[Congressional Record (Bound Edition), Volume 151 (2005), Part 1]
[Extensions of Remarks]
[Page 140]
[From the U.S. Government Publishing Office, www.gpo.gov]




           THE STOP COUNTERFEITING IN MANUFACTURED GOODS ACT

                                 ______
                                 

                          HON. JOE KNOLLENBERG

                              of michigan

                    in the house of representatives

                        Tuesday, January 4, 2005

   Mr. KNOLLENBERG. Mr. Speaker, today I am reintroducing legislation--
the Stop Counterfeiting in Manufactured Goods Act. This bipartisan bill 
addresses the problem of counterfeit manufactured goods. I hope my 
colleagues will join me in passing this bill at the earliest 
opportunity.
  The problem of counterfeit manufactured goods is a growing problem 
around the world that threatens public safety and harms our economy 
here at home. Too often, counterfeit goods steal sales from legitimate 
American manufacturers and cost Americans high-paying manufacturing 
jobs. In fact, according to the U.S. Customs Service and Border 
Protection, counterfeiting costs the U.S. an estimated $200 billion 
annually.
  Manufacturers in this country are the most efficient and 
technologically advanced in the world, but they face many challenges. 
The biggest challenges are the costs they directly cannot control. We 
need to focus on measures that alleviate these costs, and crack down on 
those criminals that break the rules and drive up costs, thereby 
stealing manufacturing companies of what is rightfully theirs.
  Counterfeiting is not just about lost sales and jobs, however. It is 
a means by which the most nefarious organizations finance their 
activities. Interpol Secretary General Ronald Noble has stated that 
``we know that al-Qaeda supporters have been found with commercial size 
volume of counterfeit goods.''
  It is my belief, and that of a broad coalition backing this 
legislation, that to address the scourge of counterfeiting, the U.S. 
Government must possess additional tools. That is exactly what my bill 
provides.
  The Stop Counterfeit in Manufactured Goods Act strengthens the 
federal trademark law used to prosecute counterfeiters with two 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. We should not leave 
counterfeiters in business, and this provision will help us dig up the 
roots of counterfeiting networks.
  The bill also 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.
  The Stop Counterfeiting in Manufactured Goods Act will have a 
positive impact here in the United States and end the merciless 
stealing of American jobs and sales. In fact, the Department of 
Justice's Task Force on Intellectual Property cites this bill as a 
measure that would increase the effectiveness of intellectual property 
enforcement.
  The bill's reach will also be global. The Office of the U.S. Trade 
Representative (USTR) is currently engaged in a variety of bilateral 
and multilateral trade negotiations. However, USTR cannot readily 
negotiate criminal anti-counterfeiting standards above the levels found 
in the United States. By passing this bill into law, we will empower 
our negotiators to press for stronger anti-counterfeiting measures from 
our trading partners. The U.S. must lead by example in intellectual 
property rights enforcement and this is a critical step we must take. 
Clearly, the passage of the Stop Counterfeit of Manufactured Goods Act 
is long overdue.
  I thank the bipartisan group of Members for joining as original 
cosponsors 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 expeditiously pass 
this legislation into law.
  Mr. Speaker, I submit the following letter on this issue for the 
Record:

         American Apparel & Footwear Association, Automotive 
           Aftermarket Industry Association, Gas Appliance 
           Manufacturers Association, Grocery Manufacturers of 
           America, International AntiCounterfeiting Coalition, 
           International Trademark Association, Motor & Equipment 
           Manufacturers Association, National Association of 
           Manufacturers, National Electrical Manufacturers 
           Association, National Marine Manufacturers Association, 
           National Retail Federation, Specialty Equipment Market 
           Association, United States Chamber of Commerce
                                                  January 3, 2005.
       Dear Congressman Knollenberg: The organizations listed 
     above write in support of your legislation to strengthen the 
     criminal statute against trafficking in counterfeited goods. 
     This bill would amend the U.S. Code, 18 U.S.C. 2320, by 
     closing existing loopholes that can allow counterfeiters to 
     avoid prosecution, maintain control of assets for criminal 
     enterprises, and unjustly profit from their illegal 
     activities. This legislation would grant trademark owners 
     remedies similar to those already provided to copyright and 
     trade secret owners.
       Acts of counterfeiting result in significant economic harm 
     in the form of lost profits, diminished reputation among 
     consumers, and decreased tax revenue. The FBI estimates that 
     counterfeiting costs U.S. businesses $200 billion to $250 
     billion annually and is increasing rapidly. New York City 
     estimates that in 2003 alone, the theft of intellectual 
     property cost the city over $1 billion in lost tax revenue. 
     Another frightening trend relates to the rising occurrence of 
     substandard and dangerous counterfeit goods that present 
     severe public health and safety risks. Numerous deaths and 
     injuries have already been attributed to counterfeit 
     products. Finally, and perhaps most alarmingly, there- is 
     strong evidence suggesting that organized criminal groups and 
     terrorist organizations are increasingly involved in criminal 
     counterfeiting schemes.
       Existing domestic laws should be bolstered to effectively 
     address this problem. Your bill would strengthen those laws 
     by prohibiting the trafficking in counterfeit labels, 
     patches, stickers, hangtags, or medallions that are 
     unattached to goods. In addition, the bill would make 
     mandatory the forfeiture and destruction of counterfeit 
     goods, as well as the assets used to produce, package, and 
     distribute counterfeit goods, and requires the forfeiture of 
     property and assets derived from counterfeiting.
       Internationally, the World Customs Organization and 
     Interpol estimate that the annual global trade in 
     illegitimate goods has increased from $5.5 billion in 1982 to 
     roughly $600 billion today and it continues to grow. 
     Ambassador Zoellick, the U.S. Trade Representative, recently 
     characterized trademark counterfeiting, along with copyright 
     piracy, as a ``scourge on the global economy.''
       Immediate passage of this legislation is necessary to more 
     effectively combat counterfeiting abroad. The Office of the 
     U.S. Trade Representative advises that it will not negotiate 
     criminal anti-counterfeiting standards above the levels found 
     in current U.S. law. With a number of free trade agreements 
     currently being negotiated, it is imperative that the current 
     deficiencies in domestic law are not codified in these 
     international agreements. We should seize the opportunity 
     represented by new trade agreements to obtain stronger 
     enforcement obligations from our trading partners against 
     counterfeiting.
       The groups listed above represent thousands of trademark 
     owners whose intellectual property assets are targets of 
     counterfeiters in the U.S. and abroad. We would like to thank 
     you for your excellent leadership on this issue and we commit 
     to working with you to ensure that the U.S. House of 
     Representatives acts quickly to consider and pass this 
     important legislation. If you have any questions, please do 
     not hesitate to contact the interested associations directly, 
     or Tim Trainer ([email protected]) of the International 
     AntiCounterfeiting Coalition, telephone (202) 223-6667.

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