company confidential registration management committee counterfeit parts jason dickstein, general...

21
Company Confidential Registration Management Committee Counterfeit Parts Jason Dickstein, General Counsel Aviation Suppliers Association What Does “Counterfeit” Mean? Why is this an Issue?

Upload: willis-greene

Post on 26-Dec-2015

223 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: Company Confidential Registration Management Committee Counterfeit Parts Jason Dickstein, General Counsel Aviation Suppliers Association What Does “Counterfeit”

Company Confidential

Registration Management Committee

Counterfeit PartsJason Dickstein, General Counsel

Aviation Suppliers Association

What Does “Counterfeit” Mean?Why is this an Issue?

Page 2: Company Confidential Registration Management Committee Counterfeit Parts Jason Dickstein, General Counsel Aviation Suppliers Association What Does “Counterfeit”

RMC Workshop Minneapolis, MN 19 – 20 July 2012

Registration Management Committee

Information

Jason Dickstein, Attorney

Washington Aviation Group, PC

Clients include these trade association - all three have MOUs with IAQG and AAQG for industry support and awareness:

• Aviation Suppliers Association (ASA)

• Modification and Replacement Parts Association (MARPA)

• Aircraft Electronics Association (AEA)

Page 3: Company Confidential Registration Management Committee Counterfeit Parts Jason Dickstein, General Counsel Aviation Suppliers Association What Does “Counterfeit”

RMC Workshop Minneapolis, MN 19 – 20 July 2012

Registration Management Committee

Outline

• Counterfeiting Law

• U.S. Government Creating an Opportunity for Increased Anti-Counterfeiting Scrutiny

• Practical Tips for Auditing a Counterfeit Aircraft Parts Program

Page 4: Company Confidential Registration Management Committee Counterfeit Parts Jason Dickstein, General Counsel Aviation Suppliers Association What Does “Counterfeit”

RMC Workshop Minneapolis, MN 19 – 20 July 2012

Registration Management Committee

The FAA World of Parts

FAA Approved

Parts

Unapproved Parts

Counterfeit Parts

Page 5: Company Confidential Registration Management Committee Counterfeit Parts Jason Dickstein, General Counsel Aviation Suppliers Association What Does “Counterfeit”

RMC Workshop Minneapolis, MN 19 – 20 July 2012

Registration Management Committee

What is Counterfeiting?

Lanham Act

• Unauthorized use in commerce of a trademark so as to cause – confusion,

– mistake, or

– deceit

• FAA or DoD approval may not be dispositive of counterfeiting questions

• There are many other fraud laws and parts laws in addition to this law

Page 6: Company Confidential Registration Management Committee Counterfeit Parts Jason Dickstein, General Counsel Aviation Suppliers Association What Does “Counterfeit”

RMC Workshop Minneapolis, MN 19 – 20 July 2012

Registration Management Committee

Trademark Law

• Protects distinctive marks from use by others in commerce that leads to confusion, deception, or mistake– EXAMPLE: “palming off” something you

created as if it were another manufacturer’s product

– EXAMPLE: “reverse palming off” another manufacturer’s product as if it were something that you created

– EXAMPLE: misuse of your registrar’s logo (the logo is likely a certification mark)

Page 7: Company Confidential Registration Management Committee Counterfeit Parts Jason Dickstein, General Counsel Aviation Suppliers Association What Does “Counterfeit”

RMC Workshop Minneapolis, MN 19 – 20 July 2012

Registration Management Committee

Trademark Hypothetical

• OEM “X” sells a part described as 1526771

• Jason’s Parts obtains Air Force source approval to create a replacement that has the part number J1526771.

• OEM “X” wants to know if this part from Jason’s Parts is a counterfeit?

Page 8: Company Confidential Registration Management Committee Counterfeit Parts Jason Dickstein, General Counsel Aviation Suppliers Association What Does “Counterfeit”

RMC Workshop Minneapolis, MN 19 – 20 July 2012

Registration Management Committee

Several Cases HaveAddressed This Issue

• A single letter prefix or suffix that distinguishes OEM parts from aftermarket parts is inadequate– Could be confused for an OEM revision identifier

• Parts must be uniquely identified in a fashion that will make it possible to establish the source of such part even in the event of failure

• FAA Order 8110.42 permits multi-character prefixes and suffixes that identify source– So Jason1526771 might be an acceptable part

number

Page 9: Company Confidential Registration Management Committee Counterfeit Parts Jason Dickstein, General Counsel Aviation Suppliers Association What Does “Counterfeit”

RMC Workshop Minneapolis, MN 19 – 20 July 2012

Registration Management Committee

The U.S. Defense Industry is Experiencing Counterfeiting Issues

• Commerce and GSA have issued reports

• Congress held hearing on this subject in November 2011– Many of the counterfeits identified were

discrete electronic parts that had been purchased by OEMs

– Nearly every counterfeiting fact pattern from the reports includes a purchase from an ‘unknown suppler’

Page 10: Company Confidential Registration Management Committee Counterfeit Parts Jason Dickstein, General Counsel Aviation Suppliers Association What Does “Counterfeit”

RMC Workshop Minneapolis, MN 19 – 20 July 2012

Registration Management Committee

Boeing Testified Before Congress

• Boeing noted that they had verified that all parts supplied did conform to appropriate physical properties

