SHOP SAFE Act of 2021
Bill: H.R.3429 | Sponsor: Rep. Nadler, Jerrold (D-NY)
Policy area: Commerce

Summary:
Stopping Harmful Offers on Platforms by Screening Against Fakes in E-commerce Act of 2021 or SHOP SAFE Act of 2021
This bill makes an electronic commerce platform liable for infringement of a registered trademark by a third-party seller of goods that implicate health and safety unless the platform takes certain actions.
Specifically, the platform may be contributorily liable if the seller uses a counterfeit mark in connection with selling, offering, or advertising such goods on the platform. The platform may avoid such liability by taking certain actions before the infringing act, including (1) requiring the seller to have a registered agent or a verified address for service of process in the United States, (2) verifying the seller's identity and contact information, (3) requiring the seller to agree to not use counterfeit marks with goods sold on the platform, (4) implementing technical measures to prescreen listings on the platform and remove listings for goods being sold with a counterfeit mark, and (5) implementing policies to remove and ban repeat offenders.

To amend the Trademark Act of 1946 to provide for contributory 
   liability for certain electronic commerce platforms for use of a 
  counterfeit mark by a third party on such platforms, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Stopping Harmful Offers on Platforms 
by Screening Against Fakes in E-commerce Act of 2021'' or the ``SHOP 
SAFE Act of 2021''.

SEC. 2. CONTRIBUTORY LIABILITY FOR ELECTRONIC COMMERCE PLATFORMS.

