II 

109TH CONGRESS 

1ST SESSION S. 1699 

To amend title 18, United States Code, to provide criminal penalties for 

trafficking in counterfeit marks. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 14, 2005 

Mr. SPECTER (for himself, Mr. LEAHY, Mr. HATCH, Mr. DEWINE, Mr. 

CORNYN, Mr. BROWNBACK, Mr. VOINOVICH, Mr. FEINGOLD, Mr. LEVIN, 

Mr. BAYH, Mr. REED, and Ms. STABENOW) introduced the following bill; 

which was read twice and referred to the Committee on the Judiciary 

A BILL 

To amend title 18, United States Code, to provide criminal 

penalties for trafficking in counterfeit marks. 

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; FINDINGS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Stop Counterfeiting in Manufactured Goods Act’’. 

6 (b) FINDINGS.—The Congress finds that— 

7 (1) the United States economy is losing millions 

8 of dollars in tax revenue and tens of thousands of 
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1 jobs because of the manufacture, distribution, and 

2 sale of counterfeit goods; 

3 (2) the Bureau of Customs and Border Protec4 tion estimates that counterfeiting costs the United 

5 States $200 billion annually; 

6 (3) counterfeit automobile parts, including 

7 brake pads, cost the auto industry alone billions of 

8 dollars in lost sales each year; 

9 (4) counterfeit products have invaded numerous 

10 industries, including those producing auto parts, 

11 electrical appliances, medicines, tools, toys, office 

12 equipment, clothing, and many other products; 

13 (5) ties have been established between counter14 feiting and terrorist organizations that use the sale 

15 of counterfeit goods to raise and launder money; 

16 (6) ongoing counterfeiting of manufactured 

17 goods poses a widespread threat to public health and 

18 safety; and 

19 (7) strong domestic criminal remedies against 

20 counterfeiting will permit the United States to seek 

21 stronger anticounterfeiting provisions in bilateral 

22 and international agreements with trading partners. 

23 SEC. 2. TRAFFICKING IN COUNTERFEIT MARKS. 

24 Section 2320 of title 18, United States Code, is 

25 amended as follows: 
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1 (1) Subsection (a) is amended by inserting after 

2 ‘‘such goods or services’’ the following: ‘‘, or inten3 tionally traffics or attempts to traffic in labels, 

4 patches, stickers, wrappers, badges, emblems, medal5 lions, charms, boxes, containers, cans, cases, 

6 hangtags, documentation, or packaging of any type 

7 or nature, knowing that a counterfeit mark has been 

8 applied thereto, the use of which is likely to cause 

9 confusion, to cause mistake, or to deceive,’’. 

10 (2) Subsection (b) is amended to read as fol11 lows: 

12 ‘‘(b)(1) The following property shall be subject to for13 feiture to the United States and no property right shall 

14 exist in such property: 

15 ‘‘(A) Any article bearing or consisting of a 

16 counterfeit mark used in committing a violation of 

17 subsection (a). 

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

19 to commit or to facilitate the commission of a viola20 tion of subsection (a). 

21 ‘‘(2) The provisions of chapter 46 of this title relating 

22 to civil forfeitures shall extend to any seizure or civil for23 feiture under this section. At the conclusion of the for24 feiture proceedings, the court, unless otherwise requested 

25 by an agency of the United States, shall order that any 
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1 forfeited article bearing or consisting of a counterfeit 

2 mark be destroyed or otherwise disposed of according to 

3 law. 

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

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

6 addition to any other sentence imposed, that the person 

7 forfeit to the United States— 

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

9 any proceeds the person obtained, directly or indi10 rectly, as the result of the offense; 

11 ‘‘(ii) any of the person’s property used, or in12 tended to be used, in any manner or part, to com13 mit, facilitate, aid, or abet the commission of the of14 fense; and 

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

16 counterfeit mark used in committing the offense. 

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

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

19 and any related judicial or administrative proceeding, shall 

20 be governed by the procedures set forth in section 413 

21 of the Comprehensive Drug Abuse Prevention and Control 

22 Act of 1970 (21 U.S.C. 853), other than subsection (d) 

23 of that section. Notwithstanding section 413(h) of that 

24 Act, at the conclusion of the forfeiture proceedings, the 

25 court shall order that any forfeited article or component 
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1 of an article bearing or consisting of a counterfeit mark 

2 be destroyed. 

