Question

The following two tables apply to all problem sets:

Table#1: Market Share in U.S. Chocolate Bar Market of Major Chocolate Bar Companies (2020)

Company

Market Share (% of US Market)

Hershey

43.3%

Mars

29.8%

Lindt/Ghirardilli /R. Stove

9.1%

Ferrero*

7.0%

All others

10.8%

*Nestle sold its U.S. chocolate business to Ferrero

To simply matters assume that each chocolate bar company has a single chocolate bar marketed in the USA as noted below:

Table#2: Representative Chocolate Bar Prices (2020)

Company

Name of Chocolate Bar

Price ($ per unit)

Hershey

Hershey’s Chocolate

0.88

Mars

Snickers

1.25

Lindt/Ghirardilli /R. Stove

Dark Chocolate Cacao 90%

4.33

Ferrero

Kinder Chocolate

2.79

For problem sets M-P:

In the promotion that is offered for the CD “Rockin’ Shoes,” assume that the number of CDs sent out to customers equals 487,124 and the royalty percentage is 9.5%. Each customer is to put inside an envelope a stamped self-addressed envelope with sufficient postage for a CD plus other content as described below:

the question:

Ferrero Company is offering a promotion to its customers. Send the company one dollar plus 3 wrappers of any company’s chocolate bar and the company collects $487,124 from its customers.

How much does this chocolate company maintain it has to pay Chappell, the copyright holder of Rockin’ shoes? Show your calculations. [A1/B1]                                                                                                                                         (3 marks)

How much does Chappell maintain that it must be paid in copyright royalties? Show your calculations? [A1/B1/C1]                                                                                                                                                                   (4 marks)

Based on the precedent of Chappell v Nestle, what level of royalties would a judge, under these circumstances, mandate that the chocolate company pay Chappell? Briefly explain. (maximum 25 words)