Deck 6: Intellectual Property Rights and Other Legal Forces

Question 1

Under U.S.law,price fixing is illegal per se,while in other countries,damage or harm has to be done; this is the case in the EU.

Answer 1

True
Explanation: The per se aspect of U.S. law is not shared in the EU.

Question 2

To what degree a country's legal system is based on the rule of law makes no difference to international business; it is personal relationships that matter in foreign environments.

Answer 2

False
Explanation: The rule of law encourages international business and foreign investors because relevant interests will be protected.

Question 3

The European Patent Organization (EPO)makes filing for a patent in all 28 EU member states more difficult than it was previously.

Answer 3

False
Explanation: The EPO makes the filing easier, because it is only one filing, compared to 28.

Question 4

Intellectual property includes patents and trademarks,but not copyrights.

Question 5

The U.S.enforcement of EEOC law in U.S.companies operating abroad is an example of extraterritoriality.

Question 6

Customary international law draws on practices that have been followed often for centuries.

Question 7

The U.S.avoids extraterritorial application of its laws.

Question 8

A choice-of-law clause specifies which law will apply in the event of a dispute and is a good idea to include.

Question 9

The UN Convention on the International Sale of Goods (CISG)has established legal rules and outlined the rights and obligations of the buyer and seller.

Question 10

Many smaller and developing nations want to reduce patent protection from the current 15 to 20 years down to 5 years or even 30 months.

Question 11

The World Intellectual Property Organization (WIPO)is a UN agency that administers 24 intellectual property treaties.

Question 12

No worldwide court has the power to enforce its decrees.

Question 13

Global trademark protection follows the Office of Harmonization in the Internal Market approach.

Question 14

The source of international law is frequently the United Nations.

Question 15

Global standardization of trade-related law is progressing slowly.

Question 16

International Organization for Standardization (ISO)is the only international standardizing organization.

Question 17

Legal uncertainties constrain the growth of international business.

Question 18

Incoterms are established by the UN Commission on International Trade.

Question 19

There is one main organization that offers intellectual property (IP)protection,the UN.

Question 20

Arbitration provides foreign businesses a forum other than the U.S.court system to address disputes that involve U.S.sellers or buyers.

Question 21

Trademarks can be

A) a shape, color, design, sound, phrase, abbreviation by which the product is designated.
B) any visual property consciously associated with the product.
C) a design associated with the product, using color and shape.
D) a mark under which the firm does business.

Question 22

Smaller nations would like patent protection

A) extended, to allow for them to build their competitive advantage.
B) extended, so that they can recoup development costs.
C) reduced, so that they can enter the game earlier, possibly with generics.
D) extended, so that their profits can increase.

Question 23

Incoterms include

A) FAS and CIF.
B) CFR and COD.
C) INSAP and ECO.
D) SAE and EBI.

Question 24

In the antitrust area,the U.S.is concerned with the impact of the business deal on the consumer,whereas the EU is focused on the competitive structure of the marketplace,and so pays attention to its rivals.

Question 25

Microsoft is an example of how a company can avoid multiple antitrust laws in multiple jurisdictions,thanks to equalization agreements.

Question 26

Patent trolls are

A) a record of all patents, recorded by the UN.
B) the numerical controls issued on patents, standardized by the Paris Convention.
C) the organizing system for patent review that is kept internationally by OECD.
D) modern highway robbers who exploit loopholes in IP protection.

Question 27

Arbitration is a private solution that is

A) often preferred by foreign litigants because it is perceived as fairer, faster, cheaper, and more confidential than are the courts.
B) favored by international unions.
C) recommended by the UN for international companies facing litigation in developing countries.
D) discouraged by the U.S. Bar Association.

Question 28

Enforcing contracts that cross international borders is

A) simply a matter of applying the local law to the contract.
B) complicated and governed in most nations by the CISG.
C) secondary to who has possession of the goods, regardless of title.
D) nearly impossible, so negotiation is important.

Question 29

The EU does not apply its competition policy beyond the EU.

Question 30

Usually,to assume that foreign law

A) will be similar to U.S. law is reasonable.
B) will differ from U.S. law and must be understood is a reasonable approach.
C) won't matter because you and your trading partner will agree to arbitrate is reasonable.
D) will be biased against the foreigner is reasonable.

