108TH CONGRESS

2D SESSION S. 2227

AN ACT

To prevent and punish counterfeiting and copyright piracy,

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 ‘‘Anticounterfeiting Act

3 of 2004’’.

4 SEC. 2. FINDINGS.

5 Congress finds that—

6 (1) American innovation, and the protection of

7 that innovation by the government, has been a crit8 ical component of the economic growth of this Na9 tion throughout the history of the Nation;

10 (2) copyright-based industries represent one of

11 the most valuable economic assets of this country,

12 contributing over 5 percent of the gross domestic

13 product of the United States and creating significant

14 job growth and tax revenues;

15 (3) the American intellectual property sector

16 employs approximately 4,300,000 people, rep17 resenting over 3 percent of total United States em18 ployment;

19 (4) the proliferation of organized criminal coun20 terfeiting enterprises threatens the economic growth

21 of United States copyright industries;

22 (5) the American intellectual property sector

23 has invested millions of dollars to develop highly so24 phisticated authentication features that assist con25 sumers and law enforcement in distinguishing gen-
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1 uine intellectual property products and packaging

2 from counterfeits;

3 (6) in order to thwart these industry efforts,

4 counterfeiters traffic in, and tamper with, genuine

5 authentication features, for example, by obtaining

6 genuine authentication features through illicit means

7 and then commingling these features with counter8 feit software or packaging;

9 (7) Federal law does not provide adequate civil

10 and criminal remedies to combat tampering activities

11 that directly facilitate counterfeiting crimes; and

12 (8) in order to strengthen Federal enforcement

13 against counterfeiting of copyrighted works, Con14 gress must enact legislation that—

15 (A) prohibits trafficking in, and tampering

16 with, authentication features of copyrighted

17 works; and

18 (B) permits aggrieved parties an appro19 priate civil cause of action.

20 SEC. 3. PROHIBITION AGAINST TRAFFICKING IN ILLICIT

21 AUTHENTICATION FEATURES.

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

23 States Code, is amended—

24 (1) by striking the heading and inserting

25 ‘‘Trafficking in counterfeit labels, illicit
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1 authentication features, or counterfeit

2 documentation or packaging’’;

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

4 following:

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

6 in subsection (c), knowingly traffics in—

7 ‘‘(1) a counterfeit label affixed to, or designed

8 to be affixed to—

9 ‘‘(A) a phonorecord;

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

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

12 audiovisual work; or

13 ‘‘(D) documentation or packaging;

14 ‘‘(2) an illicit authentication feature affixed to

15 or embedded in, or designed to be affixed to or em16 bedded in—

17 ‘‘(A) a phonorecord;

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

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

20 audiovisual work; or

21 ‘‘(D) documentation or packaging; or

22 ‘‘(3) counterfeit documentation or packaging,

23 shall be fined under this title or imprisoned for not

24 more than 5 years, or both.’’;

25 (3) in subsection (b)—
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1 (A) in paragraph (2), by striking ‘‘and’’ at

2 the end;

3 (B) in paragraph (3)—

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

5 have’’ and inserting the following: ‘‘,

6 ‘audiovisual work’, and ‘copyright owner’

7 have’’; and

8 (ii) by striking the period at the end

9 and inserting a semicolon; and

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

11 ‘‘(4) the term ‘authentication feature’ means

12 any hologram, watermark, certification, symbol,

13 code, image, sequence of numbers or letters, or other

14 physical feature that either individually or in com15 bination with another feature is used by the respec16 tive copyright owner to verify that a phonorecord, a

17 copy of a computer program, a copy of a motion pic18 ture or other audiovisual work, or documentation or

19 packaging is not counterfeit or otherwise infringing

20 of any copyright;

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

22 means documentation or packaging for a phono23 record, copy of a computer program, or copy of a

24 motion picture or other audiovisual work; and
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1 ‘‘(6) the term ‘illicit authentication feature’

2 means an authentication feature, that—

3 ‘‘(A) without the authorization of the re4 spective copyright owner has been tampered

5 with or altered so as to facilitate the reproduc6 tion or distribution of—

7 ‘‘(i) a phonorecord;

8 ‘‘(ii) a copy of a computer program;

9 ‘‘(iii) a copy of a motion picture or

10 other audiovisual work; or

11 ‘‘(iv) documentation or packaging;

12 in violation of the rights of the copyright owner

13 under title 17;

14 ‘‘(B) is genuine, but has been distributed,

15 or is intended for distribution, without the au16 thorization of the respective copyright owner; or

17 ‘‘(C) appears to be genuine, but is not.’’;

18 (4) in subsection (c)—

19 (A) by striking paragraph (3) and insert20 ing the following:

