NEMA lauds anti-counterfeiting legislation

By Plant Engineering Staff October 11, 2005

The National Electrical Manufacturers Association (NEMA) announced its support for legislation sponsored by Senator Arlen Specter (R-PA), Senator Patrick Leahy (D-VT) and ten other co-sponsors that would amend U.S. criminal code provisions imposing sanctions on traffickers in counterfeit products, as well as those who traffic in counterfeit labels and packaging. “The Stop Counterfeiting in Manufactured Goods Act” (S.1699) was introduced on September 14, 2005 and mirrors legislation passed by the House of Representatives in May.

The legislation would amend the law prohibiting trafficking in products bearing counterfeit trademarks in two important ways:

1. It would clarify that criminal sanctions apply not only to those who traffic in goods bearing counterfeit marks, but also those persons who traffic in counterfeit trademarks and certification marks themselves. This amendment would overrule a 2000 Tenth Circuit Court of Appeals decision, United States v. Giles, which overturned the conviction of a person operating a business known as Fabulous Fakes, which supplied patches bearing counterfeit marks so that consumers could affix them to generic products.

2. It would make forfeiture and destruction of the counterfeit product mandatory rather than discretionary, and would authorize a court to order the forfeiture of the proceeds made from the sale of the counterfeit product, as well as the tools used to make counterfeit products and marks, after considering certain specified factors. This amendment would make the law applicable to counterfeit trademarks equal to existing law relating to counterfeit copyrighted products.

“NEMA is pleased that Senators Specter and Leahy recognize that fighting the counterfeiting problem is a bipartisan issue,” said NEMA’s President Malcolm O’Hagan. According to O’Hagan, NEMA was particularly concerned about the impact of the Court of Appeals decision that held the anti-counterfeiting law did not apply to those who sold fake trademarks, even though they knew full well the use for the fake marks. “In the case of electrical products,” he said, “we know that unbranded products such as Christmas tree lights have been imported into the United States, where the importer has arranged to purchase counterfeit UL marks to affix them to the lights prior to distribution. Both UL and the Consumer Product Safety Commission found these counterfeit products to be unsafe.”

NEMA officials were also pleased that the bill would give parity in the mandatory forfeiture remedy between those who traffic in counterfeit trademarks and those who engage in copyright piracy. Currently, only the copyright law makes forfeiture of counterfeit product mandatory. “Not only is this amendment important for domestic law,” O’Hagan said, “but it enables the United States to encourage our trading partners to adopt this kind of remedy.”