IIB 

109TH CONGRESS 

1ST SESSION H. R. 32

IN THE SENATE OF THE UNITED STATES 

MAY 24, 2005

Received; read twice and referred to the Committee on the Judiciary 

AN ACT

To amend title 18, United States Code, to provide criminal 

penalties for trafficking in counterfeit marks.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE; FINDINGS. 

2 (a) SHORT TITLE.—This Act may be cited as the 

3 ‘‘Stop Counterfeiting in Manufactured Goods Act’’. 

4 (b) FINDINGS.—The Congress finds that—

5 (1) the United States economy is losing millions 

6 of dollars in tax revenue and tens of thousands of 

7 jobs because of the manufacture, distribution, and 

8 sale of counterfeit goods; 

9 (2) the Bureau of Customs and Border Protec10 tion estimates that counterfeiting costs the United 

11 States $200 billion annually; 

12 (3) counterfeit automobile parts, including 

13 brake pads, cost the auto industry alone billions of 

14 dollars in lost sales each year; 

15 (4) counterfeit products have invaded numerous 

16 industries, including those producing auto parts, 

17 electrical appliances, medicines, tools, toys, office 

18 equipment, clothing, and many other products; 

19 (5) ties have been established between counter20 feiting and terrorist organizations that use the sale 

21 of counterfeit goods to raise and launder money; 

22 (6) ongoing counterfeiting of manufactured 

23 goods poses a widespread threat to public health and 

24 safety; and 
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1 (7) strong domestic criminal remedies against 

2 counterfeiting will permit the United States to seek 

3 stronger anticounterfeiting provisions in bilateral 

4 and international agreements with trading partners. 

5 SEC. 2. TRAFFICKING IN COUNTERFEIT MARKS. 

6 Section 2320 of title 18, United States Code, is 

7 amended as follows: 

8 (1) Subsection (a) is amended by inserting after 

9 ‘‘such goods or services’’ the following: ‘‘, or inten10 tionally traffics or attempts to traffic in labels, 

11 patches, stickers, wrappers, badges, emblems, medal12 lions, charms, boxes, containers, cans, cases, 

13 hangtags, documentation, or packaging of any type 

14 or nature, knowing that a counterfeit mark has been 

15 applied thereto, the use of which is likely to cause 

16 confusion, to cause mistake, or to deceive,’’. 

17 (2) Subsection (b) is amended to read as fol18 lows: 

19 ‘‘(b)(1) The following property shall be subject to for20 feiture to the United States and no property right shall 

21 exist in such property: 

22 ‘‘(A) Any article bearing or consisting of a 

23 counterfeit mark used in committing a violation of 

24 subsection (a). 
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1 ‘‘(B) Any property used, in any manner or part, 

2 to commit or to facilitate the commission of a viola3 tion of subsection (a). 

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

5 to civil forfeitures shall extend to any seizure or civil for6 feiture under this section. At the conclusion of the for7 feiture proceedings, the court, unless otherwise requested 

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

9 forfeited article bearing or consisting of a counterfeit 

10 mark be destroyed or otherwise disposed of according to 

11 law. 

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

13 convicted of an offense under this section, shall order, in 

14 addition to any other sentence imposed, that the person 

15 forfeit to the United States—

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

17 any proceeds the person obtained, directly or indi18 rectly, as the result of the offense; 

19 ‘‘(ii) any of the person’s property used, or in20 tended to be used, in any manner or part, to com21 mit, facilitate, aid, or abet the commission of the of22 fense; and 

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

24 counterfeit mark used in committing the offense. 
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1 ‘‘(B) The forfeiture of property under subparagraph 

2 (A), including any seizure and disposition of the property 

3 and any related judicial or administrative proceeding, shall 

4 be governed by the procedures set forth in section 413 

5 of the Comprehensive Drug Abuse Prevention and Control 

6 Act of 1970 (21 U.S.C. 853), other than subsection (d) 

7 of that section. Notwithstanding section 413(h) of that 

8 Act, at the conclusion of the forfeiture proceedings, the 

9 court shall order that any forfeited article or component 

10 of an article bearing or consisting of a counterfeit mark 

11 be destroyed. 

12 ‘‘(4) When a person is convicted of an offense under 

13 this section, the court, pursuant to sections 3556, 3663A, 

14 and 3664, shall order the person to pay restitution to the 

15 owner of the mark and any other victim of the offense 

16 as an offense against property referred to in section 

17 3663A(c)(1)(A)(ii). 

