Download Kuratko 8e Chapter 07 PDF

TitleKuratko 8e Chapter 07
TagsPatent Trademark Bankruptcy Chapter 7 Copyright
File Size165.6 KB
Total Pages11
Document Text Contents
Page 1

This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. This may not be resold,
copied, or distributed without the prior consent of the publisher.



CHAPTER 7: LEGAL CHALLENGES OF ENTREPRENEURIAL VENTURES


TRUE/FALSE


1. Entrepreneurs should be knowledgeable about certain legal concepts that affect their business venture.


ANS: T PTS: 1 NAT: AACSB Ethics | Legal Responsibilities
KEY: pg 178


2. Laws governing intellectual property rights include copyrights, trademarks, and leases.

ANS: F PTS: 1 NAT: AACSB Ethics | Legal Responsibilities
KEY: pg 179


3. A patent is an intellectual property right.

ANS: T PTS: 1 NAT: AACSB Ethics | Legal Responsibilities
KEY: pg 179


4. Design patents last for 20 years.

ANS: F PTS: 1 NAT: AACSB Ethics | Legal Responsibilities
KEY: pg 179


5. Patents eventually expire.

ANS: T PTS: 1 NAT: AACSB Ethics | Legal Responsibilities
KEY: pg 179


6. The patent process is not complex, and does not require careful planning.

ANS: F PTS: 1 NAT: AACSB Ethics | Legal Responsibilities
KEY: pg 179


7. The two parts of a patent application are specification and claims.

ANS: T PTS: 1 NAT: AACSB Ethics | Legal Responsibilities
KEY: pg 179


8. The object of a patent is to provide the holder with a temporary monopoly on his or her innovation.

ANS: T PTS: 1 NAT: AACSB Ethics | Legal Responsibilities
KEY: pg 179


9. A copyright provides exclusive rights to creative individuals for the protection of their artistic
productions.

ANS: T PTS: 1 NAT: AACSB Ethics | Legal Responsibilities
KEY: pg 182

Page 2

This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. This may not be resold,
copied, or distributed without the prior consent of the publisher.



10. Works created and copyrighted after January 1, 1978, are protected for the life of the author plus 70
years.

ANS: T PTS: 1 NAT: AACSB Ethics | Legal Responsibilities
KEY: pg 182


11. Anyone who violates an author’s exclusive rights under a copyright is liable for infringement.

ANS: T PTS: 1 NAT: AACSB Ethics | Legal Responsibilities
KEY: pg 182


12. Because of the “fair use” doctrine, it is sometimes difficult to establish infringement.

ANS: T PTS: 1 NAT: AACSB Ethics | Legal Responsibilities
KEY: pg 182


13. Copyrights have to be registered with the Copyright Office.

ANS: T PTS: 1 NAT: AACSB Ethics | Legal Responsibilities
KEY: pg 182


14. A trademark is a distinctive name, mark, or symbol that is identified with a company’s product.

ANS: T PTS: 1 NAT: AACSB Ethics | Legal Responsibilities
KEY: pg 184


15. An example of a trademark is a logo.

ANS: T PTS: 1 NAT: AACSB Ethics | Legal Responsibilities
KEY: pg 184


16. Once issued, the trademark is listed in the Principal Register of the Patent and Trademark Office.

ANS: T PTS: 1 NAT: AACSB Ethics | Legal Responsibilities
KEY: pg 184


17. The registration of a trademark is for 40 years.

ANS: F PTS: 1 NAT: AACSB Ethics | Legal Responsibilities
KEY: pg 185


18. Trademark registration and search is not costly.

ANS: F PTS: 1 NAT: AACSB Ethics | Legal Responsibilities
KEY: pg 187


19. If infringement can be proven in court, an award may be given to the trademark holder.

ANS: T PTS: 1 NAT: AACSB Ethics | Legal Responsibilities
KEY: pg 187


20. Every business at some point needs the services of an attorney.

Page 5

This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. This may not be resold,
copied, or distributed without the prior consent of the publisher.



