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TO AMEND SECTION 39-15-1190, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE UNLAWFUL USE OF COUNTERFEIT MARKS, SO AS TO FURTHER DEFINE A "COUNTERFEIT MARK", TO ESTABLISH FELONIES FOR THE USE OF A COUNTERFEIT MARK IN CERTAIN INSTANCES, FOR TRAFFICKING IN CONNECTION WITH THE USE OF A COUNTERFEIT MARK, AND FOR PRODUCTION OF A COUNTERFEIT MARK, TO PROVIDE FOR SEIZURE AND SALE OF ITEMS IN CONNECTION WITH THE USE OF A COUNTERFEIT MARK, AND TO PROVIDE FOR INVESTIGATORY POWERS OF THE SECRETARY OF STATE.
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:
(a) identical to, or substantially indistinguishable from, a registered mark or unregistered mark;
(b) 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 registered or unregistered mark is identified;
(c) likely to cause confusion, mistake, or deception, if used; and
(d) not authorized by the owner of the registered or unregistered mark.
(2) 'Registered mark' means 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.
(3) 'Retail sales value' means the value computed by multiplying the number of items having a counterfeit mark used on them or in connection with them by the retail price at which a similar item having a mark used on it or in connection with it, the use of which is authorized by the owner, is offered for sale to the public.
(4) 'Unregistered mark' means a symbol, sign, emblem, insignia, trademark, trade name, or word protected by the federal Amateur Sports Act of 1978, Title 36 USC Section 380.
(B)(1) It is unlawful for a person knowingly and wilfully to transport, transfer, distribute, sell, or otherwise dispose of, or to possess with intent to transfer, transport, distribute, sell, or otherwise dispose of, an item having a counterfeit mark on it or in connection with it.
(a) A person who violates this subsection with respect to goods or services having a retail sales value exceeding fifty thousand dollars, is guilty of the offense of distribution of counterfeit marks and, upon conviction, must be punished as follows:
(i) if the goods or services have a retail sales value of one thousand dollars or less, the person is guilty of a misdemeanor and must be fined not more than one thousand dollars or imprisoned not more than one year, or both;
(ii) if the goods or services have a retail sales value of more than one thousand dollars but less than ten thousand dollars, the person is guilty of a felony and must be fined not more than ten thousand dollars or imprisoned not more than five years, or both;
(iii) if the goods or services have a retail sales value of more than ten thousand dollars but less than fifty thousand dollars, the person is guilty of a felony and must be fined not more than twenty thousand dollars or imprisoned not more than five years, or both; and
(iv) for a second or subsequent conviction of the offenses described in subitem (a), without regard to the retail sales value of the goods or services, the person is guilty of a felony and must be fined not less than one thousand dollars or more than fifty thousand dollars or imprisoned not more than ten years, or both;
(b) A person who violates the provisions of this subsection with respect to goods or services having a retail sales value exceeding fifty thousand dollars is guilty of the offense of trafficking in counterfeit marks. A person who commits the offense of trafficking as described in this subitem is guilty of a felony and, upon conviction, must be punished as follows:
(i) for a first offense, fined not less than ten thousand dollars or more than twenty-five thousand dollars or imprisoned not more than five years, or both;
(ii) for a second or subsequent offense, fined not less than twenty thousand dollars or more than fifty thousand dollars or imprisoned not more than ten years, or both.
(2) The possession, custody, or control of more than twenty-five items having a counterfeit mark used on them or in connection with them is prima facie evidence of a violation of this section.
(C) A person who knowingly uses any object, tool, machine, or other device to produce or reproduce a counterfeit mark or 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 felony and must be fined not more than five thousand dollars or imprisoned not more than five years, or both.
(D) 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 subsections (B) or (C), is considered contraband and is subject to seizure and forfeiture in the same manner as other property may be seized and forfeited if used in the commission of specified criminal offenses as provided by law.
(E) For purposes of enforcing this section, investigators in the office of the Secretary of State have statewide jurisdiction. These investigators may conduct investigations independently or 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.
(F) The Secretary of State may refer available evidence concerning violations of this section to the appropriate solicitor who may, with or without the reference, institute the appropriate criminal proceedings.
(G) The Secretary of State also may refer available evidence concerning violations of this section to the Department of Revenue for purposes of determining the obligations of the violators of this section pursuant to state income and taxation laws."
SECTION 2. This act takes effect upon approval by the Governor.
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