HR 2100, the Antitampering Act, Amendment in the Nature of a Substitute.
Re: banning removal of, and fake or altered, product identification numbers.
Sponsor: Rep. Bob Goodlatte (R-VA).
Date adopted by CIP Subcommittee: March 23, 2000.

Editor's Notes:
  • The Courts and Intellectual Property Subcommittee provided a paper copy. Tech Law Journal scanned and converted into HTML.
  • Double spacing and line numbering were eliminated in the conversion.
  • This amendment was adopted by the House Courts and Intellectual Property Subcommittee, and then the bill as amended was adopted and reported.
  • See also, Tech Law Journal summary of HR 2100.
  • Copyright Tech Law Journal. All rights reserved.

AMENDMENT IN THE NATURE OF A SUBSTITUTE
TO H.R. 2100
OFFERED BY MR. GOODLATTE

Strike all after the enacting clause and insert the following:

SECTION 1. SHORT TITLE.

This Act may be cited as the "Antitampering Act of 2000".

SEC. 2. PROHIBITION AGAINST UNAUTHORIZED MODIFICATIONS OF PRODUCT IDENTIFICATION CODES.

(a) IN GENERAL.---Title VIII of the Act entitled "An Act to provide for the registration and protection of trademarks 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:

"SEC. 43A. UNAUTHORIZED ALTERATION OF PRODUCT IDENTIFICATION CODES.

"(a) DEFINITIONS.---In this section---

"(1) the term 'consumer'---

"(A) means---

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"(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 package, label, or component thereof, but does, not include any article of clothing;

"(3) the term 'package' means any container or wrapping in which any consumer commodity is enclosed for use in the delivery or display of that consumer commodity to retail purchasers, but does not include---

"(A) shipping containers or wrappings used solely for the transportation of any consumer commodity in bulk or in quantity to manufacturers, packers, or processors, or to wholesale or retail distributors thereof;

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"(B) shipping containers or outer wrappings used by retailers to ship or deliver any commodity to retail customers if such containers and wrappings do not include product identification codes, and if other information is not required by Federal law to be included on such containers or wrappings;

"(C) transparent wrappers or containers which do not bear written, printed, or graphic matter obscuring label information required by Federal law; or

"(D) containers used for tray pack displays in retail establishments (within the meaning set forth in regulations issued by the Secretary of Health and Human Services under sections 3 and 4 of the Fair Packaging and Labeling Act (15 U.S.C. 1452, 1453); 21 C.F.R. 1.20).

"(4) the term 'manufacturer' means the original manufacturer of a good and any duly appointed agent or representative of that manufacturer acting within the scope of its agency or representation,*

"(5) the term 'product identification code'

"(A) means any visible number, letter, symbol, marking, date (including an expiration [begin page 4] date), or code that is affixed to or embedded in any good, by which the manufacturer of the good may trace the good back to a particular lot, batch, date of production, or date of removal; and

"(B) does not include---

"(i) copyright management information conveyed in connection with copies or phonorecords of a copyrighted work or any performance or display of a copyrighted work;

"(ii) a Universal Product Code; or

"(iii) any other codes or markings on the good;

"(6) the term 'Universal Product Code' means a fixed length identification number and associated bar code symbol---

"(A) established by the Uniform Code Council accredited by the American National Standards Institute; and

"(B) used to identify companies and their products; and

"(7) the term 'value', with respect to a good, means the value of the good, as determined by the [begin page 5] court under the totality of the circumstances and facts of the case concerned.

"(b) PROHIBITED ACTS.

"(1) PROHIBITED ACTS.---Except as otherwise authorized by this Act or other 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---

"(A) to alter, conceal, remove, obliterate, deface, strip, or peel any product identification code affixed to or embedded in a good and visible to the consumer;

"(B) to affix to or embed in a good a product identification code which is visible to the consumer and which is intended by, the manufacturer for a different good, such that the code no longer accurately identifies the lot, batch, date of production, or date of removal of the good;

"(C) to affix to or embed in a good any number, letter, symbol, marking, date, or code intended to simulate a product identification code which is otherwise visible to the consumer; or

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"(D) to import, reimport, export, sell, distribute, or broker a good, in a case in which the person knows that the product identification code, which otherwise would be visible to the consumer, has been altered, concealed, removed, obliterated, defaced, stripped, peeled, affixed, or embedded in violation of subparagraph (A) or (B), or in a case in which the person knows that the good bears a number, letter, symbol, marking, date, or code in violation of subparagraph (C).

"(2) PARALLEL MARKETS.---This section shall not be construed as affecting the legality or illegality of commerce in foreign-made products bearing a genuine trademark that are imported into the, United States without the authorization of the owner of the trademark registered in the United States (commonly referred to as commerce in the 'parallel market').

"(c) APPLICABILITY.---The prohibitions set forth in subparagraphs (A), (B), and (C) of subsection (b)(1) shall apply to visible product identification codes (or simulated product identification codes in a case to which subsection (b)(1)(C) applies) affixed to, or embedded in, any good [begin page 7] held for sale or distribution in interstate or foreign commerce or after shipment therein.

"(d) EXCLUSIONS.---

"(1) UPC CODES.---Nothing in this section prohibits a person from affixing a Universal Product Code, security tag, or other legitimate pricing or inventory code or other information required by State or Federal law if such code or information does not (or can be removed so as not to) alter, conceal, remove, obliterate, deface, strip, or peel any product identification code.