Question 31

Product liability is an area of torts in which the U.S.courts can make large awards,unlike in other countries.

Question 32

The U.S.avoids trade barriers on imports in support of free trade principles.

Question 33

Tariffs are categorized as financial and political forces,but they are usually not seen as legal forces.

Question 34

In the U.S.punitive damage rulings have no measureable effect on medical areas.

Question 35

A patent gives the inventor

A) property rights for 10 years.
B) the right to use the invention until development costs are recouped.
C) exclusive right to manufacture, exploit, use, and sell the invention for a given time period.
D) the right to keep the patented process but not the product for five years.

Question 36

WIPO is a

A) UN agency that administers intellectual property treaties and advises countries on intellectual property-related administrative issues.
B) WTO group opposed to patent extension and pro-generic.
C) part of the Club of Rome that lobbies for longer patent periods.
D) research arm of the Fuel Cartel that has been advocating longer patent protection for biofuel processing systems.

Question 37

Japanese cultural values suggest that in Japan,antitrust law against cartels would be strictly enforced.

Question 38

Contingency fee cases are limited to the U.S.

Question 39

Patent treatment is standardized owing to

A) the WTO.
B) the UN Commission on Patents.
C) domestic laws in various nations.
D) WIPO, TRIPS, and the Paris Union.

Question 40

The U.S.at times applies antitrust law extraterritorially.

Question 41

Extraterritoriality is

A) a nation's attempt to enforce its law beyond its borders.
B) added territory as a result of dispute settlements in wars, such as the Sakalin Islands.
C) a citizen's claim to government assistance in a foreign environment.
D) a taxable condition most international firms attempt to avoid.

Question 42

The FCPA has

A) hurt American business because managers cannot use bribes any more.
B) challenged the creativity of American managers and consultants to develop ways to work around the FCPA.
C) brought the discussion of bribery into the open, which has, overall, been positive.
D) resulted in American foreign business going to Japanese and German businesses.

Question 43

If two English multinational companies had a dispute arising in New York City,and there were no choice of law or choice of forum clauses in their contract,it is likely that

A) a New York court would hear their complaint.
B) they would bring their dispute to an English court.
C) the dispute would not get heard in court, but rather, in the boardrooms.
D) they would reach an agreement informally and develop an off-the-books settlement.

Question 44

The concept of strict liability,as found in the U.S.legal system,applies

A) to harm done by the designer/manufacturer without the need to prove negligence.
B) to harm done within narrow limits, considering the design of the product.
C) to children harmed by products in both the U.S. and the EU.
D) strictly to harm caused by the designer/manufacturer, so no penalties outside of damages can be awarded.

Question 45

The U.S.antitrust law contains both civil and criminal penalties,

A) neither of which can be applied outside the U.S.
B) and the criminal penalties apply to foreign companies even if the conspiracy took place outside the U.S.
C) but their application to foreign companies is limited to actions that have taken place within the U.S.
D) and they can be administered by foreign courts.

Question 46

If an international manager runs afoul of a miscellaneous law while working abroad,calling the embassy

A) will ensure that the charges are dropped.
B) to let them know of the situation may be a good idea, but usually the embassy cannot help much.
C) will lead to meetings that will arrange for everything needed for dropped charges.
D) to have them explain the various legal rights you have as a foreigner to the foreign government judicial official is a reasonable approach.

Question 47

Antitrust law is intended to

A) challenge successful businesses to allow proper levels of competition.
B) prevent large concentrations of economic power, such as monopolies.
C) create a more trusting business environment.
D) allow socialism to flourish.

Question 48

In the Global Debate,voluntary American dolphin-safe tuna labeling is objected to on what grounds?

A) Dolphin and tuna are not the same species.
B) The labeling is seen as a nontariff barrier for unlabeled, imported tuna.
C) Mexican tuna cannot be labeled by U.S. regulation.
D) Labeling requires additional expenditure in the fishing process.

Question 49

Anyone studying legal forces affecting international business soon realizes

A) there is a remarkable level of coordination among legal systems in the developed nations.
B) that most laws are predictable, and that, although there is variance, what constitutes illegal behavior is commonly shared.
C) the variety of these forces complicates the task of understanding the laws.
D) because of the World Court, officials in most legal systems are open to collaborating with their international colleagues.

