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[109th Congress Public Law 181]
[From the U.S. Government Printing Office]

[DOCID: f:publ181.109]

[[Page 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. <<NOTE: Mar. 16, 2006 -  [H.R. 32]>> 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. TRAFFICKING IN COUNTERFEIT <<NOTE: Stop Counterfeiting in 
            Manufactured Goods Act. 18 USC 1 note.>> MARKS.

    (a) Short Title; Findings.--
            (1) Short title.--This section may be cited as the ``Stop 
        Counterfeiting in Manufactured Goods Act''.
            (2) <<NOTE: 18 USC 2320 note.>> 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:

[[Page 120 STAT. 286]]

    ``(b)(1) <<NOTE: Courts.>> 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;

[[Page 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) <<NOTE: 28 USC 994 note.>> Sentencing Guidelines.--
            (1) Review and amendment.--Not <<NOTE: Deadline.>> 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

[[Page 120 STAT. 288]]

        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 <<NOTE: Protecting American Goods and Services Act 
            of 2005. 18 USC 1 note.>> 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.

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

                                  <all>
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