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Union Calendar No. 360

108TH CONGRESS 

2D SESSION H. R. 3632

[Report No. 108–600] 

To prevent and punish counterfeiting of copyrighted copies and phonorecords, 

and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 21, 2003

Mr. SMITH of Texas (for himself, Mr. KELLER, Mr. WEXLER, Mr. GOODLATTE, Mr. GALLEGLY, and Mr. CARTER) introduced the following bill; 

which was referred to the Committee on the Judiciary 

JULY 13, 2004

Additional sponsor: Mrs. BLACKBURN

JULY 13, 2004 

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on November 21, 2003] 

A BILL

To prevent and punish counterfeiting of copyrighted copies 

and phonorecords, and for other purposes.

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. 

2 This Act may be cited as the ‘‘Anti-counterfeiting 

3 Amendments Act of 2004’’. 

4 SEC. 2. PROHIBITION AGAINST TRAFFICKING IN COUNTER5 FEIT COMPONENTS. 

6 (a) IN GENERAL.—Section 2318 of title 18, United 

7 States Code, is amended—

8 (1) by striking the section heading and inserting 

9 the following: 

10 ‘‘§ 2318. Trafficking in counterfeit labels, illicit labels, 

11 or counterfeit documentation or pack12 aging’’; 

13 (2) by striking subsection (a) and inserting the 

14 following: 

15 ‘‘(a) Whoever, in any of the circumstances described 

16 in subsection (c), knowingly traffics in—

17 ‘‘(1) a counterfeit label or illicit label affixed to, 

18 enclosing, or accompanying, or designed to be affixed 

19 to, enclose, or accompany—

20 ‘‘(A) a phonorecord; 

21 ‘‘(B) a copy of a computer program; 

22 ‘‘(C) a copy of a motion picture or other 

23 audiovisual work; 

24 ‘‘(D) a copy of a literary work; 

25 ‘‘(E) a copy of a pictorial, graphic, or 

26 sculptural work; 
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1 ‘‘(F) a work of visual art; or 

2 ‘‘(G) documentation or packaging; or 

3 ‘‘(2) counterfeit documentation or packaging, 

4 shall be fined under this title or imprisoned for not more 

5 than 5 years, or both.’’; 

6 (3) in subsection (b)—

7 (A) in paragraph (2), by striking ‘‘and’’ 

8 after the semicolon; 

9 (B) in paragraph (3)—

10 (i) by striking ‘‘and ‘audiovisual work’ 

11 have’’ and inserting the following: ‘‘ ‘audio12 visual work’, ‘literary work’, ‘pictorial, 

13 graphic, or sculptural work’, ‘sound record14 ing’, ‘work of visual art’, and ‘copyright 

15 owner’ have’’; and 

16 (ii) by striking the period at the end 

17 and inserting a semicolon; and 

18 (C) by adding at the end the following: 

19 ‘‘(4) the term ‘illicit label’ means a genuine cer20 tificate, licensing document, registration card, or 

21 similar labeling component— 

22 ‘‘(A) that is used by the copyright owner to 

23 verify that a phonorecord, a copy of a computer 

24 program, a copy of a motion picture or other 

25 audiovisual work, a copy of a literary work, a 
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1 copy of a pictorial, graphic, or sculptural work, 

2 a work of visual art, or documentation or pack3 aging is not counterfeit or infringing of any 

4 copyright; and 

5 ‘‘(B) that is, without the authorization of 

6 the copyright owner— 

7 ‘‘(i) distributed or intended for dis8 tribution not in connection with the copy, 

9 phonorecord, or work of visual art to which 

10 such labeling component was intended to be 

11 affixed by the respective copyright owner; or 

12 ‘‘(ii) in connection with a genuine cer13 tificate or licensing document, knowingly 

14 falsified in order to designate a higher num15 ber of licensed users or copies than author16 ized by the copyright owner, unless that cer17 tificate or document is used by the copy18 right owner solely for the purpose of moni19 toring or tracking the copyright owner’s dis20 tribution channel and not for the purpose of 

21 verifying that a copy or phonorecord is 

22 noninfringing; 