Question 50

One difference between the U.S.and EU approach to antitrust law is that

A) the U.S. follows the per se concept, wherein actions are illegal whether they have done harm.
B) the EU forbids market dominance by cartels, no matter the conditions, whereas the U.S. does not.
C) the U.S. focus is on impact on competition, whereas the EU focus is on the consumer.
D) the EU avoids competition, whereas the U.S. seeks it.

Question 51

The U.S.and the EU both

A) apply antitrust law extraterritorially.
B) oppose the Japanese Anti-Monopoly Law.
C) share a commitment to the per se concept in law.
D) oppose the Japanese Anti-Monopoly Law as a nontariff barrier.

Question 52

The Alien Tort Statute allows foreigners to

A) sue in the U.S. courts for residency in the U.S.
B) file claims in U.S. courts for violations of international law that may have occurred beyond the U.S. borders.
C) file claims in U.S. courts for alleged violations of foreign laws.
D) file claims against other foreign nationals for violation of U.S. EEOC law.

Question 53

FCPA includes

A) uncertainties that make its application problematic.
B) specific explicit rules with clear definitions of terms that U.S. companies must follow in their foreign operations.
C) all accounting processes, including the accounting of transfer payments.
D) foreign tax liabilities and other adjustments specific to business outside of the home country.

Question 54

Arbitration is often preferred when the contract stipulates U.S.law and one of the litigants is foreign because it is

A) easier to influence an arbiter than a judge.
B) quicker, cheaper, and more private than the U.S. court system.
C) more discreet, although more costly than the court system.
D) less bureaucratic than the court system of any country.

Question 55

Transparency International's 2013 Index lists which countries as being among the most transparent?

A) Switzerland, Singapore, the Netherlands
B) Zaire, Hong Kong, Italy
C) the U.S., Italy, France
D) Russia, Mexico, Spain

Question 56

The Foreign Corrupt Practices Act (FCPA)is U.S.legislation that

A) outlines bribery practices that are allowed abroad but not in the U.S.
B) prohibits bribery by American companies abroad.
C) allows bribery in foreign dealings when culturally sanctioned.
D) outlines and prohibits foreign bribery practices by foreign nationals in foreign nations.

Question 57

The existence of the rule of law in a foreign market suggests that

A) lawyers will be necessary in any substantive business transaction.
B) personal relationships will be less effective than in a country governed outside the rule of law system.
C) legal rulings will be the basis of any dispute resolution.
D) foreign investors can assume that their interests will be protected.

Question 58

The main sources of international law are

A) the UN International Court of Justice.
B) the U.S. Supreme Court and the EU Court of Justice.
C) bilateral and multilateral treaties, along with customary law.
D) nonexistent at this point.

Question 59

Punitive damages in product liability cases can be awarded in

A) Japan.
B) Japan and the EU.
C) the UK.
D) the U.S.

Question 60

Where litigation in international disputes should occur is

A) usually evident from the documentation available.
B) at times unclear, in which case, the UN International Court of Justice will make a jurisdictional ruling.
C) often complex, so contracts should include choice of law and choice of forum clauses.
D) dictated by where the problem arose; a problem arising in India is adjudicated in India.

Question 61

Patent trolling is a process of

A) looking for loopholes in patent protection and exploiting them.
B) recording and registering of patents in foreign countries to protect the firm's IP.
C) searching out patents that have expired and negotiating their replacements.
D) legal research that uncovers obscure, deceased patent holders and liberates their inventions.

Question 62

In the U.S.and EU,attitudes toward competition

A) are quite similar.
B) are based on differing assumptions, with the U.S. following a per se concept and the EU concerned about the existence of harm.
C) differ because the EU is anticompetitive; its Commission on Competition ensures competition isn't too severe.
D) differ on the role of market dominance; the U.S. supports it and the EU wants to avoid it.

Question 63

Patents are government grants that give the owner

A) exclusive rights to use, sell, manufacture, or exploit the invention or process.
B) the exclusive right to use the fundamental ideas on which the invention is based.
C) the rights to sell the invention, but only beyond the patent-granter's borders.
D) rights to the invention but does not prevent others from copying the invention.

