The document discusses how trade intelligence from PIERS can be used to identify counterfeiters and gray market activities. It notes that counterfeiting represents a $600 billion global market and describes how analyzing import documents in PIERS, such as unexpected suppliers and consignees, can reveal counterfeit and gray market shipments of branded goods entering the country. The document also provides examples of how identifying supplier and consignee relationships that don't match legitimate distribution channels can help companies recognize illegal trade activities.

1. USING TRADE INTELLIGENCE TO
IDENTIFY COUNTERFEITERS
The Licensing Expo – Crushing the Counterfeiters
June 19, 2013
PRESENTED BY:
ALIET MARTINEZ, DIRECTOR OF CLIENT DEVELOPMENT
PIERS / THE JOC GROUP INC.

2. The Licensing Expo – Crushing the Counterfeiters
June 19, 2013
THE GLOBAL COUNTERFEIT MARKET
• Represents 7% of all global trade
• Cost U.S. companies $250 Billion/year
• Counterfeits are responsible for the loss of 750,000 U.S. jobs
• Counterfeiters net $600B/year globally
• Highest profit margin of any illegal trade
• Up to 90% of counterfeits come from China
• In 2011, U.S. Customs seized over $200 million in counterfeit
goods, representing only a small percent of U.S. imports
• Profit margin on counterfeit cigarettes can net 20-1
• Counterfeited medicines is a $75 billion/year market

3. The Licensing Expo – Crushing the Counterfeiters
June 19, 2013
CAUSES OF COUNTERFEITING
• Minimal penalties vs. high profit margin
• Overseas manufacturing with limited regulatory oversight
• Global economy makes it easy for counterfeits to blend in
with legitimate trade
• Internet allows counterfeiters to sell directly to consumers

4. The Licensing Expo – Crushing the Counterfeiters
June 19, 2013
IT’S NOT JUST HANDBAGS AND WATCHES
• Consumer goods (high volume
low cost products)
• Brand name drugs
• Cigarettes
• Electronics
• Luxury goods
Popular Counterfeits Threat
• Not subject safety regulations and
proper testing
• Counterfeits have been linked to
terrorist organizations
• Cost to a brand’s bottom line and
brand equity
• Violent activity related to
counterfeit organizations

5. The Licensing Expo – Crushing the Counterfeiters
June 19, 2013
PIERS / THE JOURNAL OF COMMERCE HISTORY
In 1827, The Journal of Commerce paved the way in
trade intelligence by gathering and listing goods on
arriving vessels…
PIERS continued this ground breaking tradition in
the 1970s as the JOC’s‚ first venture in electronic
information services.
Today PIERS is the most comprehensive database of international trade activity
in the world‚ collecting and standardizing data from over 16 million bills of lading
annually for U.S. imports and exports.

6. The Licensing Expo – Crushing the Counterfeiters
June 19, 2013
ABOUT PIERS TRADE INTELLIGENCE
PIERS is the most comprehensive database of U.S. import and export activity in
the world. The detailed trade data that powers PIERS database is sourced from
bill of lading documents collected from U.S. Customs.
Every year PIERS processes more than
17,000,000 bills of lading, which translates
into over 20,000,000 shipments annually.
PIERS turns this raw data into
cleansed, standardized, enhanced and
validated data points which provide the
trusted intelligence that companies use to
make profitable decisions.

