[Congressional Record Volume 144, Number 132 (Monday, September 28, 1998)]
[House]
[Pages H9110-H9117]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                TRADEMARK ANTICOUNTERFEITING ACT OF 1998

  Mr. GOODLATTE. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 3891) to amend the Trademark Act of 1946 to prohibit the 
unauthorized destruction, modification, or alteration of product 
identification codes, and for other purposes, as amended.
  The Clerk read as follows:

                               H.R. 3891

       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 ``Trademark Anticounterfeiting 
     Act of 1998''.

     SEC. 2. PROHIBITION AGAINST UNAUTHORIZED ALTERATION OF 
                   PRODUCT IDENTIFICATION CODES.

       (a) In General.--Chapter 65 of title 18, United States 
     Code, is amended by inserting after section 1365 the 
     following:

     ``Sec. 1365A. Unauthorized modification of product 
       identification codes

       (a) Definitions.--In this section--
       ``(1) the term `consumer'--
       ``(A) means--
       ``(i) the ultimate user or purchaser of a good; or
       ``(ii) any hotel, restaurant, or other provider of services 
     that must remove or alter the container, label, or packaging 
     of a good in order to make the good available to the ultimate 
     user or purchaser; and
       ``(B) does not include any retailer or other distributor 
     who acquires a good for resale;
       ``(2) the term `good' means any article, product, or 
     commodity that is customarily produced or distributed for 
     sale, rental, or licensing in interstate or foreign commerce, 
     and any container, packaging, label, or component thereof;
       ``(3) the term `manufacturer' includes the original 
     manufacturer of a good and a duly appointed agent or 
     representative of that manufacturer acting within the scope 
     of its agency or representation;
       ``(4) the term `product identification code'--
       ``(A) includes any number, letter, symbol, marking, date 
     (including an expiration date), code, software, or other 
     technology that is affixed to or embedded in any good, by 
     which the manufacturer of the good may trace the good back to 
     a particular production lot or batch or date of removal, or 
     carry out product recalls or otherwise identify the date of 
     manufacture, the date of expiration, or other comparable 
     critical data; and
       ``(B) does not include copyright management information 
     conveyed in connection with copies or phonorecords of a 
     copyrighted work or any performance or display of a 
     copyrighted work;
       ``(5) the term `Universal Product Code' refers to the 
     multidigit bar code and number representing goods in retail 
     applications; and
       ``(6) the term `value' means the face, par, or market 
     value, whichever is the greatest.
       ``(b) Prohibited Acts.--Except as otherwise authorized by 
     Federal law, it shall be unlawful for any person, other than 
     the consumer or the manufacturer of a good, knowingly and 
     without authorization of the manufacturer--
       ``(1) to directly or indirectly alter, conceal, remove, 
     obliterate, deface, strip, or peel any product identification 
     code affixed to or embedded in that good;
       ``(2) to directly or indirectly affix or embed a product 
     identification code to or in that good which is intended by 
     the manufacturer for a different good, such that the code no 
     longer accurately identifies the source of the good;
       ``(3) to directly or indirectly affix to or embed in that 
     good any number, letter, symbol, marking, date, code, or 
     other technology intended to simulate a product 
     identification code; or
       ``(4) to import, export, sell, distribute, or broker that 
     good, in a case in which the person knows that the product 
     identification code has been altered, concealed, removed, 
     obliterated, defaced, stripped, peeled, affixed, or embedded 
     in violation of paragraph (1) or (2), or in a case in which 
     the person knows that the good bears an unauthorized number, 
     letter, symbol, marking, date, or other code in violation of 
     paragraph (3).

[[Page H9111]]

       ``(c) Applicability.--The prohibitions set forth in 
     subsection (b) shall apply to product identification codes 
     (or simulated product identification codes in a case to which 
     subsection (b)(3) applies) affixed to, or embedded in, any 
     good held for sale or distribution in interstate or foreign 
     commerce or after shipment therein.
       ``(d) Exclusion.--
       ``(1) UPC codes.--Nothing in this section prohibits a 
     retailer or distributor from affixing to a good--
       ``(A) a Universal Product Code or other legitimate pricing 
     or inventory codes or information, or
       ``(B) information required by State or Federal law,

