Part I (Business Law)

(1a) The authority of a court to hear and decide cases is known as

a. Jurisdiction

b. Stare decisis

c. Habeas corpus

d. Law of the land

(1b) Based on the U.S. Constitution Article III, Section 1, how many court(s) must exist?

a. 0

b. 1

c. 12

d. 50

(2) Which of the following is not a function of a Judge?

a. Make evidentiary rulings

b. Make factual determinations

c. Charge the jury as to the law

d. Maintain order in the courtroom

(3) The concept of judicial review originated from which of the following?

a. Explicitly stated with the text of the U.S. Constitution

b. Explicitly stated in the Declaration of Independence

c. As a result of a decision by the U.S. Supreme Court

d. District Courts do not have the power of judicial review

(4) Which of the following source of law refers to a body of that developed from usage and customs?

a. Treaties

b. Statutes

c. Ordinance

d. Common Law

(5) Spiderman invents a new robot that is so realistic, it can act in movie roles with the audience believing it to be a live person. Spiderman engages Bruce Wayne (aka Batman) to invest in his robots. Bruce Wayne is interested in investing, but he demands that he is issued preferred stocks that can be converted into common stocks at advantageous rates. What type of business entity should Spiderman form if he is to get Bruce Wayne to invest?

a. S-corporation

b. C-corporation

c. E-corporation

d. Limited liability company

(6) Spiderman borrowed $100 from Bruce Wayne (aka Batman). According to Bruce Wayne, he lent the money on the condition that it be paid back in a week with 10% interest. According to Spiderman, the money was lent on the condition it be paid by in 2 weeks with 5% interest. Who determines the time of repayment and interest amount on the loan?

a. A jury determines time and judge determines interest.

b. A jury determines interest and judge determines time.

c. A jury determines both interest and time.

d. A jury and judge together determine time and interest.

(7) Batman (a citizen of Pennsylvania) is the owner of a copyright for the Batman song theme. It is goes "Da da da da da da da da da da da da da da da da da Batman!" and can be heard on the 1968 Batman tv show. As Batman drives around Gotham (located in Pennsylvania), he blasts this song to warn criminals that he is protecting the city from criminal activities. Spiderman (also a citizen of Pennsylvania) hears this song and decides to incorporate parts of it to his own theme song. Batman decides to sue Spiderman for copyright infringement and believes damages to amount to approximately $50,000. Can Batman sue Spiderman in Federal Court?

a. No. Batman must sue in state court, a court of general jurisdiction.

b. No. Batman must sue in state court because there is no diversity of citizenship.

c. No. Batman must sue in state court because the among in controversy does not exceed

$75,000.

d. Yes. Batman may sue federal court as it will have original jurisdiction.

(8) Spiderman was swinging through the city of Gotham, and as he was traveling using his webslinger, he accidently sprayed Batman's Batmobile with web, causing damage. Batman got estimates for repairs, and the cost to remove the web was approximately $25,000. Batman decided not to send a demand letter, and instead filed a complaint with the proper state court. At what point is Spiderman required to respond to the complaint?

a. Spiderman is not required to respond to the complaint unless he first received a demand letter stating the cause of action and demand for damages.

b. Spiderman is not required to respond to the complaint until the complaint and summons are filed with the court.

c. Spiderman is not required to respond to the complaint until he is served with a copy of the complaint.

d. Spiderman is not required to respond to the complaint until he is served with a copy of the complaint and summons.

(9) Continuing with the facts from question no. 8 above, no one witnessed Spiderman hitting the Batmobile with web. Spiderman is required to respond to the complaint. Instead of answering the complaint, he filed a 12(b)(6) motion. Under which of the following ground would a court most likely grant the 12(b)(6) motion?

a. Numerous people own a webslinger, and there is no evidence to suggest that Spiderman is the person who is responsible for the damage.

b. There is no evidence to suggest that web from a webslinger can cause the damage to the Batmobile.

c. Spiderman is required to file answer the complaint prior to filing any motion.

d. Batman cannot sue Spiderman as they are in different comic universes.

