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Reported to Senate (07/18/2002)

 
[Congressional Bills 107th Congress]
[From the U.S. Government Printing Office]
[S. 2395 Reported in Senate (RS)]






                                                       Calendar No. 500
107th CONGRESS
  2d Session
                                S. 2395

  To prevent and punish counterfeiting and copyright piracy, and for 
                            other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 30, 2002

   Mr. Biden (for himself, Mr. Allen, Mr. Hollings, Mrs. Boxer, Mrs. 
 Murray, Mr. Smith of Oregon, Mr. Nelson of Nebraska, Mr. Dorgan, Mr. 
   Conrad, Mr. Hatch, Mr. Leahy, Mrs. Feinstein, Mr. DeWine, and Mr. 
   Thurmond) introduced the following bill; which was read twice and 
               referred to the Committee on the Judiciary

                             July 18, 2002

                Reported by Mr. Leahy, with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

_______________________________________________________________________

                                 A BILL


 
  To prevent and punish counterfeiting and copyright piracy, and for 
                            other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

<DELETED>SECTION 1. SHORT TITLE.</DELETED>

<DELETED>    This Act may be cited as the ``Anticounterfeiting 
Amendments of 2002''.</DELETED>

<DELETED>SEC. 2. FINDINGS.</DELETED>

<DELETED>    Congress finds that--</DELETED>
        <DELETED>    (1) American innovation, and the protection of 
        that innovation by the government, has been a critical 
        component of the economic growth of this Nation throughout the 
        history of the Nation;</DELETED>
        <DELETED>    (2) copyright-based industries represent one of 
        the most valuable economic assets of this country, contributing 
        over 5 percent of the gross domestic product of the United 
        States and creating significant job growth and tax 
        revenues;</DELETED>
        <DELETED>    (3) the American intellectual property sector 
        employs approximately 4,300,000 people, representing over 3 
        percent of total United States employment;</DELETED>
        <DELETED>    (4) the proliferation of organized criminal 
        counterfeiting enterprises threatens the economic growth of 
        United States copyright industries;</DELETED>
        <DELETED>    (5) the American intellectual property sector has 
        invested millions of dollars to develop highly sophisticated 
        authentication features that assist consumers and law 
        enforcement in distinguishing genuine intellectual property 
        products and packaging from counterfeits;</DELETED>
        <DELETED>    (6) in order to thwart these industry efforts, 
        counterfeiters traffic in, and tamper with, genuine 
        authentication features, for example, by obtaining genuine 
        authentication features through illicit means and then 
        commingling these features with counterfeit software or 
        packaging;</DELETED>
        <DELETED>    (7) Federal law does not provide adequate civil 
        and criminal remedies to combat tampering activities that 
        directly facilitate counterfeiting crimes; and</DELETED>
        <DELETED>    (8) in order to strengthen Federal enforcement 
        against counterfeiting of copyrighted works, Congress must 
        enact legislation that--</DELETED>
                <DELETED>    (A) prohibits trafficking in, and 
                tampering with, authentication features of copyrighted 
                works; and</DELETED>
                <DELETED>    (B) permits aggrieved parties an 
                appropriate civil cause of action.</DELETED>

