LSTD 2106 CHAPTER 24 COMPLETE
QUESTIONS AND ANSWERS
Trade Secret - ANSWER-a formula, pattern, compilation, program, device, method,
technique, or process that meets the following criteria: Derives independent economic
value, actual or potential, from not being generally known to and not being readily
ascertainable by proper means by other persons who can obtain economic value from
its disclosure or use; and is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy. Economic value must be identified by the owner,
and secrecy must be kept. (protected by state statutes and state common law)
Misappropriation - ANSWER-(1) The acquisition of a trade secret of another by a
person who knows or has reason to know that the trade secret was acquired by
improper means or (2) the disclosure of a trade secret to another without express or
implied consent.
Economic Espionage Act - ANSWER-A federal statute passed in 1996 that provides
criminal penalties for domestic and foreign theft of trade secrets.
Advantages of Trade Secret Protection - ANSWER-1) no formal registration is required
and 2) protection for trade secrets does not expire after a fixed period of time
Trademark - ANSWER-A nonfunctional, distinctive word, name, shape, symbol, phrase,
or combination of words and symbols that helps consumers to distinguish one product
from another
Trade Dress - ANSWER-a product's distinctive design, packaging, color, or other
characteristic that makes it unique from other products or goods
Arbitrary Marks - ANSWER-a mark that has no direct connection to the product
Federal Trademark Dilution Act - ANSWER-federal law that permits mark holders to
recover damages and prevent others from diluting distinctive techniques (Dilution
occurs either blurring or tarnishment)
Blurring - ANSWER-dilutes the distinctive quality of the mark through its identification
with goods that are not alike
Tarnishment - ANSWER-occurs when an association arising from the similarity between
a mark or trade name and a famous mark harms the reputation of the famous mark with
something that a consumer might find objectionable
QUESTIONS AND ANSWERS
Trade Secret - ANSWER-a formula, pattern, compilation, program, device, method,
technique, or process that meets the following criteria: Derives independent economic
value, actual or potential, from not being generally known to and not being readily
ascertainable by proper means by other persons who can obtain economic value from
its disclosure or use; and is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy. Economic value must be identified by the owner,
and secrecy must be kept. (protected by state statutes and state common law)
Misappropriation - ANSWER-(1) The acquisition of a trade secret of another by a
person who knows or has reason to know that the trade secret was acquired by
improper means or (2) the disclosure of a trade secret to another without express or
implied consent.
Economic Espionage Act - ANSWER-A federal statute passed in 1996 that provides
criminal penalties for domestic and foreign theft of trade secrets.
Advantages of Trade Secret Protection - ANSWER-1) no formal registration is required
and 2) protection for trade secrets does not expire after a fixed period of time
Trademark - ANSWER-A nonfunctional, distinctive word, name, shape, symbol, phrase,
or combination of words and symbols that helps consumers to distinguish one product
from another
Trade Dress - ANSWER-a product's distinctive design, packaging, color, or other
characteristic that makes it unique from other products or goods
Arbitrary Marks - ANSWER-a mark that has no direct connection to the product
Federal Trademark Dilution Act - ANSWER-federal law that permits mark holders to
recover damages and prevent others from diluting distinctive techniques (Dilution
occurs either blurring or tarnishment)
Blurring - ANSWER-dilutes the distinctive quality of the mark through its identification
with goods that are not alike
Tarnishment - ANSWER-occurs when an association arising from the similarity between
a mark or trade name and a famous mark harms the reputation of the famous mark with
something that a consumer might find objectionable