7. The Licensing Expo – Crushing the Counterfeiters
June 19, 2013
Available fields:
• Shipper name & address
• Consignee name & address
• Notify Party name & address
• Country of Origin/Destination
• U.S. & Foreign Ports
• HS Code(s)
• Standardized Commodity Description
• Quantity & Unit of Measure
• Weight in MTONs
• TEUs
• Estimated Value
• Ocean Carrier
• Date of Arrival/Departure
• And More!
DETAILED BILL OF LADING DATA

8. June 19, 2013
SPOTTING COUNTERFEITERS
FAKE SNEAKER MANUFACTURING INC.
123/45 NGUYEN THI MINH KHAI
PHOUNG 5 - QUAN 3 - TPHCM
VIETNAM
CANAL ST. SNEAKERS
123 CANAL ST STE 516
NEW YORK, NY 10015
UNITED STATES
CANAL ST. SNEAKERS
123 CANAL ST STE 516
NEW YORK, NY 10015
UNITED STATES
Overseas supplier unknown
to the manufacturer
Retailer receiving the goods not a
licensed dealer of Nike
Shipment lists Nike sneakers in the
commodity description
Import Bill of Lading

9. The Licensing Expo – Crushing the Counterfeiters
June 19, 2013
Gray Market: A market where a product is bought and sold outside of the
manufacturer's authorized trading channels. Most prevalent among products where the
price varies significantly from country to country.
Example: A product intended for a particular market is either routed to or legally sold to a
distributor in another market where the cost of that product is higher. The difference in price
offered by various legitimate markets creates an opportunity for the middleman to obtain
branded merchandise at a discount and sell them for higher price than he would have
through the intended distribution channel.
• It is estimated that gray market diversions cost U.S. companies as much as $63 billion in
revenue
• Manufacturers may lose approximately 4.5% of sales to gray marketers
GRAY MARKET OVERVIEW

10. The Licensing Expo – Crushing the Counterfeiters
June 19, 2013
• Supply & Demand Imbalance
• Distributor Channel Conflict
• Disruptive Pricing Pressure
• Revenue Cannibalization
• Profit Erosion
• Negative Customer Experience
• Product Warranty & Safety Issues
• Legal & Regulatory Risk
GRAY MARKET IMPACT
• Issues with warranties and returns
• Gray market resellers may change
packaging or instructions or may be
missing entirely
• Lack of regulatory oversight by local
governments
• Lack of quality control
• Products may be mishandled or
damaged during multiple shipments
Impact on the Brand Impact on the Consumer

11. The Licensing Expo – Crushing the Counterfeiters
June 19, 2013
IDENTIFYING GRAY MARKET ACTIVITIES
Licensed U.S. Wholesaler pays $100/unit direct from
manufacturer and charges $120/unit
Licensed Brazilian Wholesaler
pays $60/unit from the same manufacturer and
charges $80/unit
Rather than spend $120/unit
from the U.S. wholesaler, a U.S.
retailer places an order from the
Brazilian wholesaler at $80/unit
which is still significantly less
even after the additional shipping

12. June 19, 2013
IDENTIFYING GRAY MARKET ACTIVITY
EGYPT ATHLETIC APPAREL
ABDEL NABI E’L RAGABI ST, ABO RADI ZONE
EL MEHALLA, CAIRO
EGYPT
FAMOUS FOOTEAR
1 WOODRIDGE CENTER STE 210
WOODBRIDGE, NJ 08879
UNITED STATES
Overseas supplier is a licensed
Nike distributor in Egypt
Retailer is purchasing Nike
products on the gray
market by importing the
product from an Egyptian
distributor rather than a
U.S. distributor
Shipment lists Nike apparel in the
commodity description
Import Bill of Lading
FAMOUS FOOTEAR
1 WOODRIDGE CENTER STE 210
WOODBRIDGE, NJ 08879
UNITED STATES

13. The Licensing Expo – Crushing the Counterfeiters
June 19, 2013
• Cross-referencing import and export transactions against blacklisted
suppliers and distributors can help identify counterfeiters
• Consignees that are not licensed retailers or distributors may also be
likely counterfeiters
• Unusual and unlikely sources of brand name products can be a
strong indication of gray market activity
• PIERS is the only complete database of U.S. export
shipments, allowing you to spot gray market trading from your U.S.
distributors
SUMMARY

14. The Licensing Expo – Crushing the Counterfeiters
June 19, 2013
QUESTIONS