Deck 7: The International Legal Environment: Playing by the Rules

Question 1

In the United States, a patent reverts to public domain if it is not produced within a specified period.

Answer 1

False
Explanation: Once a trademark, patent, or other intellectual property right is registered, most countries require that these rights be used and properly policed. The United States is one of the few countries in which an individual can hold a patent without the patented entity being manufactured and sold throughout the duration of the patent period.

Question 2

The World Court can settle disputes between a company and a government.

Answer 2

False
Explanation: Legal disputes can arise in three situations: between governments, between a company and a government, and between two companies. The World Court can adjudicate disputes between governments, whereas the other two situations must be handled in the courts of the country of one of the parties involved or through arbitration.

Question 3

One of the deterrents to litigation with respect to disputes in the international business arena is the fear of creating a poor image and damaging public relations.

Answer 3

True
Explanation: Fear of creating a poor image and damaging public relations is one of the deterrents to litigation.

Question 4

Code law prohibits the receipt and payment of interest on loans.

Question 5

Steps are being taken in common-law countries to codify commercial law even though the primary basis of commercial law is common law, that is, precedents set by court decisions.

Question 6

In many code-law countries, ownership of intellectual property rights is established by registration rather than by prior use.

Question 7

The sole requirement of an arbitration clause is that the parties agree to abide by the awards resulting from the process of arbitration.

Question 8

The statements made by the parties during conciliation may be used as evidence in the subsequent litigation.

Question 9

The form of law found in the United States and England is classified as civil or code law.

Question 10

When dealing with foreign countries, a marketer should refer to "international commercial law" for guidance.

Question 11

The ownership of intellectual property rights in United States, a common-law country, is established by registration rather than by prior use.

Question 12

Common law is based on an all-inclusive system of written rules of law.

Question 13

Disputes relating to commercial transactions must be settled in courts and cannot be settled informally.

Question 14

The General Agreement on Tariffs and Trade is the most comprehensive multilateral agreement on intellectual property to date.

Question 15

If conciliation is not used to settle a difference in an international business dispute or an agreement cannot be reached, the next step is litigation.

Question 16

In Marxist-socialist societies, law is strictly subordinate to prevailing economic conditions.

Question 17

Islamic law defines a complete system that prescribes specific patterns of social and economic behavior for all individuals.

Question 18

A certain level of piracy is beneficial for some companies as it provides an unplanned product trial.

Question 19

The form of law found in Germany, France, and Japan is called civil or code law.

Question 20

Legal ownership in one country does not necessarily mean ownership in other countries.

Question 21

Which of the following laws is primarily found in the United States, England, Canada, and other countries once under English influence?

A) Code law
B) Common law
C) Religious law
D) Civil law
E) Universal law

Question 22

Code law is also known as _____.

A) business law
B) common law
C) religious law
D) civil law
E) universal law

Question 23

Firms that have been penalized for bribing by the Foreign Corrupt Practices Act (FCPA) can reduce the penalties by helping in investigations.

Question 24

The Informed Consumer Standard is used in the consumer protection courts in Canada and it places the onus of making the right decisions on the buyer who is expected to have substantial knowledge of the industry and its products.

Question 25

The basis for _____ is tradition, past practices, and legal precedents set by the courts through interpretations of statutes, legal legislation, and past rulings.

A) civil law
B) common law
C) code law
D) commercial law
E) criminal law

Question 26

The shipping companies collect taxes for products that are sold by a company through the Internet to customers outside its home country.

Question 27

_____ seeks "interpretation through the past decisions of higher courts which interpret the same statutes or apply established and customary principles of law to a similar set of facts."

A) Constitutional law
B) Family law
C) Criminal law
D) Civil law
E) Common law

Question 28

Civil or code law is derived from _____.

A) English law
B) Economic law
C) Greek law
D) Persian law
E) Roman law

Question 29

Global concern for the environment is limited to industrial pollution, hazardous waste disposal, and rampant deforestation and excludes issues that focus directly on consumer products.

