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Anti-counterfeiting and Anti-piracy Strategy
Due-Diligence Awareness Partnership
Munish Sudan Senior Manager, IP Cell
TATA STEEL LTD. [email protected]
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Counterfeiting is just not lost of revenues
39th $18.16 Billion
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Tata Steel – portfolio of more than 600 patent families
50 registered trademarks
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1. Lost tax revenue 2. Cost of Enforcement
3. Safety 4. Negative Impact on Innovation
1. Safety 2. Cost
1. Cost to failures 2. Lost sales 3. Brand Value
4. License revenue
Government
Customer
Industry
It is not only Industry which gets Impacted…..
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Innovation is key to India’s economic growth and development
“...the future prosperity of India in the new knowledge economy will increasingly depend on its ability to generate new ideas, processes and solutions. The process of innovation `shall convert knowledge into social good and economic wealth. In a globally competitive world, India has to unleash its innovation potential to increase capacity, productivity, efficiency and inclusive growth.”... Hon. President Pranab Mukherjee
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Counterfeiting and Piracy Discourage Innovation…….
IP Enforcement
R&D/Innovation
IP
Commercial Exploitation
Differentiation in the market
If there is counterfeiting,
there is no differentiation
possible
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Product Life Cycle…….
Sales
Time
Development/R&D
Introduction Growth Maturity Saturation Decline
Phase more prone to counterfeiting
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Why Counterfeiting Happens?
“If I had an hour to solve a problem I'd spend 55 minutes thinking about the problem and 5 minutes thinking about solutions.” Albert Einstein
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Research & Development
Manufacturers Customers
Three Important elements of the Value Chain
Supply Chain
Counterfeit and pirated products, previously largely distributed through informal markets, are infiltrating legitimate supply chains, with products now appearing on the shelves of established shops. OECD Report 2007
Eighty-three percent of all the counterfeit items discovered by the respondents‘ organizations came from approved vendors. Construction Industry Institute (CII) Report
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Counterfeiting ….……. Consumer perspective
35
21
21
6
5
5 3 2 1 1
% Cannot afford the genuine product
They think genuine products areoverpriced
They don't know it's not genuine
Because they don't have access to thegenuine products
CF product "do the job" just as well asgenuine ones
It would be ridiculous or stupid to paythe full price of genuine Products
They are constantly offered thoseproducts by sellers
CF products are more easily accessiblethan genuine
They want to help CF products sellers
CF sellers are more willing to serve theircustomers than regular Retailers
Source: BASCAP Study
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Counterfeiting ….……. Manufacturer perspective
Increasing due diligence, Visibility & Control
Suppliers
X
X
X
X
Un-Authorized Distributors/Retailers
Y Y
Authorized Distributors/Retailer
Customer
Decreasing due diligence, Visibility & Control
Confidentiality is not used as strategic tool to retain long term advantages in the market.
No Processes to Measure
Losses
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Counterfeiting ….……. Supply Chain perspective
No robust mechanisms to trace product throughout the life cycle
Weak enforcement standards – easy to hide your identity and restart
Free trade via Internet: The proliferation of Internet auction sites has resulted an Exponential increase in the volume of counterfeit sales
Weak alignment of distributors and retailers with manufacturers’ vision
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Key Factors driving Counterfeiting
Market Institutional Technology Consumer
Large potential market size and very high profitability per unit – risk is very low
Low risk of discovery and
prosecution – easy to conceal
Shortage of feasible
technologies to differentiate
between genuine and counterfeit
product
Awareness towards healthy,
safety and quality is low
Genuine power of brand
Legal and regulatory
framework - Weak Enforcement
Counterfeiting via Internet Auction
Inability to comprehend
difference between counterfeit and original product
Non-availability of Genuine Products – small towns
Socio-Economic
factor
Low regard for IPR
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Research & Development
Launched world’s first branded cold rolled steel (CRS) called ‘TATA Steelium
Commodities to Brands
TATA Steelium – how we are doing it
AC
TIO
N
I
MPA
CT
2007
Tata Steelium Logo embossed every metre of length, Unique packaging with bar code, location-wise floor price
Authenticity
Brand Awareness, Customer Trust Customized Brand Management via email,
examples, comparative studies
Distributors, dealers and customers Meet Brand Care, Brand Ethics
Rewards and Punishments Brand Vision maintained
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Research & Development
TATA Steelium – how we are doing it
Extending Due Diligence from Inside to out
Level 1 Screening
List of potential Candidate
Level 2 Due diligence from
business and product knowledge perspective
Level 3
Interviews with senior officials
Phase 1 Criteria
Willingness to be exclusive to Tata Steel
Registration with Tax authorities
Market Reputation – Involvement in any unethical, Criminal/ counterfeiting activities
Investment Capabilities
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Developing Win-win Strategies with Supply Chain partners
• Licensing Partnership of a large company with a SME (Jyoti Cera Rubber ) – Strategic Alignment
• 3% royalty • 3 million INR (1st year), 12 million INR (4th year).
Invention (Application No. : 404/KOL/2009 ): Developed a hybrid idler, specially designed with a coating of high alumina ceramic powder with polymer (called JCR-1000 CERO ZIP).
An indirect approach to ensure Anti-counterfeiting and alignment with manufacturer’s vision
Confidentiality IP Protection Strategic
Alignment
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Conduct a due diligence of your distributors/retailers/suppliers at regular intervals. Know your supply chain intimately, from top to bottom (use technology)
Adopt Zero tolerance strategy
Secure your Supply chain and maintain confidentiality at highest level
Develop a feasible mechanism for reporting counterfeiting
Due Diligence
Make Customer Aware of Counterfeiting Hazards – Safety, Quality, Longevity etc.
Develop processes to record losses
at organizational level
Track performance of your Products/Brands at regular intervals
Register your Trademarks and Educate employees on Confidentiality
Awareness Develop a strong alignment with your distributors/ retailers/ suppliers – exploit employee Network to maximum
Engage with customers via interactive social media/rewards platform to spread awareness and report incidents of counterfeiting
Engage with enforcement agencies and government to curb counterfeiting
Partnership
Anti-counterfeiting and Anti-piracy Strategy
= Business Excellence
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Research & Development