Japan Patent Atty Assoc ASEAN IP Seminar Tokyo

• 1. IP Enforcement Strategies in Thailand
  Edward J Kelly
  

2. Trafficking in Fakes
How the Starfish Model Works Against You
and How It Can Work For You
By: Edward J Kelly
Intellectual PropertyLawyer
Chair, SISHA USA (www.sisha.org)
JPAA ASEAN SEMINAR
September 14-16 2011
3. The Starfish and the Spider

• Change in Organizational Modeling 4. Examples: Apache open source software, Wikipedia, Alcoholics Anonymous, eBay, Skype, Facebook, LinkedIn 5. Sunni Awakening strategy employed by General David Petraeus in Iraq

Model:Starfish Counterfeiting Operation: Whac - a - Mole
6. Traffic in Fake Goods
7. SE Asia as Trafficking Center Why?
- Example of SE Asiaas Trans-shipment hub: vulnerabilities and determining factors
Loose visa rules and relaxed rule of law
Geography: Control of land route from China to Singapore
Indochina central location between India and China
Miles and miles (4863 KM) of open borders between Thailand, Myanmar, Laos, Cambodia and Malaysia- just lines on the map
Extensive river networks (Mekong Delta) rife with smuggling
Smuggling routes developed over centuries (narcotics, human smuggling, arms, contraband)
Close family ties between 2nd and 3rd generation local Chinese businessmen and southern Chinese merchants (Pearl River Delta region)
Systemic Corruption
Availability of Slave Labor
Result: Hub for Moving People and Moving Fakes
8. Traditional Enforcement Strategies
No Unfair Competition Law
Trademark Almost exclusively criminal remedies sought
Fastest, Most Cost-Effective Tool
Disadvantages: Cannot Settle. Corruption Risk. Scapegoating
Patent Almost exclusively civil remedies sought
Exception design patent (motorcycle example)
Anton Pillar Orders Capture the Evidence
Long slow expensive process with many disadvantages
Difficult to prove damages. No discovery. Injunction is rare.
Copyright Almost exclusively criminal remedies sought.
Software Owners (CAD/CAM) very active. But also work of applied art (general purpose engine example)
Primary Advantage: Settlement Possible with Great Leverage
Arbitration/Mediation in the Thai Culture the Middle Way
Disadvantage : Infringer Plays Games
9. Thailands Need to Reform
Need to Implement Paris Convention and Enact Unfair Competition Law
Trade Dress Needed
Make Counterfeiting a Predicate Offense to the Anti-Money Laundering Law
Make Counterfeiting a Predicate Offense to the Cybercrime Law
Landlord Liability Law Needed
Eliminate Scapegoating
Injunctive Relief Simplified
Damages: Proof, Awards and Collection
Deterrent Penalties Imposed on Offenders
10. Fear & Loathing: New Strategy
Traditional Strategy: Maintenance. Enforcement. Government Outreach and Training. Public Education.
Scaring the Consumer with Messaging about Criminality Does that Work? Replica Watch/MPAA Example
Need to Focus More Resources on Public Education Educate Consumers on the Social Harm Associated with Fakes
-Public Health Hazards/Risks (Fear)
-Showing Counterfeiters to be Pariahs (Loathing)
- Appeals to Conscience, Personal Responsibility and Social Justice (our Better Angels)
-Understanding what Motivates Consumers Is it Cool? Cost/Benefit? Social Utility?
11. What Does This Mean for You?

• Some thoughts to consider in taking on a starfish organization 12. Decentralize yourself- Flatten or be Flattened. 13. The best opponent for a starfish organization is often another starfish 14. Change has been so rapid that industries and governments have found themselves employing outdated strategies. 15. This is a lean approach . . .In counterfeiting, the large decentralized network of buyers/sellers wreaks havoc on the market. Fight fire with water (not fire) 16. Small is better. Distribute authority and know how across the neural network. Information and intelligence sharing is key. 17. Need to be cross-disciplinary and to network in cross-disciplinary way: 18. Holistic strategies need to be employed to Starve the Beast of the ability to feed on profit 19. Starfish organizations create communities of like minded persons the value is not necessarily in any one persons skill set or know how. The value is in the peer network!

