Transcript Slide 1
MEMA Brand Protection Council
March 5, 2009 Detroit, MI
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Agenda
• Welcome & Introductions – Cifranic & Kempski • FBI Update – Charles Rankin • Review Antitrust Guidelines – Arent Fox • Legal Update – Arent Fox • Government Affairs Update – Boland • Quantifying IP Protection in the US – Cameron • Lunch • N.A. Security Products Organization - Sherwood • Work Session: Identification Guidelines – Cifranic • Break – 15 minutes • Council Updates: – Special Report: Flow of Counterfeit Products – 2008 MEMA Brand Protection Award nominations – Mid America Truck Show – Future meetings 2
MEMA Brand Protection Council
• “To support members’ global efforts to prevent, detect and prosecute intellectual property offenses against their products and brands”.
• “Provide the means for collective industry action against counterfeiting, sharing market intelligence and best practices, media and education campaigns and gaining increased enforcement by all relevant law enforcement agencies”.
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Anti-Trust Guidelines
It is the unqualified policy of the Motor & Equipment Manufacturers Association to conduct its operations in strict compliance with the antitrust laws of the United States. MEMA's antitrust policy prohibits any discussions which constitute or imply an agreement or understanding concerning: 1) prices, discounts, or terms or conditions of sale; 2) profits or profit margins or cost data; 3) market shares, sales territories or markets; 4) allocation of customers or territories; 5) selection, rejection or termination of customers or suppliers; 6) restricting the territory or markets in which a company may resell products; 7) restricting the customers to whom a company may sell; or 8) any matter which is inconsistent with the proposition that each manufacturer, wholesaler and distributor must exercise its independent business judgement in pricing its services or products, dealing with its customers and suppliers and choosing markets in which it will compete. 4
Legal Update
Tony Lupo – Arent Fox Sarah Bruno – Arent Fox 5
Government Affairs Update Brand Protection Council
March 5, 2009 Catherine Boland Director, Government Relations Motor and Equipment Manufacturers Association 6
MEMA Washington, D.C. Office
• Six person office that develops legislative and regulatory strategies on issues impacting automotive and heavy duty suppliers • Resource for OESA, AASA, HDMA members • Government Affairs Committee that sets legislative priorities based on input from market segments 7
MEMA Legislative Summit
LEGISLATIVE SUMMIT
• April 29-30, Hyatt Regency on Capitol Hill • Costs: $200 registration fee, $2000 exhibitor fee • Tom Donohue, US Chamber president, is keynote; will invite Henry Waxman to attend Thurs breakfast • Program committee call held 1/16 with several good suggestions on agenda and meeting materials • Economic data from CAR, “sustainability” document • MEMA, MSAs to continue push for registration, exhibitors 8
Implementing the PRO-IP bill
• Fiscal Year 2009 Omnibus Appropriations – Close to $9.4 million for dedicated FBI agents • Same localities of DOJ Computer Hacking and Intellectual Property (CHIP) units with no less than 26 agents assigned for this purpose – $3 million in grants for state and local training to combat IP crimes including counterfeiting and piracy • U.S. Chamber will be working to get funding in FY 2010 for state and local grants – Should this be a MEMA priority? 9
Implementing the PRO-IP bill
• President Obama has not appointed the Intellectual Property Enforcement Coordinator, aka IP Czar – This is a Senate-confirmed post • Government Accountability Office (GAO) study on how the federal government can best protect the IP of manufacturers – GAO has not begun work on this study, but they will reach out to MEMA when they begin work on it 10
Customs Reauthorization & Trade Enforcement • In January, Rep. Charles Rangel and Rep. Sander Levin introduced the Trade Enforcement Act of 2009 (H.R. 496) – Title III of bill covers enforcement of IP laws at U.S. borders •
Enforces U.S. Intellectual Property Rights (IPR)
. The bill creates a Director of IPR Enforcement and an IPR Enforcement advisory committee to advise on IPR enforcement issues; promotes the use of new technology to better fight intellectual property rights (IPR) infringement; creates a “watch list” for suspected bad actors; and prevents Customs from excusing fines assessed for illegal imports.