     if such code or information does not (or can be removed so as 
     not to) permanently alter, conceal, remove, obliterate, 
     deface, strip, or peel any product identification code.
       ``(2) Repackaging for resale.--(A) Nothing in this section 
     prohibits a distributor from removing an article, product, or 
     commodity of retail sale from a shipping container and 
     placing such article, product, or commodity in another 
     shipping container for purpose of resale in a quantity 
     different from the quantity originally provided by the 
     manufacturer or from replacing a damaged shipping container, 
     if, except as provided in paragraph (1), such article, 
     product, or commodity of retail sale retains its original 
     product identification code, without any obstruction or 
     alteration, and if--
       ``(i) such distributor is registered with all applicable 
     Federal and State agencies;
       ``(ii) such distributor repackages the article, product, or 
     commodity in full compliance with all applicable State and 
     Federal laws and regulations; and
       ``(iii) the act of repackaging does not result in a 
     prohibited act under section 301 of the Federal Food, Drug, 
     and Cosmetic Act or violate any other applicable State or 
     Federal law or regulation.
       ``(B) As used in this paragraph, the term `shipping 
     container' means--
       ``(i) a container or wrapping used for the transportation 
     of any article, product, or commodity in bulk or in quantity 
     to manufacturers, packers, or processors, or to wholesale or 
     retail distributors thereof; and
       ``(ii) containers or wrappings used by retailers to ship or 
     deliver any article, product, or commodity to retail 
     customers, if such containers and wrappings bear no printed 
     matter pertaining to any particular article, product, or 
     commodity.
       ``(e) Criminal Penalties.--Any person who willfully 
     violates this section shall--
       ``(1) be fined under this title, imprisoned not more than 1 
     year, or both;
       ``(2) if the total retail value of the good or goods 
     involved in the violation is greater than $5,000, be fined 
     under this title, imprisoned not more than 5 years, or both;
       ``(3) if the person acts with reckless disregard for the 
     risk that the health or safety of the public would be 
     threatened and under circumstances manifesting extreme 
     indifference to such risk, and the violation threatens the 
     health or safety of the public, be fined under this title, 
     imprisoned not more than 10 years, or both;
       ``(4) if the person acts with reckless disregard for the 
     risk that another person will be placed in danger of death or 
     bodily injury and under circumstances manifesting extreme 
     indifference to such risk and--
       ``(A) serious bodily injury to any individual results, be 
     fined under this title, imprisoned not more than 20 years, or 
     both; or
       ``(B) death of an individual results, be fined under this 
     title, imprisoned for any term of years or for life, or both; 
     and
       ``(5) with respect to any second or subsequent violation, 
     be subject to twice the maximum term of imprisonment that 
     would otherwise be imposed under this subsection, fined under 
     this title, or both.
       ``(f) Injunctions and Impounding, Forfeiture, and 
     Disposition of Goods.--
       ``(1) Injunctions and impounding.--In any prosecution under 
     this section, upon motion of the United States, the court 
     may--
       ``(A) grant 1 or more temporary, preliminary, or permanent 
     injunctions on such terms as the court determines to be 
     reasonable to prevent or restrain the alleged violation; and
       ``(B) at any time during the proceedings, order the 
     impounding, on such terms as the court determines to be 
     reasonable, of any good that is in the custody or control of 
     the defendant and that the court has reasonable cause to 
     believe was involved in the violation.
       ``(2) Forfeiture and disposition of goods.--Upon conviction 
     of any person of a violation of this section, the court 
     shall--
       ``(A) order the forfeiture of any good involved in the 
     violation that is in the custody or control of the defendant 
     or that has been impounded under paragraph (1)(B); and
       ``(B) either--
       ``(i) order the destruction of each good forfeited under 
     subparagraph (A); or
       ``(ii) if the court determines that any good forfeited 
     under subparagraph (A) is not unsafe or a hazard to health, 
     dispose of the good by delivery to such Federal, State, or 
     local government agencies as, in the opinion of the court, 
     have a need for such good, or by gift to such charitable or 
     nonprofit institutions as, in the opinion of the court, have 
     a need for such good, if such disposition would not otherwise 
     be in violation of law and if the manufacturer consents to 
     such disposition and is given the opportunity to reapply a 
     product identification code to the good.''.
       ``(g) Civil Remedies.--
       ``(1) In general.--Any person who is injured by a violation 
     of this section, or threatened with such injury, may bring a 
     civil action in an appropriate United States district court 
     against the alleged violator.
       ``(2) Injunctions and impounding and disposition of 
     goods.--In any action under paragraph (1), the court may--
       ``(A) grant 1 or more temporary, preliminary, or permanent 
     injunctions on such terms as the court determines to be 
     reasonable to prevent or restrain the violation;
       ``(B) at any time while the action is pending, order the 
     impounding, on such terms as the court determines to be 
     reasonable, of any good that is in the custody or control of 
     the alleged violator and that the court has reasonable cause 
     to believe was involved in the violation; and
       ``(C) as part of a final judgment or decree--
       ``(i) order the destruction of any good involved in the 
     violation that is in the custody or control of the violator 
     or that has been impounded under subparagraph (B); or
       ``(ii) if the court determines that any good impounded 
     under subparagraph (B) is not unsafe or a hazard to health, 
     dispose of the good by delivery to such Federal, State, or 
     local government agencies as, in the opinion of the court, 
     have a need for such good, or by gift to such charitable or 
     nonprofit institutions as, in the opinion of the court, have 
     a need for such good, if such disposition would not otherwise 
     be in violation of law, and if the manufacturer consents to 
     such disposition and is given the opportunity to reapply a 
     product identification code to the good.
       ``(3) Damages.--
       ``(A) In general.--Subject to subparagraph (B), in any 
     action under paragraph (1), the plaintiff shall be entitled 
     to recover the actual damages suffered by the plaintiff as a 
     result of the violation, and any profits of the violator that 
     are attributable to the violation and are not taken into 
     account in computing the actual damages. In establishing the 
     violator's profits, the plaintiff shall be required to 
     present proof only of the violator's sales, and the violator 
     shall be required to prove all elements of cost or deduction 
     claimed.
       ``(B) Statutory damages.--In any action under paragraph 
     (1), the plaintiff may elect, at any time before final 
     judgment is rendered, to recover, instead of actual damages 
     and profits described in subparagraph (A), an award of 
     statutory damages for any violation under this section in an 
     amount equal to--
       ``(i) not less than $500 and not more than $100,000, with 
     respect to each type of goods involved in the violation; and
       ``(ii) if the violation threatens the health and safety of 
     the public, as determined by the court, not less than $5,000 
     and not more than $1,000,000, with respect to each type of 
     goods involved in the violation.
       ``(4) Costs and attorney's fees.--In any action under 
     paragraph (1)--
       ``(A) in addition to any damages recovered under paragraph 
     (3), a prevailing plaintiff may recover the full costs of the 
     action; and
       ``(B) the court, in its discretion, may also award 
     reasonable attorney fees to the prevailing party.
       ``(5) Repeat violations.--
       ``(A) Treble damages.--In any case in which a person 
     violates this section within 3 years after the date on which 
     a final judgment was entered against that person for a 
     previous violation of this section, the court, in an action 
     brought under this subsection, may increase the award of 
     damages for the later violation to not more than 3 times the 
     amount that would otherwise be awarded under paragraph (3), 
     as the court considers appropriate.
       ``(B) Burden of proof.--A plaintiff that seeks damages as 
     described in subparagraph (A) shall bear the burden of 
     proving the existence of the earlier violation.
       ``(6) Limitations on actions.--No civil action may be 
     commenced under this section later than 3 years after the 
     date on which the claimant discovers the violation.
       ``(7) Innocent violations.--In any action under paragraph 
     (1), the court in its discretion may reduce or remit the 
     total award of damages in any case in which the violator 
     sustains the burden of proving, and the court finds, that the 
     violator was not aware and had no reason to believe that the 
     acts of the violator constituted a violation.''.
       (b) Conforming Amendment.--The table of sections for 
     chapter 65 of title 18, United States Code, is amended by 
     inserting after the item relating to section 1365 the 
     following:

``1365A. Unauthorized modification of product identification codes.''.

     SEC. 3. ATTORNEY GENERAL REPORTING REQUIREMENTS.

       Section 2320(f) of title 18, United States Code, is 
     amended--
       (1) by inserting ``unauthorized modification of product 
     identification codes under section 1365A,'' after 
     ``involve''; and
       (2) in paragraph (4), by inserting ``1365A,'' after 
     ``sections''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Virginia (Mr. Goodlatte) and the gentleman from Michigan (Mr. Conyers) 
each will control 20 minutes.
  The Chair recognizes the gentleman from Virginia (Mr. Goodlatte).


