WORLD TRADE ORGANIZATION  
ORGANISATION MONDIALE DU COMMERCE  
ORGANIZACIÓN MUNDIAL DEL COMERCIO 
IP/N/1/USA/E/3 
24 August 2012 
 (12-4573) 
Council for Trade-Related Aspects  
of Intellectual Property Rights Original:   English/ 
 anglais/  inglés 
 
  
MAIN DEDICATED INTELLECTUAL PR OPERTY LAWS AND REGULATIONS 
NOTIFIED UNDER ARTICLE 63.2 OF THE AGREEMENT 
 
UNITED STATES 
  The present document reproduces the pages containing Section 818
1 of the text  of the 
National Defense Authorization Act for Fiscal Year 2012,  which Section refers specifically to the 
enforcement of intellectual property rights, which entered into force on 31 December 2011, as notified 
by the United States on 20 June 2012 under Ar ticle 63.2 of the Agreement (see document 
IP/N/1/USA/5). 
 
Conseil des aspects des droits de propriété 
intellectuelle qui touchent au commerce 
 
PRINCIPALES LOIS ET RÉGLEMENTATIONS CONSACRÉES À 
LA PROPRIÉTÉ INTELLECTUELLE NOTIFIÉES AU TITRE 
DE L'ARTICLE 63:2 DE L'ACCORD 
 
ÉTATS-UNIS 
 
 Le présent document contient le texte de l'article 8181 de la Loi d'autorisation de défense 
nationale pour l'exercice 2012, qu i fait expressément référence au respect des droits de propriété 
intellectuelle et qui est entré en vigueur le 31 déce mbre 2011, et a été notifié par les États-Unis le 
20 juin 2012 au titre de l'article 63:2 de l' Accord (voir le document IP/N/1/USA/5). 
 
Consejo de los Aspectos de los Derechos de Propiedad 
Intelectual relacionados con el Comercio  
PRINCIPALES LEYES Y REGLAMENTOS DEDICADOS A LA 
PROPIEDAD INTELECTUAL NOTIFICADOS EN VIRTUD 
DEL PÁRRAFO 2 DEL ARTÍCULO 63 DEL ACUERDO 
 
ESTADOS UNIDOS 
  En el presente documento se reproduce el texto
1 del artículo 818 de la Ley de asignaciones a 
la defensa nacional para el ejercicio fiscal de 2012, artículo que se refier e específicamente a la 
observancia de los derechos de pr opiedad intelectual.  La Ley entró en vigor el 31 de diciembre de 
2011 y fue notificada por los Estados Unidos el 20 de junio de 2012 en virtud de lo dispuesto en el 
párrafo 2 del artículo 63 del Acuerdo (véase el documento IP/N/1/USA/5). 
 
                                                      
1 In English only./En anglais seulement./En inglés solamente.     
   IP/N/1/USA/E/3 
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  SEC. 818. DETECTION AND AVOIDANCE OF  COUNTERFEIT ELECTRONIC PARTS. 
 
(a) ASSESSMENT OF DEPARTMENT OF DEFENSE POLICIES AND SYSTEMS.—The 
Secretary of Defense shall conduct an assessment of  Department of Defense acquisition policies and 
systems for the detection and avoidance of counterfeit electronic parts. 
 
(b) ACTIONS FOLLOWING ASSESSMENT.—Not later than 180 days after the date of the 
enactment of the Act, the Secretary shall, b ased on the results of the assessment required by 
subsection (a)—  
(1) establish Department-wide definitions of  the terms ''counterfeit electronic part'' 
and ''suspect counterfeit electronic part'', which de finitions shall include previously used parts 
represented as new;  
 
(2) issue or revise guidance applicable to  Department components engaged in the 
purchase of electronic parts to implement a risk-based approach to minimize the impact of 
counterfeit electronic parts or suspect counte rfeit electronic parts on the Department, which 
guidance shall address requirements for trai ning personnel, making sourcing decisions, 
ensuring traceability of parts, inspecting and testing parts, reporting and quarantining counterfeit electronic parts and suspect counte rfeit electronic parts, and taking corrective 
actions (including actions to recover co sts as described in subsection (c)(2)); 
 
(3) issue or revise guidance applicable to the Department on remedial actions to be 
taken in the case of a supplier who has repeat edly failed to detect and avoid counterfeit 
electronic parts or otherwise failed to exercise due diligence in the detection and avoidance of 
such parts, including consideration of whether to suspend or debar a supplier until such time 
as the supplier has effectively addressed th e issues that led to such failures; 
 
(4) establish processes for ensuring that Department personnel who become aware of, 
or have reason to suspect, that any end item,  component, part, or material contained in 
supplies purchased by or for the Department contains counterfeit electronic parts or suspect counterfeit electronic parts provide a report in writing within 60 days to appropriate 
Government authorities and to the Government-I ndustry Data Exchange Program (or a similar 
program designated by the Secretary); and 
 
(5) establish a process for analyzing, assessing, and acting on reports of counterfeit 
electronic parts and suspect counterfeit electroni c parts that are submitted in accordance with 
the processes under paragraph (4). 
 
