SHOP SAFE Act of 2021

I 117TH CONGRESS 1ST SESSION H. R. 3429 To amend the Trademark Act of 1946 to provide for contributory liability for certain electronic commerce platforms for use of a counterfeit mark by a third party on such platforms, and for other purposes. IN THE HOUSE OF REPRESENTATIVES MAY 20, 2021 Mr. NADLER (for himself, Mr. ISSA, Mr. JOHNSON of Georgia, and Mr. CLINE) introduced the following bill; which was referred to the Committee on the Judiciary A BILL To amend the Trademark Act of 1946 to provide for con- tributory liability for certain electronic commerce plat- forms for use of a counterfeit mark by a third party on such platforms, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Stopping Harmful Of- 4 fers on Platforms by Screening Against Fakes in E-com- 5 merce Act of 2021’’ or the ‘‘SHOP SAFE Act of 2021’’. 6 VerDate Sep 11 2014 05:27 Jun 22, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3429.IH H3429 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 3429 IH SEC. 2. CONTRIBUTORY LIABILITY FOR ELECTRONIC COM- 1 MERCE PLATFORMS. 2 (a) PLATFORM LIABILITY.—Section 32 of the Act en- 3 titled ‘‘An Act to provide for the registration and protec- 4 tion of trademarks used in commerce, to carry out the pro- 5 visions of certain international conventions, and for other 6 purposes’’, approved July 5, 1946 (commonly known as 7 the ‘‘Trademark Act of 1946’’) (15 U.S.C. 1114), is 8 amended by inserting at the end the following: 9 ‘‘(4)(A) Subject to subparagraph (C), an elec- 10 tronic commerce platform shall be deemed 11 contributorily liable in a civil action by the registrant 12 for the remedies hereinafter provided for a case in 13 which without the consent of the registrant, a third- 14 party seller uses in commerce a counterfeit mark in 15 connection with the sale, offering for sale, distribu- 16 tion, or advertising of goods that implicate health 17 and safety on the platform, unless the platform dem- 18 onstrates that the platform took each of the fol- 19 lowing steps to prevent such use on the platform be- 20 fore any infringing act by the third-party seller: 21 ‘‘(i) Determined after a reasonable inves- 22 tigation, and reasonably periodically con- 23 firmed— 24 VerDate Sep 11 2014 05:27 Jun 22, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3429.IH H3429 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 3429 IH ‘‘(I) that the third-party seller des- 1 ignated a registered agent in the United 2 States for service of process; or 3 ‘‘(II) in the case of third-party seller 4 located in the United States, and if the 5 seller has not designated a registered agent 6 under subclause (I), that the third-party 7 seller has designated a verified address for 8 service of process in the United States. 9 ‘‘(ii) Verified through governmental identi- 10 fication or other reliable documentation the 11 identity, principal place of business, and contact 12 information of the third-party seller. 13 ‘‘(iii) Required the third-party seller to— 14 ‘‘(I) take reasonable steps to verify 15 the authenticity of goods on or in connec- 16 tion with which a registered mark is used; 17 and 18 ‘‘(II) attest to the platform that the 19 third-party seller has taken reasonable 20 steps to verify the authenticity of the 21 goods under subclause (I). 22 ‘‘(iv) Imposed on the third-party seller as 23 a condition of participating on the platform 24 contractual requirements that— 25 VerDate Sep 11 2014 05:27 Jun 22, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3429.IH H3429 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 3429 IH ‘‘(I) the third-party seller agrees not 1 to use a counterfeit mark in connection 2 with the sale, offering for sale, distribu- 3 tion, or advertising of goods on the plat- 4 form; 5 ‘‘(II) the third-party seller consents to 6 the jurisdiction of United States courts 7 with respect to claims related to the third- 8 party seller’s participation on the platform; 9 and 10 ‘‘(III) the third-party seller designates 11 an agent for service of process in the 12 United States, or, in the case of third- 13 party seller located in the United States, 14 the third-party seller designates a verified 15 address for service of process in the United 16 States. 17 ‘‘(v) Displayed conspicuously on the plat- 18 form the verified principal place of business, 19 contact information, and identity of the third- 20 party seller, and the country from which the 21 goods will be shipped, except the platform shall 22 not be required to display any such information 23 that constitutes the personal identity of an indi- 24 vidual, a home street address, or personal con- 25 VerDate Sep 11 2014 05:27 Jun 22, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3429.IH H3429 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 3429 IH tact information of an individual, and in such 1 cases shall instead provide alternative, verified 2 means of contacting the third-party seller. 3 ‘‘(vi) Displayed conspicuously in each list- 4 ing the country of origin and manufacture of 5 the goods, unless such information was not rea- 6 sonably available to the third-party seller and 7 the third-party seller had identified to the plat- 8 form the steps it undertook to identify the 9 country of origin and manufacture of the goods 10 and the reasons it was unable to identify the 11 same. 12 ‘‘(vii) Required each third-party seller to 13 use images that the seller owns or has permis- 14 sion to use and that accurately depict the ac- 15 tual goods offered for sale on the platform. 16 ‘‘(viii) Implemented at no cost to the reg- 17 istrant reasonable proactive technological meas- 18 ures for screening goods before displaying the 19 goods to the public to prevent any third-party 20 seller’s use of a counterfeit mark in connection 21 with the sale, offering for sale, distribution, or 22 advertising of goods on the platform. 