109TH CONGRESS
1ST SESSION
H. R. 32
AN ACT
To amend title 18, United States Code, to provide
criminal penalties for trafficking in counterfeit
marks.
109TH CONGRESS
1ST SESSION
H. R. 32
AN ACT
To amend title 18, United States Code, to provide criminal
penalties for trafficking in counterfeit marks.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; FINDINGS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Stop Counterfeiting in Manufactured Goods Act’’.
(b) FINDINGS.—The Congress finds that—
(1) the United States economy is losing millions
of dollars in tax revenue and tens of thousands of
jobs because of the manufacture, distribution, and
sale of counterfeit goods;
(2) the Bureau of Customs and Border Protec-
tion estimates that counterfeiting costs the United
States $200 billion annually;
(3) counterfeit automobile parts, including
brake pads, cost the auto industry alone billions of
dollars in lost sales each year;
(4) counterfeit products have invaded numerous
industries, including those producing auto parts,
electrical appliances, medicines, tools, toys, office
equipment, clothing, and many other products;
(5) ties have been established between counter-
feiting and terrorist organizations that use the sale
of counterfeit goods to raise and launder money;
(6) ongoing counterfeiting of manufactured
goods poses a widespread threat to public health and
safety; and
(7) strong domestic criminal remedies against
counterfeiting will permit the United States to seek
stronger anticounterfeiting provisions in bilateral
and international agreements with trading partners.
SEC. 2. TRAFFICKING IN COUNTERFEIT MARKS.
Section 2320 of title 18, United States Code, is
amended as follows:
(1) Subsection (a) is amended by inserting after
‘‘such goods or services’’ the following: ‘‘, or inten-
tionally traffics or attempts to traffic in labels,
patches, stickers, wrappers, badges, emblems, medal-
lions, charms, boxes, containers, cans, cases,
hangtags, documentation, or packaging of any type
or nature, knowing that a counterfeit mark has been
applied thereto, the use of which is likely to cause
confusion, to cause mistake, or to deceive,’’.
(2) Subsection (b) is amended to read as fol-
lows:
‘‘(b)(1) The following property shall be subject to for-
feiture to the United States and no property right shall
exist in such property:
‘‘(A) Any article bearing or consisting of a
counterfeit mark used in committing a violation of
subsection (a).
‘‘(B) Any property used, in any manner or part,
to commit or to facilitate the commission of a viola-
tion of subsection (a).
‘‘(2) The provisions of chapter 46 of this title relating
to civil forfeitures shall extend to any seizure or civil for-
feiture under this section. At the conclusion of the for-
feiture proceedings, the court, unless otherwise requested
by an agency of the United States, shall order that any
forfeited article bearing or consisting of a counterfeit
mark be destroyed or otherwise disposed of according to
law.
‘‘(3)(A) The court, in imposing sentence on a person
convicted of an offense under this section, shall order, in
addition to any other sentence imposed, that the person
forfeit to the United States—
‘‘(i) any property constituting or derived from
any proceeds the person obtained, directly or indi-
rectly, as the result of the offense;
‘‘(ii) any of the person’s property used, or in-
tended to be used, in any manner or part, to com-
mit, facilitate, aid, or abet the commission of the of-
fense; and
‘‘(iii) any article that bears or consists of a
counterfeit mark used in committing the offense.
‘‘(B) The forfeiture of property under subparagraph
(A), including any seizure and disposition of the property
and any related judicial or administrative proceeding, shall
be governed by the procedures set forth in section 413
of the Comprehensive Drug Abuse Prevention and Control
Act of 1970 (21 U.S.C. 853), other than subsection (d)
of that section. Notwithstanding section 413(h) of that
Act, at the conclusion of the forfeiture proceedings, the
court shall order that any forfeited article or component
of an article bearing or consisting of a counterfeit mark
be destroyed.
‘‘(4) When a person is convicted of an offense under
this section, the court, pursuant to sections 3556, 3663A,
and 3664, shall order the person to pay restitution to the
owner of the mark and any other victim of the offense
as an offense against property referred to in section
3663A(c)(1)(A)(ii).
