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Chapter Exercise #4 1. Trademark Infringement. Nike, Inc., manufactures and markets footwear, apparel, and related accessories. To identify its products, Nike uses the word Nike and/or a swoosh design as its trademarks. Nike spends millions advertising the trademarks. Sales revenues for items bearing the trademarks are in the billions. Nike began using the phrase Just Do It in 1989 as a slogan for its sweatshirts, T-shirts, caps, and other accessories. Sales revenues for Just Do It items generate millions of dollars. Nike, the swoosh design, and Just Do It have gained widespread public acceptance and recognition. Michael Lane is a commercial art student at a prestigious university. As a summer project, he and his four college friends, Jerry, Logan, Sue and Michelle, decided to market his first name, Mike, as a takeoff on the Nike logo. They named their project Just Did It Enterprises and concentrated on marketing T-shirts and sweatshirts to members of the general public with the given (first) name of Michael. They also mailed brochures to college athletes and celebrities named Michael. Sales were entirely by mail order. Approximately two-thirds of those purchasing the shirts were named Mike. Lane believed that the other third probably bought a T-shirt for a friend, relative, or loved one named Mike. Ultimately, the project lost money. Nike sued Lane and all of his friends for trademark infringement. Lane and his friends argued that the word play was humorous and was just a parody. Should the court rule that Nike’s trademark had been infringed? Explain. 2. Fair Use Doctrine. The trademark suit eventually settled and the group of friends graduated from college and moved on with their lives. Immediately after graduation, Jerry Uver, one of the friends, left the US for two years to work as an aid worker for a non- governmental organization (NGO) doing relief work in third world countries. After he returned back to the United States, he told his family he would leave Church of the Life’s Way, popular religious sect that his entire family belonged to. His family disowned him, but he was determined to expose the sect leader, R.M. Umber, who was a vindictive and profoundly disturbed man. Jerry spent the next several years investigating, and then writing a book about Umber and the Church. Jerry’s purpose was to expose what he believed was the pernicious nature of the Church and the deceit upon which its teachings were based. Approximately 13 percent of Jerry’s book consisted of quotations from Umber’s published works on the Church, its doctrines and teachings. When Arrow Publications, which held exclusive copyright rights in all of Umber’s works, learned that Seground Publish Group planned to publish Jerry’s book, it sued Carol Publishing for copyright infringement. Seground Publishing claimed that Jerry’s use of Umber’s works was a fair use of the copyrighted materials. Discuss the factors of the fair use doctrine that the court must consider in making its decision? What will its decision be?

3. Criminal Intent. Logan, another friend from college, failed to pay the federal government the total amount of income tax he owed from a small business he opened a few years ago. Attempts by the Internal Revenue Service (IRS) to collect the tax proved fruitless. Therefore, the IRS obtained (through lawful means) a tax lien on Logan’s personal property, which included his truck. One night, Logan’s girlfriend, upon hearing the truck’s motor, awakened her sleeping boyfriend. Wielding a shotgun, Logan went to his front door and told the two men who were attempting to take his truck to stop. Logan claimed that he did not know the two men were IRS agents. Subsequently, the federal government indicted Logan for obstructing justice. Can Logan be held criminally liable if he did not know that the men were IRS agents performing their duty? 4. Criminal Act. Sue’s life after college did not go as everyone expected. She had also been into fashion and loved shopping. That love of shopping soon turned into an addiction. One day, she went to a department store, spent some time shopping, and eventually filled a large, empty chandelier box with approximately $900 worth of clothing. When she went to the check-out counter, the cashier indicated that he wanted to look inside the box before accepting Sue’s payment for the chandelier. Sue then pushed the cart back into the isles and departed from the premises. Sue was convicted of grand larceny by the trial court. On appeal, Sue argued that because she had not actually removed any goods from the store, she had not committed larceny. Is she correct? Did Sue performed the criminal act of unlawfully removing the goods? 5. Embezzlement. It seems like none of Michael Lane’s friends was spared from misfortunate after their involvement in the trademark infringement lawsuit. Michelle was no exception. As a single mother, she worked for a small furniture store in her neighborhood. She was one of only five employees. She did everything from sales, to account payable and receivables, payroll, and other administrative duties. Last fall, her infant son went to the ER for what turned out to be a minor nursemaid’s elbow. But the hospital visit and examination by two doctors resulted in a $6,000 bill not covered by her insurance for various reasons. Desperate for money to pay the medical bill, Mitchell decided to borrow money from the furniture store with the intent to pay it back as soon as she could. She then transferred funds from the store’s account to a fictitious vendor bank account. She made a total of two transfers. To her disbelief, no one discovered the transfers, and within 3 months, she was to repay the full amount back. She then shut down the fake account. It was only five months later that the fund transfers were discovered by the owner of the store. The owner then fired Michelle and sued her for embezzlement. Michelle argued she did not steal anything – that she merely borrowed the funds, all of which were completely repaid. Would the court agree with her?