ch06

Student: ___________________________________________________________________________

1. In order to minimize copyright infringement on YouTube Salar Kamangar implemented a content

tracking system called ContentID.
True False
2. Entrepreneurs, because of their lack of understanding of intellectual property, ignore important steps that
they should have taken to protect these assets.
True False
3. A lawyer may work on a retainer basis by which he or she provides office and consulting time, which
includes court time and other legal fees related to the action.
True False
4. When resources are limited, the entrepreneur can offer a lawyer stock in exchange for legal services.
True False
5. A patent is a contract between the government and an inventor.
True False
6. A design patent has a term of 14-years, beginning on the date of filing with the Patent and Trademark
Office (PTO).
True False
7. Any invention requiring FDA approval has the term of its patent extended by the amount of time it takes
the FDA to review the invention.
True False
8. The most commonly issued type of patent is the plant patent.
True False
9. A utility patent grants the owner protection from anyone else making, using, and/or selling the identified
invention and generally reflects protection of new, useful, and unobvious processes.
True False
10. The three main categories of patents are design, utility and provisional patents.
True False
11. The Patent Cooperation Treaty, which has over 100 participants, was established to facilitate patent
filings in multiple countries in one office rather than filing in each separate country.
True False
12. A provisional patent application can be used to establish the date of conception of the invention.
True False
13. To prevent others from copying his or her ideas, the entrepreneur should not send drawings with the
patent application.
True False
14. The three major parts of a patent application are the introduction, description and warranty sections.
True False
15. The claims section of a patent application is probably the most difficult section of the application to
prepare since this area sets the criteria by which any infringements will be determined.
True False
16. Copying a product and improving it is not patent infringement.
True False
17. An example of a business method patent is Amazon.com's single clicking feature used by a buyer to order
products.
True False
18. An entrepreneur should seek a patent attorney who has experience in their product line.
True False
19. A trademark is a distinguishing word, name, or symbol used to identify a product.
True False
20. A trademark is given a 50-year registration with no renewal.
True False
21. To file for trademark protection only intent to use is necessary.
True False
22. Once accepted, the trademark is published in the Trademark Official Gazette to allow any party 90 days
to oppose or request an extension to oppose.
True False
23. Getting a trademark typically takes 2 years.
True False
24. One benefit of having a registered trademark is that it establishes the right to deposit registration with
customs to prevent importation of goods with a similar mark.
True False
25. A copyright protects original works of authorship.
True False
26. A copyright can be used to protect sculptures or blueprints.
True False
27. Copyright law does not apply to music, especially when downloaded from the Internet.
True False
28. A trade secret is protected by state law.
True False
29. The reason that many noncompete agreements, which help protect trade secrets, are thrown out of court is
that they are poorly structured and written.
True False
30. While dealing with leaking of trade secrets, legal action can be taken only after the secret has been
revealed.
True False
31. Licensing requires the licensee to pay a royalty to the licensor.
True False
32. Licensing a trademark generally involves a franchising agreement.
True False
33. Licensing agreements generate revenue while minimizing risk and start-up investment costs.
True False
34. Licensing can be a way to start a new venture when the idea may infringe on someone else's patent,
trademark, or copyright.
True False
35. Life insurance for employees is a required benefit under federal law.
True False
36. Skyrocketing medical costs have resulted in lowering workers' compensation insurance premiums.
True False
37. Health insurance premiums are less expensive if there is a large group of insured participants.
True False
38. Under the Sarbanes-Oxley Act CEOs are not required to vouch for the firm's financial statements because
they don't get involved with the day to day operations of the firm.
True False
39. An oral agreement is enforceable indefinitely.
True False
40. Contracts for the sale of real estate must be in writing to be valid.
True False
41. A patent attorney hired as a specialist to help the entrepreneur obtain a patent would most likely be hired
on a(n):
A. retainer fee
B. success fee
C. out-of-pocket reimbursement
D. one-time fee
42. A _________ is a contract between the government and an inventor.
A. patent
B. franchise
C. trademark
D. trade secret
43. Which of the following is a contract that grants the owner protection, based on the appearance of an
object?
A. Utility patent
B. Design patent
C. Plant patent
D. Disclosure document
44. The _____ patent is granted for a 14-year term.
A. utility
B. design
C. plant
D. procedure
45. The _______ was established to facilitate patent filings in multiple countries.
A. General Agreement on Trades and Tariffs
B. Patent and Trademark Office
C. Sarbanes-Oxley Act
D. Patent Cooperation Treaty
46. The ________ is filed to establish a date of conception of an invention and replaces what used to be
known as a disclosure document.