<DELETED>SEC. 3. PROHIBITION AGAINST TRAFFICKING IN ILLICIT 
              AUTHENTICATION FEATURES.</DELETED>

<DELETED>    (a) In General.--Section 2318 of title 18, United States 
Code, is amended--</DELETED>
        <DELETED>    (1) by striking the heading and inserting 
        ``Trafficking in counterfeit labels, illicit authentication 
        features, or counterfeit documentation or 
        packaging'';</DELETED>
        <DELETED>    (2) by striking subsection (a) and inserting the 
        following:</DELETED>
<DELETED>    ``(a) Whoever, in any of the circumstances described in 
subsection (c), knowingly traffics in--</DELETED>
        <DELETED>    ``(1) a counterfeit label affixed to, or designed 
        to be affixed to--</DELETED>
                <DELETED>    ``(A) a phonorecord;</DELETED>
                <DELETED>    ``(B) a copy of a computer 
                program;</DELETED>
                <DELETED>    ``(C) a copy of a motion picture or other 
                audiovisual work; or</DELETED>
                <DELETED>    ``(D) documentation or 
                packaging;</DELETED>
        <DELETED>    ``(2) an illicit authentication feature affixed to 
        or embedded in, or designed to be affixed to or embedded in--
        </DELETED>
                <DELETED>    ``(A) a phonorecord;</DELETED>
                <DELETED>    ``(B) a copy of a computer 
                program;</DELETED>
                <DELETED>    ``(C) a copy of a motion picture or other 
                audiovisual work; or</DELETED>
                <DELETED>    ``(D) documentation or packaging; 
                or</DELETED>
        <DELETED>    ``(3) counterfeit documentation or 
        packaging,</DELETED>
<DELETED>shall be fined under this title or imprisoned for not more 
than 5 years, or both.'';</DELETED>
        <DELETED>    (3) in subsection (b)--</DELETED>
                <DELETED>    (A) in paragraph (2), by striking ``and'' 
                at the end;</DELETED>
                <DELETED>    (B) in paragraph (3)--</DELETED>
                        <DELETED>    (i) by striking ``and `audiovisual 
                        work' have'' and inserting the following: ``, 
                        `audiovisual work', and `copyright owner' 
                        have''; and</DELETED>
                        <DELETED>    (ii) by striking the period at the 
                        end and inserting a semicolon; and</DELETED>
                <DELETED>    (C) by adding at the end the 
                following:</DELETED>
        <DELETED>    ``(4) the term `authentication feature' means any 
        hologram, watermark, certification, symbol, code, image, 
        sequence of numbers or letters, or other physical feature that 
        either individually or in combination with another feature is 
        used by the respective copyright owner to verify that a 
        phonorecord, a copy of a computer program, a copy of a motion 
        picture or other audiovisual work, or documentation or 
        packaging is not counterfeit or otherwise infringing of any 
        copyright;</DELETED>
        <DELETED>    ``(5) the term `documentation or packaging' means 
        documentation or packaging for a phonorecord, copy of a 
        computer program, or copy of a motion picture or other 
        audiovisual work; and</DELETED>
        <DELETED>    ``(6) the term `illicit authentication feature' 
        means an authentication feature, that--</DELETED>
                <DELETED>    ``(A) without the authorization of the 
                respective copyright owner has been tampered with or 
                altered so as to facilitate the reproduction or 
                distribution of--</DELETED>
                        <DELETED>    ``(i) a phonorecord;</DELETED>
                        <DELETED>    ``(ii) a copy of a computer 
                        program;</DELETED>
                        <DELETED>    ``(iii) a copy of a motion picture 
                        or other audiovisual work; or</DELETED>
                        <DELETED>    ``(iv) documentation or 
                        packaging;</DELETED>
                <DELETED>in violation of the rights of the copyright 
                owner under title 17;</DELETED>
                <DELETED>    ``(B) is genuine, but has been 
                distributed, or is intended for distribution, without 
                the authorization of the respective copyright owner; 
                or</DELETED>
                <DELETED>    ``(C) appears to be genuine, but is 
                not.'';</DELETED>
        <DELETED>    (4) in subsection (c)--</DELETED>
                <DELETED>    (A) by striking paragraph (3) and 
                inserting the following:</DELETED>
        <DELETED>    ``(3) the counterfeit label or illicit 
        authentication feature is affixed to, is embedded in, or 
        encloses, or is designed to be affixed to, to be embedded in, 
        or to enclose--</DELETED>
                <DELETED>    ``(A) a phonorecord of a copyrighted sound 
                recording;</DELETED>
                <DELETED>    ``(B) a copy of a copyrighted computer 
                program;</DELETED>
                <DELETED>    ``(C) a copy of a copyrighted motion 
                picture or other audiovisual work; or</DELETED>
                <DELETED>    ``(D) documentation or packaging; or''; 
                and</DELETED>
                <DELETED>    (B) in paragraph (4), by striking ``for a 
                computer program'';</DELETED>
        <DELETED>    (5) in subsection (d)--</DELETED>
                <DELETED>    (A) by inserting ``or illicit 
                authentication features'' after ``counterfeit labels'' 
                each place it appears;</DELETED>
                <DELETED>    (B) by inserting ``or illicit 
                authentication features'' after ``such labels''; 
                and</DELETED>
                <DELETED>    (C) by inserting before the period at the 
