INDIAN ARTS AND CRAFTS ACT OF 1990

P.L. 101-644, see page 104 Stat. 4662

DATES OF CONSIDERATION AND PASSAGE

House: September 27, October 27, 1990 Senate: October 25, 17, 1990

House Report (Interior and Insular Affairs Committee) No. 101-400(1), Feb. 6, 1990 [To accompany H.R. 2006]

House Report (Judiciary Committee) No. 101-400(11), Sept. 21, 1990 . .

[To accompany B.R. "2006] .. ;; ..... ~~· _ . -· ~ .H' :'-: th:.\ J H~~~~ :\ :··- · ::: ~ ·

Cong. Record Vol. 136 (1990)··' .. h:: ~o;;:-,:. ~ ~:-·· :..~:·: . .• . . :. ·)" -~.,if:! .>I" ' ,· ~;.; ... . ,.: ;·. ·•

.No .Senate Report wa8 submitted with this 'le}iista~on:. ~.-. · · :: · ~

HOUSE REPORT NO. 101-400(1)

[page 1]

The Committee on Interior and Insular Affairs, to whom was re­ferred the 'Qill (H.R. 2006) to expand the powers ,of the IJ?.dianed~ and Crafts Board, and for other purposes, bavmg c:ons1~er 8

same, reports favorably thereon with an amendment and recom· mends that the bill as amended do pass.

• • • • • (page 3]

• • • • • PuRPOSE

The purpose of H.R. 2006 is to protect Indian artists from ~n.fair competition from counterfeits. The bill would amend the prov1s10~ of 25 U.S.C. 805a, which creates and sets forth the powers an8 duties of the Indian Arts and Craft Board, and the provisions of 1

6382

INDIAN ARTS . P.L.

[p.

and 1159, which se1

"" ............ "' Indian Arts res1~nt:Lng goods and :

BACt

1935 Act esta' Board's traden of Indian-prod'

in sections nntvu1e for fmes nc

months. law has been

enforce it. 'I the effectiver:

~l!:tsbar trademarks

tXl!iltul~K law, the Indi a goverr

not guarar of the owner '

or her goods is located i

t ,ul'll&tln arts and cr law has beet

meaningful d arts and cr:

prosecuti­I:!UI'1'AY\t. federal law

Al& ~·"""l'-'1'-'li:IL, Nevada

IJlUltictn by enacting crafts. Howe·

119H~~~~o'n is weakened l responsibility f the past, have existing laws.

Congress hE R.~ltnot.inK Indian art.E ~l[!lltlerc:e Departm

Indian arts and

OF 1990

2

SAGE

(990

Committee)

.01-400(11),

legislation.. ·

I)

•

•

rtists from !nd the n1'1"1vi•ln

the powers e provisions

INDIAN ARTS AND CRAFI'S ACT P.L. 101-644

(page 4]

c 1158 and 1159, which set forth criminal and civil penalties y.s.c~unterfeiting Indian Arts and Craft Board trademarkes and f~~ misrepresenting goods and products as being Indian-produced.

BACKGROUND

Since 1935, the Indian Arts and Crafts Board, as established by Act of August 27, 1935 (49 Stat. 891; 25 U.S.C. Section 305a),

~~ been responsible for promoting the development of Indian arts d crafts. The Board is responsible, in the field of Indian arts and

an afts for improving the economic status of Native Americans; es­~lishing and expanding the marketing opportunities for Indian

le· and assisting Indian tribes to develop a framework to sup­~J the preservation and evolution of tribal cultural activities. The Board is also empowered to create a. Government trade mark of senuineness; establish standards and regulations for the use of auc:h trademarks; and to register them in the U.S. Patent Office without charge. ·

In addition, the 1935 Act established criminal penalties for coun­terfeiting of the Board's trademark and for ,.misrepresentation, for uipoSes of sale, of Indian-produced goods and products. These pro­~ions, now found in sections 1158 and 1159 of title 18, Umted ·states Code, provide for rmes not to exceed $500 and imprisonment not to exceed six months.

Although this law has been in effect for many years, very little bas been done to enforce it. There is little information available which documents the effectiveness of the Board in assisting Indian artists to register trademarks or in the enforcement of the law. against violations. .

Under existing law, the Indian Arts and Crafts Board can only license an artist under a government-owned mark. The registration o( a trademark does not guarantee exclusive rights, but rather rec· ~izes the riJht of the owner to use the mark in commerce and to ; distinguish hiB or her goods from those of others. Because the ~~ office of the Board is located in Washington, .. D.C., .far-away ·from .. · ·' ' '~' .,,. ·: .; .::::; · where many Indian arts and crafts are sold; regist:etmg: Cdi!\plaints · ·3 . ;: (\ '~::: ):: .... ·,:; ! ' ,

and enforcing the law has become a cumbersome: tod!ss~··Existmg~ ... : f::'~' · . ·' · .. :·L : I.a..'! p~ovides po meaningful deterrent to ~o~~e -w~~;: .. ~:isre~~!lt~· ' .. :· :::.:~·~_.:, · ~z·~;. ~·~ .; iuutatton Indian arts and crafts. As testimony. mdicated1 there . - . . ·-··. hasn't been a single prosecution in over rlfty years, primarily be- ,; cause the current federal law requires "willfulness" and "intent" ~ to prove a violation. . •

Many states, including Alaska, Arizona, California, Colorado, Minnesota, Montana, Nevada and New Mexico, have reacted to misrepresentation by enacting legislation to regulate the sale of Indian arts and crafts. However, in most states, enforcement of state legislation is weakened by ambiguity of the laws. Again, in . most cases the responsibility for enforcement lies with county at· torneys who, in the past, have shown little interest in investigating violation of the existing laws.

In recent years, Congress has paid renewed attention to protect­ing and promoting-Indian arts and crafts. In a 1985 report to Con­~· the Commerce Department estimated that unmarked import Imitations of Indian arts and crafts are siphoning off 10 to 20 per·

6383

LEGISLATIVE HISTORY · HOUSE REPORT NO. 101-400(1)

[page 5]

cent of the market for genuine handicrafts produced domestically. This industry's value has been estimated at $400-$800 million an­nually. This means that imitation of Native American handicrafts are siphoning an estimated $40 to $80 million from the genuine manufacturers' markets. .

