Transcript Slide 1
Intellectual Property and Brand Protection
Jack Cameron, AAP
Vice President, Automotive Aftermarket Suppliers Association Group Executive, MEMA Brand Protection Council
What is MEMA?
• Motor & Equipment Manufacturers Association – founded 1904 • Exclusively represents North American Manufacturers • Over 700 members • Three Market Segment Associations: • Automotive Aftermarket Suppliers Association (AASA) • Heavy Duty Manufacturers Association (HDMA) • Original Equipment Manufacturers Association (OESA)
MEMA Brand Protection Council
• Formed in 2004 • Represents all MEMA market segments • Approximately 35 member companies • Law enforcement members include: • Federal Bureau of Investigations (FBI) • Department of Justice (DOJ) • Royal Canadian Mounted Police (RCMP) • Liaison with other agencies include: • Customs and Border Protection (CBP) • Immigrations and Customs Enforcement (ICE)
• • • • • • • •
Counterfeiting Statistics:
The automotive industry loses an estimated
$12 Billion
in revenue annually (75% from Asia) to service parts counterfeiters,
$3 Billion
in the U.S. alone.
Projected to grow to
$45 Billion
by 2011.
It is estimated that
250,000
automotive industry jobs are lost to counterfeit auto parts.
The International Anti-Counterfeiting Coalition puts revenue loss to U.S. Trademark holders at
$200 Billion
per year.
The International Chamber of Commerce estimates 7% of the world trade is in counterfeit goods worth
$350 Billion
.
More than
80%
of goods seized at U.S. borders are produced in China. Other countries include Taiwan, Hong Kong, Russia, India, Pakistan and Uruguay.
An estimated
30%
of products sold in mainland China are counterfeit.
Counterfeit parts constitute over
37%
of the total automotive aftermarket in India.
Most Frequently Counterfeited
• Oil filters, air filters, fuel filters • Disc brake pads • Brake Rotors • Spark plugs • Suspension parts • Belts and hoses • Windshields • Alloy Wheels • Head & tail lamps
Counterfeit Product
Counterfeit windshields seized and destroyed in China
Counterfeit Product
Seizure of brake pads in Shanghai GM “AC Delco” packaging with Chrysler Group “Grand Cherokee” labeled parts
Counterfeit Product
Seizure of brake pads in Kuwait
Counterfeit Product
Safety Issues: • No machining on the inside surface or bezel to ensure true fit to the rotor’s surface • Aluminum is substandard
Also noted:
The counterfeit wheel is marked “USA” and “UAW,” neither of which Chrysler Group casts into this part and has a slightly tilted Chrysler Pentastar trademark.
The genuine wheel has the Pentastar (although not as visible due to the heavy use of the casting), location of origin and the supplier’s vendor code.
Source: DaimlerChrysler
GENUINE COUNTERFEIT
Counterfeit Product
• The Pentastar’s internal lines are too thick • “
Mop o r
” instead of “
Mopar
” • The silk screening on these fakes leaves the filter’s print smudged and hard to read • The boxes are made of inferior paper
Counterfeit Product
Seizure of filters in China
Counterfeit Product
Brake Valves Fake Genuine Bendix
Counterfeit Product
Bearings
Incorrect font on logo and product
Fake Genuine Timken
Counterfeit Product
Belt Tensioners
Counterfeit Product
Alternators
Genuine Fake
Counterfeit Product
Starters
Genuine Fake
Counterfeit Product
Adhesives
Fake Genuine
Counterfeit Product
MEMA Brand Protection Council Display
Other IP Violations
• Copyrights – Web Site Design – Advertising / Viral Marketing – Packaging – Catalogs and Price Sheets • Trademarks – Logos / Product Names – Part Numbers – Shape and Design of Packaging – Trade Dress
Guidelines To Protect IP
• • • •
Registration
– Register all copyrights and trademarks with the U.S. Patent and Trademark Office. Additionally, register with U.S. Customs and Border Protection.
License Agreement
– Even when giving permission for customers to use IP on their own Web sites, it is important and helpful to have them sign a license agreement to avoid problems down the road. It also helps keep track of legitimate use versus infringement.
