BILL NUMBER: AB 326 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Cedillo
FEBRUARY 10, 2011
An act to amend Section 350 of the Penal Code, relating to
counterfeit marks.
LEGISLATIVE COUNSEL'S DIGEST
AB 326, as introduced, Cedillo. Counterfeit marks.
Any person who willfully manufactures, intentionally sells, or
knowingly possesses for sale any counterfeit mark registered with the
Secretary of State or registered on the Principal Register of the
United States Patent and Trademark Office is guilty of a felony,
punishable, upon conviction, by a fine, or imprisonment, or both, as
specified. In any action brought pursuant to this provision, existing
law authorizes, upon request of any law enforcement agency and
consent from the specific registrants, the court to consider a motion
to have goods, articles, or other matter bearing the marks, and
other devices that were used in connection with that crime, excluding
certain recordings or audiovisual works, donated to a nonprofit
organization for the purpose of distributing the goods to persons
living in poverty at no charge to the persons served by the
organization. For purposes of these provisions, a person includes a
business entity.
This bill would additionally provide immunity for any person,
including, but not limited to, law enforcement, from liability to any
person for costs, damages, or other claims or expenses as a result
of actions taken or omitted in good faith in the course of donating
goods pursuant to this provision. The bill would also provide that no
person who is granted immunity by this provision shall be criminally
prosecuted or be subjected to any criminal penalty for or because of
any action taken or omitted in good faith in the course of donating
goods pursuant to this provision.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 350 of the Penal Code is amended to read:
350. (a) Any person who willfully manufactures, intentionally
sells, or knowingly possesses for sale any counterfeit mark
registered with the Secretary of State or registered on the Principal
Register of the United States Patent and Trademark Office, shall,
upon conviction, be punishable as follows:
(1) When the offense involves less than 1,000 of the articles
described in this subdivision, with a total retail or fair market
value less than that required for grand theft as defined in Section
487, and if the person is an individual, he or she shall be punished
by a fine of not more than ten thousand dollars ($10,000), or by
imprisonment in a county jail for not more than one year, or by both
that fine and imprisonment; or, if the person is a business entity,
by a fine of not more than two hundred thousand dollars ($200,000).
(2) When the offense involves 1,000 or more of the articles
described in this subdivision, or has a total retail or fair market
value equal to or greater than that required for grand theft as
defined in Section 487, and if the person is an individual, he or she
shall be punished by imprisonment in a county jail not to exceed one
year, or in the state prison for 16 months, or two or three years,
or by a fine not to exceed five hundred thousand dollars ($500,000),
or by both that imprisonment and fine; or, if the person is a
business entity, by a fine not to exceed one million dollars
($1,000,000).
(b) Any person who has been convicted of a violation of either
paragraph (1) or (2) of subdivision (a) shall, upon a subsequent
conviction of paragraph (1) of subdivision (a), if the person is an
individual, be punished by a fine of not more than one hundred
thousand dollars ($100,000), or by imprisonment in a county jail for
not more than one year, or in the state prison for 16 months, or two
or three years, or by both that fine and imprisonment; or, if the
person is a business entity, by a fine of not more than four hundred
thousand dollars ($400,000).
(c) Any person who has been convicted of a violation of
subdivision (a) and who, by virtue of the conduct that was the basis
of the conviction, has directly and foreseeably caused death or great
bodily injury to another through reliance on the counterfeited item
for its intended purpose shall, if the person is an individual, be
punished by a fine of not more than one hundred thousand dollars
($100,000), or by imprisonment in the state prison for two, three, or
four years, or by both that fine and imprisonment; or, if the person
is a business entity, by a fine of not more than four hundred
thousand dollars ($400,000).
(d) (1) Except as provided in paragraph (2), in any action brought
under this section resulting in a conviction or a plea of nolo
contendere, the court shall order the forfeiture and destruction of
all of those marks and of all goods, articles, or other matter
bearing the marks, and the forfeiture and destruction or other
disposition of all means of making the marks, and any and all
electrical, mechanical, or other devices for manufacturing,
reproducing, transporting, or assembling these marks, that were used
in connection with, or were part of, any violation of this section.
(2) Upon request of any law enforcement agency and consent from
the specific registrants, the court may consider a motion to have the
items described in paragraph (1), not including recordings or
audiovisual works as defined in Section 653w, donated to a nonprofit
organization for the purpose of distributing the goods to persons
living in poverty at no charge to the persons served by the
organization. No person, including, but not limited to, a r
equesting law enforcement agency or specific registrant,
shall be liable under the laws of the state to any person for costs,
damages, or other claims or expenses as a result of actions taken or
omitted in good faith in the course of donating goods pursuant to
this subdivision. No person who is granted immunity by this
subdivision shall be criminally prosecuted or be subjected to any
criminal penalty for or because of any action taken or omitted in
good faith in the course of donating goods pursuant to this
subdivision.
