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Chapter 8
Intellectual Property
and Internet Law
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. In Case 8.1, Coca-Cola Co. v. Koke Co. of America, the United States Supreme Court
upheld an injunction prohibiting competing beverage companies from calling their
products “Koke.”
ANSWER: T PAGE: 207 TYPE: =

NAT: AACSB Communication AICPA Legal
2. A famous trademark may be diluted only by the unauthorized use of an identical

mark.
ANSWER: F PAGE: 208 TYPE: N

NAT: AACSB Reflective AICPA Legal
3. Trademark dilution requires proof that consumers are likely to be confused by the
unauthorized use of the mark.
141
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
142 UNIT TWO: THE COMMERCIAL ENVIRONMENT

NAT: AACSB Analytic AICPA Legal
4. A trademark must be registered to support a trademark infringement action.

5. A party who unintentionally uses the trademark of another is not liable for trademark
infringement.

6. A fanciful use of ordinary words may be trademarked.

7. An arbitrary use of ordinary words may not be trademarked.
ANSWER: F PAGE: 210 TYPE: =

8. A suggestive use of ordinary words may not be trademarked.

9. A personal name is not protected under trademark law unless it acquires a secondary
meaning.
ANSWER: T PAGE: 210 TYPE: +

10. A generic term is not protected under trademark law unless it acquires a secondary
meaning.
CHAPTER 8: INTELLECTUAL PROPERTY AND INTERNET LAW 143

11. A service mark distinguishes products used, or “put into service,” by the government.

12. A certification mark distinguishes products approved, or “certified,” by the

government.
ANSWER: F PAGE: 211 TYPE: +

13. A collective mark distinguishes products that are likely to be of interest to collectors.

14. Trade dress has the same legal protection as trademarks.

15. A trade name cannot be registered with the federal government if it is also a
trademark.

16. Because the Internet is vast, the unauthorized use of another’s mark in a domain
name is generally permissible.

17. A license permits the use of intellectual property for certain limited purposes.
ANSWER: T PAGE: 215 TYPE: N

18. In the United States, a patent is given to the first person to file for it.

19. Patent protection begins on the date that a patent is issued.

20. In the United States, a patent is given to the first person to invent a product or
process.

21. A patent applicant must demonstrate that the invention, discovery, or design is
commercially practicable to receive a patent.

22. Patent infringement occurs only if an invention is copied in its entirety.

23. Copyright protection is automatic—registration is not required.

NAT: AACSB Analytic AICPA Critical Thinking
24. It is possible to copyright an idea.

NAT: AACSB Reflective AICPA Critical Thinking
25. A copy must be exactly the same as the original to infringe a copyright.

26. A person can reproduce copyrighted material for purposes such as teaching, including
multiple copies for classroom use, without paying royalties.

27. Exchanging pirated, copyrighted works with others is a not crime unless money is
involved.

28. Downloading software or music into a computer’s random access memory without
authorization is copyright infringement.

29. A marketing technique can be a trade secret.

30. A list of customers cannot be a trade secret.

31. Pricing information cannot be a trade secret.

32. There are no registration requirements for trade secrets.

33. Anyone who writes a book has automatic copyright protection in every country in the
world.
ANSWER: F PAGE: 227 TYPE: +

34. Each member country of the TRIPS agreement must include in its domestic laws broad
intellectual property rights.

35. The Madrid Protocol concerns trademarks.

MULTIPLE-CHOICE QUESTIONS
1. Paula develops a new espresso machine, which she names “Quik Shot.” She also
writes the operating manual. Paula can obtain trademark protection for
a. the espresso machine.

b. the “newness” of the espresso machine.
c. the name.
d. the operating manual.
ANSWER: C PAGE: 207 TYPE: +

2. Beans Coffee & Cocoa Company makes and sells a chocolate-flavored coffee drink
under the name “CoCoCafe.” Darkroast Java, Inc., later markets a similar tasting drink
under the name “KoKoKafe.” This is most likely
a. copyright infringement.
b. patent infringement.
c. trademark infringement.
d. a theft of trade secrets.
ANSWER: C PAGE: 207 TYPE: N

3. Copy Products, Inc., uses, in its ads, a trademark that is similar, but not identical, to
the famous, registered mark of Imitated Goods, Inc. Copy’s unauthorized use of the
mark constitutes trademark dilution provided
a. consumers are confused.

b. Copy and Imitated are competitors.
c. Copy’s use is intentional.
d. Copy’s use reduces the value of Imitated’s mark.
ANSWER: D PAGE: 208 TYPE: +

