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Asian Enforcement Practice
F. David [email protected] J. [email protected]
IP Protections
Patents
Trademarks
Trade Secrets
Copyrights
• Creative expression• Author’s life
+ 70 years
• Signs/symbols/source indicator for goods & services
• Perpetual
• New “ideas”
• 20 years
• Idea that’s kept secret
• Perpetual
Recommended Reading
“Illicit” by Moises Naim “Knockoff: The Deadly Trade in Counterfeit Goods” by Tim Phillips
John Dillinger: “Why do I rob banks? That’s where the money is!”
4
5The Dark Side of Globalization
• Traffickers▫ Exploit child and slave labor▫ Pay no taxes▫ Provide no benefits to society▫ Are nimble, organized and
ruthlessly efficient▫ Are essentially criminal “service
providers” diversified in their portfolios of criminal activity: Counterfeits/pirate goods Weapons Drugs Documents Prostitution Art and Antiquities Endangered species Human organs (Yes! Even
organs!)
©Nation News©Nation News
6What Vulnerabilities do Traffickers Look For in Setting Up a Base of Operations?
• Example of SE Asia as Trans-shipment hub: determining factors▫ Loose visa rules and relaxed “rule of law”▫ Geography: Thailand controls land route from
China to Singapore▫ “Indochina” central location between India and
China▫ Miles and miles (4863 KM) of open borders
between Thailand and Myanmar, Laos, Cambodia and Malaysia- just lines on the map
▫ Extensive river networks (Mekong Delta) rife with smuggling
▫ Smuggling routes developed over centuries (narcotics, human smuggling, arms, contraband)
▫ Close family ties between 2nd and 3rd generation Thai-Chinese (Teo-chiew) and southern Chinese merchants (Pearl River Delta region)
▫ Low paid government officials gives rise to low level corruption to “look the other way”
• Result: 30 Million people trafficked in/from SE Asia in last ten years: compare transatlantic slave trade
7
Victims of the Global Trade: Modern Day Slavery
Former US Secretary of State, General Colin Powell: "It is incomprehensible that trafficking in human beings is taking place in the 21st Century – incomprehensible but true. Trafficking leaves no land untouched, including our own.”
Slave Camps & Child Labor
GET REAL - The Truth About Counterfeiting
• Counterfeiting is big business.• It is estimated that counterfeiting is a $600 billion a
year problem.• In fact, it’s a problem that has grown over 10,000
percent in the past two decades• Approximately 5%-7% of the world trade is in
counterfeit goods.
9
The Powell Doctrine
10
• FORCE, when used, should be overwhelming and disproportionate• Internal company support is
strong• No Half Measures• Objective clearly identified
• Commercial vs. Legal objective
• Exit strategy necessary
11
Strategies• Creating a climate of deterrence• Counterfeiter generally won’t stop, it’s too lucrative, so best to
move them away from your brand to another less aggressive rights holder
• Combination of Customs Watch List, police raids, warnings and follow up, market patrols, calling cards, threats of civil action, publicity: bring all weapons to bear on the source to decrease their ROI.
• Rational party will move away from the brand which is turning up the heat
• Strategy is most effective when different affected brands in the same industry work together to share intelligence and costs: e.g., software alliance, sports apparel, electronics, video games, pharma, cosmetics, tobacco. More bang for the (limited) budget
Strategies• Creating a climate of deterrence• Counterfeiter generally won’t stop, it’s too lucrative, so best to
move them away from your brand to another less aggressive rights holder
• Combination of Customs Watch List, police raids, warnings and follow up, market patrols, calling cards, threats of civil action, publicity: bring all weapons to bear on the source to decrease their ROI.
