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18 USC - Chicago-Kent College of Law

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18 USC - Chicago-Kent College of Law ...

     FOR EDUCATIONAL USE ONLY Page 1

     18 U.S.C.A. ? 2320

    Effective: March 16, 2006

United States Code Annotated Currentness

    Title 18. Crimes and Criminal Procedure (Refs & Annos)

     Part I. Crimes (Refs & Annos)

     Chapter 113. Stolen Property (Refs & Annos)

    ? 2320. Trafficking in counterfeit goods or services

     (a) Whoever intentionally traffics or attempts to traffic in goods or services and knowingly uses a

    counterfeit mark on or in connection with such goods or services, or intentionally traffics or

    attempts to traffic in labels, patches, stickers, wrappers, badges, emblems, medallions, charms,

    boxes, containers, cans, cases, hangtags, documentation, or packaging of any type or nature,

    knowing that a counterfeit mark has been applied thereto, the use of which is likely to cause

    confusion, to cause mistake, or to deceive, shall, if an individual, be fined not more than

    $2,000,000 or imprisoned not more than 10 years, or both, and, if a person other than an individual,

    be fined not more than $5,000,000. In the case of an offense by a person under this section that

    occurs after that person is convicted of another offense under this section, the person convicted, if

    an individual, shall be fined not more than $5,000,000 or imprisoned not more than 20 years, or

    both, and if other than an individual, shall be fined not more than $15,000,000.

(b)(1) The following property shall be subject to forfeiture to the United States and no property

    right shall exist in such property:

(A) Any article bearing or consisting of a counterfeit mark used in committing a violation of

    subsection (a).

(B) Any property used, in any manner or part, to commit or to facilitate the commission of a

    violation of subsection (a).

(2) The provisions of chapter 46 of this title relating to civil forfeitures, including section 983 of

    this title, shall extend to any seizure or civil forfeiture under this section. At the conclusion of the

    forfeiture proceedings, the court, unless otherwise requested by an agency of the United States,

    shall order that any forfeited article bearing or consisting of a counterfeit mark be destroyed or

    otherwise disposed of according to law.

(3)(A) The court, in imposing sentence on a person convicted of an offense under this section, shall

    order, in addition to any other sentence imposed, that the person forfeit to the United States--

(i) any property constituting or derived from any proceeds the person obtained, directly or

    indirectly, as the result of the offense;

(ii) any of the person's property used, or intended to be used, in any manner or part, to commit, ? 2007 Thomson/West. No Claim to Orig. U.S. Govt. Works. facilitate, aid, or abet the commission of the offense; and

     FOR EDUCATIONAL USE ONLY Page 2 18 U.S.C.A. ? 2320 (B) The forfeiture of property under subparagraph (A), including any seizure and disposition of the property and any related judicial or administrative proceeding, shall be governed by the (iii) any article that bears or consists of a counterfeit mark used in committing the offense.procedures set forth in section 413 of the Comprehensive Drug Abuse Prevention and Control Act

    of 1970 (21 U.S.C. 853), other than subsection (d) of that section. Notwithstanding section 413(h)

    of that Act, at the conclusion of the forfeiture proceedings, the court shall order that any forfeited

    article or component of an article bearing or consisting of a counterfeit mark be destroyed.

    (4) When a person is convicted of an offense under this section, the court, pursuant to sections 3556, 3663A, and 3664, shall order the person to pay restitution to the owner of the mark and any

    other victim of the offense as an offense against property referred to in section 3663A(c)(1)(A)(ii).

    (5) The term "victim", as used in paragraph (4), has the meaning given that term in section 3663A(a)(2).

(c) All defenses, affirmative defenses, and limitations on remedies that would be applicable in an

    action under the Lanham Act shall be applicable in a prosecution under this section. In a

    prosecution under this section, the defendant shall have the burden of proof, by a preponderance of

    the evidence, of any such affirmative defense.

