President Bush speaks at the ceremony signing the “Stop Counterfeiting in Manufactured Goods Act” into law.
Posted: March 17, 2006, 9 a.m., EST
WASHINGTON — President George Bush yesterday signed into law the “Stop Counterfeiting in Manufactured Goods Act,” attended by representatives of the Motor and Equipment Manufacturers Association (MEMA) and other industry groups. MEMA representatives, including MEMA President and CEO Bob McKenna were sitting front row center for the ceremony.
The bill was introduced by Rep. Joe Knollenberg (R-MI) at the beginning of the 109th Congress with the support of MEMA and other industry associations that helped craft the bill and worked for its passage. It passed in the House on March 7 and the Senate on Feb. 15.
“One of the problems we have is that people feel comfortable, at times, in trying to take a shortcut to success in the business world,” President Bush said prior to signing the bill into law. “They feel like they can copy existing products, instead of designing their own. In order to keep this economy innovative and entrepreneurial, it’s important for us to enforce law, and if the laws are weak, pass new laws, to make sure that the problem of counterfeiting, which has been growing rapidly, is arrested, is held in check.
“Counterfeiting costs our country hundreds of billion dollars a year,” he added. “Counterfeiting hurts businesses. They lose the right to profit from their innovation. Counterfeiting hurts workers, because counterfeiting undercuts honest competition, rewards illegal competitors. Counterfeiting hurts our — counterfeiting hurts consumers, as fake products expose our people to serious health and safety risks. Counterfeiting hurts the government. We lose out on tax revenue. We have to use our resources for law — of law enforcement to stop counterfeiting. Counterfeiting hurts national security, as terrorist networks use counterfeit sales to sometimes finance their operations.”
“We are very pleased that this important legislation has now passed into law,” MEMA’s McKenna said. “Passage of the ‘Stop Counterfeiting in Manufactured Goods Act’ was a very high priority on our legislative agenda to our brand protection initiative for automotive aftermarket.”
The “Stop Counterfeiting in Manufactured Goods” law extends federal seizure authority to include not only the infringing product, but also the tooling, equipment and supplies used to produce and traffic counterfeit goods and criminalizes production of stickers, tags boxes or other items used to traffic fake products. The law also expands the current definition of trafficking to include the import and export counterfeit goods and clearly specifies that it is illegal to give away counterfeit goods in exchange for some future benefit – in effect, the “bartering” of counterfeit goods. Networks of counterfeiters have used these loopholes to frustrate investigation and prosecution under current law.
“This loophole helped counterfeiters cheat consumers by passing off poorly-made items as brand-name goods. By closing the loophole, we’re going to keep honest Americans from losing business to scam artists,” Bush said. “The bill strengthens penalties for counterfeiters and gives prosecutors new tools to stop those who defraud American consumers. The bill requires courts to order the destruction of all counterfeit products seized as a part of a criminal investigation. The bill requires convicted counterfeiters to turn over their profits, as well as any equipment used in their operations, so it can’t be used to cheat our people again. The bill requires those convicted of counterfeiting to reimburse the legitimate businesses they exploited. These common sense reforms will help law enforcement to crack down on this serious crime. We’ve got to get the counterfeiters and their products off the streets.”
“Congressmen Knollenberg has once again stood up for automotive suppliers. This stronger counterfeiting law could not have happened with out his commitment and leadership. “The Stop Counterfeiting in Manufactured Goods Act” will help Federal Law Enforcement protect American intellectual property and innovation.” McKenna said. “Counterfeiting is a crime that is stealing good American manufacturing jobs and hurting the brand image of legitimate manufacturers that play by the rules. This tough new law will help us better protect our intellectual property, protect the safety and quality of aftermarket parts sold in America and put more counterfeiters out of business.
The FBI estimates that product counterfeiting costs U.S. businesses $200 billion to $250 billion annually. Product counterfeiting is estimated to cost American automotive suppliers approximately $12 billion in lost sales annually. MEMA’s has created a Brand Protection Council to share best industry practices to detect and prevent product counterfeiting, educate law enforcement and media to the problem and lobby for stronger laws and intellectual property rights protection at home and abroad.
With the impact of counterfeiting reaching across the entire automotive industry, other industry associations including the Automotive Aftermarket Industry Association (AAIA) and the Specialty Market Equipment Association (SEMA) commented on the occasion of the signing. SEMA joined the Coalition Against Counterfeiting and Piracy (CACP), an industry-wide effort led by the U.S. Chamber of Commerce, the National Association of Manufacturers and a number of other trade associations and companies. Coalition members share their expertise on intellectual property issues and raise Congressional awareness on the harm caused by counterfeiting.
“Our association and industry congratulate and thank bill sponsors, Rep. Joe Knollenberg, R-Mich. and Sen. Arlen Specter, R-Pa., for marshalling strong bi-partisan support to pass legislation so vital to protecting American consumers, businesses and workers from the dangers of product piracy,” said Kathleen Schmatz, AAIA president and CEO. “We also salute President Bush for his commitment to enact tougher penalties and for his administration’s comprehensive Strategy Targeting Organized Piracy (STOP) campaign.”
“Our laws now become a greater deterrent to trademark theft, by making the potential costs of getting caught much higher than the potential profits of product piracy,” said Lee Kadrich, AAIA vice president, government affairs and trade. “This new act also arms U.S. trade negotiators to win equivalent statutory protections from the many trade partners seeking free trade agreements with the United States.”
“This new law closes loopholes that have allowed traffickers to market their counterfeited goods,” said Stuart Gosswein, SEMA’s Director of Federal Government Affairs, who attended the signing ceremony. “SEMA is grateful to Rep. Joe Knollenberg (R-MI) for introducing the legislation, and to Sen. Arlen Specter (R-PA) and Sen. Patrick Leahy (D-VT) for their valuable contributions in helping pass this bipartisan bill.”
“Counterfeit products have caused significant damage to SEMA members and their customers,” said Chris Kersting, SEMA’s President and CEO. “They exploit the intellectual property of our member companies, they threaten the jobs of their employees and they can ruin a company’s good reputation.”
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