Venable partner Justin Pierce was quoted in a Law360 article on November 21, 2012, on the potential impact of the U.S. Department of Defense's (DOD) upcoming regulations decreed by Section 818 of the National Defense Authorization Act of 2012. The provision creates extensive anti-counterfeiting restrictions for the government and contractors, and could potentially incur significant costs for contractors.
One stipulation of the law imposes new traceability requirements for defense parts. Pierce said "while such programs can be useful going forward, they come with costs, and are less feasible for the out-of-production parts that are most at risk for counterfeits." He added the "use of some of these new advanced technologies can make it very hard for counterfeiters to get past the authentication process. New requirements to include this technology are great, but may turn out to be expensive for some to implement."
Pierce noted that "While the DOD’s anti-counterfeiting steps will come at a cost, they will combat a real problem and inject greater reliability in the DOD supply chain." He added that "in a best case scenario, the DOD’s regulations, along with the information it learns from the rule’s reporting requirements, can serve as a model for commercial industries plagued by similar problems."
Pierce concluded, saying "As it is implemented, I believe this can serve as a great model, in some cases, for other industries as well."