                end the following: ``, and of any equipment, device, or 
                materials used to manufacture, reproduce, or assemble 
                the counterfeit labels or illicit authentication 
                features''; and</DELETED>
        <DELETED>    (6) by adding at the end the following:</DELETED>
<DELETED>    ``(f) Civil Remedies for Violation.--</DELETED>
        <DELETED>    ``(1) In general.--Any copyright owner who is 
        injured by a violation of this section or is threatened with 
        injury, may bring a civil action in an appropriate United 
        States district court.</DELETED>
        <DELETED>    ``(2) Discretion of court.--In any action brought 
        under paragraph (1), the court--</DELETED>
                <DELETED>    ``(A) may grant 1 or more temporary or 
                permanent injunctions on such terms as the court 
                determines to be reasonable to prevent or restrain 
                violations of this section;</DELETED>
                <DELETED>    ``(B) at any time while the action is 
                pending, may order the impounding, on such terms as the 
                court determines to be reasonable, of any article that 
                is in the custody or control of the alleged violator 
                and that the court has reasonable cause to believe was 
                involved in a violation of this section; and</DELETED>
                <DELETED>    ``(C) may award to the injured party--
                </DELETED>
                        <DELETED>    ``(i) reasonable attorney fees and 
                        costs; and</DELETED>
                        <DELETED>    ``(ii)(I) actual damages and any 
                        additional profits of the violator, as provided 
                        by paragraph (3); or</DELETED>
                        <DELETED>    ``(II) statutory damages, as 
                        provided by paragraph (4).</DELETED>
        <DELETED>    ``(3) Actual damages and profits.--</DELETED>
                <DELETED>    ``(A) In general.--The injured party is 
                entitled to recover--</DELETED>
                        <DELETED>    ``(i) the actual damages suffered 
                        by the injured party as a result of a violation 
                        of this section, as provided by subparagraph 
                        (B); and</DELETED>
                        <DELETED>    ``(ii) any profits of the violator 
                        that are attributable to a violation of this 
                        section and are not taken into account in 
                        computing the actual damages.</DELETED>
                <DELETED>    ``(B) Calculation of damages.--The court 
                shall calculate actual damages by multiplying--
                </DELETED>
                        <DELETED>    ``(i) the value of the 
                        phonorecords or copies to which counterfeit 
                        labels, illicit authentication features, or 
                        counterfeit documentation or packaging were 
                        affixed or embedded, or designed to be affixed 
                        or embedded; by</DELETED>
                        <DELETED>    ``(ii) the number of phonorecords 
                        or copies to which counterfeit labels, illicit 
                        authentication features, or counterfeit 
                        documentation or packaging were affixed or 
                        embedded, or designed to be affixed or 
                        embedded,</DELETED>
                <DELETED>unless such calculation would underestimate 
                the actual harm suffered by the copyright 
                owner.</DELETED>
                <DELETED>    ``(C) Definition.--For purposes of this 
                paragraph, the term `value of the phonorecord or copy' 
                means--</DELETED>
                        <DELETED>    ``(i) the retail value of an 
                        authorized phonorecord of a copyrighted sound 
                        recording;</DELETED>
                        <DELETED>    ``(ii) the retail value of an 
                        authorized copy of a copyrighted computer 
                        program; or</DELETED>
                        <DELETED>    ``(iii) the retail value of a copy 
                        of a copyrighted motion picture or other 
                        audiovisual work.</DELETED>
        <DELETED>    ``(4) Statutory damages.--The injured party may 
        elect, at any time before final judgment is rendered, to 
        recover, instead of actual damages and profits, an award of 
        statutory damages for each violation of this section in a sum 
        of not less than $2,500 or more than $25,000, as the court 
        considers appropriate.</DELETED>
        <DELETED>    ``(5) Subsequent violation.--The court may 
        increase an award of damages under this subsection by 3 times 
        the amount that would otherwise be awarded, as the court 
        considers appropriate, if the court finds that a person has 
        subsequently violated this section within 3 years after a final 
        judgment was entered against that person for a violation of 
        this section.</DELETED>
        <DELETED>    ``(6) Limitation on actions.--A civil action may 
        not be commenced under this section unless it is commenced 
        within 3 years after the date on which the claimant discovers 
        the violation.</DELETED>
<DELETED>    ``(g) Other Rights Not Affected.--Nothing in this section 
shall enlarge, diminish, or otherwise affect liability under section 
1201 or 1202 of title 17.''.</DELETED>
<DELETED>    (b) Technical and Conforming Amendment.--The item relating 
to section 2318 in the table of sections at the beginning of chapter 
113 of title 18, United States Code, is amended by inserting ``or 
illicit authentication features'' after ``counterfeit 
labels''.</DELETED>

