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6/16/2016
1
Luxottica’s Approach to
Fighting ORC &
Product Counterfeiting
June 16, 2016
OVER 50 YEARS OF EXCELLENCE
WITH AN EXTRAORDINARY 2015!
41% WHOLESALE
59% RETAIL
People Customers
>80Mln
Stores
>7.000
8.837 MLN€NET SALES
>40EYEWEAR AND RETAIL
BRANDS
12MANUFACTURING
PLANTS
4LOGISTICS
HUBS
>93mnPRESCRIPTION
FRAMES
AND SUNGLASSES
~150,000DOORS
>150COUNTRIES
>7,200RETAIL STORES
~79,000LUXOTTICANS
>9mnONESIGHT
PATIENTS
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A VERTICALLY INTEGRATED BUSINESS MODEL
Manufactured
Frames
>80Mln
Customers
>80Mln
Countries
130
Design Engineering
VALUE CREATION
ProductDevelopment
Manufacturing
Logistics
Wholesale
DistributionRetail
Network
CUSTOMERS
THE BEST BRAND PORTFOLIO IN THE INDUSTRY
43% WHOLESALE
57% RETAIL
Brands
>45
Manufactured
Frames
>80Mln
Group
1
People
>77.000 >8Mln
Customers
>80Mln
Stores
>7.000
Countries
130
ENTERSTHE GROUP
Proprietary
Brands
Licensed
Brands
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RETAIL NETWORKGlobal leader in optical and sun retail
Over 7,000 stores worldwide
Leading premium optical
retailer in:
- North America
- Central & Latin America
- Europe
- South Africa
- Greater China
- Asia
- Pacific
A strong and diversified retail brand
portfolio
SUN & LUXURYOPTICAL
OUR MAIN CONCERN
WHEN WE TALK ABOUT FAKE PRODUCTS WE MAINLY
REFER TO OUR PROPRIETARY BRANDS
OUR MAIN CONCERN IN THE FIGHT AGAINST
COUNTERFEITING IS TO PROTECT OUR BRAND IDENTITY
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WHY ILLEGAL & UNAUTHORIZED ACTIVITIES MATTER
BRANDSTRATEGY
IT IS HARMFUL TO THE CONSUMER EXPERIENCE
& IMPACTS ON
BRANDVALUE
CONSUMERHEALTH
EYEWEARINDUSTRY
HOLISTIC APPROACH TO BRAND PROTECTION
43% WHOLESALE
57% RETAIL
>45
Manufactured
Frames
>80Mln
Group
1
People
>77.000
OneSight
Patients
>8Mln
>7.000
Countries
130
Luxottica is continuously reinforcing the wall that has been built to protect its IP rights from third party
infringements and adverse affects of ORC.
Product
counterfeiting
Other infringements
Grey Market
Bricks of the wall
Customs surveillance to prevent
importation of fakes and/or parallel
market goods (whenever possible)
Intelligence and investigation system to
find the roots of counterfeiting, grey-
market and organized retail crime.
W W W
Monitoring of online sales to clean the
most critical channel for both fakes, grey-
market and stolen goods
Audits on our suppliers and commercial
partners to verify compliance with our
agreements and IP rights protection
Organized Retail Crime
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INTEGRATED MARKETPLACE PROTECTION
43% WHOLESALE
57% RETAIL
Brands
>45
Manufactured
Frames
>80Mln
Group
1
People
>77.000
OneSight
Patients
>8Mln
Customers
>80Mln
Stores
>7.000
Countries
130
Authorized Retailers
Counterfeits
Grey-Market Products
Organized Retail Crime
(ORC)
Other Theft Activities (burglary)
Our focus is to protect brand equity
TEAM STRUCTURE
43% WHOLESALE
Brands
>45
Manufactured
Frames
>80Mln
Group
1
People
>77.000
OneSight
Patients
>8Mln
Customers
>80Mln
Stores
>7.000
Countries
130
BRAND
ENFORCEMENT
Customs Training
IP Monitoring /
Enforcement
Grey-Market
Investigations
Channel Program
Compliance
Focus PointsFocus Points
ASSET
PROTECTION
Awareness Training
IP Monitoring /
Reporting
Internal / External
Investigations
Compliance Audits
ORC Investigation
Coordination
LEGAL
IP Training
IP Enforcement
Litigation
Trademark
Management
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HOW DO WE TACKLE FAKES
Our goal is to clean markets as much as possible, prioritizing
countries of intervention based on a mix of the following:
Importance of the Country
for the business
Effectiveness of law enforcement
against counterfeiting crime
Level of presence of fakes
within the country
Our strategy is to protect our trademarks in order to prevent fraud
experiences which could discourage potential customers.
PAYMENT
SYSTEMS
DOMAIN NAME COPYRIGHT LOGO
COPYRIGHT
IMAGESFAKE
PRODUCTS
AdWords
ONLINE OFFLINE
HOW DO WE TACKLE FAKES OFFLINE
CUSTOMS SURVEILLANCE / TRAINING
We consider Customs seizures as the most cost/effective way to seize fakes. In Countries where Customs are active we try to take max advantage out of it, also through trainings.
MARKET SURVEYS
Market surveys are key to spot fake product sellers, through our business people around the globe
INVESTIGATIONS
We focus investigations where almost all fakes bearing our trademarks are manufactured.
RAID ACTIONS
We focus raid actions particularly on manufacturing plants or big warehouses and we always try to carry them out jointly with other brand-owners: we really experienced the benefits of cooperation with other brands.
Customs surveillance
Destruction
Customs training
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HOW WE TACKLE ORGANIZED RETAIL CRIME
Investigation
� Field Training and Development
� Recognize, React and Respond “3 R’s Training”
� Positional Associate and Manager Training
� Security Systems and Enhanced Locking
Hardware� Information Sharing
AwarenessPrevention Compliance Detection
� Disseminate BOLO’s (internal / external) ,
� Bulletins / Intelligence Reports
� Partnerships:� Mall Security� Law Enforcement� Prosecutors
� Compliance Audits� Regional ORC
Training � Physical Security
Standards� Field review of
Incident Reports� Field review of Video
Evidence
� Coordinated Investigation Approach
� Documentation / validation of losses
� Intelligence & Case Building
� Online Enforcement
13
� Incident Report Analysis
� POS Exception Reports
� Fencing Operations (online / offline)
ANTI-COUNTERFEITING CIVIL LITIGATION
Liability Theory: Direct and Contributory Trademark Infringement
� Direct = those who sell the counterfeit products, e.g., vendors
� Contributory = those who contribute to or authorize the sale of counterfeit goods
� Most commonly used against landlords/owners of premises
� Liability attaches if the landlord/owner knew or had reason to know that its premises were being used for the sale of counterfeit goods
Damages for Trademark Infringement
� Lanham Act allows the trademark owner to pursue actual damages or statutory damages
� Actual damages: defendant’s profits, attorney’s fees, etc.
� Statutory damages: up to $200K per mark, per type of good sold
› If willful: up to $2MM per mark, per type of good sold
Civil Litigation Targets
� Flea markets, swap shops, storefronts, kiosks, property owners/landlords, online e-marketplaces, etc.
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CONTACTS
JOHN STEWART
To know more about counterfeiting visit www.luxottica.com/…
MILLIE KRESEVICH
The Luxottica Experience In Brand Protection
THANK YOU
