Deck 15: Navigating Legal and Ip Issues

Question 1

What support service is offered by the U.S.Patent and Trademark Office?

A)general advice to startup companies
B)pro bono legal program
C)small business grants
D)tax preparation services

Answer 1

B

Question 2

Which of the following online resources provide legal forms?

A)http://www.sec.gov
B)http://www.irs.gov/business
C)http://entrepreneurship.org
D)http://www.dol.gov

Answer 2

C

Question 3

What two characteristics should a lawyer have when working with a startup?

A)years of experience and willingness to work at reduced charges
B)knowledge of laws across states and knowledge of the industry
C)industry knowledge and a willingness to work with startups
D)knowledge about all aspects of the business and laws across states

Answer 3

C

Question 4

A C corporation has transferable ownership.This refers to the fact that:

A)a C corporation can change its structure at any time after the first year
B)it can issue stock in exchange for capital and can pass on to new owners
C)it can adapt to more employees as the company grows
D)it can be owned by an unlimited number of shareholders

Question 5

In a C corporation, who is liable for its actions?

A)the corporation
B)the shareholders
C)the owner of the company
D)the board of directors

Question 6

Which of the following provides links to information regarding federal and state employment laws?

A)IRS.gov/business
B)Business.gov
C)D.O.L.Office of Small and Disadvantaged Businesses
D)Securities Laws and Regulations

Question 7

In an LLC, how are profits and losses reported?

A)on individual tax returns
B)on the corporation's tax return
C)on both the corporate and individual tax return
D)on either the corporate or individual tax return

Question 8

As a sole proprietorship, what schedule will you need to fill out to report your business income?

A)Schedule A and B
B)Schedule C
C)Schedule D
D)Schedule F

Question 9

How does the author suggest that the Internet's legal resources be used?

A)to access low-cost legal forms and advice
B)to identify the type of legal counsel you will need
C)to seek advice from free legal services
D)to find sample documents that match your industry, products, and services

Question 10

Which of the following can be affected by the type of legal structure your company has?

A)the authorities you need to notify, taxes, records, decision process
B)taxes and ability to sue the company
C)taxes and marketability of your company
D)taxes only

Question 11

What business entity refers to a business owner who has not formed an entity to run the business?

A)sole practitioner
B)self-employed
C)sole proprietorship
D)nonentity small business

Question 12

Why did Corey Hague, founder of FlexGround, establish separate companies rather than operate one company with national presence?

A)it helps share the revenue across multiple owners
B)it allows him to maximize the state laws and regulations
C)it allows him to offer different products in each location
D)it allows him to respond to local market needs

Question 13

In an S corporation, what is the maximum number of shareholders allowed?

A)12
B)50
C)75
D)100

Question 14

A C corporation's disadvantage is double taxation.This means that:

A)the corporation is taxed on the profit it makes and the shareholders are taxed on the dividends
B)the corporation pays taxes in April and October
C)corporations are taxed more heavily than other corporate structures
D)corporations pay taxes on the goods they purchase to create the product rather than on the profits from the sale of the goods

Question 15

What is the name of the organization, sponsored by the Small Business Administration, that serves as counselors to entrepreneurs and business owners?

A)SCORE
B)SMART
C)USPTO
D)SSA

Question 16

How did FlexGround protect its in-ground, randomized water sprayer called the Splashground from competitors?

A)It was the first to offer the product, associating its use with the company name.
B)Since it was an add-on product, it was not important to protect it.
C)They did not advertise the service until people were ready to buy.
D)They obtained a patent.

Question 17

In an S corporation, taxes are "passed through." This means which of the following?

A)the individual pays twice, taxes on profits and taxes on income
B)the individual pays no taxes because the company has already been taxed
C)income that the owner takes is reported on personal income taxes only
D)the revenue that the owner takes to live on is not taxed

Question 18

Which of the following is NOT a way that a C corporation can minimize double taxation?

A)use profits to fund the growth of the company
B)pay out profits in the form of additional compensation to the owners
C)reserve the reporting of taxed income into the next fiscal year
D)not realize enough revenue to make a profit

Question 19

What is the greatest danger of following legal advice given on a lawyer's site on the Internet?

A)The advice may be given by a lawyer who does not have an official office.
B)The advice may not be accurate to your type of business or state in which you are operating.
C)The service is free and there is no paperwork to document the advice
D)Sample documents and forms will not be available.

Question 20

What action will most likely be required of someone who starts his company as a sole proprietorship?

A)obtain a license or business permit in your jurisdiction
B)file for status as a C corporation
C)file for status as an S corporation
D)file as an LLC

Question 21

Which of the following would be considered fair use of copyrighted material?

