Enforcement in Asia Pacific

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• Enforcement in Asia Pacific
• prepared by rouse co. international
• November 7, 2007

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The Enforcement Toolbox

• Customs
• good organisation vital
• random results
• most cases valuable
• training essential
• transnational

• Administrative
• Enforcement
• simple, quick, cheap
• low deterrent value
• seizure of goods
• can be stretched

ADMIN.
LITIGATION
CUSTOMS
PROSECUTION

• Criminal Prosecution
• complex expensive
• evidence value high
• usually stronger deterrent
• need preparation

• Civil Litigation/ADR
• complex, expensive
• tactics and venue are key
• compensation possible
• allows for creative solutions,
• lasting results

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Administrative cases vs. IP litigation in China
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The current state of enforcement in China

• Raids have been most effective against mid-sized
  operationsbut 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 radaradministrative 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.

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The disappearing middle

• Whos 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
  factoriesvolumes 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

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The disappearing middle

• Whos 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 brand
• Even as its own brand begins to mature,
  counterfeiters find their old streams of income
  difficult to abandon.

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Litigation in China
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Where do you turn?

• Increasingly, its 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.

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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
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Markets
Shanghai Export Co.
IntendedMarkets
Zhejiang Factory
Dubai Seizure x 2 containers
Singapore Transit
Court order to seize goods failed
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Markets in Europe
Rotterdam Customs seizure
Shantou Factories
Dubai Transit
Traced back to Nigerian importer
Guangzhou arrests
8 pharma brands Criminal prosecution
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• the end
• Please contact Joshua Mandell
• Email jmandell_at_iprights.com