A USLicensor Can Try to Prevent a Licensee from Voiding Its

question 15

Multiple Choice

A U.S.licensor can try to prevent a licensee from voiding its contract and using what it has learned to create a competitor by:

• A) using lawyers from both countries to write the licensing agreement.
• B) insisting that all licensees have a published code of ethics.
• C) having the licensee pay a fee for the use of the manufacturing process,trademark,patent,or other proprietary knowledge.
• D) locally registering patents and trademarks to the U.S.firm-not the licensee.
• E) avoiding the use of any patents and trademarks.

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Definitions:

Revenue Forgone

The potential income that is given up when choosing one alternative over another; essentially, it's the opportunity cost of revenue not earned.

Differential Analysis

A decision-making process that looks at the difference in costs and benefits between alternative choices.

Product Cost Distortion

When the allocated costs of manufacturing a product do not accurately reflect the actual costs, leading to incorrect pricing or profitability analysis.

Total Cost Concept

A management accounting concept that includes all costs, both fixed and variable, incurred in producing a product or delivering a service.