    (d)(1) During preparation of the presentence report pursuant to Rule 32(c) of the Federal Rules of Criminal Procedure, victims of the offense shall be permitted to submit, and the probation officer

    shall receive, a victim impact statement that identifies the victim of the offense and the extent and

    scope of the injury and loss suffered by the victim, including the estimated economic impact of the

    offense on that victim.

    (2) Persons permitted to submit victim impact statements shall include--

(A) producers and sellers of legitimate goods or services affected by conduct involved in the

    offense;

    (B) holders of intellectual property rights in such goods or services; and

    (C) the legal representatives of such producers, sellers, and holders.

(e) For the purposes of this section--

(1) the term "counterfeit mark" means--

    (A) a spurious mark--

    (i) that is used in connection with trafficking in any goods, services, labels, patches, stickers,

    wrappers, badges, emblems, medallions, charms, boxes, containers, cans, cases, hangtags,

    documentation, or packaging of any type or nature;

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     18 U.S.C.A. ? 2320

    (ii) that is identical with, or substantially indistinguishable from, a mark registered on the

    principal register in the United States Patent and Trademark Office and in use, whether or not

    the defendant knew such mark was so registered;

    (iii) that is applied to or used in connection with the goods or services for which the mark is

    registered with the United States Patent and Trademark Office, or is applied to or consists of

    a label, patch, sticker, wrapper, badge, emblem, medallion, charm, box, container, can, case,

    hangtag, documentation, or packaging of any type or nature that is designed, marketed, or

    otherwise intended to be used on or in connection with the goods or services for which the

    mark is registered in the United States Patent and Trademark Office; and

    (iv) the use of which is likely to cause confusion, to cause mistake, or to deceive; or

    (B) a spurious designation that is identical with, or substantially indistinguishable from, a

    designation as to which the remedies of the Lanham Act are made available by reason of

    section 220506 of title 36;

    but such term does not include any mark or designation used in connection with goods or

    services, or a mark or designation applied to labels, patches, stickers, wrappers, badges,

    emblems, medallions, charms, boxes, containers, cans, cases, hangtags, documentation, or

    packaging of any type or nature used in connection with such goods or services, of which the

    manufacturer or producer was, at the time of the manufacture or production in question,

    authorized to use the mark or designation for the type of goods or services so manufactured or

    produced, by the holder of the right to use such mark or designation.

(2) the term "traffic" means to transport, transfer, or otherwise dispose of, to another, for

    purposes of commercial advantage or private financial gain, or to make, import, export, obtain

    control of, or possess, with intent to so transport, transfer, or otherwise dispose of;

    (3) the term "financial gain" includes the receipt, or expected receipt, of anything of value; and

(4) the term "Lanham Act" means 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 (15 U.S.C. 1051 et seq.).

(f) Nothing in this section shall entitle the United States to bring a criminal cause of action under

    this section for the repackaging of genuine goods or services not intended to deceive or confuse.

(g)(1) Beginning with the first year after the date of enactment of this subsection, the Attorney

    General shall include in the report of the Attorney General to Congress on the business of the

    Department of Justice prepared pursuant to section 522 of title 28, an accounting, on a district by

    district basis, of the following with respect to all actions taken by the Department of Justice that

    ? 2007 Thomson/West. No Claim to Orig. U.S. Govt. Works. involve trafficking in counterfeit labels for phonorecords, copies of computer programs or

     computer program documentation or packaging, copies of motion pictures or other audiovisual

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     18 U.S.C.A. ? 2320

    works (as defined in section 2318 of this title), criminal infringement of copyrights (as defined in section 2319 of this title), unauthorized fixation of and trafficking in sound recordings and music videos of live musical performances (as defined in section 2319A of this title), or trafficking in (A) The number of open investigations. goods or services bearing counterfeit marks (as defined in section 2320 of this title):

    (B) The number of cases referred by the United States Customs Service.

    (C) The number of cases referred by other agencies or sources.

(D) The number and outcome, including settlements, sentences, recoveries, and penalties, of all

    prosecutions brought under sections 2318, 2319, 2319A, and 2320 of this title.

