SHOP SAFE Act Passes Out of House Judiciary Committee
A bill that would require foreign sellers on e-commerce platforms to accept personal jurisdiction in the U.S. and allow themselves to be served in a lawsuit passed in the House Judiciary Committee on Sept. 29. The SHOP SAFE ACT also requires e-commerce platforms to confirm that their sellers provide legitimate contact information. Committee Chairman Jerrold Nadler, D-N.Y., as he introduced the bill, said, "The bill also encourages platforms to monitor and screen for known indicia of counterfeiting and to keep repeat infringers from reappearing on their platforms. These measures assess a platform’s actions from a reasonableness standard, taking into account that different-sized platforms will have different resources and capabilities to devote to these efforts."
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
The American Apparel and Footwear Association said it hopes the bill comes up for a vote.
The SHOP SAFE Act had bipartisan co-sponsors from the committee, and Nadler praised the Intellectual Property Subcommittee leaders' consideration of input from stakeholders over more than two years. Despite that, the AAFA still wants changes to the text. “The proliferation of counterfeit products on some of our most trusted online marketplaces hampers American business and puts American consumers in harm’s way,” AAFA's director of brand protection, Christina Mitropoulos, said in a statement. “We are glad to see Congress prioritize the protection of American intellectual property with this bipartisan bill, and look forward to working with members of the House Judiciary committee to improve the language of the bill ahead of its vote on the floor.”
Nadler said during the committee meeting: "From toys to contact lenses to cosmetics, no industry is immune from counterfeiting. While attempting to appear legitimate to unsuspecting consumers, counterfeit products avoid the health and safety standards with which authentic products must comply. What results? Counterfeit air bags that deploy fractions of a second too late; counterfeit bike helmets that break in half upon impact; counterfeit batteries that explode from poor construction; and counterfeit toys that break into small pieces that can be swallowed by young children," he said.
He called the notice and take-down approach too reactive. But he said the bill's authors chose not to apply the direct liability for counterfeits that physical stores have to e-commerce companies. He added, "Finally, and significantly, the bill includes a provision that addresses the concern that the notice-and-takedown procedure for reporting counterfeit listings is sometimes abused. The bill creates a new cause of action that allows third-party sellers who have had their listings taken down based on a material, false misrepresentation in a take-down notice to recover in a civil action against the person who made the misrepresentation. This important new addition to the bill will further the goal of balancing the equities in the fight against online counterfeits."