Congress’s efforts to discourage the sale of harmful or dangerous counterfeit goods, though well-intentioned, miss the mark. In an effort to crack down on such sales, Congressional lawmakers from both parties have set their sights on the wrong target: lawful online marketplaces.
For instance, consider the Stopping Harmful Offers on Platforms by Screening Against Fakes in E-commerce Act (SHOP SAFE Act) that’s being debated in the House of Representatives and U.S. Senate. The bill seeks to safeguard consumers by preventing online marketplaces from selling “goods that implicate health and safety.”
Formerly a stand-alone bill, the SHOP SAFE Act is now deeply embedded within the proposed America COMPETES Act — a 2,000-plus page monstrosity of a bill. If passed in either format, however, both consumers and online marketplaces will suffer unnecessarily.
First, the SHOP SAFE Act would greatly undermine existing laws aimed at combating the trafficking of harmful or dangerous counterfeit goods. The U.S. already has laws that target criminals benefiting from the sale of counterfeit items (18 U.S. Code § 2320, to be specific). And there are already stiff penalties in place. Instead of making new laws, perhaps lawmakers could focus on enforcement.CARTOONS | AF BRANCOVIEW CARTOON
Currently, brands with copyright infringement claims can take civil action against counterfeiters in three ways: through direct infringement, which occurs when producing or performing work based on copyrighted work; through vicarious infringement, when secondary liability is correlated to direct infringement; and through contributory infringement, when indirect actions that may lead to infringement of patents.
The bill demands online marketplaces take steps “to avoid contributory trademark liability” for counterfeit products sold on the platform—claiming “the steps are reasonable, and the benefit to platforms is significant.” Here the bill’s careful wording is misleading, perhaps intentionally so.