Deck 7: Intellectual Property and Other Legal Forces

Question 1

A choice-of-law clause specifies where a dispute will be settled.

Answer 1

False

Question 2

The U.S. enforcement of Equal Employment Opportunity Commission (EEOC) law in U.S. companies operating abroad is an example of extraterritoriality.

Answer 2

True

Question 3

Although arbitration procedures may be confidential, enabling a company to avoid unwelcome publicity accompanying an open court case, arbitration is generally slower than law courts.

Answer 3

False

Question 4

The source of international law is frequently the United Nations.

Question 5

Public international law refers to legal relations between governments and publicly held companies.

Question 6

No worldwide court has the power to enforce its decrees.

Question 7

Discovery refers to the process of finding out facts that indicate a law has been violated, and it leads to the filing of a legal case, or litigation.

Question 8

Intellectual property includes patents and trademarks but not copyrights.

Question 9

The source of international law is mostly the tendency of powerful nations to apply their laws extraterritorially.

Question 10

By UN regulation, contracts cannot contain choice-of-law and choice-of-forum clauses.

Question 11

Tax law is exempt from extraterritoriality.

Question 12

Arbitration is less popular than legal proceedings, largely because arbitration is more expensive.

Question 13

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

Question 14

Incoterms are established by the UN Commission on International Trade.

Question 15

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

Question 16

According to the World Health Organization, about one-quarter of all drugs sold through "questionable" Internet pharmacies are estimated to be counterfeit.

Question 17

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

Question 18

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 19

The United States avoids extraterritorial application of its laws.

Question 20

Where litigation should occur has to do with the location of the problem and is usually clear to both the defendant and the plaintiff.

Question 21

If you are a Westerner and become victim of a miscellaneous law in a foreign country, all you have to do is call your embassy and you'll be released to your government.

Question 22

In the United States, punitive damage rulings have no measureable effect on medicine.

Question 23

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

Question 24

Trademarks can include a shape, a color, or a sound.

Question 25

Global standardization of trade-related law is progressing slowly.

Question 26

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

Question 27

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 28

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

Question 29

The United States avoids trade barriers on imports in support of free trade principles.

Question 30

In the antitrust area, the United States is concerned with the impact of the business deal on the consumer, whereas the EU focus is on the competitive structure of the marketplace, so it pays attention to rivals.

Question 31

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

Question 32

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

Question 33

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

Question 34

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

Question 35

The European Patent Organization makes filing for a patent in all 27 EU member-states more difficult than it was previously.

Question 36

The United States at times applies antitrust law extraterritorially.

Question 37

Contingency-fee cases are limited to the United States.

Question 38

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

Question 39

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.

Question 40

There is one main organization that offers IP protection, the UN.

Question 41

The United Kingdom Bribery Act includes penalties for corporate failure to prevent bribery, but only if the act of bribery occurred in the United Kingdom.

Question 42

Anyone studying legal forces affecting international business soon realizes that:

A) there is a remarkable level of coordination among legal systems in the developed nations.
B) 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) thanks to the World Court, officials in most legal systems are open to collaborating with their international colleagues.
E) none of the above.

Question 43

Laws governing transactions of individuals and companies that cross international borders are:

A) none of B, C, D, orE
B) private international law.
C) product liability law.
D) public international law.
E) customary law.

Question 44

Legal uncertainties have affected international business, and:

A) they have prevented IB growth.
B) they have not, though, slowed down the growth of IB; instead, they have made it 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.
E) none of the above.

Question 45

U.S. accounting practice is guided by the Securities and Exchange Commission (SEC) and the International Accounting Standards Board (IASB), and it follows standards known as generally accepted accounting principles (GAAP).

Question 46

Incoterms attempt to standardize shipping agreements, and they include:

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

Question 47

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.
E) two of the above.

Question 48

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) none of A, B, D, orE
D) legal rulings will be the basis of any dispute resolution.
E) foreign investors can assume that their interests will be protected.

Question 49

Incoterms include:

A) FAS and DAF.
B) CFR and COD.
C) INSAP and ECO.
D) SAE and EBI.
E) DOA and EDP

Question 50

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.
E) determined by a jury during pretrial discovery.

Question 51

Many U.S. laws affect activities of international firms, and their impacts have been coordinated.

Question 52

Enforcing contracts that cross international borders is:

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

Question 53

Arbitration is often preferred because it is:

A) easier to influence an arbiter than a judge.
B) quicker and more private than the U.S. court system, although often more expensive.
C) more discreet, although more costly than the court system.
D) less bureaucratic than the court system of any country.
E) none of the above.