•
Increases Staffing, Resources, Training and Coordination
out their import safety and IPR enforcement responsibilities. . The bill authorizes the support, resources and training that Customs and Immigration and Customs Enforcement need and deserve to carry 11
Customs Reauthorization & Trade Enforcement • Senator Max Baucus, Chairman of the Senate Finance Committee, is planning to move Customs Reauthorization legislation in the coming months • Senator Debbie Stabenow of Michigan serves on the Finance Committee and is interested in being helpful to the supplier industry on counterfeiting 12
CBP Seizures
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Pocket Card
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Patent Reform
• Earlier this week, Patent Reform legislation was introduced in both Houses of Congress • These bills are very similar to the legislation opposed by MEMA and other business groups last year • Issues of concern that remain – Apportionment of Damages – Inequitable Conduct • If you or your company is interested in this, have the appropriate member of your staff contact me 15
Anti-Counterfeiting Trade Agreement
• In 2007, USTR announced that they had begun discussions with our trading partners engaged in discussions to negotiate an anti-counterfeiting trade agreement • Discussions include Canada, the European Union (with its 27 Member States), Japan, Korea, Mexico, New Zealand, and Switzerland • ACTA still being negotiated • Very few details available 16
Discussion
For more information contact Catherine Boland Director, Government Relations 202-312-9241 or [email protected]
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Quantifying IP Protection in the US
• Requested by DOJ and other government agencies to place an updated value on lost revenues and expenditures to protect Intellectual Property • Current estimate by the FTC of $12B global and $3B US is in need of updating and validating • Article in Authentication News by Reconnaissance International states $16B global growing 9-10% annual • Need to update MEMA BPC Special Report on IP • Last BPC Work Session proposed a member survey 18
Quantifying IP Protection in the US
Survey Results – 6 of 25 Member Companies Responding: 1. What were your companies net sales of motor vehicle component parts (OE and aftermarket) for the most recent fiscal year? Global Avg. $3,354 Million US Only $1,265 Million Tot $20,125 Million $7,590 Million 2. About how much has your company spent on protection of intellectual property rights (IP) during the most recent fiscal year? Please include all expenditures including legal fees, staff salaries, product security, training, direct actions taken and the expenses associated with the acquisition and protection of patents, copyrights and trademarks. Dollar amount ($) or percent of net sales (%) $1 Million Average $4 Total 3. What were your companies lost sales of motor vehicle component parts (OE and aftermarket) that can be attributed to IP theft or infringement? Dollar amount ($) or percent of net sales (%) $11 Million Average* $33 Total 90% confidence interval = $0 to $23 million 75% confidence interval = $2 to $20 million 19
Quantifying IP Protection in the US
Mathematical Update to 2004 FTC Estimates: (In Billions $USD) Global Vehicle Parts Sales Global Aftermarket Parts Sales FTC Counterfeit Estimate
2004
$1,147.90
1.0% $336.90
3.6% $12
2005
$1,980.00
0.6% $352.80
3.4% $12
2007 Adjusted
$1,340.00
1.0% $380.20
3.5% $13.40
$13.31
U.S. Vehicle Parts Sales U.S. Aftermarket Parts Sales FTC Counterfeit Estimate n/a $175.80
1.7% $3 $388.70
0.8% $184.70
1.6% $3 $388.00
1.0% $191.10
1.7% $3.88
$3.25
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Lunch
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The North American Security Products Organization
A Security Assurance Standard for the Protection of Security Components
Robert Sherwood, CPP
NASPO Chairman VP Security Programs Management, Sekuworks LLC 22
NASPO
Concept proposed at a conference First Board Meeting December 2002 Development of an industry standard completed September 2003 First audited companies certified January 2004 Recognized as an ANSI Accredited Standards Developer October 2004 ANSI/NASPO-SAv3.0P-2005 Declared by ANSI as an American National Standard on November, 2005 - Update January 2008 23
The Need for NASPO
Fraud and terrorism has been enabled by the lack of a secure supply chain to restrict the availability of security materials and technologies.
