REGULATORY FRAMEWORK FOR BUSINESS TRANSACTIONS – NEW TOPICS

MCQ (NEW TOPICS/SPECIAL LAWS)1

 Coverage:
o Banking Laws
 General Banking Law
 New Central Bank Act
 Anti-Money Laundering Act
 PDIC Law
 Law on Bank Secrecy
o Securities Regulation Code
o Intellectual Property Code
o Insolvency Law
o Corporate Rehabilitation

1. X is a depositor of AAA Bank. She has three (3) deposit accounts all under
her name. One, in checking account, one in saving account and another one in
time deposit account. Each account has a balance of Php250,000. AAA Bank
became insolvent. Philippine Deposit Insurance Corporation closed the Bank.
X therefore is unable to withdraw from all of the accounts. She then filed
her claims with the Philippine Deposit Insurance Corporation. Which
statement is most accurate?
a. X can claim a total of Php500,000 for all the three (3) accounts.
b. X can only claim from one (1) account of Php250,000.
c. X can claim a total of Php750,000 from all the three (3) accounts.
d. X cannot claim anything from any of the deposit accounts.

2. The Bank Secrecy Law (RA 1405) prohibits disclosing any information about
deposit records of an individual without court order except -
a. In an examination to determine gross estate of a decedent.
b. In an investigation for violation of Anti-Graft and Corrupt Practices.
c. In an investigation by the Ombudsman.
d. In an impeachment proceeding.

3. X works as a research computer engineer with the Institute of Computer

Technology, a government agency. When not busy with his work, but during
office hours, he developed a software program for law firms that will allow
efficient monitoring of the cases, which software program is not at all
related to his work. Assuming the program is patentable, who has the right
over the patent?
a. X;
b. Institute of Computer Technology;
c. Neither X nor the Institute of Computer Technology can claim patent
right over the invention;
d. X and the employer of X will jointly have the rights over the patent.

4. The "test of dominancy" in the Law on Trademarks, is a way to determine

whether there exists an infringement of a trademark by -
a. Determining if the use of the mark has been dominant in the market.
b. Focusing on the similarity of the prevalent features of the competing
marks which might create confusion.
c. Looking at the mark whether they are similar in size, form or color.
d. Looking at the mark whether there is one specific feature that is
dominant.
5. X's painting of Madonna and Child was used by her mother to print some
personalized gift wrapper. As part of her mother's efforts to raise funds
for Bantay Bata, the mother of X sold the wrapper to friends. Y, an
entrepreneur, liked the painting in the wrapper and made many copies and
sold the same through National Bookstore. Which statement is most accurate?
a. Y can use the painting for his use because this is not a copyrightable
material.
b. X can sue Y for infringement because artistic works are protected from
moment of creation.
c. Works of art need to be copyrighted also to get protection under the
law.
1 Lifted from BAR Exam Questions & Quizzers
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d. Y can use the drawing even though not copyrighted because it is
already a public property having been published already.

6. Compulsory Licensing of Inventions which are duly patented may be dispensed

with or will be allowed exploitation even without agreement of the patent
owner under certain circumstances, like national emergency, for reason of
public interest, like national security, etc. The person who can grant such
authority is -
a. the Director General of the Intellectual Property Office;
b. the Director of Legal Affairs of the Intellectual Property Office;
c. the owner of the Patent right;
d. Any agent of the owner of the Patent right.

7. The Fair Use Doctrine allows others to utilize copyrighted works under
certain conditions. The factors to consider whether use is fair or not would
be the purpose and character of the use, nature of the copyrighted work,
amount and substantiality of the portions used, and what else?
a. Effect of the use upon the creator of the work.
b. Effect of the use upon the potential market of the work.
c. Effect of the use upon the public in general.
d. Effect of the use upon the class in which the creator belongs.

8. XYZ Corporation bought ten (1 0) units of Honda Civic from CCC Corporation.
ABC Bank granted a loan to XYC Corporation which executed a financing

agreement which
the interest provided
rates and for
the the
due principal
dates. Onamount, the installment
due dates payments,
of the installment
payments, XYZ Corporation was asked to pay for some handling charges and
other fees which were not mentioned in the Financing Agreement. Can XYC
Corporation refuse to pay the same?
a. No, because handling charges and other fees are usual in certain
banking transactions.
b. Yes, because ABC Bank is required to provide XYZ Corporation not only
the amount of the monthly installments but also the details of the
finance charges as required by the Truth in Lending Act.
c. No, because the Finance Agreement is a valid document to establish the
existence of the obligation.
d. Yes, because legally, finance charges are never allowed in any banking
transaction.

9. Which of the following is an exception to the secrecy of bank deposits which

are in Philippine Pesos, but NOT an exception to the secrecy of foreign
currency deposits?
a. Upon Bangko Sentral ng Pilipinas (SSP) inquiry into or examination of
deposits or investments with any bank, when the inquiry or examination
is made in the course of the SSP's periodic special examination of
said bank to ensure compliance with the Anti-Money Laundering Act
(AMLA);
b. Upon Philippine Deposit Insurance Corporation (PDIC) and SSP inquiry
into and examination of deposit accounts in case there is a finding of
unsafe or unsound banking practice;
c. Upon inquiry in cases of impeachment;
d. Upon inquiry by the Commissioner of Internal Revenue in the event a
taxpayer files an application to compromise his tax liabilities on the
ground of financial incapacity.
10. The Anti-Money Laundering Law is a law that seeks to prevent money
laundering activities by providing for more transparency in the Philippine
Financial System, hence the following institutions are covered by the law,
except:
a. Bank and any financial institutions;
b. Pawnshops;
c. Casino operators;
d. All of the above.

11. For purposes of determining violation of the provisions of Anti-Money

Laundering Law, a transaction is considered as a "Suspicious Transaction"
with "Covered Institutions" regardless of the amount involved, where which
 the following circumstances exist/s?
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a. the amount involved is not commensurate with the client's business or
financial capacity;
b. there is no underlying legal or trade obligation, purpose or economic
justification;
c. client is not properly identified;
d. All of the above.

12. The main feature of the Foreign Investment Act of 1991 is to introduce
the concept of "Negative Lists". Under the said law, what is a "Negative
List"?
a. It is a list of business activities or enterprises in the Philippines
that foreigners are disqualified to engage in.
b. It is a list of business activities or enterprises in the Philippines
that foreigners are qualified to engage in.
c. It is a list of business activities or enterprises that are open to
foreign investments provided it is with the approval of the Board of
Investment.
d. It is a list of business activities or enterprises that are open to
foreign investments provided it is with the approval of the Securities
and Exchange Commission.

13. May a publicly listed universal bank own 100% of the voting stocks in
another universal bank and in a commercial bank?
a. Yes, if with the permission of the Bangko Sentral ng Pilipinas.

b.
c. No,
Yes,since it has
as there is no
no power to invest
prohibition in equities.
on it.
d. No, since under the law, the 100% ownership on voting stocks must be
in either bank only.

