A bill to prevent and punish counterfeiting and copyright piracy, and for other purposes.

Summary: Anticounterfeiting Act of 2004 - Amends the Federal criminal code to prohibit trafficking in an "illicit authentication feature." Defines that term to mean an authentication feature that: (1) has been tampered with or altered without authorization so as to facilitate the reproduction or distribution of a phono-record, a copy of a computer program, motion picture or other audiovisual work, or documentation or packaging, in violation of the rights of the copyright owner; (2) is genuine, but has been distributed or is intended for distribution without authorization; or (3) appears to be genuine but is not.

Authorizes a copyright owner who is injured by a violation of this Act or is threatened with injury to bring a civil action in an appropriate U.S. district court. Allows the court to: (1) grant temporary or permanent injunctions to prevent or restrain violations; (2) order the impounding of an article in the custody or control of the alleged violator that the court has reasonable cause to believe was involved in a violation; and (3) award to the injured party reasonable attorney fees and costs, actual damages and any additional profits of the violator, or statutory damages. Authorizes: (1) the injured party to elect to recover, instead of actual damages and profits, an award of statutory damages of between $2,500 and $25,000 for each violation; and (2) the court to increase a damage award by three times the amount that would otherwise be awarded upon finding that a person has violated this Act within three years after a final judgment was entered for a previous violation. Sets a three-year statute of limitations from discovery of the violation.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Anticounterfeiting Act of 2004''.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) American innovation, and the protection of that 
        innovation by the government, has been a critical component of 
        the economic growth of this Nation throughout the history of 
        the Nation;
            (2) copyright-based industries represent one of the most 
        valuable economic assets of this country, contributing over 5 
        percent of the gross domestic product of the United States and 
        creating significant job growth and tax revenues;
            (3) the American intellectual property sector employs 
        approximately 4,300,000 people, representing over 3 percent of 
        total United States employment;
            (4) the proliferation of organized criminal counterfeiting 
        enterprises threatens the economic growth of United States 
        copyright industries;
            (5) the American intellectual property sector has invested 
        millions of dollars to develop highly sophisticated 
        authentication features that assist consumers and law 
        enforcement in distinguishing genuine intellectual property 
        products and packaging from counterfeits;
            (6) in order to thwart these industry efforts, 
        counterfeiters traffic in, and tamper with, genuine 
        authentication features, for example, by obtaining genuine 
        authentication features through illicit means and then 
        commingling these features with counterfeit software or 
        packaging;
            (7) Federal law does not provide adequate civil and 
        criminal remedies to combat tampering activities that directly 
        facilitate counterfeiting crimes; and
            (8) in order to strengthen Federal enforcement against 
        counterfeiting of copyrighted works, Congress must enact 
        legislation that--
                    (A) prohibits trafficking in, and tampering with, 
                authentication features of copyrighted works; and
                    (B) permits aggrieved parties an appropriate civil 
                cause of action.

SEC. 3. PROHIBITION AGAINST TRAFFICKING IN ILLICIT AUTHENTICATION 
              FEATURES.