(c) REGULATIONS.— 
 
(1) IN GENERAL.—Not later than 270 days after the date of the enactment of this 
Act, the Secretary shall revise the Department of Defense Supplement to the Federal 
Acquisition Regulation to address the detection a nd avoidance of counterfeit electronic parts. 
 
(2) CONTRACTOR RESPONSIBILITIES.—The revised regulations issued pursuant 
to paragraph (1) shall provide that— 
 
(A) covered contractors who supply electr onic parts or products that include 
electronic parts are responsible for detecting and avoiding the use or inclusion of counterfeit electronic parts or suspect counte rfeit electronic parts in such products and 
for any rework or corrective action that may be required to remedy the use or inclusion of such parts; and IP/N/1/USA/E/3 
Page 4  
 
   
(B) the cost of counterfeit electronic parts and suspect counterfeit electronic 
parts and the cost of rework or correctiv e action that may be required to remedy the 
use or inclusion of such parts are not a llowable costs under Department contracts. 
 
(3) TRUSTED SUPPLIERS.—The revised regulations issued pursuant to 
paragraph (1) shall— 
 
(A) require that, whenever possible,  the Department and Department 
contractors and subcontractors at all tiers— 
 
(i) obtain electronic parts that are in production or currently available 
in stock from the original manufacturers of the parts or their authorized dealers, or from trusted suppliers who obtain such parts exclusively from the 
original manufacturers of the parts or their authorized dealers; and 
 
(ii) obtain electronic parts that are not in production or currently 
available in stock from trusted suppliers; 
 
(B) establish requirements for notification of the Department, and inspection, 
testing, and authentication of electronic parts that the Department or a Department 
contractor or subcontractor obtains from an y source other than a source described in 
subparagraph (A); 
 
(C) establish qualification requirements, consistent with the requirements of 
section 2319 of title 10, United States Code, pursuant to which the Department may 
identify trusted suppliers th at have appropriate policies and procedures in place to 
detect and avoid counterfeit electronic part s and suspect counterfeit electronic parts; 
and 
 
(D) authorize Department contractors and subcontractors to identify and use 
additional trusted suppliers, provided that— 
 
(i) the standards and processes for id entifying such trusted suppliers 
comply with established industry standards; 
 
(ii) the contractor or subcontractor assumes responsibility for the 
authenticity of parts provided by such suppliers as provided in paragraph (2); 
and  
 
(iii) the selection of such trusted s uppliers is subject to review and 
audit by appropriate Department officials. 
 
(4) REPORTING REQUIREMENT.—The revised regulations issued pursuant to 
paragraph (1) shall require that any Departme nt contractor or subcontractor who becomes 
aware, or has reason to suspect, that any end ite m, component, part, or material contained in 
supplies purchased by the Department, or purch ased by a contractor or subcontractor for 
delivery to, or on behalf of, the Department, c ontains counterfeit electronic parts or suspect 
counterfeit electronic parts report in writing w ithin 60 days to appropriate Government 
authorities and the Government-Industry Data Exchange Program (or a similar program 
designated by the Secretary). 
  IP/N/1/USA/E/3 
 Page 5 
 
 
  (5) CONSTRUCTION OF COMPLIANCE WITH REPORTING 
REQUIREMENT.—A Department contractor or subcontractor that provides a written report required under this subsection sh all not be subject to civil liability on the basis of such 
reporting, provided the contractor or subcontract or made a reasonable effort to determine that 
the end item, component, part, or material con cerned contained counterfeit electronic parts or 
suspect counterfeit electronic parts. 
 
(d) INSPECTION PROGRAM.—The Secretary of Homeland Security shall establish and 
implement a risk-based methodology for the enhanced targeting of electronic parts imported from any country, after consultation with the Secretary of De fense as to sources of counterfeit electronic parts 
and suspect counterfeit electronic parts in the supply chain for products purchased by the Department 
of Defense.  
(e) IMPROVEMENT OF CONTRACTOR SYSTEMS FOR DETECTION AND 
AVOIDANCE OF COUNTERFEIT ELECTRONIC PARTS.— 
 
(1) IN GENERAL.—Not later than 270 days after the date of the enactment of this 
Act, the Secretary of Defense shall implement a program to enhance contractor detection and avoidance of counterfeit electronic parts. 
 
