1. The Role of Brand Information in State Financing Systems in the U.S. Jason Linnell/Walter Alcorn/Heather Smith National Center for Electronics Recycling May 7, 2007 ISEE

2. Central question Brand marking on an electronic product has become the primary means of assigning financial responsibility for recycling costs in several states Brand marking on an electronic product has become the primary means of assigning financial responsibility for recycling costs in several states –Completely new use of brand information –States are doing it differently What is the impact? What is the impact?

3. What is a “Brand?” “a name, sign or symbol used to identify items or services of the seller” “a name, sign or symbol used to identify items or services of the seller” Why look at “brand” for producer responsibility? Why look at “brand” for producer responsibility? –Most reliable visible evidence at end-of-life and when sold, can’t know actual assembler or “manufacturer” Most large producers use same name for brand Most large producers use same name for brand –i.e. Dell-Dell, Sony-Sony But, brand name can differ from producer name But, brand name can differ from producer name –Retailers brand differently, i.e. Walmart-ilo

4. Relevant Brand History In the consumer electronics industry some manufacturers began licensing brands In the consumer electronics industry some manufacturers began licensing brands –Licensing less common among IT companies Primary brands and secondary brands Primary brands and secondary brands –Presario, Inspiron, Macintosh

5. Brand/Producer Differences Difference between brand “licensor” and brand “licensee” Difference between brand “licensor” and brand “licensee” –No central registry of either! May have different physical manufacturer (e.g., contract manufacturing) May have different physical manufacturer (e.g., contract manufacturing) The producer of the product may license a legacy brand name (e.g., RCA, IBM) The producer of the product may license a legacy brand name (e.g., RCA, IBM) –“Back from the Dead” brands – Polaroid, Westinghouse A single producer often owns multiple brands A single producer often owns multiple brands –Panasonic has Panasonic, Quasar*, Technics A single brand may be produced by more than one company A single brand may be produced by more than one company –Historically: GE formerly by GE, then Thomson, now TTE –Concurrently: Funai for “Magnavox” TV/VCR/DVD combos, Philips for all other “Magnavox”

6. Brand Recording Brand recording required whether all units are recorded (ME) or a sample (WA) Brand recording required whether all units are recorded (ME) or a sample (WA) High potential for errors with recording High potential for errors with recording NCER developed Best Mgmt Practices NCER developed Best Mgmt Practices –Reduce errors, guide for brand recorders Steps detailed for brand recorder Steps detailed for brand recorder –Distinguish product categories – gray area –Find true “brand” label –Identifies common mis-identified markings

7. What is THE “Brand?” for Electronics Recycling Purposes Same product may include multiple “brand” markings Same product may include multiple “brand” markings –Are true brands, but not correct brand for assignment of responsibility Correct brands to record depends on program, purpose of brand recording Correct brands to record depends on program, purpose of brand recording In Maine, correct is brand one that is registered to a claiming “manufacturer” In Maine, correct is brand one that is registered to a claiming “manufacturer” In Washington, brand ownership determines responsibility assignment In Washington, brand ownership determines responsibility assignment

8. Brand Recording Pitfalls Candidate for misidentification “Creative”: drive, not brand “Personal Computer”: not brand, but IBM trademark The BRAND! “CCI”

9. Monitor, no label on front Manufacturer here: Sceptre Technologies

10. Could be recorded as: Multi-MediaMulti-Media Legend 2000Legend 2000 Intel/Intel InsideIntel/Intel Inside Packard Bell *Packard Bell *

11. Bare tube from residential collection; “Zenith” on tube label, but is it the “brand”?

12. Correlating Observed Brands and a Manufacturer An additional step that depends on definition of manufacturer and flexibility of system. An additional step that depends on definition of manufacturer and flexibility of system. –Need to interpret statutory and regulatory requirements before a company could be held financially responsible Usually government function, critical decisions Usually government function, critical decisions –Around 1500 brands, which to pursue?

13. Maine’s Approach Current and historic manufacturers “claim” brands in recycling plans Current and historic manufacturers “claim” brands in recycling plans –Sometime split by product category, date of manufacture –Licensee or licensor can claim If brand identified at a consolidator is not claimed, ME DEP follows this process If brand identified at a consolidator is not claimed, ME DEP follows this process –Search US Patent Office database –Search other Business Directories/Databases i.e. “Brands and Their Companies”, Orion Blue Book i.e. “Brands and Their Companies”, Orion Blue Book –If no info, general web search –Still no info, DEP works with AG office to assign status Could be mis-identified Could be mis-identified