"(2) REPACKING AND REPACKAGING FOR RESALE.---(A) Nothing in this section prohibits a person from removing a good from a shipping container and repackaging the good in another shipping container, or from repacking a good together with its original package within a new package or shipping container, if---

"(i) the good retains its original product identification code, which has not been altered, concealed, or removed;

"(ii) the repackaging is in full compliance with all applicable Federal laws and regulations, including section 301 of the Federal Food, Drug, and Cosmetic Act;

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"(iii) the new package or shipping container includes a label that clearly states---

"(I) that the good has been repackaged; and

"(II) the name of the repacker; and

"(iv) in a case in which such product identification code is on an original shipping container which is discarded, the product identification code is reproduced without alteration on the new package or new shipping container.

(B) Nothing in this section shall prohibit---

"(i) a registered pharmacist or other authorized health care provider from dispensing prescription drugs as otherwise authorized under Federal and State law to consumers pursuant to a valid prescription; or

"(ii) the repackaging of food products and perishable commodities that are transferred from their original package for purposes of immediate availability, preparation, and purchase or consumption by the consumer.

"(e) FLEA MARKETS.---

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"(1) PROHIBITIONS.---No person at a flea market shall sell, offer for sale, or knowingly permit the sale of any of the following products:

"(A) Baby food, infant formula, or similar food products manufactured and packaged for sale for consumption primarily by children under 3 years of age.

"(B) Any drug, food for special dietary use, cosmetic, or device, as such terms are defined in the Federal Food, Drug, and Cosmetic Act and regulations issued under that Act.

"(2) EXCLUSION.---Nothing in this subsection shall prohibit a person from engaging in activity otherwise prohibited by paragraph (1), in the case of a product described in paragraph (1)(B), if that person maintains for public inspection written documentation identifying the person as- an authorized representative of the manufacturer or distributor of that product.

"(3) FLEA MARKET DEFINED.---(A) As used in this subsection, the term 'flea market' means any location, other than a permanent retail store, at which space is rented or otherwise made available to others for the conduct of business as transient or limited vendors.

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"(B) For purposes of subparagraph (A), transient or limited vendors shall not include those persons who sell by sample or catalog for future delivery to the purchaser.

"(f) CRIMINAL PENALTIES.---Any person who willfully violates this section shall be punished as provided in section 1365A of title 18.

"(g) CIVIL REMEDIES.---

"(1) IN GENERAL.--- Any person who is injured by a violation of this section, or demonstrates the likelihood of such injury, may bring a civil action in an appropriate United States district court against the alleged violator. The complaint shall set forth in detail the manner and form of the alleged violation..

"(2) INJUNCTIONS AND IMPOUNDING AND DISPOSITION OF GOODS.---In any action under paragraph (1), the court may---

"(A) grant one or more temporary, preliminary, or permanent injunctions upon the posting of a bond at least equal to the value of the goods affected and 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, upon the posting of [begin page 11] a bond at least equal to the value of the goods affected and, on such terms as the court determines to be reasonable, if the court has reasonable cause to believe the goods were involved in the violation; and

"(C) as part of a final judgment or decree, in the court's discretion---

"(i) order the destruction of any good involved in the violation or that has been impounded under subparagraph (B); or

"(ii) order the disposal 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.

"(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 [begin page 12] 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 court finds that the violation threatens the health and safety of the public, 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), in addition to any damages [begin page 13] recovered under paragraph (3), the court in its discretion may award the prevailing party its costs in the action and its reasonable attorney's fees.

"(5) REPEAT VIOLATIONS.---

"(A) TREBLE DAMAGES.---In any ease 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 may, in its discretion, in an action brought under this subsection, 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 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 or has reason to know of the violation.

"(7) INNOCENT VIOLATIONS.---In any action under paragraph (1), the court in its discretion may [begin page 14] reduce or remit the total award of damages or award no damages in any case in which the, violator sustains the burden of proving, and tile court finds, that the violator was not aware and had no reason to believe that the acts of tile violator constituted a violation.

"(h) 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:

1365A. Tampering with 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 value of the good or goods involved in the violation is greater than $10,000, be [begin page 15] 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) if 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 criminal violation, be subject to twice the maximum term of imprisonment that would otherwise be imposed under this subsection, fined under this title, or both.

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"(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 one 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 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 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) order the disposal of the good by delivery to such Federal, State, or local [begin page 17] 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.

"(3) RETURN OF GOODS UPON NONCONVICTION.---If a person is not convicted following a prosecution under this section, the court may, in its discretion, order any goods impounded under paragraph (1)(B) or with respect to which an injunction was issued under paragraph (1)(A) to be returned to the defendant.

(b) CRIMINAL FORFEITURE.---Section 982(a)(5) of title 18, United States Code, is amended---

(1) in subparagraph (D) by striking "or" after the semicolon;

(2) in subparagraph (E) by adding "or" after the semicolon; and

(3) by inserting after subparagraph (E) the following:

"(F) Section 1365A (tampering with product identification codes);".

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(c) 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. Tampering with product identification codes.".

SEC. 4. ATTORNEY GENERAL REPORTING REQUIREMENTS.

Section 2320(f) of title 18, United States Code, is amended---

(1) by inserting "criminal tampering with product identification codes under section 1365A," after "involve"; and

(2) in paragraph (4), by inserting "1365A," after "sections".

SEC. 5. EFFECTIVE DATE.

This Act and the amendments made by this Act shall take effect 6 months after the date of the enactment of this Act.