(2) ELEMENTS.—The program implemented pursuant to paragraph (1) shall— 
 
(A) require covered contractors that supply electronic parts or systems that 
contain electronic parts to establish polici es and procedures to eliminate counterfeit 
electronic parts from the defense supply chain, which policies and procedures shall address— 
 
(i) the training of personnel;  
 
(ii) the inspection and testing of electronic parts; 
 
(iii) processes to abolish count erfeit parts proliferation; 
 
(iv) mechanisms to enab le traceability of parts; 
 
(v) use of trusted suppliers; 
 
(vi) the reporting and quarantining of counterfeit electronic parts and 
suspect counterfeit electronic parts; 
 
(vii) methodologies to identify suspect counterfeit parts and to 
rapidly determine if a suspect counte rfeit part is, in fact, counterfeit; 
 
(viii) the design, operation, and maintenance of systems to detect and 
avoid counterfeit electronic parts and suspect counterfeit electronic parts; and 
 
(ix) the flow down of counte rfeit avoidance and detection 
requirements to subcontractors; and 
 
(B) establish processes for the review and approval of contractor systems for 
the detection and avoidance of counterfe it electronic parts and suspect counterfeit 
electronic parts, which processes shall be comparable to the processes established for 
contractor business systems under section 893 of the Ike Skelton National Defense IP/N/1/USA/E/3 
Page 6  
 
  Authorization Act for Fiscal Year 2011 (P ublic Law 111–383; 124 Stat. 4311; 10 
U.S.C. 2302 note). 
 
(f) DEFINITIONS.—In subsections (a ) through (e) of this section: 
 
(1) The term ''covered contractor'' has the meaning given that term in 
section 893(f)(2) of the Ike Skelton National De fense Authorization Act for Fiscal Year 2011. 
 
(2) The term ''electronic part'' means an integrated circuit, a discrete electronic 
component (including, but not limited to, a transist or, capacitor, resistor, or diode), or a circuit 
assembly. 
 
(g) INFORMATION SHARING.— 
 
(1) IN GENERAL.—If United States Customs and Border Protection suspects a 
product of being imported in violation of secti on 42 of the Lanham Act, and subject to any 
applicable bonding requirements, the Secretar y of the Treasury may share information 
appearing on, and unredacted samples of, pro ducts and their packaging and labels, or 
photographs of such products, packaging, and la bels, with the rightholders of the trademarks 
suspected of being copied or simulated for purposes of determining whether the products are 
prohibited from importation pursuant to such section. 
 
(2) SUNSET.—This subsection shall expire on the date of the enactment of the 
Customs Facilitation and Trade Enforcement Reauthorization Act of 2012. 
 
(3) LANHAM ACT DEFINED.—In this subsection, the term ''Lanham Act'' means 
the Act entitled ''An Act to provide for the regi stration and protection of trademarks used in 
commerce, to carry out the provisions of certa in international conventions, and for other 
purposes'', approved July 5, 1946 (commonly re ferred to as the ''Trademark Act of 1946'' or 
the ''Lanham Act''). 
 
(h) TRAFFICKING IN INHERENTLY DANGEROUS GOODS OR SERVICES.— 
Section 2320 of title 18, United States C ode, is amended to read as follows: 
 
''§ 2320. Trafficking in counterfeit goods or services 
 
''(a) OFFENSES.—Whoever intentionally— 
 
''(1) traffics in goods or services and knowingly uses a counterfeit mark on or in 
connection with such goods or services, 
 
''(2) traffics in labels, patches, sticke rs, wrappers, badges, emblems, medallions, 
charms, boxes, containers, cans, cases, hangtags, documentation, or packaging of any type or 
nature, knowing that a counterfeit mark has been a pplied thereto, the use of which is likely to 
cause confusion, to cause mistake, or to deceive, or 
 
''(3) traffics in goods or services knowing that such good or service is a counterfeit 
military good or service the use, malfunction, or failure of which is likely to cause serious 
bodily injury or death, the disclosure of clas sified information, impairment of combat 
operations, or other significant harm to a comb at operation, a member of the Armed Forces, 
or to national security, or attempts or conspir es to violate any of paragraphs (1) through (3) 
shall be punished as provided in subsection (b). 
  IP/N/1/USA/E/3 
 Page 7 
 
 
  ''(b) PENALTIES.— 
 
''(1) IN GENERAL.—Whoever commits an offense under subsection (a)— 
 
''(A) if an individual, shall be fine d not more than $2,000,000 or imprisoned 
not more than 10 years, or both, and, if a person other than an individual, shall be 
fined not more than $5,000,000; and 
 
''(B) for a second or subsequent offense under subsection (a), if an individual, 
shall be fined not more than $5,000,000 or imprisoned not more than 20 years, or 
both, and if other than an individual, shall be fined not more than $15,000,000. 
 