14. Washington’s Approach Current manufacturers register brands for which they have legal ownership and pay admin fee Current manufacturers register brands for which they have legal ownership and pay admin fee –No division by product category, historic brand owners Statutory Definition of Manufacturer: Statutory Definition of Manufacturer: –(14) "Manufacturer" means any person…who…(a) Manufactures or has manufactured a covered electronic product under its own brand names for sale in or into this state….[emphasis added] Regulatory Definition of Manufacturer: Regulatory Definition of Manufacturer: –"Manufacturer" means the person who: (a) Has legal ownership of the brand, brand-name or cobrand of electronic products sold in or into Washington state…[emphasis added]

15. Same Brand, Different Manufacturers in Different States BrandME Manuf.WA Manuf.MD Manuf. ABSMagnell Associate, Inc. (laptop) ABS Computer Technologies Inc (laptop) X DisneyMemCorp Inc. (tv)Disney Consumer Products, Inc. (tv) X EmersonFunai (monitor and tv) Petters Group Worldwide (laptop) X IBMLenovo Inc. (laptop and monitor) IBM (laptop and monitor) International Business Machines (all) MagnavoxPhilips Electronics (monitor, tv, tv/ radio) and Funai (TV/DVD/VCR combo units only) Philips Electronics (tv and monitor) Philips Consumer Electronics (all)

16. Other State Approaches California California –No need to track/register brand info under ARF law –Limited data gathering for non-CRT claims from recyclers Maryland Maryland –Collects brand info on annual registration form, but no tracking at end of life

17. Critical Policy Questions Who should be considered the responsible producer in producer responsibility systems? Who should be considered the responsible producer in producer responsibility systems? –Should the decision be a business decision worked out among companies involved in producing and selling the product? Greater administrative burden? Greater administrative burden? –Does ownership of a brand – really just IP – serve as a viable proxy for producer? Is this truly producer responsibility, or an IP tax? Is this truly producer responsibility, or an IP tax? How will these choices work in the longer run? How will these choices work in the longer run? What are the alternative approaches? What are the alternative approaches?

18. What’s New Brand-based systems to date look at brand on returned product, but now…. Brand-based systems to date look at brand on returned product, but now…. 2007 legislation looking at use of brands is based on current sales or market share 2007 legislation looking at use of brands is based on current sales or market share –Brand licensee/licensor question still in play –Still untested, unexplored Not discussed much during legislative deliberations Not discussed much during legislative deliberations

19. What’s New Minnesota’s new law Minnesota’s new law –Obligation is on the “manufacturer” to recycle 0.6 lbs. for every pound sold into state Subd. 11. "Manufacturer" means a person who: (1) manufactures video display devices to be sold under its own brand as identified by its own brand label; or (2) sells video display devices manufactured by others under its own brand as identified by its own brand label. [emphasis added] Subd. 11. "Manufacturer" means a person who: (1) manufactures video display devices to be sold under its own brand as identified by its own brand label; or (2) sells video display devices manufactured by others under its own brand as identified by its own brand label. [emphasis added] Obligation falls to brand licensee like Washington? Obligation falls to brand licensee like Washington?

20. What’s New (cont) Tennessee Legislation (HB 1163) Tennessee Legislation (HB 1163) –(6) “Manufacturer” means any person: (A) who manufactures or manufactured covered devices under a brand that it owns or owned or is or was licensed to use, other than a license to manufacture covered devices for delivery exclusively to or at the order of the licensor; (A) who manufactures or manufactured covered devices under a brand that it owns or owned or is or was licensed to use, other than a license to manufacture covered devices for delivery exclusively to or at the order of the licensor; (B) who sells or sold covered devices manufactured by others under a brand that the seller owns or owned or is or was licensed to use, other than a license to manufacture covered devices for delivery exclusively to or at the order of the licensor….[emphasis added] (B) who sells or sold covered devices manufactured by others under a brand that the seller owns or owned or is or was licensed to use, other than a license to manufacture covered devices for delivery exclusively to or at the order of the licensor….[emphasis added]

21. What’s New (cont) Oregon legislation (HB 2626) Oregon legislation (HB 2626) –(6)(a) 'Manufacturer' means any person, irrespective of the selling technique used, including by means of remote sale: ' (A) That manufactures covered electronic devices under a brand that it owns or is licensed to use; ' (B) That sells covered electronic devices manufactured by others under a brand that the seller owns….[emphasis added]

22. Conclusions Brand Data Still Limited and Not Representative Brand Data Still Limited and Not Representative Inconsistent Definitions of “Brand,” “Manufacturer,” and “Covered Product” Hold No Benefits Inconsistent Definitions of “Brand,” “Manufacturer,” and “Covered Product” Hold No Benefits Recyclers and Other Organizations Need More Expertise in Brand Counting Methodology Recyclers and Other Organizations Need More Expertise in Brand Counting Methodology Brand Claims/Registrations Need Regular Tracking Brand Claims/Registrations Need Regular Tracking

23. Thank You! Jason Linnell NCER Phone: (304) 699-1008 jlinnell@electronicsrecycling.org Walter Alcorn Alcorn Consulting (703) 390-9200 walter@alcornconsulting.com