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Title: Vaughn Volpi

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Best Practices for a Global Brand Protection
StrategyInternal and External Success Factors
and Risks
  • Presented by
  • Vaughn Volpi
  • Chief Strategy Officer
  • Rudy Diaz
  • Chief Operating Officer
  • PICA Corporation
  • September 20, 2010

Presentation Outline
  • Building an internal brand protection program
    that supports your business objectives.
  • Managing through the day-to-day external risk
    factors inherent in operating a successful
    worldwide program.
  • Case studies which illustrate how proper program
    design and management will yield measurable
  • Open Panel Discussion

Building Your Program
Structure and Global Alignment
  • Define Strategy
  • Establish Global Metric
  • Increase Market Share
  • Increase Revenue
  • Identifying Internal Stakeholders
  • Identifying External Partners
  • Resource Allocation

Program Integration
  • Successful brand protection programs will include
    all of the
  • following elements.
  • Centralized Program Management
  • Intelligence Gathering
  • Web Monitoring, Intelligence and Enforcement
  • Hotline Management
  • Diversion Control Programs
  • Counterfeiting Enforcement
  • Data Management
  • Domain Name Management
  • Training
  • Authentication Solutions

Four Pillars of Brand Protection
  • Intelligence and Enforcement
  • Metrics
  • Barriers to Entry
  • Training

Intelligence and Enforcement
  • Investigative Resources
  • Training
  • Case Management
  • Generating Actionable Intelligence
  • Life Cycle
  • Methodology
  • Identifying Sources
  • Enforcement Actions

  • Defining Success
  • Return on Investment
  • Formula for valuing seized product
  • Sizing the Problem
  • Market Survey
  • Availability of Illicit Product
  • Number of Incidents

Barriers to Entry
  • Legal
  • Product Engineering Design
  • Packaging
  • Security Labeling
  • Tying Authentication Tools to Lead Generation
  • Supply Chain Auditing

  • Who to Train
  • Investigators
  • Law Enforcement
  • Sales Force
  • Channel
  • In-house Counsel
  • What to train them in
  • Authentication Tools
  • Expectation of Action
  • Brand Awareness

Identifying External Risks
Where Does Risk Reside?
  • Counterfeiters
  • Business Partners
  • Investigators
  • Lawyers
  • PSS Providers
  • Media
  • Government Agencies
  • Supply Chain
  • Informants
  • Law enforcement

In Short - Everywhere
Overcoming External Risks
Corrupt and Unethical Practices
  • Bribery and kick-backs
  • Corporate policy violations
  • Conflicts of interest
  • Use or threatened use of violence
  • Extortion or blackmail
  • Same violations by third parties

Corrupt and Unethical PracticesAdvice
  • If you dont have a corporate ethics or
    corruption policy write one
  • Make sure all third party vendors review and are
    contractually bound by the same policies
  • Audit work product and expenses periodically to
    insure compliance
  • Do not bend the rules for
  • results
  • Manage vendor selection and procurement by

Governmental Backlash
  • Government-protected infringer organizations
  • Active participation and support of your
  • Political bias based on the nationality of your
  • Potential revocation or non-renewal of registered
    trademarks or licenses
  • Unfair competition and judicial corruption
  • Criminal charges for willful negligence or agent

Governmental BacklashAdvice
  • Work closely with your public affairs, legal,
    investigative and PR staff to expose corrupt
    practices and collaborate with honest government
  • Be politically neutral and sensitive
  • Utilize politically and economically-connected
    resources in-country
  • Identify and stress the areas where your
    interests are aligned with government and the
  • Use the local media to promote good corporate
    citizenry and fight corrupt practices
  • Know and control what your business partners are

Managing Sources
  • Informants
  • Law Enforcement
  • Other Govt. Officials
  • Yours and host country
  • Tipsters
  • Estranged Parties
  • Disgruntled former employees or biz partners
  • Competitors
  • Ex-significant others

