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believe in music© 2011 Dean A. Pelletier
Protecting Economic Drivers Because All Roads Lead To The U.S.
January 14, 2011
The NAMM Show Anaheim, California
Dean A. Pelletier, Board Member and ShareholderMcAndrews, Held & [email protected](312) 775-8128 (direct)
© 2011 Dean A. Pelletier [email protected] in music
2
Trade Secret
Overview Intellectual Property (IP) Fundamentals
Economic Drivers
IP Protects Economic Drivers
U.S. Marketplace Activity
Chinese IP Law and Enforcement
IP Strategies
Leveraging IP
Foreign Operations and IP Strategies
Combating Foreign Unfair Competition
© 2011 Dean A. Pelletier [email protected] in music
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IP Fundamentals
Patent (“what”)
Utility
Design
Trade secret (“what”)
Trademark (“who”)
Copyright (“how”)
Trade Secret
© 2011 Dean A. Pelletier [email protected] in music
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Economic Drivers
Efficient manufacturing processes
Innovative products
Consistent product qualityQuantity
Pri
ce
Equilibrium
Demand Supply
© 2011 Dean A. Pelletier [email protected] in music
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IP Protects Economic Drivers
Efficient manufacturing processes
Innovative products
Consistent product quality
Trade Secret
Trade Secret
© 2011 Dean A. Pelletier [email protected] in music
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U.S. Marketplace Activity
U.S. ITC Year in Review, 2001-2009.
4046
4144
57
7073
8885
0
10
20
30
40
50
60
70
80
90
100
2001 2002 2003 2004 2005 2006 2007 2008 2009
Fiscal Year
Active §337 Investigations
www.usitc.gov/press_room/337_stats.htm (Number of Investigations Instituted by Fiscal Year (Oct. 1- Sept. 30))
29
1519
27 25
3431
43
29
51
0
10
20
30
40
50
60
70
80
90
100
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Fiscal Year
§337 Investigations Instituted
© 2011 Dean A. Pelletier [email protected] in music
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U.S. Marketplace Activity
Chinese companies are often sued in §337 investigations
1117 18
11
28
23 14
25
18
23
0
10
20
30
40
50
60
2006 2007 2008 2009 2010
Fiscal Year
§337
In
vest
igat
ion
s In
stit
ute
d 55%
38%
42%
55%
§337 Investigations Involving a Chinese Respondent or Goods of Chinese Origin
32%
© 2011 Dean A. Pelletier [email protected] in music
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U.S. Marketplace Activity
Sources of counterfeit and pirated goods seized by U.S. Customs and Border Protection (CBP) (FY 2009): China: 79%
Hong Kong: 10%
Total value of seized goods from
China (FY 2009): “only $205 million”
China: Intellectual Property Infringement, Indigenous Innovation Policies, and Frameworks for Measuring the Effects on the U.S. Economy, Inv. No. 332-514, USITC Pub. No. 4199, November 2010 (“ITC Report”), Executive Summary, xvi and 2-10, 3-15.
© 2011 Dean A. Pelletier [email protected] in music
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IP Laws and Enforcement in China China: form (IP law) vs. substance (IP law enforcement)
“Enforcement of IPR [i.e., IP rights] laws remains a serious problem in China.”
“Administrative IPR enforcement, consisting of raids and seizure of infringing goods, generally results only in temporary slowdowns in production; penalties are not sufficient to deter repeat offenders.”
Certain items on China’s radar in December 2010:
protecting trademark rights in local markets; clarifying landlords’ liabilities
handling bad faith trademark registrations and
imposing liability for facilitating online copyright infringement
Reality: inherent level of IP infringement/misappropriation
ITC Report, Executive Summary, xiii and 3-25; www.export.gov/china/policyadd/JCCT_outcomes.asp
© 2011 Dean A. Pelletier [email protected] in music
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Inventory IP assets
Monitor the marketplace (e.g., trade shows, websites, customers)
Implement policies and procedures
Overlapping IP
ROI
IP Strategies
© 2011 Dean A. Pelletier [email protected] in music
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Leveraging IP
Use (trademarks are unique)
License
Cross-license
Sell
Enforce
© 2011 Dean A. Pelletier [email protected] in music
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U.S. nexus
Management
Reasonable efforts (trade secrets)
Foreign Operations and IP Strategies Catch 22
Opportunities
Risks
Inherent
Express: IP transfer market access
Foreign partner, subsidiary or licensee
IP transfer; which IP?
Written agreements
IP ownership
IP licenses
2nd
Place3rd
Place1st
Place
© 2011 Dean A. Pelletier [email protected] in music
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Combating Foreign Unfair Competition Protect U.S. market and operations from
foreign unfair competition, including IP infringement/misappropriation
Record registered U.S. trademarks and copyrights with CBP; work with CBP
Criminal actions; e.g., U.S. Immigration and Customs Enforcement’s efforts against counterfeit and pirated goods
Contact alleged wrongdoer(s)
Civil litigation (U.S. district court, state court, U.S. International Trade Commission, alternative dispute resolution)
© 2011 Dean A. Pelletier [email protected] in music
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Combating Foreign Unfair Competition
Protect foreign markets
Obtain IP rights in foreign countries.
Where appropriate, pursue foreign actions (administrative, civil, criminal, customs).
believe in music© 2011 Dean A. Pelletier
Thank you. . . any questions?
January 14, 2011
The NAMM ShowAnaheim, California
Dean A. Pelletier, Board Member and ShareholderMcAndrews, Held & [email protected](312) 775-8128 (direct)
