Tuesday, June 28, 2011

Leading high-tech companies convene to share brand protection strategies, best practices

LOS GATOS, USA: The Alliance for Gray Market and Counterfeit Abatement (AGMA), a non-profit organization dedicated to addressing the gray marketing, counterfeiting, software piracy and warranty and service abuse of branded goods around the globe, recently held their quarterly industry forum to discuss various topics related to brand protection issues. Hosted by Dolby Laboratories Inc. in San Francisco, the meeting featured interactive discussions and presentations focused on brand protection strategies and best practices.

Andy Sherman, Dolby's general counsel, opened the meeting by discussing the challenges intellectual property rights holders face, and the importance of organizations such as AGMA where IP rights holders can come together and share their experiences and best practices.

Following Sherman's presentation, Steve Jeffords, director of sales engineering and advanced support at Dolby, went on to describe Dolby's licensing business and the challenges faced by the company in enforcing licensing compliance. Jeffords shared the entire Dolby licensing process from implementation through the royalty model, including best practices related to contractual compliance and intelligence and enforcement tools.

A key focus for this meeting was to discuss recent legal victories in an effort to guide AGMA member companies through the often complicated litigation process. Cisco's Jeff Bonham reviewed a warranty and service abuse case which involved an estimated $33,000,000 loss for Cisco.

According to Bonham: "Historically, warranty and service abuse investigations have focused on the lack of a return, or the return of a lesser (genuine) product. However, this has shifted recently. Fraudsters are now returning altered or 'frankenstein' parts, which are legitimate-looking parts consisting of old and scrapped components that have been assembled to appear as actual 'broken' parts. The purpose is to receive genuine, refurbished parts to sell for profit on the gray market."

The defendants in the recent Cisco case involving this scheme were recently sentenced to pay restitution and serve a combined total of more than eight years in prison.

Michael Morrissey, a member of EMC's Corporate Investigative Services team, reviewed a recent "E-Fencing" case which began as an internal investigation, and ultimately resulted in the convictions of two former EMC employees and an EMC Value Added Reseller (VAR). An outcome of the legal proceedings was EMC's implementation of a ground-breaking compliance program that establishes measures to ensure that VARs do not improperly use manufacturer's updates for used equipment, and requires confirmation that their retailers are legitimate. This compliance program is expected to provide a model for all online equipment resellers in the future.

According to AGMA president, Ram Manchi: "AGMA member companies have been stepping up efforts to take legal action in the brand protection fight. There is much to be learned by sharing the details of these recent successfully litigated cases -- collectively, our efforts to protect intellectual property rights can make an impact on a much larger scale than individually."

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