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Anticounterfeiting Amendments of 
2002''.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) American innovation, and the protection of that 
        innovation by the government, has been a critical component of 
        the economic growth of this Nation throughout the history of 
        the Nation;
            (2) copyright-based industries represent one of the most 
        valuable economic assets of this country, contributing over 5 
        percent of the gross domestic product of the United States and 
        creating significant job growth and tax revenues;
            (3) the American intellectual property sector employs 
        approximately 4,300,000 people, representing over 3 percent of 
        total United States employment;
            (4) the proliferation of organized criminal counterfeiting 
        enterprises threatens the economic growth of United States 
        copyright industries;
            (5) the American intellectual property sector has invested 
        millions of dollars to develop highly sophisticated 
        authentication features that assist consumers and law 
        enforcement in distinguishing genuine intellectual property 
        products and packaging from counterfeits;
            (6) in order to thwart these industry efforts, 
        counterfeiters traffic in, and tamper with, genuine 
        authentication features, for example, by obtaining genuine 
        authentication features through illicit means and then 
        commingling these features with counterfeit software or 
        packaging;
            (7) Federal law does not provide adequate civil and 
        criminal remedies to combat tampering activities that directly 
        facilitate counterfeiting crimes; and
            (8) in order to strengthen Federal enforcement against 
        counterfeiting of copyrighted works, Congress must enact 
        legislation that--
                    (A) prohibits trafficking in, and tampering with, 
                authentication features of copyrighted works; and
                    (B) permits aggrieved parties an appropriate civil 
                cause of action.