No structure was available to recognize and certify organizations that met a specified level of security assurance.
Governmental agencies and private industry has recognized that this standard supports their efforts of enhanced security assurance.
One holistic recognized standard versus multiple narrowly defined standards.
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NASPO and Current Legislation
Sarbanes Oxley – Risk management requirements for publicly held companies Bioterrorism Bill – Secure supply issues in pharmaceuticals and food Real ID Act – Securing our identification documents Consumer Privacy Act (GLB Act) – Securing personal information in the financial market 25
Application of the ANSI/NASPO Standard
Requirements in RFP’s and contracts Compliance to legislative and industry regulations Internal security practices The control of purchased and sold security materials.
A set of “Best Practices” for organizations Recognition of certified companies for market differentiation 26
Risk Management Requirements
3 - Levels : Class I - Very High Security Class II - Medium-High Security Class III - Basic Security Management Objectives (Security Culture) Avoids Weakness of Checklist Approach 9 Areas of Risk Each Area has Own Objective Risk Reduction Infrastructure, Systems Procedures Based on a Consensus of Best Practice 27
Risk Management Objectives
Class I – To prevent
all
unwanted disclosure of information of potential strategic value to Criminals and Terrorists criminals and terrorists and to fully mitigate the effects of fraudulent acts in the event that they occur.
Class II To prevent unwanted disclosure of selected information of potential strategic value to Criminals and Terrorists criminals and terrorists and to mitigate the effects of fraudulent acts in the event that they occur.
Class III To be aware of the need and act to avoid disclosure of selected information of potential strategic value to Criminals criminals and to act quickly to mitigate the effects of fraudulent acts in the event that they occur.
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Areas of Risk
Customer Related Information –
Computer (IT) and Non Computer Based
Materials Supply & Custody Chains Physical Intrusion Personnel Disaster Recovery Breaches of Security Management 29
Public Disclosure Standard
Security Assurance Standards For the Document & Product Security Industry
Version 1.0P
November 16, 2004 ©
NASPO 2004
2300 N Street, NW, Washington, D.C. 20037 -1128, U.S.A.
www.naspo.info
Avoids helping bad guys.
Requirements re-stated as performance requirements.
Requirements say
what how
to deliver security.
not Elective requirements removed Class 1, II & III retained.
Certificates based solely on compliance with mandatories.
Perception of Very High Barriers should Deter Attempts to Defraud 30
Risk Reduction
Policies Procedures Infrastructure Systems
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Certification
Openness (under NDA) Qualification Application/Class Determination Readiness Review Conformity Assessment (NASPO Audit) Action Items Certificate Award by NASPO Board Annual Maintenance 32
NASPO Conformity Assessment
(Audit) Self evaluation prior to audit.
Non disclosure agreement with independent, trained auditor Mutual classification determination On-site audit verifying self audit to actual Discrepancy rectification Audit report to NASPO Certification 33
Conformity Assessment Process
Vulnerability Assessment Attractiveness of Product Portfolio to Thieves Consequences of Getting Into Wrong Hands History of Local Attack Identification of Potential Risks Identification of Actual Risks Being Taken 34
NASPO / ASIS Connection
Both Standards Development Organizations (SDO) NASPO / ASIS Standards Complementary NASPO Standard Example: Requires employee background screening ASIS Standards Example: Guide to implementing a screening process 35
Security Assurance in the Context of ISO
Technical Advisory Group (TAG) 247 established
“Fraud Countermeasures and Control”
ISO Secretariat for TC 247 has been awarded to ANSI.
