I

106TH CONGRESS

2D SESSION H. R. 4982

To prohibit the unauthorized destruction, modification, or alteration of product batch codes to protect consumer health and safety and assist with

law enforcement efforts, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JULY 26, 2000

Mr. STEARNS introduced the following bill; which was referred to the

Committee on Commerce

A BILL

To prohibit the unauthorized destruction, modification, or

alteration of product batch codes to protect consumer

health and safety and assist with law enforcement efforts, 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,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Consumer Labeling

5 Protection Act of 2000’’.

6 SEC. 2. PROHIBITION AGAINST UNAUTHORIZED MODIFICA7 TIONS OF PRODUCT BATCH CODES.

8 (a) IN GENERAL.—
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1 (1) PROHIBITED ACTS.—Except as otherwise

2 authorized by this Act or other Federal law, it shall

3 be unlawful for any person, other than the consumer

4 or the manufacturer of a good, knowingly and with5 out authorization of the manufacturer—

6 (A) to alter, conceal, remove, obliterate,

7 deface, strip, or peel any product batch code af8 fixed to or embedded in a good and visible to

9 the consumer, except that it is not a violation

10 of this section for a person to alter, conceal, re11 move, obliterate, deface, strip, or peel any prod12 uct batch code in the course of removing any

13 other codes or markings that are placed on or

14 embedded in the product batch code;

15 (B) to affix or imbed a batch code to or in

16 a good which is intended by the manufacturer

17 for a different good such that the batch code no

18 longer accurately identifies the actual date of

19 manufacture, place of manufacture, or expira20 tion date of the good; and

21 (C) to place into foreign or domestic com22 merce a good, in a case in which the person

23 knows that the product batch code, which oth24 erwise would be visible to the consumer, has

25 been altered, concealed, removed, obliterated,
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1 defaced, stripped, peeled, affixed, or embedded

2 in violation of subparagraph (A), or in a case

3 in which the person has knowledge that the

4 good bears a number, letter, symbol, marking,

5 date, or code which is incorrect.

6 (2) FEDERAL TRADE COMMISSION ACT.—A vio7 lation described in paragraph (1) shall be deemed to

8 be an unlawful deceptive act or practice in violation

9 of section 5 of the Federal Trade Commission Act

10 and such a violation shall be treated in accordance

11 with that Act.

12 (b) APPLICABILITY.—The prohibitions set forth in

13 subparagraphs (A), (B), and (C) of subsection (b)(1) shall

14 apply to visible product batch codes (or simulated product

15 batch codes in a case to which subsection (b)(1)(C) ap16 plies) affixed to, or embedded in, any good held for sale

17 or distribution in interstate or foreign commerce or after

18 shipment therein.

19 (c) EXCLUSIONS.—

20 (1) UPC CODES.—Nothing in this section pro21 hibits a person from affixing a Universal Product

22 Code, security tag, or other legitimate pricing or in23 ventory code or other information required by State

24 or Federal law if such code or information does not

25 (or can be removed so as not to) alter, conceal, re-
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1 move, obliterate, deface, strip, or peel any product

2 batch code.

3 (2) REPACKAGING, REPACKING, OR TEMPO4 RARILY JOINING PRODUCTS FOR RESALE.—(A)

5 Nothing in this section prohibits a person from re6 moving a good from a package and repackaging the

7 good in another package, from repacking a good in

8 its original package within a new package, or from

9 temporarily joining products together such that the

10 product batch code is temporarily obscured, if—

11 (i) the good retains its original product

12 batch code, which has not been altered, con13 cealed, or removed;

14 (ii) the repackaging, repacking, or tem15 porary joining of products is in full compliance

16 with all applicable Federal laws and regula17 tions, including section 301 of the Federal

18 Food, Drug, and Cosmetic Act; and

19 (iii) the new package, in the case of a good

20 that has been repackaged, includes a label that

21 clearly states—

22 (I) that the good has been repack23 aged; and

24 (II) the name of the repackager.