(2)(A) The report under paragraph (1), with respect to criminal infringement of copyright, shall

    include the following:

(i) The number of infringement cases in these categories: audiovisual (videos and films); audio

    (sound recordings); literary works (books and musical compositions); computer programs;

    video games; and, others.

(ii) The number of online infringement cases.

(iii) The number and dollar amounts of fines assessed in specific categories of dollar amounts.

    These categories shall be: no fines ordered; fines under $500; fines from $500 to $1,000; fines

    from $1,000 to $5,000; fines from $5,000 to $10,000; and fines over $10,000.

    (iv) The total amount of restitution ordered in all copyright infringement cases.

(B) In this paragraph, the term "online infringement cases" as used in paragraph (2) means those

    cases where the infringer--

    (i) advertised or publicized the infringing work on the Internet; or

(ii) made the infringing work available on the Internet for download, reproduction, performance,

    or distribution by other persons.

(C) The information required under subparagraph (A) shall be submitted in the report required in

    fiscal year 2005 and thereafter.

CREDIT(S)

    (Added Pub.L. 98-473, Title II, ? 1502(a), Oct. 12, 1984, 98 Stat. 2178, and amended Pub.L. 103-322, Title XXXII, ? 320104(a), Title XXXIII, ? 330016(1)(U), Sept. 13, 1994, 108 Stat. 2110, 2148; Pub.L. 104-153, ? 5, July 2, 1996, 110 Stat. 1387; Pub.L. 105-147, ? 2(f), Dec. 16,

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     18 U.S.C.A. ? 2320

     1997, 111 Stat. 2679; Pub.L. 105-225, ? 4(b), Aug. 12, 1998, 112 Stat. 1499; Pub.L. 105-354, ? 2(c), Nov. 3, 1998, 112 Stat. 3244; Pub.L. 107-140, ? 1, Feb. 8, 2002, 116 Stat. 12; Pub.L.

    107-273, Div. A, Title II, ? 205(e), Nov. 2, 2002, 116 Stat. 1778; Pub.L. 109-181, ? ? 1(b), 2(b), HISTORICAL AND STATUTORY NOTES

    Mar. 16, 2006, 120 Stat. 285, 288.)

    Revision Notes and Legislative Reports

    1984 Acts. House Report No. 98-1030 and House Conference Report No. 98- 1159, see 1984 U.S. Code Cong. and Adm. News, p. 3182.

    1994 Acts. House Report Nos. 103-324, 103-489, and House Conference Report No. 103-711, see 1994 U.S. Code Cong. and Adm. News, p. 1801.

    1996 Acts. House Report No. 104-556, see 1996 U.S. Code Cong. and Adm. News, p. 1074.

    1998 Acts. House Report No. 105-326, see 1998 U.S. Code Cong. and Adm. News, p. 381.

2002 Acts. House Conference Report No. 107-685 and Statement by President, see 2002 U.S.

    Code Cong. and Adm. News, p. 1120.

    2006 Acts. House Report No. 109-68, see 2006 U.S. Code Cong. and Adm. News, p. 211.

    Statement by President, see 2006 U.S. Code Cong. and Adm. News, p. S11.

References in Text

    Chapter 46 of this title, referred to in subsec. (b)(2), is Forfeiture, 18 U.S.C.A. ? 981 et seq.

Section 413 of the Comprehensive Drug Abuse Prevention and Control Act of 1970, referred to in

    subsec. (b)(3)(B), is Pub.L. 91-513, Title II, 413, as added Pub.L. 98-473, Title II, ? 303, Oct. 12, 1984, 98 Stat. 2044, and amended Pub.L. 98-473, Title II, ? 2301(d)-(f), Oct. 12, 1984, 98 Stat.

    2192, 2193, which is classified to 21 U.S.C.A. ? 853.

The Lanham Act, referred to in subsecs. (c), (d)(1)(B),(3), of this section, is Act July 5, 1946, c.

    540, 60 Stat. 427, which is classified generally to chapter 22 (section 1051 et seq.) of Title 15,

    Commerce and Trade. For complete classification of this Act to the Code, see Short Title note set

    out under section 1051 of Title 15 and Tables.