• Rational party will move away from the brand which is turning up the heat
• Strategy is most effective when different affected brands in the same industry work together to share intelligence and costs: e.g., software alliance, sports apparel, electronics, video games, pharma, cosmetics, tobacco. More bang for the (limited) budget
IP Enforcement: Holistic StrategyIP Enforcement: Holistic Strategy
12
▫ Investigation: Tracking Source of Supply Developing leads- client info network Private Investigators Customs & Immigration Hotline- phone and email Informants and law enforcement tipsters Trap purchase: building trust and confidence: Follow the
money trail Tracing phone/emails of vendor/supplier (no privacy in
Thailand) Surveillance of retail and internet sales Placing CI in factory as employee for 2-3 months Documentary discovery not available in civil procedure so
must obtain documents surreptitiously Flipping low level operators (carefully) to work up the
food chain
IP Enforcement: Holistic StrategyIP Enforcement: Holistic Strategy
13
Brand Owner’s Goals
• Business Goals▫ Fast result▫ Punish unfair
competition▫ Deal defendant a
hard, possibly fatal blow and recapture market share lost to infringer
▫ Send message to the market (distributors) and competitors that brand owner will enforce its valuable IP: risk to copy
▫ Maximize value of legal rights by use of media to promote products and designs
• Legal Goals▫ Immediate seizure
of infringing stock▫ Stop the
infringement NOW▫ Develop useful
precedent▫ Judgment of
injunction and damages where feasible
▫ Forfeit/Destruction of stock
▫ At least recover damages and costs
▫ Avoid countersuit
14The “Brand Protection” Puzzle
Maintenance
Brand Protection
Education
Enforcement
Supporting
government
authorities
15
Law Enforcement
• Department of Special Investigation (“DSI”)
• Economic Crime Police (“ECOTECH”)
• Royal Thai Police Crime Suppression (“CSB”)
16
Established on October 3, 2002 under the jurisdiction of the Ministry of Justice
(DSI = US FBI)
Established on October 3, 2002 under the jurisdiction of the Ministry of Justice
(DSI = US FBI)
Criminal Raid Action with Assistance from Department of Special Investigation : DSI
17
Ministry of Justice
Police General Chidchai Minister of Justice
On behalf of • IP Association • LGP Asia
On behalf of • IP Association • LGP Asia
18
Royal Thai Customs Watch List
• Ex-officio action• Fines for violations imposed by Customs
Authority are higher (4X value of seized goods) than the fines imposed by the Courts for TM Act violations (Maximum 400,000 Baht)
• Cost-effective (no need for private investigation)
• Shipping documents can generate leads in source or destination countries (better intel)
• Seizures can lead to civil actions against importers, generating compensation to fund additional anti-counterfeiting measures
Thailand as Transshipment Hub
Source: DG TAX UD European CommissionSource: DG TAX UD European Commission
20Perception: Anything Goes . . .Perception: Anything Goes . . .
21Perception Becomes Reality as OC moves in
Guns, Knives and
Axes
Guns, Knives and
Axes
22
Predators on the Prowl
Ukrainian Hacker
• Maksym Kovalchuk, 26• Ring leader of a worldwide
software piracy/tech crime ring: caused $100 Million in losses
• Arrested Bangkok May 20, 2003• Offer software deals in e-mails,
take orders and payment by money order mailed to intermediaries, including a Russian exchange student in Philadelphia and a businessman in Massachusetts
• Extradited to the US and imprisoned for 36 months
24
Busted: Christopher Neil & John Mark Karr
25Busted: “Merchant of Death”Victor Bout: Russian Arms Dealer
Fighting Fire with Fire: Dealing with Ethical Dilemmas
• Bribery and corruption: public and private• “Persons of influence”, “poohyaibaan” or
friends in high places. Beware of “Seh ______”• Death threats and reprisals• Foreign operators: guests in the Kingdom• Lesser threats: Blacklisting, grey listing• Targeting family members• Transparency issues: Self-dealing, cutouts,
outsourced work • Methodology: Violation of civil liberties, e.g.,
privacy▫Ethical question: given the tactics of the
adversary, is it ethical to get the results “by any means necessary”?
27WHY CARE? Winners & Losers in the Globalized Economy
• Why the State Should Care▫Encourage investment in manufacturing
▫Encourage investment in domestic R&D, the knowledge -based economy & mind share- a form of technology transfer- training workforce to world class standards
▫Trade preferences with partners (i.e., “301”, FTA, GSP) & competitiveness
▫Disrupt funding for Black Markets, Organized Crime & Terrorism www.customs.gov/custoday/nov2002/interpol.htm IACC White Paper January 2006 www.iacc.org/WhitePaper.pdf www.interpol.int/FinancialCrime/IntellectualProperty/
Default.asp
28Examples of Success: Industry Collaboration
• October 5, 2005: Auto Parts• DaimlerChrysler Mercedes Benz, GM, BMW,
Honda and Department of Special Investigation (“DSI”)
• 50,000 plus goods seized, machinery attached, bank accounts frozen, foreign owner arrested, tax avoidance charges filed (example of piling on to create deterrence)
• DSI : “largest operation ever discovered in SE Asia”; investigating money laundering, funding for terrorism activities, illegal labor practices, immigration charges
29
Mercedes Benz ® ExampleMercedes Benz ® Example
DaimlerChrysler & General MotorsRaid Action Against Autotrim
International Transaction Co., Ltd.
34
DSI Raid at Hatyai Factory, Songkla
NGK Raid Action Against Retail_& Wholesale Shops in Lampang & Lamphun
Province
41
Destruction Ceremony
Shiseido-Raid Actions Against Shops/Warehouses (Donmuang
Market) on August 2008
45
WHY CARE? CHILD LABOR
46
Modern Day Slave Trade
47Human Trafficking: Victims are criminals?
Human Trafficking: Victims are criminals?
48
QUESTIONS/FOLLOW UP/CONTRIBUTE
• Contact Ed Kelly 24/7/365▫www.lgpatlaw.com/attorneys/ed_kelly▫www.sisha.org▫www.facebook.com/thaifixer?ref=profiler▫+1 831 645 7308(dd); +6689 526 5305 (m)▫[email protected]▫[email protected]▫[email protected]
Thank You!