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.
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 -

1 Lifted from BAR Exam Questions & Quizzers

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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 provided for the principal amount, the installment
payments, the interest rates and the due dates. On due dates 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?
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.
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b. No, since it has no power to invest in equities.
c. Yes, as there is no prohibition 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-original 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

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 who must not have a
relation with the corporation which would interfere with his exercise of independent judgment in carrying 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 -
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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.
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.
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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 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
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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.
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 original book, reproduced one copy of the Journal for
lending to the University’s students for room use. Is the U.E. Law Library liable for copyright 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.
c. No. 1 is false; No. 2 is true.
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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.
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.

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b. Ascertain the identity of the person borrowing the owner’s duplicate original title of property mortgaged
before allowing such person to borrow such title for photocopying purposes.
c. Check both the owner’s duplicate original 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.
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 of depositor’s loan to the bank resulting in the
insufficiency of the funds to cover the amount of the check drawn.
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.
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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?
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
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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 original 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 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. Which of the following are rights conferred by a patent?

a. Where the subject matter of a patent is a product, to 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
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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.
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

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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. No. He has not registered his tradename.
c. Yes. This is a case of unfair competition.
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

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.
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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 original 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, it is not copyrightable.
D. No, on all 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.

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

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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
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.
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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

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 not true about the Bangko Sentral ng Pilipinas?

a. The Bangko Sentral shall provide policy 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 original 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.

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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.
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 original 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.
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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.
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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