    Date of enactment of this subsection, referred to in subsec. (f)(1), is the date of enactment of Pub.L. 104-153, which was approved July 2, 1996.

Amendments

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     18 U.S.C.A. ? 2320

2006 Amendments. Subsec. (a). Pub.L. 109-181, ? 1(b)(1), inserted ", or intentionally traffics or

     attempts to traffic in labels, patches, stickers, wrappers, badges, emblems, medallions, charms,

     boxes, containers, cans, cases, hangtags, documentation, or packaging of any type or nature,

    Subsec. (b). Pub.L. 109-181, ? 1(b)(2), rewrote subsec. (b), which formerly read: "Upon a knowing that a counterfeit mark has been applied thereto, the use of which is likely to cause

    determination by a preponderance of the evidence that any articles in the possession of a defendant confusion, to cause mistake, or to deceive," following "such goods or services".

    in a prosecution under this section bear counterfeit marks, the United States may obtain an order

    for the destruction of such articles."

Subsec. (e)(1). Pub.L. 109-181, ? 1(b)(3)(B), rewrote the matter following subpar. (B), which

    formerly read: "but such term does not include any mark or designation used in connection with

    goods or services of which the manufacturer or producer was, at the time of the manufacture or

    production in question authorized to use the mark or designation for the type of goods or services

    so manufactured or produced, by the holder of the right to use such mark or designation;".

    Subsec. (e)(1)(A). Pub.L. 109-181, ? 1(b)(3)(A), rewrote subpar. (A), which formerly read:

"(A) a spurious mark--

"(i) that is used in connection with trafficking in goods or services;

"(ii) that is identical with, or substantially indistinguishable from, a mark registered for those

    goods or services on the principal register in the United States Patent and Trademark Office and

    in use, whether or not the defendant knew such mark was so registered; and

    "(iii) the use of which is likely to cause confusion, to cause mistake, or to deceive; or"

Subsec. (e)(2). Pub.L. 109-181, ? 2(b)(1), rewrote par. (2), which formerly read: "the term

    'traffic' means transport, transfer, or otherwise dispose of, to another, as consideration for anything

    of value, or make or obtain control of with intent so to transport, transfer, or dispose of; and".

Subsec. (e)(3). Pub.L. 109-181, ? 2(b)(2), (3), redesignated former par. (3) as par. (4), and added

    new par. (3).

    Subsec. (e)(4). Pub.L. 109-181, ? 2(b)(2), redesignated former par. (3) as par. (4).

Subsec. (f). Pub.L. 109-181, ? 1(b)(4), redesignated former subsec. (f) as subsec. (g), and added

    new subsec. (f).

    Subsec. (g). Pub.L. 109-181, ? 1(b)(4)(A), redesignated former subsec. (f) as subsec. (g).

2002 Amendments. Subsec. (e)(1)(B). Pub.L. 107-140, ? 1, struck out "section 220706 of title

    36" and inserted "section 220506 of title 36".

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     18 U.S.C.A. ? 2320

Subsec. (f). Pub.L. 107-273, ? 205(e), designated the matter preceding former par. (1) as new par.

    (1) and redesignated former pars. (1) to (4) as subpars. (A) to (D) thereof; substituted "of this title"

    for "of title 18" wherever appearing; and inserted a new par. (2).

1998 Amendments. Subsec. (e). Pub.L. 105-225, ? (4)(b), substituted "section 220706 of title 36"

    for "section 110 of the Olympic Charter Act" in cl. (1)(B); added "and" after the semicolon, in cl.

    (2); substituted a period for "; and", in cl. (3); and struck out cl. (4). Prior to repeal, cl. (4) read as

    follows: "the term 'Olympic Charter Act' means the Act entitled 'An Act to incorporate the United

    States Olympic Association', approved September 21, 1950 (36 U.S.C. 371 et seq.)." These amendments by section 4(b) of Pub.L. 105-225, which were directed to be applied to subsec. (d) of

    this section, were executed to subsec. (e) of this section, to reflect the probable intent of Congress.