    (a) Platform Liability.--Section 32 of the Act entitled ``An Act to 
provide for the registration and protection of trademarks used in 
commerce, to carry out the provisions of certain international 
conventions, and for other purposes'', approved July 5, 1946 (commonly 
known as the ``Trademark Act of 1946'') (15 U.S.C. 1114), is amended by 
inserting at the end the following:
            ``(4)(A) Subject to subparagraph (C), an electronic 
        commerce platform shall be deemed contributorily liable in a 
        civil action by the registrant for the remedies hereinafter 
        provided for a case in which without the consent of the 
        registrant, a third-party seller uses in commerce a counterfeit 
        mark in connection with the sale, offering for sale, 
        distribution, or advertising of goods that implicate health and 
        safety on the platform, unless the platform demonstrates that 
        the platform took each of the following steps to prevent such 
        use on the platform before any infringing act by the third-
        party seller:
                    ``(i) Determined after a reasonable investigation, 
                and reasonably periodically confirmed--
                            ``(I) that the third-party seller 
                        designated a registered agent in the United 
                        States for service of process; or
                            ``(II) in the case of third-party seller 
                        located in the United States, and if the seller 
                        has not designated a registered agent under 
                        subclause (I), that the third-party seller has 
                        designated a verified address for service of 
                        process in the United States.
                    ``(ii) Verified through governmental identification 
                or other reliable documentation the identity, principal 
                place of business, and contact information of the 
                third-party seller.
                    ``(iii) Required the third-party seller to--
                            ``(I) take reasonable steps to verify the 
                        authenticity of goods on or in connection with 
                        which a registered mark is used; and
                            ``(II) attest to the platform that the 
                        third-party seller has taken reasonable steps 
                        to verify the authenticity of the goods under 
                        subclause (I).
                    ``(iv) Imposed on the third-party seller as a 
                condition of participating on the platform contractual 
                requirements that--
                            ``(I) the third-party seller agrees not to 
                        use a counterfeit mark in connection with the 
                        sale, offering for sale, distribution, or 
                        advertising of goods on the platform;
                            ``(II) the third-party seller consents to 
                        the jurisdiction of United States courts with 
                        respect to claims related to the third-party 
                        seller's participation on the platform; and
                            ``(III) the third-party seller designates 
                        an agent for service of process in the United 
                        States, or, in the case of third-party seller 
                        located in the United States, the third-party 
                        seller designates a verified address for 
                        service of process in the United States.
                    ``(v) Displayed conspicuously on the platform the 
                verified principal place of business, contact 
                information, and identity of the third-party seller, 
                and the country from which the goods will be shipped, 
                except the platform shall not be required to display 
                any such information that constitutes the personal 
                identity of an individual, a home street address, or 
                personal contact information of an individual, and in 
                such cases shall instead provide alternative, verified 
                means of contacting the third-party seller.
                    ``(vi) Displayed conspicuously in each listing the 
                country of origin and manufacture of the goods, unless 
                such information was not reasonably available to the 
                third-party seller and the third-party seller had 
                identified to the platform the steps it undertook to 
                identify the country of origin and manufacture of the 
                goods and the reasons it was unable to identify the 
                same.
                    ``(vii) Required each third-party seller to use 
                images that the seller owns or has permission to use 
                and that accurately depict the actual goods offered for 
                sale on the platform.
                    ``(viii) Implemented at no cost to the registrant 
                reasonable proactive technological measures for 
                screening goods before displaying the goods to the 
                public to prevent any third-party seller's use of a 
                counterfeit mark in connection with the sale, offering 
                for sale, distribution, or advertising of goods on the 
                platform.
                    ``(ix) Implemented at no cost to the registrant a 
                program to expeditiously disable or remove from the 
                platform any listing for which a platform has 
                reasonable awareness of use of a counterfeit mark in 
                connection with the sale, offering for sale, 
                distribution, or advertising of goods. Reasonable 
                awareness of use of a counterfeit mark may be inferred 
                based on information regarding the use of a counterfeit 
                mark on the platform generally, general information 
                about the third-party seller, identifying 
                characteristics of a particular listing, or other 
                circumstances as appropriate. A platform may reinstate 
                a listing disabled or removed under this clause if, 
                after an investigation, the platform reasonably 
                determines that a counterfeit mark was not used in the 
                listing. A reasonable decision to reinstate a listing 
                shall not be a basis for finding that a platform failed 
                to comply with this clause.
                    ``(x) Implemented a policy that requires 
                termination of a third-party seller that has reasonably 
                been determined to have engaged in repeated use of a 
                counterfeit mark in connection with the sale, offering 
                for sale, distribution, or advertising of goods on the 
                platform. Use of a counterfeit mark by a third-party 
                seller in three separate listings within one year shall 
                be considered repeated use, except when reasonable 
                mitigating circumstances exist. A platform may 
                reinstate a third-party seller if, after an 
                investigation, the platform reasonably determines that 
                the third-party seller did not engage in repeated use 
                of a counterfeit mark or that reasonable mitigating 
                circumstances existed. A reasonable decision to 
                reinstate a third-party seller shall not be a basis for 
                finding that a platform failed to comply with this 
                clause.
                    ``(xi) Implemented at no cost to the registrant 
                reasonable technological measures for screening third-
                party sellers to ensure that sellers who have been 
                terminated do not rejoin or remain on the platform 
                under a different seller identity or alias.
                    ``(xii) Provided a verified basis to contact a 
                third-party seller upon request by a registrant that 
                has a bona fide belief that the seller has used a 
                counterfeit mark in connection with the sale, offering 
                for sale, distribution, or advertising of goods on the 
                platform except that the platform is not required to 
                provide information that constitutes the personal 
                identity of an individual, a home street address, or 
                personal contact information of an individual (in such 
                case, the provider shall provide an alternative means 
                of contacting the third-party seller).
            ``(B) In this paragraph:
                    ``(i) The term `counterfeit mark' has the meaning 
                given that term in section 34(d)(1)(B).
                    ``(ii) The term `electronic commerce platform' 
                means any electronically accessed platform that 
                includes publicly interactive features that allow for 
                arranging the sale, purchase, payment, or shipping of 
                goods, or that enables a person other than an operator 
                of such platform to sell or offer to sell physical 
                goods to consumers located in the United States.
                    ``(iii) The term `goods that implicate health and 
                safety' means goods the use of which can lead to 
                illness, disease, injury, serious adverse event, 
                allergic reaction, or death if produced without 
                compliance with all applicable Federal, State, and 
                local health and safety regulations and industry-
                designated testing, safety, quality, certification, 
                manufacturing, packaging, and labeling standards.
                    ``(iv) The term `third-party seller' means a person 
                other than the electronic commerce platform who uses 
                the platform to arrange for the sale, purchase, 
                payment, or shipping of goods.
            ``(C) This paragraph shall apply--
                    ``(i) to an electronic commerce platform that has 
                annual sales on the platform of $500,000 or more; or
                    ``(ii) to an electronic commerce platform with less 
                than $500,000 in annual sales six months after the 
                platform has received ten notices (in which there is a 
                reference to this paragraph and an explicit 
                notification to the platform of the ten-notice limit), 
                in aggregate, identifying listings on the platform that 
                reasonably could be determined to have used a 
                counterfeit mark in connection with the sale, offering 
                for sale, distribution, or advertising of goods that 
                implicate health or safety.
            ``(D) Nothing in this paragraph may be construed to limit 
        liability in a context other than that outlined in this 
        paragraph, including any cause of action available under other 
        provisions of this Act, notwithstanding that the same facts may 
        give rise to a claim under this paragraph.''.
    (b) Effective Date.--This Act and the amendment made by this Act 
shall take effect one year after the date of the enactment of this Act.
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