14. Under the Intellectual Property Code, lectures, sermons, addresses or

dissertations prepared for oral delivery, whether or not reduced in writing
or other material forms, are regarded as
a. Non-srcinal works.
b. Original works.
c. Derivative works.
d. Not subject to protection.

15. T is the registered trademark owner of "CROCOS" which he uses on his

ready-to-wear clothes. Banking on the popularity of T's trade mark, B came
up with his own "CROCOS" mark, which he then used for his "CROCOS" burgers.
T now sues B for trademark infringement but B argues that his product is a
burger, hence, there is no infringement. Is B correct?
a. No, since the owner of a well-known mark registered in the Philippines
has rights that extends even to dissimilar kinds of goods.
b. Yes, since the right of the owner of a well-known mark registered in
the Philippines does not extend to goods which are not of the same
kind.
c. Yes, as B was in bad faith in coming up with his own "CROCOS" mark.
d. No, since unlike T, he did not register his own "CROCOS" mark for his
product.

16. Under the Financial Rehabilitation and Insolvency Act (FRIA), the
filing of a petition for voluntary rehabilitation must be approved by:
a. a majority vote of the Board of Directors and authorized by the vote
of the stockholders representing at least a majority of the
outstanding capital stock
b. a majority vote of the Board of Directors and authorized by the vote
of the stockholders representing at least two-thirds of the
outstanding capital stock
c. two-thirds vote of the Board of Directors and authorized by the vote
of the stockholders representing at least a majority of the
outstanding capital stock
d. two-thirds vote of the Board of Directors and authorized by the vote
of the stockholders representing at least two-thirds of the
outstanding capital stock
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17. X, who is the Executive Vice President of ABC Corporation, a listed
company, can be held liable or guilty of insider trading if, he -
a. Bought shares of ABC Corporation when it was planning to acquire
another company to improve its asset base, the news of which increased
the price of the shares in the Stock Exchange.
b. Bought shares of XYC Corporation, a sister company of ABC Corporation
when he learned that XYC Corporation was about to also list its share
in the Philippine Stock Exchange.
c. Bought shares of ZZZ Corporation when he learned that ABC Corporation
would acquire ZZZ Corporation.
d. All of the above.

18. The purpose of the "Tender Offer" Rule is to -

a. Ensure an even playing field for all shareholders of a company in
terms of opportunity to sell their shareholdings.
b. Ensure that minority shareholders in a publicly listed company are
protected in the sense that they will equally have the same
opportunity as the majority shareholders in terms of selling their
shares.
c. Ensure that the shareholders who would also want to sell their
shareholdings will have the opportunity for a better price.
d. All of the above.

19. Section 38 of The Securities Regulation Code defines an independent

director as a person
would interfere with who
his must not have
exercise a relation with
of independent the corporation
judgment in carryingwhich
out
the responsibilities of a director. To ensure independence therefore, he
must be -
a. Nominated and elected by the entire shareholders;
b. Nominated and elected by the minority shareholders;
c. Nominated and elected by the majority shareholders;
d. Appointed by the Board.

20. "Securities" issued to the public are required by law to be registered

with -
a. The Bangko Sentral ng Pilipinas;
b. The Philippine Stock Exchange;
c. The Securities and Exchange Commission;
d. The Securities and Exchange Commission and the Philippine Stock
Exchange.

21. The government agency granted with the power of supervision and
examination over banks and non-bank financial institutions performing quasi-
banking functions, to ensure that the conduct of its business is on a sound
financial basis that will provide continued solvency and liquidity is -
a. The Philippine Deposit Insurance Corporation;
b. The Bangko Sentral ng Pilipinas;
c. The Anti-Money Laundering Council;
d. The Securities and Exchange Commission.

22. X maintains a savings deposit in the amount of Php·1 Million with ABC
Bank Corporation. X also has obtained a loan from ABC Bank Corporation in
the amount of Php1 Million. In case of default,
a. ABC Bank can set-off the loan from the savings account being
maintained by X with ABC Bank.
b. Set-off is not possible because legal compensation is not allowed in
banking transaction.
c. Deposit accounts are usually earmarked for specific purpose hence
offsetting is not legally possible.
d. Off -setting is not possible because the obligation of X is a "simple
loan".

23. XYZ Corporation is engaged in lending funds to small vendors in

various public markets. To fund the lending, XYZ Corporation raised funds
through borrowings from friends and investors. Which statement is most
accurate?
a. XYZ Corporation is a bank.
b. XYZ Corporation is a quasi-bank.
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c. XYZ Corporation is an Investment Company.
d. XYZ is none of the above.

24. XXX Bank Corporation and ZZZ Corporation were merged into XX ZZ Bank
Corporation. So as not to create any unnecessary conflict, all the former
directors of both banks wanted to be appointed /elected as members of the
Board of Directors of the merged bank. Each bank used to have eleven (11)
members of the board. The maximum number of directors of the merged bank is
a. 15;
b. 22;
c. 21;
d. 11.

25. All senior officers of ABC Bank are entitled to obtain a housing loan.
X is an Executive Vice President for Operations of ABC Bank. She obtained a
housing loan with the ABC Bank. Which statement is most accurate?
a. The housing loan of X requires a guarantor from somebody who is not
connected with the bank.
b. The housing loan of X requires the approval of the Board of Directors
of the bank.
c. The housing loan of X, being a benefit for employees, does not require
(a) but will require (b).
d. The housing loan of X, being a benefit for employees, will not require
(a) and (b).

26. ABC Holdings Company, a Hong Kong company, owns 10% of XYZ Bank.
Because of the peace and order situation in the Philippines, ABC Holding
Company wanted to sell its shareholdings in XYZ Bank. Unfortunately, nobody
is interested to buy a 1 0% shareholdings in a bank. The board of directors
of XYZ Bank thought that it would be a good idea to buy back the shares
owned by ABC Holding Company. Which statement is most accurate?
a. Buying back the shares by XYZ Bank is absolutely not allowed.
b. Buying back the shares may be allowed provided it is with the approval
of the Monetary Board and disposed of within six (6) months.
c. Buying back the shares may be allowed provided such shares 'will be
disposed of within ten (1 0) years.
d. Buying back the shares may be done anytime provided the Board of
Directors will approve the same.

27. X is being charged for violation of Anti-Graft and Corrupt Practices

because he is suspected of having accumulated unexplained wealth. X
maintains deposit accounts with ABC Bank. The Ombudsman filed criminal cases
against X before the Sandiganbayan. Can the Court issue subpoenas against
ABC Bank to produce all documents pertaining to all the deposit accounts of
X?
a. Yes, because there is already a pending case and provided the subpoena
must be specific as to which account.
b. Yes, it is enough that the specific bank is identified.
c. No, because the issuance of the subpoena has no real legal basis.
d. Even without a subpoena, information about the deposit accounts of X
can be submitted to the Sandiganbayan because it will be used in a
pending case.