KEY: pg 182


12. To effectively pursue a patent, experts recommend that the entrepreneur
a. handle all matters personally.
b. prepare a realistic budget for infringement.
c. fill out a preprinted form obtained from a patent office.
d. sue as quickly as possible.




ANS: B PTS: 1 NAT: AACSB Ethics | Legal Responsibilities
KEY: pg 179


13. The specification section of a patent application should include all of the following except
a. an introduction. c. a summary of invention.
b. examples and/or experimental results. d. a budget for handling infringement.




ANS: D PTS: 1 NAT: AACSB Ethics | Legal Responsibilities
KEY: pg 179


14. In order to obtain a patent, an application should be filed with
a. the Office of Government Publications.
b. the Patent and Trademark Office of the Department of Commerce.
c. Government Accounting Office.
d. the United States Patent Office.




ANS: B PTS: 1 NAT: AACSB Ethics | Legal Responsibilities
KEY: pg 182


15. What percentage of issued patents is commercially valuable?
a. a very small percentage c. 40 percent
b. around 20 percent d. 75 percent




ANS: A PTS: 1 NAT: AACSB Ethics | Legal Responsibilities
KEY: pg 182


16. A person who loses an infringement battle in court may have to pay
a. extra legal fees.
b. damages of up to five times the actual amount.
c. higher profits due to the infringement.
d. the taxpayers back.




ANS: A PTS: 1 NAT: AACSB Ethics | Legal Responsibilities
KEY: pg 182


17. An infringement budget deals with
a. legal battles. c. the outside molding of a building.
b. government bribes. d. advertising expenditures.




ANS: A PTS: 1 NAT: AACSB Ethics | Legal Responsibilities
KEY: pg 179


18. The owner of the copyright may do all of the following except
a. reproduce the work. c. perform the work publicly.
b. sell the rights for a period of 200 years. d. display the work publicly.

Page 6

This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. This may not be resold,
copied, or distributed without the prior consent of the publisher.



ANS: B PTS: 1 NAT: AACSB Ethics | Legal Responsibilities
KEY: pg 182


19. Anyone who violates an author’s exclusive rights under a copyright is liable for:
a. a prison term.
b. infringement.
c. a monetary payment equal to proven damages.
d. two times annual sales.




ANS: B PTS: 1 NAT: AACSB Ethics | Legal Responsibilities
KEY: pg 182


20. For the author of creative material to obtain a copyright, the material must be in _____ form.
a. nontangible c. tangible
b. technical d. commercial




ANS: C PTS: 1 NAT: AACSB Ethics | Legal Responsibilities
KEY: pg 182


21. Because of the doctrine, it is sometimes difficult to establish infringement.
a. fair use c. freedom of information
b. acquisition d. right to publish




ANS: A PTS: 1 NAT: AACSB Ethics | Legal Responsibilities
KEY: pg 182


22. The determination of fair use of copyrights is based on
a. the effect of use on potential market.
b. the time period involved.
c. specific legal guidelines set forth by OSHA.
d. the GAD doctrine.




ANS: A PTS: 1 NAT: AACSB Ethics | Legal Responsibilities
KEY: pg 183


23. Under copyright law, which of the following are the rights of the owner?
a. the right to reproduce work
b. the right to display the work of others
c. the right to perform any work they choose
d. the right to sell any work on the market as demand will bear




ANS: A PTS: 1 NAT: AACSB Ethics | Legal Responsibilities
KEY: pg 189


24. Works created after January 1, 1978, have a copyright for the life of the author plus
a. 70 years. c. 14 years.
b. 50 years. d. 10 months.




ANS: A PTS: 1 NAT: AACSB Ethics | Legal Responsibilities
KEY: pg 182


25. Copyrights may be expressed in
a. books. c. motion pictures.
b. periodicals. d. all of the above.

Page 10

This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. This may not be resold,
copied, or distributed without the prior consent of the publisher.