Question 30

Cybersquatters buy and register descriptive nouns, geographic names, names of ethnic groups and pharmaceutical substances, and other similar descriptors and hold them until they can be sold at an inflated price.

Question 31

Moving their businesses outside the political boundaries of the home country exempts the companies from the home-country laws.

Question 32

The laws regulating direct selling in China are unusually detailed compared to others around the world.

Question 33

Laws governing _____ offer the most striking differences between common-law and code-law systems.

A) international trade
B) social welfare
C) homicide
D) intellectual property
E) domestic industry

Question 34

The responsibility of determining if a license is required rests with the exporter.

Question 35

Charging what the market will bear is a suggested strategy for IP-rich firms to make money in China.

Question 36

Under common law, the ownership of intellectual property is established by _____.

A) title deeds
B) use
C) tradition
D) patent
E) registration

Question 37

Under _____, the legal system is generally divided into three separate codes: commercial, civil, and criminal.

A) constitutional law
B) code law
C) family law
D) religious law
E) traditional law

Question 38

Code law is based upon _____.

A) the interpretation through the past decisions of higher courts
B) the established and customary principles of law and their legal precedence
C) an all-inclusive system of written rules of law
D) the interpretation of the Koran
E) the codes of English law that apply in all countries under English influence

Question 39

Which of the following forms of law is derived from English law?

A) Code law
B) Common law
C) Religious law
D) Civil law
E) Universal law

Question 40

Antitrust laws were not enforced in the United States for the better part of the twentieth century.

Question 41

The World Court can adjudicate disputes between _____.

A) governments
B) a company and a government
C) two companies
D) a citizen and a government
E) trade associations of two countries

Question 42

Because of political changes in the late twentieth century, which of the following countries has had to build from scratch an entire commercial legal system?

A) France
B) Germany
C) Taiwan
D) Russia
E) Saudi Arabia

Question 43

A textile manufacturing company is trying to solve a dispute with one of its raw material suppliers over a breach of contract. After the failure of the initial attempts to solve the dispute in a friendly informal manner, the companies have approached an international commission to appoint an informed party to act as a referee and make a judgment that both parties will honor. Which of the following dispute resolution methods is being used by the companies in the above scenario?

A) Litigation
B) Arbitration
C) Mediation
D) Coercion
E) Judicial intervention

Question 44

_____ is considered complete as a result of catchall provisions found in most of this type of law systems.

A) Common law
B) Code law
C) Islamic law
D) Marxist-socialist tenets
E) The English legal tradition

Question 45

Which of the following methods is considered most effective while resolving disputes with Chinese business partners?

A) Arbitration
B) Conciliation
C) Coercion
D) Litigation
E) Criminal suits

Question 46

Islamic law is also known as the _____.

A) Ulema
B) Umrah
C) Zakat
D) Shari'ah
E) Barakah

Question 47

Ralph Richards has been attempting to solve a problem that his company has with a contract default by the Dutch government. He has tried conciliation but the two parties did not find any common ground on which they could begin a fruitful negotiation for settlement. Which of the following is likely to be the course of action that both the parties will try next?

A) Mediation
B) Informal settlement
C) Arbitration
D) Litigation
E) Coercion

Question 48

When formal arbitration organizations receive requests for arbitration, they initially attempt to resolve the issue by:

A) coercion.
B) prosecution.
C) direct legal intervention.
D) litigation.
E) conciliation.

Question 49

Which of the following is true of code-law systems?

A) They represent a legal system that is not all-inclusive.
B) They establish ownership of intellectual property by prior use rather than registration.
C) They originate from tradition, past practices, and legal precedents set by the courts through interpretations of statutes, legal legislation, and past rulings.
D) They sometimes fail to consider agreements to be enforceable unless properly notarized or registered.
E) They fail to consider unforeseeable human acts such as riots as acts of nature.

Question 50

The Islamic law prohibits the payment of _____.

A) taxes
B) profits
C) interest
D) equity
E) accounting fees

Question 51

In the usual _____ procedure, parties select a disinterested and informed party or parties to serve as a referee to determine the merits of the case and make a judgment that both parties agree to honor under the law.