28. X, a private individual, maintains a dollar deposit with ABC Bank. X

is suspected to be the leader of a Kidnap for Ransom Gang and he is
suspected of depositing all ransom money in said deposit account which are
all in US Dollars. The police want to open said account to know if there are
really deposits in big amounts. Which statement is most accurate?
a. The same rules under Secrecy of Bank Deposit Act will apply.
b. An approval from the Monetary Board is necessary to open the account.
c. Because the deposit is in US Dollars, it is covered by the Foreign
Currency Deposit Act which allows disclosure only upon the written
permission of the depositor.
d. Approval from the Court is necessary to order disclosure of the
account.

29. X is a depositor of AAA Bank. She has three (3) deposit accounts all
 under her name. One, in checking account, one in saving account and another
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one in time deposit account. Each account has a balance of Php250,000. AAA
Bank became insolvent. Philippine Deposit Insurance Corporation closed the
Bank. X therefore is unable to withdraw from all of the accounts. She then
filed her claims with the Philippine Deposit Insurance Corporation. Which
statement is most accurate?
a. X can claim a total of Php500,000 for all the three (3) accounts.
b. X can only claim from one (1) account of Php250,000.
c. X can claim a total of Php750,000 from all the three (3) accounts.
d. X cannot claim anything from any of the deposit accounts.

30. The Bank Secrecy Law (RA 1405) prohibits disclosing any information
about deposit records of an individual without court order except -
a. In an examination to determine gross estate of a decedent.
b. In an investigation for violation of Anti-Graft and Corrupt Practices.
c. In an investigation by the Ombudsman.
d. In an impeachment proceeding.

31. Under the Anti-Money Laundering Law, a covered institution is required

to maintain a system of verifying the true identity of their clients as well
as persons purporting to act on behalf of
a. Those doing business with such clients.
b. Unknown principals.
c. The covered institution.
d. Such clients.

32. A bank can be placed under receivership when, if allowed to continue

in business, its depositors or creditors would incur
a. probable losses
b. inevitable losses
c. possible losses
d. a slight chance of losses

33. Apart from economic rights, the author of a copyright also has moral
rights which he may transfer by way of assignment. The term of these moral
rights shall last
a. During the author's lifetime and for 50 years after his death.
b. Forever.
c. 50 years from the time the author created his work.
d. During the author's lifetime.

34. X invented a device which, through the use of noise, can recharge a
cellphone battery. He applied for and was granted a patent on his device,
effective within the Philippines. As it turns out, a year before the grant
of X's patent, Y, also an inventor, invented a similar device which he used
in his cellphone business in Manila. But X files an injunctive suit against
Y to stop him from using the device on the ground of patent infringement.
Will the suit prosper?
a. No, since the correct remedy for X is a civil action for damages.
b. No, since Y is a prior user in good faith.
c. Yes, since X is the first to register his device for patent
registration.
d. Yes, since Y unwittingly used X’s patented invention.

35. It is a legal scheme whereby a debtor, who has sufficient assets but
who may be unable to meet his obligations as and when they fall due, may
petition for more time within which to settle such obligations.
a. Insolvency Proceedings
b. Suspension of Payments
c. Corporate Rehabilitation
d. Voluntary Insolvency

36. Samsung invented a cellular phone that can also play digital music or
MP3s. It applied for the issuance of letters patent.
a. The invention is not patentable because it is a combination of old
functions which does not produce a new result.
b. The invention is patentable because it is a new product which is
beneficial to the public.
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c. The invention is not patentable because Samsung is a foreign
corporation and it should file its application in its home country.
d. The invention is patentable because it combines existing elements, a
cellular phone and a digital music player, and produces a new and
useful result, namely, the convenience of having two gadgets in one.

37. Lucky Me registered its trademark, “Ang Sarap Pancit Palabok” with the
Intellectual Property Office. Nissin subsequently introduced its new
product, “Ang Sarap Pinoy Ramen”. Lucky Me sued for trademark infringement.
a. Nissin is not guilty of trademark infringement because the trademark
“Ang Sarap” is descriptive, hence not capable of exclusive
appropriation.
b. Nissin is not guilty of trademark infringement because its product,
Pinoy Ramen, belongs to a different category from Lucky Me’s
product, Pancit Palabok.
c. Nissin is guilty of trademark infringement because it did not
register its trademark “Ang Sarap Pinoy Ramen”.
d. Nissin is guilty of trademark infringement because the trademark
“Ang Sarap” is fanciful and arbitrary, hence capable of exclusive
appropriation.

38. Center Book Store is the publisher of the book Legal Journal. It
donated one copy to the Library of the U.E. College of Law. The Library, in
order to preserve the srcinal book, reproduced one copy of the Journal for
lending to copyright
liable for the University’s students for room use. Is the U.E. Law Library
infringement?
a. No. The reproduction is consistent with fair use.
b. Yes. Only the National Library is allowed to reproduce books and
other works.
c. No. The copy of the Journal is marked “For Room Use Only” and is
therefore not made available to the public outside of the Library.
d. Yes. The law only allows a library to photocopy a book if it is
fragile or rare.

39. Which among the following is not a function of the Bangko Sentral ng
Pilipinas?
a. As official depositary of the Philippine government.
b. As financial adviser of the Philippine government.
c. As fiscal agent of the Philippine government.
d. As the watchdog of government funds.

40. No. 1 – A bank may be may lend to a single borrower more than fifteen
(15%) of the bank’s unimpaired capital.
No. 2 – A deposit in a bank in foreign currency may be inquired into
provided the depositor gives his consent, orally or in writing.
a. Both are false.
b. Both are true.
c. No. 1 is true; no. 2 is false.
d. No. 1 is true; no. 2 is false.

41. It is a bank which creates or accepts demand deposits subject to

withdrawal by checks and primarily organized to carry on the business of
accepting drafts and issuing letters of credit, discounting and negotiating
promissory notes, receiving deposits, buying and selling foreign exchange
and gold and silver bullion and lending money against the borrower’s
security in property.
a. Rural bank;
b. Thrift bank;
c. Universal bank;
d. Commercial bank.

42. No. 1 - The Ombudsman may inquire into the bank deposit of a public
officer whose case is pending criminal investigation in the Ombudsman even
if there is no actual case filed in court.
No. 2 - A writ of garnishment directed to a bank deposit is prohibited
by law.
a. Both are false.
 b. Both are true.
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c. No. 1 is false; No. 2 is true.
d. No. 1 is true; No. 2 is false

43. Jose and his wife, Perla, opened and maintained the following accounts
with Allied Bank Recto. (a) Savings deposit – P300,000; (b) Demand deposit –
P400,000; (c) Time deposit - P350,000. They also have the same
deposits with the same amount in Allied Bank Makati. If Allied bank becomes
insolvent the Philippine Deposit Insurance Corporation will be bound to be
liable to the spouses for its insurance liability equivalent to
a. Two deposits.
b. One deposit.
c. Six deposits.
d. Three deposits.

