Chapter 4: Laws, Regulations, and Compliance

Mary is the cofounder of Acme Widgets, a manufacturing firm. Together with her partner, Joe, she has developed a special oil that will dramatically improve the widget manufacturing process. To keep the formula secret, Mary and Joe plan to make large quantities of the oil by themselves in the plant after the other workers have left. They want to protect this formula for as long as possible. What type of intellectual property protection best suits their needs? A. Copyright B. Trademark C. Patent D. Trade secret

D. Mary and Joe should treat their oil formula as a trade secret. As long as they do not publicly disclose the formula, they can keep it a company secret indefinitely.

Which one of the following is the comprehensive EU law that governs data privacy that was passed in 2016 and goes into effect in 2018? A. DPD B. GLBA C. GDPR D. SOX

D. The General Data Protection Regulation (GDPR) is a comprehensive data privacy law that protects personal information of EU residents worldwide. The law is scheduled to go into effect in 2018.

What industry is most directly impacted by the provisions of the Gramm-Leach Bliley Act? A. Healthcare B. Banking C. Law enforcement D. Defense contractors

B. The Gramm-Leach-Bliley Act provides, among other things, regulations regarding the way financial institutions can handle private information belonging to their customers.

What framework allows U.S companies to certify compliance with EU privacy laws? A. COBiT B. Privacy Shield C. Privacy Lock D. EuroLock

B. The Privacy Shield framework, governed by the U.S Department of Commerce and Federal Trade Commission, allows U.S companies to certify compliance with EU data protection law.

Which law governs information security operations at federal agencies? A. FISMA B. FERPA C. CFAA D. ECPA

A. The Federal Information Security Management Act (FISMA) includes provisions regulating information security at federal agencies. It places authority for classified systems in the hands of the National Security Agency (NSA) and authority for all other systems with the National Institute for Standards and Technology (NIST).

What act updated the privacy and security requirements of the Health Insurance Portability and Accountability Act (HIPAA)? A. HITECH B. CALEA C. CFAA D. CCCA

A. The Health Information Technology for Economic and Clinical Health Act (HITECH) of 2009 amended the privacy and security requirements of HIPAA

What law prevents government agencies from disclosing personal information than an individual supplies to the government under protected circumstances? A. Privacy Act B. Electronic Communications Privacy Act C. Health Insurance Portability and Accountability Act D. Gramm-Leach-Bliley Act

A. The Privacy Act of 1974 limits the ways government agencies may use information that private citizens disclose to them under certain circumstances.

What is the broadest category of computer systems protected by the Computer Fraud and Abuse Act, as amended? A. Government-owned systems B. Federal Interest Systems C. Systems used in interstate commerce D. Systems located in the United States

5. The original Computer Fraud and Abuse Act of 1984 covered only systems used by the government and financial institutions. The act was broadened in 1986 to include all federal interest systems. The Computer Abuse Amendments Act of 1994 further amended the CFAA to cover all systems that are used in interstate commerce, including a large portion (but not all) of the computer systems in the United States.

Matthew recently authored an innovative algorithm for solving a mathematical problem, and he wants to share it with the world. However, prior to publishing the software code in a technical journal, he wants to obtain some sort of intellectual property protection. Which type of protection is best suited to his needs? A. Copyright B. Trademark C. Patent D. Trade secret

A. Copyright law is the only type of intellectual property protection available to Matthew. It covers only specific software code that Matthew used. It does not cover the process or ideas behind the software. Trademark protection is not appropriate for this type of situation. Patent protection does not apply to mathematical algorithms. Mathew can't seek trade secret protection because he plans to publish the algorithm in a public technical journal.

The Children's Online Privacy Protection Act (COPPA) was designed to protect the privacy of children using the internet. What is the minimum age a child must be before companies can collect personal identifying information from them without parental consent? A. 13 B. 14 C. 15 D. 16

A. The Children's Online Privacy Protection Act (COPPA) provides severe penalties for companies that collect information from young children without parental consent. COPPA states that this consent must be obtained from the parents of children younger than the age of 13 before any information is collected (other than basic information required to obtain that consent).

Which one of the following is not a requirement that Internet service providers must satisfy in order to gain protection under the "transitory activities" clause of the Digital Millennium Copyright Act? A. The service provider and the originator of the message must be located in different states B. The transmission, routing, provision of connections, or copying must be carried out by an automated technical process without selection of material by the service provider. C. Any intermediate copies must not ordinarily be accessible to anyone other than anticipated recipients and must not be retained for longer than the provider D. The transmission must be originated by a person other the provider.