                             General Leave

  Mr. GOODLATTE. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days within

[[Page H9112]]

which to revise and extend their remarks on H.R. 3891, the bill under 
consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Virginia?
  There was no objection.
  Mr. GOODLATTE. Mr. Speaker, I yield myself such time as he may 
consume.
  Mr. Speaker, I rise today in support of the Trademark 
Anticounterfeiting Act of 1998. This important legislation will provide 
law enforcement the tools they need to combat the growing crime of 
altering or removing product identification codes from goods and 
packaging. This bill will also provide manufacturers and consumers with 
civil and criminal remedies to fight those counterfeiters and illicit 
distributors of goods with altered or removed product codes. Finally, 
this bill will protect consumers from the possible health risks that so 
often accompany tampered goods.
  Product codes play a critical role in the regulation of goods and 
services. For example, when problems arise over drugs or medical 
devices regulated by the Food and Drug Administration, the product 
codes play a vital role in conducting successful recalls. Similarly, 
the Consumer Product Safety Commission and other regulators rely on 
product codes to conduct recalls of automobiles, dangerous toys and 
other items that pose safety hazards.
  Product codes are frequently used by law enforcement to conduct 
criminal investigations as well. These codes have been used to pinpoint 
the location and sometimes the identity of criminals. Recently, product 
codes aided in the investigation of terrorist acts, including the 
bombing of Olympic Park in Atlanta and the bombing of Pan Am Flight 103 
over Lockerbee, Scotland.
  At the same time, manufacturers have limited weapons to prevent 
unscrupulous distributors from removing the coding to divert products 
to unauthorized retailers or place fake codes on counterfeit products.

                              {time}  1345

  For example, one diverter placed genuine, but outdated, labels of 
brand name baby formula on substandard baby formula and resold the 
product to retailers. Infants who were fed the formula suffered from 
rashes and seizures. We cannot take the chance of any baby being harmed 
by infant formula or any other product that might be defaced, decoded 
or otherwise tampered with. FDA enforcement of current law has been 
vigilant and thorough, but this potentially serious problem must be 
dealt with even more effectively as counterfeiters and illicit 
distributors utilize the advanced technologies of a digital age in 
their crimes.
  Mr. Speaker, my legislation will provide Federal measures which will 
further discourage tampering and protect the ability of manufacturers 
to implement successful recalls and trace product when needed. It would 
prohibit the alteration or removal of product identification codes on 
goods or packaging for sale in interstate or foreign commerce, 
including those held in areas where decoding frequently occurs.
  The legislation will also prohibit goods that have undergone decoding 
from entering the country, prohibit the manufacture and distribution of 
devices primarily used to alter or remove product identification codes, 
and allow the seizure of decoded goods and decoding devices. It will 
require offenders to pay monetary damages and litigation damages in the 
event of repeat violations.
  The bill will also impose criminal sanctions, including fines and 
imprisonment, for violators who are knowingly engaged in decoding 
violations. The bill would not require product codes, prevent decoding 
by authorized manufacturers, or prohibit decoding by consumers.
  It also includes language offered by my colleague, the gentleman from 
Florida (Mr. Wexler) that would allow for repackaging of products for 
legitimate resale purposes. The bill also includes language to address 
concerns raised by the gentleman from Arkansas, (Mr. Hutchinson), on 
behalf of Wal-Mart, to protect those who unknowingly had violated any 
portion of the bill.
  This legislation is a good approach designed to strengthen the tools 
of law enforcement, provide greater security for the manufacturers of 
products, and most importantly, provide consumers with improved safety 
from tampered with or counterfeit goods.
  Mr. Speaker, I urge my colleagues to join me in supporting passage of 
this bill which will go a long way toward closing the final gap in 
Federal law enforcement tools to protect consumers and the products 
they enjoy.
  Mr. Speaker, I reserve the balance of my time.
  Mr. CONYERS. Mr. Speaker, I yield myself 1 minute.
  I greet my dear colleagues on the other side, the distinguished 
members of the Committee on the Judiciary, with a question or two that 
makes this anticounterfeiting act a little bit suspect.
  Now, there is nobody in the Congress supporting counterfeiting, but 
this legislation and its claim to help consumers by assisting in the 
recall of defective merchandise falls on its face, because the problem 
is, not only is this information already protected by current law, but 
the bill is not limited to products which implicate public health, nor 
is it limited to recall information. Instead, it covers any product 
sold in the country from books to perfume, and I think it is quite 
broad.
  Mr. Speaker, I yield such time as he may consume to the gentleman 
from New York (Mr. Forbes) who, along with the gentleman from New York 
(Mr. Schumer), has worked on this matter.
  Mr. FORBES. Mr. Speaker, I thank the gentleman from Michigan for 
yielding me this time.
  I rise to strongly oppose H.R. 3891 because of its effects on the 
retail sector of our economy and on American consumers seeking quality 
products at discount prices. This bill, unfortunately, does nothing to 
stop counterfeiting of goods. Instead, it stops legal sales by discount 
retailers.
  If made law, H.R. 3891 will have a substantial negative impact on the 
United States economy, preventing millions of dollars in legitimate 
sales. Numerous products like cameras, watches and name brand clothing 
and electronics presently available at discount prices will disappear, 
if this bill becomes law, from discount shelves. Consumer prices will 
rise and jobs will be lost among retailers, distributors and importers.
  H.R. 3891 purports to eliminate counterfeit goods. I support that 
most worthy objective. But I regrettably have to conclude that the bill 
does not further that goal. Despite the fact that it is named the 
Trademark Anticounterfeiting Act, the legislation does not prohibit or 
discourage the manufacture, sale or distribution of counterfeit goods, 
nor does it punish the use of phoney product identification codes.
  Instead, the bill prohibits the removal of genuine product 
identification codes from products. Because the bill deals only with 
the removal of genuine manufactured goods, by definition, it could have 
little or no effect on stopping or discouraging counterfeit goods.
  Mr. Speaker, the true effect of H.R. 3891 will be to limit the 
distribution of genuine goods to discount stores. Brand name products 
are often sold in what is called the parallel market or the gray 
market. Legitimacy of this multibillion dollar market, which 
encompasses a wide variety of products such as cameras, clothing, 
electronic products, perfume and watches, has been upheld by numerous 
Federal courts, including the Supreme Court. Parallel market imports 
constitute, at retail, a multibillion dollar industry.
  The billions of dollars in savings enjoyed by American consumers 
because of the parallel market has been well chronicled. Parallel or 
gray market imports are responsible for increasing the buying power of 
U.S. consumers over the last decade by preventing foreign manufacturers 
from monopolizing the distribution of products to U.S. retailers.
  Americans will pay hundreds of millions of dollars more, 
unfortunately, each year to foreign manufacturers if this bill becomes 
law. Even though the parallel market is completely legal and benefits 
in a great way consumers, some product manufacturers believe that the 
parallel market is not in their best interests. So if they have these 
great lots of unsold products that they want to move in the discount 
area, manufacturers, by virtue of enactment

