PUBLIC LAW 109–181—MAR. 16, 2006 120 STAT. 285

Public Law 109–181

109th Congress

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:

18 USC 2320

note.

Stop

Counterfeiting in

Manufactured

Goods Act.

18 USC 1 note.

Mar. 16, 2006

[H.R. 32]

120 STAT. 286 PUBLIC LAW 109–181—MAR. 16, 2006

‘‘(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;

Courts.

PUBLIC LAW 109–181—MAR. 16, 2006 120 STAT. 287

‘‘(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

Deadline.

28 USC 994 note.

120 STAT. 288 PUBLIC LAW 109–181—MAR. 16, 2006

LEGISLATIVE HISTORY—H.R. 32 (S. 1699):

HOUSE REPORTS: No. 109–68 (Comm. on the Judiciary).

CONGRESSIONAL RECORD:

Vol. 151 (2005): May 23, considered and passed House.

Vol. 152 (2006): Feb. 15, considered and passed Senate, amended.

Mar. 7, House concurred in Senate amendment.

Æ

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.’’.

Approved March 16, 2006.

Protecting

American Goods

and Services Act

of 2005.

18 USC 1 note.