A)A writer references a portion of a comedian's script in a book in order to demonstrate a key point in the book.
B)A writer copies a portion of a new book on chess in which he reveals the secrets in the competitor's book.He credits the original author.
C)A songwriter puts the words of a poem to a musical score.
D)A writer and biologist copy 30 diagrams from another textbook, citing the original author.

Question 22

Which of the following would be protected by copyright?

A)the recipe for a unique chocolate chip scone
B)a new smartphone app
C)the choreography for a new musical
D)the chemical composition of a new hair care product

Question 23

The term vesting can best be described as which of the following?

A)shares paid out to employees on a regular, usually annual basis
B)a concept that determines how much of the company value a cofounder earns based on certain time periods
C)the time and duties the cofounders must contribute to the business.
D)the investment that each cofounder must contribute to the start and growth of the business

Question 24

An LLP is best suited for what type of business?

A)a business with more than two partners
B)a sole owner who wants to guard against liability
C)a professional practice, such as a legal or accounting group
D)a company with less than 10 employees

Question 25

What characteristic of a C corporation will make it possible to pass the corporation on to new owners after the original owners pass away?

A)vesting
B)the laws of inheritance
C)transferable ownership
D)stockholder rights

Question 26

Which of the following would be used for the symbol used by a home health care agency to identify their service?

A)a trademark
B)an HCA mark
C)a copyright
D)a service mark

Question 27

An employee leaves a company and has been developing one of its products for the last 3 years.That product is a glue that remains tacky for hours, enabling certain types of art work to be performed.After he leaves the company, the employee joins another company and finalizes the glue development for his new company.Who is likely to own the rights of the intellectual property involved in the formulation of the glue?

A)The employee; he invented it.
B)The original company who paid for the product to be developed.
C)The new company because the product was released while the employee worked for them.
D)The glue cannot be considered intellectual property.

Question 28

Which of the following is NOT a characteristic of a benefit corporation?

A)it is certified by the nonprofit B Lab
B)it follows strict standards of social and environmental performance and accountability
C)it must fulfill a social mission
D)it is only available to C corporations

Question 29

What government agency authorizes a C-corp?

A)the state government.
B)the federal government
C)local county and city jurisdictions
D)the federal courts

Question 30

An employee for a beverage company combines the ingredients used in creating the mix.Later he is fired from the company and decides to sell the same mix under a new label to a competing company.What concept might be represented in this action?

A)a copyright violation
B)a trade secret, provided a nondisclosure was signed by the employee
C)a trade secret, regardless of the lack of a nondisclosure agreement
D)No violation.Secrets are secrets only until they are known.

Question 31

Which of the following is the official authoritative source for information about copyrights?

A)Google Patents
B)SCC
C)U.S.Copyright Office
D)Patent Pro

Question 32

Which of the following conditions is applicable to all 501(c)(3) organizations?

A)they must be classified as a church, educational, or charitable institution
B)their earnings should be used to benefit the shareholders
C)profit must be reinvested and used for the organization's exempt purpose
D)shareholder earnings are limited by the tax code

Question 33

A limited partnership is made up of which of the following?

A)general partners and limited partners
B)general partners and shareholders
C)general partners only
D)limited partners only

Question 34

Which of the following is NOT true of an LLC?

A)profits and losses are reported on individual tax returns
B)there is double taxation-on the corporation and on personal income
C)LLCs have continuous existence
D)there is potential tax sheltering from losses while personal assets are protected.

Question 35

In a general partnership, which of the following is true?

A)a general partner and a limited partner jointly manage the business
B)two or more people manage and share in the profits and losses of the business
C)two or more people manage the business under the direction of a board of directors
D)taxes are paid on the corporation

Question 36

Gary is fascinated by a new device that uses a GPS-like tracker to help owners locate their pets.He purchases the product, disassembles it, and uses it as a pattern for a similar device.The new device uses a less expensive casing, but otherwise has duplicated the technology.What legal concept may be represented in this action?

A)a copyright violation
B)a trademark violation
C)a patent violation
D)a fair use violation

Question 37

Unless otherwise defined, who owns the product idea when an employer hosts a "hackathon" where participants share their ideas?

A)the employee who generated it
B)all the employees who brainstormed and contributed to the idea
C)the company hosting it
D)the team that presents the product idea

Question 38

What should an entrepreneur do if he or she worked on a product with a former employer and wants to market the product as his or her own?

A)market it before the former employer does
B)consult an IP attorney to review employee contracts and applicable laws
C)keep all documentation proving that you are the inventor
D)market the product in another country

Question 39

How much does IP theft cost the United States in lost revenue?

A)$3 million
B)$100 million
C)$3 billion
D)$300 billion

Question 40

Which of the following would be considered fair use of copyrighted material?