44. Which of the following is a proper defense against the application of

the "short-swing" profit rule?
a. That the sale or purchase was not the result of information obtained
by such owner, officer, director or beneficial owner because of his
or her position.
b. That one was no longer an officer at the time of either the sale or
purchase of the securities.
c. That the same was not sold or purchased within the statutory three
month period.
d. That the beneficial owner was not such both at the time of the

purchase and the sale.

45. Which among the following securities transactions require that the
securities be registered in order to be compliant with the Securities
Regulation Code?
a. A sale of capital stock of a corporation to its own stockholders
only where no fee is paid in connection with the sale.
b. A bank selling its own securities.
c. An insurance company selling its own securities.
d. The transaction of a broker on the PSE pursuant to his client's
orders.

46. The General Banking Law of 2000 applies –

a. To all types of banks in suppletory manner.
b. Only to banks which are not government owned or controlled.
c. To savings and mortgage banks, non-stock savings and loans
associations, and private development banks.
d. To the operation of branches of foreign banks in the Philippines.

47. Which of the following negates a charge that an entity is engaged in

banking business?
a. If it obtains funds only from qualified depositors.
b. If it invests, rather than lends, the funds obtained.
c. If at any given time, the number of depositors falls below twenty
(20).
d. If it has not obtained the requisite authority to operate as such from
the Bangko Sentral ng Pilipinas.

48. The distinction between deposits and deposit substitutes is material

in determining –
a. Whether an entity accepting either one is subject to supervision by
the BSP.
b. Whether a commercial bank that accepts both will need a separate
license from the BSP.
c. What degree of diligence a bank is required to exercise in handling
the same.
d. Whether a universal bank may use the same purposes of lending or
relending, as the case may be.

49. A bank teller fails to observe the standard procedures of a bank in

verifying the signature of the drawer of a check and honors the same when
presented for payment by a person who forged the signature of the drawer on
the check entrusted to him. What defense can a bank raise to negate or
 mitigate its liability to the drawer whose signatures was forged.
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a. The drawer is guilty of contributory negligence.
b. The act of the bank teller is unauthorized.

50. A bank is NOT liable for its failure to observe the degree of
diligence as required by its fiduciary duty under Sec. 2 of the GBL of 2000.
a. If such failure was prior to the enactment of the GBL of 2000.
b. If no actual damage was suffered by the depositor.
c. If the transaction involves money market placements.
d. If there is a contractual stipulation between the bank and the depositor
supported by valuable consideration which lowers the degree of diligence
required to be exercised by the bank to that of a good father of family.
51. A bank may be deemed as a mortgagee in good faith if it does not –
a. Ascertain the mortgagor’s title or ownership over the property mortgaged.
b. Ascertain the identity of the person borrowing the owner’s duplicate
srcinal title of property mortgaged before allowing such person to
borrow such title for photocopying purposes.
c. Check both the owner’s duplicate srcinal title to the property mortgaged
and the title thereof in the registry of deeds.
d. Conduct an ocular inspection of the property, provided there is nothing
in the title to the property which would arouse suspicion and require an
ocular inspection.

52. A universal bank and a commercial bank differ in terms of their power
–
a. To invest in non-financial allied enterprises.
b. To create and accept demand deposits.
c. To act as investment house.
d. To perform quasi-banking functions.

53. Rural banks and cooperative banks essentially differ in terms of –

a. Purpose.
b. Powers.
c. Governing law in matters other than organization, ownership, capital
requirements, powers, supervision, and general conduct of business.
d. Being authorized to create or accept demand deposits even without
Monetary Board approval.

54. The distinction between the three modes of entry of foreign banks in
the Philippines under the Foreign Banks Liberalization Act is material in
determining –
a. Whether or not a foreign bank may avail of more than one mode of entry.
b. Whether or not Monetary Board Approval is required for such entry.
c. Whether or not head office guarantee is required.
d. Whether or not the foreign bank shall perform the same functions enjoy
the same privileges, and be subject to the same limitations imposed upon
a Philippine bank of the same category.

55. The head office of a foreign bank authorized to operate branches in

the Philippines is sued in a Philippine court by a payee of a check drawn by
a depositor of the Philippine branch of such foreign bank which refused to
honor a check notwithstanding that funds were sufficient. What defense can
the head office raise to avoid liability to such payee?
a. Philippine courts have no jurisdiction over the head office of the
foreign bank.
b. The head office of a foreign bank is not liable for the unauthorized acts
of its Philippine branch.
c. The head office guarantee is applicable only to liabilities to
depositors.
d. The bank is not liable to the payee for dishonor of checks.

56. That a deposit is in the nature of a loan –

a. Is inconsistent with the fiduciary duty imposed on banks in the handling
thereof.
b. Means that the same may be classified as a preferred credit.
c. Means that the bank which has loaned the depositor money has a right to
compensation if both loan obligations are already due and demandable,
even without prior consent of the depositor.
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d. Means that in cases where banks are placed under receivership or
liquidation, a depositor has no other means to recover on his deposit
except through such receivership and liquidation proceedings where he
will be treated as a creditor of the bank.

57. A time deposit differs from a demand deposit in that –

a. Numbered accounts are not allowed for time deposits, but are allowed for
demand deposits.
b. Instruments issued pursuant to a time deposit are generally non-
negotiable, while instruments issued pursuant to a demand deposit are
negotiable.
c. Funds in time deposit account earn interest, while funds in a demand
deposit account cannot earn interest.
d. Funds in a time deposit account cannot be withdrawn at any time, while
funds in a demand deposit account can.

58. A bank dishonors a check drawn against an account with insufficient

funds. Under which circumstances can the bank be held liable for such
dishonor?
a. If the depositor has another account in the bank with sufficient funds to
cover the amount of the check drawn but the bank did not apply such funds
to cover said check.
b. If the bank did not notify the depositor that it had previously availed
of its legal right to compensation and applied the funds in the checking

account in payment
insufficiency of the of depositor’s
funds loan
to cover the to the
amount bank
of the resulting
check drawn. in the
c. If before dishonoring the check, the bank did not notify the depositor
that his funds are insufficient to cover the amount of the check drawn as
to give him an opportunity to deposit sufficient funds.
d. If the bank does not allow the depositor to deposit the funds needed to
cover the check drawn within a reasonable time after presentment in order
to avoid dishonor of said check.

59. A Bank is liable to the depositor if it allows withdrawal of the funds

in the depositor’s account by someone who is not actually authorized by the
depositor, but who –
a. Presents the passbook and a withdrawal slip signed by the depositor.
b. Surrenders the certificate of time deposit.
c. Appears as an authorized signatory of a corporate depositor in the latest
board resolution submitted to the bank, but is actually no longer
connected with the corporate depositor.
d. Appears in the bank records as the depositor but is actually merely a
trustee for the true owner of the funds.

