Business Law - Chapter 12 Intellectual Property

The laws of intellectual property protect property that is primarily the result of mental creativity rather than physical effort. 
TRUE

Intellectual property consists of the fruits of someone's mind. The laws of intellectual property protect property that is primarily the result of mental creativity rather than physical effort.

Network Solutions, Inc. is funded by the National Science Foundation and is responsible for registering domain names on the Internet. 
TRUE

Network Solutions, Inc. (NSI), which is funded by the National Science Foundation, is responsible for registering domain names on the Internet.

As discussed in the case in the text, Toys "R" Us, Inc. v. Canarsie Kiddie Shop, Inc., evidence of actual confusion is a prerequisite for the plaintiff to recover in a trademark infringement action. 
FALSE

Evidence of actual confusion is a strong indication that there is a likelihood of confusion. It is not, however, a prerequisite for the plaintiff to recover.

A person who applies for a domain name on the Internet will be granted the domain name so long as no one else holds that name. 
TRUE

Network Solutions, Inc. (NSI), which is funded by the National Science Foundation, is responsible for registering domain names. Anyone seeking to register a domain name must now state in the application that the name will not infringe on anyone else's intellectual property rights and that the registrant intends to use it on a regular basis on the Internet.

Trade dress is entitled to the same protection as a trademark. 
TRUE

Trade dress is entitled to the same protection as a trademark.

Copyrights protect the expression of creative ideas. 
TRUE

Copyrights protect the expression of creative ideas.

Copyrights protect ideas themselves. 
FALSE

Copyrights do not protect ideas themselves but only the fixed form of expressing them, such as books, periodicals, musical compositions, plays, motion pictures, sound recordings, lectures, works of art, and computer programs.

A service mark is a mark licensed by a group that has established certain criteria for use of the mark such as "U.L. Tested" or "Good Housekeeping Seal of Approval." 
FALSE

A certification mark is a mark licensed by a group that has established certain criteria for use of the mark such as "U.L. Tested" or "Good Housekeeping Seal of Approval."

A teacher cannot be held liable for copyright infringement under the Fair Use Doctrine so long as copies are only used for educational purposes. 
FALSE

In determining whether the fair-use doctrine provides a valid defense to a claim of copyright infringement, Section 107 of the Copyright Act requires that the court weigh the following four factors: (1) The purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes. (2) The nature of the copyrighted work. (3) The amount and substantiality of the portion used in relation to the copyrighted work as a whole, and (4) The effect of the use on the potential market for or value of the copyrighted work.

Tying arrangements are illegal. 
TRUE

The only restrictions on the patent holder are that he or she may not use the patent for an illegal purpose such as a tying arrangement or cross-licensing. A tying arrangement occurs when the holder issues a license to use the patented object only if the licensee agrees to buy some non-patented product from the holder.

An invention might be considered a trade secret. 
TRUE

A trade secret is a process, product, method of operation, or compilation of information that gives a businessperson an advantage over his or her competitors. Inventions and designs might be considered trade secrets.

Which of the following consists of the fruits of one's mind? 
A. Theoretical property
B. Cognitive property
C. Intellectual property
D. Protected property
E. Tradable property

Intellectual property consists of the fruits of someone's mind.

A[n] ________ is a distinctive mark, word, design, picture, or arrangement that is used by a producer in conjunction with a product and tends to cause consumers to identify the product with the producer. 
A. Copyright
B. Patent
C. Trade secret
D. Trademark
E. Intellamark

A trademark is a distinctive mark, word, design, picture, or arrangement used with a product that helps consumers identify the product with the producer.

Which of the following is true regarding whether the shape of a product or package may be a trademark? 
A. The shape of a product may be a trademark if it is nonfunctional but the shape of a package may not be a trademark.
B. The shape of a product may be a trademark if it is functional but the shape of a package may not be a trademark.
C. The shape of a product or package may be a trademark if it is functional.
D. The shape of a product or package may be a trademark if it is nonfunctional.
E. The shape of a package may be a trademark if it is nonfunctional, but the shape of a product may not be a trademark.