Managing SourcesAdvice
  • Dont try and do this in-house. This is
    potentially treacherous work that should only be
    undertaken by experienced professionals
  • Train and establish relationships with police
    whenever practicable
  • Leverage government and embassy assets for
    information, advice and support
  • Listen to all comers, but validate the
    information, source and motive
  • Never let them close to you or the company
  • Need to know basis
  • Test their honesty
  • Be generous, but only upon success
  • Do not encourage illegal activity
  • Beware of theft of trade secrets
  • Dont burn your information sources

Wrongful Arrest and Seizure
  • Creates liability for your company
  • Destroys law enforcement relationships
  • Devastating to public opinion

Wrongful Arrest and SeizureAdvice
  • Trust but verify
  • Measure twice, cut once
  • During seizures follow the when in doubt, leave
    it out rule
  • Review all evidence and complaints before they
    are submitted to law enforcement
  • Do your homework on the target (e.g. make sure
    hes not a licensee)

Evidence Handling Destruction
  • Theft
  • Tampering
  • Biohazard materials
  • Pollution issues
  • Sale of donated items
  • Negative perception from law enforcement for
    refusing to donate

Evidence Handling DestructionAdvice
  • Use secure storage
  • Always retain some evidence until the case is
    fully adjudicated
  • Set strict guidelines for the destruction of
    products with biohazard or polluting elements
  • Ask your agents to videotape and supervise
  • Locate trustworthy charities in each of your
    critical markets where product can be safely
    donated, if possible
  • Dispose of evidence as soon as legally possible

Infringer Retribution
  • Stalking
  • Threatening calls
  • Kidnapping
  • Assault
  • Battery
  • Murder

Infringer RetributionAdvice
  • Know your enemies. Make sure your investigations
    are thorough
  • Report any violent history or dangerous
    affiliations to law enforcement
  • Stay behind the scenes
  • Let professional risk-takers take the risk
  • Report all threats to corporate security and/or
    law enforcement
  • Institute a travel safety and intelligence system
  • Instruct your vendors to proceed with their work
    quietly and professionally.

Legal System Variances
  • Many countries have very strict laws governing
    investigation work
  • Courts in many countries often side with local
    infringers against multinational companies
  • Non-local vendors and counsel may not fully
    understand the realities of the local system
  • Local vendors and counsel may take advantage of
    your lack of knowledge
  • The legal process in certain countries can be
    slow and expensive

Legal System VariancesAdvice
  • Hire experienced multi-national vendors and
    counsel with direct experience and resources in
    your key markets
  • Reach out to your colleagues in the industry for
    recommendations and advice
  • Choose criminal over civil remedies when
    operating in an unfamiliar area.
  • Choose your battles carefully
  • Allocate budget based on impact to the business
    and likelihood of success

PSS Failures
  • Theft
  • Quality, performance, sourcing, or integration
  • Exact duplication
  • Practical compromise
  • Inability to act at law enforcement speed

PSS FailuresAdvice
  • Keep very tight controls on access, sourcing and
    distribution to keep legit PSDs off the black
  • Apply and distribute the device uniformly
    throughout your supply chain, even if the
    packaging varies
  • Choose a solution that is unique to your company
    and avoid buying off the rack
  • Make sure the device contains overt features that
    are easily recognizable, but not easily defeated
  • Build in multiple layers of covert features -
    dont divulge them all at once it is cost
    effective and will extend the life of the device
  • Update at least the covert features on your
    device every 3-4 years

Negative Public Relations
  • Damages brand and/or company reputation
  • Can invite political intervention
  • Reflects poorly on the value brand protection
    brings to the business

Negative Public RelationsAdvice
  • Avoid making public statements against infringers
  • Arrange for your PR Dept. or the Police to make
    all statements
  • Arm your PR Dept. with local facts designed to
    turn public opinion against counterfeiting
  • Remember that nothing you do is worth damaging
    the brand image

and worst of all Failure to Act
  • Infringers are not brand-loyal. If you are an
    easy target you will be a victim.
  • Can lead to the erosion of your companys IP
  • Threatens your market position and reputation.
  • Consumers of IS counterfeits are your core target
  • Depending on the market size, a 1 counterfeit
    share can cost up to 100 million per year in
    lost sales.