60. What can a bank lawfully do or omit to do without violating its duty
to exercise extraordinary diligence in the handling of deposits?
a. Allowing a crossed check to be cashed provided that the payee is
personally known to the bank.
b. Accepting as deposit a check which is not indorsed by the payee, provided
that the check is a manager’s check.
c. Closing a demand deposit account with prior notice to a depositor who has
been misusing such account repeatedly overdrawing against it.
d. Disclosing information regarding “and/or” savings account where one of
the two depositors has given his written permission for such disclosure.
61. The right to secrecy of bank deposits –
a. Being part of municipal law, does not apply to deposits in branches of
foreign banks in the Philippines.
b. Is a constitutional right which may, however, be regulated by statute.
c. Cannot be invoked in the absence of an express statutory provision.
d. If violated will render the information obtained thereby inadmissible as
evidence in any proceeding against the depositor.

62. A public officer is charged with violation of the anti-graft and

corrupt practices act before the Office of the Ombudsman. The Ombudsman
requests a bank to disclose information regarding the accounts in the name
of the public officer’s immediate family. What principle or ground may the
 bank invoke to resist such inquiry?
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a. An inquiry into bank deposits cannot be had at the preliminary
investigation level.
b. No inquiry into bank deposits can be had in the absence of a court order.
c. No inquiry can be made except into bank accounts of the person charged.
d. The office of the Ombudsman has no power to inquire into bank deposits.

63. An ex-president of the Philippines is accused of committing the crimes

of plunder and money laundering in the course of the proceedings, the Office
of the Special Prosecutor filed a Motion with the Sandiganbayan for the
issuance of an order directing the examination of such ex-President’s U.S.
Dollar account. What ground can be validly invoked by the ex-president to
oppose such motion?
a. A foreign currency deposit cannot be inquired without the consent of the
depositor.
b. Plunder is not an exception to the prohibition against disclosure under
the Foreign Currency Deposit Act.
c. Money Laundering is not an exception to the prohibition against
disclosure under the Foreign Currency Deposit Act.
d. Assuming that money laundering is an exception to the prohibition against
disclosure under the Foreign Currency Deposit Act, the court must first
find probable cause of money laundering since the instant charges do not
fall within the cases where no court order is required.

64. Are rebroadcasting and retransmission protected intellectual property

rights?
a. No. Since rebroadcasting and retransmission are forms of copyright
infringement
b. Yes. Since Rebroadcasting and retransmissions are allowed under the must-
carry rule.
c. Rebroadcasting is not a protected intellectual property right due to the
must-carry rule whereas retransmissions are protected copyrights.
d. Rebroadcasting is a protected intellectual property right whereas
retransmissions are not protected copyrights due to the must-carry rule.

65. XX applied for the issuance of a preliminary injunctive order on the ground
that she is entitled to the use of the trademark on product A and its
container based on her copyright and patent over the same. Can she do this?
a. Yes. These are registrable marks
b. No. These are not registrable marks
c. Yes, although its copyrightability and patentability should be registered
separately
d. No. These are rights which are not interchangeable. The granting of one
right will not necessarily apply to the other rights.

66. Which of the following are not included under technology transfer
arrangements under the IP code?
a. the licensing of a new management program in favor of a Philippine
company
b. the exact process of how to create a new and improved child-proof paint
c. the secret ingredient of the KFC srcinal recipe chicken.
d. the use of Windows software in businesses.

67. Which of the following are patentable medicines?

a) the mere discovery of a new form or new property of a known substance
which does not result in the enhancement of the known efficacy of that
substance,
b) the mere discovery of any new property or new use for a known substance,
c) the mere use of a known process resulting in a new product that employs
at least one new reactant.
d) the mere use of a known process unless such known process results in a
new product

68. A files a patent application for product Z, a revolutionary computer

chip which is capable of outperforming current chips by as much as 10x. A is
employed by company B, a software company. A’s job is to develop software
 programs for businesses. He developed this chip during office hours and days
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where he was researching for software ideas which he would use for his job.
B filed its application over the same product at the day after A filed his
patent. Who owns the patent?

a. A since A filed his patent first.

b. B since A made his chip during office hours and days.
c. A since A made the chip not in the course of regular duties.
d. B since A made the chip during office hours and utilized B’s resources.

69. A is a holder of patent X. B also holds a patent over X. A trial

ensued and B was declared the true owner of the patent. What are the
remedies for B?

a. Upon filing a motion in court, the court shall order for his substitution
as patentee
b. the court shall order for his substitution as patentee, or at the option of
the court, cancel the patent, and award actual and other damages in his
favor if warranted by the circumstances,
c. the court shall order for his substitution as patentee, or at the option of
the true inventor, cancel the patent, and award actual and other damages in
his favor if warranted by the circumstances
d. Upon a petition by the true inventor, cancel the patent, and award actual
and other damages in his favor if warranted by the circumstances.

70.
a. WhereWhich of the following
the subject matter ofare rights is
a patent conferred by a to
a product, patent?
restrain, prohibit
and prevent any unauthorized person or entity from making, using, offering
for sale, selling or importing that product;
b. Where the subject matter of a patent is a process, to restrain, prevent or
prohibit any unauthorized person or entity from using the process, and from
manufacturing, dealing in, using, selling or offering for sale, or
importing any product obtained directly or indirectly from such process.
c. Patent owners shall have the right to assign, or transfer by succession
the patent, and to conclude licensing contracts for the same
d. All of the above

71. Which of the following requisites are not included for an invention to
be patentable?
a. It is New, it has an inventive step, and it does not form part of a prior
art
b. It is New, it has an inventive step, and it is industrially applicable
c. It is new, it does not form part of a prior art and it is registered
d. None of the above

72. A Scientist has managed to create a new breed of pigs by altering its
DNA of which such has never existed prior to such act by the scientist. Is
the pig breed patentable?
a. No. Since it is immoral
b. Yes. Since the pig was created purely by the hand of the scientist
c. No. Since animal breeds are not patentable
d. Yes. Although the animal breeds are not patentable, the essential micro-
biological process is patentable

73. Are Computer programs never patentable?

a. No. Computer programs are always patentable
b. Yes. Section 22 is explicit on this
c. No. Computer programs may be patentable provided it forms part of a
process
d. Yes. It contains non-patentable elements

74. A filed a patent in Malaysia over his invention on January 8, 2009. He

subsequently filed a patent in the Philippine IPO on March 30, 2009,
expressly claiming priority. Apparently, B has also filed a patent
pertaining to the same invention on February 18, 2009. Who has priority
right over the patent?
a. A since he filed his patent in Malaysia earlier and also he has
claimed priority expressly.
Page 12 of 20
REGULATORY FRAMEWORK FOR BUSINESS TRANSACTIONS – NEW TOPICS
b. B since a patent application in a foreign country has no effect here
in the Philippines
c. A since he filed his patent in Malaysia earlier and also he has
claimed priority expressly, and it is within 12 months from the
initial registration in Malaysia.
d. B since he was the first one to file his registration in the
Philippines

75. A was able to invent a new type of vehicle. However, B was able to
register the invention first although it was clearly A who was the true
inventor. What remedy may A avail of?
a. He will file a civil case of patent infringement
b. He can file for cancellation of patent plus damages
c. He can file for the substitution as the real patentee
d. Both A and C

76. A medicine already being distributed both in the U.S. and in the
Philippines by distributor VX authorized by the patent holder is now being
imported by A, a doctor who operates a small clinic and is using the drug
for the treatment of his patients. Is A liable for patent infringement?
a. Yes. A is liable since VX is the only authorized distributor of the
patented drug.
b. No. A is not liable since section 72 (1) allows such use of the
product.

c. Yes. A is liable since he is not an authorized distributor of the

product.
d. No. A is not liable since this is a case of fair use.

