I

106TH CONGRESS

1ST SESSION H. R. 2100

To amend the Trademark Act of 1946 to prohibit the unauthorized destruction, modification, or alteration of product identification codes, and for

other purposes.

IN THE HOUSE OF REPRESENTATIVES

JUNE 9, 1999

Mr. GOODLATTE (for himself and Ms. LOFGREN) introduced the following bill;

which was referred to the Committee on the Judiciary

A BILL

To amend the Trademark Act of 1946 to prohibit the unauthorized destruction, modification, or alteration of product identification codes, 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 ‘‘Antitampering Act of

5 1999’’.

6 SEC. 2. PROHIBITION AGAINST UNAUTHORIZED ALTER7 ATION OF PRODUCT IDENTIFICATION CODES.

8 (a) IN GENERAL.—Title VIII of the Act entitled ‘‘An

9 Act to provide for the registration and protection of trade-
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1 marks used in commerce, to carry out the provisions of

2 certain international conventions, and for other pur3 poses.’’, approved July 5, 1946 (commonly referred to as

4 the ‘‘Lanham Act’’ and the ‘‘Trademark Act of 1946’’)

5 is amended by inserting after section 43 (15 U.S.C. 1125)

6 the following:

7 ‘‘UNAUTHORIZED MODIFICATIONS OF PRODUCT

8 IDENTIFICATION CODES

9 ‘‘SEC. 43A. (a) DEFINITIONS.—In this section—

10 ‘‘(1) 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 ‘‘(2) the term ‘good’ means any article, product,

22 or commodity that is customarily produced or dis23 tributed for sale, rental, or licensing in interstate or

24 foreign commerce, and any container, packaging,

25 label, or component thereof, but does not include

26 any article of clothing;
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1 ‘‘(3) the term ‘manufacturer’ includes the origi2 nal manufacturer of a good and a duly appointed

3 agent or representative of that manufacturer acting

4 within the scope of its agency or representation;

5 ‘‘(4) the term ‘product identification code’—

6 ‘‘(A) includes any number, letter, symbol,

7 marking, date (including an expiration date),

8 code, software, or other technology that is af9 fixed to or embedded in any good, by which the

10 manufacturer of the good may trace the good

11 back to a particular production lot or batch or

12 date of removal, or otherwise identify the date

13 of manufacture, the date of expiration, or other

14 comparable critical data; and

15 ‘‘(B) does not include copyright manage16 ment information conveyed in connection with

17 copies or phonorecords of a copyrighted work or

18 any performance or display of a copyrighted

19 work;

20 ‘‘(5) the term ‘Universal Product Code’ refers

21 to the multidigit bar code and number representing

22 goods in retail applications; and

23 ‘‘(6) the term ‘value’ means the face, par, or

24 market value, whichever is the greatest.
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1 ‘‘(b) PROHIBITED ACTS.—Except as otherwise au2 thorized by Federal law, it shall be unlawful for any per3 son, other than the consumer or the manufacturer of a

4 good, knowingly and without authorization of the

5 manufacturer—

6 ‘‘(1) to directly or indirectly alter, conceal, re7 move, obliterate, deface, strip, or peel any product

8 identification code affixed to or embedded in that

9 good;

10 ‘‘(2) to directly or indirectly affix or embed a

11 product identification code to or in that good which

12 is intended by the manufacturer for a different good,

13 such that the code no longer accurately identifies the

14 source of the good;

15 ‘‘(3) to directly or indirectly affix to or embed

16 in that good any number, letter, symbol, marking,

17 date, code, or other technology intended to simulate

18 a product identification code; or

19 ‘‘(4) to import, reimport, export, sell, distribute,

20 or broker that good, in a case in which the person

21 knows that the product identification code has been

22 altered, concealed, removed, obliterated, defaced,

23 stripped, peeled, affixed, or embedded in violation of

24 paragraph (1) or (2), or in a case in which the per25 son knows that the good bears an unauthorized
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1 number, letter, symbol, marking, date, or other code

2 in violation of paragraph (3).

3 ‘‘(c) APPLICABILITY.—The prohibitions set forth in

4 subsection (b) shall apply to product identification codes

5 (or simulated product identification codes in a case to

6 which subsection (b)(3) applies) affixed to, or embedded

7 in, any good held for sale or distribution in interstate or

8 foreign commerce or after shipment therein.

9 ‘‘(d) EXCLUSION.—

10 ‘‘(1) UPC CODES.—Nothing in this section pro11 hibits a retailer or distributor from affixing a Uni12 versal Product Code or other legitimate pricing or

13 inventory code or information required by State or

14 Federal Law if such code or information does not

15 (or can be removed so as not to) permanently alter,

16 conceal, remove, obliterate, deface, strip, or peel any

17 product identification code.

