1. © 2011 Dean A. Pelletier dpelletier@mcandrews-ip.com Protecting Economic Drivers Because All Roads Lead To The U.S. January 14, 2011 The NAMM Show Anaheim, California Dean A. Pelletier, Board Member and Shareholder McAndrews, Held & Malloy dpelletier@mcandrews-ip.com (312) 775-8128 (direct)

2. © 2011 Dean A. Pelletier dpelletier@mcandrews-ip.com 1 Trade Secret Overview  Intellectual Property (IP) Fundamentals  Economic Drivers  IP Protects Economic Drivers  U.S. Marketplace Activity  Chinese IP Law and Enforcement  IP Strategies  Leveraging IP  Foreign Operations and IP Strategies  Combating Foreign Unfair Competition

3. © 2011 Dean A. Pelletier dpelletier@mcandrews-ip.com 2 IP Fundamentals  Patent (“what”)  Utility  Design  Trade secret (“what”)  Trademark (“who”)  Copyright (“how”) Trade Secret

4. © 2011 Dean A. Pelletier dpelletier@mcandrews-ip.com 3 Economic Drivers  Efficient manufacturing processes  Innovative products  Consistent product quality Quantity Price Equilibrium DemandSupply

5. © 2011 Dean A. Pelletier dpelletier@mcandrews-ip.com 4 IP Protects Economic Drivers  Efficient manufacturing processes  Innovative products  Consistent product quality Trade Secret

6. © 2011 Dean A. Pelletier dpelletier@mcandrews-ip.com 5 U.S. Marketplace Activity U.S. ITC Year in Review, 2001-2009. Active §337 Investigations www.usitc.gov/press_room/337_stats.htmwww.usitc.gov/press_room/337_stats.htm (Number of Investigations Instituted by Fiscal Year (Oct. 1- Sept. 30)) §337 Investigations Instituted

7. © 2011 Dean A. Pelletier dpelletier@mcandrews-ip.com 6 U.S. Marketplace Activity  Chinese companies are often sued in §337 investigations 55% 38% 42% 55% §337 Investigations Involving a Chinese Respondent or Goods of Chinese Origin 32%

8. © 2011 Dean A. Pelletier dpelletier@mcandrews-ip.com 7 U.S. Marketplace Activity  Sources of counterfeit and pirated goods seized by U.S. Customs and Border Protection (CBP) (FY 2009):  China: 79%  Hong Kong: 10%  Total value of seized goods from China (FY 2009): “only $205 million” China: Intellectual Property Infringement, Indigenous Innovation Policies, and Frameworks for Measuring the Effects on the U.S. Economy, Inv. No. 332-514, USITC Pub. No. 4199, November 2010 (“ITC Report”), Executive Summary, xvi and 2-10, 3-15.

9. © 2011 Dean A. Pelletier dpelletier@mcandrews-ip.com 8 IP Laws and Enforcement in China  China: form (IP law) vs. substance (IP law enforcement)  “Enforcement of IPR [i.e., IP rights] laws remains a serious problem in China.”  “Administrative IPR enforcement, consisting of raids and seizure of infringing goods, generally results only in temporary slowdowns in production; penalties are not sufficient to deter repeat offenders.”  Certain items on China’s radar in December 2010:  protecting trademark rights in local markets; clarifying landlords’ liabilities  handling bad faith trademark registrations and  imposing liability for facilitating online copyright infringement  Reality: inherent level of IP infringement/misappropriation ITC Report, Executive Summary, xiii and 3-25; www.export.gov/china/policyadd/JCCT_outcomes.aspwww.export.gov/china/policyadd/JCCT_outcomes.asp

10. © 2011 Dean A. Pelletier dpelletier@mcandrews-ip.com 9  Inventory IP assets  Monitor the marketplace (e.g., trade shows, websites, customers)  Implement policies and procedures  Overlapping IP  ROI IP Strategies

11. © 2011 Dean A. Pelletier dpelletier@mcandrews-ip.com 10 Leveraging IP  Use (trademarks are unique)  License  Cross-license  Sell  Enforce

12. © 2011 Dean A. Pelletier dpelletier@mcandrews-ip.com 11  U.S. nexus  Management  Reasonable efforts (trade secrets) Foreign Operations and IP Strategies  Catch 22  Opportunities  Risks  Inherent  Express: IP transfer market access  Foreign partner, subsidiary or licensee  IP transfer; which IP?  Written agreements  IP ownership  IP licenses 2 nd Place 3 rd Place 1 st Place

13. © 2011 Dean A. Pelletier dpelletier@mcandrews-ip.com 12 Combating Foreign Unfair Competition  Protect U.S. market and operations from foreign unfair competition, including IP infringement/misappropriation  Record registered U.S. trademarks and copyrights with CBP; work with CBP  Criminal actions; e.g., U.S. Immigration and Customs Enforcement’s efforts against counterfeit and pirated goods  Contact alleged wrongdoer(s)  Civil litigation (U.S. district court, state court, U.S. International Trade Commission, alternative dispute resolution)

14. © 2011 Dean A. Pelletier dpelletier@mcandrews-ip.com 13 Combating Foreign Unfair Competition  Protect foreign markets  Obtain IP rights in foreign countries.  Where appropriate, pursue foreign actions (administrative, civil, criminal, customs).

15. © 2011 Dean A. Pelletier dpelletier@mcandrews-ip.com Thank you... any questions? January 14, 2011 The NAMM Show Anaheim, California Dean A. Pelletier, Board Member and Shareholder McAndrews, Held & Malloy dpelletier@mcandrews-ip.com (312) 775-8128 (direct)