The Commerce Department also found that most of the counter· feit market is made up of jewelry production that has been under­selling genuine Indian jewelry _made by th Zuni, Navajo and Hopi by as much as 50 percent. Many of these counterfeits originate from imports in the Philippines and Mexico. ·Entrepreneurs are now sending supplies and samples to foreign countries where they can be reproduced at a reduced cost. Those samples are then being duplicated and sent back to the United States and passed through Customs with a temporary peel-off tag which indicates the country of origin. Once these imitat1ons reach the market it is very easy to sell them as Indian or American made. Areas where these imports appear to be concentrated are in Denver, "Colorado; Albuquerque, New Mexico; and Phoenix, Arizona, all of which are major market· ing areas for Indian arts and crafts.

In response to these _practices, the Customs Service was directed in the Omnibus Trade Bill, P.L. 100-418, to promulgate regulations to require the permanent marking of country-of-origin on imported Indian-style jewelry. While most of the attention has been concen· trated on curbing importation of foreign imitations and consumer education, Congress has begun to shift its attention to problems in the domestic market.

As ·noted above, sales .of Indian Rrts and crafts total several hun· dred million dollars annually. Events such as the Santa Fe Indian Market have 'enerated millions of dollars for the local economy. Because many Indians depend on the sale of their arts and crafts as their sole source of income, there have been efforts to expand Indian-owned marketing enterprises to more directly benefit Indian individuals and tribes.

In the last ten years, because of the expanding market for Indian arts and crafts, there has been a greater frequency in the number of fraudulent sales. Particular attention has been focused in New Mexico where there is growing concerns about misrepresentation in the sale of authentic Indian arts and crafts and the misrepresen· tation of Indian ·artists by individuals claiming to be members of an Indian tribe.

EXPLANATION

In resronse to these concerns, Congressman Ben Nighthorse Campbel and Congressman Joy Kyl introduced H.R. 2006, a bill to expand the powers of the Indian Arts and Crruts Board.

The bill, as introduced, amends section 2 of the 1935 Act to expand the power of the Board b)' authorizing it to recognize and register with the U.S. Patent and Trademark Office trademarks for individual Indians and Indian tribes in addition to the government trademark. It also specifically authorizes the Board to pursue or defend actions in appropriate courts to protect its decisions. In ad· dition, the bill amends the criminal provisions of the Act to clarify and simplify procedures for prosecution and increases the penalties

6384

INDIAN

from a $500 fine and sUi mined under title 18 and

On August 17, 1989, t hearing in Santa Fe, N~' ing, testimony was recel.' testimony from the Ind1 Attorney, and a number •

The Committee consid · that time, an amendmen. testimony received by th­tions with the Administ adopted.

Co~>

The provisions of the C in the section-by-section summary of the substan substitute. ·

The Congressional fin~ .original bill were deletec Arts and Crafts Act of J Section 2 and throughou

· · " Th te "c .gamzatton . e rm and 5 as "any legally est zation composed of meml

Section 3 of the bill pr initiate a civil enforce1 made by the Departmen .provide for a referral of .Attorney General for pre . . The definition of "lndi ·The substitute includes • .The ne~ definition defi member of an Indian tr. member of an Indian tt tribe's lineage. In additi• clause.

Language in Section · civil actions in any co1.. and included in a new was added to clarify the actions may be brought :ing on the facts of a p: sions were added in Sec1 their own laws with r• ·duced goods and anothet

SECT.

· There follows a secti :;ported.

total several ! Santa Fe 1e local ecCJ,noJnlf; ir arts and efforts to -_-t·-·•·w; :tly benefit ....... ,-.u;,

Ben Nightho~ :.R. 2006, a bill to loard. ._ the 1935 Act t9 to recognize and ~e trademarks for > the government ard to pursue or 1 decisions. In ad­the Act to clarify ~ses the penalties

INDIAN ARTS AND CRAFTS ACT P.L. 101-644

[page 6]

from a $500 fine and six months imprisonment to fines as deter­mined under title 18 and to imprisonment not to exceed two years.

On August 17, 1989, the Interior Committee conducted a field hearing in Santa Fe, New Mexico on H.R. 2006. During that hear­ing, testimony was received from over · twenty witnesses, including testimony from the Indian Arts and Crafts Board, the local U.S. Attorney, and a number of Indian tribes. · · The Committee considered the bill on November 15, 1989. At

that time, an amendment in the nature of a substitute, based upon testimony received by the Committee and on subsequent consulta­tions with the Administration and other concerned parties, was adopted.

CoMMlTl'EE AMENDMENT

The provisions of the Committee substitute are more fully set out in the section-by-section analysis which follows. The following is a summary of the substantive changes which were included in the substitute. ·

The Congressional findings and declarations in section 1 of the original bill were deleted and replaced with a short title, "Indian Art$ and Crafts Act of 1989". The word "group" which occurs in Section 2 and throughout the bill was replaced with the term "or­gan_ization". The term "organization" is then defined in Sections 4 and 5 as "any legally established arts and crafts marketing organi­zation composed of members of Indian tribes".

Section 3 of the bill provided that the Secretary of Interior could initiate a ciVil enforcement action. Based on recommendations made by the-Department of Justice, this language was changed to provide for a referral of matters by the Secretary of Interior to the Attorney General for prosecution and enforcement.

The def'mition of uindian" occurs in Section 4 of the original bill. The substitute includes an expanded definition in Sections 4 and 5. T~e new defmition defines "Indian" as any individual who is a m~mber ·of ·aq. · Indiaii tribe or any individu~ :who,_ alth~gh Q..ot-.a ·. : ., ... ___ _ ine~ri~f.';pf.~' "I~~iiip.· · tribe, is cex:tified by,. tha~ ,triba..~ r~ .Pf, th&;-_,. __ -~ :;::.: . . !:..-:; :;j .m1·b~s'!it1'~~~:J~;I!-~~~~-ion, both sections aJao il'\clp.d~ . .-.!KWr.~Qjli~~ _ i ::··•·t, _,,,., __ t :.:.- "' ~- ~ -.cause. - -.. ·· 1:·- ·-- - _, .... , . .. -- - - ,- :, , -.:~·~ -

Language· in Section 4 which allowed the aggrieved p_artY. ·to file civil actions in any court of competent jurisdiction, was stricken and included in a new Section 5 of the substitute. New Ian·guage was added to clarify the intent of the Committee that enforcement actions may be brought in Federal, Tribal and State courts depend-ing on the facts of a particular case. In addition, two new provi-sions were added in Section 5, one to pre-empt states from enacting their own laws with respect to misrepresentation of Indian-pro-duced goods and another to provide a severability clause. ·

SECTION-BY-8ECTION ANALYSIS

There follows a section-by-section analysis of H,R. 2006 as re­ported.