‘‘(5) The term ‘victim’, as used in paragraph (4), has
the meaning given that term in section 3663A(a)(2).’’.
(3) Subsection (e)(1) is amended—
(A) by striking subparagraph (A) and in-
serting the following:
‘‘(A) a spurious mark—
‘‘(i) that is used in connection with
trafficking in any goods, services, labels,
patches, stickers, wrappers, badges, em-
blems, medallions, charms, boxes, con-
tainers, cans, cases, hangtags, documenta-
tion, or packaging of any type or nature;
‘‘(ii) that is identical with, or substan-
tially indistinguishable from, a mark reg-
istered on the principal register in the
United States Patent and Trademark Of-
fice and in use, whether or not the defend-
ant knew such mark was so registered;
‘‘(iii) that is applied to or used in con-
nection with the goods or services for
which the mark is registered with the
United States Patent and Trademark Of-
fice, or is applied to or consists of a label,
patch, sticker, wrapper, badge, emblem,
medallion, charm, box, container, can,
case, hangtag, documentation, or pack-
aging of any type or nature that is de-
signed, marketed, or otherwise intended to
be used on or in connection with the goods
or services for which the mark is registered
in the United States Patent and Trade-
mark Office; and
‘‘(iv) the use of which is likely to
cause confusion, to cause mistake, or to
deceive; or’’; and
(B) by amending the matter following sub-
paragraph (B) to read as follows:
‘‘but such term does not include any mark or
designation used in connection with goods or
services, or a mark or designation applied to la-
bels, patches, stickers, wrappers, badges, em-
blems, medallions, charms, boxes, containers,
cans, cases, hangtags, documentation, or pack-
aging of any type or nature used in connection
with such goods or services, of which the manu-
facturer or producer was, at the time of the
manufacture or production in question, author-
ized to use the mark or designation for the type
of goods or services so manufactured or pro-
duced, by the holder of the right to use such
mark or designation.’’.
(4) Section 2320 is further amended—
(A) by redesignating subsection (f) as sub-
section (g); and
(B) by inserting after subsection (e) the
following:
‘‘(f) Nothing in this section shall entitle the United
States to bring a criminal cause of action under this sec-
tion for the repackaging of genuine goods or services not
intended to deceive or confuse.’’.
SEC. 3. SENTENCING GUIDELINES.
(a) REVIEW AND AMENDMENT.—Not later than 180
days after the date of enactment of this Act, the United
States Sentencing Commission, pursuant to its authority
under section 994 of title 28, United States Code, and
in accordance with this section, shall review and, if appro-
priate, amend the Federal sentencing guidelines and policy
statements applicable to persons convicted of any offense
under—
(1) section 1204 of title 17, United States
Code; or
(2) section 2318 or 2320 of title 18, United
States Code.
(b) AUTHORIZATION.—The United States Sentencing
Commission may amend the Federal sentencing guidelines
in accordance with the procedures set forth in section
21(a) of the Sentencing Act of 1987 (28 U.S.C. 994 note)
as though the authority under that section had not ex-
pired.
(c) RESPONSIBILITIES
OF UNITED STATES SEN-
TENCING COMMISSION.—In carrying out this section, the
United States Sentencing Commission shall determine
whether the definition of ‘‘infringement amount’’ set forth
in application note 2 of section 2B5.3 of the Federal sen-
tencing guidelines is adequate to address situations in
which the defendant has been convicted of one of the of-
fenses listed in subsection (a) and the item in which the
defendant trafficked was not an infringing item but rather
was intended to facilitate infringement, such as an anti-
circumvention device, or the item in which the defendant
trafficked was infringing and also was intended to facili-
tate infringement in another good or service, such as a
counterfeit label, documentation, or packaging, taking into
account cases such as U.S. v. Sung, 87 F.3d 194 (7th
Cir. 1996).
Passed the House of Representatives May 23, 2005.
Attest:
Clerk.