Chapter 6—Analyzing Product/Service Design and Protection
TRUE/FALSE
1. Each time a new product or service or an improvement to an existing product or service is introduced,
it will have gone through a design and development process.
2. Product development and intellectual-property development are not closely intertwined.
3. A product life cycle is analogous to an industry life cycle with periods of product development, market
introduction, growth, maturity, and decline.
4. Investors consider research and development, engineering, and testing of new products to be low-risk,
so funding for these activities is not difficult for the entrepreneur to secure.
5. Poor execution in product development results in missed opportunities to enter the market at a quiet
time without immediate competition.
6. With the benefits of information and systems technologies, the success rate of new product
development has climbed to 85 percent at launch.
7. The product development cycle consists of a series of tasks leading to introduction of the product to
the marketplace.
8. Intellectual-property rights are legal rights associated with patents, trademarks, copyrights, and trade
secrets.
9. A patent gives the patent holder the right to defend the patent against others who would attempt to
manufacture, use, or sell the invention during the period of the patent.
10. Laws and phenomena of nature, naturally occurring substances, abstract mathematical formulas, and
ideas are eligible to be patented.
MULTIPLE CHOICE
1. The main reason for new product development failure is lack of ____.
a.
sufficient funding
b.
good market and industry analysis
c.
effective leadership
d.
innovation
e.
patents
2. Initial market tests are accomplished using a working ____ of near production quality.
a.
concept
b.
platform
c.
model
d.
prototype
e.
None of these choices
3. ____ product development provides a young firm with a network of expertise that it couldn’t afford to
hire in-house.
a.
Outsourcing
b.
Patenting
c.
Protecting
d.
Networking
e.
Testing
4. A ____ consists of a novel and confidential formula, device, idea, process, pattern, or compilation of
information that gives the owner a competitive advantage in the marketplace.
a.
copyright
b.
patent
c.
trade secret
d.
property right
e.
trademark
5. ____ protect original works of authors, composers, screenwriters, and computer programmers.
a.
International protection
b.
Copyrights
c.
Trade secrets
d.
A patent
e.
All of these choices
6. To qualify for ____, the work must be in a fixed and tangible form; that is, one must be able to see or
hear it.
a.
federal copyright protection
b.
federal patent protection
c.
trade secrets
d.
a trademark
e.
None of these choices
7. The ____ prohibits the falsification, alteration, or removal of copyright management data on digital
copies, making it a crime to circumvent an encrypted work without authorization.
a.
trademark law
b.
patent office
c.
Digital Millennium Copyright Act
d.
Trademark Dilution Revison Act
e.
All of these choices
8. Like patents, ____ can suffer from infringement, counterfeiting, or misappropriation.
a.
trade secrets
b.
copyrights
c.
trademarks
d.
All of these choices
e.
“trade secrets” and “copyrights” only
9. Poor execution, time-to-market increases, and missed first-to-market opportunities are some of the
problems associated with ____.
a.
lack of new product development resources
b.
new product development failure
c.
failure to protect intellectual property
d.
lack of teamwork
e.
All of these choices
10. Lack of good market analysis, technical problems, and human error are reasons for ____.
a.
new product failure
b.
product simplification
c.
research and development
d.
shortened product life cycles
e.
All of these choices
11. Opportunity recognition, technical feasibility analysis, and prototype building and field testing are
elements of the ____.
a.
industry life cycle
b.
product development cycle
c.
trademark process
d.
new product checklist
e.
successful product realization
12. ____ can be defined as the activity that transforms a set of requirements into a format that brings all
the elements into an integrated whole or system.
a.
Product design
b.
Feasibility analysis
c.
Prototyping
d.
Industry analysis
e.
None of these choices
13. The probability of success for a new product launch is about ____ percent.
a.
40
b.
50
c.
60
d.
70
e.
80
14. Intellectual-property rights are protected by ____.
a.
patents
b.
trademarks
c.
copyrights
d.
trade secrets
e.