25 (B) Nothing in this section shall—
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1 (i) prohibit the repackaging of pre2 scription drugs in accordance with all ap3 plicable Federal and State laws;

4 (ii) prohibit a registered pharmacist

5 or other authorized health care provider

6 from dispensing prescription drugs as au7 thorized under Federal and State law to

8 consumers pursuant to a valid prescription;

9 (iii) prohibit the repackaging of food

10 products and perishable commodities that

11 are transferred from their original package

12 for purposes of immediate availability,

13 preparation, and purchase or consumption

14 by the consumer; or

15 (iv) annul, limit, impair, or otherwise

16 affect conduct that is prohibited or per17 mitted by section 526 of the Tariff Act of

18 1930 (relating to the importation of arti19 cles bearing trademarks) or regulations

20 issued under that section.

21 (d) CIVIL REMEDIES.—

22 (1) IN GENERAL.—Any manufacturer who is in23 jured by a violation of this section, or demonstrates

24 the likelihood of such injury, may bring a civil action

25 in an appropriate United States district court
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1 against the alleged violator. The complaint shall set

2 forth in detail the manner and form of the alleged

3 violation.

4 (2) INJUNCTIONS AND IMPOUNDING AND DIS5 POSITION OF GOODS.—In any action under para6 graph (1), the court may—

7 (A) grant one or more temporary, prelimi8 nary, or permanent injunctions upon the post9 ing of a bond at least equal to the value of the

10 goods affected and on such terms as the court

11 determines to be reasonable to prevent or re12 strain the violation;

13 (B) at any time while the action is pend14 ing, order the impounding upon the posting of

15 a bond at least equal to the value of the goods

16 affected and, on such terms as the court deter17 mines to be reasonable, if the court has reason18 able cause to believe the goods were involved in

19 the violation; and

20 (C) as part of a final judgment or decree,

21 in the court’s discretion—

22 (i) grant one or more temporary, pre23 liminary, or permanent injunctions on such

24 terms as the court determines to be rea-
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1 sonable to prevent or restrain the alleged

2 violation; and

3 (ii) at any time during the pro4 ceedings, order the impounding, on such

5 terms as the court determines is reason6 able, of any good that is in the custody or

7 control of the defendant and that the court

8 has reasonable cause to believe was in9 volved in the violation.

10 (D) upon conviction of any person in viola11 tion of this section, order the forfeiture and de12 struction of any good involved in the violation.

13 (3) DAMAGES.—

14 (A) IN GENERAL.—Subject to subpara15 graph (B), in any action under paragraph (1),

16 the plaintiff shall be entitled to recover the ac17 tual damages suffered by the plaintiff as a re18 sult of the violation, and any profits of the vio19 lator that are attributable to the violation and

20 are not taken into account in computing the ac21 tual damages. In establishing the violator’s

22 profits, the plaintiff shall be required to present

23 proof only of the violator’s sales, and the viola24 tor shall be required to prove all elements of

25 cost or deduction claimed.
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1 (B) STATUTORY DAMAGES.—In any action

2 under paragraph (1), the plaintiff may elect, at

3 any time before final judgment is rendered, to

4 recover, instead of actual damages and profits

5 described in subparagraph (A), an award of

6 statutory damages for any violation under this

7 section in an amount equal to not less than

8 $5,000 and not more than $1,000,000, with re9 spect to each type of goods involved in the vio10 lation.

11 (4) ATTORNEYS’ FEES.—In any action under

12 paragraph (1), in addition to damages covered under

13 paragraph (3), the court in its discretion may award

14 the prevailing party its costs in the action and its

15 reasonable attorneys’ fees.

16 (5) REPEAT VIOLATIONS.—

17 (A) TREBLE DAMAGES.—In any case in

18 which a person violates this section within 3

19 years after the date on which a final judgment

20 was entered against that person for a previous

21 violation of this section, the court may, in its

22 discretion, in an action brought under this sub23 section, increase the award of damages for the

24 later violation to not more than 3 times the

25 amount that would otherwise be awarded under
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1 paragraph (3), as the court considers appro2 priate.

3 (B) BURDEN OF PROOF.—A plaintiff that

4 seeks damages described in subparagraph (A)

5 shall bear the burden of proving the existence

6 of the earlier violation.

7 (6) LIMITATIONS ON CIVIL ACTIONS.—No civil

8 action may be commenced under this section later

9 than 18 months after the date on which the claimant

10 discovers the violation.