A) arbitration
B) informal settlement
C) conciliation
D) litigation
E) coercion

Question 52

Identify the method that accounts for the majority of resolutions in international commercial transaction disputes.

A) Criminal suits
B) Conciliation
C) Arbitration
D) Litigation
E) Coercion

Question 53

Which of the following is true of arbitration?

A) Lawsuits are initiated between the conflicting parties.
B) Preliminary step of conciliation is often bypassed.
C) International Chamber of Commerce has been weak and ineffective.
D) Plaintiff and the defendant select a person each to present their case.
E) ICC Court does not appoint any member to regulate the private affairs of the two parties.

Question 54

Jimmy's foods, a popular food company in the United States, is trying to resolve a dispute with a local company in New Zealand that has been operating under the same name in its country. All attempts made by the U.S. company to settle the issue in a friendly manner have failed. The directors want to retain their trade name in New Zealand and have decided to settle the dispute with the local company by appointing a mediator. They also want the sessions to be private because of the fear of creating a poor public image. Which of the following dispute resolution methods is best suited for this situation?

A) Conciliation
B) Prosecution
C) Arbitration
D) Coercion
E) Litigation

Question 55

Apart from intellectual property laws, an illustration of how fundamental differences in the common and code systems can cause difficulty is in:

A) conducting civil trials.
B) determining laws governing export and import.
C) deciding heredity laws.
D) determining criminal laws.
E) evaluating the performance of a contract.

Question 56

In code-law countries, the ownership of intellectual property is determined by _____.

A) heredity
B) nature of use
C) duration of usage
D) registration
E) indemnification

Question 57

_____ is a nonbinding agreement between parties to resolve disputes by asking a third party to mediate differences.

A) Litigation
B) Prosecution
C) Arbitration
D) Conciliation
E) Coercion

Question 58

Under the premise that law, according to _____, is strictly subordinate to prevailing economic conditions, such fundamental propositions as private ownership, contracts, due process, and other legal mechanisms have had to be developed.

A) common law
B) code law
C) Islamic law
D) Marxist-socialist tenets
E) legal tradition

Question 59

Which of the following is usually placed in the arbitration clause and is becoming standard in many international contracts?

A) The preferred court or legal body of arbitration
B) The place of arbitration and the language used in the arbitration process
C) The contract stating that the results of the arbitration process are not binding on both parties
D) The judgment of the legal action initiated in the litigation stage
E) The copy of the lawsuit filed by the plaintiff

Question 60

The basis for _____ is the interpretation of the Koran.

A) common law
B) code law
C) Islamic law
D) Marxist-socialist tenets
E) legal tradition

Question 61

Which of the following countries has enacted the most stringent green marketing laws that regulate the management and recycling of packaging waste?

A) South Korea
B) China
C) Germany
D) United States
E) India

Question 62

According to Canadian law, what is the standard expected by courts in Canada to determine whether a representation is false or misleading?

A) De novo standard
B) Credulous person standard
C) Clearly erroneous standard
D) Informed consumer standard
E) Discretionary standard

Question 63

The _____ is a multicountry agreement that has established a regional patent system that allows any nationality to file a single international application for a European patent.

A) Madrid Arrangement
B) Paris Convention
C) TRIPs Agreement
D) Basel Convention
E) European Patent Convention

Question 64

Which of the following is the most attractive target for pirates because of high development cost and low reproducibility costs?

A) Apparels
B) Software
C) Auto parts
D) Books
E) Agricultural produce

Question 65

The _____ of the United States makes it illegal for companies to pay bribes to foreign officials, candidates, or political parties.

A) Taft-Hartley Act
B) Informed Consumer Standard
C) Foreign Corrupt Practices Act
D) Best Practices Act
E) International Codes of Law

Question 66

Which of the following poses a major challenge to international marketers while dealing with counterfeiting?

A) The ease with which consumers can tell the difference between real and counterfeit products
B) The theft of products by pirates during shipping
C) Government regulations legitimizing counterfeiting
D) The collusion between contract manufacturers and illegitimate sellers
E) The widespread availability of duplication software

Question 67

In which of the following countries is the ownership of IP rights established by prior use?

