Management Accounting

Bush Inks Anti-Knockoff Measure

The new law closes several loopholes that manufactured-goods counterfeiters have used with impunity.
Stephen TaubMarch 17, 2006

President Bush signed a law Thursday that will toughen many measures against counterfeit goods that pervade industries including apparel, fashion accessories, electronics — even pharmaceuticals and auto parts

Indeed, the Stop Counterfeiting in Manufactured Goods Act was sponsored by Rep. Joe Knollenberg (R-Mich.), whose constituents include employees of Detroit’s auto industry.

“Counterfeiting costs our country hundreds of billions of dollars a year,” said Bush at the signing ceremony. Businesses “lose the right to profit from their innovation,” he continued, which also reduces U.S. jobs; consumers may be exposed to health and safety risks; and the government loses out on tax revenue.

Drive Business Strategy and Growth

Drive Business Strategy and Growth

Learn how NetSuite Financial Management allows you to quickly and easily model what-if scenarios and generate reports.

The law closes several loopholes that counterfeiters have used with impunity. It empowers the government to confiscate not only the knockoffs themselves but also the equipment used to make them. It also strengthens protections against the use of counterfeit labels and packaging that often are used to mislead consumers about the quality of second-rate goods. And counterfeiters — who under previous laws could surrender their inventory of knockoff goods but keep any profits they may have already made — can now be compelled to pay damages.

“This bill is certainly a piece of the total solution,” said David Blackburn, president and CEO of automotive-gauge supplier Thomas G. Faria, in congressional testimony before the law’s passage, according to The Detroit Free Press. Blackburn reportedly testified that counterfeiters in China were not only undercutting him in Asia but also pitching his customers in the United States.

“The real solution,” Blackburn reportedly added, “is for the Chinese government to provide effective and real enforcement of intellectual-property rights.”