4. Li’l Canine Company (LCC) uses a trademark that neither LCC nor anyone else has
registered with the government. Under federal trademark law, LCC
a. can register the mark for protection.

b. cannot register a mark that has been used in commerce.
c. has committed trademark infringement.
d. must put off registration until the mark is out of use for six months.
ANSWER: A PAGE: 209 TYPE: N

5. In 2010, Online Marketing 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.
ANSWER: A PAGE: 209 TYPE: +

6. Bubbly Cola features Sparkly Cola’s trademark without its owner’s permission.
Bubbly’s use of the mark is actionable provided

b. Bubbly’s use is intentional.
c. Bubbly’s use reduces the value of Sparkly’s mark.
d. Sparkly’s mark is registered.

7. Modern Clothing, Inc., and National Denim Corporation use the mark “Made by
Members of the U.S. Textile Workers Union” on the tags of their products to indicate
the participation of the union in the manufacture. Modern and National are not in
business together and do not own this mark. This mark is
a. a certification mark.
b. a collective mark.
c. a service mark.
d. trade dress.
ANSWER: B PAGE: 211 TYPE: =

8. Home Products Company and House & Yard, Inc., use the mark “Good Housekeeping
Seal of Approval” to certify the quality of their products. Home Products and House &
Yard are not in business together and do not own this mark. This mark is
c. a service mark.
d. trade dress.
ANSWER: A PAGE: 211 TYPE: =

9. Standard Corporation can not claim a trademark in the phrase “Quality Is Standard” if
the phrase
a. has a secondary meaning.

b. is descriptive.
c. is generic.
d. means nothing.
ANSWER: C PAGE: 211 TYPE: =

10. Trek Transport Company uses a mark associated with its name to distinguish its
services from those of other trucking firms. This mark is
c. a service mark.
d. trade dress.

11. Ernie’s Good Eatin’ Cafe uses a distinctive decor, layout, menu, and style of service.
This restaurant’s image and overall appearance is
c. a service mark.
d. trade dress.
ANSWER: D PAGE: 211 TYPE: =

12. E-Shopping Corporation inserts Fiesta Mall, Inc.’s trademark as a meta tag in E-
Shopping’s Web site’s key-words field without Fiesta’s permission in a manner that
suggests Fiesta authorized the use. This is
d. no infringement.

13. Delite Toys, Inc., makes EZ Goo, a famous children’s toy. Without Delite’s consent,
Fast Adhesives Company begins to use “ezgoo” as part of the URL for Fast’s Web site.
Fast claims that no consumer would confuse the Web site with the toy. Fast has
committed
d. no actionable violation.

14. Mary Kate Corporation allows Ashley Company to use Mary Kate’s trademark as part
of Ashley’s domain name. This is
a. a license.
b. a likelihood of consumer confusion.
c. cybersquatting.
d. trademark dilution.

15. Ric designs a new computer hard drive, which he names “Sci Phi.” He also writes the
operating manual to be included with each final product. Ric could obtain patent
protection for
a. the hard drive.

b. the “newness” of the hard drive.
c. the name.

16. Phil invents “PhutureNow,” new Web site design software, and applies for a patent. If
Phil 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.
ANSWER: B PAGE: 215 TYPE: =

17. Sights Unseen, Inc., (SUI) sells scopes with distinctively designed and made lenses and
mirrors to scientists. Telescopes, Etc. Corporation later begins to sell scopes with
identical set-ups of lenses and mirrors, without SUI’s permission, to consumers. This is
most likely
d. not infringement.
ANSWER: B PAGE: 218 TYPE: N

18. Gas Up, Inc., designs, makes, and sells a fuel injection system that copies Hybrid
Corporation’s design without Hybrid’s permission. This is most likely
ANSWER: B PAGE: 218 TYPE: +

19. RiteMade Machinery, Inc., designs, makes, and sells a drill press. Steel Equipment
Company copies the design without RiteMade’s permission. Steel’s conduct is
actionable provided

b. Steel’s conduct is intentional.
c. Steel’s conduct reduces the value of RiteMade’s design.
d. RiteMade’s design is patented.
ANSWER: D PAGE: 218 TYPE: N

20. In 2010, Sara writes Terror at the Track, a novel about racecar driving. Sara does not
register the work with the appropriate government office. Under federal copyright
law, Sara’s work is protected
a. for ten years.

b. for twenty years.
c. for the life of the author plus seventy years.
d. forever.

