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Global Associations Ponder Action Against Counterfeits

Posted On: 12/14/2006

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 ATLANTA -- Six leaders representing nine trade associations from the U.S. and Europe met here on November 18, in conjunction with the 2006 International Association of Amusement Parks and Attractions show, to discuss possible joint actions and policies that would defend them against "unfair" competition from a new generation of Asian counterfeits, especially in the redemption game sector.

The session was called by the Amusement Industry Council of Europe, whose Gerry Robinson spoke on behalf of Italian and Spanish trade associations, as well as for the UK's Amusement and Leisure Equipment Suppliers association.

Also present were IAAPA chairman Clark Robinson, American Amusement Machine Association president Mike Rudowicz, International Association for the Leisure and Entertainment Industries president Larry Davis and executive director Tracy Sarris, and Gianni Chiari of EASSI, the European park association.

Merit Entertainment's Bob Fay, Benchmark Games's Al Kress and Family Fun Co.'s Richard and Dianne Oltmann also participated.

ALES's Robinson said that game copies represent a "growing concern" that could "decimate our industry."

Rudowicz said, "We're having a problem, mainly with redemption [games]," and at least four AAMA manufacturer members who exhibited products at IAAPA were experiencing consistent problems with Asian-made copies.

Robinson called for the assembled groups to form a united front. In addition to encouraging individual association members to be aggressive and diligent about filing for trademarks, patents and copyrights on their products, technologies and concepts, Robinson suggested six possible steps that the associations could take collectively.

1. Adopt a code of conduct for association members, who would agree not to copy protected intellectual property.

2. Lobby the governments of Asian nations for stricter protection of intellectual property that is trademarked in the West.

3. Adopt strict no-copies policies for international trade exhibitions, with a relevant clause included in exhibitor contracts and possibly enforced by an on-site attorney at each show.

4. Alert operators about copies and warn them of possible legal and insurance consequences from buying and using copies.

5. Publish the names of copiers in the trade press.

6. Work with other industries that are experiencing similar problems from Asian copying sources.

Merit's Fay said that most overseas law enforcement agencies will defend trademarked products, because a trademark is easily visible and recognizable. A copyright or patent inhered in a software program or other element may be difficult to see, discern or interpret, and thus is more difficult to protect.

Fay outlined the procedures that he used successfully to defend U.S. and Japanese manufacturers against counterfeit copies of video games in the 1980s -- a strategy that he has revived recently for Merit (see VT September).

Elements of Fay's strategy include recruiting and training undercover investigators who purchase counterfeits and then turn them over to authorities, who then stage police raids; initiating a criminal case that is subsequently publicized in the trade press; and following up with ongoing surveillance of the targeted copymakers.

He added that the strategy has been updated with a new step -- forcing copiers to take down websites that advertise counterfeit products.

ALE's Robinson said that even when copy factories are shut down, the problem persists. "You close one factory today," he said, "and tomorrow they reopen under another name with the exact same copy products for sale."

Adding to the difficulties, he said, is the fact that under Chinese law a Western trademark is not considered to be in effect until the protected product is utilized on Chinese territory.

IAAPA's Robinson said that the parks association has a code of conduct already, but conceded it "could be tougher." He also cautioned that enforcement is "a whole different ball game" that could cost up to $500,000 per year. Fay said, "Associations are not in place to mediate disputes among members."

Rudowicz said joint ventures with Chinese companies increase a U.S. or European manufacturer's chances of winning tough enforcement from overseas authorities, since some of their own nationals (i.e., local Chinese firms) would also be victims of any copy games.

No formal action plan was adopted, but the members agreed in principle to cooperate to find a common policy that can help defend members' intellectual property. "We cannot solve this problem for all concerned, but we can move in stages," said ALE's Robinson.

Family Fun Co.'s Oltmann, the first U.S. manufacturer to go public with this problem during IAAPA Expo 2005, said at the conclusion of the meeting that he was happy with everything he'd heard.

"At least we have a start," he said.