A)a T-shirt company uses a famous clause from a song and places it on their T-shirts.
B)a high school teacher copies a portion of a song sheet to explain the use of timing and syncopation
C)a nonprofit organization sells copies of a copyrighted cookbook as a fundraiser
D)a movie producer uses a popular song as background to one of her movie scenes

Question 41

Which of the following might support a claim that the person you hired as a contractor might be classified as an employee?

A)the person works only for the employer
B)the person brings in his or her own supplies
C)the person is a professional, using that expertise to perform the job
D)the person informs you of his or her working schedule at the start of each week

Question 42

What legal structure determines minimum wage and overtime pay?

A)Civil Liberties Act
B)the hiring company's salary administration policy
C)Fair Labor Standards Act
D)Minimum Wage Act

Question 43

Which of the following might support a claim that the person you hired as a contractor might be classified as an employee?

A)the contractor provides similar services to other clients
B)the contractor is free to set his or her own hours
C)the employee pays for the travel expense incurred by the contractor
D)the employee supplies his or her own tools

Question 44

Which of the following best describes a patent troll?

A)an agency constantly looking for unprotected products
B)an agency that is dedicated to finding piracy and counterfeit products
C)an agency that owns a patent but has never produced the product
D)an agency that files suit for a patent violation

Question 45

Which of the following indicates that the employee has the ability to work in the United States?

A)Declaration of U.S.Citizenship
B)I-9
C)W-4
D)Form 940

Question 46

Which of the following is true when compensating employees with company equity?

A)the equity to be issued will be considered salary and not subject to securities laws
B)the equity will be considered a gift since no cash was issued
C)the shares may be considered a taxable item
D)the shares cannot be tied to performance

Question 47

Candy-corp hires a summer intern to work in the candy shop during the summer.The intern works 20 hours a week and earns course credit for a course he is taking toward his culinary degree.He is learning a great deal, and at the same time, the company is benefiting from the intern because they did not need to schedule their regular employees full time and they are not paying the intern.What is the legal liability this company is incurring?

A)The summer intern is learning store operations that may not be related to his academic program.
B)The intern is performing actual work and not just observing.
C)The intern is benefiting the company by replacing duties which could be provided by paid employees.
D)The intern is working too many hours.

Question 48

Which of the following forms will let the employer know how much money to withhold from paychecks for federal taxes?

A)I-9
B)T-140
C)W-4
D)Form 940

Question 49

Which of the following would be a disadvantage of hiring a contractor?

A)you would not be able to have the contractor arrive at a certain time or perform the job in a certain way
B)the contractor would not be required to perform the job to the same level as an employee
C)the contractor could be terminated if he or she did not fulfill their contracts
D)the contractor generally would have less of a personal commitment to doing the job well

Question 50

Failure to assign ownership occurs in which of the following situations?

A)when someone makes significant contributions to a product design without a formal agreement of who owns the idea
B)only when someone makes a significant contribution and is not paid for the contribution
C)only when someone makes a significant contribution and is paid for the contribution
D)when someone fails to place the company name on the patent

Question 51

In the case of FedEx where contractor/drivers sued for overtime pay and benefits, what was the primary reason why the courts ruled that they had been misclassified and were, in fact, employees?

A)the contractors paid for their own uniforms
B)the company controlled the activities of the drivers
C)the contractors owned their own trucks
D)the contractors worked for FedEx for a long period of time

Question 52

Which of the following forms will be needed to indicate federal unemployment tax that will be used should the employee lose his or her job?

A)Form 940
B)W-2
C)I-9
D)W-4

Question 53

IP protection doesn't always work.What contributes to this failure?

A)laws protecting the company's rights may not be recognized in other countries
B)there are too many patents on record, making it difficult to monitor them
C)companies fail to renew their patents after the expiration date
D)the product or service has evolved after the original protection was filed

Question 54

Many resources exist for entrepreneurs.Legal clinics are an excellent source.Which of these clinics would offer the best advice?

A)advice from second- and third-year law students associated with a leading university
B)a local SCORE organization
C)a group of local entrepreneurs in the same industry
D)a lawyer who works for your former employer

Question 55

What pitfall might affect the ability to attain a patent?

A)not developing a prototype
B)disclosing the product or service to the public before the patent is filed
C)not filing for the patent 45 days after the invention of the product
D)not having the company logo on the product

Question 56

After filing for a provisional patent, how long do you have before developing the idea into a working prototype?

A)3 years
B)1 year
C)14 months
D)2 years

Question 57

What step might be taken if some disclosure of your product is necessary in order to obtain funding, obtain raw materials, or other disclosures necessary in the development of the product?