18 ‘‘(2) REPACKAGING FOR RESALE.—(A) Nothing

19 in this section prohibits a distributor from removing

20 an article, product, or commodity of retail sale from

21 a shipping container and placing such article, prod22 uct, or commodity in another shipping container for

23 purpose of resale in a quantity different from the

24 quantity originally provided by the manufacturer or

25 from replacing a damaged shipping container, if, ex-
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1 cept as provided in paragraph (1), such article,

2 product, or commodity of retail sale retains its origi3 nal product identification code, without any obstruc4 tion or alteration, and if—

5 ‘‘(i) such distributor is registered with all

6 applicable Federal and State agencies;

7 ‘‘(ii) such distributor repackages the arti8 cle, product, or commodity in full compliance

9 with all applicable State and Federal laws and

10 regulations; and

11 ‘‘(iii) the act of repackaging does not re12 sult in a prohibited act under section 301 of the

13 Federal Food, Drug, and Cosmetic Act or vio14 late any other applicable State or Federal law

15 or regulation.

16 ‘‘(B) As used in this paragraph, the term ‘ship17 ping container’ means—

18 ‘‘(i) a container or wrapping used for the

19 transportation of any article, product, or com20 modity in bulk or in quantity to manufacturers,

21 packers, or processors, or to wholesale or retail

22 distributors thereof; and

23 ‘‘(ii) containers or wrappings used by re24 tailers to ship or deliver any article, product, or

25 commodity to retail customers, if such con-
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1 tainers and wrappings bear no printed matter

2 pertaining to any particular article, product, or

3 commodity.

4 ‘‘(e) CRIMINAL PENALTIES.—Any person who will5 fully violates this section shall be punished as provided in

6 section 1365A of title 18.

7 ‘‘(f) CIVIL REMEDIES.—

8 ‘‘(1) IN GENERAL.—Any person who is injured

9 by a violation of this section, or threatened with

10 such injury, may bring a civil action in an appro11 priate United States district court against the al12 leged violator.

13 ‘‘(2) INJUNCTIONS AND IMPOUNDING AND DIS14 POSITION OF GOODS.—In any action under para15 graph (1), the court may—

16 ‘‘(A) grant 1 or more temporary, prelimi17 nary, or permanent injunctions on such terms

18 as the court determines to be reasonable to pre19 vent or restrain the violation;

20 ‘‘(B) at any time while the action is pend21 ing, order the impounding, on such terms as

22 the court determines to be reasonable, of any

23 good that is in the custody or control of the al24 leged violator and that the court has reasonable
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1 cause to believe was involved in the violation;

2 and

3 ‘‘(C) as part of a final judgment or

4 decree—

5 ‘‘(i) order the destruction of any good

6 involved in the violation that is in the cus7 tody or control of the violator or that has

8 been impounded under subparagraph (B);

9 or

10 ‘‘(ii) if the court determines that any

11 good impounded under subparagraph (B)

12 is not unsafe or a hazard to health, dispose

13 of the good by delivery to such Federal,

14 State, or local government agencies as, in

15 the opinion of the court, have a need for

16 such good, or by gift to such charitable or

17 nonprofit institutions as, in the opinion of

18 the court, have a need for such good, if

19 such disposition would not otherwise be in

20 violation of law, and if the manufacturer

21 consents to such disposition and is given

22 the opportunity to reapply a product iden23 tification code to the good.

24 ‘‘(3) DAMAGES.—
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1 ‘‘(A) IN GENERAL.—Subject to subpara2 graph (B), in any action under paragraph (1),

3 the plaintiff shall be entitled to recover the ac4 tual damages suffered by the plaintiff as a re5 sult of the violation, and any profits of the vio6 lator that are attributable to the violation and

7 are not taken into account in computing the ac8 tual damages. In establishing the violator’s

9 profits, the plaintiff shall be required to present

10 proof only of the violator’s sales, and the viola11 tor shall be required to prove all elements of

12 cost or deduction claimed.

13 ‘‘(B) STATUTORY DAMAGES.—In any ac14 tion under paragraph (1), the plaintiff may

15 elect, at any time before final judgment is ren16 dered, to recover, instead of actual damages

17 and profits described in subparagraph (A), an

18 award of statutory damages for any violation

19 under this section in an amount equal to—

20 ‘‘(i) not less than $500 and not more

21 than $100,000, with respect to each type

22 of goods involved in the violation; and

23 ‘‘(ii) if the violation threatens the

24 health and safety of the public, as deter25 mined by the court, not less than $5,000
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1 and not more than $1,000,000, with re2 spect to each type of goods involved in the

3 violation.

4 ‘‘(4) COSTS AND ATTORNEY’S FEES.—In any

5 action under paragraph (1)—

6 ‘‘(A) in addition to any damages recovered

7 under paragraph (3), a prevailing plaintiff may

8 recover the full costs of the action; and

9 ‘‘(B) the court, in its discretion, may also

10 award reasonable attorney fees to the prevailing

11 party.

12 ‘‘(5) REPEAT VIOLATIONS.—

13 ‘‘(A) TREBLE DAMAGES.—In any case in

14 which a person violates this section within 3

15 years after the date on which a final judgment

16 was entered against that person for a previous

17 violation of this section, the court, in an action

18 brought under this subsection, may increase the

19 award of damages for the later violation to not

20 more than 3 times the amount that would oth21 erwise be awarded under paragraph (3), as the

22 court considers appropriate.