A. provisional patent
B. defensive document
C. trademark
D. copyright
47. The section of the patent application which provides the criteria by which any infringement will be
determined is the:
A. background and advantages section.
B. description of the invention.
C. claims section.
D. executive summary.
48. The section of the patent application that includes engineering specifications, materials and components
is the:
A. background and advantage section.
B. description of invention.
C. claims section.
D. executive summary.
49. Priceline.com's service where a buyer can submit a price bid for a particular service is an example of
a:
A. utility patent.
B. design patent.
C. business method patent.
D. license.
50. The initial registration for a trademark lasts:
A. 10 years.
B. 14 years.
C. 17 years.
D. 20 years.
51. Which of the following statements is(are) not true?
A. A trademark may be a word, slogan, symbol, design or particular sound.
B. Unlike a patent, trademark does not last indefinitely.
C. It is possible to file for a trademark if you intend to use this mark in the future.
D. There are four categories of trademarks.
52. To apply for a trademark:
A. intent to use the mark is required.
B. the mark must actually have been used on goods.
C. the mark must be copyrighted.
D. the mark must have been used on goods that are already traded.
53. It takes approximately ______ to obtain a trademark.
A. 12 months
B. 13 months
C. 14 months
D. 18 months
54. Which government office is responsible for the federal registration of trademarks?
A. U.S. Trademark Services
B. Local Chambers of Commerce
C. Patent and Trademark Office
D. Internal Revenue Service
55. The entire trademark registration process takes approximately:
A. 7 months
B. 13 months
C. 18 months
D. 2 years
56. Once accepted, the trademark is published in the Trademark Official Gazette for ____ days to allow any
party to oppose or request an extension to oppose the use of the mark.
A. 10
B. 30
C. 90
D. 180
57. Authors or publishers of software are protected under:
A. copyrights.
B. trademarks.
C. utility patents.
D. trade secrets.
58. Copyrights are registered with:
A. the U.S. Justice Department.
B. the Internet Commission.
C. the GATT.
D. the Library of Congress.
59. Copyrights can protect all of the following except:
A. music.
B. molded plastic parts.
C. sculptures.
D. models.
60. The term of a copyright is the author's life plus:
A. 20 years.
B. 30 years.
C. 50 years.
D. 70 years.
61. Trade secrets are protected:
A. by the General Agreement on Tariffs and Trade.
B. by federal law.
C. by state law.
D. by the Library of Congress.
62. Trade secrets can be protected for:
A. an unlimited period of time.
B. 20 years according to federal law.
C. 14 years according to state law.
D. 50 years if renewed to the maximum allowed, five 10-year renewable terms.
63. Licensing can be used by the entrepreneur to:
A. protect the Board of Directors from liability.
B. insulate management from liability.
C. protect confidentiality of a trade secret.
D. copy a competitor's patent.
64. Licensing represents opportunities for:
A. expanding into new markets.
B. reaching more customers in existing target markets.
C. an entrepreneur to profit with less risk and costly start-up investment.
D. an entrepreneur to gain access to others' copyrights, trademarks and patents.
65. The _______ created the commission that prescribes safety standards for products.
A. Consumer Product Safety Act
B. Patent Cooperation Treaty
C. Sarbanes-Oxley Act
D. U.S. Labor Department
66. What type of insurance is mandatory in some states?
A. Property
B. Bonding
C. Life
D. Workers' Compensation
67. What type of insurance would cover fire or burglary damage?
A. Property
B. Bonding
C. Life
D. Workers' Compensation
68. Which of the following is true regarding the Sarbanes-Oxley Act?
A. It only applies to companies that make over $10 million in gross revenue.
B. Private companies are not included in this act.
C. The act does not cover fraud via TV or radio.
D. The act only covers a narrow range of corporate governance activity.
69. Which of the following is not a condition that makes a contract legally enforceable?
A. Consideration is given by both parties
B. All parties involved are competent
C. Money is exchanged for products/services
D. Acceptance of the offer must be voluntary
70. What type of agreement must always be in writing in order to be a legally binding contract?
A. Client
B. Distributor
C. Supplier
D. Real estate
71. The courts consider oral agreements under $500 binding if:
A. the agreement is for less than one year.
B. the parties have previously done business together.
C. the transaction is for services rendered.
D. the new venture is incorporated.
72. Identify and describe the major parts of a patent application.
A. Introduction - this section should contain the background and advantages of the invention and the
nature of problems that it overcomes. It should clearly state how the invention differs from existing
offerings.
B. Description of Invention - should contain a brief description of the drawings that accompany it. These
drawings must comply with PTO requirements. Following this would be a detailed description of the
invention, which may include engineering specifications, materials, components, and so on, that are vital
to the actual making of the invention.
C. Claims - the most difficult section of the application to prepare since claims are the criteria by which
any infringements will be determined. Essential parts of the invention should be described in broad
terms so as to prevent others from getting around the patent. At the same time, the claims must not be so
general that they hide the invention's uniqueness and advantages.

