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Bonus A - Working Within the Legal Environment
PPT A-30
Number of Identity Theft Complaints
1. This slide highlights the rise in the number of
identity theft complaints according to the Federal
Trade Commission.
2. Ask the students, What has given rise to the
growing number of identity theft complaints? Do
you know anyone who has experienced identity
theft?
3. If you believe you have been a victim of identity
theft, the Federal Trade Commission advises you
to do the following:
• File a police report.
• Check your credit reports.
• Notify creditors and dispute any unauthor-
ized transactions.
PPT A-31
Taxes
Taxes can be used to raise revenue or adjust behavior.
Bonus A - Working Within the Legal Environment
A-55
A-56
PPT A-36
How Assets Are Divided in Bankruptcy
PPT A-37
Going, Going, Gone
1. This slide profiles the bankruptcies of 2008–
2011.
2. Have students research the companies listed in
the slide. Why did these businesses go bankrupt
instead of their competitors?
3. Ask the students, Is there a pattern of why busi-
nesses survive or go bankrupt? What mistakes do
failed businesses make that others do not? What
are the effects on the consumer when businesses
fail? What are the effects on the economy as a
whole?
PPT A-38
Deregulating Commerce
Today some believe the airline industry could use more
government regulation since passenger services have de-
creased, delays and flight cancellations have increased,
and charges such as baggage fees have become common.
A-57
PPT A-39
Hamburger Regulations
PPT A-40
Progress Assessment
1. The purpose of antitrust law is to foster competi-
tion in the free market.
2. Describe bankruptcy provisions under Chapters 7,
11, and 13.
• Chapter 7— liquidation of nonexempt as-
sets used by business and individuals.
• Chapter 11—reorganizations of firms as-
sets used by businesses
• Chapter 13—allows small businesses and
individuals to pay back creditors over a
three- to five-year time period
3. Deregulation occurs when the government with-
draws certain laws and regulations that seem to
hinder competition. Examples of deregulation in-
clude telecommunications and the airline indus-
try. Deregulation of the banking and investment
industries has not been successful.
Bonus A - Working Within the Legal Environment
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lecture
links
lecture link A-1
THE DIFFERENCES BETWEEN PATENTS, COPYRIGHTS,
AND TRADEMARKS
Patent is the abbreviated term for letters patent. The Constitution gives Congress the power to en-
act laws relative to patents in Article I, section 8. The first Patent Law was enacted in 1790. The most re-
cent revision was the American Inventors Protection Act of 1999. Patents are issued by the United States
Patent and Trademark Office (USPTO) of the U.S. Department of Commerce. Generally, the term of a
patent is 20 years from the date on which the patent was filed.
Bonus A - Working Within the Legal Environment
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While registering a trademark with the USPTO gives the holder some advantages, registration is
not necessary to establish legal rights. In fact, the symbols TM or SM may be used with a person’s mark
to inform the public of his or her claims. However, the “R in a circle” mark can be used only after the
USPTO actually registers it. Also, a mark cannot be registered unless it had been used “in commerce” or
unless the applicant files an “intent to use” application.
lecture link A-2
NORTEL’S PATENT AUCTION
In early 2009, the telecommunications company Nortel Networks filed for Chapter 11 bankruptcy
in Delaware, Canada, and Europe. In order to cover some of the costs of its financial downfall, the com-
pany hired a small law firm specializing in intellectual property to help sell its cache of patents. While a
patent auction may not carry the same glitz as priceless paintings or jewelry on the block, their value far
exceeds that of any standard trinket sell-off. Analysts estimate the patent portfolio will sell for no less
than several billion dollars.
Whoever ends up in possession of the patents will hold a powerful position in the wireless world.