23 ‘‘(B) BURDEN OF PROOF.—A plaintiff that

24 seeks damages as described in subparagraph
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1 (A) shall bear the burden of proving the exist2 ence of the earlier violation.

3 ‘‘(6) LIMITATIONS ON ACTIONS.—No civil ac4 tion may be commenced under this section later than

5 3 years after the date on which the claimant dis6 covers the violation.

7 ‘‘(7) INNOCENT VIOLATIONS.—In any action

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

9 reduce or remit the total award of damages in any

10 case in which the violator sustains the burden of

11 proving, and the court finds, that the violator was

12 not aware and had no reason to believe that the acts

13 of the violator constituted a violation.

14 ‘‘(g) ENFORCEMENT.—The Attorney General shall

15 enforce this section.’’.

16 (b) CONFORMING AMENDMENT.—The heading for

17 title VIII of the Act of July 5, 1946, is amended by strik18 ing ‘‘AND DILUTION’’ and inserting ‘‘DILUTION,

19 AND ADULTERATION OF PRODUCT CODES’’.

20 SEC. 3. CRIMINAL PENALTIES.

21 (a) IN GENERAL.—Chapter 65 of title 18, United

22 States Code, is amended by inserting after section 1365

23 the following:
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1 ‘‘§ 1365A. Criminal tampering with product identi2 fication codes

3 ‘‘(a) CRIMINAL PENALTIES.—Any person who will4 fully violates section 43A of the Act of July 5, 1946 (com5 monly referred to as the ‘Trademark Act of 1946’) shall—

6 ‘‘(1) be fined under this title, imprisoned not

7 more than 1 year, or both;

8 ‘‘(2) if the total retail value of the good or

9 goods involved in the violation is greater than

10 $5,000, be fined under this title, imprisoned not

11 more than 5 years, or both;

12 ‘‘(3) if the person acts with reckless disregard

13 for the risk that the health or safety of the public

14 would be threatened and under circumstances mani15 festing extreme indifference to such risk, and the

16 violation threatens the health or safety of the public,

17 be fined under this title, imprisoned not more than

18 10 years, or both;

19 ‘‘(4) if the person acts with reckless disregard

20 for the risk that another person will be placed in

21 danger of death or bodily injury and under cir22 cumstances manifesting extreme indifference to such

23 risk and—

24 ‘‘(A) serious bodily injury to any individual

25 results, be fined under this title, imprisoned not

26 more than 20 years, or both; or
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1 ‘‘(B) death of an individual results, be

2 fined under this title, imprisoned for any term

3 of years or for life, or both; and

4 ‘‘(5) with respect to any second or subsequent

5 violation, be subject to twice the maximum term of

6 imprisonment that would otherwise be imposed

7 under this subsection, fined under this title, or both.

8 ‘‘(b) INJUNCTIONS AND IMPOUNDING, FORFEITURE,

9 AND DISPOSITION OF GOODS.—

10 ‘‘(1) INJUNCTIONS AND IMPOUNDING.—In any

11 prosecution under this section, upon motion of the

12 United States, the court may—

13 ‘‘(A) grant 1 or more temporary, prelimi14 nary, or permanent injunctions on such terms

15 as the court determines to be reasonable to pre16 vent or restrain the alleged violation; and

17 ‘‘(B) at any time during the proceedings,

18 order the impounding, on such terms as the

19 court determines to be reasonable, of any good

20 that is in the custody or control of the defend21 ant and that the court has reasonable cause to

22 believe was involved in the violation.

23 ‘‘(2) FORFEITURE AND DISPOSITION OF

24 GOODS.—Upon conviction of any person of a viola25 tion of this section, the court shall—
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1 ‘‘(A) order the forfeiture of any good in2 volved in the violation that is in the custody or

3 control of the defendant or that has been im4 pounded under paragraph (1)(B); and

5 ‘‘(B) either—

6 ‘‘(i) order the destruction of each

7 good forfeited under subparagraph (A); or

8 ‘‘(ii) if the court determines that any

9 good forfeited under subparagraph (A) is

10 not unsafe or a hazard to health, dispose

11 of the good by delivery to such Federal,

12 State, or local government agencies as, in

13 the opinion of the court, have a need for

14 such good, or by gift to such charitable or

15 nonprofit institutions as, in the opinion of

16 the court, have a need for such good, if

17 such disposition would not otherwise be in

18 violation of law and if the manufacturer

19 consents to such disposition and is given

20 the opportunity to reapply a product iden21 tification code to the good.’’.

22 (b) CONFORMING AMENDMENT.—The table of sec23 tions for chapter 65 of title 18, United States Code, is

24 amended by inserting after the item relating to section

25 1365 the following:

‘‘1365A. Criminal tampering with product identification codes.’’.
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1 SEC. 4. ATTORNEY GENERAL REPORTING REQUIREMENTS.

2 Section 2320(f) of title 18, United States Code, is

3 amended—

4 (1) by inserting ‘‘criminal tampering with prod5 uct identification codes under section 1365A,’’ after

6 ‘‘involve’’; and

7 (2) in paragraph (4), by inserting ‘‘1365A,’’

8 after ‘‘sections’’.

Æ