1. mofo.com Brand Protection in China Strategies to Counter Ambush Marketing, Counterfeiting and Parallel Imports March 3, 2015 Presented By Craig I. Celniker

2. PRIVILEGED & CONFIDENTIAL; ATTORNEY WORK PRODUCT 2 Ambush Marketing Famous Names Laws Chinese Civil Code Trademark Law Chinese Anti-Unfair-Competition-Act Cases Yi Jian Lian Qiaodan Sport Famous Titles Laws Chinese Anti-Unfair-Competition-Act Cases Beijing Yoshow Film & TV Co Ltd Wuhan Huaqi Movies & TV Production Co Ltd Cultural and Sports Events Laws Regulations on the Protection of Olympic Symbols Administrative Regulations on Special Marks

3. PRIVILEGED & CONFIDENTIAL; ATTORNEY WORK PRODUCT 3 Grey Market Goods In general, goods sourced from trademark owner overseas may be imported into China. But, Victoria’s Secret Case False advertising Lux Case Registration is king, Proving facts in Chinese Court is hard D’Ange Case No registration  AUCL only Michelin Cases Find a safety angle Alteration lack of certification

4. PRIVILEGED & CONFIDENTIAL; ATTORNEY WORK PRODUCT 4 Counterfeit Goods Anti-Counterfeiting laws aplenty Trademark Law, Article 52 Copyright Law (Packaging) Patent Law (Design and Utility Patents) Anti-Unfair Competition Law Landlord liability Product Quality Law (Article 32) Criminal Law (Articles 213-215) Multiple Supreme Court Interpretations Multiple Regulations Enforcement

5. PRIVILEGED & CONFIDENTIAL; ATTORNEY WORK PRODUCT 5 Administrative Actions Overview Mainly enforced by State Administration for Industry and Commerce (“AIC”) Readily available and quick Infringed party files complaint directly with local AIC Remedies AIC can enter premises and seize goods, order infringing goods to be stopped, levy fines, destroy goods, etc. No permanent relief, no damages, and fines are low Advantages Inexpensive and fast, local, no attorney needed Disadvantages Local protectionism, non-transparent Penalties non-deterrent and difficult to transfer to criminal prosecution Cooperation with AIC

6. PRIVILEGED & CONFIDENTIAL; ATTORNEY WORK PRODUCT 6 Customs Actions Overview Registered trademark or an unregistered well-known trademark entering or leaving China. Sua sponte detention by Customs after recordation Detention by application Procedures File application with evidentiary documents, proof of suspected infringing goods and post a bond Customs detains goods and notifies patent holder and consignee/consignor Patent holder applies to court for order to cease infringement or preserve property Court makes a determination and Customs helps execute order Penalties Administrative: up to 30% of the value of the infringing goods or up to RMB50,000 (US $8,000) Criminal: customs must transfer all cases that meet criminal prosecution thresholds to the Chinese police

7. PRIVILEGED & CONFIDENTIAL; ATTORNEY WORK PRODUCT 7 Civil Litigation Trademark Infringement /AUCL Collect as much evidence as possible before seeking enforcement, observing all evidence rules (e.g., notarization and translation) Select venues wisely; depending on current political climates, certain venues are less receptive to foreign entities Procedures Most civil actions decided within 9 – 18 months Delays of up to 3 years possible in “sensitive” matters Remedies Preliminary Injunction and permanent injunction: same as copyright litigation Damages: plaintiff may elect calculation method Defendants profits, Plaintiff’s lost profits statutory damages of ~ US $80,000 Sellers of infringing items not liable for damages where they can prove they obtained goods lawfully and they identify the supplier

8. PRIVILEGED & CONFIDENTIAL; ATTORNEY WORK PRODUCT 8 Trademark Cases on the Rise

9. PRIVILEGED & CONFIDENTIAL; ATTORNEY WORK PRODUCT 9 Essential Elements of Brand Protection End-to-end coordination Proactive approach integrated with Client legal teams – inside and outside counsel – internationally Cost efficiency Integrated IP strategy Make sure rights are registered Optimize existing internal protocols An ounce of prevention Joined up intelligence gathering Real-time collation of intelligence and outcomes Intelligent reporting Local, regional and globally coordinated enforcement Attack chokepoints, not brushfires Employ “best of breed” specialists

10. PRIVILEGED & CONFIDENTIAL; ATTORNEY WORK PRODUCT 10 Review and Optimize IP Review existing IP strategy and portfolio Align registrations with effective enforcement tools (e.g., utility model patents) localize the original English (or other foreign language) trademark Optimize efficacy of local enforcement relationships (e.g., customs registration, training) Analyze and leverage outcomes of past enforcement efforts Work with Client to understand protocols for interactions with— Local authorities Employees Supply chain partners Distributors Customers

11. PRIVILEGED & CONFIDENTIAL; ATTORNEY WORK PRODUCT 11 Gather, Analyze, and Deploy Intelligence in Continuous Feedback Loop Continuous real-time and locally informed monitoring Dark net monitoring Discreet field inquiries Internal controls, investigations Data mining Media Surveys of local markets, fairs and trade shows Intelligent feedback and collation of information to continually enhance intelligence resolution Effective utilization of specialist providers

12. PRIVILEGED & CONFIDENTIAL; ATTORNEY WORK PRODUCT 12 Identify and Take Action Against “Core Actors” Collate and deploy intelligence to identify “core actors” and choke points Packagers Logistics Syndicates Websites (Use specialist providers and feedback data)

13. PRIVILEGED & CONFIDENTIAL; ATTORNEY WORK PRODUCT 13 Metrics for Success Interruption of Key Players Injunctions Seizure Damages Awards Awards in region will be modest, but may also give rise to actions against key players in other regions Identify potential defendants for suit in high damages jurisdictions Ultimately make counterfeiting and unlawful distribution of products sufficiently comparatively less profitable to encourage migration of counterfeiters Result: Increased sales of authentic/authorized products and increased ability to maintain jurisdictional price differentials

14. PRIVILEGED & CONFIDENTIAL; ATTORNEY WORK PRODUCT 14 Thank You

15. PRIVILEGED & CONFIDENTIAL; ATTORNEY WORK PRODUCT 15 Criminal Enforcement [OUT FOR NOW] Overview Cases can be brought by prosecutors or injured parties Available for patent cases (passing off only), copyright cases and trademark cases Remedies Fines and/or imprisonment Possibility of civil damages in addition to criminal punishment Advantages Deterrent damages possible Potentially cheaper than civil litigation Criminal measures for willful trademark counterfeiting and copyright piracy on a commercial scale are WTO obligations Disadvantages Legal thresholds to trigger criminal enforcement are high Not all IPR infringements (e.g., patent infringement) are criminalized Difficult to have administrative cases referred to criminal prosecution