[Congressional Record Volume 141, Number 199 (Thursday, December 14, 1995)]
[Senate]
[Pages S18594-S18595]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         THE ANTICOUNTERFEITING CONSUMER PROTECTION ACT OF 1995

  Mr. LEAHY. Mr. President, I was pleased to be an original sponsor of 
S. 1136, the Anticounterfeiting Consumer Protection Act of 1995, to 
provide additional tools to combat trademark and goods counterfeiting 
crimes that cost our Nation billions of dollars per year.
  The Judiciary Committee received estimates that international 
counterfeiting amounts to more than $200 billion a year. Bank robberies 
in this country involve less than $50 million a year. Just as we do not 
tolerate theft of peoples' funds from our banks, we can no longer 
tolerate the theft of intellectual property rights or reputation 
through unlawful copying, counterfeiting and infringement.
  Even States like Vermont, with one of the lowest violent crime rates 
in the Nation, is home to businesses losing money to counterfeiters. 
Vermont Maple syrup producers comply with stringent standards so that 
syrup lovers around the world are not disappointed. They have to be 
constantly vigilant against counterfeiters who use the Vermont label to 
get a free ride on the reputation for excellence that syrup from my 
State enjoys.
  Another example, concerns our IBM facility in Essex Junction, which 
makes 16- and 64-megabyte memory chips, known as Dynamic Random Access 
Memory Chips or DRAM. These memory chips are also the subject of 
counterfeiting activities. In addition, IBM has estimated annual losses 
to bootleg computer software at $1 billion.
  The Software Publishers Association and Business Software Alliance 
estimate that software counterfeiting may account for as much as $6.5 
billion a year, which is over 40 percent of all software industry 
revenues. This is unacceptable for any business if it is to survive.
  At our Judiciary Committee hearing on October 10, we heard from Tom 
McGann, executive vice president of Burton Snowboards of Burlington, 
VT. This company is the world leader in making snowboard equipment, but 
loses an estimated $1 million annually to copycat boots made in Korea.
  Companies that work hard and devote resources to developing good 
products, ensure design and safety standards, and develop a well-
deserved reputation for quality should have their trademarks and good 
names protected. Moreover, consumers need to be sure that what they are 
buying is what it appears to be. Burton Snowboards' testimony brings 
home the reality and the damage of counterfeit goods.
  Tom McGann made several important points and was by my estimation the 
most important and persuasive witness from which we heard. Tom observed 
that current legal options against counterfeiters were ``so time 
consuming and so costly that we began to wonder why we went to the 
trouble of getting the patent at all.'' He also hit the nail on the 
head when he spoke about the unfairness of allowing those who make no 
investment in development and quality control to rip off companies that 
do. He made perhaps the most critical point when he testified that from 
a business perspective copies undercut the reputation and lead to the 
loss of public confidence in products of the company that is being 
copied.
  Burton Snowboards is the world leader in making snowboard equipment, 
boots and related products. This private company was begun by Jake 
Burton Carpenter, who is generally credited with having developed the 
sport. This is a classic American story in which Jake-and-a-bandsaw-in-
a-garage has led to a company that invests heavily in research and 
development to make the finest products of its kind in the world. 
Burton Snowboards' investment should be protected and its customers' 
confidence rewarded.
  Our bill takes important steps to address the problem of 
counterfeiting in several ways. It seeks to expand our existing 
racketeering law to cover crimes involving counterfeiting and copyright 
infringement and to give our law enforcement officers additional, 
needed authority to seize counterfeit merchandise and impose fines on 
counterfeiters. It authorizes statutory damages of up to $1 million in 
private suits against infringers.
  I also want to emphasize one of the considerations that bring me to 
this fight--the health and safety risks posed by counterfeit products. 
Consumers are being defrauded and being placed in jeopardy by products 
that do not meet the safety standards that are required of legitimate 
businesses. We must do everything that we can to confront these dangers 
as well as the economic damage of illegal counterfeiting. Everything 
from snowboard boots to software to airplane parts to baby formula to 
medicine and medical supplies have been the subject of counterfeiting. 
In addition to the economic harm, the health and safety risks from some 
counterfeit products provide additional justification for our doing 
everything that we can to confront the dangers as well as the damage of 
illegal counterfeiting.
  Most troubling at our hearing was the testimony that increasingly, 
the revenue lost to legitimate U.S. companies is going into the pockets 
of international crime syndicates and organized criminals, who 
manufacture, import, and distribute counterfeit goods to fund their 
other criminal enterprises. It is time to use our RICO weapons against 
racketeers who are engaged in criminal infringing activities.
  As we marked up the bill at the Judiciary Committee, I offered--and 
the Committee accepted--an amendment to clarify its provisions. Most 
importantly, my amendment clarified that those subject to civil 
penalties for participating in the importation of counterfeit goods 
should include those who ``aid and abet'' rather than those ``in any 
way concerned in'' the activity.
  Even as we make our laws more effective in combating counterfeiting 
crimes here, we cannot overlook the international nature of the 
problem. Copycat goods with the labels of legitimate, American 
companies are manufactured, distributed, and sold in foreign cities 
around the globe. We should insist that our trading partners take 
action against all kinds of intellectual property violations: Whether 
counterfeiting or copyright piracy, it amounts to theft and fraud on 
the consuming public. We cannot tolerate our trading partners and 
international allies acting as safe havens for pirates. We must take 
all responsible action we can to protect against piracy and 
counterfeiting.
  Our Nation's economic health in the next century rests in large part 
with our innovative high-technology and intellectual property 
companies. It is not protectionism to demand that others around the 
world recognize basic standards on trademark, patent, and copyright law 
and enforce prohibitions against counterfeiting and infringement. If 
our intellectual-property-based industries are to continue to lead the 
world, their creativity must be rewarded and their property rights and 
investments must be protected.
  In addition to this legislation, we need to enlist the public in this 
fight and to educate the public about the downside of trademark 
counterfeiting and patent and copyright infringement. We need to be 
sure that our international negotiators and our trading partners share 
our resolve against these crimes.
  I thank Jake Burton Carpenter, Tom McGann, and all those at Burton 
Snowboard for working with us on this measure. I also want to note the 
strong support of the Business Software Alliance and the Software 
Publishers Association, the Interactive Digital Software Association, 
the Recording Industry Association of America, the International 
Trademark Association, the American Amusement Machine Association, and 
the Imaging Supplies Coalition.
  I appreciate hearing from Steven Olechny of The Timberland Co. from 
our neighboring State of New Hampshire and thank Timberland for its 
support for this legislation. I note the support a wide range of 
companies making everything from the Barney dinosaur and Mighty Morphin 
Power Rangers to Polo, No Fear, Nautica, and Hilfinger clothing to 
Oakley sunglasses and thank Hunting World, Hoechst Celanese, Procter & 
Gamble, Nintendo, Kodak, Polo Ralph Lauren, Nautica Apparel, Oakley, No 
Fear, Tommy Hilfinger Licensing, Chanel, Lyons 

[[Page S18595]]
Group, Warner Bros., the Walt Disney Co., Saban Entertainment, Rolex, 
the Coalition to Advance the Protection of Sports Logos, and the 
Cosmetic, Toiletry, and Fragrance Association for their comments on the 
legislation and their support. Finally, I want to thank John Bliss and 
the members of the International Anti-Counterfeiting Coalition for 
their effective work against international counterfeiting and their 
support for this legislation.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. GORTON. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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