Anti-Counterfeit Law Introduced in Senate
The U.S. Senate is examining a new bill that will impose tougher laws on counterfeiters of clothing and other goods.
Senate Bill 1699 would make it a crime to sell counterfeit packaging, hangtags and labels and allow authorities to confiscate equipment used to make such items. The bill was introduced by Sen. Arlen Specter (R-Pa.) on Sept. 14 and has been dubbed the Stop Counterfeiting in Manufactured Goods Act.
The House of Representatives has already passed a similar bill. Both are aimed at closing a loophole in U.S. law that does not cover the counterfeiting of trimmings. Legislators plan to vote on the bill by the end of the year.
The Bureau of Customs and Border Protection estimates counterfeits cost the United States about $200 million annually. Apparel is one of the key targets for counterfeiters, but Specter said hazardous items such as automobile parts, batteries and electrical equipment are also being tagged with counterfeit labels.
Paul Charmandy, vice president of new business development for tags-and-labels provider Paxar Corp., said the legislation, if passed, would help combat the problem but added that companies have to commit to hiring attorneys and establishing plans of attack to fight counterfeiting and diversion.
“In Naples, Italy, you can buy kits with labels and tags of famous labels. In a recent East L.A. bust, they seized 260,000 items, many of which were labels, hangtags, patches and buttons. If you’ve got a brand, you’ve got a problem. People will use it to make a quick buck,” said Charmandy, who presented a “Protect Your Brand” seminar for the White Plains, N.Y.–based company in September at the Los Angeles Downtown Sheraton Hotel.
The executive said the underground tagsand- labels trade is robust. One of the reasons is because of loopholes in the law resulting in part from a 2000 ruling by the 10th U.S. Circuit Court of Appeals. In a handbag-counterfeiting case, the court held that people who sell counterfeit trademarks that are not actually attached to any “goods or services” do not violate the federal criminal trademark infringement statute.
“If you get caught counterfeiting currency, you’re looking at 25 years in prison,” said Charmandy. “If you get caught with counterfeit jeans, you get slapped on the hands and will not likely see any jail time.”
Apparel manufacturers and suppliers like Paxar have been taking matters into their own hands. Paxar has developed a line of labels and hangtags embedded with technologies such as micro tracer threads, ultraviolet fluorescent inks, micro-printing and software that allows companies to identify serial numbers. Paxar is using some of the same technologies used to produce currency at the U.S. Mint. Other technology suppliers have developed taggants laced with, among other things, plant DNA, holographic images and isotopes.
“These aren’t the only solutions. They’re tools,” Charmandy said. “You work hard to protect your brand, and these people are stealing. It’s a never-ending battle. I liken the situation to the steering-wheel locking device on cars. If the thieves see you have something, maybe they will go on to the next company.”
The issue remains a hot topic in the industry. The American Apparel & Footwear Association will host a seminar called “Knock It Off” Nov. 15–16 at the Fashion Institute of Technology in New York. U.S.
Commerce Secretary Carlos Gutierrez is scheduled to deliver the keynote address. For more information, visit www.americanapparel.org. —Robert McAllister