Terms of Use
– Always add a "terms of use" clause to any cyber information (Web site, e-catalog, etc.) that must be accepted prior to any one having access to data, even if it is public. This helps defend and guard against possible misuse.
Redirect
– When illegal or infringing sites are shut down, many companies having found it beneficial to redirect Internet surfers to the official site location.
Guidelines To Protect IP
• • • •
Settlement
– It is usually in companies' best interest to reach a settlement especially with small infringers. Settling minimizes costs yet still gains publicity for the plaintiff company, and establishes it as a business which pursues infringers.
Cease and Desist
– This action is still the first step in contacting an infringer. More often than not, cease and desist orders produce results and saves expense of a law suit.
Evidence of Confusion
– In these cases, infringers use legitimate brand names and part numbers as cross reference, and confuse or mislead buyers into thinking they are buying the genuine part. Proof of this is important in any legal action and usually obtained from the infringer's Web site.
Obtain Rights in Foreign Markets
– Companies which register trademarks and copyrights only filed in the United States put their IP at risk in global markets.
•
Guidelines To Protect IP
Develop “Product Identification Training” Utilizing U.S. Custom & Border Protection Guidelines (handout)
– Company Information – Registration and Recordation Information – Product Information – Manufacturing and Distribution Information – Violation Information – Disclaimer
MEMA Brand Protection Council
• Quarterly meetings to share best practices and develop actionable solutions • Washington DC meetings with US agencies: – DOJ, CBP, ICE, FBI, NHTSA • Participation in law enforcement training conferences – booth, materials, interaction • Published white papers / Special Reports: – Direct Importing: Do Risks Outweigh Rewards – October 2007 – Intellectual Property: Protecting Valuable Assets – January 2008 – Protection of Part Numbers and E-Catalogs – January 2008 – Distributor Liability on Counterfeit Parts – February 2008 – Scams Prey on Corporate Goodwill – June 2008 • Launched “member-only” web site
MEMA Brand Protection Council
• Trade Show Anti-Counterfeit Activities – AAPEX Guidelines, Enforcement and Webinar – Announced cooperation with CLEPA and JAPIA (Trilateral) – Provided recommended guidelines to North American shows • Adopted by American Trucking Association trade show • Adopted by Mid-America Trucking show • Agreement by Truck World Show in Canada • Developed Counterfeit and Gray Market Flow Chart – For North American law enforcement training (requested by DOJ) – To be published as a Special Report (see attached slides) • Developed Position Paper on Brand Protection – Utilized in MEMA Legislative Summit Capitol Hill visits – To be expanded to Talking Points white paper • Developing MEMA member survey – Quantify size and expenditure of IP protection in our industry
AAPEX 2007
• Patent Infringement Complaints: 5 • Trademark and Copyright: 5 • NHTSA Complaints: 22 • All of the above lead to product removal and/or booth closures
AAPEX 2007
Confiscation of infringing products on show floor
MEMA BPC Initiatives
Original Equipment Channel
O.E. Vehicle Manufacturer O.E. Dealer
Raw Material Or Component
Domestic Supplier International Supplier Domestic Manufacturer Distribution Center
MEMA Member Company US Manufacturer
Unauthorized International Supplier Unauthorized Manufacturer Will-Fit Supplier
converted to counterfeit
Warehouse Distributor Master Dist / Importer of Record Internet / web site /mail order Repair Facility End User / Vehicle Owner Parts Store / Jobber / Retail Chain
Independent Aftermarket Channel Legitimate w/ Counterfeit Color Key: and Gray Market = Raw Materials and/or Components = MEMA Member Companies / US Mfgs = Original Equipment Channel = Independent Aftermarket Channel = Steps in the legitimate Supply Chain = Illegitimate Steps in Supply Chain
Broker
MEMA BPC Initiatives
International Origin U.S. Destination
Free Trade Zone Freight
O
Consolidator Customs Broker
Dubai
Customs Broker Freight Consolidator Purchaser
Canada Shipments get “pinballed” around the world prior to final destination Paraguay Panama Mexico Illustrative of Potential Counterfeit and Gray Market
Government Affairs
• “Stop Counterfeiting in Manufactured Goods Act” – Signed into law by President Bush in 2005 – Extends authority of federal seizures to include tooling, equipment and supplies used to produce counterfeit goods.