''(2) SERIOUS BODILY INJURY OR DEATH.— 
 
''(A) SERIOUS BODILY INJURY.—W hoever knowingly or recklessly 
causes or attempts to cause serious bodily injury from conduct in violation of 
subsection (a), if an individual, shall be fined not more than $5,000,000 or imprisoned 
for not more than 20 years, or both, and if other than an individual, shall be fined not more than $15,000,000. 
 
''(B) DEATH.—Whoever knowingly or recklessly causes or attempts to cause 
death from conduct in violation of subsection (a ), if an individual, shall be fined not 
more than $5,000,000 or imprisoned for any term  of years or for life, or both, and if 
other than an individual, shall be fined not more than $15,000,000. 
 
''(3) COUNTERFEIT MILITARY GOODS OR SERVICES.—Whoever commits an 
offense under subsection (a) involving a counterfeit military good or service— 
 
''(A) if an individual, shall be fine d not more than $5,000,000, imprisoned not 
more than 20 years, or both, and if other th an an individual, be fined not more than 
$15,000,000; and  
 
''(B) for a second or subsequent offense,  if an individual, shall be fined not 
more than $15,000,000, imprisoned not more th an 30 years, or both, and if other than 
an individual, shall be fined not more than $30,000,000. 
 
''(c) FORFEITURE AND DESTRUCTION OF  PROPERTY; RESTITUTION.— Forfeiture, 
destruction, and restitution relating to this section shall be subject to section 2323, to the extent 
provided in that section, in addition to any other similar remedies provided by law.  
''(d) DEFENSES.—All defenses, affirmative defe nses, and limitations on  remedies that would 
be applicable in an action under the Lanham Act sh all be applicable in a prosecution under this 
section. In a prosecution under this section, the defe ndant shall have the burden of proof, by a 
preponderance of the evidence, of any such affirmative defense. 
 
''(e) PRESENTENCE REPORT.—(1) During prepar ation of the presentence report pursuant 
to Rule 32(c) of the Federal Rules of Criminal Proc edure, victims of the offe nse shall be permitted to 
submit, and the probation officer shall receive, a victim  impact statement that identifies the victim of 
the offense and the extent and scope of the inju ry and loss suffered by the victim, including the 
estimated economic impact of the offense on that victim.   IP/N/1/USA/E/3 
Page 8  
 
  ''(2) Persons permitted to submit victim  impact statements shall include— 
 
''(A) producers and sellers of legitimate goods or services affected by conduct 
involved in the offense; 
 
''(B) holders of intellectual property rights in such goods or services; and 
 
''(C) the legal representatives of such  producers, sellers, and holders. 
 
''(f) DEFINITIONS.—For the purposes of this section— 
 
''(1) the term 'counterfeit mark' means— 
 
''(A) a spurious mark— 
 
''(i) that is used in connection w ith trafficking in any goods, services, 
labels, patches, stickers, wrappers, badges, emblems, medallions, charms, 
boxes, containers, cans, cases, hangtags,  documentation, or packaging of any 
type or nature; 
 
''(ii) that is identical with, or substantially indistinguishable from, a 
mark registered on the principal regi ster in the United States Patent and 
Trademark Office and in use, whether or not the defendant knew such mark was so registered; 
 
''(iii) that is applied to or used in connection with the goods or 
services for which the mark is registered with the United States Patent and 
Trademark Office, or is applied to or consists of a label, patch, sticker, 
wrapper, badge, emblem, medallion, charm, box, container, can, case, 
hangtag, documentation, or packaging of any type or nature that is designed, marketed, or otherwise intended to be  used on or in connection with the 
goods or services for which the mark is registered in the United States Patent 
and Trademark Office; and 
 
''(iv) the use of which is likely to  cause confusion, to cause mistake, 
or to deceive; or 
 