(10) Batman is building a new Batmobile (a car). Among the new features is to build a web-sling function that will allow the vehicle to climb buildings better and when necessary, to swing between two buildings. Spiderman, who is a New York State citizen, established a store in Gotham (a city located in Pennsylvania) and, as a sole proprietor, was selling the web-slinging devices. The store name is "Web 'R Us." Batman bought the device and installed it in his Batmobile. As Batman was chasing Joker, Batman attempted to climb up a building using the web-slinging function installed on the Batmobile. However, the web broke, causing damage to the car. Batman decides to sue Spiderman. Where can Batman sue Spiderman?

e. Nowhere. The web-slinging device was not intended to be installed on a car and was not intended to bear the weight of a car so there is no liability.

f. Batman can sue Web 'R Us in Pennsylvania only, as it where the device was sold.

g. Batman can sue Spiderman in Pennsylvania only, as it is where the device was sold.

h. Batman can sue Spiderman in Pennsylvania (where the device was sold) and New York (where Spiderman is a citizen).

(11) Batman and Spiderman formed a business to sell utility belts (the belt Batman uses with all his "wonderful toys"). Together, they borrowed money to open retail stores, started a website, and advertised the utility belt. Despite their best efforts, the business was unsuccessful, and they lost money. The creditors sued both Batman and Spiderman to recover the borrowed money, but Spiderman ran (or swung) away. The creditors were successful in the lawsuit and the judge found that Batman is personally liable for the entire sum of money borrowed from the creditors. Based on the judge's finding, what type of business entity did Batman and Spiderman form?

a. Sole Proprietorship

b. Partnership

c. C Corporation

d. S Corporation

(12) Batman is CEO (Chief Executive Officer) of a corporation that uses bats to delivery messages.

Spiderman, his COO (Chief Operation Officer), proposes to replace all the bats with pigeons because they are cheaper to feed, easier to train, and can fly both day and night. Spiderman prepares a full report outlining all the benefits of pigeons over the bats. Without reading the report, Batman threw the report into shredder as he stated that he wants to continue to use bats because they are his favorite flying creature. What fiduciary duty has Batman likely violated?

a Duty of Care

b. Duty of Loyalty

c. Duty of Confidentiality

d. Duty of Disclosure

(13) Batman forms an S-Corporation called "Happy Robots, Inc." to sell test taking robots. Batman is Happy Robot's sole shareholder and sole employee. Happy Robots, Inc. borrows money from Gotham bank to buy materials and build manufacturing plants. The robots, however, prove to be completely useless because all universities prohibit the use of robots to take tests and even when they do take the test, students often fail. Happy Robots can no longer pay back the loan from Gotham bank. Assuming that Batman complied with all formalities and there is no showing of improper conduct, which of the following is true?

a. Gotham bank can recover the money borrowed from Batman because he is the sole shareholder and sole employee.

b. Gotham bank can recover the money borrowed from Batman because the bank can pierce the corporate veil.

c. Gotham bank can only recover from Happy Robots, Inc. because Batman is protected from personal liability.

d. Gotham bank can only recover from Happy Robots, Inc. because robots are legal entities.

(14) Spiderman receives an email from a person alleging to be the Prince of Congo. In the letter, the Prince states that he has $10 million in a bank account in the U.S., but he is unable to access the money because he needs $10,000 to travel to the U.S. and withdraw the money personally. If Spiderman electronically transfers the $10,000 to the Prince's foreign bank account (the account information is provided), the Prince of Congo will come to the U.S., withdraw the $10 million, and pay Spiderman $1 million for his efforts. The Prince also informs Spiderman that he has to hurry as he has made the same offer to other individuals. How can this transaction best be characterized?

a. The email is an offer and Spiderman can accept by transferring $10,000.

b. The email is an offer and Spiderman can accept by promising to pay the $10,000.

c. The email is not an offer because the Prince did not prove he has $10 million.

d. The email is not an offer because the offer is unconscionable.

