IB
Union Calendar No. 366
105TH CONGRESS
2D SESSION
H. R. 3891
[Report No. 105–650]
To amend the Trademark Act of 1946 to prohibit the unauthorized destruc-
tion, modification, or alteration of product identification codes, and for
other purposes.
IN THE HOUSE OF REPRESENTATIVES
MAY 19, 1998
Mr. GOODLATTE introduced the following bill; which was referred to the
Committee on the Judiciary
JULY 28, 1998
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part printed in italic]
[For text of introduced bill, see copy of bill as introduced on May 19, 1998]
A BILL
To amend the Trademark Act of 1946 to prohibit the unau-
thorized destruction, modification, or alteration of prod-
uct identification codes, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This 
Act 
may 
be 
cited 
as 
the 
‘‘Trademark
Anticounterfeiting Act of 1998’’.
SEC. 2. PROHIBITION AGAINST UNAUTHORIZED ALTER-
ATION OF PRODUCT IDENTIFICATION CODES.
(a) IN GENERAL.—Title VIII of the Act entitled ‘‘An
Act to provide for the registration and protection of trade-
marks used in commerce, to carry out the provisions of cer-
tain international conventions, and for other purposes.’’,
approved July 5, 1946 (commonly referred to as the
‘‘Lanham Act’’ and the ‘‘Trademark Act of 1946’’) is
amended by inserting after section 43 (15 U.S.C. 1125) the
following:
‘‘UNAUTHORIZED MODIFICATIONS OF PRODUCT
IDENTIFICATION CODES
‘‘SEC. 43A. (a) DEFINITIONS.—In this section—
‘‘(1) the term ‘consumer’—
‘‘(A) means—
‘‘(i) the ultimate user or purchaser of
a good; or
‘‘(ii) any hotel, restaurant, or other
provider of services that must remove or
alter the container, label, or packaging of a
good in order to make the good available to
the ultimate user or purchaser; and
‘‘(B) does not include any retailer or other
distributor who acquires a good for resale;
‘‘(2) the term ‘good’ means any article, product,
or commodity that is customarily produced or distrib-
uted for sale, rental, or licensing in interstate or for-
eign commerce, and any container, packaging, label,
or component thereof;
‘‘(3) the term ‘manufacturer’ includes the origi-
nal manufacturer of a good and a duly appointed
agent or representative of that manufacturer acting
within the scope of its agency or representation;
‘‘(4) the term ‘product identification code’—
‘‘(A) includes any number, letter, symbol,
marking, date (including an expiration date),
code, software, or other technology that is affixed
to or embedded in any good, by which the manu-
facturer of the good may trace the good back to
a particular production lot or batch or date of
removal, or otherwise identify the source of the
good, the date of manufacture, the date of expira-
tion, or other comparable critical data; and
‘‘(B) does not include copyright manage-
ment information conveyed in connection with
copies or phonorecords of a copyrighted work or
any performance or display of a copyrighted
work;
‘‘(5) the term ‘Universal Product Code’ refers to
the multidigit bar code and number representing
goods in retail applications; and
‘‘(6) the term ‘value’ means the face, par, or
market value, whichever is the greatest.
‘‘(b) PROHIBITED ACTS.—Except as otherwise author-
ized by Federal law, it shall be unlawful for any person,
other than the consumer or the manufacturer of a good,
knowingly and without authorization of the manufac-
turer—
‘‘(1) to directly or indirectly alter, conceal, re-
move, obliterate, deface, strip, or peel any product
identification code affixed to or embedded in that
good;
‘‘(2) to directly or indirectly affix or embed a
product identification code to or in that good which
is intended by the manufacturer for a different good,
such that the code no longer accurately identifies the
source of the good;
‘‘(3) to directly or indirectly affix to or embed in
that good any number, letter, symbol, marking, date,
code, or other technology intended to simulate a prod-
uct identification code; or
‘‘(4) to import, export, sell, distribute, or broker
that good, the product identification code for which
has been altered, concealed, removed, obliterated, de-
faced, stripped, peeled, affixed, or embedded in viola-
tion of paragraph (1) or (2), or that bears an unau-
thorized number, letter, symbol, marking, date, or
other code in violation of paragraph (3).
‘‘(c) APPLICABILITY.—The prohibitions set forth in
subsection (b) shall apply to product identification codes
(or simulated product identification codes in a case to
which subsection (b)(3) applies) affixed to, or embedded in,
any good held for sale or distribution in interstate or for-
eign commerce or after shipment therein.
‘‘(d) EXCLUSION.—
‘‘(1) UPC CODES.—Nothing in this section pro-
hibits a retailer from affixing a Universal Product
Code or other electronic pricing code to a good if that
code does not (or can be removed so as not to) perma-
nently alter, conceal, remove, obliterate, deface, strip,
or peel any product identification code.