23 ‘‘(ix) Implemented at no cost to the reg- 24 istrant a program to expeditiously disable or re- 25 VerDate Sep 11 2014 05:27 Jun 22, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3429.IH H3429 kjohnson on DSK79L0C42PROD with BILLS 6 •HR 3429 IH move from the platform any listing for which a 1 platform has reasonable awareness of use of a 2 counterfeit mark in connection with the sale, of- 3 fering for sale, distribution, or advertising of 4 goods. Reasonable awareness of use of a coun- 5 terfeit mark may be inferred based on informa- 6 tion regarding the use of a counterfeit mark on 7 the platform generally, general information 8 about the third-party seller, identifying charac- 9 teristics of a particular listing, or other cir- 10 cumstances as appropriate. A platform may re- 11 instate a listing disabled or removed under this 12 clause if, after an investigation, the platform 13 reasonably determines that a counterfeit mark 14 was not used in the listing. A reasonable deci- 15 sion to reinstate a listing shall not be a basis 16 for finding that a platform failed to comply 17 with this clause. 18 ‘‘(x) Implemented a policy that requires 19 termination of a third-party seller that has rea- 20 sonably been determined to have engaged in re- 21 peated use of a counterfeit mark in connection 22 with the sale, offering for sale, distribution, or 23 advertising of goods on the platform. Use of a 24 counterfeit mark by a third-party seller in three 25 VerDate Sep 11 2014 05:27 Jun 22, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3429.IH H3429 kjohnson on DSK79L0C42PROD with BILLS 7 •HR 3429 IH separate listings within one year shall be con- 1 sidered repeated use, except when reasonable 2 mitigating circumstances exist. A platform may 3 reinstate a third-party seller if, after an inves- 4 tigation, the platform reasonably determines 5 that the third-party seller did not engage in re- 6 peated use of a counterfeit mark or that rea- 7 sonable mitigating circumstances existed. A rea- 8 sonable decision to reinstate a third-party seller 9 shall not be a basis for finding that a platform 10 failed to comply with this clause. 11 ‘‘(xi) Implemented at no cost to the reg- 12 istrant reasonable technological measures for 13 screening third-party sellers to ensure that sell- 14 ers who have been terminated do not rejoin or 15 remain on the platform under a different seller 16 identity or alias. 17 ‘‘(xii) Provided a verified basis to contact 18 a third-party seller upon request by a registrant 19 that has a bona fide belief that the seller has 20 used a counterfeit mark in connection with the 21 sale, offering for sale, distribution, or adver- 22 tising of goods on the platform except that the 23 platform is not required to provide information 24 that constitutes the personal identity of an indi- 25 VerDate Sep 11 2014 05:27 Jun 22, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3429.IH H3429 kjohnson on DSK79L0C42PROD with BILLS 8 •HR 3429 IH vidual, a home street address, or personal con- 1 tact information of an individual (in such case, 2 the provider shall provide an alternative means 3 of contacting the third-party seller). 4 ‘‘(B) In this paragraph: 5 ‘‘(i) The term ‘counterfeit mark’ has the 6 meaning given that term in section 34(d)(1)(B). 7 ‘‘(ii) The term ‘electronic commerce plat- 8 form’ means any electronically accessed plat- 9 form that includes publicly interactive features 10 that allow for arranging the sale, purchase, 11 payment, or shipping of goods, or that enables 12 a person other than an operator of such plat- 13 form to sell or offer to sell physical goods to 14 consumers located in the United States. 15 ‘‘(iii) The term ‘goods that implicate 16 health and safety’ means goods the use of 17 which can lead to illness, disease, injury, serious 18 adverse event, allergic reaction, or death if pro- 19 duced without compliance with all applicable 20 Federal, State, and local health and safety reg- 21 ulations and industry-designated testing, safety, 22 quality, certification, manufacturing, packaging, 23 and labeling standards. 24 VerDate Sep 11 2014 05:27 Jun 22, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H3429.IH H3429 kjohnson on DSK79L0C42PROD with BILLS 9 •HR 3429 IH ‘‘(iv) The term ‘third-party seller’ means a 1 person other than the electronic commerce plat- 2 form who uses the platform to arrange for the 3 sale, purchase, payment, or shipping of goods. 4 ‘‘(C) This paragraph shall apply— 5 ‘‘(i) to an electronic commerce platform 6 that has annual sales on the platform of 7 $500,000 or more; or 8 ‘‘(ii) to an electronic commerce platform 9 with less than $500,000 in annual sales six 10 months after the platform has received ten no- 11 tices (in which there is a reference to this para- 12 graph and an explicit notification to the plat- 13 form of the ten-notice limit), in aggregate, iden- 14 tifying listings on the platform that reasonably 15 could be determined to have used a counterfeit 16 mark in connection with the sale, offering for 17 sale, distribution, or advertising of goods that 18 implicate health or safety. 19 ‘‘(D) Nothing in this paragraph may be con- 20 strued to limit liability in a context other than that 21 outlined in this paragraph, including any cause of 22 action available under other provisions of this Act, 23 notwithstanding that the same facts may give rise to 24 a claim under this paragraph.’’. 25 VerDate Sep 11 2014 05:27 Jun 22, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H3429.IH H3429 kjohnson on DSK79L0C42PROD with BILLS 10 •HR 3429 IH (b) EFFECTIVE DATE.—This Act and the amend- 1 ment made by this Act shall take effect one year after 2 the date of the enactment of this Act. 3 Æ VerDate Sep 11 2014 05:27 Jun 22, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6301 E:\BILLS\H3429.IH H3429 kjohnson on DSK79L0C42PROD with BILLS