Question 54

The Alien Tort Statute allows foreigners to:

A) sue in U.S. courts for residency in the United States.
B) file claims in U.S. courts for violations of international law that may have occurred beyond U.S. borders.
C) file claims in U.S. courts for alleged violations of foreign laws.
D) file claims against other foreign nationals for violations of U.S. EEOC law.
E) avoid prosecution from U.S. laws as long as they live, work, and have citizenship in another country.

Question 55

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 get heard not in court but, rather, in the boardrooms.
D) they would reach an agreement informally and develop an off-the-books settlement.
E) they would bring their dispute to the World Court for adjudication.

Question 56

The Foreign Corrupt Practices Act (FCPA) clearly stipulates terminology and behavior that is illegal on the part of U.S. businesses and of foreign businesses operating in the United States

Question 57

Usually, it is reasonable to assume that foreign law:

A) will be similar to U.S. law.
B) will differ from U.S. law and must be understood.
C) won't matter because you and your trading partner will agree to arbitrate.
D) will be biased against the foreigner.
E) will vary but that U.S. law will take precedence.

Question 58

Discussion of bribery and transparency has generally not come into despite the Foreign Corrupt Practices Act (FCPA), the OECD convention, and the UN initiative.

Question 59

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) two of the above.
E) all of A, B, and C.

Question 60

The main source(s) of international law is(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.
E) the WIPO.

Question 61

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 the OECD.
D) modern highway robbers who exploit loopholes in IP protection.
E) the framework used for filing and referencing patents.

Question 62

Patent trolling is the process of:

A) looking for loopholes in patent protection and exploiting them.
B) recording and registering 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.
E) none of the above.

Question 63

Both the ISO and the IEC 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.
E) none of the above.

Question 64

U.S. antitrust law is applied:

A) to all firms based in the United States, but not others.
B) to all firms, including extraterritorially.
C) only to U.S.-owned firms with assets in the United States.
D) to all firms, as long as they have assets in the United States.
E) all of the above.

Question 65

Smaller nations would like patent protection:

A) extended, to allow 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.
E) to be the same for government patent holders as for multinational companies.

Question 66

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 rights 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.
E) two of the above.

Question 67

Patent treatment is standardized thanks to:

A) the WTO.
B) the UN Commission on Patents.
C) domestic laws in various nations.
D) the Paris Union.
E) the ACTA.

Question 68

WIPO and TRIPS represent:

A) patent harmonization agreements in Southeast Asia and the EU, respectively.
B) anticounterfeiting agreements in Korea and North America, respectively.
C) WTO and UN agreements on IP.
D) UN and WTO agencies or programs that focus on IP.
E) international governments during litigation at the World Court.

Question 69

With patents:

A) there is standardization, to some degree, through the Paris Union.
B) there is no standardization, so often companies such as Nestlé file many patent applications in different countries.
C) total harmonization has been reached through UN accords and the EPO.
D) an inventor is automatically granted rights to her invention as long as she completes a patent filing.
E) the first person to file is the one who receives patent protection.

Question 70

The EU applies its competition policy:

A) extraterritorially.
B) only within the EU.
C) within the EU and applicant states.
D) within the EU and other European nations.
E) none of the above.

Question 71

Intellectual property:

A) excludes intangibles, which is why it is a difficult area.
B) includes thoughts and ideas, but not tangible products.
C) includes anything that is a result of a creative process that does not have material qualities.
D) includes anything that is the result of things created using someone's intellect.
E) excludes things found in nature, such as natural colors, scents, and sounds.

Question 72

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.
E) two of the above.

Question 73

In the United States and EU, attitudes toward competition:

A) are quite similar.
B) are based on differing assumptions, with the United States 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, with the United States supporting it and the EU wanting to avoid it.
E) are both focused on prevention of price fixing.

Question 74

Trademarks can be:

A) a color.
B) a sound.
C) a design.
D) two of the above.
E) all of A, B, and C.

Question 75

Copyrights are protected under:

A) The WIPO Copyright Treaty.
B) the International Convention for the Protection of Industrial Property.
C) The Berne Convention of 1886.
D) the Treaty of Rome.
E) two of the above.

Question 76

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 illegal trademark use is a local issue.
D) long-standing convention, but no legal agreements.
E) the UN's Office of Harmonization.

Question 77

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

A) the United States 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 United States 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 United States seeks it.
E) the EU emphasizes the prevention of price fixing, while the United States does not.

Question 78

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 right to sell the invention, but only beyond the patent-granter's borders.
D) rights to the invention but do not prevent others from copying the invention.
E) two of the above.

Question 79

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) a research arm of the fuel cartel that has been advocating longer patent protection for biofuel processing systems.
E) creation of the Paris Union.

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 been progressing in some areas, such as taxation, but there is a long road forward.
D) two of the above.
E) all of A, B, and C.