[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 2934 Introduced in Senate (IS)]

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118th CONGRESS
  1st Session
                                S. 2934

    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.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

           September 26 (legislative day, September 22), 2023

 Mr. Coons (for himself and Mr. Tillis) introduced the following bill; 
  which was read twice and referred to the Committee on the Judiciary

_______________________________________________________________________

                                 A BILL


 
    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 2023'' or the ``SHOP 
SAFE Act of 2023''.

SEC. 2. CONTRIBUTORY LIABILITY FOR ELECTRONIC COMMERCE PLATFORMS.

    (a) In General.--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) Except as provided in subparagraph (B), an 
        electronic commerce platform shall be contributorily liable in 
        a civil action under paragraph (1) for a case in which a third-
        party seller is shown to have used in commerce a counterfeit 
        mark in connection with the sale, offering for sale, 
        distribution, or advertising of a good that implicates health 
        and safety on the platform.
            ``(B) An electronic commerce platform shall not be subject 
        to contributory liability under subparagraph (A) if the 
        electronic commerce platform demonstrates that the platform 
        took reasonable measures to implement each of the following 
        steps to prevent infringing use by the applicable third-party 
        seller on the platform before that infringing use:
                    ``(i) Determined after an investigation and 
                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 that 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) Imposed on the third-party seller as a 
                condition of participating on the electronic commerce 
                platform requirements that the third-party seller--
                            ``(I) consents to the jurisdiction of the 
                        courts of the United States with respect to 
                        claims related to participation by the third-
                        party seller on the platform; and
                            ``(II) uses images on the electronic 
                        commerce platform that accurately depict the 
                        goods sold, offered for sale, distributed, or 
                        advertised on the electronic commerce platform.
                    ``(iii) Provided accessible electronic means by 
                which a registrant and consumer can notify the 
                electronic commerce platform of suspected use of a 
                counterfeit mark.
                    ``(iv)(I) Implemented at no charge from the 
                electronic commerce platform to registrants proactive 
                measures for screening listings for goods before 
                displaying the goods to the public to prevent the use 
                by any third-party seller of a counterfeit mark in 
                connection with the sale, offering for sale, 
                distribution, or advertising of goods on the platform.
                    ``(II) For purposes of implementing the proactive 
                measures described in subclause (I)--
                            ``(aa) a registrant shall provide the 
                        applicable electronic commerce platform with a 
                        notice of the mark of the registrant and a 
                        point of contact in advance; and
                            ``(bb) the applicable electronic commerce 
                        platform may not require that a registrant 
                        participate in any program specific to the 
                        electronic commerce platform.
                    ``(III) An electronic commerce platform shall not 
                be liable under subparagraph (A) for failure to comply 
                with subclause (I) if the registrant has not provided 
                the platform with the information required under 
                subclause (II) and information relating to the mark is 
                not publicly available.
                    ``(IV) If the screening described in subclause (I) 
                blocks goods from being displayed on the applicable 
                electronic commerce platform, the electronic commerce 
                platform shall allow an opportunity for the applicable 
                third-party seller to provide proof that the goods in 
                question are not counterfeit.
                    ``(v)(I) Implemented at no charge from the 
                electronic commerce platform to registrants a program 
                to expeditiously disable or remove from the platform 
                any listing for which the platform has actual or 
                constructive knowledge of the use of a counterfeit mark 
                in connection with the sale, offering for sale, 
                distribution, or advertising of goods.
                    ``(II) For the purposes of subclause (I), 
                constructive knowledge of the use of a counterfeit mark 
                may be inferred based on information gathered by the 
                applicable electronic commerce platform (including 
                information submitted by registrants to the electronic 
                commerce platform), including information regarding--
                            ``(aa) the use of a counterfeit mark on the 
                        platform;
                            ``(bb) the allegedly infringed 
                        registration;
                            ``(cc) identifying characteristics of a 
                        particular listing or third-party seller; or
                            ``(dd) other circumstances, as appropriate.
                    ``(III) An electronic commerce platform may 
                reinstate a listing disabled or removed under this 
                clause, if, after an investigation initiated by the 
                platform or upon request of the affected third-party 
                seller, the platform reasonably determines that a 
                counterfeit mark was not used in the listing.
                    ``(IV) A verified decision to reinstate a listing 
                under subclause (III) shall not be a basis for finding 
                that the applicable electronic commerce platform failed 
                to comply with this clause.
                    ``(vi)(I) Implemented a publicly available, written 
                policy that requires termination of a third-party 
                seller that has 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 electronic commerce 
                platform.
                    ``(II) The use of a counterfeit mark by a third-
                party seller in 3 separate listings during a 1-year 
                period typically shall be considered repeated use for 
                the purposes of subclause (I), but an electronic 
                commerce platform may allow a third-party seller to 
                remain active after repeated use of a counterfeit mark 
                when mitigating circumstances exist.
                    ``(III) The determination of whether mitigating 
                circumstances exist for the purposes of subclause (II) 
                shall consider the overall activity of the applicable 
                third-party seller, efforts the third-party seller has 
                taken to cure supply-chain concerns, third-party seller 
                intent, the scope and nature of the defenses offered by 
                the third-party seller, efforts the third-party seller 
                takes to refute or resolve disputes once notified of a 
                concern, and any other factor considered relevant by a 
                court.
                    ``(IV) An electronic commerce platform may 
                reinstate a third-party seller after terminating the 