The shape of a product or package may be a trademark if it is nonfunctional.

Which of the following is an example of a product developing secondary meaning? 
A. Customers identify a certain color as identifying a company's product.
B. Customers hear of the term through a secondary source such as media advertising.
C. A company has illegally misappropriated a trademark and has used it in second place to identify a product.
D. A company has agreed to only use a trademark secondarily after the primary user has abandoned it.
E. None of the above.

In Qualitex Co. v. Jacobson Products Co., Justice Breyer, writing for a majority of the Supreme Court, noted that a color, if unusual enough in the context, could in fact come to identify goods with their source, just as descriptive words on a product could.

Under which of the following is a trademark protected under state common law? 
A. If it is used interstate.
B. If it is used intrastate.
C. If it is used commercially.
D. If it is used intrastate and also commercially.
E. A trademark cannot be protected under state common law.

A trademark used intrastate is protected under state common law.

To be protected in ____________ use, a trademark must be registered with the U.S. Patent Office under the Lanham Act of 1947. 
A. Interstate
B. Intrastate
C. Interstate and intrastate
D. Commercial
E. Interstate, intrastate, and commercial

To be protected in interstate use, a trademark must be registered with the U.S. Patent and Trademark Office (USPTO) under the Lanham Act of 1947.

If a trademark is registered, what may the owner obtain in the event of infringement from a person who used the trademark to pass off goods as being those of the mark owner? 
A. Damages only.
B. An injunction prohibiting the infringer from using the mark only.
C. An additional amount of damages computed as a multiplier of 5 times the original damages.
D. Damages, an injunction prohibiting the infringer from using the mark, and additional damages based on a multiplier of 5 times the original damages.
E. Damages and an injunction prohibiting the infringer from using the mark.

If a mark is registered, the holder of the mark may recover damages from an infringer who uses it to pass off goods as being those of the mark owner. The owner may also obtain an injunction prohibiting the infringer from using the mark.

If a trademark is unregistered, which of the following may the holder recover when an infringer uses the mark to pass off goods as being those of the mark owner? 
A. Only damages.
B. Only an injunction prohibiting the infringer from using the mark.
C. An additional amount of damages computed as a multiplier of 5 times the original damages.
D. Damages, an injunction prohibiting the infringer from using the mark, and additional damages based on a multiplier of 5 times the original damages.
E. Damages and an injunction prohibiting the infringer from using the mark.

If a mark is registered, the holder of the mark may recover damages from an infringer who uses it to pass off goods as being those of the mark owner. The owner may also obtain an injunction prohibiting the infringer from using the mark. (Only the latter remedy is available for an unregistered mark.)

Once a trademark is registered today, when must it be renewed for the first time? 
A. Between the first and second year.
B. Between the second and third year.
C. Between the third and fourth year.
D. Between the fourth and fifth year.
E. Between the fifth and sixth year.

Once a mark has been registered, the registration must be renewed between the fifth and sixth years. After that renewal, the mark holder must renew every 10 years. (If the mark was initially registered before 1990, renewal is necessary only every 20 years.)

After the initial renewal, assuming a trademark was initially registered after 1990, how often must the trademark be renewed? 
A. Every nine years.
B. Every ten years.
C. Every eleven years.
D. Every twelve years.
E. Every thirteen years.

Once a mark has been registered, the registration must be renewed between the fifth and sixth years. After that renewal, the mark holder must renew every 10 years. (If the mark was initially registered before 1990, renewal is necessary only every 20 years.)

Which of the following is a mark used in conjunction with a service? 
A. Product trademark
B. Collective mark
C. Certification mark
D. Service mark
E. Physical activity mark

A service mark is a mark used in conjunction with a service, such as the name "AT&T" painted on a vehicle that provides repair services for AT&T phone users.

Which of the following is mark affixed to a good, its packaging, or its labeling? 
A. Product trademark
B. Collective mark
C. Certification mark
D. Service mark
E. Physical activity mark

A product trademark is a mark affixed to a good, its packaging, or its labeling, such as the Nike "swoosh."