[[Page H9113]]

of this bill, would really have the ability to go after the 
manufacturer of these products and in a subtle way either limit their 
distribution or certainly limit the consumers' benefit, that being a 
reduction in cost.
  The ultimate goal of manufacturers is to control the final retail 
price of their products. When done explicitly, the practice known as 
resale price maintenance has been plainly illegal under antitrust laws 
since the beginning of this century. The reason resale price 
maintenance is illegal is because we want retail outlets to compete on 
price when competition yields the best deal for consumers.
  Manufacturers' use of product identification codes as cutoff access 
to the parallel market is simply resale price maintenance in disguise, 
and while I certainly appreciate the worthy nature, perhaps the goal of 
the authors of this legislation, I would suggest that this bill is far 
too broad. Proponents claim it will protect consumers by assisting the 
recall of defective merchandise; certainly a worthy goal, but if this 
is the purpose, the bill could easily be limited to products which 
implicate real public health and safety concerns, such as food, 
medicine and children's car seats and baby pajamas.
  Mr. Speaker, numerous laws are already on the books that regulate the 
marketing of products which are of special concern for public safety: 
The Federal Food, Drug and Cosmetic Act, the Consumer Product Safety 
Act, Federal Meat Inspection Act, the Tariff Act, the Lanham Act, and 
the Anticounterfeiting Consumer Protection Act of 1996.
  Mr. CONYERS. Mr. Speaker, will the gentleman yield?
  Mr. FORBES. I yield to the gentleman from Michigan.
  Mr. CONYERS. Mr. Speaker, I want to thank the gentleman for his very 
thoughtful introduction into this discussion, pointing out that we are 
all against counterfeiting, that there are all kinds of laws which I am 
going to point out to my friends on the other side, and suggest a way 
that we could remedy this.
  Mr. FORBES. Mr. Speaker, I rise to express my strong opposition to 
the ``Trademark Anti-counterfeiting Act'' (H.R. 3892) because of its 
effects on the retail sector of our economy and on American Consumers 
seeking quality products at discount prices.
  This bill does nothing to stop counterfeiting of goods. Instead it 
stops legal sales by discount retailers.
  If made law, the ``Trademark Anti-counterfeiting Act'' will have a 
substantial negative impact on the U.S. economy preventing millions of 
dollars in legitimate sales. Numerous products like cameras, watches 
and name brand clothing and electronics presently available at discount 
prices will disappear from discount shelves. Consumer prices will rise 
and jobs will be lost among retailers, distributors and importers.
  The bill purports to eliminate counterfeit goods. I support this 
objective, but the bill does not further that goal.
  Despite the fact that it is named the ``Trademark Anti-counterfeiting 
Act,'' this legislation does not prohibit or discourage the 
manufacture, sale or distribution of counterfeit goods, nor does it 
punish the use of phony product identification codes.
  Instead, this bill prohibits the removal of genuine product 
identification codes from products.
  Because the bill deals only with the removal of genuine manufacturer 
codes, by definition it can have no effect on stopping or discouraging 
counterfeit goods.
  The true effect of H.R. 3891 will be to limit the distribution of 
genuine goods in discount stores. Brand-name products are often sold in 
what is called the ``parallel market'' or the ``gray market.''
  The legitimacy of this multi-billion dollar market, which encompasses 
a wide variety of products, such as cameras, clothing, electronic 
products, perfume and watches, has been upheld by numerous federal 
courts, including the U.S. Supreme Court.
  In March of this year, the U.S. Supreme Court ruled In Quality King 
Distributors, Inc. v. L'anza Research Int'l, Inc. that the ``parallel 
market'' is protected under our copyright laws. Similarly, as far back 
as 1987, the U.S. Supreme Court rejected an attack on the ``parallel 
market'' under our trademark law.
  ``Parallel Market'' imports constitute at retail a multi-billion 
dollar industry. Parallel or ``Gray Market'' imports were responsible 
for increasing the buying power of U.S. consumers over the last 10 
years, by preventing foreign manufacturers from monopolizing the 
distribution of their products to U.S. retailers.
  The billions of dollars in savings enjoyed by American consumers 
because of the ``parallel market'' have been well chronicled in 
nationally recognized trade publications like the Chain Store Age 
Executive and the Discount Store News.
  Americans will pay hundreds of millions of dollars more each year to 
foreign manufacturers if this bill is made law. Even though the 
``parallel market'' is completely legal and benefits consumers, some 
product manufacturers believe that the parallel market is not in their 
interest.
  In an effort to keep their products out of discount stores, some 
place codes on the products that enable them to trace the chain of 
distribution of a particular item and then retaliate against 
distributors that sell goods into the ``parallel market.''
  The ultimate goal of these manufacturers is to control the final 
retail price of their products. When done explicitly, this practice, 
known as ``resale price maintenance,'' has been plainly illegal under 
antitrust laws since 1908. The reason resale price maintenance is 
illegal is because we want retail outlets to compete on price--that 
competition yields the best deals for customers.
  Manufacturers' use of product identification codes to cut off access 
to the parallel market is simply resale price maintenance in disguise. 
We should not change Federal law to assist manufacturers in this 
anticonsumer practice, yet that would be the effect of H.R. 3891.
  I am also very concerned that the ``Trademark Anti-competitiveness 
Act'' is far too broad. Proponents claim it will protect consumers by 
assisting recall of defective merchandise. If this is the purpose, the 
bill can easily be limited to products which implicate real public 
health and safety concerns, such as food, medicine and children's car 
seats and baby pajamas.
  Instead this bill covers any product sold in the U.S., no matter how 
benign, including such harmless items as books, clothing and furniture. 
There is no reason for including these everyday, innocuous products 
within the scope of the bill.
  In addition, the bill addresses a problem that is already addressed 
by other, more comprehensive statutes.
  Numerous laws already regulate the marking of products which are of 
special concern for public safety. Some of these laws include: the 
Federal Food, Drug & Cosmetic Act; the Consumer Product Safety Act; the 
Federal Meat Inspection Act; the Tariff Act of 1930; the Lanham Act; 
and the Anti-counterfeiting Consumer Protection Act of 1996 that 
applies Racketeer Influenced and Corrupt Organizations Act (RICO) 
penalties to counterfeiters.
  Finally, this bill would have disastrous impacts on interstate 
commerce and on our legal system. It renders billions of dollars worth 
of merchandise illegal overnight.
  The legislation criminalizes the act of decoding products and 
mandates the seizure and destruction of these decoded products. The 
avalanche of litigation that would follow between manufacturers and 
resellers and between retailers and their suppliers would be enormous.
  If the bill is meant to avoid counterfeiting, then it should not 
apply to genuine products. If the bill seeks to address the issue of 
consumer protection in recalls, then it should do so without granting a 
limited group of product manufacturers broad anti-competitive powers.
  Many parties that will be affected by H.R. 3891 have not had their 
concerns heard by this House. If made law, this bill will result in 
serious unforeseen hardships to consumers and businesses alike. I 
strongly urge that this bill be amended to avoid these negative 
consequences.
  I urge my colleagues to vote against this bill, and I reserve the 
balance of my time.
  Mr. CONYERS. Mr. Speaker, I reserve the balance of my time.
  Mr. GOODLATTE. Mr. Speaker, I yield such time as he may consume to 
the gentleman from North Carolina (Mr. Coble), the chairman of the 
Subcommittee on Intellectual Property.
  Mr. COBLE. Mr. Speaker, I thank the gentleman from Virginia and 
commend him for the diligent hard work that he has put forward on this 
bill, and I urge my colleagues to support it.
  Mr. Speaker, H.R. 3891 safeguards the ability of manufacturers to 
control the use of their products with which valuable marks are 
associated by protecting the integrity of corresponding ``product 
identification codes'' contained in product packaging. These codes, Mr. 
Speaker, comprised of numbers, letters, symbols, or expiration markings 
affixed to goods, enable manufacturers, it seems to me, to trace 
products back to a particular production lot, batch, or date of 
removal. In my opinion, this bill will further legitimate commercial 
interests, maintain the value of trademarks affiliated with goods, and 
promote public health and safety.