21. Fiona invents a new deep-sea fishing net, which she names “Great Catch.” She also
writes the operating manual to be included with each net. Fiona could obtain
copyright protection for
a. the net.
b. the “newness” of the net.
c. the name.

22. The graphics used in “Go!,” a handheld video game featuring racecars, are protected
by
a. copyright law.
b. patent law.
c. trademark law.
d. trade secrets law.

23. Ellen publishes a book titled First Place, which includes a chapter from Frank’s
copyrighted book Great Racecar Drivers. Ellen’s use of the chapter is actionable
provided

b. Ellen’s use is intentional.
c. Ellen’s use reproduces Frank’s chapter exactly.
d. Ellen does not have Frank’s permission.

24. Mace copies Nick’s book, Off the Beaten Path, in its entirety and sells it to Parkland
Books, Inc., without Nick’s permission. Parkland publishes it under Mace’s name. This
is
b. fair use.
c. licensing.
d. protected expression.

25. Cathy uses, on her new recording Drive By, the exact note-for-note melody of a song
written by Earl without his permission. This is

26. Joey reproduces Mina’s copyrighted work without paying royalties. Joey is most likely
excepted from liability for copyright infringement under the “fair use” doctrine if
a. Joey copies the entire work.

b. Joey distributes the copies freely to the public.
c. Joey’s use has no effect on the market for Mina’s work.
d. Joey’s use is for a commercial purpose.

27. Kay and Leo copy and exchange MP3 music files over the Internet without anyone’s
permission. With respect to songs owned by Natural Recording Company, this is
b. fair use.
c. licensing.
d. protected expression.

28. The process behind the production of “Fast Pace,” a racecar video game, is protected
by
a. copyright law.
b. patent law.
c. trademark law.

29. The idea for “On Your Mark,” a computer game featuring racing cars, is protected by
a. copyright law.
b. patent law.
c. trademark law.

30. Diamond Financial Planners employs Ella, who is the firm’s most productive
performer. Ella, dissatisfied with the commission structure, quits to work for Feldstar
Investments, Inc. She takes her list of Diamond clients to induce them to switch to
Feldstar. Trade secrets law covers
a. Diamond’s list of clients.

b. Ella’s performance.
c. Feldstar’s commission structure.
d. none of the choices.

31. RockStar Software, Inc., develops a new series of performance-related video games.
This software is most likely protected by
a. copyright law.
b. patent law.
c. trademark law.

32. Ross e-mails Super Snowboard Company’s marketing campaign to Winter Sports
Corporation, Super’s competitor, without its permission. This is

33. Chocolate Chip Cookie Corporation (4C) obtains, and gives its employees, a list of the
customers of Sugar & Spice Sales, Inc. (3S). Under the law that applies to trade
secrets, 4C’s conduct is actionable provided

b. 4C’s conduct is intentional.
c. 4C uses the list.
d. 4C does not have 3S’s permission to use the list.

34. Canada and the United States are signatories of the Berne Convention. Doug, a citizen
of Canada, publishes a book first in Canada and then in the United States. Doug’s
copyright must be recognized by
a. all of the signatories of the Berne Convention.
b. Canada and the United States only.

c. Canada only.
d. none of the signatories of the Berne Convention.

35. New Apps Company develops “Browser Lite,” software to speed the display of
graphics on Web sites. Browser Lite has the most copyright protection under
a. the Berne Convention.

b. the Paris Convention
c. the TRIPS Agreement.
d. the Madrid Protocol.

ESSAY QUESTIONS
1. Hawk Corporation begins making and selling motorcycles in 2000 under the mark
“Hawk.” Ten years later, Hawk.com, Inc., a different company selling medical
equipment and supplies, begins to use “hawk” as part of its URL and registers it as a
domain name. Can Hawk Corporation stop Hawk.com’s use of “hawk”? If so, what
must the motorcycle-maker show?
ANSWER: Hawk may be successful in obtaining an order to stop the use of its
name as part of another company’s URL and registered domain name. This use may
constitute trademark dilution. Dilution occurs when a trademark is used, without
permission, in a way that diminishes the distinctive quality of the mark. This cause of
action does not require proof that consumers are likely to be confused by a
connection between the unauthorized use and the mark. As in this problem, the
products involved do not have to be similar. To succeed on a charge of dilution, how-
ever, a mark must be shown to have been famous when the dilution took place.
PAGES: 214–215 TYPE: =