''(B) a spurious designation that is identical with, or substantially 
indistinguishable from, a designation as to which the remedies of the Lanham Act are 
made available by reason of section 220506 of  title 36; but such term does not include 
any mark or designation used in connection with goods or services, or a mark or designation applied to labels, patches, stickers, wrappers, badges, emblems, 
medallions, charms, boxes, containers, cans,  cases, hangtags, documentation, or 
packaging of any type or nature used in  connection with such goods or services, of 
which the manufacturer or producer was, at the time of the manufacture or production 
in question, authorized to use the mark or designation for the type of goods or 
services so manufactured or produced, by the ho lder of the right to use such mark or 
designation; 
 
''(2) the term 'financial gain ' includes the receipt, or expected receipt, of anything of 
value; 
  IP/N/1/USA/E/3 
 Page 9 
 
 
  ''(3) the term 'Lanham Act' means the Act entitled 'An Act to provide for the 
registration and protection of trademarks used in commerce, to carry out the provisions of 
certain international conventions, and for othe r purposes', approved July 5, 1946 (15 U.S.C. 
1051 et seq.); 
 
''(4) the term 'counterfeit military good or service' means a good or service that uses a 
counterfeit mark on or in connection with such good or service and that— 
 
''(A) is falsely identified or labele d as meeting military specifications, or 
 
''(B) is intended for use in a military or national security application; and 
 
''(5) the term 'traffic' means to transport, tr ansfer, or otherwise dispose of, to another, 
for purposes of commercial advantage or private financial gain, or to make, import, export, obtain control of, or possess, with intent to so transport, transfer, or otherwise dispose of. 
 
''(g) LIMITATION ON CAUSE OF ACTION.—Nothi ng in this section shall entitle the 
United States to bring a criminal cause of action under this section for the repackaging of genuine 
goods or services not intended to deceive or confuse.  
''(h) REPORT TO CONGRESS.—(1) Beginning with th e first year after the date of enactment 
of this subsection, the Attorney General shall in clude in the report of the Attorney General to 
Congress on the business of the Department of Justice pr epared pursuant to section 522 of title 28, an 
accounting, on a district by district basis, of th e following with respect to all actions taken by the 
Department of Justice that involve trafficking in counterfeit labels for phonorecords, copies of 
computer programs or computer program documentation or packaging, copies of motion pictures or 
other audiovisual works (as defined in section 2318 of this title), criminal infringement of copyrights 
(as defined in section 2319 of this  title), unauthorized fixation of a nd trafficking in sound recordings 
and music videos of live musical performances (as defined in section 2319A of this title), or 
trafficking in goods or services bearing counterfeit ma rks (as defined in section 2320 of this title): 
 
''(A) The number of open investigations. 
 
''(B) The number of cases referred by the United States Customs Service. 
 
''(C) The number of cases referred by other agencies or sources. 
 
''(D) The number and outcome, including settlements, sentences, recoveries, and 
penalties, of all prosecutions brought under secti ons 2318, 2319, 2319A, and 2320 of title 18. 
 
''(2)(A) The report under paragraph (1), with  respect to criminal infringement of 
copyright, shall include the following: 
 
''(i) The number of infringement cases in these categories: audiovisual 
(videos and films); audio (sound recordi ngs); literary works (books and musical 
compositions); computer programs; video games; and, others. 
 
''(ii) The number of online infringement cases. 
 
''(iii) The number and dollar amounts of fines assessed in specific categories 
of dollar amounts. These categories shall be : no fines ordered; fines under $500; fines 
from $500 to $1,000; fines from $1,000 to $5,000; fines from $5,000 to $10,000; and fines over $10,000. IP/N/1/USA/E/3 
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''(iv) The total amount of restitution ordered in all copyright infringement 
cases. 
 
''(B) In this paragraph, the term 'online infringement cases' as used in paragraph (2) 
means those cases where the infringer— 
 
''(i) advertised or publicized the infringing work on the Internet; or 
 
''(ii) made the infringing work available on the Internet for download, 
reproduction, performance, or di stribution by other persons. 
 
''(C) The information required under subpa ragraph (A) shall be submitted in the 
report required in fiscal year 2005 and thereafter. 
 
''(i) TRANSSHIPMENT AND EXPORTATION.—No goods or services, the trafficking in of 
which is prohibited by this section, shall be tran sshipped through or exported from the United States. 
Any such transshipment or exportation shall be deemed  a violation of section 42 of an Act to provide 
for the registration of trademarks used in co mmerce, to carry out the provisions of certain 
international conventions, and for other purposes, approved July 5, 1946 (commonly referred to as the 
'Trademark Act of 1946' or the 'Lanham Act').''. 
 
 
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