    See 1997 Amendments note set out under this section.

Pub.L. 105-354, ? 2(b)(1), amended the directory language of Pub.L. 105- 225, ? 4(b) by

    substituting "2320(e)" for "2320(d)", requiring no change in text.

    1997 Amendments. Subsec. (d). Pub.L. 105-147, ? 2(f)(2), added subsec. (d). Former subsec. (d) redesignated as (e).

Subsec. (e), (f). Pub.L. 105-147, ? 2(f)(1), redesignated former subsecs. (d) and (e) as (e) and (f),

    respectively.

    1996 Amendments. Subsec. (e). Pub.L. 104-153, ? 5, added subsec. (e).

    1994 Amendments. Subsec. (a). Pub.L. 103-322, ? 320104(a)(1), in the first sentence substituted "$2,000,000 or imprisoned not more than 10 years" for "$250,000 or imprisoned not more than

    five years" and "$5,000,000" for "$1,000,000".

Pub.L. 103-322, ? 320104(a)(2), in the second sentence substituted "$5,000,000 or imprisoned

    not more than 20 years" for "$1,000,000 or imprisoned not more than fifteen years" and

    "$15,000,000" for "$5,000,000".

Pub.L. 103-322, ? 330016(1)(U), directed that "under this title" be substituted for "not more than

    $250,000". Amendment could not be executed in view of earlier deletion of "$250,000" pursuant

    to section 320104(a)(1)(A) of Pub.L. 103-322.

Effective and Applicability Provisions

1998 Acts. Section 2(c) of Pub.L. 105-354 provided in part that amendments by that subsection

    were effective Aug. 12, 1998.

Transfer of Functions ? 2007 Thomson/West. No Claim to Orig. U.S. Govt. Works. For transfer of the functions, personnel, assets, and liabilities of the United States Customs Service

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     18 U.S.C.A. ? 2320

     of the Department of the Treasury, including the functions of the Secretary of the Treasury relating

     thereto, to the Secretary of Homeland Security, and for treatment of related references, see 6 Findings U.S.C.A. ? ? 203(1), 551(d), 552(d) and 557, and the Department of Homeland Security

    Reorganization Plan of November 25, 2002, as modified, set out as a note under 6 U.S.C.A. ? 542.

    Pub.L. 109-181, ? 1(a)(2), Mar. 16, 2006, 120 Stat. 285, provided that:

"The Congress finds that--

"(A) the United States economy is losing millions of dollars in tax revenue and tens of thousands

    of jobs because of the manufacture, distribution, and sale of counterfeit goods;

"(B) the Bureau of Customs and Border Protection estimates that counterfeiting costs the United

    States $200 billion annually;

"(C) counterfeit automobile parts, including brake pads, cost the auto industry alone billions of

    dollars in lost sales each year;

"(D) counterfeit products have invaded numerous industries, including those producing auto parts,

    electrical appliances, medicines, tools, toys, office equipment, clothing, and many other products;

"(E) ties have been established between counterfeiting and terrorist organizations that use the sale

    of counterfeit goods to raise and launder money;

"(F) ongoing counterfeiting of manufactured goods poses a widespread threat to public health and

    safety; and

"(G) strong domestic criminal remedies against counterfeiting will permit the United States to

    seek stronger anticounterfeiting provisions in bilateral and international agreements with trading

    partners."

CROSS REFERENCES

    "Contraband" defined as in this section for purposes of any good bearing counterfeit mark

    and unlawful use of vessels, vehicles and aircraft in aid of commercial counterfeiting, see 49

    USCA ? 80302.

    Forfeitures and other penalties under Tariff Act of 1930, merchandise or packaging in which

    copyright, trademark, or trade name protection violations of this section are involved, see 19

    USCA ? 1595a.

    Laundering of monetary instruments, racketeering, crimes, see 18 USCA ? 1956.

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     18 U.S.C.A. ? 2320 FEDERAL SENTENCING GUIDELINES Transportation of contraband prohibited, contraband as any good bearing a counterfeit a

     mark as defined in this section, see 49 USCA ? 80302.

