Question 1

Under UCITA, an offeree is unable to make a counteroffer when dealing with an electronic agent.

Accepted Answer

Under UCITA (Uniform Computer Information Transactions Act), an electronic agent operates automatically and cannot process counteroffers, as it lacks the ability to understand or negotiate terms beyond its programming.

Question 2

In regard to the Statute of Frauds, UCITA allows for a signed writing to be replaced by an authenticated electronic record.

Accepted Answer

UCITA does allow for a signed writing to be replaced by an authenticated electronic record, which is a departure from the traditional Statute of Frauds requirements.

Question 3

Under EU law, a licensor may prohibit its licensees from soliciting sales from outside its exclusive territories, but it cannot prohibit unsolicited or passive sales.

Accepted Answer

This is known as the "passive sales" principle of EU competition law, which allows licensees to respond to unsolicited orders from customers located outside their exclusive territory. Prohibiting passive sales is considered a violation of competition law and can result in penalties or legal action.

Question 4

Gray market sales are illegal in the EU.

Accepted Answer

Gray market sales are not illegal in the EU. However, they may violate manufacturer agreements and warranties.

Question 5

The Chinese Regulations Governing Contracts for the Importation of Technology is more favorable for licensors than licensees.

Accepted Answer

The Chinese Regulations Governing Contracts for the Importation of Technology are designed to protect the interests of Chinese companies and the state, often imposing stricter requirements and controls on foreign licensors to ensure technology transfer benefits the Chinese licensee.

Question 6

The advantages of licensing over direct foreign investment usually include all of the following except:

Accepted Answer

Licensing typically does not lead to increased revenues compared to direct foreign investment, as it involves granting rights to another company to produce or sell products, often resulting in lower profit margins.

Question 7

The compensation paid to the owner of intellectual property by a licensee is known as:

Accepted Answer

The compensation paid to the owner of intellectual property by a licensee is known as royalties.

Question 8

The term which best describes the relationship in which a licensor permits the licensee to employ its trademark or service mark in a contractually specified manner for the marketing of goods or services is:

Accepted Answer

The relationship described in the question is that of franchising, where a company permits another to use its trademark or service mark in a specific and agreed upon manner for the purpose of marketing goods or services. Technology transfer involves the transfer of technical knowledge, while copyright transfer involves transferring exclusive rights to reproduce and distribute original creative works.

Question 9

When a licensor requires a licensee to purchase its supplies of unlicensed materials from a designated supplier, it is known as:

Accepted Answer

This practice is known as tying and can be considered a violation of antitrust laws if it results in restricting competition.

Question 10

A _________ in a licensing agreement will often prohibit the use of know-how after the termination of the term of the contract:

Accepted Answer

The answer of A _________ in a licensing agreement will...

Question 11

A clause in a licensing agreement which requires any improvement of the technology by the licensee to be assigned back to the licensor is known as a:

Accepted Answer

A grant back clause is a term in a licensing agreement where the licensee agrees to give any improvements developed during the term of the agreement back to the licensor. An improvements clause is a similar term in which the licensor has the right to any improvements made by the licensee. Therefore, the correct answer is E, as both A and B accurately describe the clause in question.

Question 12

A _________ clause in a licensing agreement describes the rights and know-how being transferred, along with any restrictions or limitations on their use:

Accepted Answer

A grant clause in a licensing agreement outlines the rights being granted to the licensee, including know-how and any limitations or restrictions on their use.

Question 13

A licensing agreement in which the licensor retains the right to produce, sell, or use its rights within the licensed territory is known as a:

Accepted Answer

A sole license agreement allows the licensor to retain some of its rights, including the right to produce or sell a product. A non-exclusive license agreement allows others to do the same, and an exclusive license agreement prevents anyone else from using the licensed rights. "Most Favored License" is not a commonly used term in the licensing world.

Question 14

A _________ license is one that includes the rights to use a patent, along with some other intellectual property right that is not of the type or duration of the patent being licensed:

Accepted Answer

A hybrid license is one that includes the rights to use a patent, along with some other intellectual property right, such as a trademark or copyright, that is not of the type or duration of the patent being licensed. This type of license may be used when a company wants to license both a patent and another type of intellectual property that is related to the product or technology covered by the patent. The hybrid license allows the licensee to use the patent and the other intellectual property right together, which can be beneficial in terms of branding and marketing the product or technology.

Question 15

A schedule of payments made by the licensee to the licensor, not connected with sales by the licensee, and made to ensure that the licensee will make reasonable efforts to produce, market, and sell the licensed product is known as:

Accepted Answer

Guaranteed considerations are payments made by the licensee to the licensor that are not tied to sales, but are made to ensure that the licensee will use reasonable efforts in producing, marketing, and selling the licensed product. This is a common feature of licensing agreements as the licensor wants to ensure that the licensee is committed to the success of the licensed product.

Question 16

A clause in a licensing agreement that allows the licensee to terminate the agreement if the licensor fails to correct defects in the product or re-perform services is known as a:

Accepted Answer

A "Exclusive remedy clause" typically specifies the sole remedy available to the licensee if the licensor fails to meet certain obligations, such as correcting defects or re-performing services. This clause limits the licensee's recourse to the specific remedies outlined in the agreement, which could include termination of the agreement under certain conditions.

Question 17

A clause in an agreement in which the licensor reserves any intellectual property or contractual rights not expressly transferred by the license is known as a:

Accepted Answer

A reservation of rights clause is a common provision in license agreements that allows the licensor to retain certain rights in the licensed property, including intellectual property or contractual rights, that are not expressly transferred by the license. This ensures that the licensor maintains control over the property and can continue to use it in other ways or license it to others in the future, if desired.

Question 18

The importation of a foreign made trademarked good for sale in the United States in competition with the U.S. trademark owner's goods is known as:

Accepted Answer

Gray marketing, also known as parallel importation, refers to the importation of trademarked goods into the United States without the permission of the trademark owner. This can lead to competition with the U.S. trademark owner's goods and potential damage to their brand reputation. Black marketing typically refers to illegal or underground sales of goods, white marketing does not have a specific definition in this context, and red marketing is not a recognized term in the industry.

Question 19

A clause in an exclusive licensing agreement that provides benchmarks for production and sales, the amount of monies to be expended by the licensee and minimum royalty levels is known as a:

Accepted Answer

A best efforts clause in an exclusive licensing agreement sets specific benchmarks for production and sales, financial commitments by the licensee, and minimum royalty payments, ensuring the licensee diligently maximizes the potential of the licensed property.

Question 20

The licensee's duties to take all reasonable measures to protect the licensor's copyrights and trademarks are spelled in the licensing agreement's__________:

Accepted Answer

The duty of the licensee to take reasonable measures to protect the licensor's copyrights and trademarks is typically outlined in the infringement clause of the licensing agreement. This clause outlines the licensee's obligation to prevent any unauthorized use or infringement of the licensor's intellectual property rights.

Quiz 15: Law of Intellectual Property Rights Licensing