77. A has been importing patented medical drugs from Thailand. The patent
is owned by B. B has a local distribution unit in the Philippines. B wants
to file a case of patent infringement and importation of counterfeit drugs
against A. Will this prosper?
a. No. This is a case of fair use
b. Yes. A counterfeit drug is a form of infringement against the patent
of B.
c. No. An unregistered drug is not the same as a counterfeit drug and
also that section 72 (1) allows such importation by a 3rd party.
d. Yes. B has not authorized A to distribute the products.

78. When a device appropriates a prior invention by incorporating its

innovative concept and, although with some modification and change, performs
substantially the same function in substantially the same way to achieve
substantially the same result, what test should be applied?
a. Literal infringement test
b. Denicola test
c. Doctrine of Equivalents test
d. Fair Use test

79. B was selling a product of A who was the patent holder of B’s product.
Apparently, B has been passing A’s patent as his. A filed a criminal case of
infringement against B. will this prosper?
a. Yes. A is the rightful owner of the patent
b. No. B is exempted under the fair use doctrine
c. Yes. A never authorized B to sell such products as his.
d. No. B has yet to be found guilty of a previous infringement, hence A
has no cause of action.

80. A utility model lasts for:

a. 20years non-renewable
b. 5 years, renewable for another 2 consecutive terms.
c. 7 years, renewable for another 2 consecutive terms.
d. 7 years non-renewable
Page 13 of 20
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81. The provisions of compulsory licensing provides for instances where
the patent holder is required to grant a license to the government or to a
3rd party. Is this provision unfair for depriving the patent holder of his
right to his property?
a. No. This is a case of eminent domain.
b. Yes. This is a case of depriving the patent holder of his property
without due process of law
c. No. The patent holder is not deprived of his rights to the patent
since he will still receive royalties for his patents.
d. Yes. The patent holder has exclusive rights over his patents and such
exclusivity is rendered inutile by the provision.
82. Q: Which of the following types of names confer the greatest chance of
being a valid trademark?
a. Generic
b. Descriptive
c. Suggestive
d. Arbitrary/Fanciful

83. Businessman A puts up a sari-sari store named “Andongs”. B also puts

up a sari-sari store named “Andongs” a month later. Can A filed against B an
infringement case?
a. Yes. A can file an infringement case against B for unlawfully using
his tradename.

b.
c. No.
Yes.He hasis
This not
a registered his competition.
case of unfair tradename.
d. No. He has not registered his trademark.
84. When testing whether the likelihood of deception has occurred, at what
point of a transaction do we consider such likelihood?
a. After the sale of the item bearing the mark.
b. Prior to the sale of the item bearing the mark.
c. At the point of the sale of the item bearing the mark.
d. None of the above.

85. When is non-use of a mark excusable?

a. It must always be used, failure to use it for any reason will forfeit
the use of such mark.
b. When the trademark owner is lacking in funds due to slow sales.
c. When the trademark owner has already registered his mark with the IPO
d. When the cause of such non-use is due to reasons independent of the
will of the trademark owner.

86. . Which among the following statements is false?

a. Infringement of trademark is the unauthorized use of a trademark,
whereas unfair competition is the passing off of one’s goods as those
of another.
b. In infringement of trademark, fraudulent intent is unnecessary,
whereas in unfair competition, fraudulent intent is essential.
c. In infringement of trademark and in unfair competition, prior
registration are both necessary.
d. In infringement of trademark and in unfair competition, prior
registration to both are not necessary

87. Suppose an author published a book describing a new method of book-

keeping, which of the following statements is true?
a. The author has a copyright over the book as well as the method
described in his book; thus, he is able to preclude others from only
copying the book as well as preclude others from employing the method
as described in the book without his permission.
b. The author has an exclusive right to the method described in the book.
c. The extent of the author’s copyright is limited to him being able to
prevent third persons from copying portions of his work; he is unable
to prevent third persons from employing or describing the method
discussed in such book.
d. The extent of the copyright extends to the idea itself, not merely the
expression
Page 14 of 20
REGULATORY FRAMEWORK FOR BUSINESS TRANSACTIONS – NEW TOPICS
88. A reporter wants to write a true-to-life story about a person who was
kidnapped and buried alive for 83 hours. The reporter then extensively
interviewed the survivor and spent several months coming up with a book
documenting the plight of the survivor. A Hollywood studio company then
made a movie out of the ordeal of the survivor. The reporter is saying that
even though the movie was not based on the book, the research he has spent
documenting the event was copyrightable. Is the contention of the reporter
correct?
A. Yes, considering that the research material used served as the foundation
for the subsequent book of the reporter about the survivor.
B. Yes, considering that the reporter has exerted substantial time and
effort in his research, it is copyrightable.
C. No, facts and research involved in obtaining facts should not be
distinguished, and are not copyrightable.
D. No. the subject matter is not copyrightable.

89. Is a work with a merger of aesthetic and functional features

copyrightable?
A. No, copyright law contemplates only srcinal intellectual creations in
the literary and artistic domain and is the proper subject of a patent.
B. Yes, on all cases.
C. It depends, if the design elements reflect a merger of aesthetic and
functional consideration cannot be separated from utilitarian features,

D. it
No,is
onnot
allcopyrightable.
cases.

90. The following are functions of banks except:

a. Deposit function
b. Loan function
c. Make collections and payments
d. Outsourcing of functions

91. It is commonly known as an account with fixed term.

a. Savings account
b. Time deposit
c. Peso deposit
d. Dollars account

92. Bank accounts maybe garnished by the creditors of the depositor. Which
of the following deposits are exempt from garnishment?
a. Foreign Currency deposits and those exempt by rules of Civil Procedure
like provision for the family for four months.
b. Deposit that have become dormant for a period of ten (10) years.
c. Money or security or other evidence of indebtedness of any kind and
interests thereon with banks, buildings and loan associations.
d. Loans and other credit accommodations with maturities of more than five
(5) years.