(15) Batman sends Spiderman a letter reading, "I have a collection of grappling guns that can be used to swing, which can be used if your webslinger runs out of web. I will sell them to you at a fair price." How can the letter best be characterized?

a. The letter is a binding offer to sell the grappling guns if Spiderman accepts within a reasonable time.

b. The letter is a binding offer to sell the grappling guns, but only if they are used to swing through the city.

c. The letter is not a binding offer to sell because it is too indefinite.

d. The letter is not a binding offer to sell because of the Mailbox Rule.

(16) Batman wants to sell his Batmobile to Joker. Batman approaches Joker and says, "I think I want to sell my Batmobile for $1,000." Joker replies, "I'll give you $800 for it." Batman then says, "okay." Which of the following best describes this transaction?

a. Offer, counter-offer, acceptance.

b. Offer, offer, acceptance.

c. Offer, preliminary negotiations, acceptance.

d. Preliminary negotiations, offer, acceptance.

(17) Batman promises to pay Spiderman $500 to paint the Batmobile if Spiderman can do so within a week. Spiderman agrees. They put all the terms into a written contract, except the color that the Batmobile is to be painted. Later, before Spiderman starts to paint the car, Batman learns that Joker is willing to paint the car for $250. Batman calls Spiderman and informs him that the "deal is off." Spiderman sues for breach of contract. What is Batman best argument that the contract is not valid or enforceable?

a. The contract is too indefinite because a reasonable color cannot be implied and is important to the contract.

b. The contract is a mistake because Batman did not know that Joker could paint the car for $250.

c. The contract is unconscionable because it is not fair to pay more than $250 to paint the car.

d. The contract is covered by the statute of fraud because the contract could not be performed within a year.

(18) Batman offers to sell the Batmobile for $900. In which of the following responses has Spiderman retained the ability to accept the original offer? Stated another way, in which of the responses has Spider not rejected the offer?

a. "I can only pay $500 for the Batmobile?"

b. "I accept, but you need to paint it green."

c. "I am not rejecting your offer, but would you take $500?"

d. "I'll never pay $900 for that ugly car."

(19) What is the principal effect of a counter-offer?

a. A counter-offer creates a binding contract based on the terms of the counter-offer.

b. A counter-offer rejects the original offer and replaces it with a new offer.

c. A counter-offer creates a new offer, but the original offer is still capable of being accepted.

d. A counter-offer creates a binding contract based on the terms of the original offer.

(20) Batman goes into a Pawn store and sees a painting he believes is a Picasso reproduction. The

Pawn store owner says the painting is a Picasso reproduction and offers to sell it to Batman for

$100. Batman hands over the money, but before the Pawn store owner hands over the painting, another customer yells "stop," and explains that the painting is real. Must the Pawn store owner complete the transaction and hand over the painting to Batman ?

a. Absolutely yes. A deal is a deal.

b. Absolutely yes. Both the buyer and seller take the risk it is a bad deal.

c. Absolutely not. There is a mistake as to the nature of the painting.

d. Absolutely not. Selling valuable Picasso paintings at a pawn store is unconscionable.

Part II - Intellectual Property

(2) Which of the following is not feature of the "specification" in a patent or patent application?

a. Specification should state what is "new" about the invention.

b. Specification should in full, clear, concise, and exact terms enable a person skilled in the art or science to make use of the invention.

c. Specification is used to interpret and understand the claims

d. Specification should include the claims.

(3) A person can infringe a patent by all of the following except:

a. Making a product with the invention in order to research its technical effectiveness.

b. Using a product with the invention for his/her own personal use.

c. Selling a product with the invention in order to profit from the product.

d. Publishing drawings of the product with the invention on a website.

(4) If a person invents a working webslinger (see any Spiderman movie and image below). What type of patentable subject matter would this be?