WASHINGTON — U.S. Representative Joe Knollenberg (R-Mich. 9th District) yesterday introduced legislation to strengthen the federal law used to prosecute counterfeiters whose products threaten public health, harm American manufacturers and cost jobs in the U.S.
The Stop Counterfeiting in Manufactured Goods Act would require the mandatory destruction of equipment used to manufacture and package counterfeit goods. In addition, the proposed legislation addresses methods that counterfeiters have used to evade prosecution, such as the selling of patch sets or medallions that can later be attached to generic merchandise and given the appearance of a genuine product, as well as placing a counterfeit mark on goods not specifically listed in the trademark registration.
“Manufacturers in this country are the most efficient and technologically advanced in the world, but they face many challenges,” said Knollenberg. “Our goal as policy makers should be to focus on items that can improve the environment in which manufacturers compete. Cracking down on counterfeit goods – which threaten public safety, steal sales from legitimate manufacturers and cost American jobs – is an achievable action we can take to improve the environment for our manufacturers.”
The act contains three provisions:
* It provides for the mandatory destruction of the equipment used to manufacture and package counterfeit goods.
* It clarifies that Title 18, Section 2320 prohibits trafficking in counterfeit labels/patches/medallions that are unattached to any goods.
* It closes a loophole wherein counterfeiters place “famous” trademarks on products for which the company has not registered its trademark. “Famous” trademarks would be protected from this abuse.
The International Chamber of Commerce estimates that seven percent of the world trade is in counterfeit goods and that the counterfeit market is worth $350 billion. The U.S. Customs Service has estimated that counterfeiting has resulted in the loss of 750,000 jobs and costs the U.S. around $200 billion annually. Counterfeit automobile parts cost the industry alone over $12 billion. It is estimated that if these losses were eliminated, the auto industry could hire 200,000 additional workers.
U.S. Representative Mark Green (R-WI) is an original cosponsor of the bill. The legislation will be referred to the House Committee on the Judiciary.
MEMA issued a statement yesterday applauding Rep. Joe Knollenberg’s legislative initiative to strengthen the federal criminal law against trafficking in counterfeit goods.
“Counterfeiting has become a serious problem for manufacturers of automotive products, as well as thousands of other American manufacturers,” said MEMA Chairman Scott Meyer. “In addition to billions of dollars of lost sales and lost jobs, counterfeit automotive parts, components and tools often do not meet our standards for quality, performance and safety; this creates a serious risk to public safety and hurts the reputation of legitimate suppliers that are victimized by counterfeiters. Congressman Knollenberg has stepped forward to address these problems in a very effective way with his bill.”
Knollenberg’s legislation will also make it a crime to produce and traffic in labels or emblems that are later affixed to counterfeit goods, and will tighten the law and close loopholes on the unauthorized use of “famous marks.”
“Counterfeiting is a serious problem to automotive suppliers, particularly on the aftermarket side of the business,” Meyer added. “Counterfeit products often do not meet the quality and safety standards of the well-known branded product. If left unchecked penetration by counterfeit automotive products, as well as other manufactured goods, has the potential to undermine the public’s confidence and trust in what they are buying. We can’t let that happen. We look forward to working with the Congress toward passage enactment of this bill and encourage all automotive suppliers to help us in this effort.”
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