93. An Act that vests the Bangko Central ng Pilipinas with the sole power
and authority to issue currency within the territory of the Philippines
a. Act No. 3936 -Private Development Banks
b. R.A. 9302- Thrift Banks Act
c. The New Central Bank Act
d. R.A. 6848- Islamic Investment Bank of the Philippines

94. When may the Anti- Money Laundering Council (AMLC) perform an inquiry
into deposits of a person?
a. For purposes of determining his liabilities.
b. To determine his assets with proper court order.
c. Upon order of the court when there is probable cause that the deposits
are related to crime of unlawful activities defined in R.A. 9194
d. When there is written consent of the depositor.
Page 15 of 20
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95. The total amount of loans, credit accommodations and guarantees that
may be extended by a bank to any person, partnership, association,
corporation, or other entity is known as CEILING.
What is the percentage required of the net worth of such bank?
a. 20%
b. 30%
c. 25%
d. 35%

96. The BSP upon approval of at least five (5) members of the Monetary
Board, may also grant this kind of loan or advances in the amount not
exceeding 50% of its total deposits and deposits substitutes is known as:
a. Loans without collateral
b. Emergency loans
c. Salary loans
d. Banking loans

97. The powers that may be conferred to the conservator are such powers as
may be necessary in Conservatorship except:
a. To take charge of the assets, liabilities, and the management
b. To reorganize the management of the subject bank
c. To collect all monies and debts due and exercise all powers necessary to
restore its viability
d. All of the above

98. Any activity resulting from a trustor- trustee relationship involving

the appointment of a trustee
by a trustor for the administration, holding, management of funds for the
use or benefit or advantage of the trustor or of others called
beneficiaries
a. Partnership Business
b. Trust Business
c. Corporation Business
d. Trusteeship Business

99. Entities engaged in the lending of funds obtained in the form of

deposits from the public.
a. Quasi Banks
b. Banks
c. Pawnshop
d. Commercial Banks

100. Ramon was asked to enumerate the classification of Banks in the

Philippines. Upon answering he enumerated that Universal Bank, Commercial
bank, Cooperative Bank Islamic Bank, Thrift and Rural Banks are the
different classifications of Banks. After Ramon recited the professor called
Ann and asked her the same question. Ann reply and said that bank are
classified as the Central Bank, Metro Bank, Banco de Oro , Bank of the
Philippine Island and Banco Filipino. If you are called to recite too, will
you support Ramon’s answer?:

a. No. Ramon’s answer is incorrect as Ann correctly enumerated the

classifications of Bank in the Philippines
b. Yes. Ramon correctly enumerated the classifications of Bank in the
Philippines
c. No Ramon and Ann is incorrect
d. No. Ann correctly enumerated the classifications of Bank in the
Philippines

101. Which of the following statement is not true about the nature of
Banking business?

a. Banking business is fiduciary in nature and requires high standard of

integrity and performance
b. Bank must exercise utmost diligence or the highest degree of care in the
handling of deposits
c. Banking business is fiduciary in nature and require extraordinary
 diligence
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d. Bank must exercise that degree of care like that of a good father of the
family in the handling of deposits
e. Both A and B are correct while C and D are incorrect

102. All foreign currency deposits are considered of an absolutely

confidential in nature and shall exempt from attachment, garnishment or any
other order or process of any court, legislative body, government agency or
any administrative body whosoever. The following are the exemption to the
secrecy of foreign currency deposit except:
a. Upon the written permission of the depositor
b. Upon order of competent court in cases of violation of AMLA when it
established that there probable cause that the deposits or investments
involved are in any way related to a money laundering offense
c. The BSP and PDIC to the Corporation and/or Bangko Sentral may inquire
into or examine deposit accounts pursuant to explanation
d. The PDIC with prior approval of the Monetary Board

103. All of the following are exceptions to the Bank Secrecy Law except?
a. Upon order of the competent court in cases involving Graft and Corrupt
Practices Act
b. Examination by an independent auditor hired by the bank
c. The BSP and PDIC to the Corporation and/or Bangko Sentral may inquire
into or examine deposit accounts pursuant to explanation
d. In- camera inspection by the Ombudsman

104. The following are the grounds when the Monetary Board may close a bank
or quasi-bank except?
a. If unable to pay its liabilities (cash flow test)
b. Has insufficient realizable assets to meet its liabilities (balance sheet
test)
c. If cannot continue without involving probable losses to its depositors or
creditors.
d. It persistently conducts business in a sound and safe manner

105. As part of the safeguards against imprudent banking, the General

Banking Law imposes limits or restrictions on loans and credit
accommodations which may be extended by banks. Which of the following are
not considered limits and restriction on loans and credit accommodation?

a. SBL Rules- those promulgated by the Bangko Sentral ng Pilipinas upon

authority if Section 35 of the General Banking Law of 2000
b. DOSRI Rules- promulgated by BSP, upon authority of section 5 of the
General Banking law
c. Anti-Money Laundering Law
d. No commercial bank shall make any loan or discount on the security of
shares of its on capital stocks.

106. These statements were presented to you for evaluation:

I. The conservator is appointed to take charge of the assets,
liabilities and the management of a bank or a quasi-bank in a state
of continuing liability, or unwillingness to maintain a condition of
liquidity deemed adequate to protect the interest of depositors and
creditors

II. The receiver is appointed to manage a bank or quasi-bank that is

unable to pay its liabilities in the ordinary course of business, or
has insufficient realizable assets to meet its liabilities, or
cannot continue business without probable losses

In your evaluation of the said statements:

a. Statement 1 is correct , statement 2 is incorrect
b. Statement 1 is incorrect, statement 2 is correct
c. Both Statement are correct
d. None of the statements is correct
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107. Ritchie love to shop and she has a habit of paying only in cash. In
one of her shopping sprees in SM North Edsa, she got the shock of he life
when for the first time, a store cashier refuse to accept her coins in
payment for a purchase worth not more than one hundred pesos. Ritchie was
paying 70 pesos in 25-centavo coins and twenty five pesos in 10-centavo
coin. The salesgirl told her that her coins where not legal tender. Do you
agree?
a. Yes, Coins shall be legal tender in amounts not exceeding P 75.00 for
denominations of 25 centavos and above and 25.00 for denominations of 10
centavos or less
b. No. Coins shall be legal tender in amounts not exceeding P 100.00 for
denominations of 25 centavos and above and 25.00 for denominations of 10
centavos or less
c. Yes. All notes and coins shall be legal tender for all debts , public and
private, in amounts not exceeding 100 for denominations of 1, 5, 10 and 25
sentimo coins

d. Yes. All notes and coins issued by the Bangko Sentral shall be fully
guaranteed as legal tender in the Philippines unless otherwise fixed by the
Monetary Board, that coins shall be legal tender in amounts not exceeding
Fifty pesos (P50.00) for denominations of Twenty-five centavos and above,
and in amounts not exceeding Twenty pesos (P20.00) for denominations of Ten
centavos or less.

108. Which is
a. The Bangko not true
Sentral about
shall the Bangko
provide policySentral ng Pilipinas?
directions in the areas of money,
banking and credit
b. The Bangko Sentral is hereby authorized to adopt, alter, and use corporate
seal which shall be judicially noticed: to enter into contracts ; to
lease or own real and personal property
c. BSP may compromise, condone or release, in whole or in part , any claim
of or settled liability to the Bangko Sentral regardless of the amount
involved under such term and condition as may be prescribed by the Monetary
Board to protect the interest of the Bangko Sentral
d. The Bangko Sentral may acquire and hold assets and incur such liabilities
in connections with its operations authorized by the provision of RA 7653.