– Congress took the position that even if the parts can be shown to conform to all physical properties, counterfeits are nonetheless considered “non-conforming”

– Passed 2012 National Defense Authorization Act

– Requires the Secretary of Defense to implement a program to “enhance contractor detection and avoidance of counterfeit electronic parts”

– Program will essentially shift the burden for detecting counterfeit parts onto contractors by requiring them to establish policies and procedures to ensure counterfeit electronic parts do not enter the supply chain

– A trusted supplier program will be part of this (Section 818 of the 2012 NDAA)

Page 11: Company Confidential Registration Management Committee Counterfeit Parts Jason Dickstein, General Counsel Aviation Suppliers Association What Does “Counterfeit”

RMC Workshop Minneapolis, MN 19 – 20 July 2012

Registration Management Committee

2012 National Defense Authorization Act

Passed 2012

– Requires the Secretary of Defense to implement a program to “enhance contractor detection and avoidance of counterfeit electronic parts”

– Program will essentially shift the burden for detecting counterfeit parts onto contractors by requiring them to establish policies and procedures to ensure counterfeit electronic parts do not enter the supply chain

– A trusted supplier program will be part of this (Section 818 of the 2012 NDAA)

Page 12: Company Confidential Registration Management Committee Counterfeit Parts Jason Dickstein, General Counsel Aviation Suppliers Association What Does “Counterfeit”

RMC Workshop Minneapolis, MN 19 – 20 July 2012

Registration Management Committee

Tips for a Counterfeit Program

• How does the business ‘know’ their suppliers

– Programs like FAA AC 00-56 help ensure adequate quality systems for distributors using 3rd party audit verification

– Registrar auditor regularly conducting AC 00-56 audits

– FAA does not give a certificate number or logo to distributor to use

– http://www.aviationsuppliers.org/FAA-AC-00-56A

– 594 companies participating in program

Page 13: Company Confidential Registration Management Committee Counterfeit Parts Jason Dickstein, General Counsel Aviation Suppliers Association What Does “Counterfeit”

RMC Workshop Minneapolis, MN 19 – 20 July 2012

Registration Management Committee

Tips for a Counterfeit Program

•A Robust Receiving Inspection Process–Clear standards

–Inspector training

–Closed loop process for investigating red flags

Page 14: Company Confidential Registration Management Committee Counterfeit Parts Jason Dickstein, General Counsel Aviation Suppliers Association What Does “Counterfeit”

RMC Workshop Minneapolis, MN 19 – 20 July 2012

Registration Management Committee

Unusual Finish/No Inspection Stamp

Page 15: Company Confidential Registration Management Committee Counterfeit Parts Jason Dickstein, General Counsel Aviation Suppliers Association What Does “Counterfeit”

RMC Workshop Minneapolis, MN 19 – 20 July 2012

Registration Management Committee

Tips for a Counterfeit Program

•The receiving inspectors should look at the Parts – Not Just the Paperwork–Inspectors should look for visual discrepancies

–Ensure the parts match the paperwork

Page 16: Company Confidential Registration Management Committee Counterfeit Parts Jason Dickstein, General Counsel Aviation Suppliers Association What Does “Counterfeit”

RMC Workshop Minneapolis, MN 19 – 20 July 2012

Registration Management Committee

Vibrapeened Part Number

Page 17: Company Confidential Registration Management Committee Counterfeit Parts Jason Dickstein, General Counsel Aviation Suppliers Association What Does “Counterfeit”

RMC Workshop Minneapolis, MN 19 – 20 July 2012

Registration Management Committee

Tips for a Counterfeit Program

•Inspectors should read the documentation–Inspectors should identify and investigate incongruities

Page 18: Company Confidential Registration Management Committee Counterfeit Parts Jason Dickstein, General Counsel Aviation Suppliers Association What Does “Counterfeit”

RMC Workshop Minneapolis, MN 19 – 20 July 2012

Registration Management Committee

No Documentation (OOP)

Page 19: Company Confidential Registration Management Committee Counterfeit Parts Jason Dickstein, General Counsel Aviation Suppliers Association What Does “Counterfeit”

RMC Workshop Minneapolis, MN 19 – 20 July 2012

Registration Management Committee

Documentation Review Tips

• Check whether inspectors– ensure part numbers match the part number

listed on the documentation

– ensure serial numbers match the serial number listed on the documentation

– ensure the part that arrived matches the purchase order description

– Look at the signatures – do they appear to be robo-signed and is this normal?

Page 20: Company Confidential Registration Management Committee Counterfeit Parts Jason Dickstein, General Counsel Aviation Suppliers Association What Does “Counterfeit”

RMC Workshop Minneapolis, MN 19 – 20 July 2012

Registration Management Committee

Different Finish

Page 21: Company Confidential Registration Management Committee Counterfeit Parts Jason Dickstein, General Counsel Aviation Suppliers Association What Does “Counterfeit”

RMC Workshop Minneapolis, MN 19 – 20 July 2012

Registration Management Committee

Thank You

Jason Dickstein, ASA Counsel

Washington Aviation Group, PC

2233 Wisconsin Avenue, Suite 503

Washington, DC 20007

Tel: (202) 628-6776 – Fax: (202) 628-8948

[email protected]