In the Senate of the United States,

February 15, 2006.

Resolved, That the bill from the House of Representatives (H.R. 32) entitled ‘‘An Act to amend title 18, United

States Code, to provide criminal penalties for trafficking in

counterfeit marks.’’, do pass with the following

AMENDMENT:

Strike out all after the enacting clause and insert:

1 SECTION 1. TRAFFICKING IN COUNTERFEIT MARKS.

2 (a) SHORT TITLE; FINDINGS.—

3 (1) SHORT TITLE.—This section may be cited as

4 the ‘‘Stop Counterfeiting in Manufactured Goods

5 Act’’.
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1 (2) FINDINGS.—The Congress finds that—

2 (A) the United States economy is losing

3 millions of dollars in tax revenue and tens of

4 thousands of jobs because of the manufacture,

5 distribution, and sale of counterfeit goods;

6 (B) the Bureau of Customs and Border Pro7 tection estimates that counterfeiting costs the

8 United States $200 billion annually;

9 (C) counterfeit automobile parts, including

10 brake pads, cost the auto industry alone billions

11 of dollars in lost sales each year;

12 (D) counterfeit products have invaded nu13 merous industries, including those producing

14 auto parts, electrical appliances, medicines,

15 tools, toys, office equipment, clothing, and many

16 other products;

17 (E) ties have been established between coun18 terfeiting and terrorist organizations that use the

19 sale of counterfeit goods to raise and launder

20 money;

21 (F) ongoing counterfeiting of manufactured

22 goods poses a widespread threat to public health

23 and safety; and

24 (G) strong domestic criminal remedies

25 against counterfeiting will permit the United
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1 States to seek stronger anticounterfeiting provi2 sions in bilateral and international agreements

3 with trading partners.

4 (b) TRAFFICKING IN COUNTERFEIT MARKS.—Section

5 2320 of title 18, United States Code, is amended as follows:

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

7 ‘‘such goods or services’’ the following: ‘‘, or inten8 tionally traffics or attempts to traffic in labels, patch9 es, stickers, wrappers, badges, emblems, medallions,

10 charms, boxes, containers, cans, cases, hangtags, docu11 mentation, or packaging of any type or nature, know12 ing that a counterfeit mark has been applied thereto,

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

14 mistake, or to deceive,’’.

15 (2) Subsection (b) is amended to read as follows:

16 ‘‘(b)(1) The following property shall be subject to for17 feiture to the United States and no property right shall

18 exist in such property:

19 ‘‘(A) Any article bearing or consisting of a coun20 terfeit mark used in committing a violation of sub21 section (a).

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

23 to commit or to facilitate the commission of a viola24 tion of subsection (a).
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1 ‘‘(2) The provisions of chapter 46 of this title relating

2 to civil forfeitures, including section 983 of this title, shall

3 extend to any seizure or civil forfeiture under this section.

4 At the conclusion of the forfeiture proceedings, the court,

5 unless otherwise requested by an agency of the United

6 States, shall order that any forfeited article bearing or con7 sisting of a counterfeit mark be destroyed or otherwise dis8 posed of according to law.

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

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

11 addition to any other sentence imposed, that the person for12 feit to the United States—

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

14 any proceeds the person obtained, directly or indi15 rectly, as the result of the offense;

16 ‘‘(ii) any of the person’s property used, or in17 tended to be used, in any manner or part, to commit,

18 facilitate, aid, or abet the commission of the offense;

19 and

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

21 counterfeit mark used in committing the offense.

22 ‘‘(B) The forfeiture of property under subparagraph

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

24 and any related judicial or administrative proceeding, shall

25 be governed by the procedures set forth in section 413 of
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1 the Comprehensive Drug Abuse Prevention and Control Act

2 of 1970 (21 U.S.C. 853), other than subsection (d) of that

3 section. Notwithstanding section 413(h) of that Act, at the

4 conclusion of the forfeiture proceedings, the court shall order

5 that any forfeited article or component of an article bearing

6 or consisting of a counterfeit mark be destroyed.

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

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

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

10 owner of the mark and any other victim of the offense as

11 an offense against property referred to in section

12 3663A(c)(1)(A)(ii).

