Presented at October 1, 2009 Counterfeit Workshop

1. COUNTERFEIT ELECTRONIC PARTS:
Awareness, Avoidance, Detection and
Mitigation
Current and Proposed Legal Tools to Combat
Counterfeit Parts
© 2009 Timothy Trainer 1

2. Timothy Trainer
Global Intellectual Property Strategy
Center, P.C.
Washington, D.C.
www.globalipsc.com
Tel. 202-955-1144
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©2009 Timothy Trainer

3. Disclaimer
This presentation does not constitute legal
advice. You are advised to consult legal counsel
for specific issues of concern.
Information in this session deals with domestic
and foreign laws and developments and is
intended only as an overview.
©2009 Timothy Trainer 3

4. Why We’re here—The Concern
•Use of semiconductors in an expanding
array of products
• mobile phones
• automobile braking systems
• medical devices
• home appliances
• satellites
• much more
©2009 Timothy Trainer
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5. Why We’re here—an Example
• March 2009 (Houston Chronicle) Article
• NASA’s Acting Administrator tells Congress
cost overruns due, in part, to fake parts
• Problem is growing as fakes enter NASA
supply chain
• NASA personnel and aerospace industry
officials have found stolen manufacturer
markings on parts
©2009 Timothy Trainer 5

6. U.S. Criminal Law: Changes Benefitting
Industry
18 USC 2318 - Trafficking in Counterfeit Labels,
Documentation or Packaging (aimed at copyrighted
materials)
• a counterfeit label or illicit label affixed to, enclosing, or
accompanying, or designed to be affixed to, enclose,
or accompany a copy of a computer program
• “illicit label” means a genuine certificate, licensing
document, registration card, or similar labeling
component
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©2009 Timothy Trainer

7. U.S. Criminal Law: Changes Benefitting
Industry
18 USC 2320 - Trafficking in Counterfeit Goods
• Fines and jail terms possible for trafficking in:
• counterfeit goods, packaging and labeling
materials
• Importing, exporting, transshipping such goods
• Increased level of penalty for knowingly or
recklessly causes or attempts to cause serious
bodily injury (do counterfeits of your products fit
under this provision?)
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©2009 Timothy Trainer

8. Additional U.S. Criminal Laws & other
Statutes
18 USC 1341 - Frauds and Swindles (using
postal service)
18 USC 1343 - Fraud by wire, radio or television
19 USC 1526 – Customs authority to seize
counterfeit goods
19 CFR Part 133 – Customs Trademark &
Copyright regulatory provisions for detentions &
seizures
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©2009 Timothy Trainer

9. Proposed Legislation
S. 1466 (Sen. Stabenow)
• Increase disclosure of info to IPR owners upon detention of
goods
• Improve Customs recordation of ® and © by coordinating with
USPTO and US Cop. Office
• Self-certification of low risk importers (who wouldn’t identify
themselves as low risk???)
• Increase IPR enforcement staffing for Customs
• Customs seizure authority of circumvention devices (17 USC
1201) under 19 USC 1595a(c)(2)(g)**
• Customs Off. Of Chief Counsel to protect USG interests in
forfeiture proceedings
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©2009 Timothy Trainer

10. Proposed Legislation
S. 1631 (Sen. Baucus)
• Commercial Targeting (IPR as one area)
• Establish within ICE a Nat’l IPR Coordination Center
(NOTE: Already exists)
• Create a confidential list of repeat IPR violators
• Each port of entry to have 1 full-time person primarily
responsible for IPR
• Availability of samples
• Seizure of circumvention devices**
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©2009 Timothy Trainer

11. Civilian Agency Acquisition Council and
the Defense Acquisition Regulations
Council
• Early stages of developing new rules to ensure that
agencies are not buying counterfeit products
• Regulators considering how to amend the Federal
Acquisition Regulation (FAR) to require contractors
selling IT products to prove that products are authentic
• Some have proposed trade associations police their
members or offer some certification that can be
audited (certifications could give the govt a uniform
and reasonable assurance that the IT products and
their parts aren’t counterfeits)
©2009 Timothy Trainer 11