[[Page H9114]]

  Finally I should note, and I am not sure this has been mentioned yet, 
that H.R. 3891 contains an ``innocent infringer'' exception to the bill 
adopted during subcommittee markup, and other changes which the 
gentleman from Virginia (Mr. Goodlatte) has authored to preserve the 
ability of distributors to engage in lawful diversion of products. 
These additions to the bill, it seems to me, will ensure that public 
health and safety will be advanced on the one hand, but not on the 
other hand, at the expense of lawful commercial practices.
  Mr. Speaker, I again thank the gentleman from Virginia for his work 
in bringing the bill to the floor, and I urge its adoption today.
  Mr. CONYERS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, this discussion on the floor is tracking the same 
discussion that we had in the Committee on the Judiciary, and so 
perhaps we are so absorbed with the presidential scandal that maybe the 
members on the committee just cannot focus on this subject.
  What is the matter, I say to my colleagues? We already told my 
colleagues that there are six Federal food, drug and cosmetic laws 
already on the books regulating for public inspection, plus the Federal 
Meat Inspection Act, the Tariff Act of 1930, the Lanham Act, 
Anticounterfeiting Consumer Protection Act of 1996, and the Consumer 
Product Safety Act.
  My colleagues get on the floor, and I do not want to say they are 
taking advantage of the lack of knowledge of the rest of the Members of 
the House, but my colleagues know that there are dozens of bills 
fighting counterfeiting and that the real problem, I say to my 
colleague from Virginia (Mr. Goodlatte), is that they are not being 
properly enforced; and that if the gentleman would have tailored his 
bill in a reasonable way to limit recall information, to protect the 
bar code issue, but just to open it up, I am going to have to say 
something here as politely as I am able to.
  What the gentleman is doing is attacking the parallel market. The 
gentleman is going after the wholesalers, and wait until the citizens 
find out about this. What the gentleman is saying is that all the 
companies that sell below the wholesale houses, the pharmaceuticals, 
the TJ Maxxes, the RiteAids, all of them are going to be wiped out by a 
very cute way that the gentleman is handling this, because I think 
there is a motive here.
  If the gentleman was really after counterfeiting, the gentleman would 
tailor it so that we can all get it.

                              {time}  1400

  What the gentleman from Virginia (Mr. Goodlatte) is doing is 
protecting the high end retailers in America. I think we went through 
this in the Committee on the Judiciary. Why does the gentleman not come 
clean and say it?
  They deserve congressional representation, but to mask it into an 
anti-counterfeiting act, where we pick up designer jeans, cameras, 
perfumes, and all of these items that are sold in cut rate and 
wholesale situations, the gentleman knows that that is what the goal of 
this is. So why do we not just call it for what it is?
  I am protecting the people in America that want to go to the malls 
and get a good deal. I am protecting the people that want to buy at 
discounted prices. What the gentleman is doing is putting the parallel 
market out of business. Why does the gentleman not come clean and admit 
it, or concede it, or maybe we will stipulate it? But do not talk about 
this as an anticrime issue. It is simply not that.
  Mr. Speaker, I reserve the balance of my time.
  Mr. GOODLATTE. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I certainly hope that the gentleman from Michigan (Mr. 
Conyers) is not attempting to protect those folks who are violating the 
law and attempting to defraud consumers in this country.
  Let me just point out who it is that supports this bill. The 
gentleman says we are attacking the gray market, but the National 
Association of Mass Retailers does not oppose this bill. It is 
supported by the United States Chamber of Commerce. It is supported by 
the AFL-CIO. It is supported by the National Association of 
Manufacturers, and it is supported by the National Consumers League.
  We are protecting consumers here, and we are not doing anything to 
affect those people who legitimately sell in the parallel market. I 
hope they continue to do so. That is certainly not what we are trying 
to affect here.
  We are trying to help law enforcement be able to trace product codes. 
It would be a shame if the batteries sold to the perpetrator of the 
Atlanta bombings were tampered with by somebody because it was not 
against the law to tamper with the identification code, and the FBI was 
not able to trace, as they were in that case, those products back to 
where they were sold to help identify the perpetrators.
  The same thing with the bombing over Lockerbie, Scotland. We do not 
know what kind of product may be used in a law enforcement 
investigation. It might be something related to a product that is for 
health and safety, but it might not be.
  If Members were to, for example, exempt clothing from this, there are 
all kinds of product defects that take place with clothing. They can 
catch on fire, and people need to have the ability to be contacted and 
notified that there is a problem.
  Limiting it to health and safety does not take into consideration 
products like baby toys, batteries. Where do we draw the line? 
Predatory pricing can be addressed through current antitrust laws. 
Those laws exist on the books. There are not laws on the books today 
prohibiting fraud from taking place when somebody tampers with or 
removes a code. That is why we make this distinction.
  In response to retail concerns, we have added language making the 
bill only applicable to those who knowingly perform one of the 
prohibited acts, so I cannot imagine why there would be any effort to 
protect those people who knowingly want to perpetrate a fraud like 
this. That is why we have the support of groups like the National 
Consumers League.
  The bill also includes additional protections in the bill for 
innocent infringers. We are not targeting those folks. The current law 
does not adequately address the problem of product code tampering. That 
is what we are addressing in this bill. We are not addressing the 
parallel market.
  Those who were concerned about that entered into detailed 
negotiations with us with other members of the committee. I am sorry 
that the gentleman did not choose to participate in those negotiations, 
but we worked with several members of the committee on both sides of 
the aisle to make changes to address those concerns. Those concerns 
have been addressed.
  We are simply going after the bad guys, I would say to the gentleman 
from Michigan. I would hope that he would change his mind about the 
importance of this bill, both from the standpoint of protecting 
consumers, and from the standpoint of helping law enforcement address a 
serious problem.
  Mr. Speaker, I reserve the balance of my time.
  Mr. CONYERS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, does the gentleman know what I am going to do? I am 
going to see that the gentleman does not get two-thirds on the vote 
today, that is what I am going to do for this bill, because the 
gentleman is misrepresenting the fact that there is no protection 
against trademark counterfeiting. May I refer the gentleman to the law? 
The gentleman has been on the committee some number of years now.
  The Federal Food, Drug, and Cosmetic Act, 21 United States Code, 
annotated Section 301. Section 331 deals with adulteration and 
misbranding. How can the gentleman say there is nothing protecting us 
against counterfeiting? Section 333 provides for seizure of adulterated 
drugs or cosmetics. Has the gentleman ever heard of the law? Section 
342 addresses false or misleading labels. Section 350-A regulates 
infant formula.
  The gentleman did not come to the floor not knowing this. The 
gentleman knew this, because the gentleman from New York (Mr. Schumer) 
took 30 minutes explaining it, and the gentleman said we would work it 
out. We have not worked anything out. That is why I am opposed to it.
  By the way, since the Chamber of Commerce supports this, the discount