A)mark all prototypes and designs with the company name
B)file for a patent under your personal name instead of the company
C)file for a provisional patent
D)change the nature of the product after you have disclosed it

Question 58

Which of the following might support a claim that the person you hired as a contractor might be classified as an employee?

A)the person was not eligible for vacation
B)the person subcontracted the work at some time during the relationship
C)the person was included in company training to help him or her perform the job
D)the person paid his or her taxes separately

Question 59

Which of the following may be a liability issue if hiring an unpaid intern?

A)the Fair Labor Standards Act provides a minimum wage, overtime, and other protections to all workers
B)the internship must be associated with an educational entity such as a college or high school
C)the internship must be associated with earned educational credit hours
D)the intern may not learn enough to pass the school's internship requirement

Question 60

What number of employees must a company have before they are required to provide family and medical leave and sick leave?

A)any size company
B)a company with over 10 employees
C)a company with 15 employees or more
D)a company with over 50 employees

Question 61

What is indicated by China's announcement that they will be using a "designed in China" rather than "made in China" label on innovations?

A)They are protecting their brands with the label.
B)China is rebranding its image of lower quality products.
C)China is investing in their own ideas, which may mean less IP theft.
D)They understand the value of a good tagline and are implementing it.

Question 62

Which of these nonlegal methods can be used to protect your patent?

A)promoting your trademark brand
B)getting the patent renewed every 3 years
C)hiring a patent protection officer
D)making sure that your product is not sold outside of the country

Question 63

Which of the following websites would provide information about employee safety?

A)www.nolo.com
B)www.osha.gov
C)www.sba.gov
D)www.irs.gov

Question 64

What significant change is taking place in China that may help reduce IP theft?

A)China has signed international agreements with the World Trade Center.
B)More people in China are applying for patents to protect their own inventions.
C)China is changing the labeling on all products exported from China.
D)China is growing its economic base.

Question 65

What cannot be protected as intellectual property?

A)artistic expression
B)a trademark
C)an idea
D)an invention

Question 66

Which of the following websites would provide information about attaining an EIN?

A)www.irs.gov
B)www.sba.gov
C)www.dol.gov
D)http://workforcesecurilty.doleta.gov

Question 67

Who should be consulted before setting up an employee benefits program?

A)your HR manager
B)an accountant experienced with employee benefits
C)the company lawyer
D)the provider, such as the insurance company or retirement fund company

Question 68

Which of the following must be paid for by the employer?

A)Medicare
B)medical leave
C)paid sick days
D)life insurance

Question 69

How long does a federally registered trademark last before it must be renewed?

A)It is a lifelong registration.
B)100 years
C)10 years
D)25 years

Question 70

With which of the following agencies must you register to pay state unemployment compensation tax?

A)the federal Department of Labor
B)the labor department of your state
C)the franchise tax board
D)the state tax board

Question 71

Which of the following would NOT be a good reason to hire a contractor?

A)the job requirements are short in duration
B)it is a policy of the company to hire only contractors to perform the job
C)the job is not usually performed by regular employees
D)the contractor has knowledge that is not normally part of the company's skillset

Question 72

Why does the employer fill out an IRS form 940 every year?

A)to report income taxes withheld from employee wages
B)to report federal unemployment tax
C)to report the number of employees from their company who have filed for unemployment
D)to report the number of employees who filed a workers' compensation claim

Question 73

How long does a company have to register a newly hired employee with your state directory?

A)within 2 months of the hire date
B)within 5 days of the hire date
C)within 20 days of the hire date
D)at any time before filing state taxes

Question 74

Which of the following would NOT be placed in an employee handbook?

A)company benefits
B)attendance policy
C)smoking bans
D)promotion timelines

Question 75

Tom has been a lead salesman for a brokerage house but recently got a better position at a competing house.Prior to leaving, Tom copied the customer list and contact information from his company.What may be infringed by this action?

A)the company's patent
B)trade secrets
C)copyrights
D)No principles were violated since he contributed to the call list in the first place.

Question 76

Which of the following is true about filing for a patent?

A)Patents are based on a "first to file" basis.
B)Patents are based on a "first to invent" basis.
C)Patents can be shared if multiple people invent the same product.
D)Patents are awarded to the best design should multiple people file at the same time.

Question 77

According to the International Trade Union Confederation (ITUC), which of the following countries scores highest for equality at work?

A)Uruguay
B)China
C)Egypt
D)Columbia

Question 78

Which of the following countries is most likely to violate IP rights?

A)England
B)Germany
C)China
D)Australia

Question 79

In order to know what posters need to be placed in your office, which of the following would be a good source?

A)unions active in your industry
B)state unemployment agencies
C)the Department of Labor
D)U.S.Publications Office

Question 80

How long does a patent generally last?

A)2 years
B)10 years
C)20 years
D)50 years