[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 32 Enrolled Bill (ENR)]


        H.R.32

                       One Hundred Ninth Congress

                                 of the

                        United States of America


                          AT THE SECOND SESSION

          Begun and held at the City of Washington on Tuesday,
             the third day of January, two thousand and six


                                 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 Representatives of the 
United States of America in Congress assembled,

SECTION 1. TRAFFICKING IN COUNTERFEIT MARKS.

    (a) Short Title; Findings.--
        (1) Short title.--This section may be cited as the ``Stop 
    Counterfeiting in Manufactured Goods Act''.
        (2) Findings.--The Congress finds that--
            (A) 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;
            (B) the Bureau of Customs and Border Protection estimates 
        that counterfeiting costs the United States $200 billion 
        annually;
            (C) counterfeit automobile parts, including brake pads, 
        cost the auto industry alone billions of dollars in lost sales 
        each year;
            (D) counterfeit products have invaded numerous industries, 
        including those producing auto parts, electrical appliances, 
        medicines, tools, toys, office equipment, clothing, and many 
        other products;
            (E) ties have been established between counterfeiting and 
        terrorist organizations that use the sale of counterfeit goods 
        to raise and launder money;
            (F) ongoing counterfeiting of manufactured goods poses a 
        widespread threat to public health and safety; and
            (G) strong domestic criminal remedies against 
        counterfeiting will permit the United States to seek stronger 
        anticounterfeiting provisions in bilateral and international 
        agreements with trading partners.
    (b) 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 intentionally traffics or 
    attempts to traffic in labels, patches, stickers, wrappers, badges, 
    emblems, medallions, 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 follows:
    ``(b)(1) The following property shall be subject to forfeiture 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 violation of subsection (a).
    ``(2) The provisions of chapter 46 of this title relating to civil 
forfeitures, including section 983 of this title, shall extend to any 
seizure or civil forfeiture under this section. At the conclusion of 
the forfeiture 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 indirectly, as the result of the 
    offense;
        ``(ii) any of the person's property used, or intended to be 
    used, in any manner or part, to commit, facilitate, aid, or abet 
    the commission of the offense; 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 inserting the 
        following:
            ``(A) a spurious mark--
                ``(i) that is used in connection with trafficking in 
            any goods, services, labels, patches, stickers, wrappers, 
            badges, emblems, medallions, charms, boxes, containers, 
            cans, cases, hangtags, documentation, or packaging of any 
            type or nature;
                ``(ii) that is identical with, or substantially 
            indistinguishable from, a mark registered on the principal 
            register in the United States Patent and Trademark Office 
            and in use, whether or not the defendant knew such mark was 
            so registered;
                ``(iii) that is applied to or used in connection with 
            the goods or services for which the mark is registered with 
            the United States Patent and Trademark Office, or is 
            applied to or consists of a label, patch, sticker, wrapper, 
            badge, emblem, medallion, charm, box, container, can, case, 
            hangtag, documentation, or packaging of any type or nature 
            that is designed, 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 Trademark 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 subparagraph (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 labels, patches, stickers, wrappers, badges, emblems, 
    medallions, charms, boxes, containers, cans, cases, hangtags, 
    documentation, or packaging of any type or nature used in 
    connection with such goods or services, of which the manufacturer 
    or producer was, at the time of the manufacture or production in 
    question, authorized to use the mark or designation for the type of 
    goods or services so manufactured or produced, by the holder of the 
    right to use such mark or designation.''.
        (4) Section 2320 is further amended--
            (A) by redesignating subsection (f) as subsection (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 section for the repackaging 
of genuine goods or services not intended to deceive or confuse.''.
    (c) Sentencing Guidelines.--
        (1) 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 subsection, 
    shall review and, if appropriate, amend the Federal sentencing 
    guidelines and policy statements applicable to persons convicted of 
    any offense under section 2318 or 2320 of title 18, United States 
    Code.
        (2) 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 expired.
        (3) Responsibilities of united states sentencing commission.--
    In carrying out this subsection, 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 sentencing guidelines is adequate to address situations in 
    which the defendant has been convicted of one of the offenses 
    listed in paragraph (1) 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 facilitate 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).

SEC. 2. TRAFFICKING DEFINED.

    (a) Short Title.--This section may be cited as the ``Protecting 
American Goods and Services Act of 2005''.
    (b) Counterfeit Goods or Services.--Section 2320(e) of title 18, 
United States Code, is amended--
        (1) by striking paragraph (2) and inserting the following:
        ``(2) the term `traffic' means to transport, transfer, or 
    otherwise dispose of, to another, for purposes of commercial 
    advantage or private financial gain, or to make, import, export, 
    obtain control of, or possess, with intent to so transport, 
    transfer, or otherwise dispose of;'';
        (2) by redesignating paragraph (3) as paragraph (4); and
        (3) by inserting after paragraph (2) the following:
        ``(3) the term `financial gain' includes the receipt, or 
    expected receipt, of anything of value; and''.
    (c) Conforming Amendments.--
        (1) Sound recordings and music videos of live musical 
    performances.--Section 2319A(e) of title 18, United States Code, is 
    amended by striking paragraph (2) and inserting the following:
        ``(2) the term `traffic' has the same meaning as in section 
    2320(e) of this title.''.
        (2) Counterfeit labels for phonorecords, computer programs, 
    etc.--Section 2318(b) of title 18, United States Code, is amended 
    by striking paragraph (2) and inserting the following:
        ``(2) the term `traffic' has the same meaning as in section 
    2320(e) of this title;''.
        (3) Anti-bootlegging.--Section 1101 of title 17, United States 
    Code, is amended by striking subsection (b) and inserting the 
    following:
    ``(b) Definition.--In this section, the term `traffic' has the same 
meaning as in section 2320(e) of title 18.''.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.