The Role of Brand Information in State Financing

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

Central question • 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 a “Brand? ” • “a name, sign or symbol used to identify items or • services of the seller” 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 – i. e. Dell-Dell, Sony-Sony • But, brand name can differ from producer name – Retailers brand differently, i. e. Walmart-ilo

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

Brand/Producer Differences • Difference between brand “licensor” and brand “licensee” – No central registry of either! • May have different physical manufacturer (e. g. , contract • manufacturing) 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 – Panasonic has Panasonic, Quasar*, Technics • 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”

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

What is THE “Brand? ” for Electronics Recycling Purposes • 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 In Maine, correct is brand one that is registered to a claiming “manufacturer” In Washington, brand ownership determines responsibility assignment

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

Manufacturer here: Sceptre Technologies Monitor, no label on front

Could be recorded as: • Multi-Media • Legend 2000 • Intel/Intel Inside • Packard Bell *

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

Correlating Observed Brands and a Manufacturer • 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 – Around 1500 brands, which to pursue?

Maine’s Approach • 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 – Search US Patent Office database – Search other Business Directories/Databases • 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

Washington’s Approach • 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: – (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: – "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]

Same Brand, Different Manufacturers in Different States Brand ME Manuf. WA Manuf. MD Manuf. ABS Magnell Associate, Inc. (laptop) ABS Computer Technologies Inc (laptop) X Disney Mem. Corp Inc. (tv) Disney Consumer Products, Inc. (tv) X Emerson Funai (monitor and tv) Petters Group Worldwide (laptop) X IBM Lenovo Inc. (laptop and monitor) IBM (laptop and monitor) International Business Machines (all) Magnavox Philips Electronics (monitor, tv/ radio) and Funai (TV/DVD/VCR combo units only) Philips Electronics (tv and monitor) Philips Consumer Electronics (all)

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

Critical Policy Questions • 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? – Does ownership of a brand – really just IP – serve as a viable proxy for producer? • Is this truly producer responsibility, or an IP tax? • How will these choices work in the longer run? • What are the alternative approaches?

What’s New • 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 – Brand licensee/licensor question still in play – Still untested, unexplored • Not discussed much during legislative deliberations

What’s New • 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] • Obligation falls to brand licensee like Washington?

What’s New (cont) • 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; • (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]

What’s New (cont) • 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]

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

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