Which of the following is a mark identifying the producers as belonging to a larger group, such as a trade union? 
A. Product trademark
B. Collective mark
C. Certification mark
D. Service mark
E. Physical activity mark

A collective mark is a mark identifying the producers as belonging to a larger group, such as a trade union.

Which of the following is a mark licensed by a group that has established certain criteria for use of the mark, such as "U.L. Tested" or "Good housekeeping Seal of Approval"? 
A. Product trademark
B. Collective mark
C. Certification mark
D. Service mark
E. Physical activity mark

A certification mark is a mark licensed by a group that has established certain criteria for use of the mark, such as "U.L. Tested" or "Good Housekeeping Seal of Approval."

As referenced in the case in the text, Toys "R" Us, Inc. v. Canarsie Kiddie Shop, Inc., which of the following is true regarding generic terms? 
A. Generic terms are not eligible for protection as trademarks.
B. The rule that generic terms are ineligible for protection as trademarks does not apply to words that designate an entire species.
C. The rule that generic terms are ineligible for protection as trademarks does not apply to sub-classifications or varieties of goods.
D. Generic terms are eligible for protection as trademarks only if they have been used for at least ten years.
E. Generic terms are eligible for protection as trademarks only if they have been used for at least seven years.

A generic term is entitled to no trademark protection whatsoever, since any manufacturer or seller has the right to call a product by its name.

In which of the following orders of ascending strength may marks fall? 
A. Generic, suggestive, descriptive, arbitrary or fanciful.
B. Descriptive, generic, suggestive, arbitrary or fanciful.
C. Arbitrary or fanciful, generic, descriptive, suggestive.
D. Generic, descriptive, suggestive, arbitrary or fanciful.
E. Suggestive, generic, descriptive, arbitrary or fanciful.

A mark can fall into one of four general categories which, in order of ascending strength, are: (1) generic; (2) descriptive; (3) suggestive; and (4) arbitrary or fanciful.

A _______________ mark identifies a significant characteristic of the product but is not the common name of the product. 
A. Suggestive
B. Arbitrary or fanciful
C. Generic
D. Descriptive
E. Common

A descriptive mark identifies a significant characteristic of the product, but is not the common name of the product.

To obtain trademark protection, a descriptive term must have attained ____________. 
A. Secondary meaning
B. Primary meaning
C. Primary application
D. Secondary application
E. Secondary acknowledgement

To achieve trademark protection, a descriptive term must have attained secondary meaning, that is, it must have become distinctive of the applicant's goods in commerce.

A ____________ mark is one that requires imagination, thought, and perception to reach a conclusion as to the nature of the goods. 
A. Generic
B. Descriptive
C. Suggestive
D. Conclusory
E. Artful

A suggestive mark is one that requires imagination, thought, and perception to reach a conclusion as to the nature of the goods.

When trademark infringement is alleged, what is the effect of actual confusion? 
A. It is not a prerequisite for the plaintiff to recover but it is a strong indication that there is a likelihood of confusion.
B. It is a prerequisite for the plaintiff to recover.
C. It is a weak indication that there is a likelihood of confusion.
D. It is a strong indication that the plaintiff will bridge the gap.
E. It is a strong indication that there is a likelihood of confusion and also that the plaintiff will bridge the gap.

Evidence of actual confusion is a strong indication that there is a likelihood of confusion. It is not, however, a prerequisite for the plaintiff to recover.

Which of the following is the way people and businesses are located on the Web? 
A. Through product names
B. Through Internet names
C. Through domain names
D. Through trademark names
E. Through search engines

Domain names are important because they are the way people and businesses are located on the Web.

With which of the following does a government website address end? 
A. .gov
B. .edu
C. .net
D. .org
E. .com

Most Web sites have two domains. The first-level domain, the one the address ends with, generally identifies the type of site. For example, if it is a government site, it will end in gov.