All of these choices
15. Beginning in the late 1990s, what percent of the Fortune 100 companies’ market capitalization was
based on intellectual property?
a.
77 percent
b.
65 percent
c.
75 percent
d.
93 percent
e.
85 percent
16. A ____ is the primary means of protecting an original invention.
a.
trademark
b.
copyright
c.
trade secret
d.
patent
e.
None of these choices
17. Customer identification, customer validation, and ____ are all part of the product development cycle.
a.
product protection
b.
value creation
c.
outsourcing
d.
product creation
e.
business creation
18. What percent of all patents come from large companies?
a.
88 percent
b.
78 percent
c.
85 percent
d.
80 percent
e.
90 percent
19. In the context of patent protection, ____ is knowledge that is publicly available or was published prior
to the date of the invention⎯that is, before the filing of the patent application.
a.
utility
b.
prior art
c.
copyright
d.
intellectual property
e.
None of these choices
20. The three major categories of patents are design patents, business method patents, and ____ patents.
a.
utility
b.
prior art
c.
manufacture
d.
obviousness
e.
None of these choices
21. The need of Internet companies to protect their ways of doing business is addressed by a/an ____
patent.
a.
design
b.
utility
c.
business method
d.
prior art
e.
general usage
22. Which of the following is not eligible for a patent?
a.
A machine
b.
A business method
c.
A naturally occurring substance
d.
An improvement on a machine
e.
A food additive
23. In 2006, the ____ was signed into law to provide relief to owners whose marks have been tarnished by
third-party marks.
a.
Trademark Fair Act
b.
Trademark Infringement Act
c.
Trademark Dilution Revision Act
d.
Copyright Dilution Revision Act
e.
Trade Secret Protection Act
24. ____ is knowledge that is publicly available or was published prior to the date of the invention⎯that
is, before the filing of the patent application.
a.
Utility
b.
Fair use
c.
Prior use
d.
Prior art
e.
Fair art
25. ____ patents are the most common type of patent.
a.
Utility
b.
Trademark
c.
Design
d.
Business method
e.
Technology
26. Most countries require that an invention be manufactured in the country within ____ of the issuance of
the foreign patent.
a.
six months
b.
one year
c.
two years
d.
three years
e.
four years
27. A ____ is a way for inventors to use the term patent pending.
a.
non-provisional patent
b.
provisional patent
c.
pending patent
d.
foreign patent
e.
patent application
28. The ____ protects inventors from infringers who would violate a patent by making small, insignificant
changes in the claims.
a.
dilution act
b.
infringement act
c.
doctrine of fair use
d.
doctrine of equivalents
e.
None of these choices
29. ____ is found if a trademark is likely to cause confusion with a trademark already existing in the
marketplace.
a.
Infringement
b.
Dilution
c.
Counterfeiting
d.
Trademark violation
e.
None of these choices
30. Under the Copyright Extension Act of 1998, a copyright lasts for the life of the holder plus ____ years.
a.
50
b.
60
c.
70
d.
80
e.
100
SHORT ANSWER
1. Briefly discuss the impact that technology has had on the product life cycle.
2. A 2003 study found that large companies with sales over $1 billion in the United States and Europe
consider innovation “integral to current strategic goals.” Discuss what that statement means to these
firms’ smaller entrepreneurial counterparts.
3. Discuss three common problems that result from a lack of sufficient new product development
resources.
4. Briefly discuss the three fundamental strategies that should be incorporated in any entrepreneur’s
product development program.
5. Briefly discuss the product development cycle.
6. Briefly discuss the benefits of outsourcing product development for today’s entrepreneur.
7. Briefly discuss intellectual-property rights.
8. Briefly discuss what a utility patent protects.
9. Briefly discuss patent infringement.
10. Briefly discuss the Digital Millennium Copyright Act (DMCA).
