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Chapter 14
Intellectual Property Rights
N.B.: TYPE indicates that a question is new, modified, or unchanged, as follows.
N A question new to this edition of the Test Bank.
+ A question modified from the previous edition of the Test Bank.
= A question included in the previous edition of the Test Bank.
TRUE/FALSE QUESTIONS
1. More than two hundred years ago, the Declaration of Independence recognized
the importance of protecting creative works.
2. States do not have trademark statutes.
3. Trademarks may be registered only with the federal government.
4. A service mark distinguishes products used by those in public service.
5. A famous trademark may be diluted only by the unauthorized use of an
identical mark.
6. Counterfeit goods copy or otherwise imitate trademarked goods, and they are
in fact sometimes genuine trademarked goods.
7. A trade name can be protected under the common law, but only if it is unusual
or fancifully used.
8. A license permits the use of another’s intellectual property for certain purposes.
9. A patent applicant must demonstrate that an invention is “commercially
practicable” to receive a patent.
10. With a few exceptions, almost anything is patentable.
11. The first person to invent a product obtains the patent rights rather than the first
person to file an application for a patent.
12. For an infringement of copyright to occur, the reproduction must be exactly the
same as the original.
CHAPTER 14: INTELLECTUAL PROPERTY RIGHTS 3
BUSPROG: Reflective AICPA: BB-Legal
13. An exception to liability for copyright infringement is made under the “fair use”
doctrine.
14. All aspects of software are protected by copyright law.
15. Technology has limited the potential for copyright infringement via the Internet.
16. Protection of trade secrets extends both to ideas and to their expression.
17. Production techniques are not trade secrets.
18. The theft of trade secrets is a federal crime.
19. Under the Madrid Protocol, a company can register its trademark in more than
one country with a single application.
20. Under the Anti-Counterfeiting Trade Agreement, member nations are required
to establish border measures that allow officials to search commercial
shipments of imports and exports for counterfeit goods.
MULTIPLE-CHOICE QUESTIONS
1. Savory Bean Company makes and sells a sweet espresso coffee beverage
under the name “Sugar Sugar.” Tropic Roast, Inc., later markets a similar drink
under the name “Sweet Sweet.” This is most likely
a. copyright infringement.
b. patent infringement.
c. trademark infringement.
d. not infringement.
2. Effervescent Egg Cream Company’s trademark is used by Fizzy Drinks without
its owner’s permission. Fizzy’s use of the mark is actionable provided that
a. consumers are confused.
b. Fizzy’s use is intentional.
c. Fizzy and Effervescent are competitors.
d. Effervescent’s mark is registered.
3. In 2014, Cloud Computing Corporation registers its trademark as provided by
federal law. After the first renewal, this registration
a. is renewable every ten years.
b. is renewable every twenty years.
c. runs for the life of the corporation plus seventy years.
d. runs forever.
4. Gold & Sweet Company bottles and sells maple syrup from its plant in
Vermont. On the labels is a logo that states “100% Genuine New England
Maple Syrup Certified by the Northeast Maple Syrup Harvesters Association.”
This logo is
a. a certification mark.
b. none of the choices.
c. a service mark.
d. trade dress.
5. Wendy works as a weather announcer for a TV station under the character
name Weather Wendy. Wendy can register her character’s name as
a. a certification mark.
b. a trade name.
c. a service mark.
d. none of the choices.
6. René operates The Spicy Chocolatier Café chain of restaurants. “The Spicy
Chocolatier Café” is
a. a certification mark.
b. none of the choices.
c. a service mark.
d. a trade name.
7. Metro Movers Miami Corporation allows Metro Movers Milwaukee Company to
use Metro Movers’ trademark as part of its company advertising. This is
a. a license.
b. a likelihood of consumer confusion.
c. a generic use.
d. trademark dilution.
8. GreatGro, Inc., makes genetically modified seeds with properties that are iden-
tical to Hearty Harvest Corporation’s patented seeds, without Hearty Harvest’s
permission. This is most likely
a. copyright infringement.
b. patent infringement.
c. trademark infringement.
d. not infringement.
9. Odell invents “Profits Unbound,” new stock-trading algorithm software, and
applies for a patent. If Odell is granted a patent, his invention will be protected
a. for ten years.
b. for twenty years.
c. for the life of the inventor plus seventy years.
d. forever.