[[Page H9115]]

drugstores do not support it, the Price Club does not support it, Rite 
Aid does not support it. The discounters and the parallel market are 
going to get wiped out, and the gentleman knows it. The gentleman knows 
it.
  We have got all of these counterfeiting laws. Sections 351 and 352 
govern adulterated or misbranded drugs or devices. Section 361 and 362 
addresses cosmetics that are adulterated or misbranded. We have a 
Federal Meat Inspection Act, a Tariff Act, an anti-counterfeiting 
Consumer Protection Act of 1996. The gentleman was in on it. The 
gentleman helped pass it.
  Now the gentleman is coming here arguing that this is for the benefit 
of the good guys, and the gentleman does not want me helping the bad 
guys. I want to suggest to the gentleman that it may be just the 
opposite.
  Mr. Speaker, I reserve the balance of my time.
  Mr. GOODLATTE. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I would say to the gentleman from Michigan (Mr. Conyers) 
that the legislation that he cited, some of which I authored and he 
supported, does not address issues where the law is intended to apply 
for reasons other than harm to the consumer. So if it is a matter of 
law enforcement, tracing the location of a product, it does not apply.
  This legislation makes it clear that we cannot tamper with a product 
code because doing so is perpetrating a fraud, for one reason or 
another. But secondly, keeping that code on the product helps us to 
give law enforcement the tools they need to track down criminals.
  In many, many cases criminals use products in the commission of a 
crime. When we can trace those products back to what store they were 
purchased from, where they were distributed from, we have a much 
greater chance of narrowing the field of suspects and tracking down who 
it was who actually purchased that product.
  For that reason, and the others that I have already cited, the bill 
has strong support from a wide array of groups, from labor unions to 
retailers to manufacturers to law enforcement to consumers, and ought 
to deserve the same kind of broad-based bipartisan support here on the 
floor of the House of Representatives.
  We did conduct further discussions with the gentleman from New York 
(Mr. Schumer) and others in the committee following the markup in the 
committee, and we reached agreement with a number of folks about 
changes which were made and incorporated into the legislation. Did we 
make everybody happy? No, because there are some folks out there who 
want to take labels off of products or change the labels in order to 
mislead folks about what is going on. That is simply what this 
legislation is directed at attacking.
  Mr. Speaker, I would ask the gentleman to reconsider his opposition 
to the bill. I would love to have his support for the bill, but I think 
he is on the wrong side of what is in the best interests of consumers, 
law enforcement, manufacturers, retailers, all across the board.
  Mr. Speaker, I would again reserve the balance of my time, and urge 
the Members to support this legislation.
  Mr. CONYERS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, let me say to my good friend, the gentleman from 
Virginia, I have never been, nor my staff, invited to participate in 
one single negotiation. If the gentleman from New York (Mr. Schumer) 
has, that would be almost unbelievable. I know he has not, either. Does 
the gentleman say he has?
  Mr. GOODLATTE. Mr. Speaker, will the gentleman yield?
  Mr. CONYERS. No, not at this point.
  Mr. GOODLATTE. The gentleman asked the question. I will be happy to 
answer it.
  Mr. CONYERS. Does the gentleman remember what he told me earlier, 
that he has time that he can yield to himself?
  Mr. Speaker, the point that I am making is that I have never been in 
any negotiations. I voted against this measure. It is a funny thing 
about this big rush on the bill, and there was not much notice about 
this bill. It came up at the last minute with no notice. There has been 
no opportunity to amend the bill, I say to the gentleman from Virginia 
(Mr. Goodlatte). Why not? Because the gentleman does not think he needs 
to, because he can get two-thirds. I have news for the gentleman.
  The fact of the matter is that this bill will allow all kinds of 
manufacturers to terminate distributors who sell their goods at a deep 
discount. We know that is what is behind it. And citing the Chamber of 
Commerce and my friends in labor, and by the way, I would love to 
compare my labor record with the gentleman's some day off the floor, we 
have groups of consumers, working people, discount organizations, that 
do not think we need a bill with this latitude.
  We have been through this, so the gentleman is going to railroad it 
through on a suspension: perfume, cameras, designer jeans, jewelry, 
watches, shirts. I ask the gentleman to tell me, why do those items 
need to be covered?
  Mr. GOODLATTE. Mr. Speaker, will the gentleman yield?
  Mr. CONYERS. I yield to the gentleman from Virginia.
  Mr. GOODLATTE. Mr. Speaker, I thank the gentleman for yielding. The 
reason why items need to be covered is----
  Mr. CONYERS. These items.
  Mr. GOODLATTE. Any item is potentially left at the scene of a crime. 
Any item could be left at the scene of a crime and could be traced to 
determine who it was that committed the crime.
  Mr. CONYERS. Reclaiming my time, now the gentleman has said something 
that the gentleman never said in the committee, and certainly it goes 
against any negotiations with whomever the gentleman entered into them 
with.
  If the gentleman is now telling me we should cover all items in the 
market, then I guess, if I can quote the gentleman on that in my 
handout, I think that will take care of it for today. The gentleman 
thinks everything should be covered; not just these items not covered, 
but all items should be covered, everything in commerce? If that is the 
gentleman's position, that just reinforces my opposition to it.
  Mr. Speaker, I reserve the balance of my time.
  Mr. GOODLATTE. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, let me first say to the gentleman from Michigan, nothing 
is being railroaded. As the gentleman has quite accurately pointed out, 
for something to pass on suspension, it requires a two-thirds vote. If 
it were brought up under a rule it would only take a majority vote, so 
we are not trying to put anything over on anybody.
  Frankly, it surprised me that the gentleman came down here to oppose 
it. We had no idea that the gentleman was opposed to the legislation at 
this point. The gentleman never indicated any reservations about the 
bill. If he had done so, we would have wanted to include him in any 
negotiations that we had, because we were working very diligently to 
pull together the support necessary to pass this important legislation.
  But the gentleman is entirely inaccurate when he says there is no 
opportunity for amendment. The bill itself at the desk is a manager's 
amendment taken from suggestions made by those who had concerns in the 
Committee on the Judiciary meeting, and we did not reach agreement with 
everybody. It is hard to reach agreement with everybody. But we reached 
agreement with some of those who raised reservations, and we changed 
the bill accordingly.
  Mr. Speaker, I am sorry that the gentleman has the opposition. I 
would love to have sat down with him ahead of time and attempted to 
work those matters out, if it were possible. But I was never notified 
that the gentleman was going to oppose the legislation. I do not 
believe the basis on which the gentleman is opposing it is appropriate. 
It is simply not the case that this is going to damage the parallel 
markets or the so-called gray markets.