‘‘(2) REPACKAGING FOR RESALE.—(A) Nothing
in this section prohibits a distributor from removing
an article, product, or commodity of retail sale from
a shipping container and placing such article, prod-
uct, or commodity in another shipping container for
purpose of resale in a quantity different from the
quantity originally provided by the manufacturer or
from replacing a damaged shipping container, if, ex-
cept as provided in paragraph (1), such article, prod-
uct, or commodity of retail sale retains its original
product identification code, without any obstruction
or alteration, and if—
‘‘(i) such distributor is registered with all
applicable Federal and State agencies;
‘‘(ii) such distributor repackages the article,
product, or commodity in full compliance with
all applicable State and Federal laws and regu-
lations; and
‘‘(iii) the act of repackaging does not result
in a prohibited act under section 301 of the Fed-
eral Food, Drug, and Cosmetic Act or violate
any other applicable State or Federal law or reg-
ulation.
‘‘(B) As used in this paragraph, the term ‘ship-
ping container’ means—
‘‘(i) a container or wrapping used for the
transportation of any article, product, or com-
modity in bulk or in quantity to manufacturers,
packers, or processors, or to wholesale or retail
distributors thereof; and
‘‘(ii) containers or wrappings used by re-
tailers to ship or deliver any article, product, or
commodity to retail customers, if such containers
and wrappings bear no printed matter pertain-
ing to any particular article, product, or com-
modity.
‘‘(e) CRIMINAL PENALTIES.—Any person who willfully
violates this section shall be punished as provided in section
1365A of title 18.
‘‘(f) CIVIL REMEDIES.—
‘‘(1) IN GENERAL.—Any person who is injured
by a violation of this section, or threatened with such
injury, may bring a civil action in an appropriate
United States district court against the alleged viola-
tor.
‘‘(2) INJUNCTIONS AND IMPOUNDING AND DIS-
POSITION
OF
GOODS.—In any action under para-
graph (1), the court may—
‘‘(A) grant 1 or more temporary, prelimi-
nary, or permanent injunctions on such terms as
the court determines to be reasonable to prevent
or restrain the violation;
‘‘(B) at any time while the action is pend-
ing, order the impounding, on such terms as the
court determines to be reasonable, of any good
that is in the custody or control of the alleged vi-
olator and that the court has reasonable cause to
believe was involved in the violation; and
‘‘(C) as part of a final judgment or de-
cree—
‘‘(i) order the destruction of any good
involved in the violation that is in the cus-
tody or control of the violator or that has
been impounded under subparagraph (B);
or
‘‘(ii) if the court determines that any
good impounded under subparagraph (B) is
not unsafe or a hazard to health, dispose of
the good by delivery to such Federal, State,
or local government agencies as, in the
opinion of the court, have a need for such
good, or by gift to such charitable or non-
profit institutions as, in the opinion of the
court, have a need for such good, if such dis-
position would not otherwise be in violation
of law, and if the manufacturer consents to
such disposition and is given the oppor-
tunity to reapply a product identification
code to the good.
‘‘(3) DAMAGES.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), in any action under paragraph (1),
the plaintiff shall be entitled to recover the actual
damages suffered by the plaintiff as a result of
the violation, and any profits of the violator that
are attributable to the violation and are not
taken into account in computing the actual dam-
ages. In establishing the violator’s profits, the
plaintiff shall be required to present proof only
of the violator’s sales, and the violator shall be
required to prove all elements of cost or deduc-
tion claimed.
‘‘(B) STATUTORY DAMAGES.—In any action
under paragraph (1), the plaintiff may elect, at
any time before final judgment is rendered, to re-
cover, instead of actual damages and profits de-
scribed in subparagraph (A), an award of statu-
tory damages for any violation under this sec-
tion in an amount equal to—
‘‘(i) not less than $500 and not more
than $100,000, with respect to each type of
goods involved in the violation; and
‘‘(ii) if the violation threatens the
health and safety of the public, as deter-
mined by the court, not less than $5,000
and not more than $1,000,000, with respect
to each type of goods involved in the viola-
tion.
‘‘(4) COSTS AND ATTORNEY’S FEES.—In any ac-
tion under paragraph (1)—
‘‘(A) in addition to any damages recovered
under paragraph (3), a prevailing plaintiff may
recover the full costs of the action; and
‘‘(B) the court, in its discretion, may also
award reasonable attorney fees to the prevailing
party.
‘‘(5) REPEAT VIOLATIONS.—
‘‘(A) TREBLE DAMAGES.—In any case in
which a person violates this section within 3
years after the date on which a final judgment
was entered against that person for a previous
violation of this section, the court, in an action
brought under this subsection, may increase the
award of damages for the later violation to not
more than 3 times the amount that would other-
wise be awarded under paragraph (3), as the
court considers appropriate.
