New Law Stiffens Penalties on Counterfeit Products

A bill creating tougher penalties for counterfeiting goods was signed into law Thursday by President Bush.

The law “protects the hard work of American innovators,” the president said. “Counterfeiting undercuts honest competition, rewards illegal competition.”

Manufacturers lose an estimated $200 billion a year from counterfeit products, according to U.S. Customs and Border Protection.

The crackdown applies to a variety of products, including auto parts, electrical appliances, medicines, tools, toys, office equipment and clothing.

The U.S. auto parts industry was a major supporter of the law, contending that counterfeit goods, such as brake pads made from wood chips, are a threat to public health and safety.

The new law would require destruction of machinery, tooling and supplies used to produce counterfeit goods. It also bars trafficking in counterfeit labels, patches, and medallions that can be attached to generic merchandise, giving the appearance that a knockoff product is genuine.

The U.S. Sentencing Commission also must strengthen its definition of “trafficking” to include sound recordings, computer programs and music videos of live performances.

Putting more teeth into the law also gives U.S. trade negotiators a stronger hand in demanding tougher anti-counterfeiting steps from trade partners, supporters said.