To prevent and punish counterfeiting of copyrighted copies and phonorecords, and for other purposes.

November 21, 2003

Mr. SMITH of Texas (for himself, Mr. KELLER, Mr. WEXLER, Mr. GOODLATTE, Mr. GALLEGLY, and Mr. CARTER) introduced the following bill; which was referred to the Committee on the Judiciary

To prevent and punish counterfeiting of copyrighted copies and phonorecords, and for other purposes.

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

SECTION 1. SHORT TITLE.

This Act may be cited as the `Anti-counterfeiting Amendments of 2003'.

SEC. 2. PROHIBITION AGAINST TRAFFICKING IN ANTI-COUNTERFEITING COMPONENTS.

(a) IN GENERAL- Section 2318 of title 18, United States Code, is amended--

(1) by striking the section heading and inserting the following:

`Sec. 2318. Trafficking in counterfeit labels 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, enclosing, or accompanying, or designed to be affixed to, enclose, or accompany--

`(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

`(2) 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) by striking paragraph (1) and inserting the following:

`(1) the term `counterfeit label' means--

`(A) an identifying label or container that appears to be genuine, but is not; or

`(B) a genuine certificate, licensing document, registration card, or similar labeling component--

`(i) that is used by the 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 infringing of any copyright; and

`(ii) that is, without the authorization of the copyright owner--

`(I) distributed or intended for distribution not in connection with the copy or phonorecord to which such labeling component was intended to be affixed by the respective copyright owner; or

`(II) in the case of a computer program, altered or removed to falsify the number of authorized copies or users, type of authorized user, or edition or version of the computer program;';

(B) in paragraph (2), by striking `and' at the end;

(C) 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 `; and' ; and

(D) by adding at the end the following:

`(4) 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.';

(4) in subsection (c)--

(A) by striking paragraph (3) and inserting the following:

`(3) the counterfeit label is affixed to, encloses, or accompanies, or is designed to be affixed to, enclose, or accompany--

`(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), by inserting before the period at the end the following: `, and of any equipment, device, or material used to manufacture, reproduce, or assemble the counterfeit labels'; and

(6) by adding at the end the following:

`(f) CIVIL REMEDIES FOR VIOLATION-

`(1) IN GENERAL- Any copyright owner who is injured, or is threatened with injury, by a violation of this section 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 in paragraph (3); or

`(II) statutory damages, as provided in 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 in 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 which are, or are intended to be, affixed with, enclosed in, or accompanied by any counterfeit labels or counterfeit documentation or packaging, by

`(ii) the number of phonorecords or copies which are, or are intended to be, affixed with, enclosed in, or accompanied by any counterfeit labels or counterfeit documentation or packaging.

`(C) DEFINITION- For purposes of this paragraph, the term `value of the phonorecord or copy' means--

`(i) in the case of a copyrighted sound recording, the retail value of an authorized phonorecord of that sound recording;

`(ii) in the case of a copyrighted computer program, the retail value of an authorized copy of that computer program; and

`(iii) in the case of a copyrighted motion picture or other audiovisual work, the retail value of an authorized copy of that motion picture or 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.'.

END