10. NoGas, Inc., designs and makes a non-fuel propulsion system that copies parts
of Omni Momentum Corporation’s designs without Omni’s permission. This is
most likely
a. copyright infringement.
b. patent infringement.
c. trademark infringement.
d. not infringement.
11. In 2014, Kelly writes Like the Wind, a novel about marathoners and ultra
marathoners. Kelly does not register the work with the appropriate government
office. Under federal copyright law, Kelly’s work is protected
a. for ten years.
b. for twenty years.
c. for the life of the author plus seventy years.
d. forever.
12. Edge is a video game featuring interactive extreme sports. The graphics used
in the game are protected by
a. copyright law.
b. patent law.
c. trademark law.
d. none of the choices.
13. Milo publishes a book titled No Equals, which includes a chapter from Paige’s
copyrighted book Olympic Champions. Milo’s use of the chapter is actionable
provided that
a. consumers are confused.
b. Milo’s use is intentional.
c. Milo’s use reproduces Paige’s chapter exactly.
d. Milo does not have Paige’s permission.
14. Giancarlo copies Hedrick’s book, Information Free, in its entirety and sells it to
Justice Fair Books, Inc., without Hedrick’s permission. Justice Fair publishes it
under Giancarlo’s name. This is
a. copyright infringement.
b. fair use.
c. licensing.
d. protected expression.
15. Kamal reproduces Lorena’s copyrighted work “Musica” without paying royalties.
Kamal is most likely excepted from liability for copyright infringement under the
“fair use” doctrine if
a. Kamal copies the entire work.
b. Kamal distributes the copies without charge to the public.
c. Kamal’s use has no effect on the market for Lorena’s work.
d. Kamal’s use is for a commercial purpose.
16. Damien buys a copy of the book Exchange. Later, after reading the book,
Damien sells it to his sister. Under the first sale doctrine, Damien’s sale of the
book is
a. legal.
b. legal only if the copyright has expired.
c. legal only if Damien sells it for less than he paid for it.
d. illegal.
17. Robyn, an employee at Social Media, Inc., is laid off. Before he leaves, he e-
mails Social Media’s marketing campaign to Tweets & Trades Corporation,
Social Media’s competitor, without permission. This is
a. a sneaky but legal method of competing with a business rival.
b. a secretive but lawful way to exact revenge on a supervisor.
c. a simple, legitimate attempt to create a job opportunity.
d. a theft of trade secrets.
18. The idea for “Prices & Profit,” an app that businesses can use to control their
revenue, profits, and payrolls, is protected by
a. copyright law.
b. patent law.
c. trademark law.
d. trade secrets law.
19. Like most successful companies, Pads & Phones, Inc. (P&P), has trade
secrets. The law protects those secrets if
a. P&P employees do not divulge the information to outside parties.
b. P&P employees do not handle confidential documents.
c. P&P employees never leave the company’s employ.
d. the information is unique and has value to a competitor.
20. Siri downloads and sells, in international markets via the Internet, e-textbooks
without the authors’ or publishers’ permission. The international treaty that
applies to pirated copyrighted works being distributed via the Internet is
a. the Federal Trademark Dilution Act.
b. the Madrid Protocol.
c. the Trade-Related Aspects of Intellectual Property Rights agreement.
d. the Anti-Counterfeiting Trade Agreement.
ESSAY QUESTIONS
1. In 2005, Recreation & Relaxation Corporation began making and selling all-
terrain vehicles (ATVs) under the mark “R&R.” Ten years later,
recoveryandrehabilitation.com, Inc., a different company selling medical
equipment and supplies, begins to use “R&R” as part of its URL and registers it
as a domain name. Can Recreation & Relaxation stop
recoveryandrehabilitation.com’s use of “R&R”? If so, what must the ATV maker
show?
CHAPTER 14: INTELLECTUAL PROPERTY RIGHTS 11
2. For five years, clothing makers and marketers Style-One Corporation and
Trend Now, Inc., both use the phrase “Looks Great” on their labels. Style-One
files a suit against Trend Now, claiming trademark infringement. Trend Now
argues that the phrase generally is not associated with any particular firm and
that other companies use the same phrase on their labels and in their ads. In
whose favor is the court most likely to rule, and why?