ANS: D PTS: 1 NAT: AACSB Ethics | Legal Responsibilities
KEY: pg 200


SHORT ANSWER


1. Define a patent and describe its limitations.


ANS:
A patent is a right, granted by the government, of an inventor to protect an idea against infringement.
Patents can cover products, machines, and improvements on already patented things. A patent allows
the holder to have a temporary monopoly on his or her new creation. Design patents last for 14 years,
all others last 20 years. But, patents are expensive and time consuming to secure. Also, if a patent is
infringed upon, a court battle decides its validity. A patent can be invalidated for three reasons: A
patent holder may wait too long before asserting his or her rights, a patent may be misused, or a patent
may be proven not to meet patentability requirements.

PTS: 1 NAT: AACSB Ethics | Legal Responsibilities


2. What does a copyright protect and what are the guidelines for copyright protection?

ANS:
A copyright protects a person’s literary and artistic creations. Since 1978, a copyright gives protection
for the life of the creator plus 50 years. A copyright allows the holder to reproduce the work, prepare
copies, perform the work, and display the work. There are certain important guidelines for copyright
protection. It isn’t necessary to register copyrights unless you need to sue someone. Needless
registration only adds unnecessary time and effort. When buying material for internal use, it would be
reasonable to duplicate certain parts on occasion. But, duplicating entire pieces on a regular basis
would clearly violate a copyright holder’s rights. Care should be taken in using materials such as
catalogs. Materials that require a lot of expense to compile many times contain fictitious items to trap
people who merely copy material. It may be useful to copyright advertisements that may be of use to
competitors. Government documents cannot be copyrighted, but their format can. Therefore, you
can’t simply duplicate a page of text. And finally, use common sense in using copyrighted material. It
is illegal to rephrase another person’s material and call it your own.

PTS: 1 NAT: AACSB Ethics | Legal Responsibilities


3. What are the uses of trademarks and how can they be invalidated?

ANS:
A trademark is a distinctive symbol of a company. A trademark can be used to distinguish goods,
services, quality, and materials used. A trademark must be in some way unique to the object. A
trademark can be invalidated in any of four ways. A third party may challenge a trademark’s
distinctiveness within five years. A trademark owner may fail to file an affidavit stating a trademark’s
use or lack of use within six years of registration. An owner may fail to use a trademark for two
consecutive years without justification. And finally, a trademark may become synonymous with the
product itself.

PTS: 1 NAT: AACSB Ethics | Legal Responsibilities


4. What are the rules for avoiding pitfalls in selecting trademarks?

Page 11

This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. This may not be resold,
copied, or distributed without the prior consent of the publisher.




ANS:
Trademarks registration and research is expensive. Trademark infringement is even more expensive.
There are five basic rules to avoid difficulties with trademarks. A corporate name or mark should
never be selected without a trademark search. If your attorney recommends against a trademark for
legal reasons, trust his judgment. Try to find a unique name or mark. Use a distinctive logotype when
using a descriptive name for a product. When an abbreviation or acronym must be used, use a
distinctive logotype.

PTS: 1 NAT: AACSB Ethics | Legal Responsibilities


5. Name the three forms of bankruptcy and describe their functions?

ANS:
Bankruptcy was designed for three major reasons. One is to guarantee that assets will be fairly divided
among creditors. The second is to project debtors from losing too many of their assets. And debtors
are protected from unreasonable demands of creditors. There are three major sections of bankruptcy
for small business. Chapter 7 is straight bankruptcy, or liquidation. In Chapter 7, the debtor forfeits
all assets of a business, which a court-appointed trustee then sells. All receipts are then divided among
the creditors. Chapter 7 allows the debtor to be relieved of all obligations. Chapter 11 is known as
reorganization. In this proceeding, the debtor pays a portion of the debt and the remainder is
relinquished. The debtor is then allowed to continue his or her venture.

Chapter 13 allows the debtor to repay the debt over a longer period of time. Chapter 13 avoids
declaration of bankruptcy, and allows payment in installments, and protection by the court.


PTS: 1 NAT: AACSB Ethics | Legal Responsibilities

Similer Documents