H. R. 32

One Hundred Ninth Congress

of the

United States of America 

AT THE SECOND SESSION 

Begun and held at the City of Washington on Tuesday, 

the third day of January, two thousand and six 

An Act 

To amend title 18, United States Code, to provide criminal penalties for trafficking 

in counterfeit marks.

Be it enacted by the Senate and House of Representatives of 

the United States of America in Congress assembled,

SECTION 1. TRAFFICKING IN COUNTERFEIT MARKS. 

(a) SHORT TITLE; FINDINGS.— (1) SHORT TITLE.—This section may be cited as the ‘‘Stop 

Counterfeiting in Manufactured Goods Act’’. 

(2) FINDINGS.—The Congress finds that—

(A) the United States economy is losing millions of 

dollars in tax revenue and tens of thousands of jobs because 

of the manufacture, distribution, and sale of counterfeit 

goods; 

(B) the Bureau of Customs and Border Protection estimates that counterfeiting costs the United States $200 

billion annually; 

(C) counterfeit automobile parts, including brake pads, 

cost the auto industry alone billions of dollars in lost sales 

each year; 

(D) counterfeit products have invaded numerous industries, including those producing auto parts, electrical appliances, medicines, tools, toys, office equipment, clothing, 

and many other products; 

(E) ties have been established between counterfeiting 

and terrorist organizations that use the sale of counterfeit 

goods to raise and launder money; 

(F) ongoing counterfeiting of manufactured goods poses 

a widespread threat to public health and safety; and 

(G) strong domestic criminal remedies against counterfeiting will permit the United States to seek stronger 

anticounterfeiting provisions in bilateral and international 

agreements with trading partners. 

(b) TRAFFICKING IN COUNTERFEIT MARKS.—Section 2320 of title 

18, United States Code, is amended as follows: 

(1) Subsection (a) is amended by inserting after ‘‘such goods 

or services’’ the following: ‘‘, or intentionally traffics or attempts 

to traffic in labels, patches, stickers, 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 applied thereto, 

the use of which is likely to cause confusion, to cause mistake, 

or to deceive,’’. 

(2) Subsection (b) is amended to read as follows: 
H. R. 32—2

‘‘(b)(1) The following property shall be subject to forfeiture 

to the United States and no property right shall exist in such 

property: 

‘‘(A) Any article bearing or consisting of a counterfeit mark 

used in committing a violation of subsection (a). 

‘‘(B) Any property used, in any manner or part, to commit 

or to facilitate the commission of a violation of subsection 

(a). 

‘‘(2) The provisions of chapter 46 of this title relating to civil 

forfeitures, including section 983 of this title, shall extend to any 

seizure or civil forfeiture under this section. At the conclusion 

of the forfeiture proceedings, the court, unless otherwise requested 

by an agency of the United States, shall order that any forfeited 

article bearing or consisting of a counterfeit mark be destroyed 

or otherwise disposed of according to law. 

‘‘(3)(A) The court, in imposing sentence on a person convicted 

of an offense under this section, shall order, in addition to any 

other sentence imposed, that the person forfeit to the United 

States—

‘‘(i) any property constituting or derived from any proceeds 

the person obtained, directly or indirectly, as the result of 

the offense; 

‘‘(ii) any of the person’s property used, or intended to be 

used, in any manner or part, to commit, facilitate, aid, or 

abet the commission of the offense; and 

‘‘(iii) any article that bears or consists of a counterfeit 

mark used in committing the offense. 

‘‘(B) The forfeiture of property under subparagraph (A), 

including any seizure and disposition of the property and any 

related judicial or administrative proceeding, shall be governed 

by the procedures set forth in section 413 of the Comprehensive 

Drug Abuse Prevention and Control Act of 1970 (21 U.S.C. 853), 

other than subsection (d) of that section. Notwithstanding section 

413(h) of that Act, at the conclusion of the forfeiture proceedings, 

the court shall order that any forfeited article or component of 

an article bearing or consisting of a counterfeit mark be destroyed. 

‘‘(4) When a person is convicted of an offense under this section, 

the court, pursuant to sections 3556, 3663A, and 3664, shall order 

the person to pay restitution to the owner of the mark and any 

other victim of the offense as an offense against property referred 

to in section 3663A(c)(1)(A)(ii). 

