The Role of Brand Information in The Role of Brand Information in StateState

Financing Systems in the U.S.Financing Systems in the U.S.

Jason Linnell/Walter Alcorn/Heather Jason Linnell/Walter Alcorn/Heather SmithSmith

National Center for Electronics National Center for Electronics Recycling Recycling

May 7, 2007 May 7, 2007

ISEEISEE

Central questionCentral question

• Brand marking on an electronic Brand marking on an electronic product has become the primary product has become the primary means of assigning financial means of assigning financial responsibility for recycling costs in responsibility for recycling costs in several statesseveral states– Completely new use of brand Completely new use of brand

informationinformation– States are doing it differentlyStates are doing it differently

• What is the impact?What is the impact?

What is a “Brand?”What is a “Brand?”• ““a name, sign or symbol used to identify items or a name, sign or symbol used to identify items or

services of the seller” services of the seller”

• Why look at “brand” for producer responsibility?Why look at “brand” for producer responsibility?– Most reliable visible evidence at end-of-life Most reliable visible evidence at end-of-life and when and when

sold, can’t know actual assembler or “manufacturersold, can’t know actual assembler or “manufacturer””

• Most large producers use same name for brandMost large producers use same name for brand– i.e. Dell-Dell, Sony-Sony i.e. Dell-Dell, Sony-Sony

• But, brand name can differ from producer nameBut, brand name can differ from producer name– Retailers brand differently, i.e. Walmart-iloRetailers brand differently, i.e. Walmart-ilo

Relevant Brand HistoryRelevant Brand History

• In the consumer electronics industry In the consumer electronics industry some manufacturers began licensing some manufacturers began licensing brandsbrands– Licensing less common among IT Licensing less common among IT

companiescompanies

• Primary brands and secondary Primary brands and secondary brandsbrands– Presario, Inspiron, MacintoshPresario, Inspiron, Macintosh

Brand/Producer DifferencesBrand/Producer Differences• Difference between brand “licensor” and brand Difference between brand “licensor” and brand

“licensee”“licensee”– No central registry of either!No central registry of either!

• May have differentMay have different physical manufacturer (e.g., contract physical manufacturer (e.g., contract manufacturing)manufacturing)

• The producer of the product may license a legacy brand The producer of the product may license a legacy brand name (e.g., RCA, IBM)name (e.g., RCA, IBM)– ““Back from the Dead” brands – Polaroid, WestinghouseBack from the Dead” brands – Polaroid, Westinghouse

• A single producer often owns multiple brandsA single producer often owns multiple brands– Panasonic has Panasonic, Quasar*, TechnicsPanasonic has Panasonic, Quasar*, Technics

• A single brand may be produced by more than one A single brand may be produced by more than one companycompany– Historically: GE formerly by GE, then Thomson, now TTEHistorically: GE formerly by GE, then Thomson, now TTE– Concurrently: Funai for “Magnavox” TV/VCR/DVD combos, Concurrently: Funai for “Magnavox” TV/VCR/DVD combos,

Philips for all other “Magnavox”Philips for all other “Magnavox”

Brand RecordingBrand Recording• Brand recording required whether all Brand recording required whether all

units are recorded (ME) or a sample units are recorded (ME) or a sample (WA)(WA)

• High potential for errors with recordingHigh potential for errors with recording

• NCER developed Best Mgmt PracticesNCER developed Best Mgmt Practices– Reduce errors, guide for brand recordersReduce errors, guide for brand recorders

• Steps detailed for brand recorderSteps detailed for brand recorder– Distinguish product categories – gray areaDistinguish product categories – gray area– Find true “brand” labelFind true “brand” label– Identifies common mis-identified markingsIdentifies common mis-identified markings

What is What is THETHE “Brand?” for “Brand?” for Electronics Recycling PurposesElectronics Recycling Purposes

• Same product may include multiple “brand” Same product may include multiple “brand” markingsmarkings– Are true brands, but not correct brand for Are true brands, but not correct brand for

assignment of responsibilityassignment of responsibility

• Correct brands to record depends on Correct brands to record depends on program, purpose of brand recordingprogram, purpose of brand recording

• In Maine, correct is brand one that is In Maine, correct is brand one that is registered to a claiming “manufacturer”registered to a claiming “manufacturer”

• In Washington, brand ownership determines In Washington, brand ownership determines responsibility assignmentresponsibility assignment