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

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

20 (3) Subsection (e)(1) is amended—

21 (A) by striking subparagraph (A) and in22 serting the following: 

23 ‘‘(A) a spurious mark—

24 ‘‘(i) that is used in connection with 

25 trafficking in any goods, services, labels, 
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1 patches, stickers, wrappers, badges, em2 blems, medallions, charms, boxes, con3 tainers, cans, cases, hangtags, documenta4 tion, or packaging of any type or nature; 

5 ‘‘(ii) that is identical with, or substan6 tially indistinguishable from, a mark reg7 istered on the principal register in the 

8 United States Patent and Trademark Of9 fice and in use, whether or not the defend10 ant knew such mark was so registered; 

11 ‘‘(iii) that is applied to or used in con12 nection with the goods or services for 

13 which the mark is registered with the 

14 United States Patent and Trademark Of15 fice, or is applied to or consists of a label, 

16 patch, sticker, wrapper, badge, emblem, 

17 medallion, charm, box, container, can, 

18 case, hangtag, documentation, or pack19 aging of any type or nature that is de20 signed, marketed, or otherwise intended to 

21 be used on or in connection with the goods 

22 or services for which the mark is registered 

23 in the United States Patent and Trade24 mark Office; and 
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1 ‘‘(iv) the use of which is likely to 

2 cause confusion, to cause mistake, or to 

3 deceive; or’’; and 

4 (B) by amending the matter following sub5 paragraph (B) to read as follows: 

6 ‘‘but such term does not include any mark or 

7 designation used in connection with goods or 

8 services, or a mark or designation applied to la9 bels, patches, stickers, wrappers, badges, em10 blems, medallions, charms, boxes, containers, 

11 cans, cases, hangtags, documentation, or pack12 aging of any type or nature used in connection 

13 with such goods or services, of which the manu14 facturer or producer was, at the time of the 

15 manufacture or production in question, author16 ized to use the mark or designation for the type 

17 of goods or services so manufactured or pro18 duced, by the holder of the right to use such 

19 mark or designation.’’. 

20 (4) Section 2320 is further amended—

21 (A) by redesignating subsection (f) as sub22 section (g); and 

23 (B) by inserting after subsection (e) the 

24 following: 
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1 ‘‘(f) Nothing in this section shall entitle the United 

2 States to bring a criminal cause of action under this sec3 tion for the repackaging of genuine goods or services not 

4 intended to deceive or confuse.’’. 

5 SEC. 3. SENTENCING GUIDELINES. 

6 (a) REVIEW AND AMENDMENT.—Not later than 180 

7 days after the date of enactment of this Act, the United 

8 States Sentencing Commission, pursuant to its authority 

9 under section 994 of title 28, United States Code, and 

10 in accordance with this section, shall review and, if appro11 priate, amend the Federal sentencing guidelines and policy 

12 statements applicable to persons convicted of any offense 

13 under—

14 (1) section 1204 of title 17, United States 

15 Code; or 

16 (2) section 2318 or 2320 of title 18, United 

17 States Code. 

18 (b) AUTHORIZATION.—The United States Sentencing 

19 Commission may amend the Federal sentencing guidelines 

20 in accordance with the procedures set forth in section 

21 21(a) of the Sentencing Act of 1987 (28 U.S.C. 994 note) 

22 as though the authority under that section had not ex23 pired. 

24 (c) RESPONSIBILITIES OF UNITED STATES SEN25 TENCING COMMISSION.—In carrying out this section, the 
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1 United States Sentencing Commission shall determine 

2 whether the definition of ‘‘infringement amount’’ set forth 

3 in application note 2 of section 2B5.3 of the Federal sen4 tencing guidelines is adequate to address situations in 

5 which the defendant has been convicted of one of the of6 fenses listed in subsection (a) and the item in which the 

7 defendant trafficked was not an infringing item but rather 

8 was intended to facilitate infringement, such as an anti9 circumvention device, or the item in which the defendant 

10 trafficked was infringing and also was intended to facili11 tate infringement in another good or service, such as a 

12 counterfeit label, documentation, or packaging, taking into 

13 account cases such as U.S. v. Sung, 87 F.3d 194 (7th 

14 Cir. 1996).

Passed the House of Representatives May 23, 2005. 

Attest: JEFF TRANDAHL, 

Clerk.