Asia Report - Spring 2012
Think Outside the Packaging
New Frontiers in IP Protection
FTI Consulting
April 19, 2012
Rod Sutton
Chairman, Asia Pacific Region
Robert Youill
Managing Director
In this issue, Robert Youill takes us into the high-stakes operations of counterfeit manufacturers and traders, and the challenges many companies have suffered by trying to protect their most valuable intellectual property (IP) resources and capital.
The global trade of pirated goods is estimated to reach up to US $1,770 billion by 2015.
Over the past two decades of economic globalisation, counterfeit manufacturers and traders have been actively operating in the shadows. The small, independent counterfeiting operations of the past have been replaced by highly-organised international syndicates that can reach distant markets around the world. In 2008, the growing global trade in pirated goods was estimated to exceed US$650 billion per year, with estimates that this trade will grow from US$1,220-US$1,770 billion by 2015.
Although the counterfeiters have been moving ahead, many IP rights owners continue to fight counterfeit and infringement problems through classic strategies, focusing on standalone operations instead of evolving with the times. Many companies still allocate budgets for protecting IP rights, and measure results through obsolete performance indicators that emphasise seizure quantities, the value of goods denied entry into a market, the total number of enforcement actions, prosecution head-count, and others. Regardless, new counterfeiting operations crop up as quickly as the old ones are raided or prosecuted.
Small armies of commercial investigators and under-experienced IP protection specialists seem to do little to end the spot-and-seize anti-counterfeiting cycle. Targets are drawn and milestones (usually based on seizure quantity) are established. Criteria are then given to service providers with reports coming in from the field, often supported by informants. Actions are taken, reports are written and invoices are issued. At the end of each year, reports are filed on the good effort that everyone has put into cutting down the waves of fake goods. With all of this going on, it’s a shame that it barely scratches the surface of the real problem.