23 ‘‘(5) the term ‘documentation or packaging’ 

24 means documentation or packaging, in physical form, 

25 for a phonorecord, copy of a computer program, copy
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1 of a motion picture or other audiovisual work, copy 

2 of a literary work, copy of a pictorial, graphic, or 

3 sculptural work, or work of visual art; and 

4 ‘‘(6) the term ‘counterfeit documentation or 

5 packaging’ means documentation or packaging that 

6 appears to be genuine, but is not.’’; 

7 (4) in subsection (c)—

8 (A) by striking paragraph (3) and inserting 

9 the following: 

10 ‘‘(3) the counterfeit label or illicit label is affixed 

11 to, encloses, or accompanies, or is designed to be af12 fixed to, enclose, or accompany—

13 ‘‘(A) a phonorecord of a copyrighted sound 

14 recording or copyrighted musical work; 

15 ‘‘(B) a copy of a copyrighted computer pro16 gram; 

17 ‘‘(C) a copy of a copyrighted motion picture 

18 or other audiovisual work; 

19 ‘‘(D) a copy of a literary work; 

20 ‘‘(E) a copy of a pictorial, graphic, or 

21 sculptural work; 

22 ‘‘(F) a work of visual art; or 

23 ‘‘(G) copyrighted documentation or pack24 aging; or’’; and 
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1 (B) in paragraph (4), by striking ‘‘for a 

2 computer program’’; and 

3 (5) in subsection (d)—

4 (A) by inserting ‘‘or illicit labels’’ after 

5 ‘‘counterfeit labels’’ each place it appears; and 

6 (B) by inserting before the period at the end 

7 the following: ‘‘, and of any equipment, device, 

8 or material used to manufacture, reproduce, or 

9 assemble the counterfeit labels or illicit labels’’. 

10 (b) CIVIL REMEDIES.—Section 2318 of title 18, United 

11 States Code, is further amended by adding at the end the 

12 following: 

13 ‘‘(f) CIVIL REMEDIES.—

14 ‘‘(1) IN GENERAL.—Any copyright owner who is 

15 injured, or is threatened with injury, by a violation 

16 of subsection (a) may bring a civil action in an ap17 propriate United States district court. 

18 ‘‘(2) DISCRETION OF COURT.—In any action 

19 brought under paragraph (1), the court—

20 ‘‘(A) may grant 1 or more temporary or 

21 permanent injunctions on such terms as the 

22 court determines to be reasonable to prevent or 

23 restrain a violation of subsection (a); 

24 ‘‘(B) at any time while the action is pend25 ing, may order the impounding, on such terms 
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1 as the court determines to be reasonable, of any 

2 article that is in the custody or control of the al3 leged violator and that the court has reasonable 

4 cause to believe was involved in a violation of 

5 subsection (a); and 

6 ‘‘(C) may award to the injured party—

7 ‘‘(i) reasonable attorney fees and costs; 

8 and 

9 ‘‘(ii) (I) actual damages and any addi10 tional profits of the violator, as provided in 

11 paragraph (3); or 

12 ‘‘(II) statutory damages, as provided 

13 in paragraph (4). 

14 ‘‘(3) ACTUAL DAMAGES AND PROFITS.—

15 ‘‘(A) IN GENERAL.—The injured party is 

16 entitled to recover—

17 ‘‘(i) the actual damages suffered by the 

18 injured party as a result of a violation of 

19 subsection (a), as provided in subparagraph 

20 (B) of this paragraph; and 

21 ‘‘(ii) any profits of the violator that 

22 are attributable to a violation of subsection 

23 (a) and are not taken into account in com24 puting the actual damages. 
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1 ‘‘(B) CALCULATION OF DAMAGES.—The 

2 court shall calculate actual damages by multi3 plying—

4 ‘‘(i) the value of the phonorecords, cop5 ies, or works of visual art which are, or are 

6 intended to be, affixed with, enclosed in, or 

7 accompanied by any counterfeit labels, il8 licit labels, or counterfeit documentation or 

9 packaging, by 

10 ‘‘(ii) the number of phonorecords, cop11 ies, or works of visual art which are, or are 

12 intended to be, affixed with, enclosed in, or 

13 accompanied by any counterfeit labels, il14 licit labels, or counterfeit documentation or 

15 packaging. 