6385

' ·- ·

LEGISLATIVE HISTORY HOUSE REPORT NO. 101-400(1)

, [page 7]

SECTION 1

Section 1 cites this act as the "Indian Arts and Crafts Act o( 1989".

SECTION 2

Section 2 of the Act amends clause (g) of the 1935 Act by expand­ing the powers of the Indian Arts and Crafts Board to include rea· istration of trademarks on behalf of an Indian individual, Indian tribe or group. The Board may now establish standards and regula­tions for the use of Government-owned trademarks and register such trademarks with the United States Patent and Trademark Office without charge. In addition. the Board can now pursue or defend violations in the appropriate court.

SECTIONS

, . ,~·, , j <) u..<j .i. . .,~~~~n)~, aqcJs. ,a ~ew sectio~ 5 to the ·,],.~~~ ;~et, e_s~~ishirtg_ ~· : ; .... : ·~ . ..... r , '·~ .. and,,Ciafts Board. Subsectxon (a) of. thlllnew.~JeCtlon authonzea

:·: ·.~: - ~···- · .. ::;::.>: ~,lQ.~~ r~iye compla!nts .of violations>~(6eqtio!l·-1 ·~59 ~~·:title !, L· ~· -· ~h-~ r.:31~J~i1RJ·9:~e.F~~: a~ch c;:Qmplamts to th~ ~p~ _fqr-~-tn~e.s~gat~on.; It~fur-··· - : . . · tlier. autnoiizes th&·Board, on the baslS of-sucho~n.vestr.gatxoni lto· rec>

ommend to the Attorney General that criminal prOceedings under that section be instituted.

Subsection (b) of the new section also authorizes the Board to rec­ommend that the Secretary of the Interior refer the matter to tht Attorney General for civil action under section 6 of the Act.

SECTION 4

Subsection (a) amends section 1159 of title 18, U.S.C., which ee­tablishes existing penalties for criminal misrepresentation of any item as an Indian product when that product is not Indian ma~e.

Subsection (a) of Section 1159. as amended merely restates exiSt­ing law making it a crime to misrepresent a product as Indian·P~ duced.

Subsection (b) expands the criminal penalties by providing thaedt. in cases of a first violation, a person may ·be fmed and imprison for up to one year and, for repeat violations, the sentence may be increased to not more than two years. ,.

Subsection (c) defines the terms "Indian", "Indian froduct • "~ndian tribe" and "tribal organization" for purposes o the sec­tlon.

Subsection (d) adds a severability clause. Subsection (b) of section 4 is a conforming amendment to the

table of sections for chapter 53 of title 18.

SECTION 5

Section 5 adds a new section 6 to the 1934 Act, establishing the Indian Arts and Crafts Board, as follows:

Subsection (a) of the new section 6 adds new civil penalties for misrepresentation that may be sought by an aggrieved party. to obtain injunctive or other equitable relief and damages includ1ng treble damages.

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INDIAN Al

CosT"'

(I) INDIAN ARTS AND CHAri'S ACT

P.L 101-644

[page 8]

Subsection (b) of the new section provides that, in addition to the relief as defined in suQsection (a), the aggrieved party may be awarded punitive damages and the cost of the suit as well as rea·

nable attorney's fees. 10 Subsection (c)(l) establishes that a civil action may be com­menced under subsection (a) in the following situations: (1) by the Attorney General of the United States upon the request of the Sec· retal'Y of the Interior on behalf of an !~dian tribe of tribal organi­zation· (2) by the Attorney General of the state in which the viola­tion ~curred; or (3) by an Indian tribe or group on behalf of its members. "'

Subsection (c)(2) provides that in such case any amount recovered pursuant this section shall be paid to the aggrieved party after the cost of the suit and attorney's fee· is reimbursed to the Attorney General. In cases where the amount recovered for the costs of the 1uit and attorney's fees do not concern an individual Indian, Indian tribe or tribal organization, then the entire award may be retained by the State. Finally in cases where the Indian tribe files on behalf of itself, the amount recovered for the costs of the suit and attor­ney's fees may be deducted from the total amount awarded under 111bsection (a)(2)(c). Subsection (d)(l) defmes the term "Indian" to be any individual who· is a member of an Indian tribe; or any individ­ual who is certified by that tribe to be of that tribe's lineage.

Subsection (d)(2) defines the term "Indian product" and "product of a particular Indian tribe or tribal organization".

Subsection (d)(3) defmes the term "Indian tribe" to mean any Indian tribe, band, nation, Alaska Native village. or other orga­pi,zed ~oup or community which are recognized as eligible for spe-Ciat~ces-·beeaus.e-of t~eir status as Indians. , .... _ ..... _ . .

1 ':-su~o'il: (dX4):defmes the term "tribal organizat'iori:j,.·'·:~ ~- ~!· :: .. , ~ -'_-_' · · ·;: . · "t "'''; ·: ~ubsictiofi (e)'prre-empts states from enacttng '·th~ir.'oW1l~.b\~itot. · '1:_-- :. : ··':; . ': - --~1

·-::!·tegulatiC?ftil: whi~,_:-penalize any person or -proVii:f~lf .ciVU:: a~ ',."_~_ -... ~"-~:~ · ~-,,~, ~- ·-~; ·" baSed upo?· misrepresentation !lf Indian prQd~c~ g~~~-~~-~..$~ ;·: ,.-. ':J ... <~; :~r,.