With which of the following does a network website address end? 
A. .gov
B. .edu
C. .net
D. .org
E. .com

Most Web sites have two domains. The first-level domain, the one the address ends with, generally identifies the type of site. For example, a network site will end in net.

With which of the following does an organization website address end? 
A. .gov
B. .edu
C. .net
D. .org
E. .com

Most Web sites have two domains. The first-level domain, the one the address ends with, generally identifies the type of site. For example, an organization site will end in org.

With which of the following does a business website address end? 
A. .gov
B. .edu
C. .net
D. .org
E. .com

Most Web sites have two domains. The first-level domain, the one the address ends with, generally identifies the type of site. For example, a business website ends in com.

Which of the following is responsible for registering domain names for Internet use? 
A. Internet Solutions, Inc.
B. Domain Names Co.
C. Internet Domain Inc.
D. Network Solutions, Inc.
E. Findability, Inc.

Network Solutions, Inc. (NSI), which is funded by the National Science Foundation, is responsible for registering domain names.

A registrant may lose registration of a domain name for Internet usage by not using it for more than ___________ days. 
A. 30
B. 60
C. 90
D. 120
E. 180

A registrant may lose registration of a domain name by not using it for more than 90 days.

Which of the following provides that a portion of a copyrighted work may be reproduced for purposes of criticism, comment, news reporting, teaching, scholarships, and research? 
A. The Limited Use Doctrine
B. The Copyright Use Doctrine
C. The Fair Use Doctrine
D. The Trade Use Doctrine
E. The Approved Use Doctrine

The fair use doctrine provides that others may reproduce a portion of a copyrighted work for purposes of criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, and research.

Which of the following is true regarding what may be the subject of a patent? 
A. Only products may be the subject of patents.
B. Only processes may be the subject of patents.
C. Only inventions may be the subject of patents.
D. An invention may be the subject of a patent, but a plant produced by asexual reproduction may not be the subject of a patent.
E. A product, a process, an invention, or a plant produced by asexual reproduction may be the subject of a patent.

A patent protects a product, process, invention, machine, or plant produced by asexual reproduction.

Assuming the subject matter of a proposed patent is patentable, which of the following criteria must be satisfied in order for a non-design patent to be granted? 
A. The object of the patent must be novel.
B. The object of the patent must be useful.
C. The object of the patent must be non-obvious.
D. The object of the patent must be both novel and non-obvious.
E. The object of the patent must be novel, useful, and non-obvious.

Assuming the subject matter is patentable, in order for a patent to be granted, the object of the patent must be novel, or new. No one else must have previously made or published the plans for this object. The object must be useful, unless it is a design. It must provide some utility to society. Also, the object must be non-obvious. The invention must not be one that a person of ordinary skill in the trade could have easily discovered.

When a patent is issued for an object, it gives its holder the exclusive right to produce, sell, and use the object of the patent for __________ years from the date of application. 
A. Ten
B. Twenty
C. Thirty
D. Forty
E. Fifty

When a patent is issued for an object, it gives its holder the exclusive right to produce, sell, and use the object of the patent for 20 years from the date of application.

Which of the following is true regarding trade secret protection? 
A. A trade secret is protected from unlawful appropriation by competitors as long as it is kept secret and consists of elements not generally known in the trade.
B. A trade secret is protected from unlawful appropriation by competitors for ten years.
C. A trade secret is protected from unlawful appropriation by competitors for twenty years.
D. A trade secret is protected from unlawful appropriation by competitors for thirty years as long as it is kept secret and consists of elements not generally known in the trade.
E. A trade secret is protected from unlawful appropriation by competitors for seventy years.

A trade secret is protected by the common law from unlawful appropriation by competitors as long as it is kept secret and consists of elements not generally known in the trade.

Which of the following is false regarding trade secret protection? 
A. Competitors may not discover trade secrets by doing reverse engineering.
B. Competitors may discover secrets by going on public tours of plants and observing the use of the trade secret.
C. Lawful discovery of a trade secret means there is no longer a trade secret to be protected.
D. An invention may be considered a trade secret.
E. A design may be considered a trade secret.