(3) Forfeiture of the proceeds of the crime shall be subject to
Chapter 9 (commencing with Section 186) of Title 7 of Part 1.
However, no vehicle shall be forfeited under this section that may be
lawfully driven on the highway with a class 3 or 4 license, as
prescribed in former Section 12804 of the Vehicle Code,
and that is any of the following:
(A) A community property asset of a person other than the
defendant.
(B) The sole class 3 or 4 vehicle , as described in former
Section 12804 of the Vehicle Code, available to the immediate
family of that person or of the defendant.
(C) Reasonably necessary to be retained by the defendant for the
purpose of lawfully earning a living, or for any other reasonable and
lawful purpose.
(e) For the purposes of this section, the following definitions
shall apply:
(1) When counterfeited but unassembled components of computer
software packages are recovered, including, but not limited to,
counterfeited computer diskettes, instruction manuals, or licensing
envelopes, the number of "articles" shall be equivalent to the number
of completed computer software packages that could have been made
from those components.
(2) "Business entity" includes, but is not limited to, a
corporation, limited liability company, or partnership. "Business
entity" does not include a sole proprietorship.
(3) "Counterfeit mark" means a spurious mark that is identical
with, or confusingly similar to, a registered mark and is used, or
intended to be used, on or in connection with the same type of goods
or services for which the genuine mark is registered. It is not
necessary for the mark to be displayed on the outside of an article
for there to be a violation. For articles containing digitally stored
information, it shall be sufficient to constitute a violation if the
counterfeit mark appears on a video display when the information is
retrieved from the article. The term "spurious mark" includes genuine
marks used on or in connection with spurious articles and includes
identical articles containing identical marks, where the goods or
marks were reproduced without authorization of, or in excess of any
authorization granted by, the registrant. When counterfeited but
unassembled components of any articles described under subdivision
(a) are recovered, including, but not limited to, labels, patches,
fabric, stickers, wrappers, badges, emblems, medallions, charms,
boxes, containers, cans, cases, hangtags, documentation, or
packaging, or any other components of any type or nature that are
designed, marketed, or otherwise intended to be used on or in
connection with any articles described under subdivision (a), the
number of "articles" shall be equivalent to the number of completed
articles that could have been made from those components.
(4) "Knowingly possess" means that the person possessing an
article knew or had reason to believe that it was spurious, or that
it was used on or in connection with spurious articles, or that it
was reproduced without authorization of, or in excess of any
authorization granted by, the registrant.
(5) Notwithstanding Section 7, "person" includes, but is not
limited to, a business entity.
(6) "Registrant" means any person to whom the registration of a
mark is issued and that person's legal representatives, successors,
or assigns.
(7) "Sale" includes resale.
(8) "Value" has the following meanings:
(A) When counterfeit items of computer software are manufactured
or possessed for sale, the "value" of those items shall be equivalent
to the retail price or fair market price of the true items that are
counterfeited.
(B) When counterfeited but unassembled components of computer
software packages or any other articles described under subdivision
(a) are recovered, including, but not limited to, counterfeited
digital disks, instruction manuals, licensing envelopes, labels,
patches, fabric, stickers, wrappers, badges, emblems, medallions,
charms, boxes, containers, cans, cases, hangtags, documentation, or
packaging, or any other components of any type or nature that are
designed, marketed, or otherwise intended to be used on or in
connection with any articles described under subdivision (a), the
"value" of those components shall be equivalent to the retail price
or fair market value of the number of completed computer software
packages or other completed articles described under subdivision (a)
that could have been made from those components.
(C) "Retail or fair market value" of a counterfeit article means a
value equivalent to the retail price or fair market value, as of the
last day of the charged crime, of a completed similar genuine
article containing a genuine mark.
(f) This section shall not be enforced against any party who has
adopted and lawfully used the same or confusingly similar mark in the
rendition of like services or the manufacture or sale of like goods
in this state from a date prior to the earliest effective date of
registration of the service mark or trademark either with the
Secretary of State or on the Principle Register of the United States
Patent and Trademark Office.
(g) An owner, officer, employee, or agent who provides, rents,
leases, licenses, or sells real property upon which a violation of
subdivision (a) occurs shall not be subject to a criminal penalty
pursuant to this section, unless he or she sells, or possesses for
sale, articles bearing a counterfeit mark in violation of this
section. This subdivision shall not be construed to abrogate or limit
any civil rights or remedies for a trademark violation.
(h) This section shall not be enforced against any party who
engages in fair uses of a mark, as specified in Section 14247 of the
Business and Professions Code.
(i) When a person is convicted of an offense under this section,
the court shall order the person to pay restitution to the trademark
owner and any other victim of the offense pursuant to Section 1202.4.