Intellectual Property Rights

A Global Perspective

Robert L. Dodge, CPP

Vice President

Pinkerton Consulting and Investigations

INTELLECTUAL PROPERTY

DEFINED

A number of distinct types of legal monopolies over creations of the mind, both artistic and commercial, and the corresponding fields of law. (WIKIPEDIA)

“We are in the midst of an intangible

asset and intellectual property global

economy where as much as 65 % of

an organization’s value and sources

of revenue and future wealth creation

lie in intangible assets, IP and

proprietary competitive advantages.”

BROOKINGS INSTITUTE

IP LEGAL PROTECTIONS

Economic Espionage Act of 1996

Trade Secrets

Patents

Trademarks

Copyrights

ENTERPRISE INTELLECTUAL

PROPERTY LOCATIONS

Executives and Board Members

Research and Development

Manufacturing

Sales and Marketing

Human Resources

Operations

A RISING GLOBAL CONCERN

• Intellectual Property Rights violations cost US

businesses $700 Billion annually (US Govt.)

• Pirated or Counterfeit goods account for roughly

7% to 9% of global trade (World Customs Organization)

A RISING GLOBAL CONCERN

• Counterfeit goods are enriching criminal

organizations by up to 500 billion in sales per year (FBI and ICE)

• Estimated upwards of 10% of Drugs Worldwide

are Counterfeit (FDA)

RISK COMPONENTS

THREAT SPECTRUM

Level of Violence

Espionage

• Elicitation

• Solicitation

• Coercion

Organized Crime

• Coercion

• Larceny

• Extortion

• Assault

• Kidnapping

Terrorism

• Assault

• Kidnapping

• Murder

• Bombing

• CBRNE

Natural

Event

Risk to Enterprise

INTELLECTUAL PROPERTY

THREATS

• Individuals

• Competitors

• Criminal Elements

• State Entity

• Inadvertent Disclosure

BUSINESS ESPIONAGE

• Globalization has increased industrial spying

• Spies come from more than 100 countries

• Majority of serious incidents come from:– China

– Russia

– Taiwan

– Vietnam

– South Korea

– India

– Japan

– Israel

– France

– Venezuela

INTELLECTUAL PROPERTY

THREATS

• Classic Agent Recruitment

• Surveillance/Surreptitious Entry

• Specialized Tech Ops

• Tasking Foreign Students/Workers

• Trade Conference Elicitation

• Governments/Private Sector Companies

• Corporate Merger/Acquisition

• Hiring Competitor Staff

• Retaining Information Brokers

• Rampant Counterfeit and Piracy Problems

• Leading exporter of counterfeit and pirated goods

• Piracy rates have not declined since WTO

accession, in some sectors have increased

• Infringement levels at 90 percent or above for

virtually every form of intellectual property

• Industrial/Economic Espionage

CHINA

CHINA

Inadequate IPR Enforcement

• Enforcement at local levels inadequate, protectionism,

poor coordination, resources, lack of training

• Underutilization of deterrent criminal remedies, most

enforcement gets channeled to administrative

authorities and administrative fines

CHINA

Inadequate IPR Enforcement

• Confiscated goods auctioned and not destroyed

• Lack of transparent Information on IPR

infringement levels and enforcement activities in

China

CHINA IPR HOT SPOTS

• Beijing Counterfeit Hot Spots

• Retail and Wholesale Markets

• Silk Street Market

• Tianyi Market

• Yaxiu Market

• Virtual Market-„Baidu” large MP3 search engine with links to IPR infringers

CHINA IPR HOT SPOTS

• Shanghai City, All

forms of IPR

infringement, but

many improvements

are being made

• Guangdong

Province, major

problem area all

forms of IPR

infringements

• Fujian Province,

known for

counterfeiting of

athletic gear

RUSSIA• 2008 US trade Rep (301)

Priority Watch List

• Piracy and Counterfeiting

Major issues

• Organized crime (full

scale operations)

Challenges –

• Ineffective Law

Enforcement (MVD)

• Politicians „in the pocket

of organized crime‟

• Violence,

• Shell Corporations

• Internet Commerce

RUSSIA

• Physical Piracy

Markets in

Moscow-

Gorbushka

Market, Rubin

Trade Center, and

Tsaritsino

• Virtual Market-

AllofMP3 + many

others

INDIA

• 2009 U.S. Govt.

Priority Watch List

• Piracy, trademark

counterfeiting are

Serious Problems

• Source Code Theft /

Industrial Espionage

& Corruption

• Criminal IPR

enforcement is weak

• Long Judicial

dispositions

TIER 2

EMERGING / PROBLEM COUNTRIES

• Argentina - Copyright piracy, widespread

availability of pirated and counterfeit products

• Chile - Pharmaceutical counterfeits

• Pakistan - Pharmaceutical counterfeits, optical disc

production and retail sales of numerous counterfeit

and pirated products

• Thailand -Across the board

• Venezuela -Across the board

• Vietnam- Across the Board

OTHER WELL KNOWN

GLOBAL IPR INFRINGEMENT

MARKETS

• Tri-Border region (Paraguay, Argentina and

Brazil)

• Czech Border Markets (Czech republic)

• La Salada (Buenos Aires, Argentina)

• Quiapo (Manila Phillipines)

• Harco Glodok (Jakarta Indonesia)

• Panthrip Plaza & Mah Boon Krong Center

(Bangkok Thailand)

CHALLENGES

INTERNATIONAL IPR

INVESTIGATIONS

• Different Cultures / Customs

• Different Languages

• Different Laws

• Poor / Non Existent Record-Keeping in

many countries

• Remote Locations, “Access often needed”

• Corruption

• Greater privacy rights / Greater risks

IPR SECURITY STRATEGY

• Screen joint-venture partners

• Due Diligence for suppliers / distributors

• Be critical about what technology is to be

introduced internationally

• Background checks, especially for those in

sensitive positions

• Non-Disclosures and Non-Competes into

contracts

• Compartmentalize production

•

Offsite meeting security-April 15th 2005, CSO Online

San Francisco

IP Loss Case Study

• A review of recent IP loss incidents shows

the majority -- in the San Francisco area –

have involved thefts of material from

parked cars in all areas of the city.

• Upon risk review, the following measure is

recommended by Pinkerton………

THANK YOU