First of all, the patents could provide integral assistance for some companies wanting to expand their tele-
communications presence. More than that, though, the patents could prove to be a fierce legal weapon in
the highly litigious wireless industry. This point has regulators at the U.S. Justice Department worried
Bonus A - Working Within the Legal Environment
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lecture link A-3
PIRACY MAY KO UFC
For years, sports leagues have been free of the piracy that has plagued music and movies. Fans
typically like to watch games as they happen, making piracy of a baseball game less appealing to down-
loaders than a film or a song. But as online streaming technology advanced, so too have the pirates’ ef-
forts to get entertainment for free. Thousands of game feeds from the NFL to the UFC now leak onto the
Internet every day. Although company watchdogs constantly scour the Web looking for infringers, the
sheer number of sites involved makes it almost impossible to shut them all down.
lecture link A-4
NEGOTIABLE INSTRUMENT FORGERY AND
THE UNIFORM COMMERCIAL CODE
Frank W. Abagnale was the main speaker at a seminar on document fraud. He is an unlikely ex-
pert, having spent time in French, Swedish, and U.S. prisons 30 years ago for creating and passing mil-
lions of dollars of bad checks. Interpol, Abagnale said, dubbed him a “master forger,” a badge of honor of
sorts, as Abagnale began his career when he was 16 years old and concluded it at age 21 with a stint in a
French lockup. After serving his time there, he was extradited to Sweden and finally to the United States,
doing 12 years. He was released early on the condition that he assist the U.S. government in its battle
against forgers. (The film Catch Me If You Can is based on Abagnale’s career as a forger.)
Bonus A - Working Within the Legal Environment
A-61
Now he’s a “senior advisor” to the FBI’s Financial Crimes Unit. In that role, he assisted in de-
signing the new $100 bill. He also provides consulting services to financial institutions and companies
worldwide.
Disputes over who is liable for bad checks often end up in court. These matters are governed by
the Uniform Commercial Code, or UCC, a set of model statutes designed by legal experts to be used by
all states in order to provide a level playing field for commerce. It is not an all-encompassing federal law,
but rather a guideline for laws to be adopted by the states individually.
States can adopt a provision of the UCC or not. For example, the portion of the UCC concerning
liability in document frauds was amended in 1990. Connecticut adopted the amendment in 1991, but New
York State has not yet done so.
What can a company do to make itself less vulnerable? One powerful weapon is known as “posi-
Bonus A - Working Within the Legal Environment
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Generally, the more difficult a company makes forgery, the less likely it is to be a victim. Forg-
ers, Abagnale said, look for easy targets, of which there are too many. “We make it so easy for people to
steal from us, that people do. People steal from us because we let them,” Abagnale said.
lecture link A-5
GOOGLE’S TAX TACTICS
Tax havens have long been used by multinationals to skirt the stringent corporate tax laws of their
home countries. But for many in and outside the business world, the abundance of tax havens by no
means justifies the revenue they deprive deserving states. Unfortunately, not only is tax sheltering com-
mon, in most cases it is legal. Google, for instance, earned $12.5 billion overseas since 2007, only 2.4%
of which was taxed. Google’s clever, entirely legal money funneling saved the company $3.1 billion and
Bonus A - Working Within the Legal Environment
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lecture link A-6
BAD TIMING FOR BANKRUPTCY LAW CHANGES
In October 2005, the U.S. Bankruptcy Code was changed to make it harder for individuals to file
for bankruptcy. The code sets new limits on personal bankruptcy filing and requires people to get profes-
sional credit counseling before they file petitions. It prohibits most middle-income filers from filing
Chapter 7 petitions, which would allow debts to be erased. Instead, if people judged to have at least $100
a month left over after paying certain debts, they must submit a five-year repayment plan under the more
restrictive rules. During the months leading up to the October transition, bankruptcy petitions hit a record
high.
A study of bankruptcy filing shows that following the biggest hurricanes of the past 30 years
bankruptcy filings were about 50% higher in states that suffered a direct hit. When storms hit areas with
less expensive buildings (rather than expensive beachfront condos), the increase in bankruptcy rates goes
even higher. The highest increase in bankruptcy filings occurred when Hurricane Elena hit Mississippi in
1985.
Once the new bankruptcy bill went into effect, everyone—regardless of income and regardless of
the reason for filling—was required to file extensive new paperwork and meet the new procedural re-
quirements. The new rules demand more payments for car lenders and credit card issuers. Many workers
discovered that the bankruptcy court may believe they have phantom income for repayment—money
from jobs they held before the storm. The court may presume they still have income even when those jobs
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The Justice Department has acknowledged the problems but has not changed the rules or guaran-
teed expedited treatment. When the stunned and exhausted victims of Hurricane Katrina finally arrive in
bankruptcy courts, they will find that the bankruptcy laws now offer less relief than before the storms
struck.iv
endnotes