Inventions and designs such as Papa John's dough and sauce recipes might be considered trade secrets. Competitors may discover a trade secret by any lawful means, such as by doing reverse engineering or by going on a public plant tour and observing its use. Lawful discovery of a secret means there is no longer a trade secret to be protected.

Which of the following administers international treaties pertaining to the protection of intellectual property? 
A. The United Nations Intellectual Property Association
B. The Federal Intellectual Property Organization
C. The National and World Intellectual Protection Agency
D. The World Intellectual Property Organization
E. There is no organization or agency with that responsibility

The primary international protection for intellectual property is offered through multilateral conventions. These treaties are generally administered by the World Intellectual Property Organization, a specialized agency of the United Nations.

Which of the following is the oldest treaty designed to protect artistic rights? 
A. The Universal Copyright Convention of 1952, as revised in 1971
B. The Paris Convention of 1883
C. The 1994 Agreement on Trade-Related Aspects of Intellectual Property Rights
D. The Berne Convention of 1886
E. The Geneva Convention of 1860

Eighty-one countries are now signatories of the Berne Convention of 1886, the oldest treaty designed to protect artistic rights.

Which of the following was developed by the United Nations as an alternative for countries who wanted to participate in some form of multilateral protection of copyrights, but did not want to agree to the terms of the Berne Convention? 
A. The Universal Copyright Convention
B. The Agreement on Trade-Related Aspects of Intellectual Property Rights
C. The Paris Convention
D. The Signatory Agreement
E. The US-Soviet Agreement

The Universal Copyright Convention (UCC) was developed by the United Nations as an alternative for countries that wanted to participate in some form of multilateral protection of copyrights but did not want to agree to the terms of the Berne Convention.

Which of the following is a principle of The Paris Convention of 1883? 
A. National treatment
B. Nonconditional protection
C. Complex treatment
D. Enforcement priority
E. Treaty affirmation

The Paris Convention of 1883 has three basic principles: (1) national treatment, as defined under the Berne Convention; (2) the right of priority, which allows a national of a member state, 12 months after filing in his or her home nation, to file an application in any other member state and have the date of application be the date of the filing in the home nation; and (3) common rules, which set out minimum standards of protection in all states.

Which of the following was the result in the "Case Opener" involving the lawsuit brought by Papa John's International, Inc. against former franchises? 
A. All claims were allowed to proceed except for claims of trademark infringement which were dismissed with prejudice without leave to replead the claim.
B. All claims were allowed to proceed except for claims of copyright infringement which were dismissed with leave to replead the claim.
C. All claims were dismissed except for claims of copyright infringement.
D. All claims were dismissed.
E. All claims were allowed to proceed.

The court denied the defendant's motion to dismiss with respect to all claims except the copyright claim. The court believed that the plaintiff could prove its case, or at least should have the opportunity to argue its case, in a court of law. The copyright claim was dismissed, but with leave to replead the copyright claim in a matter that clearly aligned the plaintiff's allegation with the legal requirements for copyright violation.

Sally, a friend of yours who just finished college and was hired at the local high school, wants to copy a number of articles from her class. She heard that you are taking business law and asks if you see any problem with her copying the articles. Based on the case in the text, Princeton University Press v. Michigan Document Services, Inc., what would you tell her? 
A. Under the fair use doctrine she is free to copy the articles because they are for educational purposes.
B. Under the fair use doctrine she must get permission from all copyright holders before copying the articles.
C. There are federal Classroom Guidelines on the issue and that you need to know more before you can advise her.
D. There are federal Classroom Guidelines that provide the maximum standards of educational fair use, and she is protected so long as she copies under 200 pages.
E. There are federal Classroom Guidelines that provide the maximum standards of educational fair use, and she is protected so long as she copies under 100 pages.

The federal Classroom Guidelines purport to "state the minimum and not the maximum standards of educational fair use," they do evoke a general idea, at least, of the type of educational copying Congress had in mind. The guidelines allow multiple copies for classroom use provided that several criteria are met.