Fast-growing Internet sleuth comes north to serve high tech industry

[caption id="attachment_23117" align="alignleft" width="130" caption=" New Momentum CEO Pam Passaretti, a Marin resident, is overseeing the company's move to new headquarters in San Rafael"][/caption]

SAN RAFAEL – A high-tech web detective agency has moved its headquarters from Irvine to San Rafael with expansion in mind.

New Momentum addresses a large and growing market on the Internet for counterfeit products.

"It's estimated that global sales of counterfeit goods on the Internet are $1.2 trillion dollars," said New Momentum CEO Pam Passaretti.

Founded in 2005 by Internet entrepreneur Stuart Clifton, New Momentum developed an automated search engine that seeks out sales of counterfeit goods and gray market activity such as channel seller infractions and brand misuse for a growing roster of high-profile companies.

According to Ms. Passaretti, whose background includes positions with IBM, Lotus Development and Kleiner Perkins Caufield & Byers, the high-tech industry was the initial focus.

"We're making the move to Northern California to be closer to our current and potential clients in high-tech, but we're expanding into the pharmaceutical industry, where counterfeit sales on the Net are growing at double the rate of legal medications," she said.

Luxury goods manufacturers are losing between $300 and $600 billion annually and increasingly, the entertainment industry is dealing with costly counterfeits[11] .

These industries are target markets for New Momentum's solution, which is deployed as a hosted, web-based subscription service.

Unlike other Enterprise Risk Management (ERM) solutions providers that track trademark infringement on the web, mostly manually, New Momentum's software finds and documents sales of products, their price, time and place of sale and sales volume.

"Counterfeit goods sellers move from one site to another every 48 hours so as not to be caught," said Ms. Passaretti. "If a person is combing the web for unauthorized sales he has to be lucky. Our solution will always find the suspect.”

Algorithms are used to prioritize the data according to what's bringing the most pain to clients, whether it's high sales volume or high markups of the illegal goods.

"This is evidence that can be used to send out cease and desist orders, Digital Millennium Copyright letters and auction shutdowns," said Ms. Passaretti. Her company also provides, through a network of partners, assistance with criminal and civil proceedings.

New Momentum clients also use the service to check up on their channel partners, who might be selling at an unauthorized price point or selling through unauthorized sales channels.

The solution has proved to be effective at stemming, if not stopping counterfeit and gray market activity.

During the first six weeks after its launch in 2007, New Momentum's software identified six large-scale syndicates for one of its clients. Another has reported seizures of about $200 million of counterfeit products and a third said pricing violations by channel partners were reduced by 98 percent.

New Momentum doesn't identify its clients.

"They're mostly Fortune 500 companies and a few are Fortune 50," said Ms. Passaretti.

New Momentum is active in China, where it maintains a development team. Unlike ERM providers whose search engines run on Google, its proprietary software is not subject to filtering or censorship.

That's important because counterfeit and gray market activities are rampant in China.

But Chinese manufacturers are plagued by the same growth of Internet sales infractions.

Recently New Momentum signed a strategic partnership agreement with Sunfaith, China's leading consulting firm focused on intellectual property protection, market research and commercial inquiry services.

Sunfaith is an adviser to Tyco Electronics and also to Beirersdorf, an International provider of beauty care products. “We expect our Chinese operation will play a significant role on our 2010 revenue growth," said Ms. Passaretti.

The privately owned company does not disclose revenues, although she said they jumped by 200 percent in 2009 and "will do well over that in 2010."

New Momentum has 20 employees now, eight in its new headquarters and the rest remaining as a customer support and development team in Irvine.

"Our future growth will take place in San Rafael,” said Ms. Passaretti, who expects a staff of 12 by the end of the year and more as the expansion continues.

"So far we haven't had to leave the area for new hires. There's a remarkable amount of talent here in the North Bay," she said.

The lease on New Momentum's office at 980 Lincoln Ave. was arranged by Kay and Kathy Yamamoto of Remax of Central Marin.

For more information visit www.newmo.com.