1. Monitoring IP Infringement on the Internet
Pam Passaretti – NewMomentum
Matt Barkley – Hewlett Packard
Imaging Supplies Coalition
2012 Anti-counterfeiting Conference
August 20, 2012
Can you tell which one is counterfeit?

2. Three Primary Issues Counterfeiting Gray Market
“Counterfeiting” is the manufacturing and/or selling of an exact imitation of something valuable with the intention to deceive or defraud.
On a global scale, counterfeiting accounts for between 5 -7 % of world trade, worth an estimated $700 billion a year
Gray Market
“Gray Market” is the sale of authentic products through unauthorized channels, or through legitimate channels but diverted outside of a contracted territory.
The estimated value of gray market for IT products alone averages $58 billion annually
Policy Violations
“Policy Violations“ encompass channel partner advertising violations, as well as marketplace listing violations.
MAP Policy Violations occur when online resellers list goods for sale at prices below a manufacturer’s requirement for Minimum Advertised Price (MAP).
Marketplace listing violations occur when marketplaces allow sellers to violate published listing policies.

3. Impact of the Internet Global Reach
"The Internet has just completely changed the face of the problem, made it more complicated and more pervasive“
John Morton, U.S. Immigration and Customs Enforcement
Global Reach
Instant access to consumers/other buyers all over the world
Easier to find customers (spam, cybersquatting)
Market Presence
No longer limited to ‘brick and mortar’ store
Easier to sell goods without expensive marketing
Low Operating Costs
Quick and inexpensive online presence
Payments can be made entirely on line
Anonymous
Able to conduct illicit business in a largely untraceable manner
Many obstacles to enforcement

4. How Brand Abuses Manifest Themselves Online
Auctions / Marketplaces
Online Retail Stores
Rogue Sites or Networks

5. Case Study #1: Counterfeiting Focus
Online Activity by Brand for Specific Toner Cartridges
Can you tell which one is counterfeit?

6. E260A21A Black Toner Cartridge
Case Study: Toner Cartridges Online Activity
TN450 Black Toner Cartridge
104 Black Toner Cartridge
S Black Toner Cartridge
85A Black Toner Cartridge
E260A21A Black Toner Cartridge
Black Toner Cartridge
MLT-D101S Black Toner Cartridge
ZT170F Toner Cartridge
Magenta Toner Cartridge
Selected representative toner cartridge from each manufacturer
Monitored global activity across 70 data sources
Processed 500 listings per manufacturer to measure size and distribution of online offerings across brands
Identified distribution of “suspect” activity based on specified risk factors
page| 6

7. Web Sites Monitored for Case Study

8. OEM vs. Compatible by Product
Processed 500 listings per product
OKI cartridge had highest percentage OEM at 99%
Brother and Canon cartridges had highest percentage compatible at 66%

9. Discount Level by Product for OEM Products
Brother TN450
Canon 104
Epson S050190
HP 85A
Lexmark E260A21A
Okidata
Samsung MLT-D101S
Toshba ZT170F
Xerox
# of listings
171
263
344
346
495
423
457
431
Reference price
$68.49
$78.99
$75.99
$68.99
$139.99
$96.99
$82.49
$184.99

10. Discount Level by Product for Compatible Products
Brother TN450
Canon 104
Epson S050190
HP 85A
Lexmark E260A21A
Okidata
Samsung MLT-D101S
Toshba ZT170F
Xerox
# of listings
329
237
156
154 5 77 43 69
Reference price
$68.49
$78.99
$75.99
$68.99
$139.99
$96.99
$82.49
$184.99

11. Top Ten Marketplaces

12. Suspect Indicators Suspect Listings: Listings Risk Index (LRI)
Points assigned to each listing for potentially negative indicators
Higher score equals higher probability of illicit listing
Suspect Sellers: Seller Risk Index (SRI)
The sum of the LRI scores for all listings for a specific seller
Higher score equals higher probability of suspect seller

13. Suspect Sellers Summary
Suspect Sellers: Seller Risk Index (SRI)
Distribution of 1,682 unique sellers by SRI score
Higher score sellers pose greater potential risk

14. Suspect Listings Summary
Distribution of 4,500 listings by LRI score
Canon 204 and Samsung MLT-D101S have the greatest number of listings with very high risk scores

15. Top 10 Suspect Listings for Samsung MLT-D101S
9 out of 10 of the top 10 suspect listings are on Taobao. Select a listing for further detail.

16. Listing Detail

17. Case Study #2 Marketplace Policy Violations Focus
HP IPG Intellectual Property Abuse on Amazon
Can you tell which one is counterfeit?