12. Civilian Agency Acquisition Council and
the Defense Acquisition Regulations
Council (cont’d)
• Officials are also interested in areas such as
contractor liability, consequential damages and
the competition aspects of purchasing IT products
from the original manufacturer or authorized
dealers.
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©2009 Timothy Trainer

13. IPR Enforcement Obligations on Trading
Partners: Additional Tools
• Free Trade Agreements (FTAs)
• All have Customs enforcement requirements
(importation, exportation and goods in-
transit) & Criminal penalty requirements
• European Council Customs Regulations
• China Customs Law/Regs: authority to seize
exports of counterfeit goods (Trademark
registered in China and deposited with
Customs)
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©2009 Timothy Trainer

14. IPR Enforcement Obligations on Trading
Partners: Additional Tools
• Proposed Anti-Counterfeiting Trade
Agreement
• Currently being negotiated
• Intended to address enforcement only
• Criminal (copyrights and trademarks)
• Customs
• Digital piracy (internet issues)
• Target: end of 2010
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©2009 Timothy Trainer

15. Additional Initiatives:
Semiconductor chip industry
• Governments/Authorities Meeting on
Semiconductors (GAMS)
• first-ever meeting with customs authorities
(9/09—South Korea) (PRC, EU, US, Japan,
Taiwan, ROK)
• Increasing threat/broad array of goods
• Imports/exports, customs best practices
• Govt-industry info sharing
• Are you involved (represented by GAMS or
thru others)?
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©2009 Timothy Trainer

16. Additional Enforcement “Tools”
• Rights abroad: Are your trademarks registered
abroad? Yes, then take advantage of foreign
enforcement efforts
• Copyrights: protect them abroad (WTO/Berne)
eliminates formalities, but check local laws
• Use available “advocates” abroad:
• U.S. Customs attaches
• U.S. Legal attaches (FBI agents abroad)
• U.S. Embassy staff (econ & commercial
officers)
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©2009 Timothy Trainer

17. Additional Enforcement “Tools”
• Understand, in detail, foreign enforcement
systems
• Who (agency) does what?
• How much enforcement authority does each
have?
• What forms of IPR are covered by criminal
laws and customs enforcement provisions?
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©2009 Timothy Trainer

18. Additional Enforcement “Tools”
• Based on the above:
• Is there a corporate inter-disciplinary team?
• Does your company/trade assn follow IPR
enforcement developments?
• Who is dedicated to providing updates on
anti-counterfeiting issues/policies
• Do you belong to government committees
focused on anti-counterfeiting?
• Is there a point person to engage INTERPOL
or the World Customs Organization? 18
©2009 Timothy Trainer

19. IPR Training/Education
• What is the corporate IPR training program?
• Does it raise IPR awareness within the
company?
• Does it promote an anti-counterfeiting/anti-
piracy culture among all employees?
• Is the IPR education program a “one size fits
all” approach?
• Who is involved in the program
development?
©2009 Timothy Trainer 19

20. Training/Education Abroad
• Activity Abroad:
• Do you have production abroad? If yes:
• IPR training: link your economic
contribution to the need for IPR protection
• Make your case
• Audience
• Policy makers, law enforcement,
administrative officials
©2009 Timothy Trainer 20

21. Training/Education Abroad
• Message:
• How counterfeits of your products pose a public
safety risk/government risk in vital programs
• The economic contribution of your presence
• How IPR protection/enforcement benefits locals
(NOTE: This requires adding a new component by
demonstrating IPR benefits)
• Consider: Good Corporate citizen component by
extending IPR awareness programs to educational
institutions/non-traditional groups
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©2009 Timothy Trainer

22. Training/Education
• Do you have diverse messaging and
formats?
• Does your training/education content
“connect the dots”, i.e., why IP is in and of
itself valuable and, therefore, worthy of
resources for enforcement?
• Is there a dedicated team/resource for IPR
training/education/awareness?
©2009 Timothy Trainer
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23. Thank You
Questions/Comments
Contact Info
ttrainer@globalipsc.com
Tel 202-955-1144
©2009 Timothy Trainer 23