Case Studies
Buenos Aires Actions
  • Tens of thousands in counterfeit packaging
  • Case originated from a previously executed
    enforcement action which identified an illicit
    packaging source in Argentina
  • Multinational approach allowed our agent to
    penetrate target and associates in Sao Paulo and
  • Excellent ties to LE facilitated the speed of
    action necessary to shut down multiple operations
  • The availability of counterfeit product in Brazil
    dropped precipitously immediately after this

Buenos Aires Actions
Singapore / PRC Syndicate
  • Sophisticated counterfeiting operation
    headquartered in Singapore with operations in
    Hong Kong, Mainland China, and the USA.
  • Their organizational structure and operations
    were identified and mapped through months of
    comprehensive investigation and research.
  • Product was being shipped all over the world.

Singapore / PRC Syndicate
Singapore / PRC Syndicate
Internal Warehouse
External Warehouse
Singapore / PRC Syndicate
Brazil Actions
  • Included different businesses in Londrina and
    Maringa (PR), and Sao Paulo (SP)
  • Imports refilling equipment and supplies from
    China through a legitimate business in Maringa,
    and prints counterfeit flat packaging at a local
    printer in Maringa, sending to Londrina
  • Took advantage of interstate commerce laws to
    conduct intra-company shipments to Sao Paulo,
    avoiding taxes at the State border
  • Focused on supplying local, State and Federal
    Government bids
  • Main shipping points were Londrina (PR) and Sao
    Paulo (SP)

Brazil Actions
  • Maringa, Parana State
  • Legitimate refilling company imports supplies
    from China
  • Printer provides counterfeit flat packaging
  • Londrina, Parana State
  • 3 subjects (A,B, C) were identified individually
    through Hotline selling in public tenders
  • Investigation identified Call Center in Londrina
    servicing all 3 subjects. Subjects also sold
  • Confidential source provided PCC location
  • Sao Paulo, Sao Paulo State
  • The owner of Subject A was found to also own a
    company in Sao Paulo, Subject D
  • Subject D was found to be co-located at the SP
    branch of a large refilling operation known to be
    involved in counterfeit
  • Subject C has a branch in SP, also co-located
    with Subject D
  • Subject E was identified through the sale of
    counterfeit products to the SP Revenue Service -
    the owner is nephew of the owner of the legit

Public Tenders
Subject A
Refiller (Maringa)
Illicit Printer(Maringa)
Legitimate Refiller/Reman
SP Branch
Same Owner
Brazil Actions
  • 15 search warrants were issued and executed
  • Business, residential and informal locations
    associated with all linked targets, both
    belonging to the organization or known to be
    business partners
  • The operation was orchestrated by Maringa Civil
    Police, with support from Londrina and Curitiba
    Civil Police Departments
  • Seizure included
  • Brand 1
  • 11,850 toner flat boxes
  • 239 toner cartridges
  • 180 toner finished product
  • 1,010 ink finished product
  • 2,500 ink security labels
  • Brand 2
  • 3,000 toner flat boxes
  • 2,000 toner security labels (counterfeit)
  • 5,000 toner security labels (OEM)
  • Stolen from China manufacturer in 2009,
    resurfaced in Brazil during raids
  • Similar amounts for at least 3 other brands

Brazil Actions
Toner Cartridges For Remanufacturing
Counterfeit Flat Boxes
Counterfeit Flat Boxes
Toner Drums forRemanufacture
Counterfeit Flat Boxes
Thanks! Questions?
  • Vaughn Volpi
  • 813.831.1999
  • Please visit our website
  • Rudy Diaz
  • 305.477.7702