Protecting Economic Drivers Because
All Roads Lead To The U.S.
January 14, 2011
The NAMM Show
Anaheim, California
Dean A. Pelletier, Board Member and Shareholder
McAndrews, Held & Malloy
dpelletier@mcandrews-ip.com
(312) 775-8128 (direct)
b e lie ve in music
© 2011 Dean A. Pelletier
dpelletier@mcandrews-ip.com
Overview

Intellectual Property (IP) Fundamentals

Economic Drivers

IP Protects Economic Drivers

U.S. Marketplace Activity

Chinese IP Law and Enforcement

IP Strategies

Leveraging IP

Foreign Operations and IP Strategies

Combating Foreign Unfair Competition
believe in music
© 2011 Dean A. Pelletier
dpelletier@mcandrews-ip.com
1
IP Fundamentals

Patent (“what”)
 Utility
 Design

Trade secret (“what”)

Trademark (“who”)

Copyright (“how”)
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© 2011 Dean A. Pelletier
dpelletier@mcandrews-ip.com
2
Economic Drivers
Efficient manufacturing processes
Price


Demand
Supply
Innovative products
Equilibrium

Consistent product quality
Quantity
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© 2011 Dean A. Pelletier
dpelletier@mcandrews-ip.com
3
IP Protects Economic Drivers

Efficient manufacturing processes

Innovative products

Consistent product quality
believe in music
© 2011 Dean A. Pelletier
dpelletier@mcandrews-ip.com
4
U.S. Marketplace Activity
§337 Investigations Instituted
100
Active §337 Investigations
100
90
90
80
80
88
70
70
85
73
70
60
57
60
51
50
40
30
34
29
20
27
15
31
41
40
44
40
29
25
19
30
20
10
10
0
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Fiscal Year
www.usitc.gov/press_room/337_stats.htm (Number of
Investigations Instituted by Fiscal Year (Oct. 1- Sept. 30))
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46
50
43
2001
2002
2003
2004
2005
2006
2007
2008
2009
Fiscal Year
U.S. ITC Year in Review, 2001-2009.
© 2011 Dean A. Pelletier
dpelletier@mcandrews-ip.com
5
U.S. Marketplace Activity

Chinese companies are often sued in §337 investigations
§337 Investigations Involving a Chinese Respondent or Goods of Chinese Origin
§337 Investigations Instituted
60
55%
50
42%
40
23
32%
55%
25
30
23
38%
14
20
18
28
10
17
18
11
11
0
2006
2007
2008
2009
2010
Fiscal Year
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© 2011 Dean A. Pelletier
dpelletier@mcandrews-ip.com
6
U.S. Marketplace Activity


Sources of counterfeit and pirated
goods seized by U.S. Customs and
Border Protection (CBP) (FY 2009):

China: 79%

Hong Kong: 10%
Total value of seized goods from
China (FY 2009): “only $205 million”
China: Intellectual Property Infringement, Indigenous Innovation Policies, and Frameworks for Measuring the Effects on the U.S.
Economy, Inv. No. 332-514, USITC Pub. No. 4199, November 2010 (“ITC Report”), Executive Summary, xvi and 2-10, 3-15.
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© 2011 Dean A. Pelletier
dpelletier@mcandrews-ip.com
7
IP Laws and Enforcement in China

China: form (IP law) vs. substance (IP law enforcement)

“Enforcement of IPR [i.e., IP rights] laws remains a serious problem in China.”



“Administrative IPR enforcement, consisting of raids and seizure of infringing goods,
generally results only in temporary slowdowns in production; penalties are not sufficient to
deter repeat offenders.”
Certain items on China’s radar in December 2010:

protecting trademark rights in local markets; clarifying landlords’ liabilities

handling bad faith trademark registrations and

imposing liability for facilitating online copyright infringement
Reality: inherent level of IP infringement/misappropriation
ITC Report, Executive Summary, xiii and 3-25; www.export.gov/china/policyadd/JCCT_outcomes.asp
believe in music
© 2011 Dean A. Pelletier
dpelletier@mcandrews-ip.com
8
IP Strategies

Inventory IP assets

Monitor the marketplace
(e.g., trade shows, websites, customers)

Implement policies and procedures

Overlapping IP

ROI
believe in music
© 2011 Dean A. Pelletier
dpelletier@mcandrews-ip.com
9
Leveraging IP

Use (trademarks are unique)

License

Cross-license

Sell

Enforce
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© 2011 Dean A. Pelletier
dpelletier@mcandrews-ip.com
10
Foreign Operations and IP Strategies


Catch 22

Opportunities

Risks

Inherent

Express: IP transfer
market access
Foreign partner, subsidiary or licensee

IP transfer; which IP?

Written agreements
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
IP ownership

IP licenses
1st
Place
2nd
Place
3rd
Place

U.S. nexus

Management

Reasonable efforts (trade
secrets)
© 2011 Dean A. Pelletier
dpelletier@mcandrews-ip.com
11
Combating Foreign Unfair Competition

Protect U.S. market and operations from
foreign unfair competition, including IP
infringement/misappropriation

Record registered U.S. trademarks and
copyrights with CBP; work with CBP

Criminal actions; e.g., U.S. Immigration and
Customs Enforcement’s efforts against
counterfeit and pirated goods

Contact alleged wrongdoer(s)

Civil litigation (U.S. district court, state court,
U.S. International Trade Commission,
alternative dispute resolution)
believe in music
© 2011 Dean A. Pelletier
dpelletier@mcandrews-ip.com
12
Combating Foreign Unfair Competition

Protect foreign markets

Obtain IP rights in foreign countries.

Where appropriate, pursue foreign actions (administrative, civil, criminal,
customs).
believe in music
© 2011 Dean A. Pelletier
dpelletier@mcandrews-ip.com
13
Thank you. . .
any questions?
January 14, 2011
The NAMM Show
Anaheim, California
Dean A. Pelletier, Board Member and Shareholder
McAndrews, Held & Malloy
dpelletier@mcandrews-ip.com
(312) 775-8128 (direct)
b e lie ve in music
© 2011 Dean A. Pelletier
dpelletier@mcandrews-ip.com