H 4823 General Bill, By Haskins
 A Bill to amend Section 39-15-1190, Code of Laws of South Carolina, 1976,
 relating to the unlawful use of counterfeit marks and the penalties therefor,
 so as to further provide for what constitutes a "counterfeit mark" and to
 increase the penalties for violations including the establishment of certain
 felonies.

   03/27/96  House  Introduced and read first time HJ-12
   03/27/96  House  Referred to Committee on Judiciary HJ-12

A BILL

TO AMEND SECTION 39-15-1190, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE UNLAWFUL USE OF COUNTERFEIT MARKS AND THE PENALTIES THEREFOR, SO AS TO FURTHER PROVIDE FOR WHAT CONSTITUTES A "COUNTERFEIT MARK" AND TO INCREASE THE PENALTIES FOR VIOLATIONS INCLUDING THE ESTABLISHMENT OF CERTAIN FELONIES.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION 1. Section 39-15-1190 of the 1976 Code, as added by Act 486 of 1994, is amended to read:

"Section 39-15-1190. (A) Whoever intentionally traffics or attempts to traffic in goods or services and knowingly uses or should have known a counterfeit mark on or in connection with such goods or services shall be deemed guilty of a misdemeanor, if an individual, be fined not more than five thousand dollars or imprisoned not more than one year, or both, and, if a person other than an individual, be fined not more than twenty thousand dollars.

(B) The term "counterfeit mark" in this section means:

(1) a spurious mark:

(a) that is used in connection with trafficking goods or services;

(b) that is identical with, or substantially indistinguishable from, a mark registered for those goods or services with the Secretary of State under this chapter and in use, whether or not the defendant knew such mark was so registered; and

(c) the use of which is likely to cause confusion, to cause mistake, or to deceive.

(2) "Counterfeit mark" does not include any mark or designation used in connection with goods or services of which the manufacturer or producer was, at the time of the manufacture or production in question, authorized to use the mark for designation for the type of goods or services so manufactured or produced, by the holder of the right to use such mark or designation.

(C) "Traffic" means transport, transfer, or otherwise dispose of, to another, as consideration for anything of value, or make or obtain control of with intent so to transport, transfer, or dispose of.

(A) For purposes of this section:

(1) `Counterfeit mark' means a mark that is used in connection with the sale or offering for sale of goods or services that are identical to or substantially indistinguishable from the goods or services with which the mark is used or registered, and the use of which is likely to cause confusion, mistake, or deception, with the use occurring without authorization of the:

(a) owner of the registered mark, and is identical to or substantially indistinguishable from a mark that is registered on the principal register of the United States Patent and Trademark Office or with the South Carolina Secretary of State; or

(b) owner of the unregistered mark and is identical to or substantially indistinguishable from symbols, signs, emblems, insignias, trademarks, trade names, or words protected by the federal Amateur Sports Act of 1978.

(2) `Retail sales value' means the value computed by multiplying the number of items having a counterfeit mark used thereon or in connection therewith, by the retail price at which a similar item having a mark used thereon or in connection therewith, the use of which is authorized by the owner, is offered for sale to the public.

(B) (1) Any person who knowingly and wilfully uses or causes to be used a counterfeit mark on or in connection with goods or services intended for sale or has possession, custody, or control of goods having a counterfeit mark used thereon or in connection therewith, that are intended for sale, shall be punished as follows:

(a) If the goods or services having a counterfeit mark used thereon or in connection therewith, or on or in connection with which the person intends to use a counterfeit mark, have a retail sales value not exceeding three thousand dollars, the person is guilty of a Class A misdemeanor and must be punished by a fine not exceeding three thousand dollars or a term of imprisonment not exceeding three years;

(b) If the goods or services having a counterfeit mark used thereon or in connection therewith, or on or in connection with which the person intends to use a counterfeit mark, have a retail sales value exceeding three thousand dollars but not exceeding ten thousand dollars, the person is guilty of a Class F felony and must be punished by a fine not exceeding five thousand dollars or a term of imprisonment not exceeding five years; and

(c) If the goods or services having a counterfeit mark used thereon or in connection therewith, or on or in connection with which the person intends to use a counterfeit mark, have a retail sales value exceeding ten thousand dollars, the person is guilty of a Class E felony and must be punished by a fine not exceeding ten thousand dollars or by a term of imprisonment not exceeding ten years.

(2) The possession, custody, or control of more than twenty-five items having a counterfeit mark used thereon or in connection therewith creates a presumption that the person having possession, custody, or control of the items intended to sell those items.

(3) Any person who knowingly:

(i) uses any object, tool, machine, or other device to produce or reproduce a counterfeit mark or;

(ii) has possession, custody, or control of any object, tool, machine, or device with intent to produce or reproduce a counterfeit mark, is guilty of a Class F felony and must be punished by a fine not exceeding five thousand dollars or by a term of imprisonment not exceeding five years.

(4) Any personal property, including any item, object, tool, machine, or device of any kind, employed as an instrumentality in the commission of, or in aiding or abetting in the commission of a violation of this section, is considered contraband and as such is subject to seizure and forfeiture in the same manner other property may be seized and forfeited if used in the commission of specified criminal offenses as provided by law.

(5) For purposes of enforcing this section, the Secretary of State's investigators have statewide jurisdiction. These investigators may assist local law enforcement agencies in their investigations and may initiate and carry out, in coordination with local law enforcement agencies, investigations of violations of this section.

(6) The Secretary of State may refer any available evidence concerning violations of this section to the appropriate solicitor who may, with or without such a reference, institute the appropriate criminal proceedings.

(7) The Secretary of State also may refer any available evidence concerning violations of this section to the Department of Revenue and Taxation for purposes of determining the obligations of the violators of this section to state income and taxation laws."

SECTION 2. This act takes effect upon approval by the Governor.