A. The Digital Millennium Copyright Act does not include any geographical location requirements for protection under the "transitory activities" exemption. The other options are three of the five mandatory requirements. The other two requirements are that the service provider must not determine the recipients of the material and the material must be transmitted with no modification to its consent.

What law protects the right of citizens to privacy by placing restrictions on the authority granted to government agencies to search private residences and facilities? A. Privacy Act B. Fourth Amendment C. Second Amendment D. Gramm-Leach-Biley Act

B. The Fourth Amendment to the U.S Constitution sets the "probable cause" standard that law enforcement officers must follow when conducting searches and/or seizures of private property. It also states that those officers must obtain a warrant before gaining involuntary access to such property.

Richard recently developed a great name for a new product that he plans to begin using immediately. He spoke with his attorney and filed the appropriate application to protect his product name but has not yet received a response from the government regarding his application. He wants to begin using the name immediately. What symbol should he use next to the name to indicate its protected status? A. © B. ® C. ™ D. †

C. Richard's product name should be protected under trademark law. Until his registration is granted, he use the ™ symbol next to it to inform others that is protected under trademark law. Once his application is approved, the name becomes a registered trademark, and Richard can begin using ® symbol.

Which criminal law was the first to implement penalties for the creators of viruses, worms, and other types of malicious code that cause harm to computer systems? A. Computer Security Act B. National Infrastructure Protection Act C. Computer Fraud and Abuse Act D. Electronic Communications Privacy Act

C. The Computer Fraud and Abuse Act, as amended, provides criminal and civil penalties for individuals convicted of using viruses, worms, Trojan horses, and other types of malicious code to cause damage to computer systems.

Which federal government agency has responsibility for ensuring the security of government computer systems that are not used to process sensitive and/or classified information? A. National Security Agency B. Federal Bureau of Investigation C. National Institute of Standards and Technology (NIST) D. Secret Service

C. The National Institute of Standards and Technology (NIST) is charged with the security management of all federal government computer systems that are not used to process sensitive national security information. The National Security Agency (part of the Department of Defense) is responsible for managing systems that no process classified and/or sensitive information.

What compliance obligation relates to the processing of credit card information? A. SOX B. HIPAA C. PCI DSS D. FERPA

C. The Payment Card Industry Data Security Standard (PCI DSS) applies to organizations involved in storing, transmitting, and processing credit card information.

Which one of the following laws is not designed to protect the privacy rights of consumers and internet users? A. Health Insurance Portability and Accountability Act B. Identity Theft Assumption and Deterrence Act C. USA PATRIOT Act D. Gramm-Leach-Bliley Act

C. The USA PATRIOT Act was adopted in the wake of the September 11, 2001, terrorist attacks. It broadens powers of the government to monitor communications between private citizens and therefore actually weaker the privacy rights of consumers and internet users. The other laws mentioned all contain provisions designed to enhance individual privacy rights.

What is the standard duration of patent protection in the United States? A. 14 years from the application date B. 14 years from the date the patent is granted C. 20 years from the application date D. 20 years from the date the patent is granted

C. U.S Patent Law provides for an exclusivity period of 20 years beginning at the time the patent application is submitted to the Patent and Trademark Office.

What type of law does not require an act of Congress to implement at the federal level but rather is enacted by the executive branch in the form of regulations, policies, and procedures? A. Criminal law B. Common law C. Civil law D. Administrative law

D. Administrative laws do not require an act of legislative branch to implement at the federal level. Administrative laws consist of policies, procedures, and regulations promulgated by agencies of the executive branch of government. Although they do not require an act of Congress, these laws are subject to judicial review and must comply with criminal and civil laws enacted by the legislative branch.

Which one of the following types of licensing agreements does not require that the user acknowledge that they read the agreement prior to executing it? A. Standard license agreement B. Shrink-wrap agreement C. Click-wrap agreement D. Verbal agreement

Shrink-wrap license agreements become effective when the user opens a software package. Click-wrap agreements require the user to click a button during the installation process to accept the license agreement. Standard license agreement requires that the user sign a written agreement prior to using the software. Verbal agreements are not normally used for software licensing but also require some active degree of participation by the software user.