On March 16, 2006, President Bush signed into law the "Stop Counterfeiting in Manufactured Goods Act" (the Act) which provides greater protection for holders of trademarks against counterfeit goods. It is the most significant anti-counterfeiting legislation in the past 20 years. The Act is based on the Congressional findings that counterfeiting costs the United States billions of dollars every year in numerous industries--including auto parts, electrical appliances, medicines, tools, toys, office equipment, clothing and many other products. Ties have been established between counterfeiting and terrorism in that terrorists use the sale of counterfeit goods to raise and launder money. Congress also found that counterfeiting continues to pose a threat to public health and safety. In the past, it was only a crime to manufacture, ship and sell counterfeit goods. It was not a crime to falsify labels or packaging used in connection with the sale of fake products. The Act expands the definition of "counterfeit mark" from goods and services to include labels, patches, stickers, wrappers, badges, emblems, medallions, charms, boxes, containers, cans, cases, hangtags, documentation or packaging that is either applied to or used in connection with counterfeit goods. The Act redefines "traffic" to protect not only against the transport, transfer or disposition of counterfeit goods for financial gain but also the making, importing, exporting, obtaining or possessing of counterfeit goods with the intent to transport, transfer or otherwise dispose of such goods. The Act also redefines "financial gain" to include not only the receipt of anything of value, but the expected receipt of anything of value. The Act strengthens penalties for the trafficking of counterfeit goods by requiring the court to order the destruction of counterfeit products that have been seized, rather than leaving the destruction at the discretion of the court. Additionally, counterfeiters that have been caught will be required to turn over their profits as well as the equipment used in their operations so such equipment cannot be used again to create counterfeit goods. The Act also calls for the payment of restitution by the counterfeiter to the legitimate owner of the trademark. With the loophole of trafficking in labels and packaging being closed and stiffer penalties being imposed for those who are caught in the distribution of counterfeit goods, trademark holders now have greater protection against counterfeit goods. It is now more difficult to steal the legitimate intellectual property of Americans, and those caught in such theft will be paying a much higher price. If you have any questions regarding the information in this bulletin, please contact Bob Felber at (615) 850-8741 or Amy Roland at (615) 850-8165 or any other member of Waller Lansden's Intellectual Property Practice at (615) 244-6380. The opinions expressed in this bulletin are intended for general guidance only. They are not intended as recommendations for specific situations. As always, readers should consult a qualified attorney for specific legal guidance.