1. Trademark Infringement Issues in Central & Eastern Europe
Presented by Jim Kennedy
Procter & Gamble
Global Brand Protection Manager
6 April 2004

2. A BRIEF OVERVIEW OF THE PROCTER & GAMBLE COMPANY*

3. P&G Worldwide… At A Glance
300 brands marketed in 160 countries
Manufacturing in 80 countries
105,000 employees

4. Brands & Trademarks

5. Brands & Trademarks Branded Goods are a P&G “Trademark”
Consumer Loyalty is key to our success
Trust is fundamental to our Brands

6. Brands & Trademarks Without our Trademarks we would have no company.
We work tirelessly to earn and keep the trust of consumers.
Trademarks protect companies investments & encourage reinvestment in the economy.

7. Types of Counterfeits that P&G Encounters
Exact Copy of Package
Look-a-Likes
Refills of Shampoo Bottles

8. Types of Counterfeits that P&G Encounters
Counterfeits—We’re Different!!
Consumer Knowledge Often Varies:
$10/$5,000 Rolex or $15/$1,200 Gucci Handbag = Consumers Know They are Purchasing a Fake
$5/$450 MS Office XP Professional = Consumer is Complicit
$2/$2.25 Bottle of Fake Shampoo = Consumer Doesn’t Know

9. Counterfeits (Non-FMCG)
Trademark Infringement
Outward Appearance is Very Close to Genuine Product
Components Usually Inferior to Genuine Product

10. Counterfeits (Non-FMCG)
Trademark Infringement
Usually Small Fraction of the Price of Genuine Product
Sometimes Viewed as a Harmless Offense
Government NEVER Collects Taxes on the Fake

11. Counterfeits vs. Pirated OM
P&G Counterfeit
Pirate
Consumer isn’t aware she/he is purchasing fake
Package is similar but product is inferior
Genuine product is usually available
Consumer often knows she/he is purchasing fake
Package is similar and product is usually identical
Often impossible to find genuine product

12. Counterfeits (FMCG) Trademark Infringement
Consumers Usually Don’t Intend to buy a Fake FMCG Product
Sometimes Viewed as a Harmless Offense
Government NEVER collects Taxes on the Fake
Price is Usually Equal to or Slightly Less than Original

13. Cost of Counterfeits Hurt Society From Many Angles:
Put Consumers at Risk
Lost Investment-Both Foreign & Local
Promote and Perpetuate Corruption
Cheat Society From Its Rightful Benefits
Source of Funding for Organized Crime

14. Common Issues
Lack of coordination among state agencies/institutions dealing with anti-counterfeiting (police, customs, prosecutors, judges, consumer protection agencies, state agencies, and industry, etc.)

15. After EU Accession? An increase of counterfeits from the East
Free flow of counterfeits among all countries
Increase in counterfeits from China

16. Identification of Fakes
Often difficult to determine
Company or distributor personnel are often the best resource.
Companies can also perform chemical analysis if necessary to help officials.

17. Enforcement – What Does Not Work
Pre-Market Controls (PMC certification) do not work with FMCG products
Counterfeits of major brands change constantly
Marks (like holograms, special printing) are easily copied.
PMC add to the cost of goods but do not protect consumers.

18. Enforcement – What Does Work
In-Market Control and Surveillance
Working with manufacturers to pre-target offending wholesalers and retailers
Raid and harass the offenders.
Let the criminals know that selling counterfeits will not be tolerated in your country.

19. Cooperation is the Key to Success!!!
All enforcement bodies need to communicate
State Standards, Police, Tax Police, Customs, and Prosecutors must cooperate.
Focus on going after the “little guy”
No prison, just seize his goods
Let him know that you will not allow him to put your citizens in danger.

20. Time is Important!
You should act now before the counterfeit problem becomes too large.
Look at the Vietnamese community in West Bohemia.
They are entrenched and it will be very difficult to clean it up.
Yi Wu in China

21. Thank You