Subsectton (t) adds a severabil1ty clause. - -- · ~ - · · · ·: · · P1

SECTION 8

Section 6 expands the existing criminal penalties for counterfeit­Ing an Indian Arts and Crafts Board trademark as established under Section 1158 of title 18, United State Code, by raising the ex­isting penalties of $500 or imprisonment for up to six months to a fine as established under this title and imprisonment for up to one year for the first violation, and a fine and imprisonment for up to 2 years or both for subsequent violations. ·

CoST AND BuooET Acr CoMPLIANCE

The cost analysis prepared by the Congressional Budget Office is aet forth below: -

6387

LEGISLATIVE IDSTORY HOUSE REPORT NO. 101-400(1)

(page 9]

U.S. CONGRESS, 'CoNGRESSIONAL BUDGET OFFICE,

Washington, DC, January 9, 1990. Hon. MoRRIS K. UDALL, Chairman. Committee on Interior and Insular Affairs, House of Representatives, Washington, DC.

DEAR MR. CHAIRMAN: The Congressional Budget Office has re­viewed H.R. 2006, the Indian Arts and Crafts Act of 1989, as or· dered reported by the House Committee on Interior and Insular Af. fairs, November 15, 1989. CBO estimates that enactment of this bill would result in costs of less than $100,000 per year to the federal government and in no cost to state and local governments.

H.R. 2006 would expand the powers of the Indian Arts and Craf\1 ·Board, giving it the authority to register trademarks on behalf of Indians, to receive complaints about trademark violations and to recon1mend criminal or civil action to the Attorney General. M well, the bill would amend existing civU penalties for misrepresent­ing Indian products, increasing fmes and maximum prison ~~ma.

The Arts and Crafts Board wo~l!i probably require addittonal staff to meet its expanded responsibilities under the act. CBO esti· mates that the cost of this staff would be less than $100,000 per year. To the extent that the Attorney General pursues cases under the legislation, there could also be some prosecution and court costs; however, CBO anticipates that these costs would not be ·sig· nificant.

If you wish further details on this estimate, we will be pleased to provide them. The CBO staff contact is Marta Morgan, who can be reached at 226-2860.

Sincerely, RoBERT D. REISCHAUER,

Director.

INFLATIONARY IMPACT STATEMENT

Enactment of H.R. 2006 is not expected to have any inflationary impact.

OVERSIGHT STATEMENT

No specific oversight activities wer~ undertaken but the commit­tee conducted hearings related to the effectiveness of existing laws in relation to its consideration of this legislation. No recommenda· tions were submitted to the committee pursuant to rule X, clause 2(b)2.

CoMMl'ITEE RECOMMENDATION

The Committee on Interior and Insular Affairs, by voice vote, 8hP" proved the bill, as amended, and recommends itS enactment by t e House.

DEPARTMENTAL REPORT

The report of the Department of Justice on HR 2006 follows: '

6388

INDIA~

y O(I)

:;, CoNGRESS, , BUDGET OFFICE, . DC, January 9, 1990. 1-:'

. ~ . ~Affairs,

Budget Office has nj. fts Act of 1989, as tJf­lterior and Insular Af. :enactment of this· bill ·er year to the federu governments. · ·-\. :ndian Arts and c~· tdemarks on behalf of .ark violations and to Attorney General. A8 lt~es for m~represe~tt unmum prtson te~ •ly require addition$! der the act. CBO eStr·· !ss than $100,000 J)tir 1 pursues cases under rosecution and court. >ats would· not be Big~

we will be pleased a . . Morgan, who can: be . ...

tli:NT -~~'.. . ._,J·

Lave any mflationary

ken but the commit- · ness of existing laws on. No recommencbi· 1n t to rule X, clause

N ., rs, by voice vote, aP. ts enactment by the

R 2006 follows:

INDIAN ARTS AND CRAFTS ACT P.L. 101-644

Hon. MoRRIS K. UDALL,

[page 10]

U.S. DEPARTMENT OF JUSTICE, OFFICE OF LEGISLATIVE AFFAIRS,

Washington, DC, August 15, 1989.

Chairman. Committee on Interior and Insular Affairs, House of Representatives, Washington. DC.

DEAR MR. CHAIRMAN: This provides the views of the Justice De­partment on H.R. 2006, a bill to promote and protect the develo~ ment of Indian arts and crafts. This bill would amend the provi· sions of 25 U .S.C. 305a, which creates and sets forth the powers and duties of the Indian Arts and Crafts Board ("Board"), and the pro- . visions of 18 U.S.C. 1158 and 1159, which set forth criminal and civil penalties for counterfeiting Indian Arts and Crafts Board trademarks and for misrepresenting goods and products as being Indian produced. The .Justice Department has no objection to en· actment ·of this legislation if amended as follows.

Section 3 of the bill would authorize the Board to receive com­p,laints of the violation of Indian trademark protectiQns and to 'recommend that the Secretary of the Interior institute a civil action under section 1159(c) of the 18, United States Code, which shall be commenced in appropriate cases." The quoted provision should be amended (with brackets showing deletions and italic showing insertions) to provide that the Board may "recommend that 'the Secretary of the Interior refer the matter to the Attorney General for civil action under 1159(c) of title 18, United States Code[,]. [which shall be commenced in appropriate cases.]" The added language is necessary since it is the Justice Department, not the Interior Department, which possesses authority to institute liti­gation. The fmal clause should be deleted: if it merely seeks to rec­ognize the Justice Department's existing prosecutorial discretion, it is redundant and therefore unnecessary; if it seeks to limit that dis­cretion, it is unwaranted and objectionable.

