SHOP SAFE Act of 2021
Bill: S.1843 | Sponsor: Sen. Coons, Christopher A. (D-DE)
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 
adding 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 a 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 3 separate listings within 1 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 the 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 that 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 not less than $500,000; or
            ``(ii) to an electronic commerce platform with less than 
        $500,000 in annual sales 6 months after the platform has 
        received 10 notices (in which there is a reference to this 
        paragraph and an explicit notification to the platform of the 
        10-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 and 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 on the date that is 1 year after the date of 
enactment of this Act.
                                 <all>