Question 64

Incoterms attempt to standardize shipping agreements,and include

A) FAS and CIF.
B) CED and COD.
C) descriptions of portside processes.
D) insurance arrangements for international shipments.

Question 65

The end result of legal trade obstacles is often

A) limited trade, with the recipient of the trade obstacles withdrawing.
B) political negotiations between the two countries, to smooth relations and reduce costs.
C) higher costs to consumers.
D) lower taxes to citizens in the tariff-imposing country due to tariff revenues.

Question 66

The Foreign Corrupt Practices Act has

A) moved the discussion of transparency and corruption out into the open.
B) impaired American competitiveness abroad.
C) jailed legions of corrupt foreign executives in the U.S.
D) introduced clear, concise terminology into the discussion of corruption.

Question 67

Running afoul of miscellaneous laws in a foreign country is

A) an error easily forgiven by foreign police.
B) a serious error, so the local law should be known.
C) not a major issue, as the embassy can work out your release.
D) not a serious issue because both your country and your company stand behind you.

Question 68

Antitrust laws differ among countries,and complying with them is often difficult for the firm,so

A) international firms have had to increase their legal staffs to ensure compliance.
B) the U.S. government is pushing for a world organization to clear antitrust issues.
C) firms have moved toward fewer mergers and more regionalized organizations.
D) firms expect to be in antitrust litigation and act accordingly.

Question 69

U.S.antitrust law is applied

A) to all U.S. firms doing business in the U.S.
B) as widely as possible, whether or not the alleged corruption took place inside the U.S. and whether or not the business is American.
C) to U.S.-owned firms with assets in the U.S.
D) to all firms with assets in the U.S.

Question 70

Trade obstacles are considered to be legal forces because

A) customs is controlled by a country's national police or army.
B) their compliance is costly to the firm and the consumer.
C) they are protected by the courts.
D) they often are based on legislation, and noncompliance can carry punishment.

Question 71

The EU applies its competition policy

A) extraterritorially.
B) only within EU.
C) within the EU and applicant states.
D) within the EU and other European nations.

Question 72

Legal uncertainties have affected international business (IB)-

A) they have slowed down IB growth.
B) they have not, though, slowed down the growth of IB; instead, they have made conducting IB more complex.
C) prices and insurance costs have risen.
D) fewer large businesses want to be involved across national borders due to the uncertainties of the legal environment.

Question 73

WIPRO and TRIPS represent

A) patent harmonization agreements in SE Asia and the EU, respectively.
B) anti-counterfeiting agreements in Korea and North America, respectively.
C) WTO and UN agreements on corruption.
D) UN and WTO agencies or programs that focus on IP.

Question 74

With patents,there is standardization,

A) to some degree, through the EPO within the EU.
B) yet this is in name only, so often companies file many patents applications in different countries.
C) with total harmonization reached through UN accords.
D) thanks to the accounting harmonization process.

Question 75

Unlike antitrust or competition proceedings in the EU,in the U.S.such proceedings

A) may involve civil and criminal penalties.
B) are heard at the local level.
C) involve only the top management team.
D) are head by a three-judge panel.

Question 76

The ISO and the IEC both promote

A) harmonization in international accountancy.
B) standardization in technology-related fields through specifications.
C) union membership in fields that are technology intensive.
D) shared bankruptcy standards across the globe.

Question 77

Trade names are protected under

A) national laws in all UN member countries.
B) the International Convention for the Protection of Industrial Property.
C) many local laws in most countries, so that illegal trademark use is a local issue.
D) long-standing convention, but no legal agreements.

Question 78

In the U.S.court system,tort claims may result in

A) exceedingly large awards.
B) lower liability insurance.
C) a reduction in strict liability.
D) reduced liability insurance costs for foreign companies.

Question 79

Intellectual property includes

A) intangibles, which is why it is a difficult area.
B) thoughts and ideas, but not tangible products.
C) anything that is a result of a creative process that does not have material qualities.
D) anything that is the result of things created using someone's intellect.

Question 80

Standardization of law

A) would challenge international business because IB would lose protection.
B) would make IB work more smoothly because uniform, predictable laws would result.
C) has not been progressing due to nationalism and patriotism.
D) does not take into account cultural aspects of legal regulations.