                              {time}  1415

  We have addressed concerns raised by a number of folks to make sure 
that that in fact would not be the case.
  Mr. Speaker, I reserve the balance of my time.
  Mr. CONYERS. Mr. Speaker, how much time remains?
  The SPEAKER pro tempore (Mr. Sununu). The gentleman from Michigan 
(Mr. Conyers) has 3\1/2\ minutes remaining. The gentleman from Virginia

[[Page H9116]]

(Mr. Goodlatte) has 5\1/2\ minutes remaining.
  Mr. CONYERS. Mr. Speaker, could we even up the time a little bit.
  Mr. GOODLATTE. Mr. Speaker, I yield 30 seconds to the gentleman from 
Michigan (Mr. Conyers) since he was kind enough to yield to me a little 
while ago.
  Mr. CONYERS. Mr. Speaker, I would like to introduce myself to the 
gentleman from Virginia (Mr. Goodlatte). I am the ranking member of the 
committee. I had no notice that the bill was being brought up. The 
information was delivered through the minority leadership of the House.
  So to tell me that I should have been following my colleague all 
along is a little bit odd. What we are trying to say here is that we 
never had a chance to amend the bill. And to tell me that there is a 
manager's amendment at the desk that I never participated in now shows 
that the bill was amended without me is not insulting, but it almost 
suggests that I don't understand the process.
  The SPEAKER pro tempore. The time of the gentleman from Michigan (Mr. 
Conyers) has expired.
  Mr. CONYERS. Mr. Speaker, I yield myself 2 additional minutes.
  The problem is this, why do we need the gentleman from Virginia (Mr. 
Goodlatte) to apply anticounterfeiting provisions to general items like 
jeans and perfume? Could the gentleman tell me what health problems he 
has discovered that makes them to be included. It is not a crime to 
sell these goods in the parallel market. The gentleman knows the case 
law on this as well as I.
  Mr. Speaker, I yield to the gentleman from Virginia (Mr. Goodlatte).
  Mr. GOODLATTE. Mr. Speaker, in the case of perfume, it is easy to 
have a product that the code can be tampered with and put in a product 
that came in the original bottle that has been tampered with, 
adulterated, could cause harm when applied to the skin. With regard to 
blue jeans, they might be flammable. They might be in a suitcase in an 
airplane that is blown up in the sky and could help to identify where 
it came from.
  Mr. CONYERS. Mr. Speaker, reclaiming my time, we had hearings, and 
there were no cases like these hypotheticals cited. So what is the 
gentleman doing? I mean, is this reality legislation or what? Can the 
gentleman tell me the jeans and perfume, one might be adulterated and 
the other might be flammable? I have the transcript of the hearings, 
and there is nothing in them about that. Now, maybe yes; but in 
reality, no.
  So I think there is an economic motivation that is not going to be 
good for the parallel market. Is the gentleman's constituents not like 
mine? They like to go and shop for discounts sometimes. What is the 
gentleman telling them?
  Mr. GOODLATTE. Mr. Speaker, will the gentleman yield?
  Mr. CONYERS. I yield to the gentleman from Virginia.
  Mr. GOODLATTE. Mr. Speaker, I like to shop for discounts myself.
  Mr. CONYERS. Then why is the gentleman doing this to the parallel 
market?
  Mr. Speaker, I reserve the balance of my time.
  Mr. GOODLATTE. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I would just say to the gentleman that it is impossible 
to define what products might be used by law enforcement at some point 
in time to trace a product code.
  Mr. FORBES. Mr. Speaker, will the gentleman yield?
  Mr. GOODLATTE. I yield to the gentleman from New York.
  Mr. FORBES. Mr. Speaker, is my good friend the gentleman from 
Virginia (Mr. Goodlatte) making a case that everything that is sold in 
the United States should have a product code so we can trace all goods?
  Mr. GOODLATTE. Reclaiming my time, no, I am only making a case that 
if a code is put on the product by the manufacturer, the Congress, the 
people should not be questioning the reason for doing that by allowing 
the removal of that code for various reasons, one of which is tracing 
products that may have been adulterated and need to be recalled, may 
have defects and need to be recalled, products that may be used by law 
enforcement, may be discovered at the scene of the crime and can trace 
a crime.
  There is no compelling argument why somebody should be able to pull 
the code off the product and continue to sell the product without 
having that kind of consumer protection. That is why the National 
Consumer League supports the bill.
  Mr. FORBES. Mr. Speaker, will the gentleman yield?
  Mr. GOODLATTE. I yield further to the gentleman from New York.
  Mr. FORBES. Mr. Speaker, would the gentleman not agree that there is 
an attempt by some manufacturers when they are tracing products at 
discount houses and they see those same products are in competition 
with their own sales that they cut off distribution to those discount 
houses?
  Mr. GOODLATTE. Mr. Speaker, reclaiming my time, that is against the 
law, and we have antitrust laws that prohibit that very activity that 
the gentleman has just described. And when that occurs, I have seen 
many instances where cases are brought for that kind of discriminatory 
treatment in the marketplace, and those laws should be enforced.
  But it certainly should not interfere with a manufacturer's 
legitimate need and law enforcement's legitimate need to have those 
product codes not tampered with, falsified on the product. I think that 
is outrageous.
  Mr. FORBES. Mr. Speaker, will the gentleman further yield?
  Mr. GOODLATTE. I yield further to the gentleman from New York.
  Mr. FORBES. Mr. Speaker, is the gentleman aware that there are 
representatives of various manufacturers that do go into these discount 
houses and they look at these product lines and they look at the 
labeling and they have taken, in the past, action against some of these 
folks that are working in the parallel market?
  Mr. GOODLATTE. Mr. Speaker, reclaiming my time, if they do so, then 
they should be prosecuted under the laws that already exist on the 
books if they are doing so in the discriminatory manner that the 
gentleman describes.
  Mr. Speaker, I reserve the balance of my time, and I inquire how much 
time is remaining.
  The SPEAKER pro tempore. The gentleman from Virginia (Mr. Goodlatte) 
has 2 minutes remaining. The gentleman from Michigan (Mr. Conyers) has 
90 seconds remaining.
  Mr. CONYERS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I am in a state of exhaustion now. The rational 
processes have taken flight in this discussion. We get no notice. We 
found out about it this morning. The bill is too broad. That was 
complained of in the committee.
  The gentleman has introduced a manager's amendment and said, well, we 
amended the bill. We gave our colleagues a unilateral manager's 
amendment. Are they not happy?
  This bill would make it easier for manufacturers to terminate 
discounters. That is the economic question underneath it. Let us not 
fool ourselves. There is no question this bill would lead to less 
discounting. I hope the gentleman's constituents would be happy to find 
that out in the event that this bill becomes law.
  Let us send the bill back to committee so that we can get a narrow 
bill that will really be good for the consumers.
  Mr. Speaker, I yield such time as he may consume to the distinguished 
gentleman from New York (Mr. Forbes) for any closing comments if he has 
any.
  Mr. FORBES. Mr. Speaker, I thank the gentleman from Michigan, and I 
would just urge my colleagues to oppose this measure. If our attempt is 
to be able to trace consumer products, then let us call it what it is 
and let us get a bill on the floor that labels every product ever sold 
in the United States of America. Unfortunately, I think this is a back-
door attempt to really raise the price of consumer goods, to thwart the 
discount market, and to make it tougher on consumers.
  I am sorry for that. I would urge my colleagues to please reject this 
bill.
  Mr. GOODLATTE. Mr. Speaker, I yield myself the balance of my time to 
close.
  Mr. Speaker, let me just say, in response to the gentleman from New 
York (Mr. Forbes), that if his statement were accurate, then 
organizations like the National Association of