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

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

15 (3) Subsection (e)(1) is amended—

16 (A) by striking subparagraph (A) and in17 serting the following:

18 ‘‘(A) a spurious mark—

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

20 trafficking in any goods, services, labels,

21 patches, stickers, wrappers, badges, em22 blems, medallions, charms, boxes, con23 tainers, cans, cases, hangtags, documenta24 tion, or packaging of any type or nature;
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1 ‘‘(ii) that is identical with, or substan2 tially indistinguishable from, a mark reg3 istered on the principal register in the

4 United States Patent and Trademark Office

5 and in use, whether or not the defendant

6 knew such mark was so registered;

7 ‘‘(iii) that is applied to or used in con8 nection with the goods or services for which

9 the mark is registered with the United

10 States Patent and Trademark Office, or is

11 applied to or consists of a label, patch,

12 sticker, wrapper, badge, emblem, medallion,

13 charm, box, container, can, case, hangtag,

14 documentation, or packaging of any type or

15 nature that is designed, marketed, or other16 wise intended to be used on or in connection

17 with the goods or services for which the

18 mark is registered in the United States Pat19 ent and Trademark Office; and

20 ‘‘(iv) the use of which is likely to cause

21 confusion, to cause mistake, or to deceive;

22 or’’; and

23 (B) by amending the matter following sub24 paragraph (B) to read as follows:
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1 ‘‘but such term does not include any mark or designa2 tion used in connection with goods or services, or a

3 mark or designation applied to labels, patches, stick4 ers, wrappers, badges, emblems, medallions, charms,

5 boxes, containers, cans, cases, hangtags, documenta6 tion, or packaging of any type or nature used in con7 nection with such goods or services, of which the man8 ufacturer or producer was, at the time of the manu9 facture or production in question, authorized to use

10 the mark or designation for the type of goods or serv11 ices so manufactured or produced, by the holder of the

12 right to use such mark or designation.’’.

13 (4) Section 2320 is further amended—

14 (A) by redesignating subsection (f) as sub15 section (g); and

16 (B) by inserting after subsection (e) the fol17 lowing:

18 ‘‘(f) Nothing in this section shall entitle the United

19 States to bring a criminal cause of action under this section

20 for the repackaging of genuine goods or services not in21 tended to deceive or confuse.’’.

22 (c) SENTENCING GUIDELINES.—

23 (1) REVIEW AND AMENDMENT.—Not later than

24 180 days after the date of enactment of this Act, the

25 United States Sentencing Commission, pursuant to
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1 its authority under section 994 of title 28, United

2 States Code, and in accordance with this subsection,

3 shall review and, if appropriate, amend the Federal

4 sentencing guidelines and policy statements applica5 ble to persons convicted of any offense under section

6 2318 or 2320 of title 18, United States Code.

7 (2) AUTHORIZATION.—The United States Sen8 tencing Commission may amend the Federal sen9 tencing guidelines in accordance with the procedures

10 set forth in section 21(a) of the Sentencing Act of

11 1987 (28 U.S.C. 994 note) as though the authority

12 under that section had not expired.

13 (3) RESPONSIBILITIES OF UNITED STATES SEN14 TENCING COMMISSION.—In carrying out this sub15 section, the United States Sentencing Commission

16 shall determine whether the definition of ‘‘infringe17 ment amount’’ set forth in application note 2 of sec18 tion 2B5.3 of the Federal sentencing guidelines is ade19 quate to address situations in which the defendant

20 has been convicted of one of the offenses listed in

21 paragraph (1) and the item in which the defendant

22 trafficked was not an infringing item but rather was

23 intended to facilitate infringement, such as an anti24 circumvention device, or the item in which the defend25 ant trafficked was infringing and also was intended
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1 to facilitate infringement in another good or service,

2 such as a counterfeit label, documentation, or pack3 aging, taking into account cases such as U.S. v.

4 Sung, 87 F.3d 194 (7th Cir. 1996).

5 SEC. 2. TRAFFICKING DEFINED.

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

7 ‘‘Protecting American Goods and Services Act of 2005’’.

8 (b) COUNTERFEIT GOODS OR SERVICES.—Section

9 2320(e) of title 18, United States Code, is amended—

10 (1) by striking paragraph (2) and inserting the

11 following:

12 ‘‘(2) the term ‘traffic’ means to transport, trans13 fer, or otherwise dispose of, to another, for purposes

14 of commercial advantage or private financial gain, or

15 to make, import, export, obtain control of, or possess,

16 with intent to so transport, transfer, or otherwise dis17 pose of;’’;

18 (2) by redesignating paragraph (3) as para19 graph (4); and

20 (3) by inserting after paragraph (2) the fol21 lowing:

22 ‘‘(3) the term ‘financial gain’ includes the re23 ceipt, or expected receipt, of anything of value; and’’.

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

2 LIVE MUSICAL PERFORMANCES.—Section 2319A(e) of

3 title 18, United States Code, is amended by striking

4 paragraph (2) and inserting the following:

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

6 in section 2320(e) of this title.’’.

7 (2) COUNTERFEIT LABELS FOR PHONORECORDS,

8 COMPUTER PROGRAMS, ETC.—Section 2318(b) of title

9 18, United States Code, is amended by striking para10 graph (2) and inserting the following:

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

12 in section 2320(e) of this title;’’.

13 (3) ANTI-BOOTLEGGING.—Section 1101 of title

14 17, United States Code, is amended by striking sub15 section (b) and inserting the following:

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

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

Attest:

Secretary.
109TH CONGRESS

2D SESSION H. R. 32

AMENDMENT