Washington, DC, March 21, 2006--The National Retail Federation today welcomed the signing of legislation intended to close a major loophole in federal law against the counterfeiting of consumer goods.
“Current law contains a loophole literally big enough to drive a truckload of counterfeit goods through,” NRF vice president for Loss Prevention Joseph LaRocca said. “This new law will close that loophole and protect U.S. consumers from counterfeits that can range from cheap imitations of designer apparel to unsafe formula that threatens the health of infants.”
“Counterfeit goods have infiltrated every part of our country, just like organized retail crime,” LaRocca said. “Counterfeiting costs America hundreds of billions of dollars and has harmful effects throughout the economy. Fake products aren’t just a rip-off for consumers who’ve paid hard-earned money for what they think is a brand-name product. They also expose consumers to serious health and safety risks in products as diverse as infant formula, toiletries, auto parts and power tools. Furthermore, many of these goods are sold on street corners or eFenced through Internet auction sites, depriving government of the tax revenues needed for law enforcement. The Stop Counterfeiting in Manufactured Goods Act gives us a powerful new tool to bring counterfeiting to an end.”
President Bush on March 16 signed H.R. 32, the Stop Counterfeiting in Manufactured Goods Act, sponsored by Representative Joe Knollenberg, R-Mich. The legislation, which first passed the House last May, won final passage this month after the House agreed to an amendment passed in the Senate in February.
Under current law, the manufacture and distribution of counterfeit labels and packaging intended to accompany counterfeit products is legal as long as the labels haven’t been attached to the bogus products. The new law closes that loophole, making it illegal to traffic in counterfeit labels, patches, stickers, hangtags and similar items regardless of whether they have been attached to products. Counterfeit labeling materials that are seized could be required to be destroyed, and equipment used to make them would be forfeited, along with assets derived from counterfeiting. Those convicted would be required to make restitution to the owners of the trademarks involved.
Enactment of the bill comes at a time when unauthorized imitations of apparel, handbags, accessories and other general retail merchandise are costing U.S. companies an increasing amount in lost sales each year. The FBI has estimated losses due to counterfeit goods at $250 billion annually.
The National Retail Federation is the world's largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet, independent stores, chain restaurants, drug stores and grocery stores as well as the industry's key trading partners of retail goods and services. NRF represents an industry with more than 1.4 million U.S. retail establishments, more than 23 million employees--about one in five American workers - and 2005 sales of $4.4 trillion. As the industry umbrella group, NRF also represents more than 100 state, national and international retail associations. www.nrf.com.
