75R8329 GWK-D By Place H.B. No. 1613 Substitute the following for H.B. No. 1613: By Place C.S.H.B. No. 1613 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the creation of the offense of trademark 1-3 counterfeiting. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. (a) The legislature finds and declares that the 1-6 counterfeiting of legitimate goods and services: 1-7 (1) has been connected with organized crime; 1-8 (2) poses health and safety threats to Texas 1-9 consumers; 1-10 (3) eliminates Texas jobs; 1-11 (4) results in economic disruption to legitimate 1-12 businesses located in Texas; 1-13 (5) is a multimillion dollar drain on the Texas 1-14 economy; and 1-15 (6) deprives legitimate intellectual property owners 1-16 of substantial revenue and consumer goodwill. 1-17 (b) To protect the residents and businesses of Texas, the 1-18 legislature finds it necessary to take appropriate action through 1-19 this Act to: 1-20 (1) remove counterfeit goods, including parts, from 1-21 the channels of commerce; and 1-22 (2) prevent the manufacture, sale, and distribution of 1-23 counterfeit goods or the offer of counterfeit services through 1-24 counterfeit service marks. 2-1 SECTION 2. Subchapter B, Chapter 32, Penal Code, is amended 2-2 by adding Section 32.23 to read as follows: 2-3 Sec. 32.23. TRADEMARK COUNTERFEITING. (a) In this section: 2-4 (1) "Counterfeit mark" means a mark that is identical 2-5 to or substantially indistinguishable from a protected mark the use 2-6 or production of which is not authorized by the owner of the 2-7 protected mark. 2-8 (2) "Identification mark" means a data plate, serial 2-9 number, or part identification number. 2-10 (3) "Protected mark" means a trademark or service mark 2-11 or an identification mark that is: 2-12 (A) registered with the secretary of state; 2-13 (B) registered on the principal register of the 2-14 United States Patent and Trademark Office; 2-15 (C) registered under the laws of another state; 2-16 or 2-17 (D) protected by Section 16.30, Business & 2-18 Commerce Code, or by 36 U.S.C. Section 371 et seq. 2-19 (4) "Retail value" means the actor's regular selling 2-20 price for a counterfeit mark or an item or service that bears or is 2-21 identified by a counterfeit mark, except that if an item bearing a 2-22 counterfeit mark is a component of a finished product, the retail 2-23 value means the actor's regular selling price of the finished 2-24 product on or in which the component is used, distributed, or sold. 2-25 (5) "Service mark" has the meaning assigned by Section 2-26 16.01, Business & Commerce Code. 2-27 (6) "Trademark" has the meaning assigned by Section 3-1 16.01, Business & Commerce Code. 3-2 (b) A person commits an offense if the person intentionally 3-3 manufactures, displays, advertises, distributes, offers for sale, 3-4 sells, or possesses with intent to sell or distribute a counterfeit 3-5 mark or an item or service that: 3-6 (1) bears or is identified by a counterfeit mark; or 3-7 (2) the person knows or should have known bears or is 3-8 identified by a counterfeit mark. 3-9 (c) A state or federal certificate of registration of 3-10 intellectual property is prima facie evidence of the facts stated 3-11 in the certificate. 3-12 (d) For the purposes of Subsection (e), when items or 3-13 services are the subject of counterfeiting in violation of this 3-14 section pursuant to one scheme or continuing course of conduct, the 3-15 conduct may be considered as one offense and the retail value of 3-16 the items or services aggregated in determining the grade of 3-17 offense. 3-18 (e) An offense under this section is a: 3-19 (1) Class C misdemeanor if the retail value of the 3-20 item or service is less than $20; 3-21 (2) Class B misdemeanor if the retail value of the 3-22 item or service is $20 or more but less than $500; 3-23 (3) Class A misdemeanor if the retail value of the 3-24 item or service is $500 or more but less than $1,500; 3-25 (4) state jail felony if the retail value of the item 3-26 or service is $1,500 or more but less than $20,000; 3-27 (5) felony of the third degree if the retail value of 4-1 the item or service is $20,000 or more but less than $100,000; 4-2 (6) felony of the second degree if the retail value of 4-3 the item or service is $100,000 or more but less than $200,000; or 4-4 (7) felony of the first degree if the retail value of 4-5 the item or service is $200,000 or more. 4-6 SECTION 3. (a) The change in law made by this Act applies 4-7 only to an offense committed on or after the effective date of this 4-8 Act. For purposes of this section, an offense is committed before 4-9 the effective date of this Act if any element of the offense occurs 4-10 before the effective date. 4-11 (b) An offense committed before the effective date of this 4-12 Act is covered by the law in effect when the offense was committed, 4-13 and the former law is continued in effect for that purpose. 4-14 SECTION 4. This Act takes effect September 1, 1997. 4-15 SECTION 5. The importance of this legislation and the 4-16 crowded condition of the calendars in both houses create an 4-17 emergency and an imperative public necessity that the 4-18 constitutional rule requiring bills to be read on three several 4-19 days in each house be suspended, and this rule is hereby suspended.