11 (7) INNOCENT VIOLATIONS.—In any action

12 under paragraph (1), the court in its discretion may

13 reduce or remit the total award of damages or award

14 no damages in any case in which the violator sus15 tains the burden of proving, and the court finds,

16 that the violator was not aware and had no reason

17 to believe that the acts of the violator constituted a

18 violation.

19 (e) DEFINITIONS.—In this section:

20 (1) BATCH CODE.—The term ‘‘batch code’’

21 means a single visible code which specifically and

22 only includes the batch number, the date of product

23 manufacture, the place of manufacture, and an expi24 ration date, if applicable, and which is clearly identi25 fied as a batch code by affixing the letters ‘‘BC’’ be-
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1 fore the batch code or by some other visual and con2 spicuous indication that it is a batch code and does

3 not include copyright management information con4 veyed in connection with copies of a copyrighted

5 work or any performance or display of a copyrighted

6 work, other codes or markings by which a manufac7 turer may attempt to monitor, control, or trace the

8 identity of a distributor or location of resell, or a

9 universal product code.

10 (2) CONSUMER.—The term ‘‘consumer’’—

11 (A) means—

12 (i) the ultimate user or purchaser of

13 a good; or

14 (ii) any hotel, restaurant, or other

15 provider of services that must remove or

16 alter the container, label, or packaging of

17 a good in order to make the good available

18 to the ultimate user or purchaser; and

19 (B) does not include any retailer or other

20 distributor who acquires a good for resale.

21 (3) GOOD.—The term ‘‘good’’ means—

22 (A) any food, drug, device, or product (in23 cluding any crib, vehicle safety seat, or toy) in24 tended for use by children under the age of 3;
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1 (B) any container, packaging, label, or

2 component of any item described in subpara3 graph (A);

4 (C) any firearm, ammunition, or mechan5 ical component principally used for explosive de6 vices;

7 (D) any additional product or separately

8 manufactured product components which have

9 been the subject of a Federal recall within 3

10 years from the date of enactment of this Act or

11 at any time after the effective date of this Act

12 if the recall was conducted by the Consumer

13 Product Safety Commission; or

14 (E) any additional product which the Fed15 eral Trade Commission may recommend to be

16 protected under this Act.

17 (4) PACKAGE.—The term ‘‘package’’ means any

18 container or wrapping in which any consumer com19 modity is enclosed for use in the delivery or display

20 of that consumer commodity to retail purchasers,

21 but does not include—

22 (A) shipping containers or wrappings used

23 solely for the transportation of any consumer

24 commodity in bulk or in quantity to manufac-
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1 turers, packers, or processors, or to wholesale

2 or retail distributors thereof;

3 (B) shipping containers or outer wrappings

4 used by retailers to ship or deliver any com5 modity to retail customers if such containers

6 and wrappings do not include product batch

7 codes, and if other information is not required

8 by Federal law to be included on such con9 tainers or wrappings;

10 (C) transparent wrappers or containers

11 which do not bear written, printed, or graphic

12 matter obscuring label information required by

13 Federal law; or

14 (D) containers used for tray pack displays

15 in retail establishments (within the meaning set

16 forth in regulations issued by the Secretary of

17 Health and Human Services under sections 3

18 and 4 of the Fair Packaging and Labeling Act

19 (15 U.S.C. 1452, 1453); 21 C.F.R. 1.20).

20 (5) MANUFACTURER.—The term ‘‘manufac21 turer’’ means the original manufacturer of a good

22 and any duly appointed agent or representative of

23 that manufacturer acting within the scope of its

24 agency or representation.
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1 (6) UNIVERSAL PRODUCT CODE.—The term

2 ‘‘Universal Product Code’’ means a fixed length

3 identification number and associated bar code

4 symbol—

5 (A) established by the Uniform Code

6 Council accredited by the American National

7 Standards Institute; and

8 (B) used to identify companies and their

9 products.

10 (7) VALUE.—The term ‘‘value’’, with respect to

11 a good, means the face, par, or market value of the

12 good, whichever is the greatest.

13 SEC. 2. EFFECTIVE DATE.

14 The amendments made by this Act shall take effect

15 6 months after the date of the enactment of this Act.

Æ