73. Identify and describe the three different types of patents.

74. List the four requirements of filing for a trademark.

75. What are the main benefits of a registered trademark?

76. Explain what makes a contract legally enforceable

 ch06 Key
1. (p. 152) TRUE

2. (p. 153) TRUE

3. (p. 153) FALSE

4. (p. 155) TRUE

5. (p. 155) TRUE

6. (p. 155) TRUE

7. (p. 155) TRUE

8. (p. 155) FALSE

9. (p. 155) TRUE

10. (p. 155-156) FALSE

11. (p. 156) TRUE

12. (p. 156) TRUE

13. (p. 157) FALSE

14. (p. 157) FALSE

15. (p. 157) TRUE

16. (p. 158) TRUE

17. (p. 159) TRUE

18. (p. 159) TRUE

19. (p. 159) TRUE

20. (p. 160) FALSE

21. (p. 160) TRUE

22. (p. 161) FALSE

23. (p. 161) FALSE

24. (p. 161) TRUE

25. (p. 162) TRUE

26. (p. 162) TRUE

27. (p. 162) FALSE

28. (p. 162) TRUE

29. (p. 165) TRUE

30. (p. 165) TRUE

31. (p. 165) TRUE

32. (p. 166) TRUE

33. (p. 167) TRUE

34. (p. 167) TRUE

35. (p. 168-169) FALSE

36. (p. 168) FALSE

37. (p. 169) TRUE

38. (p. 170) FALSE

39. (p. 171) FALSE

40. (p. 171) TRUE

41. (p. 153) D

42. (p. 155) A

43. (p. 155) B

44. (p. 155) B

45. (p. 156) D

46. (p. 156-157) A

47. (p. 157) C

48. (p. 157) B

49. (p. 159) C

50. (p. 160) A

51. (p. 159-161) B

52. (p. 160) A

53. (p. 161) B

54. (p. 161) C

55. (p. 161) B

56. (p. 161) B

57. (p. 162) A

58. (p. 162) D

59. (p. 162) B

60. (p. 162) D

61. (p. 162) C

62. (p. 162) A

63. (p. 165) D

64. (p. 167) C

65. (p. 167) A

66. (p. 169) D

67. (p. 169) A

68. (p. 170) B

69. (p. 171) C

70. (p. 171) D

71. (p. 171) A

72. (p. 157) Answer will vary.

Plant patents - These are issued under the same provisions as utility patents and are for new varieties of plants. These patents represent a limited
area of interest, and thus very few of these types of patents are issued.
Design patent - Covering new, original, ornamental, and unobvious designs for articles of manufacture, a design patent reflects the appearance of
an object. These patents are granted for a 14-year term and, like the utility patent, provide the inventor with a negative right excluding others from
making, using, or selling an article having the ornamental appearance given in the drawings included in the patent.
73. (p. 156) Utility patent - most popular type, 20-year term. A utility patent basically grants the owner protection from anyone else making, using,
and/or selling the identified invention and generally reflects protection of new, useful, and unobvious processes.

(4) the fee

(3) five specimens showing actual use of the mark
(2) a drawing of the mark
(1) completion of the written form
74. (p. 161) Filing of the trademark registration must meet four requirements:

• It provides a basis for filing trademark application in foreign countries.

• It entitles you to use the notice of registration (®).
• It establishes the right to deposit registration with customs to prevent importation of goods with a similar mark.
• It establishes incontestable rights regarding the commercial use of the mark.
• It entitles you to sue in federal court for trademark infringement, which can result in recovery of profits, damages, and costs.
75. (p. 161 table 6.2) • It provides notice to everyone that you have exclusive rights to the use of the mark throughout the territorial limits of the
United States.

• Any sales of $500 or more must be in writing (all real estate deals need to be in writing).
• Contract must be legal. Any illegal activities under a contract are not binding. An example might be gambling.
• Both parties are competent and/or have the right to negotiate for their firms.
• Consideration (something of value) is given by both parties.
• Voluntary acceptance of offer.
76. (p. 171 table 6.5) • An offer is made. It can be oral or written but is not binding until voluntary acceptance of offer is given.
 ch06 Summary
Category # of Questions
Difficulty: 1 Easy 15
Difficulty: 2 Medium 50
Difficulty: 3 Hard 9
Difficulty: Medium (depending on detail and number of benefits required by instructor) 1
Difficulty: Medium (depending on detail required by instructor) 1
Hisrich - Chapter 06 76