Section 4 of the bill would amend section 1159 of title 18, United States Code, which provides for civil and criminal penalties for the misrepresentation of a product as Indian produced. Section 1159(a), as amended, would make unlawful the "offer or display for sale of any good, with or without any Government trademark, as Indian produced, an Indian produc_t, or the product of a particular Indian or Indian tribe or group, resident within the United States, when such good is not Indian produced, an Indian product, or the product of the particular Indian or Indian tribe or group." The intent of this provision seems clear-to prevent the -passing off of non-Indian produced goods as Indian produced. However, because it does not require that there be a likelihood of confusion of false designation of origin resulting from the display of a non-Indian good as "an Indian product," this provision might be found sufficiently over­broad to give a defendant a plausible defense, or even result in in­validation of the statute. There are instances where the word "Indian" has become a generic designation for a style of clothing or other article, for example, an Indian headdress. The act of offering such an item for sale under circumstances which do not give rise to any likelihood of confusion or false designation of origin-for exam­ple, in a children's toy store-could be interpreted to fall within

6389

LEGISLATIVE HISTORY HOUSE REPORT NO. 101-400(1)

[page 111 t}'le literal wording of section 1159(a), and thus potentially form the basis of an overbreadth defense. This possibliity could be avoided by modifying the rll'st sentence of 1159(a) as follows (with italic showing insertions): · ·

It is unlawful to offer or display for sale of any good, with or without any Government trademark, in a manner that falsely suggests it as Indian produced, an Indian prod­uct, or the product of a particular Indian or Indian tribe or group, resident within the United States, when such good is not Indian produced, an Indian product, or the product of the particular Indian or Indian tribe or group.

The added language would also cause 1159(a) to essentially parallel the analogous provision of the general trademark law, the false designation provision of the Lanham Act, 15 U.S.C. 1125.

Section 4 would also amend section 1159 to empower the Attor­ney General, upon the request of the Secretary of the Interior, to bring a civil action against the alleged violator of an Indian trad­mark, and then to deduct from any amount recovered in such an action the costs of suit and reasonable attorney's fees, to be cred· ited to the Interior Department. See proposed sectioq. 1169(d). Since it is the Justice Department that would incur the actual expense of litigation, any sums so deducted should go not to the Interior De- · partment, but instead to the Treasury. These funds would then be available for appropriation to the Department of Justice, to be · used, if necessary, to hire additional attorneys to handle cases re­ferred to it by the Secretary under this section.

Section 4 would amend section 1159 to provide for imprisonment of not more than one year for a first time violator of section 1159's misrepresentation prohibition, and not more than "one year and six months" for a repeat violator. See proposed section 1159 (b). Section 5 would amend 18 U .S.C. 1159 to provide for imprisonment of not more than "one year and six months" for counterfeiting an Indian Arts and Crafts Board trademark, making no distinction be­tween first and repeat offenders. The Justice Department sees no reason for the quite unusual "one year and six" month sentence provided for under these two sections. Accordingly, we suggest that the sentence for a repeat offender under proposed section 1159 be instead for not more than two years, and that the sentence for counterfeiting under section 1158 be either for not more than one year or not more than two years, or that it be modified to parallel section 1159's two-tiered approach, differentiating between first time and repeat offenders.

Provided that the above discussed amendments are made, the Justice Department has no objection to enactment of this ·legisla· tion. The Office of Management and Budget has advised this De­partment that there is no objection to the submission of this report from the standpoint of the Administration's program.

Sincerely,

6390

CAROL T. CRAWFORD, Assistant Attorney GeneraL

lNDlAN AF

HOUSE RE

• ExPLAN·

tnS:Smuch as H.R. 200€ .:.&.mLen4:lmlento in the naturt ....... oft ..... constitute an explan

. SUMt­

. . The \>urpose of H.R. 200t ~mpet1tion from cou~~t ~ 25 U.S.C. 30~a, '! ..... ':. duties of the Indian .n.L "" e. lJ.S.C. 1158 and 1169~ wh· for counterfeiting Indlan ' misrepresenting goods anc

STATEMEI- .

. ;~:· H.R. 2006 was intx;oduc ferred to the Commlt~. Committee on the ~udlCI turn, refened the bill ~ ·Property, ~d the Admu: 'Kastenme1er. 'J On August 17, 1989, t }l.earing in Santa Fe, N~ ing testimony was rece1 testimony from the Ind

· Attorney, and a num~r The Interior Commlt

1.989. At that. tiJ?e, anf was adopted m hght 0

on subsequent consulu c:oncemed parties. The re rted the bill on Feb · _ Wonowing the c.omple ·a.nd Insular Affalrs, a . t:ommittee on the J ud1 :Department of the lnte Members of Congress. mittee on Courts, Intel 'Justice prepared anf : · which was reported 8

14,1990.

.ally form the ;' ld be a voided ' s (with italic

.ny good, : manner :an prod­l tribe or lch good product

.ally parallel w, the false 5. r the Attor­Interior, to

[ndian trad­in such an to be cred­

l59(d). Since I expense of [nterior De­uld then be ;tice, to be le cases re-

prisonment ~tion 1159's :~year and n 1159 (b). ?risonment rfeiting an :inction be­nt sees no :1 sentence tggest that >n 1159 be ntence for • than one ;o parallel veen first

nade, the is legisla-1 this De­his report

Ro, 'len.eral.

INDIAN ARTS AND CRAFl'S ACI' P.L. 101-644

HOUSE REPORT NO. 101-400(11)

[page 1]

The Committee on the Judiciary, to whom was referred the bill (H.R. 2006) to expand the powers of the Indian Arts and Crafts Board, and for other purposes, having considered the same, report favorably thereon with an amendment and recommend that the bill as amended do pass.

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ExPLANATION 01' .AMENDMENT

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Inasmuch as H.R. 2006 was ordered reported with a single amendment in the nature of a substitute, the contents of this report constitute an explanation of that amendment.

SUMMARY AND PuRPOSE

The ~urpose of H.R. 2006 is to protect Indian artists from unfair compet1tion from counterfeits. The bill would amend the provisions of 25 U.S.C. 305a, which creates and sets forth the powers and duties of the Indian Arts and Crafts Board, and the/rovisions of 18 U.S.C. 1158 anci 1159, which set forth criminal an civil .penalties for counterfeiting Indian Arts and Crafts Board trademarks and for misrepresenting goods and products as being Indian-produced.

STATEMENT OF LEGISLATIVE HisToRY

H.R .. 2006 was introduced on April 17, 1989, and was jointly re­ferred to the Committee on Interior and Insular Affairs and the Committee on the Judiciary. The Committee on the Judiciary, in turn, referred the bill to the Subcommittee on Courts, Intellectual Property, and the Administration of Justice, chaired by Robert W. Kastenmeier.