    (a) In General.--Section 2318 of title 18, United States Code, is 
amended--
            (1) by striking the heading and inserting ``Trafficking in 
        counterfeit labels, illicit authentication features, or 
        counterfeit documentation or packaging'';
            (2) by striking subsection (a) and inserting the following:
    ``(a) Whoever, in any of the circumstances described in subsection 
(c), knowingly traffics in--
            ``(1) a counterfeit label affixed to, or designed to be 
        affixed to--
                    ``(A) a phonorecord;
                    ``(B) a copy of a computer program;
                    ``(C) a copy of a motion picture or other 
                audiovisual work; or
                    ``(D) documentation or packaging;
            ``(2) an illicit authentication feature affixed to or 
        embedded in, or designed to be affixed to or embedded in--
                    ``(A) a phonorecord;
                    ``(B) a copy of a computer program;
                    ``(C) a copy of a motion picture or other 
                audiovisual work; or
                    ``(D) documentation or packaging; or
            ``(3) counterfeit documentation or packaging, shall be 
        fined under this title or imprisoned for not more than 5 years, 
        or both.'';
            (3) in subsection (b)--
                    (A) in paragraph (2), by striking ``and'' at the 
                end;
                    (B) in paragraph (3)--
                            (i) by striking ``and `audiovisual work' 
                        have'' and inserting the following: ``, 
                        `audiovisual work', and `copyright owner' 
                        have''; and
                            (ii) by striking the period at the end and 
                        inserting a semicolon; and
                    (C) by adding at the end the following:
            ``(4) the term `authentication feature' means any hologram, 
        watermark, certification, symbol, code, image, sequence of 
        numbers or letters, or other physical feature that either 
        individually or in combination with another feature is used by 
        the respective copyright owner to verify that a phonorecord, a 
        copy of a computer program, a copy of a motion picture or other 
        audiovisual work, or documentation or packaging is not 
        counterfeit or otherwise infringing of any copyright;
            ``(5) the term `documentation or packaging' means 
        documentation or packaging for a phonorecord, copy of a 
        computer program, or copy of a motion picture or other 
        audiovisual work; and
            ``(6) the term `illicit authentication feature' means an 
        authentication feature, that--
                    ``(A) without the authorization of the respective 
                copyright owner has been tampered with or altered so as 
                to facilitate the reproduction or distribution of--
                            ``(i) a phonorecord;
                            ``(ii) a copy of a computer program;
                            ``(iii) a copy of a motion picture or other 
                        audiovisual work; or
                            ``(iv) documentation or packaging;
                in violation of the rights of the copyright owner under 
                title 17;
                    ``(B) is genuine, but has been distributed, or is 
                intended for distribution, without the authorization of 
                the respective copyright owner; or
                    ``(C) appears to be genuine, but is not.'';
            (4) in subsection (c)--
                    (A) by striking paragraph (3) and inserting the 
                following:
            ``(3) the counterfeit label or illicit authentication 
        feature is affixed to, is embedded in, or encloses, or is 
        designed to be affixed to, to be embedded in, or to enclose--
                    ``(A) a phonorecord of a copyrighted sound 
                recording;
                    ``(B) a copy of a copyrighted computer program;
                    ``(C) a copy of a copyrighted motion picture or 
                other audiovisual work; or
                    ``(D) documentation or packaging; or''; and
                    (B) in paragraph (4), by striking ``for a computer 
                program'';
            (5) in subsection (d)--
                    (A) by inserting ``or illicit authentication 
                features'' after ``counterfeit labels'' each place it 
                appears;
                    (B) by inserting ``or illicit authentication 
                features'' after ``such labels''; and
                    (C) by inserting before the period at the end the 
                following: ``, and of any equipment, device, or 
                materials used to manufacture, reproduce, or assemble 
                the counterfeit labels or illicit authentication 
                features''; and
            (6) by adding at the end the following:
    ``(f) Civil Remedies for Violation.--
            ``(1) In general.--Any copyright owner who is injured by a 
        violation of this section or is threatened with injury, may 
        bring a civil action in an appropriate United States district 
        court.
            ``(2) Discretion of court.--In any action brought under 
        paragraph (1), the court--
                    ``(A) may grant 1 or more temporary or permanent 
                injunctions on such terms as the court determines to be 
                reasonable to prevent or restrain violations of this 
                section;
                    ``(B) at any time while the action is pending, may 
                order the impounding, on such terms as the court 
                determines to be reasonable, of any article that is in 
                the custody or control of the alleged violator and that 
                the court has reasonable cause to believe was involved 
                in a violation of this section; and
                    ``(C) may award to the injured party--
                            ``(i) reasonable attorney fees and costs; 
                        and
                            ``(ii)(I) actual damages and any additional 
                        profits of the violator, as provided by 
                        paragraph (3); or
                            ``(II) statutory damages, as provided by 
                        paragraph (4).
            ``(3) Actual damages and profits.--
                    ``(A) In general.--The injured party is entitled to 
                recover--
                            ``(i) the actual damages suffered by the 
                        injured party as a result of a violation of 
                        this section, as provided by subparagraph (B); 
                        and
                            ``(ii) any profits of the violator that are 
                        attributable to a violation of this section and 
                        are not taken into account in computing the 
                        actual damages.
                    ``(B) Calculation of damages.--The court shall 
                calculate actual damages by multiplying--
                            ``(i) the value of the phonorecords or 
                        copies to which counterfeit labels, illicit 
                        authentication features, or counterfeit 
                        documentation or packaging were affixed or 
                        embedded, or designed to be affixed or 
                        embedded; by
                            ``(ii) the number of phonorecords or copies 
                        to which counterfeit labels, illicit 
                        authentication features, or counterfeit 
                        documentation or packaging were affixed or 
                        embedded, or designed to be affixed or 
                        embedded, unless such calculation would 
                        underestimate the actual harm suffered by the 
                        copyright owner.
                    ``(C) Definition.--For purposes of this paragraph, 
                the term `value of the phonorecord or copy' means--
                            ``(i) the retail value of an authorized 
                        phonorecord of a copyrighted sound recording;
                            ``(ii) the retail value of an authorized 
                        copy of a copyrighted computer program; or
                            ``(iii) the retail value of a copy of a 
                        copyrighted motion picture or other audiovisual 
                        work.
            ``(4) Statutory damages.--The injured party may elect, at 
        any time before final judgment is rendered, to recover, instead 
        of actual damages and profits, an award of statutory damages 
        for each violation of this section in a sum of not less than 
        $2,500 or more than $25,000, as the court considers 
        appropriate.
            ``(5) Subsequent violation.--The court may increase an 
        award of damages under this subsection by 3 times the amount 
        that would otherwise be awarded, as the court considers 
        appropriate, if the court finds that a person has subsequently 
        violated this section within 3 years after a final judgment was 
        entered against that person for a violation of this section.
            ``(6) Limitation on actions.--A civil action may not be 
        commenced under this section unless it is commenced within 3 
        years after the date on which the claimant discovers the 
        violation.
    ``(g) Other Rights Not Affected.--Nothing in this section shall 
enlarge, diminish, or otherwise affect liability under section 1201 or 
1202 of title 17.''.
    (b) Technical and Conforming Amendment.--The item relating to 
section 2318 in the table of sections at the beginning of chapter 113 
of title 18, United States Code, is amended by inserting ``or illicit 
authentication features'' after ``counterfeit labels''.

            Passed the Senate December 8, 2004.

            Attest:

                                                             Secretary.
108th CONGRESS

  2d Session

                                S. 2227

_______________________________________________________________________

                                 AN ACT

  To prevent and punish counterfeiting and copyright piracy, and for 
                            other purposes.