Brand Recording PitfallsBrand Recording Pitfalls

Candidate for Candidate for misidentificationmisidentification

““Creative”: Creative”: drive, not branddrive, not brand

““Personal Computer”: not Personal Computer”: not brand, but IBM trademarkbrand, but IBM trademark

The BRAND! “CCI”The BRAND! “CCI”

Monitor, no label on frontMonitor, no label on front

Manufacturer Manufacturer here:here:

Sceptre Sceptre TechnologiesTechnologies

Could be recorded as:Could be recorded as:

•Multi-MediaMulti-Media

•Legend 2000Legend 2000

•Intel/Intel InsideIntel/Intel Inside

•Packard Bell *Packard Bell *

Bare tube from Bare tube from residential residential collection; collection; “Zenith” on tube “Zenith” on tube label, but is it the label, but is it the “brand”?“brand”?

Correlating Observed Brands Correlating Observed Brands and a Manufacturerand a Manufacturer

• An additional step that depends on An additional step that depends on definition of manufacturer and definition of manufacturer and flexibility of system.flexibility of system.– Need to interpret statutory and regulatory Need to interpret statutory and regulatory

requirements before a company could be requirements before a company could be held financially responsibleheld financially responsible

• Usually government function, critical Usually government function, critical decisionsdecisions– Around 1500 brands, which to pursue?Around 1500 brands, which to pursue?

Maine’s ApproachMaine’s Approach

• Current and historic manufacturers “claim” brands Current and historic manufacturers “claim” brands in recycling plansin recycling plans– Sometime split by product category, date of manufactureSometime split by product category, date of manufacture– Licensee or licensor can claimLicensee or licensor can claim

• If brand identified at a consolidator is not claimed, If brand identified at a consolidator is not claimed, ME DEP follows this processME DEP follows this process– Search US Patent Office databaseSearch US Patent Office database– Search other Business Directories/DatabasesSearch other Business Directories/Databases

• i.e. “Brands and Their Companies”, Orion Blue Booki.e. “Brands and Their Companies”, Orion Blue Book– If no info, general web searchIf no info, general web search– Still no info, DEP works with AG office to assign statusStill no info, DEP works with AG office to assign status

• Could be mis-identifiedCould be mis-identified

Washington’s ApproachWashington’s Approach

• Current manufacturers register brands for which Current manufacturers register brands for which they have legal ownership and pay admin feethey have legal ownership and pay admin fee– No division by product category, historic brand owners No division by product category, historic brand owners

• Statutory Definition of Manufacturer:Statutory Definition of Manufacturer:– (14) "Manufacturer" means any person…who…(a) (14) "Manufacturer" means any person…who…(a)

Manufactures or has manufactured a covered electronic Manufactures or has manufactured a covered electronic product product under its own brand namesunder its own brand names for sale in or into for sale in or into this state….this state….[emphasis added][emphasis added]

• Regulatory Definition of Manufacturer:Regulatory Definition of Manufacturer:– "Manufacturer" means the person who: (a) "Manufacturer" means the person who: (a) Has legal Has legal

ownership of the brandownership of the brand, brand-name or cobrand of , brand-name or cobrand of electronic products sold in or into Washington state…electronic products sold in or into Washington state…[emphasis added][emphasis added]

Same Brand, Different Same Brand, Different Manufacturers in Different StatesManufacturers in Different States

Brand ME Manuf. WA Manuf. MD Manuf.

ABS Magnell Associate, Inc. (laptop)

ABS Computer Technologies Inc (laptop)

X

Disney MemCorp Inc. (tv) Disney Consumer Products, Inc. (tv)

X

Emerson Funai (monitor and tv)

Petters Group Worldwide (laptop)

X

IBM Lenovo Inc. (laptop and monitor)

IBM (laptop and monitor)

International Business Machines (all)

Magnavox Philips Electronics (monitor, tv, tv/ radio) and Funai (TV/DVD/VCR combo units only)

Philips Electronics (tv and monitor)

Philips Consumer Electronics (all)

Other State ApproachesOther State Approaches

• CaliforniaCalifornia– No need to track/register brand info under No need to track/register brand info under

ARF lawARF law– Limited data gathering for non-CRT claims Limited data gathering for non-CRT claims

from recyclersfrom recyclers

• MarylandMaryland– Collects brand info on annual registration Collects brand info on annual registration

form, but no tracking at end of lifeform, but no tracking at end of life

Critical Policy QuestionsCritical Policy Questions• Who should be considered the responsible Who should be considered the responsible

producer in producer responsibility systems?producer in producer responsibility systems?– Should the decision be a business decision worked Should the decision be a business decision worked

out among companies involved in producing and out among companies involved in producing and selling the product? selling the product? • Greater administrative burden?Greater administrative burden?