‘‘(B) BURDEN OF PROOF.—A plaintiff that
seeks damages as described in subparagraph (A)
shall bear the burden of proving the existence of
the earlier violation.
‘‘(6) LIMITATIONS ON ACTIONS.—No civil action
may be commenced under this section later than 3
years after the date on which the claimant discovers
the violation.
‘‘(7) INNOCENT
VIOLATIONS.—In any action
under paragraph (1), the court in its discretion may
reduce or remit the total award of damages in any
case in which the violator sustains the burden of
proving, and the court finds, that the violator was not
aware and had no reason to believe that the acts of
the violator constituted a violation.
‘‘(g) ENFORCEMENT.—The Attorney General shall en-
force this section.’’.
(b) CONFORMING AMENDMENT.—The heading for title
VIII of the Act of July 5, 1946, is amended by striking
‘‘AND DILUTION’’ and inserting ‘‘DILUTION, AND
ADULTERATION OF PRODUCT CODES’’.
SEC. 3. CRIMINAL PENALTIES.
(a) IN GENERAL.—Chapter 65 of title 18, United
States Code, is amended by inserting after section 1365 the
following:
‘‘§ 1365A. Unauthorized modification of product iden-
tification codes
‘‘(a) CRIMINAL PENALTIES.—Any person who willfully
violates section 43A of the Act of July 5, 1946 (commonly
referred to as the ‘Trademark Act of 1946’) shall—
‘‘(1) be fined under this title, imprisoned not
more than 1 year, or both;
‘‘(2) if the total retail value of the good or goods
involved in the violation is greater than $5,000, be
fined under this title, imprisoned not more than 5
years, or both;
‘‘(3) if the person acts with reckless disregard for
the risk that the health or safety of the public would
be threatened and under circumstances manifesting
extreme indifference to such risk, and the violation
threatens the health or safety of the public, be fined
under this title, imprisoned not more than 10 years,
or both;
‘‘(4) if the person acts with reckless disregard for
the risk that another person will be placed in danger
of death or bodily injury and under circumstances
manifesting extreme indifference to such risk and—
‘‘(A) serious bodily injury to any individ-
ual results, be fined under this title, imprisoned
not more than 20 years, or both; or
‘‘(B) death of an individual results, be fined
under this title, imprisoned for any term of
years or for life, or both; and
‘‘(5) with respect to any second or subsequent
violation, be subject to twice the maximum term of
imprisonment that would otherwise be imposed under
this subsection, fined under this title, or both.
‘‘(b) INJUNCTIONS
AND IMPOUNDING, FORFEITURE,
AND DISPOSITION OF GOODS.—
‘‘(1) INJUNCTIONS
AND
IMPOUNDING.—In any
prosecution under this section, upon motion of the
United States, the court may—
‘‘(A) grant 1 or more temporary, prelimi-
nary, or permanent injunctions on such terms as
the court determines to be reasonable to prevent
or restrain the alleged violation; and
‘‘(B) at any time during the proceedings,
order the impounding, on such terms as the court
determines to be reasonable, of any good that is
in the custody or control of the defendant and
that the court has reasonable cause to believe was
involved in the violation.
‘‘(2) 
FORFEITURE
AND
DISPOSITION
OF
GOODS.—Upon conviction of any person of a viola-
tion of this section, the court shall—
‘‘(A) order the forfeiture of any good in-
volved in the violation that is in the custody or
control of the defendant or that has been im-
pounded under paragraph (1)(B); and
‘‘(B) either—
‘‘(i) order the destruction of each good
forfeited under subparagraph (A); or
‘‘(ii) if the court determines that any
good forfeited under subparagraph (A) is
not unsafe or a hazard to health, dispose of
the good by delivery to such Federal, State,
or local government agencies as, in the
opinion of the court, have a need for such
good, or by gift to such charitable or non-
profit institutions as, in the opinion of the
court, have a need for such good, if such dis-
position would not otherwise be in violation
of law and if the manufacturer consents to
such disposition and is given the oppor-
tunity to reapply a product identification
code to the good.’’.
(b) CONFORMING AMENDMENT.—The table of sections
for chapter 65 of title 18, United States Code, is amended
by inserting after the item relating to section 1365 the fol-
lowing:
‘‘1365A. Unauthorized modification of product identification codes.’’.
Union Calendar No. 366
105TH CONGRESS
2D SESSION
H. R. 3891
[Report No. 105–650]
A BILL
To amend the Trademark Act of 1946 to prohibit
the unauthorized destruction, modification, or al-
teration of product identification codes, and for
other purposes.
JULY 28, 1998
Reported with an amendment, committed to the Commit-
tee of the Whole House on the State of the Union, and
ordered to be printed