On August 17, 1989, the Interior Committee conducted ~ field hearing in ~anta Fe, New Mexico on H.R. 2006. During that hear­ing, testimony was received from over twenty witnesses, including testimony from the Indian Arts and Crafts Board, the local U.S. Attorney, and a number of Indian tribes. ·

The Interior Committee considered the bill on November 15, 1989. At that time, an amendment in the nature of a substitute was adopted in light of testimony received by the Committee and on subsequent consultations with the Administration and other concerned parties. The Committee on Interior and Insular Affairs re~orted the bill on February 6, 1990.

Following the completion of action by the Committee on Interior and Insular Affairs, a number of concerns were addressed to the Committee on the Judiciary by the Department of Commerce, the Department of the Interior, the Department of Justice, and several Members of Congress. In response to those concerns, the Su~om· mittee on Courts, Intellectual Property, and the Administration of Justice prepared an amendment in the nature of a substitute, which was reported favorably by the Subcommittee on September 14, 1990.

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LEGISLATIVE HISTORY HOUSE REPORT NO. 101-400(ll)

CoMMITTEE ACTION AND VOTE.

H.R. 2006 was ordered favorably reported br the Committee on September 18, 1990, by voice vote, a quorum bemg present.

DISCUSSION Since 1935, the Indian Arts and Crafts Board, as established by

the Act of August 27, 1935 (49 Stat. 891; 25 U.S.C. Section 305a), has been responsible for promoting the development of Indian arts and crafts. The Board is responsible, in the flied of Indian arts and

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crafts, for improving the economic status of Native Americans; es­tablishing and expandini the marketing opportunities for Indian people: and assistmg Ind1an tribes to develop a framework to sup­port the preservation and evolution of tribal cultural activities. The Board is also empowered to create a Government trade mark of genuineness; ·establish standards and regulations for the use of such trademarks; and to register them in the U.S. Patent Office without charge.

In addition, the 1935 Act established criminal penalties for coun­terfeiting of th_e Board's trademark and for misrepresentation, for purposes of sale, of Indian-produced goods and products. These pro­visions, now found in sections 1158 and 1159 ot title 18, Umted States Code, provide for rmes not to exceed $500 and imprisonment not to exceed six months.

Although this law has been in effect for many years, very little has been done to enforce it. There is little information available which documents the effectiveness of the Board in assisting Indian artists to register trademarks or in the enforcement of the law against violations.

Under existing law, the Indian Arts and Crafts Board can only license an artist under a government-owned mark. The registration of a trademark does not guarantee exclusive rights, but rather rec· ognizes the right of the owner to use the mark in commerce and to distingllish his or her goods from those of others. Because the office of the Board is located .in Washington, D.C., far away from where many Indian Arts and Crafts are sold, registering COJ¥laints and enforcing the law has become a cumbersome process. Existing law provides no meaningful deterrent to those who misrepresnt imita· tion Indian arts and crafts. h testimony indicated, there has not been a single prosecution in over flfty years, })rimarily because the current federal law requires "willfulness" and "intent" to prove a violation.

Many states, including Alaska, 'Arizona, California, Colorado, Minnesta, Montana, Nevada and New Mexico, have reacted to mis· representation b)' enacting legislation to regulate the sale of Indian arts. and crafts. However, in most states, enforcement of state legis· lation is weakened by ambiguity of the laws. Again, in most cases the responsibility for enforcement lies with county attorneys who, in the past, have shown little interest in investigating violation of the existing laws.

In recent years, Con~ess has paid renewed attention to protect· ing and promoting Ind1an arts and crafts. In a 1985 report to Con·

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INDIAN AR

:ommittee on 1ent.

1tablished by ection 305a), f !~dian ana ian arts and

nericans; es-3 for Indian .vork to sup. :tivities. Tlie tde mark c>f the use of

atent Office

:es for coun. 1ntation, for . These P.ro-18, Uruted

tprisonment

, very little 'n available 1ting Indian of the law

~d can only registration rather . rec­erce and to .e the office 'rom where plaints and xisting law esnt imita­tre has not »eeause the to prove a

Colorado, ted to mis­e of Indian state legis­moat cases ~neys who iolation of

to protect-. trt to Con-

INDIAN ARTS AND CRAFTS ACT P.L. 101-644

¥less, the Commerce Department estimated that unmarked import unitations of Indian arts and crafts are siphoning off 10 to 20 per· cent of the market for genuine handicrafts produced domestically. This industry's value has been estimated at $400-$800 million an­nuallr. This means that imitation of Native American handicrafts are s1phoning an estimated $40 to $80 million from the genuine manufacturers markets.

The Commerce Department also found that most of the counter· feit market is made up of jewelry production that has been under· selling genuine Indian jewelry _made by the Zuni, Navajo and Hopi by as much as 50 percent. Many of these counterfeits originate from imports in the Philippines and Mexico. Entrepreneur& are ..

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now sending supplies and samples to foreign countries where they can be reproduced at a reduced cost. Those samples are then being duplicated and sent back to the United States and passed through Customs with a temporary peel-off tag which indicates the country of origin. Once these imitations reach the market it is very easy to sell them as Indian or American made. Areas where these imports appear to be concentrated are in Denver, Colorado; Albuquerque, New Mexico; and Phoenix, Arizona; all of which are major market­ing areas for Indian arts and crafts.

In response to these "practices, the Customs Service was directed in the Omnibus Trade Bill, Public Law 100-418, to promulgate reg­ulations to require the permanent marking of country-of-origin on imported Indian-style jewelry. While most of the attention has been concentrated on curbing importation of foreign imitations and consumer education, Congress has begun to shift its attention to problems in the domestic market. .

AJJ noted above, sales of Indian arts and crafts total several hun· dred million dollars annually. Events such as the Santa Fe Indian Market have generated millions of dollars for the local economy . Because many Indians depend on the sale of their arts and crafts as their sole source of income, efforts have been made to expand . Indian-owned marketing enterprises to more directly benefit Indian individuals and tribes. .

In the last ten years, because of the expanding market of Indian arts and crafts, the number of fraudulent sales has increased. Par· ticular attention has been focused in New Mexico where there is growing concerns about misrepresentation in the sale of authentic Indian arts and crafts and the misrepresentation of Indian artists by individuals claiming to be members of an Indian tribe.