‘‘(5) The term ‘victim’, as used in paragraph (4), has the 

meaning given that term in section 3663A(a)(2).’’. 

(3) Subsection (e)(1) is amended—

(A) by striking subparagraph (A) and inserting the 

following: 

‘‘(A) a spurious mark—

‘‘(i) that is used in connection with 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 

register in the United States Patent and Trademark 

Office and in use, whether or not the defendant knew 

such mark was so registered; 
H. R. 32—3

‘‘(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’’; and 

(B) by amending the matter following subparagraph 

(B) to read as follows: 

‘‘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 holder of the right to use such mark or designation.’’. 

(4) Section 2320 is further amended—

(A) by redesignating subsection (f) as subsection (g); 

and 

(B) by inserting after subsection (e) the following: 

‘‘(f) Nothing 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.’’. 

(c) SENTENCING GUIDELINES.— (1) REVIEW AND AMENDMENT.—Not later than 180 days 

after the date of enactment of this Act, the United States 

Sentencing Commission, pursuant to its authority under section 

994 of title 28, United States Code, and in accordance with 

this subsection, shall review and, if appropriate, amend the 

Federal sentencing guidelines and policy statements applicable 

to persons convicted of any offense under section 2318 or 2320 

of title 18, United States Code. 

(2) AUTHORIZATION.—The United States Sentencing 

Commission may amend the Federal sentencing guidelines in 

accordance with the procedures set forth in section 21(a) of 

the Sentencing Act of 1987 (28 U.S.C. 994 note) as though 

the authority under that section had not expired. 

(3) RESPONSIBILITIES OF UNITED STATES SENTENCING

COMMISSION.—In carrying out this subsection, the United States 

Sentencing Commission shall determine whether the definition 

of ‘‘infringement amount’’ set forth in application note 2 of 

section 2B5.3 of the Federal sentencing guidelines is adequate 

to address situations in which the defendant has been convicted 

of one of the offenses listed in paragraph (1) and the item 

in which the defendant trafficked was not an infringing item 

but rather was intended to facilitate infringement, such as 
H. R. 32—4

an anti-circumvention device, or the item in which the defendant trafficked was infringing and also was intended to facilitate 

infringement in another good or service, such as a counterfeit 

label, documentation, or packaging, taking into account cases 

such as U.S. v. Sung, 87 F.3d 194 (7th Cir. 1996). 

SEC. 2. TRAFFICKING DEFINED. 

(a) SHORT TITLE.—This section may be cited as the ‘‘Protecting 

American Goods and Services Act of 2005’’. 

(b) COUNTERFEIT GOODS OR SERVICES.—Section 2320(e) of title 

18, United States Code, is amended—

(1) by striking paragraph (2) and inserting the following: 

‘‘(2) the term ‘traffic’ means to transport, transfer, 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;’’; 

(2) by redesignating paragraph (3) as paragraph (4); and 

(3) by inserting after paragraph (2) the following: 

‘‘(3) the term ‘financial gain’ includes the receipt, or 

expected receipt, of anything of value; and’’. 

(c) CONFORMING AMENDMENTS.— (1) SOUND RECORDINGS AND MUSIC VIDEOS OF LIVE MUSICAL

PERFORMANCES.—Section 2319A(e) of title 18, United States 

Code, is amended by striking paragraph (2) and inserting the 

following: 

‘‘(2) the term ‘traffic’ has the same meaning as in section 

2320(e) of this title.’’. 

(2) COUNTERFEIT LABELS FOR PHONORECORDS, COMPUTER

PROGRAMS, ETC.—Section 2318(b) of title 18, United States 

Code, is amended by striking paragraph (2) and inserting the 

following: 

‘‘(2) the term ‘traffic’ has the same meaning as in section 

2320(e) of this title;’’. 

(3) ANTI-BOOTLEGGING.—Section 1101 of title 17, United 

States Code, is amended by striking subsection (b) and inserting 

the following: 

‘‘(b) DEFINITION.—In this section, the term ‘traffic’ has the 

same meaning as in section 2320(e) of title 18.’’.

Speaker of the House of Representatives.

Vice President of the United States and

President of the Senate.