16 ‘‘(C) DEFINITION.—For purposes of this 

17 paragraph, the ‘value’ of a phonorecord, copy, or 

18 work of visual art is—

19 ‘‘(i) in the case of a copyrighted sound 

20 recording or copyrighted musical work, the 

21 retail value of an authorized phonorecord of 

22 that sound recording or musical work; 

23 ‘‘(ii) in the case of a copyrighted com24 puter program, the retail value of an au25 thorized copy of that computer program;
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1 ‘‘(iii) in the case of a copyrighted mo2 tion picture or other audiovisual work, the 

3 retail value of an authorized copy of that 

4 motion picture or audiovisual work; 

5 ‘‘(iv) in the case of a copyrighted lit6 erary work, the retail value of an author7 ized copy of that literary work; 

8 ‘‘(v) in the case of a pictorial, graphic, 

9 or sculptural work, the retail value of an 

10 authorized copy of that work; and 

11 ‘‘(vi) in the case of a work of visual 

12 art, the retail value of that work. 

13 ‘‘(4) STATUTORY DAMAGES.—The injured party 

14 may elect, at any time before final judgment is ren15 dered, to recover, instead of actual damages and prof16 its, an award of statutory damages for each violation 

17 of subsection (a) in a sum of not less than $2,500 or 

18 more than $25,000, as the court considers appro19 priate. 

20 ‘‘(5) SUBSEQUENT VIOLATION.—The court may 

21 increase an award of damages under this subsection 

22 by 3 times the amount that would otherwise be 

23 awarded, as the court considers appropriate, if the 

24 court finds that a person has subsequently violated 

25 subsection (a) within 3 years after a final judgment 
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1 was entered against that person for a violation of that 

2 subsection. 

3 ‘‘(6) LIMITATION ON ACTIONS.—A civil action 

4 may not be commenced under section unless it is com5 menced within 3 years after the date on which the 

6 claimant discovers the violation of subsection (a).’’. 

7 (c) CONFORMING AMENDMENT.—The item relating to 

8 section 2318 in the table of sections for chapter 113 of title 

9 18, United States Code, is amended to read as follows:

‘‘2318. Trafficking in counterfeit labels, illicit labels, or counterfeit documentation 

or packaging.’’.

10 SEC. 3. OTHER RIGHTS NOT AFFECTED. 

11 (a) CHAPTERS 5 AND 12 OF TITLE 17; ELECTRONIC

12 TRANSMISSIONS.—The amendments made by this Act—

13 (1) shall not enlarge, diminish, or otherwise af14 fect any liability or limitations on liability under 

15 sections 512, 1201 or 1202 of title 17, United States 

16 Code; and 

17 (2) shall not be construed to apply—

18 (A) in any case, to the electronic trans19 mission of a genuine certificate, licensing docu20 ment, registration card, similar labeling compo21 nent, or documentation or packaging described 

22 in paragraph (4) or (5) of section 2318(b) of 

23 title 18, United States Code, as amended by this 

24 Act; and 
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1 (B) in the case of a civil action under sec2 tion 2318(f) of title 18, United States Code, to 

3 the electronic transmission of a counterfeit label 

4 or counterfeit documentation or packaging de5 fined in paragraph (1) or (6) of section 2318(b) 

6 of title 18, United States Code. 

7 (b) FAIR USE.—The amendments made by this Act 

8 shall not affect the fair use, under section 107 of title 17, 

9 United States Code, of a genuine certificate, licensing docu10 ment, registration card, similar labeling component, or doc11 umentation or packaging described in paragraph (4) or (5) 

12 of section 2318(b) of title 18, United States Code, as amend13 ed by this Act.
Union Calendar No. 360

108TH CONGRESS 

2D SESSION H. R. 3632

[Report No. 108–600] 

A BILL

To prevent and punish counterfeiting of copypurposes. righted copies and phonorecords, and for other 

JULY 13, 2004

Reported with an amendment, committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union,