– Does ownership of a brand – really just IP – serve Does ownership of a brand – really just IP – serve as a viable proxy for producer? as a viable proxy for producer? • Is this truly producer responsibility, or an IP tax?Is this truly producer responsibility, or an IP tax?

• How will these choices work in the longer How will these choices work in the longer run?run?

• What are the alternative approaches?What are the alternative approaches?

What’s NewWhat’s New

• Brand-based systems to date look at Brand-based systems to date look at brand on returned product, but now….brand on returned product, but now….

• 2007 legislation looking at use of brands 2007 legislation looking at use of brands is based on current sales or market is based on current sales or market shareshare– Brand licensee/licensor question still in playBrand licensee/licensor question still in play– Still untested, unexploredStill untested, unexplored

•Not discussed much during legislative Not discussed much during legislative deliberationsdeliberations

What’s NewWhat’s New

• Minnesota’s new lawMinnesota’s new law– Obligation is on the “manufacturer” to recycle Obligation is on the “manufacturer” to recycle

0.6 lbs. for every pound sold into state0.6 lbs. for every pound sold into state•Subd. 11. "Manufacturer" means a person who: (1) Subd. 11. "Manufacturer" means a person who: (1)

manufactures video display devices manufactures video display devices to be sold to be sold under its own brand as identified by its own under its own brand as identified by its own brand labelbrand label; or (2) sells video display devices ; or (2) sells video display devices manufactured by others under its own brand as manufactured by others under its own brand as identified by its own brand label. identified by its own brand label. [emphasis added][emphasis added]

•Obligation Obligation falls to brand licensee like Washington?falls to brand licensee like Washington?

What’s New (cont)What’s New (cont)

• Tennessee Legislation (HB 1163)Tennessee Legislation (HB 1163)– (6) “Manufacturer” means any person: (6) “Manufacturer” means any person:

• (A) who manufactures or manufactured covered devices (A) who manufactures or manufactured covered devices under a brand that it owns or owned or is or was under a brand that it owns or owned or is or was licensed to uselicensed to use, other than a license to manufacture , other than a license to manufacture covered devices for delivery exclusively to or at the covered devices for delivery exclusively to or at the order of the licensor; order of the licensor;

• (B) who sells or sold covered devices manufactured by (B) who sells or sold covered devices manufactured by others others under a brand that the seller owns or under a brand that the seller owns or owned or is or wasowned or is or was licensed to use licensed to use, other than a , other than a license to manufacture covered devices for delivery license to manufacture covered devices for delivery exclusively to or at the order of the licensor….exclusively to or at the order of the licensor….[emphasis added][emphasis added]

What’s New (cont)What’s New (cont)

• Oregon legislation (HB 2626)Oregon legislation (HB 2626)– (6)(a) (6)(a) 'Manufacturer' means any person, 'Manufacturer' means any person,

irrespective of the selling technique used, irrespective of the selling technique used, including by means of remote sale: ' (A) including by means of remote sale: ' (A) That manufactures covered electronic That manufactures covered electronic devices devices under a brand that it owns or is under a brand that it owns or is licensed to uselicensed to use; ' (B) That sells covered ; ' (B) That sells covered electronic devices manufactured by others electronic devices manufactured by others under a brand that the seller ownsunder a brand that the seller owns….….[emphasis added][emphasis added]

ConclusionsConclusions

• Brand Data Still Limited and Not Brand Data Still Limited and Not RepresentativeRepresentative

• Inconsistent Definitions of “Brand,” Inconsistent Definitions of “Brand,” “Manufacturer,” and “Covered Product” Hold “Manufacturer,” and “Covered Product” Hold No BenefitsNo Benefits

• Recyclers and Other Organizations Need More Recyclers and Other Organizations Need More Expertise in Brand Counting MethodologyExpertise in Brand Counting Methodology

• Brand Claims/Registrations Need Regular Brand Claims/Registrations Need Regular TrackingTracking

Thank You!Thank You!

Jason LinnellJason LinnellNCERNCERPhone: (304) 699-1008Phone: (304) 699-1008jlinnell@electronicsrecycling.org

Walter AlcornWalter AlcornAlcorn ConsultingAlcorn Consulting(703) 390-9200(703) 390-9200walter@alcornconsulting.com