In response to these concerns, Congressman Ben Nighthorse Campbell and Congressman Jon Kyl introduced H.R. 2006, a bill to ~xpand the powers of th~ Indian Arts and Crafts Board. The bill, as mtroduced, amended section 2 of the 1935 Act to expand the power of the Board by authorizing it to recognize and register with the U.S. Patent and Trademark. Office trademarks for individual Indi· ans and Indian tribes in addition to the government trademark. It also specifically authorized the Board to pursue or defend actions in appropriate courts to protect its decisions. In addition, the bill amended the criminal provisions of the Act to clarify and simplify

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LEGISLATIVE IDSTORY HOUSE REPORT NO. 101-400(II)

procedures for prosecution and to increase penalties for counterfeit­ing and ~is.representation.

SECTION·BY-SECTION ANALYSIS

Section 1 Section 1 cites this act as the "Indian Arts and Crafts Act of

1989."

Section 2 Section 2 of the Act amends clause (g) of the 1935 Act by expand·

ing the powers of the Indian Arts and Crafts Board to include reg· istration of trademarks by the Government without charge, and to assign them to individual Indians or tribes, again without charge. As il,ltroduced, the bill would have permitted the Board to register

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trademarks on behalf of an Indian individual, Indian tribe or group. The Department of Commerce, however, objected that this provision deviated u~Uustifiably from the longstanding practice of registrants registering trademarks in their own names. Such con· cerns were deemed meritorious, and the~provision was amended ac­cordingly in a substitute amendment offered by Mr. Kastenmeier. Section 3

Section 8 adds a new section 5 to the 1986 Act establishing the Arts and Crafts Board. Subsection (a) of this new section authorizes the Board to refer complaints to the FBI for investigation. It fur· ther authorizes the Board, on the basis of such investigation, to rec· ommend to the Attorney General that criminal proceedings under that section be instituted.-

Subsection (b) of the new section also authorizes the Board to rec· ommend that the Secretary of the Interior refer the matter to the Attorney General for civil action under section 6 of the Act. Section 4

Subsection (a) of section 4 amends section 1159 of title 18, U.S.C., which establishes existing penalties for criminal misrepresentation of any item as an Indian product when that product is not Indian made. Section 1159, as amended, includes Four subsections.

Subsection (a) of Section 1159, as amended, merely restates exist­ing law making it a crime to misrepresent a product as Indian-pro-duced. .

Subsection (b) of Section 1159, as amended, expands the criminal penalties by increasing the fmes and prison terms for first and sub­sequent violations. Pursuant to a suggestion from the Department of Commerce, the criminal penalties provided for in the bill as in· troduced, were increased by the subcommittee amendment to make them more consistent with penalties for comparable offenses under existing law.

Subsection (c) of Section 1159, as amended, defines the terms "Indian11

, "Indian product", "Indian tribe" and "tribal organize· tion" for purposes of the section. Several members of Congress, who have state but not federally recognized Indian Tribes in their

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districts, objec~ to the d· that it did not mcl~de ~ta

·· ot "Indian tr1bes v were n · . those tribes who represen guably be in violation of t tion of Indian tribe was. ~

Subsection (d) of Sectlc. clause. f s t' Subsection (b) 0 ec 1' table of sections for chapt

Section 5 Section 5 adds a new s

Indians Arts and Crafts l Subsection (a) of the r

misrepresentation that l

obtain i~Uunctive or oth treble d~age(ba.) f the r

Subsect1on o rellef as defmed in su

· awarded. punitiv~ dams : sonable attomey·a fees.

Subsection (cXl) es~ menced· under subsectl

. Attome~ General ~f th retary of the lntenor c zation; (2) by an Indiar (8) by any person.~~ the bill also permtt~ a1 The Department of ~propriate for state Committee agrees.

Subsection (cX2) P!c ered pursuant to thu

.. after the cost of the s :. Attorney General. In itself the amount rec fees {nay_ be deducted: tion (aX2Xc). Su~sectt .individual who 18 8 1

:who is certified by th . Subsection (dX2) .de :or a particular lndlar · Subsection (dXS) d Indian tribe, band, · nized group or co~r;

' governments 88 ehgJ of its members as l Tribe" previously c -made here as well.

Subsection <dX4) d

for counterfei~

Crafts Act of

~ct by expand­to include reg. charge, and to ithout charge. :1rd to register

:Han tribe or ~ted that this 1g practice . of .es. Such con­' amended ac. Kastenmeier.

ablishing the on authorizes ration. It fur­iation, to rec­ted.ings under

Board to rec­natter to the !Act.

:le 18, U.S.C., !presentation is not Indian ions. estates exist­.s Indian-pro-

the criminal :irst and sub-Department

he liill as in­lent to make fenses under

:s the terms •al organiza. of Congress ibes in thei;

INDIAN ARTS AND CRAFl'S ACT P.L. 101~44

districts, objected to the defmition of Indian Tribe, on the grounds that it did not include state recognized tribes. Because such tribes were not "Indian tribes" within the meaning of the bill, artisans in those tribes who represented their goods as Indian made would ar­guably be in violation of the Act. To avoid this problem, the defmi· tion of Indian tribe was revised to include state recognized tribes.

Subsection (d) of Section 1159, as amended, adds a severability clause.

Subsection (b) of Section 4, is a conforming amendment to the table of sections for chapter 53 of title 18.

Section 5 Section 5 adds a new section 6 to the 1934 Act, establishing the

Indians Arts and Crafts Board, as follows: Subsection (a) of the new section 6 adds new civil penalties for

misrepresentation that may be sought by an aggrieved party to

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obtain injunctive or other equitable relief and damages including treble damages.

Subsection (b) of the new section provides that, in addition to the relief as defmed in subsection (a), the aggrieved party may be awarded punitive damages and the coat of the suit aa well as rea· sonable attorney's fees.

