Legislative efforts against counterfeiting increase

Three US states have introduced bills before their respective Senate and House of Representatives that aim to bring the states' anti-counterfeiting laws into conformity with federal law.

On March 16 2006 the Stop Counterfeiting in Manufactured Goods Act was signed into US law (see Stop Counterfeiting in Manufactured Goods Act signed into law). That bill strengthened the previous anti-counterfeiting laws by making it illegal to ship counterfeit labels or packaging. The bill also increased the penalties associated with counterfeiting by requiring courts to order the destruction of all counterfeit goods and increasing financial penalties on counterfeiters.

Although this bill strengthened the anti-counterfeiting laws in the federal courts, there are concerns that the prosecution of counterfeiters under state law will result in more lenient penalties and therefore the overall initiative to stop counterfeiting would be ineffective if the two streams of law do not conform. As a result, a coalition has been formed to encourage state legislators to pass laws bringing state anti-counterfeiting measures in line with federal law. The coalition, which includes the International Anti-Counterfeiting Coalition, the International Trademark Association, the US Chamber of Commerce's Coalition Against Counterfeiting and Piracy and the National Foundation For Women Legislators, has drafted a model state anti-counterfeiting bill modelled after the federal law as a proposal on how state law can be made to correspond to federal law.

Recently, three states have introduced bills that incorporate substantially the proposed changes in the model bill. On January 18 2007 Missouri became the first state to introduce a bill based on the model bill. Tennessee then followed suit by introducing its own bill before both its Senate and the House of Representatives on February 8 2007. Then on March 6 2007, Pennsylvania introduced its own bill. If these bills are enacted into law, it is expected that they will bring the respective state laws into conformity with federal law.

In related news, a bill has recently been introduced in the US House of Representatives to amend the Federal Food, Drug, and Cosmetic Act with respect to counterfeit drugs. The proposed amendments increase the penalties for trafficking in counterfeit drugs. This bill has been referred to the Subcommittee on Crime, Terrorism and Homeland Security.

Howard Shire and Matthew Moersfelder, Kenyon & Kenyon LLP, New York