The Top Legislative Developments of 2024 for Trademarks

In 2024, America’s legislators continued their effort to fight against the harmful impact of counterfeit products being sold to American consumers. Counterfeit sellers often detract from the revenue of American businesses, infringe upon U.S. trademark owners’ intellectual property, and threaten the safety of U.S. consumers. America’s elected officials are trying to protect their constituents, along with their businesses, via legislation intended to make it more difficult for counterfeit sellers to operate in the United States. Congress resolved to expand civil liability for e-commerce platforms offering counterfeit goods, create a task force within the Criminal Division of the Department of Justice, and prohibit any executive agency, including the U.S. Patent and Trademark Office (USPTO), from enforcing any trademark that was stolen. This article provides highlights of legislative activities undertaken in 2024 in this regard.

The SHOP SAFE Act

On June 11, 2024, Congressman Darrell Issa (R-CA), Chairman of the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet, introduced the “SHOP SAFE Act,” the “Stopping Harmful Offers on Platforms by Screening Against Fakes in E-commerce Act of 2024” (H.R. 8684). This bill would amend the Trademark Act of 1946 to provide contributory liability for certain electronic commerce platforms for the use of a counterfeit mark by a third party on such platforms. The SHOP SAFE Act would require online platforms to fulfill the same obligations for unsafe counterfeit goods as traditional brick-and-mortar businesses. The bill incentivizes online platforms to vet sellers and goods, hinder repeat counterfeiters, and provide consumers with relevant information to consider when choosing whether to buy a product online.

Specifically, the Act would establish contributory liability for an e-commerce platform in a civil legal action when a third-party seller sells products under a counterfeit mark in commerce on that platform, unless the platform is able to demonstrate that it took a series of steps before any infringing act by the third-party seller, including:

• Verifying the sellers’ identity and contact information;
• Requiring sellers to verify the authenticity of goods on or in connection with which a registered mark is used;
• Requiring sellers to contractually agree not to use counterfeit marks on the platform;
• Displaying on the platform sellers’ verified principal place of business and the origin of the goods;
• Screening goods before sellers offer them to the public;
• Expeditiously disabling or removing any listing when the platform becomes reasonably aware of a counterfeit mark; and
• Terminating sellers who sell counterfeits repeatedly.

The SHOP SAFE Act would update the rules of liability for e-commerce platforms that allow the sale of counterfeits by third-party merchants. The Act would be limited to counterfeit products that “implicate health and safety.” The Act would impose liability and damages upon a third-party seller that makes any knowing, material misrepresentation to an e-commerce platform regarding using a counterfeit mark in a product listing. Lastly, the Act would provide a cause of action against a platform that makes such misrepresentations with statutory damages up to $75,000 per notice.

This bill remains pending before the House Judiciary Committee. The version of this bill in the Senate (S. 2934), which Senators Chris Coons (D-DE) and Thom Tillis (R-NC) introduced, awaits a vote out of the Committee on the Judiciary Subcommittee on Intellectual Property.

House Report 118-784 on the Protecting American Industry and Labor from International Trade Crimes Act of 2024

On November 29, 2024, the House Judiciary Committee published House Report 118-784 on the Protecting American Industry and Labor from International Trade Crimes Act of 2024 (H.R. 9151, S. 4955). This report recommended that the bill pass. Jim Jordan, the Chairman of the House Judiciary Committee, noted in the report that “counterfeit products that look identical to a brand’s trademark can cause irreparable damage to a small business or designer –victims can suffer reputational damage, lose the opportunity to ‘break into’ a specific market, and otherwise lose revenue that would have gone to them.” The report also states that:  “Numerous federal agencies serve this direct role in the enforcement of intellectual property in the administrative and criminal realms; however the Department of Justice leads on prosecution of IP crimes, including trademark counterfeiting, copyright piracy, and economic espionage. This responsibility places the agency in the key role of enforcer of trade protections.”  The main function of the Act would be to establish a task force within the Criminal Division of the Department of Justice to prosecute international trade crimes, including trademark counterfeiting. The House Committee on the Judiciary placed this bill on the House’s Union Calendar on the same day as Report 118-784 was published. This bill has also been referred to the Senate Committee on the Judiciary.

National Anticounterfeiting and Consumer Education Awareness Month

On July 8, 2024, the Senate Committee on the Judiciary agreed on Resolution 736 designating July 2024 as “National Anti-Counterfeiting and Consumer Education and Awareness Month,” in recognition of the importance of trademarks in the economy and the role of trademarks in protecting consumer safety. The Resolution highlights the importance of public awareness to safeguard consumers and businesses from unsafe and unreliable products that threaten intellectual property rights, the economic market, and the health and well-being of consumers. Resolution 736 also acknowledges that:

• Counterfeit products threaten the United States economy and job creation, and according to United States Customs and Border Protection, cost U.S. businesses more than $275 billion per year and have led to the loss of more than 750,000 jobs;
• In 2023, United States Customs and Border Protection seized more than 23 million counterfeit goods. The counterfeit goods would have had an estimated manufacturer’s suggested retail price of over $2.75 billion if the goods were genuine, which equates to about $7,534,246 in counterfeit goods seizures every day;
• According to the USPTO, as of 2020, at least 20% of counterfeit and pirated goods sold abroad displace sales in the United States, and of the $143 billion sold of such goods, the United States economy suffers a loss of around $29 billion per year; and
• October 12, 2024, marks the 40th anniversary of the enactment of the Trademark Counterfeiting Act of 1984.

Although this resolution will not become an enforceable law and echoes Senate Resolution 325, which designated August 2023 as National Anti-Counterfeiting and Consumer Education Awareness Month, it indicates that protecting trademark owners’ intellectual property and retaining the focus on the economic damage caused by sales of counterfeit products remains a priority of the U.S. Senate. The Senate passed this Resolution by unanimous consent.

No Stolen Trademarks Honored in America Act of 2023

On November 21, 2024, Congress presented the “No Stolen Trademarks Honored in America Act of 2023” to President Biden for his signature. This bill, which both the House (H.R. 1505) and the Senate (S. 746) passed unanimously, would ban the enforcement or validation of any trademark confiscated by Cuba’s government and would expand the prohibition against U.S. federal courts enforcing rights to trademarks confiscated by Cuba and then asserted by Cuban nationals. Representative Issa sponsored the bill, which targets trademarks seized by the Castro regime.  Though the Act does not mention Cuba by name, a Judiciary Committee Report (118-232) notes that this bill addresses a decades-long battle over the trademark “Havana Club” between rum makers Bacardi and Pernod Ricard. To resolve this long-running controversy, the bill would prohibit any executive agency, including the USPTO, from recognizing, enforcing, or validating any trademark used in connection with a business or assets that were confiscated without the consent of the original owner or successor-in-interest. This bill seeks to prevent anyone from using U.S. agencies to benefit from intellectual property stolen from its rightful owner.

The House Subcommittee on Courts, Intellectual Property and the Internet

Lastly, this year the House Subcommittee on Courts, Intellectual Property and the Internet held hearings on “IP Litigation and the U.S. International Trade Commission,” “The U.S. Intellectual Property System and the Impact of Litigation Financed by Third-Party Investors and Foreign Entities,” and “Intellectual Property: Enforcement Activities by the Executive Branch.” These hearings continued Congress’ desire in 2024 to examine current governmental systems and organizations in order to defend, protect and enforce the intellectual property rights of bona fide American trademark owners.

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