A) Japan
B) Brazil
C) Saudi Arabia
D) Jordan
E) United States

Question 68

Which of the following is an effective approach to prevent Chinese consumers from creatively copying foreign intellectual property?

A) Boycotting all trade activities with China
B) Placing embargoes on trade with China
C) Charging what the market will bear
D) Disengaging local representation in sales
E) Pursuing dispute resolution at the World Court

Question 69

Which of the following commonly counterfeited products has the potential for doing the greatest harm to the consuming public?

A) Toys
B) CDs
C) Pharmaceuticals
D) Software
E) Clothing

Question 70

Which of the following is the most comprehensive multilateral agreement on intellectual property to date and covers a full range of rights that are embodied in current international agreements?

A) World Intellectual Property Organization Charter
B) Trade-Related Aspects of Intellectual Property Rights Agreement
C) Inter-American Convention Agreement
D) The Madrid Arrangement
E) Paris Agreement for the Protection of Industrial Property

Question 71

Which of the following international conventions was established to recognize intellectual property rights?

A) The Paris Convention
B) The Munich Agreement
C) The Tokyo Convention
D) The Eurasian Convention
E) The Kyoto Protocol

Question 72

Which of the following should ideally be the first step in the settlement of a dispute?

A) Using the strategy of conciliation
B) Engaging in arbitration
C) Coercing the other party
D) Placating the injured party
E) Initiating a litigation

Question 73

_____ buy and register descriptive nouns, geographic names, names of ethnic groups and pharmaceutical substances, and other similar descriptors and hold them until they can be sold at an inflated price.

A) Patent trolls
B) Server farms
C) Domain name registries
D) Cybersquatters
E) Universal resource locators

Question 74

Which of the following acts developed by the European Union erases legal and trade differences that have existed for decades between the member nations?

A) European Sanctity Act
B) European Indemnification Act
C) European Unification Act
D) Single European Market Act
E) Foreign Corrupt Practices Act

Question 75

In the United States, ownership of intellectual property rights is established by "prior use versus registration" which implies that to claim the ownership of a trademark, an individual must:

A) be recognized by the United Nations trademark protection agency.
B) pay for the right to own a trademark.
C) establish first use of a trademark.
D) prove the ownership of a trademark in a court of law.
E) register a trademark only in his home country.

Question 76

Which of the following conventions is responsible for the promotion of the protection of intellectual property rights among all the member countries of the UN?

A) The Basel Convention
B) The Madrid Arrangement
C) The Tokyo Agreement
D) The Eurasian Convention
E) The World Intellectual Property Organization

Question 77

The question of jurisdiction of U.S. law over acts committed outside the territorial limits of the country has been settled by the courts through application of a long-established principle of international law called the:

A) right of imminent domain.
B) legal transfer of power.
C) rights of foreign powers and citizens.
D) objective theory of jurisdiction.
E) McNeil principle of international law.

Question 78

Which of the following is true with regard to the Internet?

A) The Internet is strongly restricted by global and national boundaries.
B) The existing cyberlaws incorporate the uniqueness of the Internet successfully.
C) The dynamics of cross-border transactions, censorship, and piracy have been curtailed successfully with cyberlaws.
D) The individual-country laws, which may or may not include private protection, are used in the absence of uniform and internationally accepted cyberlaws.
E) The taxes are collected by transporting services like FedEx in sale of goods using the Internet site as a platform to consumers in another country.

Question 79

Which of the following is the final step in an international commercial dispute when all the other methods have failed?

A) Conciliation
B) Encouraging one's government to force the other party to comply
C) Restarting the arbitration process
D) Litigation
E) Coercion

Question 80

Arbitration clauses require agreement wherein the concerned parties agree:

A) on who is right and who is wrong.
B) on the validity of the litigation issues.
C) to abide by the awards resulting from the arbitration.
D) to not hire a legal counsel to represent them.
E) to not name the arbitrators.