                third-party seller under subclause (I), if, after an 
                investigation initiated by the platform or upon request 
                of the affected third-party seller, the platform 
                determines that the third-party seller did not engage 
                in repeated use of a counterfeit mark or that 
                mitigating circumstances exist.
                    ``(V) A verified decision by an electronic commerce 
                platform under subclause (IV) to reinstate a third-
                party seller shall not be a basis for finding that the 
                platform failed to comply with this clause.
                    ``(vii) Implemented at no charge from the 
                electronic commerce platform to registrants measures 
                for screening third-party sellers to ensure that third-
                party sellers that have been terminated under clause 
                (vi) do not rejoin or remain on the platform under a 
                different seller identity or alias.
                    ``(viii) Provided a verified basis, upon request of 
                a registrant, for the registrant to contact a third-
                party seller, or the designated agent of a third-party 
                seller for service of process, if the registrant has a 
                bona fide belief that the third-party seller has used a 
                counterfeit mark of a mark belonging to the registrant 
                in connection with the sale, offering for sale, 
                distribution, or advertising of goods that implicate 
                health and safety on the electronic commerce platform, 
                except that the platform is not required to provide 
                information that constitutes the personal identity of 
                an individual, a residential street address, or 
                personal contact information of an individual (and, in 
                such case, the platform shall provide an alternative 
                means of contacting the third-party seller).
            ``(C) The determination of whether the measures in this 
        paragraph are reasonable shall consider the size and resources 
        of an electronic commerce platform, the nature of the goods and 
        services provided by the platform, available technological and 
        non-technological solutions, the amount of information provided 
        by a registrant to the platform, and any other factor 
        considered relevant by a court.
            ``(D)(i) This paragraph shall apply to an electronic 
        commerce platform--
                    ``(I) that has sales on the platform in the current 
                or previous calendar year in an amount of not less than 
                $500,000; or
                    ``(II) with less than $500,000 in sales on the 
                platform in the current or previous calendar year, 
                beginning on the date that is 180 days after the date 
                on which the platform receives the tenth notice, in 
                aggregate, that qualifies under clause (ii).
            ``(ii) To count toward the aggregate 10-notice threshold 
        under clause (i)(II), a notice shall--
                    ``(I) include a reference to this paragraph;
                    ``(II) include an explicit notification of the 10-
                notice threshold and the requirement of the applicable 
                electronic commerce platform to publish the information 
                under clause (iii); and
                    ``(III) identify a listing on the applicable 
                electronic commerce 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.
            ``(iii) Not later than 30 days after the date on which an 
        electronic commerce platform described in clause (i)(II) 
        receives the first notice under clause (ii), the platform shall 
        make publicly available an attestation that--
                    ``(I) the sales of goods on the platform in the 
                current or previous calendar year were less than 
                $500,000; and
                    ``(II) includes an aggregate count of the notices 
                received by the platform that qualify under clause 
                (ii), which shall be updated upon receipt of additional 
                notices by the platform.
            ``(E) An electronic commerce platform shall implement and 
        maintain reasonable security procedures and practices, 
        including administrative, physical, and technical safeguards, 
        appropriate to the nature of the data and the purposes for 
        which the data will be used, to protect the data collected to 
        comply with the requirements of this paragraph from 
        unauthorized use, disclosure, access, destruction, or 
        modification.
            ``(F) This paragraph may not be construed to limit 
        liability or defenses in contexts other than those described in 
        this paragraph, including any cause of action or defenses 
        available under any other provision of this Act, 
        notwithstanding that the same facts may give rise to a claim 
        under this paragraph.
            ``(G) With respect to fiscal year 2024, and each fiscal 
        year thereafter, the amounts in subparagraph (D) shall be 
        increased by an amount equal to the percentage increase during 
        the preceding fiscal year, if any, in the Consumer Price Index 
        for All Urban Consumers published by the Department of Labor.
            ``(H) In this paragraph:
                    ``(i) The term `consumer product' has the meaning 
                given the term in section 101 of the Magnuson-Moss 
                Warranty--Federal Trade Commission Improvement Act (15 
                U.S.C. 2301) and section 700.1 of title 16, Code of 
                Federal Regulations, or any successor regulation.
                    ``(ii) The term `counterfeit mark' has the meaning 
                given the term in section 34(d)(1)(B).
                    ``(iii) The term `electronic commerce platform'--
                            ``(I) means any person or entity that 
                        operates a consumer-directed electronically 
                        based or accessed platform that--
                                    ``(aa) includes features that allow 
                                for, facilitate, or enable third-party 
                                sellers to engage in the sale or 
                                purchase of a consumer product in the 
                                United States; and
                                    ``(bb) is used by 1 or more third-
                                party sellers; and
                            ``(II) does not include any electronically-
                        accessed platform that--
                                    ``(aa) prohibits the sale of goods 
                                by a third-party seller; and
                                    ``(bb) takes reasonable steps to 
                                prevent an unauthorized third-party 
                                sale or offer for sale.
                    ``(iv) The term `good that implicates health and 
                safety' means a consumer product, the use of which can 
                lead to illness, disease, injury, serious adverse 
                event, allergic reaction, or death, if the consumer 
                product is 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.
                    ``(v) The term `third-party seller' means any 
                seller, independent of an electronic commerce platform, 
                that sells, offers to sell, or contracts to sell a 
                consumer product in the United States through an 
                electronic commerce platform.''.
    (b) Effective Date.--This section, and the amendments made by this 
section, shall take effect on the date that is 1 year after the date of 
enactment of this Act.
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