Understanding the Root of the Problem

• Luxury/Consumer Good Counterfeiting is a Demand Side Problem 20. Customer wants the Bargain the Appearance of Wealth/Style 21. Fundamentally an issue of marketing 22. Focus on Consumer Education Shunning 23. Industrial Counterfeiting is a Supply Side Problem 24. Goal is to fool the customer 25. Fundamentally an issue of product security 26. Focus on supply chain integrity 27. Victimless Crime?

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Case Study
Case Study: Auto Parts
DaimlerChrysler Mercedes Benz, GM, BMW, Honda and Department of Special Investigation (DSI)
50,000 plus goods seized, machinery attached, bank accounts frozen, foreign owner arrested, tax avoidance charges filed (example of piling on to create deterrence)
DSI : largest operation ever discovered in SE Asia; investigating money laundering, funding for terrorism activities, illegal labor practices, immigration charges
29. 14
Mercedes Benz Example
30. 31. 32. 33. Criminal Enforcement
Police authorities
Royal Thai Police
Economic and Technological Crime Suppression Division, Central Investigation Bureau
Metropolitan Police Bureau
Provincial Police Bureau 1-9
Department of Special Investigation
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34. 19
Law Enforcement
Department of Special Investigation (DSI)
Economic Crime Police (ECOTECH)
Royal Thai Police Crime Suppression (CSB)
35. 20
Criminal Raid Action with Assistance from Department of Special Investigation : DSI
Established on October 3, 2002
under the jurisdiction of the Ministry of Justice
(DSI = US FBI)
36. 21
Design Patent MOTORCYCLE issued onDecember 9, 2005
37. 22
Substantial Similarity
We can not close our eyes if two designs:
(a) have similar overall forms
(b) have a similar set of components arranged
in similar locations and
(c) have similar shapes and forms of components
AND:
The Copy Design is of inferior quality;

• Unacceptable risk to customers and damage toIPR Owner

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The Globalization of the Counterfeit Culture: Motorcycle Example
(7) elongated headlight and mounting structure
(6) upwardly inclined rear grab bar
(8) slant-eye shaped blinkers with inclined linear slits disposed therebetween in the upper central portion of the leg shield
(4) rear fender having a straight portion and a bent lower tip portion
(1) sharp-edged front fender that resembles a bird beak
(10) foot step including a plurality of vertically staggered foot steps
(12) linearly elongated slits for inducting air at the upper central portion of the leg shield behind the front wheel
(12) linearly elongated slits for inducting air at the cover below the seat
38. 24
DSI Raid at Hatyai Factory, Songkla
39. 25
40. 26
41. 27
42. 28
DSI - Bureau of IP Crime
Commander YongyootDirector DSI
43. 29
Royal Thai Customs Watch List
Ex-officio action
Fines for violations imposed by Customs Authority are higher (4X value of seized goods) than the fines imposed by the Courts for TM Act violations (Maximum 400,000 Baht)
Cost-effective (no need for private investigation)
Shipping documents can generate leads in source or destination countries (better intel)
Seizures can lead to civil actions against importers, generating compensation to fund additional anti-counterfeiting measures
44. 45. 46. 47. 33
Destruction Ceremony
48. 49. Awareness: Trafficked Labor is the Backbone of a Counterfeiting Operation
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50. Economics and Social Justice
51. Modern Day Slave Trade
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52. QUESTIONS/FOLLOW UP

• Contact Ed Kelly 24/7/365 53. www.sisha.org 54. http://th.linkedin.com/in/thaiipguy 55. www.facebook.com/thaifixer?ref=profiler 56. DD +662 646 1888 (x-1005); Mobile: +1 831 915 8835(US);

+6689 526 5305 (Thai)

• ekelly@lgpatlaw.com 57. ekelly_in_thai@yahoo.com 58. director@sisha.org

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