Sullivan University Fundamental of Business Law Copyright Rules Questions

QUESTION 1

1. “Dawn” is a song included in the sound track of “eDay,” a movie produced and distributed by FasTrac Corporation. The song features a digital sampling of a few seconds of the guitar solo of one of George Harrison’s copyrighted sound recordings without permission. Does this digital sampling constitute copyright infringement on the part of FasTrac? Explain.

1. Americans with a Better Cause (ABC), a nonprofit organization, files a suit against the U.S. Department of Justice (DOJ), claiming that a cer-tain federal statute the DOJ is empowered to enforce conflicts with the U.S. Constitution and with a state constitution. In each situation, which source of law has priority?

QUESTION 3

1. Beta Software Company and Gamma Sales Corporation agree to follow a certain security procedure in transacting their business online. Beta fails to follow the procedure, however. Due to this failure, Beta does not detect an error in the deal, which will have a negative impact on Gamma’s interest in the deal. Can Gamma avoid the effect of this error? How?

QUESTION 4

1. Brock is a shareholder of Competent Homebuilders Corporation (CHC). For the last few years, business has not been profitable for CHC. The firm has lost money on its operations. There has been some profit through sales of company assets, but the board of directors has refused to declare a dividend. This last year, the firm’s accountants failed to file fed-eral in-come tax returns and the board refused to pay the tax. Brock takes a close look at the firm and protests to the board, in particular over the fail-ure to declare a dividend, but the board ignores the complaint. Which of these events, if any, would form a ground for a court to order the dissolu-tion of CHC, on Brock’s petition? If the court denies the petition, could Brock and the other shareholders dissolve CHC?

QUESTION 5

1. Cody signs and returns a letter from Dora, referring to her sale of the Bar-D Ranch and its price. When Cody attempts to complete the deal, Dora re-fuses, claiming that they have no con-tract. Cody claims they do. What standard determines whether these parties have a contract?

QUESTION 6

1. College Copy Shop (CCS) compiles, copies, and sells reading materials to students. The compilations are prepared on the instructions of professors, who indicate which parts of which publications should be included for their students. The copied materials include texts published by Deep Topics, Inc. CCS does not obtain the permission of Deep Topics, or any of the other original publishers of the copied materials, and does not pay royalties on the sales of the compilations. Deep Topics and others file a suit against CCS, alleging infringement of their intellectual property rights. Which type of intellectual property is involved in this situation? What is CCS’s likely defense? How is a court most likely to rule? Explain.

QUESTION 7

1. Cutter Company makes and sells table saws, which are designed to be safe if used properly. Erin buys a Cutter saw and lends it to her neighbor Frank. To reach a toolbox on a high shelf in his garage, Frank props the saw at an angle against a cabinet and climbs onto the saw. Frank loses his footing, slips off the saw, falls on the blade, and is injured. He files a product liability suit against Cutter, on the ground of negligence. On what basis could the maker prevail?

QUESTION 8

1. Ed, a businessperson, is a friend of Fran, the owner of a Percolated Coffee & Baked Goods store. Every day, Ed spends five minutes in Fran’s store, looking at the goods and usually buying one or two cinnamon buns or bagels. One afternoon, Ed goes into the store, looks at the items, and picks up a $1 chocolate brownie. Ed waves the brownie at Fran without saying a word and walks out. Is there a con-tract? If so, how would it be classified in terms of formation, perform-ance, and enforceability?

QUESTION 9

1. General Equity Corporation enters into a contract with Honi, who agrees to create artwork for General’s main office building. Honi delays and eventually refuses to perform. Meanwhile, General contracts to sell the building to Ideal Investments, Inc., but before the transaction is complete, Jewel Funds Company offers to pay a higher price. General re-fuses to transfer the building to Ideal. In separate suits by General against Honi and by Ideal against General, each plaintiff seeks specific performance. How might the court rule in each case, and why?

QUESTION 10

1. In 2005, Hawk Corporation begins making and selling electric motorcycles under the mark “Hawk.” Ten years later, Hawk.com, Inc., a differ-ent company selling medical equipment and supplies, begins to use “hawk” as part of its URL and registers it as a domain name. Can Hawk Corporation stop Hawk.com’s use of “hawk”? If so, what must the motorcycle-maker show?

QUESTION 11

1. In a dispute between Cosmic Games Corporation and Mythic Engineering Associates, Inc., the court applies the doctrine of stare decisis.What is this doctrine? What does this doctrine have to do with the American le-gal system?

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QUESTION 12

1. In the following situations, two parties claim the same goods. Who is most likely to prevail in each circumstance? Explain.(a) Olan steals Phil’s television set and sells it to Quincy, an innocent purchaser, for value. Phil learns Quincy has the set and demands its return.(b) Riley takes his television set for repair to Slick, a merchant who sells new and used television sets. By accident, one of Slick’s employees sells the set to Tuna, an innocent purchaser-customer, who takes possession. Riley wants his set back from Tuna.

QUESTION 13

1. Mitch is a director and officer of Numero Uno, Inc. Mitch makes a market-ing decision that results in a dramatic decrease in profits for Numero Uno and its shareholders. The shareholders accuse Mitch of breaching his fiduci-ary duty to the corporation. What is Mitch’s best defense against this ac-cu-sation? Later, the Numero Uno board considers a resolution for the firm to compete with One-of-a-Kind Corporation. Mitch is a director and shareholder of One-of-a-Kind. What is Mitch’s responsibility in this situation?