enforcement in asia pacific
TRANSCRIPT
Enforcement in Asia Pacific
prepared by rouse & co. internationalNovember 7, 2007
The Enforcement ToolboxThe Enforcement Toolbox
Administrative Enforcement
• simple, quick, cheap• low deterrent value• seizure of goods• can be “stretched”
Customs
• good organisation vital• random results• most cases valuable• training essential• transnational
Civil Litigation/ADR• complex, expensive• tactics and venue are key• compensation possible• allows for creative solutions, •lasting results
Criminal Prosecution
• complex & expensive• evidence value high• usually stronger deterrent• need preparation
Administrative cases vs. IP litigation in China
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
2003 2004 2005 2006
Administrative Cases IP Litigation
Raids have been most effective against mid-sized operations—but counterfeiters are highly adaptive Changing supply chains in response to inspection. Reducing volume to avoid
raids and criminal prosecution.
Big counterfeiters are protected by size, corruption, and their own “IP” Years of raiding have left many mid-sized counterfeiters with two choices: get
out or get big. Meanwhile, smaller counterfeiters remain below the radar—administrative action
is not cost-effective and criminal thresholds cannot be met.
Administrative authorities realizing that they are an anomaly The AIC cannot assess damages and award compensation. As counterfeiters more sophisticated they have begun to challenge AIC decisions
in court.
The current state of enforcement in The current state of enforcement in ChinaChina
Who’s going under the radar?
• Small trading companies, internet retailers, and myriad sellers on eBay, B2B and B2C marketplace sites Counterfeits shipped directly to US and EU consumers
through courier services Products sourced from local markets and small factories—
volumes are kept low to minimize the risk of seizure
• Factories produce counterfeits off-hours in small batches while most regular production has shifted to unbranded goods
The disappearing middleThe disappearing middle
Who’s growing?
Ghidorah: The Three-Headed Monster
A single enterprise may be involved in…– OEM for major brands– Counterfeits and backdoor
sales of its customers’ products– Marketing its own competing
brandEven as its own brand begins to
mature, counterfeiters find their old streams of income difficult to abandon.
The disThe disappeaappearing middlering middle
China IP Civil Actions
4,160 4,790 5,041 5,649
13,424 14,056
3,996
5,675
8,332
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
1998 1999 2000 2001 2002 2003 2004 2005 2006
Litigation in ChinaLitigation in China
Where do you turn?Where do you turn?
Increasingly, it’s litigation
But, to be effective against global counterfeiting requires either—
• a regional rights protection platform and strategy that enables you to take action locally; or
• a localized program that is targeted and efficient, aimed at the smaller counterfeiters.
Global counterfeit supply chains
Targeted regional enforcement strategies
Coordinated information and evidence platform
Regional
Customs
Training
Trade fair
Monitoring
Database
Investigation
Company
Training
Licensees
Supply
Chain
Database
Internet
Profiling
Zhejiang Factory
Shanghai Export Co.
Singapore Transit
IntendedMarkets
Court order to seize goods failed
Dubai
Seizure x 2 containers
Markets
Guangzhou arrests
Shantou FactoriesDubai
Transit
Rotterdam
Customs seizure
8 pharma brands Criminal prosecution
Traced back to Nigerian importer
Markets in Europe