SEC. 3. PROHIBITION AGAINST TRAFFICKING IN ILLICIT AUTHENTICATION 
              FEATURES.

    (a) In General.--Section 2318 of title 18, United States Code, is 
amended--
            (1) by striking the heading and inserting ``Trafficking in 
        counterfeit labels, illicit authentication features, or 
        counterfeit documentation or packaging'';
            (2) by striking subsection (a) and inserting the following:
    ``(a) Whoever, in any of the circumstances described in subsection 
(c), knowingly traffics in--
            ``(1) a counterfeit label affixed to, or designed to be 
        affixed to--
                    ``(A) a phonorecord;
                    ``(B) a copy of a computer program;
                    ``(C) a copy of a motion picture or other 
                audiovisual work; or
                    ``(D) documentation or packaging;
            ``(2) an illicit authentication feature affixed to or 
        embedded in, or designed to be affixed to or embedded in--
                    ``(A) a phonorecord;
                    ``(B) a copy of a computer program;
                    ``(C) a copy of a motion picture or other 
                audiovisual work; or
                    ``(D) documentation or packaging; or
            ``(3) counterfeit documentation or packaging,
shall be fined under this title or imprisoned for not more than 5 
years, or both.'';
            (3) in subsection (b)--
                    (A) in paragraph (2), by striking ``and'' at the 
                end;
                    (B) in paragraph (3)--
                            (i) by striking ``and `audiovisual work' 
                        have'' and inserting the following: ``, 
                        `audiovisual work', `sound recording', and 
                        `copyright owner' have''; and
                            (ii) by striking the period at the end and 
                        inserting a semicolon; and
                    (C) by adding at the end the following:
            ``(4) the term `authentication feature' means any hologram, 
        watermark, certification, symbol, code, image, sequence of 
        numbers or letters, or other feature that either individually 
        or in combination with another feature is used by the 
        respective copyright owner to verify that a phonorecord, a copy 
        of a computer program, a copy of a motion picture or other 
        audiovisual work, or documentation or packaging is not 
        counterfeit or otherwise infringing of any copyright;
            ``(5) the term `documentation or packaging' means 
        documentation or packaging for a phonorecord, copy of a 
        computer program, or copy of a motion picture or other 
        audiovisual work; and
            ``(6) the term `illicit authentication feature' means an 
        authentication feature, that--
                    ``(A) is genuine in origin, but, without the 
                authorization of the respective copyright owner, has 
                been tampered with or altered for the purpose of 
                inducing a third party to reproduce or accept 
                distribution of--
                            ``(i) a phonorecord;
                            ``(ii) a copy of a computer program;
                            ``(iii) a copy of a motion picture or other 
                        audiovisual work; or
                            ``(iv) documentation or packaging;
                where such reproduction or distribution violates the 
                rights of the copyright owner under title 17;
                    ``(B) is genuine, but has been distributed, or is 
                intended for distribution, without the authorization of 
                the respective copyright owner and not in connection 
                with the lawfully made copy or phonorecord to which 
                such authentication feature was intended to be affixed 
                or embedded by the respective copyright owner; or
                    ``(C) appears to be genuine, but is not.'';
            (4) in subsection (c)--
                    (A) by striking paragraph (3) and inserting the 
                following:
            ``(3) the counterfeit label or illicit authentication 
        feature is affixed to, is embedded in, or encloses, or is 
        designed to be affixed to, to be embedded in, or to enclose--
                    ``(A) a phonorecord of a copyrighted sound 
                recording;
                    ``(B) a copy of a copyrighted computer program;
                    ``(C) a copy of a copyrighted motion picture or 
                other audiovisual work; or
                    ``(D) copyrighted documentation or packaging; or''; 
                and
                    (B) in paragraph (4), by striking ``for a computer 
                program'';
            (5) in subsection (d)--
                    (A) by inserting ``or illicit authentication 
                features'' after ``counterfeit labels'' each place it 
                appears;
                    (B) by inserting ``or illicit authentication 
                features'' after ``such labels''; and
                    (C) by inserting before the period at the end the 
                following: ``, and of any equipment, device, or 
                materials used to manufacture, reproduce, or assemble 
                the counterfeit labels or illicit authentication 
                features''; and
            (6) by adding at the end the following:
    ``(f) Civil Remedies for Violation.--
            ``(1) In general.--Any copyright owner who is injured by a 
        violation of this section or is threatened with injury, may 
        bring a civil action in an appropriate United States district 
        court.
            ``(2) Discretion of court.--In any action brought under 
        paragraph (1), the court--
                    ``(A) may grant 1 or more temporary or permanent 
                injunctions on such terms as the court determines to be 
                reasonable to prevent or restrain violations of this 
                section;
                    ``(B) at any time while the action is pending, may 
                order the impounding, on such terms as the court 
                determines to be reasonable, of any article that is in 
                the custody or control of the alleged violator and that 
                the court has reasonable cause to believe was involved 
                in a violation of this section; and
                    ``(C) may award to the injured party--
                            ``(i) reasonable attorney fees and costs; 
                        and
                            ``(ii)(I) actual damages and any additional 
                        profits of the violator, as provided by 
                        paragraph (3); or
                            ``(II) statutory damages, as provided by 
                        paragraph (4).
            ``(3) Actual damages and profits.--
                    ``(A) In general.--The injured party is entitled to 
                recover--
                            ``(i) the actual damages suffered by the 
                        injured party as a result of a violation of 
                        this section, as provided by subparagraph (B); 
                        and
                            ``(ii) any profits of the violator that are 
                        attributable to a violation of this section and 
                        are not taken into account in computing the 
                        actual damages.
                    ``(B) Calculation of damages.--The court shall 
                calculate actual damages by multiplying--
                            ``(i) the value of the phonorecords or 
                        copies to which counterfeit labels, illicit 
                        authentication features, or counterfeit 
                        documentation or packaging were affixed or 
                        embedded, or designed to be affixed or 
                        embedded; by
                            ``(ii) the number of phonorecords or copies 
                        to which counterfeit labels, illicit 
                        authentication features, or counterfeit 
                        documentation or packaging were affixed or 
                        embedded, or designed to be affixed or 
                        embedded,
                unless such calculation would underestimate the actual 
                harm suffered by the copyright owner.
                    ``(C) Definition.--For purposes of this paragraph, 
                the term `value of the phonorecord or copy' means--
                            ``(i) the retail value of an authorized 
                        phonorecord of a copyrighted sound recording;
                            ``(ii) the retail value of an authorized 
                        copy of a copyrighted computer program; or
                            ``(iii) the retail value of an authorized 
                        copy of a copyrighted motion picture or other 
                        audiovisual work.
            ``(4) Statutory damages.--The injured party may elect, at 
        any time before final judgment is rendered, to recover, instead 
        of actual damages and profits, an award of statutory damages 
        for each violation of this section in a sum of not less than 
        $2,500 or more than $25,000, as the court considers 
        appropriate.
            ``(5) Subsequent violation.--The court may increase an 
        award of damages under this subsection by 3 times the amount 
        that would otherwise be awarded, as the court considers 
        appropriate, if the court finds that a person has subsequently 
        violated this section within 3 years after a final judgment was 
        entered against that person for a violation of this section.
            ``(6) Limitation on actions.--A civil action may not be 
        commenced under this section unless it is commenced within 3 
        years after the date on which the claimant discovers the 
        violation.
    ``(g) Other Rights Not Affected.--Nothing in this section shall 
enlarge, diminish, or otherwise affect liability under section 1201 or 
1202 of title 17.''.
    (b) Technical and Conforming Amendment.--The item relating to 
section 2318 in the table of sections at the beginning of chapter 113 
of title 18, United States Code, is amended to read as follows:

``2318. Trafficking in counterfeit labels, illicit authentication 
                            features, or counterfeit documentation or 
                            packaging.''.




                                                       Calendar No. 500

107th CONGRESS

  2d Session

                                S. 2395

_______________________________________________________________________

                                 A BILL

  To prevent and punish counterfeiting and copyright piracy, and for 
                            other purposes.

_______________________________________________________________________

                             July 18, 2002

                       Reported with an amendment

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