HR 3891 RH Union Calendar No. 366 105th CONGRESS 2d Session H. R. 3891 [Report No. 105-650] To amend the Trademark Act of 1946 to prohibit the unauthorized destruction, modification, or alteration of product identification codes, and for other purposes. IN THE HOUSE OF REPRESENTATIVES May 19, 1998 Mr. GOODLATTE introduced the following bill; which was referred to the Committee on the Judiciary July 28, 1998 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed [Strike out all after the enacting clause and insert the part printed in italic] [For text of introduced bill, see copy of bill as introduced on May 19, 1998]
A BILL To amend the Trademark Act of 1946 to prohibit the unauthorized destruction, modification, or alteration of product identification codes, 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 `Trademark Anticounterfeiting Act of 1998'. SEC. 2. PROHIBITION AGAINST UNAUTHORIZED ALTERATION OF PRODUCT IDENTIFICATION CODES. (a) IN GENERAL- Title VIII of the Act entitled `An Act to provide for the registration and protection of trade-marks used in commerce, to carry out the provisions of certain international conventions, and for other purposes.', approved July 5, 1946 (commonly referred to as the `Lanham Act' and the `Trademark Act of 1946') is amended by inserting after section 43 (15 U.S.C. 1125) the following: `UNAUTHORIZED MODIFICATIONS OF PRODUCT IDENTIFICATION CODES `SEC. 43A. (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 otherwise identify the source of the good, 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, the product identification code for which has been altered, concealed, removed, obliterated, defaced, stripped, peeled, affixed, or embedded in violation of paragraph (1) or (2), or that bears an unauthorized number, letter, symbol, marking, date, or other code in violation of paragraph (3). `(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 from affixing a Universal Product Code or other electronic pricing code to a good if that code 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 be punished as provided in section 1365A of title 18. `(f) 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. `(g) ENFORCEMENT- The Attorney General shall enforce this section.'. (b) CONFORMING AMENDMENT- The heading for title VIII of the Act of July 5, 1946, is amended by striking `AND DILUTION' and inserting `DILUTION, AND ADULTERATION OF PRODUCT CODES'. SEC. 3. CRIMINAL PENALTIES. (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) CRIMINAL PENALTIES- Any person who willfully violates section 43A of the Act of July 5, 1946 (commonly referred to as the `Trademark Act of 1946') 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. `(b) 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.'. (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. 4. 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'. Union Calendar No. 366 105th CONGRESS 2d Session H. R. 3891 [Report No. 105-650] A BILL To amend the Trademark Act of 1946 to prohibit the unauthorized destruction, modification, or alteration of product identification codes, and for other purposes.
July 28, 1998 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed END |