21 ‘‘(3) the counterfeit label or illicit authentica22 tion feature is affixed to, is embedded in, or en23 closes, or is designed to be affixed to, to be embed24 ded in, or to enclose—
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1 ‘‘(A) a phonorecord of a copyrighted sound

2 recording;

3 ‘‘(B) a copy of a copyrighted computer

4 program;

5 ‘‘(C) a copy of a copyrighted motion pic6 ture or other audiovisual work; or

7 ‘‘(D) documentation or packaging; or’’;

8 and

9 (B) in paragraph (4), by striking ‘‘for a

10 computer program’’;

11 (5) in subsection (d)—

12 (A) by inserting ‘‘or illicit authentication

13 features’’ after ‘‘counterfeit labels’’ each place

14 it appears;

15 (B) by inserting ‘‘or illicit authentication

16 features’’ after ‘‘such labels’’; and

17 (C) by inserting before the period at the

18 end the following: ‘‘, and of any equipment, de19 vice, or materials used to manufacture, repro20 duce, or assemble the counterfeit labels or illicit

21 authentication features’’; and

22 (6) by adding at the end the following:

23 ‘‘(f) CIVIL REMEDIES FOR VIOLATION.—

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

25 is injured by a violation of this section or is threat-
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1 ened with injury, may bring a civil action in an ap2 propriate United States district court.

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

4 brought under paragraph (1), the court—

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

6 permanent injunctions on such terms as the

7 court determines to be reasonable to prevent or

8 restrain violations of this section;

9 ‘‘(B) at any time while the action is pend10 ing, may order the impounding, on such terms

11 as the court determines to be reasonable, of any

12 article that is in the custody or control of the

13 alleged violator and that the court has reason14 able cause to believe was involved in a violation

15 of this section; and

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

17 ‘‘(i) reasonable attorney fees and

18 costs; and

19 ‘‘(ii)(I) actual damages and any addi20 tional profits of the violator, as provided

21 by paragraph (3); or

22 ‘‘(II) statutory damages, as provided

23 by paragraph (4).

24 ‘‘(3) ACTUAL DAMAGES AND PROFITS.—
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1 ‘‘(A) IN GENERAL.—The injured party is

2 entitled to recover—

3 ‘‘(i) the actual damages suffered by

4 the injured party as a result of a violation

5 of this section, as provided by subpara6 graph (B); and

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

8 are attributable to a violation of this sec9 tion and are not taken into account in

10 computing the actual damages.

11 ‘‘(B) CALCULATION OF DAMAGES.—The

12 court shall calculate actual damages by

13 multiplying—

14 ‘‘(i) the value of the phonorecords or

15 copies to which counterfeit labels, illicit au16 thentication features, or counterfeit docu17 mentation or packaging were affixed or

18 embedded, or designed to be affixed or em19 bedded; by

20 ‘‘(ii) the number of phonorecords or

21 copies to which counterfeit labels, illicit au22 thentication features, or counterfeit docu23 mentation or packaging were affixed or

24 embedded, or designed to be affixed or em25 bedded, unless such calculation would un-
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1 derestimate the actual harm suffered by

2 the copyright owner.

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

4 paragraph, the term ‘value of the phonorecord

5 or copy’ means—

6 ‘‘(i) the retail value of an authorized

7 phonorecord of a copyrighted sound record8 ing;

9 ‘‘(ii) the retail value of an authorized

10 copy of a copyrighted computer program;

11 or

12 ‘‘(iii) the retail value of a copy of a

13 copyrighted motion picture or other audio14 visual work.

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

16 may elect, at any time before final judgment is ren17 dered, to recover, instead of actual damages and

18 profits, an award of statutory damages for each vio19 lation of this section in a sum of not less than

20 $2,500 or more than $25,000, as the court considers

21 appropriate.

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

23 increase an award of damages under this subsection

24 by 3 times the amount that would otherwise be

25 awarded, as the court considers appropriate, if the
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1 court finds that a person has subsequently violated

2 this section within 3 years after a final judgment

3 was entered against that person for a violation of

4 this section.

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

6 may not be commenced under this section unless it

7 is commenced within 3 years after the date on which

8 the claimant discovers the violation.

9 ‘‘(g) OTHER RIGHTS NOT AFFECTED.—Nothing in

10 this section shall enlarge, diminish, or otherwise affect li11 ability under section 1201 or 1202 of title 17.’’.

12 (b) TECHNICAL AND CONFORMING AMENDMENT.—

13 The item relating to section 2318 in the table of sections

14 at the beginning of chapter 113 of title 18, United States

15 Code, is amended by inserting ‘‘or illicit authentication

16 features’’ after ‘‘counterfeit labels’’.

Passed the Senate December 8, 2004.

Attest:

Secretary.
108TH CONGRESS

2D SESSION S. 2227

AN ACT

To prevent and punish counterfeiting and copyright

piracy, and for other purposes.