– Makes it criminal to produce stickers, tags, boxes or other items used to traffic counterfeit products.
– Expands definition of trafficking to include import and export of counterfeit goods and strengthens penalties.
Government Affairs
• “PRO-IP Bill” S. 3325 – Signed into law by President Bush on October 13, 2009 – Creates an Intellectual Property Enforcement Coordinator (IPEC) in Executive Office of the President to enforce Intellectual Property laws – Increases the resources available to federal and local law enforcement agencies to combat theft of intellectual property – Includes MEMA recommended GAO study on manufacturers rights
Government Affairs
• “International IP Protection & Enforcement Act” S. 3464 – Introduced Sept. 10 by Senators Baucus and Hatch – Requires US Trade Representative to spur countries that violate US IP rights and take specific steps to stop violators – Provides funds to increase USTR capability to improve enforcement – Did not pass this 2008 Congress but sets groundwork for similar legislation in 2009
International Efforts
• Formed Trilateral with CLEPA and JAPIA – Agreement to adopt International standards on brand protection – Develop International trade show guidelines for IP protection • Initiated European Aftermarket Forum (EAF) – Turned over to CLEPA but remain a member – Developed product authentication initiative – Tec Identity – 2D barcode authentication standard in Europe • Initiated Brand Protection Guidelines with Automechanika – Contributed to show rules and regulations on IP – Participated Brand Protection trade show booth • Formed China Aftermarket Forum (CAF) – Introduced CLEPA / Tec Identity to the China Aftermarket Forum – Anti-counterfeiting booth at Shanghai Auto Show (participation in QBPC – Quality Brands Protection Committee)
International Efforts
Shanghai Auto Show
International Efforts
Automechanika - Frankfurt
Get Help
Royal Canadian Mounted Police
Get Help
• State and Local Law Enforcement • Privately Retained Legal Counsel • U.S. Customs and Border Protection (CBP) – Web site www.cbp.gov
– E-mail [email protected]
– Contact David Brener [email protected]
• U.S. Immigrations and Customs Enforcement (ICE) – Web site www.ice.gov
– Contact David Faulconer – Web site – Contact Kiffa Shirley – Web site – Contact Matt Bassiur [email protected]
• Federal Bureau of Investigation (FBI) www.usdoj.gov/criminal/cybercrime/reporting.htm
• U.S. Department of Justice (DOJ) www.cybercrime.gov
Get Help
• U.S. Customs and Border Protection (CBP) – 20 Field Operations Offices – 327 Ports of Entry in the U.S.
– 15 Preclearance offices in Canada and Caribbean • U.S. Immigrations and Customs Enforcement (ICE) – 26 Field Offices and Headquarters – 150 Special Agents • Federal Bureau of Investigation (FBI) – Cyber Crime Unit – 56 Field Offices – 424 Special Agents – 67 FBI-led Task Forces • U.S. Department of Justice (DOJ) – CC & IP Section – 93 U.S. Attorney’s Offices (94 Districts) – 25 Units – Computer Crime & Intellectual Property – 230 Prosecutors - CCIP
Prosecutable Criminal IP Statutes
• Criminal Copyright Infringement (17 USC § 506, 18 USC § 2319) • Criminal Trademark Infringement (18 USC § 2320) • Trade Secret Theft (18 USC §§ 1831, 1832) • Bootlegging (18 U.S.C. § 2319A) • Camcording (18 USC § 2319B) • Counterfeit Labels (18 U.S.C. § 2318) • Digital Millennium Copyright Act (17 USC §§ 1201, 1204) • NO Patent Criminal Law
Get Involved
MEMA www.mema.org
AASA www.aftermarketsuppliers.org
HDMA www.hdma.org
OESA www.oesa.org
MEMA Brand Protection Council [email protected]