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Intellectual Property Rights
A Global Perspective
Robert L. Dodge, CPP
Vice President
Pinkerton Consulting and Investigations
INTELLECTUAL PROPERTY
DEFINED
A number of distinct types of legal monopolies over creations of the mind, both artistic and commercial, and the corresponding fields of law. (WIKIPEDIA)
“We are in the midst of an intangible
asset and intellectual property global
economy where as much as 65 % of
an organization’s value and sources
of revenue and future wealth creation
lie in intangible assets, IP and
proprietary competitive advantages.”
BROOKINGS INSTITUTE
ENTERPRISE INTELLECTUAL
PROPERTY LOCATIONS
Executives and Board Members
Research and Development
Manufacturing
Sales and Marketing
Human Resources
Operations
A RISING GLOBAL CONCERN
• Intellectual Property Rights violations cost US
businesses $700 Billion annually (US Govt.)
• Pirated or Counterfeit goods account for roughly
7% to 9% of global trade (World Customs Organization)
A RISING GLOBAL CONCERN
• Counterfeit goods are enriching criminal
organizations by up to 500 billion in sales per year (FBI and ICE)
• Estimated upwards of 10% of Drugs Worldwide
are Counterfeit (FDA)
THREAT SPECTRUM
Level of Violence
Espionage
• Elicitation
• Solicitation
• Coercion
Organized Crime
• Coercion
• Larceny
• Extortion
• Assault
• Kidnapping
Terrorism
• Assault
• Kidnapping
• Murder
• Bombing
• CBRNE
Natural
Event
Risk to Enterprise
INTELLECTUAL PROPERTY
THREATS
• Individuals
• Competitors
• Criminal Elements
• State Entity
• Inadvertent Disclosure
BUSINESS ESPIONAGE
• Globalization has increased industrial spying
• Spies come from more than 100 countries
• Majority of serious incidents come from:– China
– Russia
– Taiwan
– Vietnam
– South Korea
– India
– Japan
– Israel
– France
– Venezuela
INTELLECTUAL PROPERTY
THREATS
• Classic Agent Recruitment
• Surveillance/Surreptitious Entry
• Specialized Tech Ops
• Tasking Foreign Students/Workers
• Trade Conference Elicitation
• Governments/Private Sector Companies
• Corporate Merger/Acquisition
• Hiring Competitor Staff
• Retaining Information Brokers
• Rampant Counterfeit and Piracy Problems
• Leading exporter of counterfeit and pirated goods
• Piracy rates have not declined since WTO
accession, in some sectors have increased
• Infringement levels at 90 percent or above for
virtually every form of intellectual property
• Industrial/Economic Espionage
CHINA
CHINA
Inadequate IPR Enforcement
• Enforcement at local levels inadequate, protectionism,
poor coordination, resources, lack of training
• Underutilization of deterrent criminal remedies, most
enforcement gets channeled to administrative
authorities and administrative fines
CHINA
Inadequate IPR Enforcement
• Confiscated goods auctioned and not destroyed
• Lack of transparent Information on IPR
infringement levels and enforcement activities in
China
CHINA IPR HOT SPOTS
• Beijing Counterfeit Hot Spots
• Retail and Wholesale Markets
• Silk Street Market
• Tianyi Market
• Yaxiu Market
• Virtual Market-„Baidu” large MP3 search engine with links to IPR infringers
CHINA IPR HOT SPOTS
• Shanghai City, All
forms of IPR
infringement, but
many improvements
are being made
• Guangdong
Province, major
problem area all
forms of IPR
infringements
• Fujian Province,
known for
counterfeiting of
athletic gear
RUSSIA• 2008 US trade Rep (301)
Priority Watch List
• Piracy and Counterfeiting
Major issues
• Organized crime (full
scale operations)
Challenges –
• Ineffective Law
Enforcement (MVD)
• Politicians „in the pocket
of organized crime‟
• Violence,
• Shell Corporations
• Internet Commerce
RUSSIA
• Physical Piracy
Markets in
Moscow-
Gorbushka
Market, Rubin
Trade Center, and
Tsaritsino
• Virtual Market-
AllofMP3 + many
others
INDIA
• 2009 U.S. Govt.
Priority Watch List
• Piracy, trademark
counterfeiting are
Serious Problems
• Source Code Theft /
Industrial Espionage
& Corruption
• Criminal IPR
enforcement is weak
• Long Judicial
dispositions
TIER 2
EMERGING / PROBLEM COUNTRIES
• Argentina - Copyright piracy, widespread
availability of pirated and counterfeit products
• Chile - Pharmaceutical counterfeits
• Pakistan - Pharmaceutical counterfeits, optical disc
production and retail sales of numerous counterfeit
and pirated products
• Thailand -Across the board
• Venezuela -Across the board
• Vietnam- Across the Board
OTHER WELL KNOWN
GLOBAL IPR INFRINGEMENT
MARKETS
• Tri-Border region (Paraguay, Argentina and
Brazil)
• Czech Border Markets (Czech republic)
• La Salada (Buenos Aires, Argentina)
• Quiapo (Manila Phillipines)
• Harco Glodok (Jakarta Indonesia)
• Panthrip Plaza & Mah Boon Krong Center
(Bangkok Thailand)
CHALLENGES
INTERNATIONAL IPR
INVESTIGATIONS
• Different Cultures / Customs
• Different Languages
• Different Laws
• Poor / Non Existent Record-Keeping in
many countries
• Remote Locations, “Access often needed”
• Corruption
• Greater privacy rights / Greater risks
IPR SECURITY STRATEGY
• Screen joint-venture partners
• Due Diligence for suppliers / distributors
• Be critical about what technology is to be
introduced internationally
• Background checks, especially for those in
sensitive positions
• Non-Disclosures and Non-Competes into
contracts
• Compartmentalize production
San Francisco
IP Loss Case Study
• A review of recent IP loss incidents shows
the majority -- in the San Francisco area –
have involved thefts of material from
parked cars in all areas of the city.
• Upon risk review, the following measure is
recommended by Pinkerton………