[[Page H9117]]

Mass Retailers and the National Consumers League would oppose this 
legislation, and they do not.
  The reason they do not is that they share the concerns that many have 
about product safety. They share the concerns that many have about law 
enforcement and they share the concerns that many have about what 
motivations somebody has for pulling off the product identification 
code from a product and then wanting to resale it.
  What are they hiding from? I would suggest to my colleagues that they 
are hiding from the fact that there are criminal activities that take 
place by those who adulterate products, who change products, and they 
should not be allowed to do that by altering or removing these codes. 
That is what this legislation clearly addresses.
  It is clearly needed because all the laws cited by the gentleman from 
Michigan (Mr. Conyers), which are very good laws, some of which I 
introduced myself, do not cover the specific facts and the specific 
instances of removing and tampering with labels that are addressed in 
this bill, and that is why the legislation is supported by the AFL-CIO.
  I am pleased to have their support for this legislation. It is not 
often that they come together and agree with manufacturers, and the 
United States Chamber of Commerce and consumers, but when we have that 
kind of collection of support, and the needs of law enforcement, we 
ought to take advantage of the opportunity to pass a very good bill and 
ignore the concerns of a very narrow, limited group of people who are 
not just in the gray market, which we support, but which are involved 
in criminal activity in the gray market, which we do not support and 
which this bill attacks. I urge my colleagues to support this 
legislation.
  Mr. SCHUMER. Mr. Speaker, I rise in strong opposition to H.R. 3891, 
the Trademark Anticounterfeiting Act. In my view, this legislation 
would be devastating to consumers seeking quality products at discount 
prices.
  H.R. 3891 will have a substantial negative impact on the U.S. 
economy. It will preclude millions of dollars in legitimate sales. 
Numerous products presently available at discount prices will disappear 
from discount shelves. Consumer prices will rise and jobs will be lost 
among retailers, distributors, and importers.
  Furthermore, H.R. 3891 will place additional burdens on law 
enforcement and on the courts. This legislation, however, provides no 
funding for these additional enforcement responsibilities.
  The Trademark Anticounterfeiting Act, H.R. 3891, is intended to 
eliminate counterfeit goods from the marketplace. I support this goal; 
however, we find nothing in this bill to further this goal. This 
legislation does not prohibit or discourage the manufacture, sale, or 
distribution of counterfeit goods.
  The real goal of this bill is to stop the legitimate practice known 
as the ``parallel market'' or ``gray market.'' This is a perfectly 
legal market where middle men buy overstock from high end retail 
stores, and resell the goods to discount retailers. The high end 
manufacturers of these products have decided that too many consumers 
are buying their goods at discount stores and want to use this bill to 
cut off the middle men who supply discount stores.
  In an effort to keep their products out of discount stores, some 
manufacturers place codes on the products. These codes are used to 
trace the product through its chain of distribution for ammunition 
against the distributors that sell their goods in the parallel market. 
The goal of these manufacturers is to control the final retail price of 
their products. When done explicitly, ``resale price maintenance'' has 
been plainly illegal under antitrust laws since 1908. The manufacturers 
use of product identification codes to cut off access to parallel 
markets is simply resale price maintenance in disguise.
  The proponents of this bill have claimed that it will protect 
consumers by assisting in the recall of defective merchandise. If this 
is the purpose, the bill can easily be limited to products which 
implicate real public health and safety concerns, such as food, 
medicine, and products for children (like car seats and baby pajamas). 
Alternatively, parallel market resellers could be given some of the 
responsibility for enabling recalls.
  But instead of these sensible, targeted approaches, the bill as 
written is astonishingly sweeping. It covers any product sold in the 
U.S.--from books to clothing to furniture. No reason whatever has been 
articulated for including these everyday, non-threatening products 
within the scope of the bill.
  As a result of the broadly defined ``product identification code'', 
resellers will have no way to determine upon looking at a product which 
codes or markings constitute a product identification code. The 
language of H.R. 3891 is far too vague and it needs to be refined.
  In addition, the bill addresses a problem that is already addressed 
by other, more comprehensive statutes. Numerous laws already regulate 
the marking of products which are of special concern for public safety.
  Finally, H.R. 3891 would impose broad new burdens on law enforcement 
and the judiciary. By failing to provide a transition period, this law 
would render billions of dollars worth of merchandise illegal 
overnight. The avalanche of litigation that is likely to follow between 
manufacturers and resellers and between retailers and their suppliers 
is likely to be enormous due to the broad impact of this bill on the 
U.S. marketplace.
  Further, this legislation criminalizes the act of decoding products 
and mandates the seizure and destruction of these decoded products. 
Presumably, the burden of investigating and prosecuting such acts will 
fall to our law enforcement agencies. No funding has been allocated to 
defray the extra burden on these agencies or to employ additional 
personnel.
  Once again, I strongly oppose this bill. If this bill is meant to 
avoid counterfeiting, then it should not apply to genuine products. If 
this bill seeks to address the issue of consumer protection in recalls, 
then it should do so without granting a limited group of product 
manufacturers broad anti-competitive powers.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Virginia (Mr. Goodlatte) that the House suspend the 
rules and pass the bill, H.R. 3891, as amended.
  The question was taken.
  Mr. FORBES. Mr. Speaker, I object to the vote on the ground that a 
quorum is not present and make the point of order that a quorum is not 
present.
  The SPEAKER pro tempore. Pursuant to clause 5, rule I, and the 
Chair's prior announcement, further proceedings on this motion will be 
postponed.
  The point of no quorum is considered withdrawn.

                          ____________________