Intellectual property and cybersecurityShahin KohanNicole Y. Lamb-HaleTim Molino

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Shahin Kohan President, AIMS 360 / Focal Technology Solutions

Nicole Y. Lamb-Hale Former Assistant Secretary of Commerce for Manufacturing & Services, International Trade Administration

Tim Molino Director, Policy, BSA | The Software Alliance

Speakers

Shahin KohanPresident, AIMS 360 / Focal Technology Solutions

Emerging markets have the highest piracy rates

Source: 2012 BSA-IDC Piracy Study

86%

Indonesia

77%

China

63%

Russia

63%

India

57%

Mexico

55%

Malaysia

53%

Brazil

21%

Japan

19%

US

Software producers

Service providers

End users Customers

Software piracy causes harm to multiple parties

Direct and indirect harm to our industry

Software producersLost revenueBrand damageDecreased incentive to innovate

Service providersLost revenueLost business opportunityFewer customers to service

$63 billion–the value of unlicensed software in ‘11

Software drives manufacturing innovation US manufacturing IT spending is on the rise

$20B

$53B

2006

$27B

$62B

2008

$64B

$29B

2010

Software Spend

Other IT Spend

Piracy hurts our customers and end users

CustomersUnfair competitionLost revenueDecreased incentive to innovate

End usersExposure to malwareRisk of security breaches Leading to data loss

A 10% reduction in piracy would add…

Source: Economic Impact Global Software Theft on U.S. Manufacturing Competitiveness and Innovation, January 2014, NAJI, NAM, BSA Global Software Piracy Study 2011

+40,314 manufacturing jobs

+$29B manufacturing revenue

+$807M U.S. federal tax revenue

+$8.7B U.S. GDP

+25,431 IT jobs

NAJI was created to help stop IP theft Why should you join?

IT and services firms

Manufacturers Academic institutions

Orgs and associations

Support IP protection and innovation ecosystem

Improve ability for your business to compete and capture revenue in emerging markets

Position your company as an industry leader and promote your company’s brand

Show support for issues that affect many VFI members and Microsoft partners

Scan our QR code or join online www.naji.org/join-naji

Nicole Y. Lamb-HaleFormer Assistant Secretary of Commerce for Manufacturing and Services, International Trade Administration

Intellectual Property fuels economic growthStrong Intellectual Property rights and protections:

Source: GIPC International IP Index, Second Edition, January 2014

Lead to job creation and economic growth

Level the competitive playing field

Increase the flow of technology

Incentivize entrepreneurs and drive innovation

NAJI encourages actions to protect IP State enforcement by Attorneys

General

International trade agreements

US Federal legislation to protect trade secrets

Oct 2012

Jan 2013

Massachusetts AG Martha Coakley forced Thai seafood co. to agree to stop using unlicensed software when doing business in her state

CaliforniaAG Kamala Harris filed lawsuits against Chinese and Indian apparel manufacturers using stolen IT to compete unfairly

Tennessee AG Bob Cooper settles unfair competition cases against Thai tire manufacture

OklahomaAG Scott Pruitt filed complaint against Chinese oil and gas value manufacturer using unlicensed software to compete unfairly

LouisianaAG Buddy Caldwell took action against Chinese grill manufacturer who was in violation of LA law

Washington AG Bob Ferguson negotiated settlement with Brazilian aircraft manufacturer exporting goods made with unlicensed software

Apr 2013

Jun 2013

Dec 2013

Mar 2014

State AGs leverage unfair competition lawsTo address negative impact of software piracy

US trade secrets legislationEfforts are underway to protect trade secrets, including:Business methods

and plans

Financial and personal data

Computer programs and databases

Inventions, R&D info and formulas

Designs, prototypes and drawings

Machine processes and devices

International trade agreementsTrans-Pacific Partnership

Australia CanadaPeru

United StatesNew ZealandBrunei Darussalam

Negotiating countries:

Transatlantic Trade and Invest. Partnership

ChileJapanMalaysia

Mexico SingaporeVietnam

Tim MolinoDirector, Policy, BSA | The Software Alliance

BS

A’s

mem

bers

incl

ude:

“The threat of cyberattacks has become so pervasive in recent years that it now tops the U.S. government’s global threat assessment, beating out terrorism for the number one position.” —Worldwide Threat Assessment of the US Intelligence Community, Senate Select Committee on IntelligenceMarch 12, 2013

What we are dealing with . . .

Source: Trends in Proprietary Information Loss, ASIS International, August 2007

Of most organizations' value and revenue sources are in intangible assets, intellectual property and proprietary competitive advantages

75%

Pirated software unlocks the backdoor

Sources: IDC, The Dangerous World of Counterfeit and Pirated Software, March 2013

For cyber criminals to steal confidential business data, trade secrets and IP

20% of counterfeit CD/DVD programs installed malware

28% of Web-based counterfeit had performance issues

36% of Web-based counterfeits installed Trojans and adware

78% of Web-based counterfeits installed tracking cookies and spyware

Why do we care?In 2014 enterprises will spend $491 billion because of malware associated with pirated software:

Source: IDC White Paper: The Link between Pirated Software and Cybersecurity Breaches: How Malware in Pirated Software Is Costing the World Billions, March 2014

$127B in identification, repair, and data recovery from malware

$364B in dealing with data losses

64% of these losses will be attributable to criminal organizations

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© 2014 Microsoft Corporation. All rights reserved. Microsoft, Windows, and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries.The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.