Call it a small victory in a much larger battle over how to fight the semiconductor-counterfeiting war.
The Semiconductor Industry Association received notification this week that the Defense Logistics Agency (DLA) threw it a bone (my phrase, not SIA's) in the battle over DNA marking of semiconductors.
DLA announced that it will allow third-party marking on components in addition to work done by Applied DNA Sciences, which had been the mandated solution to the problem. (See: Anti-Counterfeiting DNA Marking Gets a Boost.)
“Our companies would sell the product and a third party would apply the DNA mark prior to shipping to DLA,” David Isaacs, SIA's vice president of government policy, said in an interview Friday. “That partially addresses our concerns.”
And those concerns are myriad.
To recap: SIA has long opposed this approach to anti-counterfeiting policy as onerous for components vendors. The industry organization believes the core of the problem is a more open procurement plan adopted by DLA. That could be rectified by tightening procurement so that components are bought from authorized distributors.
In addition, the marking program has a number of unknowns, including whether the marking step itself affects component quality, and, in some cases, may actually void the product warranty.
SIA laid out its concerns in a lengthy document it sent to DLA in the fall.
Keep it simple
But mostly, SIA officials have been seeking a simple resolution to the problem. Said Isaacs: “We've been urging DLA to lock the front door, to require purchasing from authorized distributors.”
Currently, DLA has a web-based purchasing process, intended presumably at increased government transparency, which “is open to anyone purchasing components… and injects a lot of uncertainty in the process,” Isaacs said.
Added Dustin Todd, SIA's government affairs director, “you can buy authentic product by going through authorized distributors now. The issues exist because its procurement problem.”
While this rule represents a tiny fraction of even mil-targeted components (FSC 5962, which SIA estimates generates less than $20 million in annual revenue), the concern is the precedent. Start requiring marking of these devices, and what's to stop DLA from throwing a wider net on more military components?
In addition to urging a front-door solution, the SIA also wants better locks on the back door, at the border.
Before 2008, incoming electronics shipments could be held for 30 days to check for counterfeiting. US Customs and Border Protection (CBP) would send companies photographs of suspect components to verify their legitimacy.
But in June of 2008, for reasons that still puzzle many, the CBP altered that process and started to redact virtually all of the useful information in its photographs. Customs agents take photos of chips, black out the markings on the package, and send the touched-up images to chip manufacturers, SIA said. That renders them useless, Isaacs said.
CBP said it had to do this because its redaction policy limited the information that can be shared with trademark owners. That's because information protected by the Trade Secrets Act cannot be provided to a third party until after seizure, even if that information is intended for the company that holds the trade secret.
Kafka would have had a field day.
But the beat goes on in the larger war on counterfeiting and the natural and evolving tension between government and industry on how best to gird for the battles ahead.
“The battle's not lost because it's part of a bigger issue,” Isaacs said. “We're in this for the long haul. We think the technical and other arguments we've brought forward will ultimately prevail.”