ISO Secretariat and US TAG Administration will be supported by the North American Security Products Organization, NASPO 36
Benefits of NASPO
Enhances Overall Security Set of “Best Practices” Uniform interoperability Vendor / Vendor Vendor / Customer Cost reductions Adoption and/or Recognition by US Government Agencies 37
NASPO Members
Pro-Document Solutions – Northstar – Meyercord Revenue – JDSU/Flex Products – Glatfelter – Sun Chemical – Intel – Chesapeake Resource Group – GDW Consulting – Amgraf – Brady – ITW Covid – Appleton – Arjo Wiggins – Keller Crescent SICPA – Sekuworks - Standard Register – John Henry – Kurz – Challenge Printing – Bristol Myers Squibb – Technicote – Ultradots – Accucote – Armark – National Label – DSS – Yottamark – Midwest Banknote – Nanoink – Authentix – Fasver – CCL Label – Digimarc – Inksure – TUV Rheinland – NPC – Ashton Potter – Gemalto – PPG – Troy Group - Latitude 49 – Viisage – Worldmark – American Bank Note – Schreiner Group RR Donnelley – 3M – Stardust Materials – Crane & Company – Tullis Russell – US Government Printing Office- Hologram Industries – Crane & Co. – on+qor - NPC
As of 4-08 38
Use of Standard Update
11 Certified Companies 32 Companies in process >25 Companies – serious intent Adopted by GPO Real ID DHS 39
The ANSI/NASPO Standard
Security Assurance Standards for the Document & Product Security Industries
Reference : ANSI/NASPO-SA- 2008
From www.naspo.info
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Thank You
Any Questions ?
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Working Session:
Identification Guidelines
• Third in a series to engage council members and develop valuable industry information to support IP enforcement • Today's topic requested by U.S. Immigration and Customs Enforcement (ICE) and U.S. Customs and Border Protection (CBP) • To be published by BPC and distributed IP enforcement – Manufacturers Identification Guide – Trademark ID Guide Book 42
Break 15 minutes
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BPC Updates
• Special Report: Flow of Counterfeit Products – Posted to web site – Distributed to Government Agency contacts • 2008 MEMA Brand Protection Award nominations • Updated BPC presentation posted to member-only web site • Mid America Truck Show • Future Agenda Topics – Ideas – Volunteers for Member Spotlight / Best Practices 44
• • •
2008 MEMA Brand Protection Award
OVERVIEW
The MEMA Brand Protection Council is establishing an award to honor government officials (foreign or domestic) whose work and dedication in the fight against counterfeiting merit special recognition by our group.
ELIGIBILITY
Any government official (foreign or domestic) is eligible for nomination for the award. The nomination form is attached.
SELECTION PROCESS
Nominations will be accepted until the June 11, 2009 Brand Protection Council meeting. Nominations will be announced and voted on during the meeting. (See nomination form) 45
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2007 MEMA Brand Protection Award Recipients
U.S. Customs and Border Protection – Port of Savannah for their timely seizure and ultimate forfeiture and destruction of products involving trademark and U.S. design patent infringement. Nominated by Chrysler.
Mr. Mohammad Al-Aiyash who is Director General of Internal Trade and Chairman of the IPR Committee for Ministry of
Commerce & Industry in the Kingdom of Saudi Arabia recognized for his efforts which lead to the seizure of counterfeit brake fluid and chassis parts. Nominated by Federal-Mogul.
The Anti-Fraud Division of the Consumer Protection Department for the Sharjah Municipality of United Arab
Emirates (UAE) for their aggressive investigation and prosecution of violators with several brand owners and MEMA members. Nominated by Ford.
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Intellectual Property and Brand Protection
Jack Cameron, AAP
Vice President, Automotive Aftermarket Suppliers Association Group Executive, MEMA Brand Protection Council
• • • • • • • •
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.
Counterfeit Product
Brake Valves Fake Genuine Bendix
Counterfeit Product
Belt Tensioners
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
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
Thank You!
Travel Safe!
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