According to NEMA, the Knollenberg bill would amend the law prohibiting trafficking in products bearing counterfeit trademarks in three ways:

1. It would clarify that criminal sanctions apply not only to those persons who traffic in goods bearing counterfeit marks, but 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 of the counterfeit product, the proceeds made from the sale of the counterfeit product, as well as the tools used to make counterfeit products and marks, mandatory rather than discretionary, for all who are convicted, plead guilty or no contest, to violating the law. This amendment would make the law applicable to counterfeit trademarks equal to existing law relating to counterfeit copyrighted products.

3. It would amend the definition of a counterfeit mark to include copies of "famous marks," which are trademarks that are well known and recognized by the public.

"NEMA is pleased that Congressman Knollenberg has introduced this legislation, which we hope will be passed by both the House and the Senate this year," said Malcolm O'Hagan, NEMA's president. 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.

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 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 during free trade agreement negotiations."

In 2002, NEMA members became concerned about the global surge in trade in counterfeit electrical products and NEMA began working with its members on educating the public, as well as its members, about counterfeit electrical products. NEMA has become an advocate for greater recognition of the threat posed by counterfeit products and recently addressed the U.S. Ambassador's Intellectual Property Roundtable in Beijing calling on China to adopt policies and practices that deter the manufacture and distribution of counterfeit products. NEMA's statement at the Ambassador's Roundtable documented numerous instances where counterfeit electrical products have been found to be unsafe. "This harms not only the consumer or the industrial worker," O'Hagan notes, "but it harms the reputation of the manufacturers and can undermine confidence in those who produce quality products."

Publication date: 05/31/2004