18. Project Parameters
Objective: Improve the listing accuracy of Amazon listings to minimize the impact of sellers attempting to leverage HP’s brand in selling their ink and toner products
Issues:
Amazon’s listing rules require products to be described according to specific nomenclature and listed within consistent product groups.
Five product categories: Original in retail packaging, Original in other packaging, Refilled, Remanufactured, Compatible
No “refurbished” product listings under Original products; Used means ‘used’ and not remanufactured
Strict naming guidelines:
[OEM Brand] + [Series Name] + [Model Name] + [Product: Ink or Toner Cartridge] + ([Color(s)], [#-Pack], if app) + "in Retail Packaging"
[Third Party Brand] + "Compatible" + [Product: Ink or Toner Cartridge] + "Replacement for" + [OEM Brand] + [Series Name] + [Model Name]
These rules are frequently violated and Amazon does little to police compliance or enforce against persistent violators

19. Select Products Monitor Process Data Take Action
Project Methodology
Select
Products
Monitor
Process
Data
Take Action
100 products; e.g.
Inkjet Print Cartridges
HP 940 Black Ink Cartridge
HP 57 Tricolor Inkjet Cartridge
HP 564 Magenta Ink Cartridge
LaserJet Print Cartridges
HP Color LaserJet 125A Black Toner Cartridge
HP LaserJet 35A Black Toner Cartridge
Amazon
Weekly monitoring
Brand and product search terms
Apply automated business rules to filter, label, and classify collected data
Fine tune key word relationships to produce high quality results
Product name misuse
Source misattribution
Miscategorization
Generate trending reports
Market sizing for specified products on Amazon
Breakdown by product, discount level, listing misuse type
Utilize data to build case with Amazon

20. Specific Issues
Product name misuse: listings where the product name mis-identifies the source or origin of a product – for example, as an HP product when the product is actually refurbished, remanufactured, refilled, non-OEM, etc.
Business Rule: apply score X to listing if criterion is met
HP or “Hew” appears in the listing title BEFORE any of the key word text strings: compatible, refurbished, remanufactured, recycled, refilled, new build, 100% new, or non-oem
Examples:
HP Remanufactured CE505A Toner Cartridge
AlphaCo Remanufactured Toner Cartridge Compatible with HP CE278A

21. Specific Issues
Source misattribution: listings that incorrectly identify the product source or origin – for example ‘by HP’ on products that are refurbished, remanufactured, refilled, non-OEM, etc.
Business Rule: apply score X to listing if both criteria are met
Product manufacturer field contains text string: HP or “Hew”
Listing title contains text string: compatible, refurbished, remanufactured, recycled, refilled, new build, 100% new, or non-oem
Examples:
by HP
by Hewlett Packard
by Solution Warehouse, HP

22. Specific Issues
Mis-categorization: 3P listings under ASINs that involve the sale of conforming products – for example, a listing under an HP ASIN that is marketing a refurbished, remanufactured, refilled, non-OEM, etc.
Business Rule: apply score to listing if both criteria are met
Listing title contains text string: retail packaging, original HP, or HP original
Item condition field or item description contains text string: compatible, refurbished, remanufactured, recycled, refilled, new build, 100% new, or non-oem

23. Monitoring Summary: 07/2011 – 06/2012
Total unique listings for specified HP products: 92,388
Total unique listings that met misuse criteria: 25,753 (28%)

24. Correlation of Listing Misuse to Product Discount %s
High correlation between listing misuse and high product discounts
Listings with discounts > 30%
80% of mis-categorized listings
64% of source misattribution listings
66% of product name misuse listings

25. Enforcement Efforts with Amazon
Initial meetings to discuss issues with Amazon started Spring 2010
Amazon issues new naming guidelines Fall 2010
HP and NewMo develop web monitoring program to track and measure compliance; launched Summer 2011
Discussions restarted to address pervasive non-compliance with naming guidelines in Fall 2011
Amazon agrees to initiate category-wide steps towards policing and editing/removal of non-compliant listings in Spring 2012
Amazon begins process of editing Source Misattribution listings and removing Miscategorized Product listings in Summer 2012
Process and timeline to concretely address Product Name listings TBD

26. Enforcement Results with Amazon
Soft enforcement efforts: March 2012 Amazon asked all parties to amend their listings to adhere to Guidelines
Immediate 30% drop sustained and growing to 40% – clearly represents “good partners”
Remaining 60% offenders – “something else”
Amazon has begun to take hard steps to remove bad listings that misrepresent HP as the source of goods
Starts to address the 60% to 70% “non-good” partners
Listings are not removed; source is simply changed from “HP” to “unknown”
Many of these listings still have Product Name issues
Hard enforcement efforts work, but recidivism is an issue
In May, Amazon removed a significant number of remans listed under HP ASINS
Within 3 weeks the listings count returned to a normal run rate and had to be readdressed

27. Conclusions / Discussion
It’s been a long haul
12 months since HP began to build its case with monitoring data
9 months since initial discussions with Amazon
Recidivism makes ongoing vigilance necessary
Category-wide steps should have industry-wide positive impact
Similar efforts from other manufacturers will reinforce the message with Amazon and help “keep them on their toes”
Questions?

28. Contact Information |
Pam Passaretti
CEO
NewMomentum
(415)
Matt Barkley
IP & Brand Protection Programs
Printing and Supplies
(360)