batman
-Can Max publish the comic without infringing on the owner's copyright?
 
Probably not
Can't copy another's expression
 
34. 
What if Max had been raised on a largely deserted island and independently came up with the idea of a superhero crime-fighter attired in tights and cape that was modeled on the bats that lived on the island? Can Max publish the comic without infringing on the owners' copyright?
 
Probably
Can only copyright the expression of an idea, not the idea itself
 
35. 
Copyright protection is not available for...
 
any "idea, procedure, process, system, method of operation, concept, principle, or discovery."
 
36. 
Copyright
 
The right of an author or originator of a literary or artistic work, or other production that falls within a specified category to have the exclusive use of that work for a given period of time
 
37. 
Copyright: How acquired
 
Automatic (once the work or creation is put in tangible form). Only the expression of an idea (and not the idea itself) can be protected by copyright.
 
38. 
Copyright: Duration
 
For authors: the life of the author plus 70 years
 
39. 
Copyright: Remedy for Infringement
 
Actual damages plus profits received by the party who infringed or statutory damages under the Copyright Act, plus costs and attorneys' fees in either situation
 
40. 
Copyright of 1976, as amended
 
-Works can be protected by registration at U.S. Copyright Office
 
41. 
Copyright: "Works Made for Hire"
 
Unless agreed otherwise, the rights to copyrighted works created by an employee within the scope of employment, remain with the employer.
 
42. 
Copyright Symbol: Required?
 
-It used to be required, but it is now optional
-It's use may be important, however, because it informs the public that the work is protected by copyright, identifies the copyright owner, and shows the year of first publication
 
43. 
Copyright: Law Grants
 
The right to:
-reproduce the work
-create derivative works based on the original
-perform the work publicly
-display the copyrighted work publicly
 
44. 
Copyright: Compilations
 
Compilations of facts are copyrightable but the compilation must be "original"
 
45. 
George Harrison copies the song He's So Fie and sells it to Phil Spector, who publishes it. Based on these facts,

A. only George commits copyright infringement
B. only Phil commits copyright infringement
C. both George and Phil commit copyright infringement
D. none of the above
 
C. both George and Phil commit copyright infringement
 
46. 
True/False
Under the "Fair Use" exception, a person can reproduce copyrighted material on a limited basis without paying royalties for purposes such as teaching, including multiple copies for classroom use.
 
True
 
47. 
Copyright Infringement: "Fair Use"
 
-Provides for exception to liability from reproduction of copyright under the "fair use" doctrine when material is used for
-criticism
-comment
-news
-teaching
-research
 
48. 
Copyright: Computer Software Copyright Act (1980)
 
-classifies computer software as a "literary work"
 
49. 
True/False
Intentionally distributing pirated, copyrighted works to others is a crime only if profit is realized from the exchange.
 
False
 
50. 
Digital Copyrights: No Electronic Theft Act (1997)
 
Extends criminal liability for piracy of copyrighted materials-even if no profit
 
51. 
Digital Copyrights: Digital Millennium Copyright Act (1998)
 
-Provides civil and criminal penalties to circumvent encryption software (like DVD)
-Limits ISP liability for subscriber act
-'Fair Use' Exceptions for Libraries, universities and others
 
52. 
Trade Secret
 
Any information that a business possesses and that gives the business an advantage over competitors (including formulas, lists, patterns, plans, processes, and programs)
 
53. 
Trade Secret: How Acquired
 
Through the originality and development of the information and processes that constitute the business secret and are unknown to others
 
54. 
Trade Secret: Duration
 
Unlimited, so long as not revealed to others.
 
55. 
Trade Secret: Remedy for Infringement
 
Monetary damages for misappropriation; punitive damages if willful; plus costs and attorneys' fees
 
56. 
Examples of Business Trade Secrets
 
-customer lists
-business plans
-research and development
-formulae
-pricing information
-marketing techniques
 
57. 
Uniform Trade Secrets Act (1979)
 
state uniform law that codifies common law
 
58. 
Economic Espionage Act (1996)
 
theft of trade secrets is a federal crime
 
59. 
International Protection for Intellectual Property: Berne Conventon
 
-Every country who signed the agreement must recognize copyright
-World Intellectual Property Organization (WIPO) Copyright Treaty 1996
 
60. 
International Protection for Intellectual Property: TRIPS Agreement of 1994
 
-created the World Trade Organization
-Each member country must include in its domestic laws broad I.P. protection and enforcement measures
-Member nations may not discriminate agains foreigh owners of O.P.
 
61. 
International Protection for Intellectual Property: Madrid Protocol
 
-signed by 61 countries, including U.S.
-allows a single application for simultaneous trademark protection in all member countries
 
62. 
Ellen publishes a book titled First Place, which incldes a chapter from Frank's copyrighted book Great Racecar Drivers without his permission. Ellen's use of the chapter is actionable

A. only if consumers are confused
B. only if Ellen and Frank are competitors
C. only if consumers are confused and Ellen and Frank are competitors
D. regardless of whether consumers are confused or Ellen and Frank are competitors
 
D. regardless of whether consumers are confused or Ellen and Frank are competitors
 
63. 
Jill develops a new expresso machine, which she names "Quik Shot." She also writes the operating manual to be included with each final product. Jill could obtain trademark protection for

A. the expresso machine
B. the name
C. the operating manual
D. the espresso machine, the name, and the operating manual
 
B. the name
 
64. 
Jill develops a new expresso machine, which she names "Quik Shot." She also writes the operating manual to be included with each final product. Jill could obtain copyright protection for A. the expresso machine
B. the name
C. the operating manual
D. the espresso machine, the name, and the operating manual
 
C. the operating manual
 
65. 
Jill develops a new expresso machine, which she names "Quik Shot." She also writes the operating manual to be included with each final product. Jill could obtain patent protection for A. the expresso machine
B. the name
C. the operating manual
D. the espresso machine, the name, and the operating manual
 
A. the espresso machine
 
66. 
Peak Corporation hacks into Quality Data Company's computers and downloads confidential customer lists. There is no contract between Peak and Quality regarding the data. This is

A. a theft of trade secrets
B. patent infringement
C trademark infringement
 
A. theft of trade secrets