Jean BergevinHead, Intellectual Property and Fight Against Counterfeiting,

European Commission

Stéphanie Martin Policy Officer, Intellectual Property and Fight Against

Counterfeiting, European Commission

Craig Moss Chief Operating Officer, CREATe.org

•

••

•

Jean BergevinHead, Fight Against Counterfeiting and Piracy Unit, European Commission

Stéphanie Martin Policy Officer, Intellectual Property and Fight Against Counterfeiting, European Commission

Craig Moss,Chief Operating Officer, Center for Responsible Enterprise and Trade (CREATe.org)

Type Trademark Design Rights

Copyright Patent Trade Secret

Definition Symbol, word, or words legally registered or established by use as representing a company or product

Protects the visual design of objects

Exclusive legal right to reproduce, publish, sell, use or distribute original works of authorship

A grant giving the creator of an invention the sole right to make, use, and sell that invention for a set period of time

Any confidential or proprietary business information that provides a competitive edge

Examples Logo, company name, brandname, graphics, slogan, catchphrase

Shape, configuration, contours,colors,texture of products or packaging

Software, music, films, books, photos

Governments determine which inventions receive patents

Unreleasedproducts, technical information and know-how, internal business information

Top IP Infringement

• Counterfeits and excess production (the "third shift")

• Product/design prototypes being shared with competitors

• Unauthorized sub-contractors

• Improper use/disposal of tooling

• Theft of trade secrets: plans, designs, technology

• British luxury sports carmaker Aston Martin was forced to recall 17,590 cars due to counterfeit parts

• Subcontractor Shenzhen Kexiang Mould Tool Co Limited was using counterfeit DuPont plastic material to mold pedal arms

• Aston Martin is now being supplied directly by a DuPont distributor

Counterfeit Goods

Counterfeits Entering Legitimate Supply Chains

Legitimate Suppliers Legitimate Distributors

•••

•

•

•

•

Fight Against Counterfeiting: Integrity of Supply Chains

& Follow the Money

Jean BergevinStéphanie MartinDG Internal Market, Industry, Entrepreneurship and SMEsUnit F5 Intellectual Property and Fight Against Counterfeiting

Adoption on 1st July 2014 - COM(2014)392

10 actions focused on commercial-scale IP infringements

2 key actions:- Action 2: Integrity of Supply Chains- Action 3: Follow The Money

Adoption on 28 October 2015 - COM(2015)550

The "Follow the Money" approach was announced as a key initiativeof the IP chapter of the Single Market Strategy.

ACTION 2 – Integrity of Supply Chains

Vulnerability

Globalised supply chains have become wider.

Many actors involved, several tiers:fragmentation and little transparency

This opacity increases drastically the vulnerability of supply chains.

Due Diligence Holistic

Supply chainintegrity

Track and Trace

TechnologiesIntellectual Property

Due Diligence

Supply Chain integrity

Supplychain

integrityMechanisms

Develop a transparency, responsibility and fairness culture throughout the supply chain

Implement good practices (audits, codes of conducts, labels, training of employees…)

Involve every actor in the supply chain under the responsibility of rightholders

Authenticity Integrity

ObjectiveDevelop cost-effective technological tools for

supply chain integrity.

Why?Provide authorities and consumers with

information on both the authenticity and the integrity of products..

How?Cooperation between right holders, security

companies, standards organisations.

1. Voluntary: non-legislative scheme based solely on voluntary good practices

2. Voluntary-Plus: semi-legislative scheme based on voluntary good practices + review of the IPR Enforcement Directive 2004/48

3. Compulsory: legislative scheme providing due diligence obligations

"Win-Win"

Rightholders: effective IP protection, other benefits related to supply chain integrity.

Consumers: responsible supply chains would ensure safety, authenticity and integrity of products

Suppliers: transparency would promote fair business practices throughout supply chains

Society at large: responsible supply chains would help promote environmental and social standards

within supply chains

Workshop5 June 2015

Ongoing online Consultation

(December 2015)

Communication2017

Action 3 – “Follow The Money”

Source of Revenues

Disrupt

Enhance

Promote

the money trail of infringing activities

The involvement of intermediaries in IPR enforcement at EU level

the initiatives that already exist at national level

Major source of income for IP infringing sites

Advert misplacement: damage to brand equity

Consumer online trust and security issue

Payment services used by IP infringers (purchasing products, subscription)

In breach of payment providers' operating rules

Consumer online trust and security issue

• Shippers

• Retailers

• Wholesalers…

“Given the similarities between many of the underlying issues… we believe that companies will benefit from aligning their IP protection strategies with those strategies associated with improved social and environmental performance… In particular, companies are likely to benefit from establishing management systems that lay the foundation for respecting and protecting IP…”

• Stanford Business School, “Similarities in Managing Supply Chain Sustainability and Intellectual Property” March 2014

Problem:• A publicly-traded global manufacturer discovered their largest

authorized distributor was selling 20% counterfeit goods

Consequence:• Fakes caused reputational and financial damage - lost sales plus

replacement/repair of faulty counterfeit goods

Challenge:• Did not want to hurt relationship with largest distributor or make

situation public knowledge and hurt company reputation –especially with investors

•••

••

•

•

••

Legal Approach Management Systems Approach

••

•

•

•

For further information:Stephanie.martin@ec.europa.eu

Action Plan on enforcement of IPR:http://eur-lex.europa.eu/legal-

content/EN/TXT/PDF/?uri=CELEX:52014DC0392&from=EN

Cmoss@CREATe.orgCopyright © 2016 CREATe.org All rights reserved