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

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

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

6 owner of the mark and any other victim of the offense 

7 as an offense against property referred to in section 

8 3663A(c)(1)(A)(ii). 

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

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

11 (3) Subsection (e)(1) is amended— 

12 (A) by striking subparagraph (A) and in13 serting the following: 

14 ‘‘(A) a spurious mark— 

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

16 trafficking in any goods, services, labels, 

17 patches, stickers, wrappers, badges, em18 blems, medallions, charms, boxes, con19 tainers, cans, cases, hangtags, documenta20 tion, or packaging of any type or nature; 

21 ‘‘(ii) that is identical with, or substan22 tially indistinguishable from, a mark reg23 istered on the principal register in the 

24 United States Patent and Trademark Of-
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1 fice and in use, whether or not the defend2 ant knew such mark was so registered; 

3 ‘‘(iii) that is applied to or used in con4 nection with the goods or services for 

5 which the mark is registered with the 

6 United States Patent and Trademark Of7 fice, or is applied to or consists of a label, 

8 patch, sticker, wrapper, badge, emblem, 

9 medallion, charm, box, container, can, 

10 case, hangtag, documentation, or pack11 aging of any type or nature that is de12 signed, marketed, or otherwise intended to 

13 be used on or in connection with the goods 

14 or services for which the mark is registered 

15 in the United States Patent and Trade16 mark Office; and 

17 ‘‘(iv) the use of which is likely to 

18 cause confusion, to cause mistake, or to 

19 deceive; or’’; and 

20 (B) by amending the matter following sub21 paragraph (B) to read as follows: 

22 ‘‘but such term does not include any mark or des23 ignation used in connection with goods or services, 

24 or a mark or designation applied to labels, patches, 

25 stickers, wrappers, badges, emblems, medallions, 
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1 charms, boxes, containers, cans, cases, hangtags, 

2 documentation, or packaging of any type or nature 

3 used in connection with such goods or services, of 

4 which the manufacturer or producer was, at the time 

5 of the manufacture or production in question, au6 thorized to use the mark or designation for the type 

7 of goods or services so manufactured or produced, 

8 by the holder of the right to use such mark or des9 ignation.’’. 

10 (4) Section 2320 is further amended— 

11 (A) by redesignating subsection (f) as sub12 section (g); and 

13 (B) by inserting after subsection (e) the 

14 following: 

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

16 States to bring a criminal cause of action under this sec17 tion for the repackaging of genuine goods or services not 

18 intended to deceive or confuse.’’. 

19 SEC. 3. SENTENCING GUIDELINES. 

20 (a) REVIEW AND AMENDMENT.—Not later than 180 

21 days after the date of enactment of this Act, the United 

22 States Sentencing Commission, pursuant to its authority 

23 under section 994 of title 28, United States Code, and 

24 in accordance with this section, shall review and, if appro25 priate, amend the Federal sentencing guidelines and policy 
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1 statements applicable to persons convicted of any offense 

2 under section 2318 or 2320 of title 18, United States 

3 Code. 

4 (b) AUTHORIZATION.—The United States Sentencing 

5 Commission may amend the Federal sentencing guidelines 

6 in accordance with the procedures set forth in section 

7 21(a) of the Sentencing Act of 1987 (28 U.S.C. 994 note) 

8 as though the authority under that section had not ex9 pired. 

10 (c) RESPONSIBILITIES OF UNITED STATES SEN11 TENCING COMMISSION.—In carrying out this section, the 

12 United States Sentencing Commission shall determine 

13 whether the definition of ‘‘infringement amount’’ set forth 

14 in application note 2 of section 2B5.3 of the Federal sen15 tencing guidelines is adequate to address situations in 

16 which the defendant has been convicted of one of the of17 fenses listed in subsection (a) and the item in which the 

18 defendant trafficked was not an infringing item but rather 

19 was intended to facilitate infringement, such as an anti20 circumvention device, or the item in which the defendant 

21 trafficked was infringing and also was intended to facili22 tate infringement in another good or service, such as a 

23 counterfeit label, documentation, or packaging, taking into 
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1 account cases such as U.S. v. Sung, 87 F.3d 194 (7th 

2 Cir. 1996). 

Æ