Counterfeit & Piracy: introduction

1. A high-level and hands-onapproach for organizations to deal with counterfeiting and piracy.Jan CorstensWIPO Moscow 9-12-11

2. Counterfeit & Piracy: introduction • Increasing phenomenon with effects on • Socio-economical environment (crime, employment, innovation...) • Right’s holders • Consumers • Government • There are 2 Markets: • Primary: consumers buy counterfeit product believing they buy the genuine products • Secondary: consumers knowingly buy counterfeit products • Governments are taking mitigating actions, adapting legislation. What should organisations do?

3. Overall Approach • In attacking and defendingagainst counterfeit & piracyorganisationsshould: • ensure effective, efficient and ongoing • pan-European, and even global • enforcement of intellectual property rights • on a hands-on or project basis • in close consultation and collaboration with customs authoritiesthroughout the European Union (and abroad) • but without forgetting the riskskthat are associatedwiththeirownextendedenterprise.

4. Short term actions • Obtain an overview of all Intellectual Property Rights (“IP”) held and create a procedure, roles & reponsibilities to keep inventory up to date • Obtain an overview of historic acts of counterfeiting and piracy encountered in the market • Createanoverview of contractualrisks of yourextendedenterprise, adaptcontractswithappropriatecontrolsansauditclauses. • Develop a solid IP protection and enforcement strategy and (internal procedures), including training of key employees • Establish favorable communication and collaboration with customs authorities throughout the EU: • which control procedures are in place in view of a successful collaboration? • Negotiations with customs authorities on collaboration and requirements and signing of Memorandum of Understanding

5. What is the extended enterprise? Suppliers Manufacturers Service Providers Affiliates Company Joint Ventures Franchisee Distributors Agents Licensees Customers

6. Map the Extended Enterprise, Example Example: Manufacturing Lifecycle Product Design Product Manufacturing IP Licensing Product Sales Product Support Supplier Inventory Inspections Most Favored Pricing Inspections Royalty Inspections Joint Development Agreement Inspections Distributor Inspections Advertising Inspections Franchise Inspections Call Center Inspections Service Provider Inspections

7. Mid term actions • Starting off with a pilot project with customs authorities, identify a limited number of countries, preferably in a European state, US or Canada. • Pilot a complianceaudit of oneor more selectedmembersfromyourextendedenterprise • Createaninternal specialist team, potentiallyassistedbyexternallegaladvisorsorauditors. • Thiscombination of these actionswill help yourorganisation: • Identify potential missing revenue and revenue leakage in the market • Identify potential excess costs • In rationalizing relationships • Increase transparency of controls and ability to mitigate risks • Identify risks of external business relationships • Increase dialogue with other parties, which can help improve relationships • Manage and protect their IP, reputation and brand

8. Long term actions • Roll out customs project to other countries (mind that even within EU approaches with customs authorities may not be consistent). • Maturityphase of complianceauditsfromyourextendedenterprise – rotation program – optimisation of activities – ROI • Include “online business approach” in youractions, create a strategy! • Termination of contracts of certainextendedenterprisemembers • Litigation