    See Federal Sentencing Guidelines ? 2B5.4, 18 USCA.

LAW REVIEW COMMENTARIES

    Criminal (and Civil) Trademark Infringement: What Statute of Limitations Applies?

    Ronald J. Nessim, 76 J.Pat. & Trademark Off.Soc'y 933 (Dec. 1994).

    Criminal counterfeiting and component parts: closing the perceived "label loophole". Debra

    D. Peterson, 30 AIPLA Q.J. 457 (2002).

    Federal circuit: A case study in specialized courts. Rochelle Cooper Dreyfuss, 64

    N.Y.U.L.Rev. 1 (1989).

    The glass slipper: Determining the limitations period on criminal trademark infringement

    requires searching for the perfect statutory fit. Ronald J. Nessim, 17 L.A.Law. 38 (Nov.

    1994).

    The Trademark Counterfeiting Act of 1984: A sensible legislative response to the ills of

    commercial counterfeiting. 14 Fordham Urb.L.J. 115 (1985-1986).

    Your image is my image: When advertising dedicates trademarks to the public

    domain--With an example from the Trademark Counterfeiting Act of 1984, Malla Pollack,

    14 Cardozo L.Rev. 1391 (1993).

LIBRARY REFERENCES

American Digest System

    Trade Regulation 312, 313

    Key Number System Topic No. 382.

Corpus Juris Secundum

    CJS Trademarks, Tradenames, & Unfair Competition ? 151, Counterfeiting or Imitating Mark

    or Label.

RESEARCH REFERENCES

ALR Library

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     18 U.S.C.A. ? 2320

145 ALR, Fed. 407, "Post-Sale Confusion" in Trademark or Trade Dress Infringement Actions

    Under ? 43 of the Lanham Trade-Mark Act (15 U.S.C.A. ? 1125).

    97 ALR 2nd 827, Revocation of Teacher's Certificate for Moral Unfitness.

169 ALR 315, Comment Note.--Duty in Instructing Jury in Criminal Prosecution to Explain and

    Define Offense Charged.

113 ALR 1179, What Amounts to Conviction or Satisfies Requirement as to Showing of

    Conviction, Within Statute Making Conviction a Ground for Refusing to Grant or for Canceling

    License or Special Privilege.

Encyclopedias

10 Am. Jur. Proof of Facts 3d 289, "Pattern of Racketeering Activity" Under the Racketeer

    Influenced and Corrupt Organizations Act (RICO).

    17 Am. Jur. Proof of Facts 3d 609, Monetary Recovery for Trademark Infringement.

79 Am. Jur. Proof of Facts 3d 1, Proof of Facts Establishing a Claim for Trade Libel or Product

    Disparagement Under ? 43(A) of the Lanham Act, 15 U.S.C.A. Section 1125(a).

Am. Jur. 2d Extortion, Blackmail, and Threats ? 120, Checklist of Acts Which Constitute

    Racketeering Activity; Federal Law Violations.

Treatises and Practice Aids

    Callmann on Unfair Compet., TMs, & Monopolies ? 22:44, Trade Identity Infringement Remedies.

    Callmann on Unfair Compet., TMs, & Monopolies ? 22:53, Counterfeiting.

    Callmann on Unfair Compet., TMs, & Monopolies ? 23:30, Statutes of Limitations.

    Eckstrom's Licensing in Foreign & Domestic Ops. ? 6:24, Infringement Suits -- Trademark Counterfeiting Act.

    Eckstrom's Licensing in Foreign & Domestic Ops. ? 6:26, Infringement Suits -- Trademark Counterfeiting Act -- Criminal Sanctions.

Federal Procedure, Lawyers Edition ? 74:559, Order for Destruction of Articles Bearing

    Counterfeit Marks. ? 2007 Thomson/West. No Claim to Orig. U.S. Govt. Works. McCarthy on Trademarks and Unfair Competition ? 5:7, Amendments to the Lanham Act --

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