[Congressional Record Volume 150, Number 68 (Friday, May 14, 2004)]
[Extensions of Remarks]
[Page E854]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




           THE STOP COUNTERFEITING IN MANUFACTURED GOODS ACT

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                          HON. JOE KNOLLENBERG

                              of michigan

                    in the house of representatives

                         Thursday, May 13, 2004

  Mr. KNOLLENBERG. Mr. Speaker, today I am introducing legislation--the 
Stop Counterfeiting in Manufactured Goods Act--that addresses the 
mounting problem of counterfeit manufactured products. I hope my 
colleagues will join me in passing this bill at the earliest 
opportunity.
  The size and scope of counterfeit manufactured goods around the world 
is growing every day. In fact, the International Chamber of Commerce 
estimates that seven percent of the world's trade is in counterfeit 
goods and that the counterfeit market is worth $350 billion.
  Not only are these counterfeit goods a documented health and safety 
risk for consumers here and abroad, but these counterfeit goods also 
impact our economy by stealing sales from legitimate American 
manufacturers and costing Americans high-paying manufacturing jobs.
  In fact, the U.S. Customs Service has estimated previously that 
counterfeiting has resulted in the loss of 750,000 jobs and costs the 
United States around $200 billion annually. Counterfeit automobile 
parts alone cost that industry over $12 billion. It is estimated that 
if these losses were eliminated, the auto industry could hire 200,000 
additional workers.
  The plight of manufacturers in this country has received a great deal 
of attention in recent months, and rightfully so. The plight is real.
  Manufacturers in this country are the most efficient and 
technologically advanced in the world, but they face many challenges. 
In the face of massive global competition, the biggest problems facing 
manufacturers are the costs they can't directly control, and harm the 
environment in which they compete. As policy makers, I believe we 
should focus on improving that environment, and cracking down on those 
companies who break the rules in the United States and abroad is one 
way that should garner strong bipartisan support.
  The Stop Counterfeiting in Manufactured Goods Act does this by 
strengthening the federal trademark law used to prosecute 
counterfeiters. It has three key provisions.
  First, the bill provides for the mandatory destruction of the 
equipment used to manufacture and package counterfeit goods. Under 
current law, counterfeiters can have their illegal goods seized, but 
retain the equipment they used to make them. I think we can all agree 
that we should not leave counterfeiters in business, and this provision 
will help us in that effort.
  Second, the bill clarifies that Title 18, Section 2320, prohibits 
trafficking in counterfeit labels, patches, and medallions that are 
unattached to any goods. Sophisticated counterfeiters have sold 
counterfeit versions of the trademarks themselves in the form of patch 
sets or medallions that can later be attached to generic merchandises 
and given the appearance of a genuine product. This is counterfeiting 
and should not stand.

  Finally, the bill offers greater protection for ``famous'' marks by 
removing the requirement that the spurious trademark be used in 
connection with goods or services identical to those for which the 
spurious mark is already registered.
  One important example of why this last provision is necessary is the 
famous Nike ``swoosh.'' Nike had never intended to enter the sports 
watch market, so it did not register its trademark for sports watches. 
A counterfeiter took advantage of this loophole by selling sports 
watches bearing a counterfeit Nike ``swoosh'' because that trademark 
was so popular. Nike was forced to add sports watches to its trademark 
registry because it had no recourse under the law to stop the 
counterfeiter. The bill closes that loophole.
  The Stop Counterfeiting in Manufactured Goods Act will have a 
positive impact here in the United States, but its reach can be global. 
Counterfeit manufactured goods are a world-wide problem and we will 
need the cooperation of our trading partners to effectively fight 
counterfeiters. With these provisions in law, our trade negotiators 
will be able to seek stronger anti-counterfeiting provisions in 
bilateral and international agreements with trading partners, with 
these improvements as the basis for asking other countries to enact 
similar changes.
  I thank Congressman Mark Green of Wisconsin for joining as an 
original co-sponsor of this legislation. I encourage all my colleagues 
to join us in cracking down on the counterfeit goods that threaten 
public safety, steal sales from legitimate manufacturers, and cost 
American jobs.
  I look forward to working with my colleagues to pass this legislation 
into law.




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