109. Mr. Dela Cruz, a second year accountancy student of a University in

Manila, photocopied some pages of the Financial Accounting book authored by
C. Valix, CPA. Mr. Ferrer, his professor in Financial Accounting, saw the
photocopies during one of their classes. He scolded Mr. Dela Cruz for not
buying the srcinal book and told him that he violated the copyright law and
maybe penalized. Is Mr. Ferrer correct?

a. Yes, because the book was photocopied without the consent of the author and
used publicly in a classroom.
b. No, because the private reproduction of a published work in a single copy,
where the reproduction is made by a natural person exclusively for research
and private study, shall be permitted, without the authorization of the
owner of copyright in the work.
c. No, because Mr. Dela Cruz reproduced a single copy only, exclusively for
his private study and he did not gain any profit for photocopying some of
the pages of the book.
d. No, because he did not reproduced the whole book but only some of its
pages, it can be permitted even without the consent of the owner of the
copyright.

110. Kris Aquino commissioned Mr. Magaling to write a biography of her late
father, Ninoy Aquino, for a fee. Upon completion of the work, Kris paid Mr.
Magaling the agreed price. The biography was copyrighted. Kris, however,
changed her mind again upon reading the book and decided not to have it
published. Can Kris Aquino sell the property without the consent of Mr.
Magaling?

a. Yes, Kris Aquino can sell the copyrighted biography of her father without
need of securing the consent of Mr. Magaling, the writer of said biography.
Page 18 of 20
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b. Mr. Magaling entered into a contract with Kris Aquino and having
compensated, he had parted with all his rights to the said book, in effect
making Kris his assignee.
c. The assignee’s rights include the right to sell the work without the
consent of the writer, Mr. Magaling.
d. All of the above

111. Atty. Ana Maganda wrote a legal opinion for a client on the
differences of a probationary, regular, casual and seasonal employee. She
quoted without permission Atty. Aliling’s comment appearing in his book
“Annotations on the Labor Code”, but she indicated the source of the
quotation, the book and the author’s name. Atty Aliling is a labor law
expert. Can Atty. Aliling hold Atty. Ana Maganda liable for infringement of
copyright for quoting a portion of his book without his permission?

a. Yes, because Atty. Ana Maganda copied somebody else’s work without the
srcinal author’s consent.
b. No, because the Intellectual Property Code provides that a quotation from a
copyrighted work can be used for judicial proceedings or for giving
professorial advice by legal practitioner, provided the source are
identified.
c. Yes, because Atty. Ana Maganda used the work of another for her own gain.
d. No, because everybody can quote somebody as long as the source and the name
of the author of the quotation are identified.

112. Read the following statements and determine which of the choices are
correct:

Statement 1: Infringement is the use by others without the registrant’s

consent of a reproduction or colorable imitation of his trademark,
tradename or service mark with the purpose of causing to mislead or
misleading the public that those goods or services are those of the
registrant.

Statement 2: The definition of infringement implies that only registered

trademarks, trade names and service marks are protected against
infringement or unauthorized use by another or others

a. Both statements are true

b. Statement 1 is true while Statement 2 is false
c. Only Statement 1 is true
d. Only Statement 2 is true

113. To establish trademark infringement, the following elements must be

shown: (1) the validity of the plaintiff’s mark; (2) the plaintiff’s
ownership of the mark; and (3) the use of the mark or its colorable
imitation by the alleged infringer results in “likelihood of confusion” Of
these, the element of ______________ is the gravamen of trademark
infringement.

a. Element no. 1
b. Element No. 2
c. Element No. 3
d. All of the above

114. Unilevel Corporation asked your legal advice regarding their plan to
use a trademark with the words “SWEET CANDY” However, there is an existing
and registered trademark using the words “TWEET CANDY” Which of the
following advices are correct.

a. The firm must abandon the plan because another company uses the trademark
Tweet Candy and there is a danger of a suit for infringement. The words
Sweet and Tweet is almost similar in sound and they can confuse or mislead
the public.
b. They can use the SWEET CANDY as long as there will be a very different
 packaging and flavors so as not to mislead the public.
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c. Unilevel is a well-known company and their products are patronized country-
wide, they can use the trademark SWEET CANDY because TWEET CANDY is owned
by a small-time company whose market is within Luzon only.
d. None of the above

115. Which of the following works are protected and can be copyrighted?
a. A biography containing your life, love and success.
b. Your musical compositions with or without words.
c. News of the day and other facts having the character of mere press
information.
d. A and B only

116. The Sogod Hotel chain reproduces DVD’s, distributes the copies thereof
to its hotels and makes them available to hotel guests for viewing in the
hotel guest rooms and charges a separate fee for the use of the DVD players.
Is Sogod Hotel liable for infringement?
a. No, the DVD viewing is done privately in the hotel guest rooms.
b. Yes, because the reproduction of the DVD’s violate the copyright or
economic rights of the owner of the film. The hotel charge fees for the use
of DVD player as well as there are room charges, they earn gain from the
use of the DVD because it entices the guests to check-in in their hotel.
c. No, the DVD viewing is part of the hotel services and it is the use of the
DVD players that is charged and not the cost of the DVD.
d. None of the above

117. Narciso Planas invented a gas-saving device, manufactured and sold it

to the market without securing a patent. San Miguel Co., a rich and well-
known company, bought one gadget, dismantled the device and studied it. In
due time, the company is manufacturing a gas-saving device similar to the
invention of Narciso Planas. Before offering it for sale, the company
secured a patent. Below are the actions and defenses available for Narciso
Planas. Which of the following statements are correct?
I. Narciso Planas should first bring an action for the cancellation of
the patent illegally secured by San Miguel Company and on the said
proceedings, he must prove that he invented the device.
II. Narciso Planas, being the inventor of the gadget, is the owner of an
intellectual creation and is entitled to legal protection of said
property right from the unauthorized use of the same by another person
or entity.
III. While the cancellation proceedings are pending, Narciso Planas may
ask the court for preliminary injunction to prevent San Miguel from
manufacturing more gadgets.
IV. San Miguel Co. has a better right over the invention because they
secured a patent before selling the device.
a. Statements I and II are correct.
b. Statements I and III are correct
c. Statement IV is correct
d. Statements I, II and III are correct

118. The infringer is liable to the following:

I. An injunction for such infringement
II. Pay actual, moral and exemplary damages
III. Deliver for impounding of the articles alleged to infringe a copyright
IV. Deliver for destruction all copies, devices and other means used for
making the infringing copies
Which of the statements above are TRUE:
a. Statement 1
b. Statement 2
c. Statement 3
d. Statement 4
e. All of the above

**Good Luck & God Bless!!!**

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