NAT: AACSB Reflective AICPA Decision Modeling
2. College Copy Shop (CCS) compiles, copies, and sells reading materials to students on
the instructions of their professors, who indicate which parts of which publications
should be included. These include texts published by Deep Topics, Inc. CCS does not
obtain the permission of Deep Topics, or any of the other original publishers of the
copied materials, and does not pay royalties on the sales of the compilations. Deep
Topics and others file a suit against CCS, alleging infringement of the plaintiffs’
intellectual property rights. Which type of intellectual property is involved in this

situation? What is CCS’s likely defense? How is a court most likely to rule? Explain.
ANSWER: The intellectual property at issue in this situation is copyright—

specifically, of course, the copyrights of the publishers of the materials that CCS copies
and sells without permission. CCS is likely to assert the “fair use” doctrine in its
defense. This doctrine includes exceptions to the general requirement that an owner’s
permission be obtained before copyrighted material can be copied. CCS is probably
likely to argue that its compilations are excepted because they are dedicated to
“educational” uses. A court is most likely to conclude, however, that the copying and
selling of the materials is not a fair use, because CCS profits from their sale, which
undercuts the potential market for the copyrighted publications from which the
copies are made. In determining fair use, a court considers four factors: the purpose
and character of the use, the nature of the copyrighted work, the amount and
substantiality of the portion used in relation to the copyrighted work as a whole, and
the effect of the use on the potential market for or value of the copyrighted work. In
this situation, the fourth factor is most significant and supports the conclusion that
CCS’s use of the materials is not a fair use.
PAGES: 220–222 TYPE: N

NAT: AACSB Reflective AICPA Decision Modeling
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Legal Environment Today 7th Edition

Miller Test Bank

Legal Environment Today 8th Edition Miller Test Bank

Legal Environment Today 8th Edition Miller Solutions

Legal Environment Today Summarized Case 8th Edition

Legal Environment Today Summarized Case 8th Edition

Legal Environment Today Business In Its Ethical

Paralegal Today The Legal Team at Work 7th Edition

Legal Environment Today Business In Its Ethical

Cengage Advantage Books Essentials of the Legal

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.

ANSWER: T PAGE: 207 TYPE: =

2. A famous trademark may be diluted only by the unauthorized use of an identical

ANSWER: F PAGE: 208 TYPE: N

ANSWER: F PAGE: 208 TYPE: N

4. A trademark must be registered to support a trademark infringement action.

ANSWER: F PAGE: 209 TYPE: N

ANSWER: F PAGE: 209 TYPE: N

6. A fanciful use of ordinary words may be trademarked.

ANSWER: T PAGE: 210 TYPE: =

7. An arbitrary use of ordinary words may not be trademarked.

ANSWER: F PAGE: 210 TYPE: =

8. A suggestive use of ordinary words may not be trademarked.

ANSWER: F PAGE: 210 TYPE: =

ANSWER: T PAGE: 210 TYPE: +

ANSWER: F PAGE: 211 TYPE: =

ANSWER: F PAGE: 211 TYPE: N

12. A certification mark distinguishes products approved, or “certified,” by the

ANSWER: F PAGE: 211 TYPE: +

ANSWER: F PAGE: 211 TYPE: N

14. Trade dress has the same legal protection as trademarks.

ANSWER: T PAGE: 211 TYPE: =

ANSWER: F PAGE: 212 TYPE: =

ANSWER: F PAGE: 213 TYPE: =

ANSWER: T PAGE: 215 TYPE: N

ANSWER: F PAGE: 215 TYPE: =

19. Patent protection begins on the date that a patent is issued.

ANSWER: F PAGE: 215 TYPE: N

ANSWER: T PAGE: 215 TYPE: =

ANSWER: F PAGE: 216 TYPE: =

22. Patent infringement occurs only if an invention is copied in its entirety.

ANSWER: F PAGE: 218 TYPE: =

23. Copyright protection is automatic—registration is not required.

ANSWER: T PAGE: 219 TYPE: N

24. It is possible to copyright an idea.

ANSWER: F PAGE: 220 TYPE: =

ANSWER: F PAGE: 220 TYPE: N

ANSWER: T PAGE: 221 TYPE: =

ANSWER: F PAGE: 223 TYPE: N

ANSWER: T PAGE: 224 TYPE: N

29. A marketing technique can be a trade secret.

ANSWER: T PAGE: 226 TYPE: N

30. A list of customers cannot be a trade secret.

ANSWER: F PAGE: 226 TYPE: =

31. Pricing information cannot be a trade secret.

ANSWER: F PAGE: 226 TYPE: =

32. There are no registration requirements for trade secrets.

ANSWER: T PAGE: 226 TYPE: N