Subsection (cXl) establishes that a civil action may be com· menced under subsection (a) in the following situations: (1) by the Attorney General of the United States upon the request of the Sec· retary of the Interior on behalf of an Indian tribe or tribal organi· zation; (2) by an I~dian tribe or group on behalf of its members; or (3) by any person aggrieved by the prohibited conduct. Originally, the bill also permittea suits to be brought by state attorneys gener· al. The Department of Justice, however, argued that it would be in· ~propriate for state omcials to enforce federal statutes and the Committee agrees. ·

Subsection (c)(2) provides that in such cases any amount recov· ered pursuant to tliis section shall be paid to the aggrieved party after the cost of the suit and attorne~s fees are reimbursed to the Attorney General. In cases where the Indian tribe rues on behalf of itself, tne amount recovered· for the costa of the suit and attorney's fees ma;r be deducted from the total amount awarded under subsec­tion (aX2)(c). Subsection (d)(l) defines the term "Indian" to. be any individual who is a member of an Indian tribe; or any individual who is certified by the tribe as an Indian artisan.

Subsection (d)(2) defmes the term "Indian product" and "product of a particular Indian tribe or tribal orJ,anization." ·

Subsection (d)(S) defines the term • Indian tribe" to mean any Indian tribe, band, nation, Alaska Native village, or other orga­nized group or community which is recognized 6y state or federal governments as eligible .for special services because of their status of ita members as Indians. Changes in the definition of "Indian Tribe" previously discussed in connection with section 4, were made here as well.

Subsection (d)(4) defines the term "tribal organization."

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LEGISLATIVE HISTORY HOUSE REPORT NO. 101-400(11)

Subsection (e) adds a severability clause. The bill previously con· tained a preemption clause. Upon further consideration, however, it was concluded that states should be permitted to protect their own Indian arts and crafts, provided that they do not interfere with federal law, and the preemption clause was therefore deleted.

Section 6 Section 6 expands the existing criminal penalties for counterfeit­

ing an Indian Arts and Crafts Board trademark as established under Section 1158 of title 18, United States Code, b)' raising the maximum fines and term of imprisonment for fll'St and subsequent violations.

Section 7 Section 7 was added by the Subcommittee on Courts, Intellectual

Property and the Administration of Justice, at the SUJ.gestion of Congressmen Kyl and Campbell. It authorizes Indian tnbes, as de­

--· fmed ·by· . the Act, to certify inc;lividualS · as 1.!\di~, .artisaruLwho . . :· rwoul~ iQOt otherwise qualify as members ?f}li_!t •. ."\ribe." '

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CoMMI'l'l'BB OVERSIGHT FINDINGS

In compliance with clause 20XSXA) of rule Xl of the Rules of the House of Representatives, the Commitwa reports that the findings and recommendations of the Committee, based on oversight activi· ties under clause 2(bX1) of rule X of the Rules of the House of Rep­resentatives, are incorporated in the descriptive portions of this report.

CoMMITrEE ON GoVERNMENT OPERATIONS OvERSIGHT FINDINGS

No fmdings or recommendations of the Committee on Govern· ment Operations were received as referred to in clause 2(1X3)(D) of rule Xl of the Rules of the House of Representatives.

NEw BuDGET AUTHoRITY 4ND TAX ExPENDITURES

Clause 2(1XSXB) of House Rule Xl is inapplicable because this leg· islation does not provide new budgetary authority or increased tax expenditures.

CoNGRESSIONAL BUDGET OFFICE CoST F.sm.u.TE

· In compliance with clause '2(I)(CX3) of rule Xl of the· Rules of the House of Representatives the Committee sets forth, with respect to the bill H.R. 2006, the following estimate and comparison prepar~ by the Director of the Congressional Budget Office under section 408 of the Congressional Budget Act of 197 4:

Hon. JACK BRooKS,

U.S. CoNGRESS, CoNGRESSIONAL BuDGET OmcE, Washington, DC, September 20, 1990.

Chairman, Committee on the Judiciary, U.S. House of Representa­tives, Washington, DC.

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INDIAN AR1 1

Ma CHAIRMAN: The . DEAR R. 2006, the lndiaJ

Vlewed H. · b the House de red relpo'7 rted1990 y CBO estime tember ' · $' ult in costs of less than re~nt and in no cost to state m H R 2006 would expanhd tt

·d. 'ving it the aut on tdf~sil to receive compl~ir

~end criminal or ctv. recu the bill would amend e 'fie indian products, increas m'rb Arts and Crafts Bof ataff "to meet its expanded. r mates that thete~\~tt~ year To the ex n leo t}le iegislation, there a . .

. costs; howeve~, CBO antlCll nUicant.

If ~ou wish rurth~6to~ proVldehtedhemt. 2~2860. be reac a

Sincerely.

!NJ'U.Tl(

Pursuant to clause 2(1: Representatives, th~ Con no significant inflattonat aleconomy.

• •

tviously con­m, however, )rotect their .ot interfere :ore deleted.

counterfeit. established raising the subsequent

[n tellectual ggestion of ibes, as de­tisans who

!ules of the !le imdinga ight activi· JSe ofRer­ID.S of thls

INDINGS

n Govern­UX3XD) of _

les of the ~espect to prepared

1r section

~E,

1,1990.

Dresenta-

INDIAN ARTS AND CRAFTS ACT P.L. 101-#J

DEAR M:a. CHAIRMAN: The Congressional Budget Office has re­viewed H.R. 2006, the Indian Arts and Crafts Act of 1990, as or­dered reported by the House Committee on the Judiciary on Sep­tember 17, 1990. CBO estimates that enactment of this bill would result in costs of_ less than $100,000 per year to the federal govern­ment and in no cost to state and local governments.

H.R. 2006 would expand the powers of the Indian Arts and Crafts Board, giving it the authority to register trademarks on behalf of Indians, to receive complaints about trademark violations, and to recommend criminal or civil action to the Attorney General. As well, the bill would amend existing. civil penalties for misrepresent­ing Indian products, increasing rmes, and muim.um prison terms. ..

The Arts and Crafts Board would probably requir~ additional staff to meet ita expanded responsibilities under the act. CBO esti·

. mates that the cost of this staff would be less than $100,000 per year. To the extent that the Attorney General pursues cases under the legislation, there also could be some prosecution and court costa; however, CBO anticipates that these costa would not be sig· nificant.

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If rou wish further details on this estimate, we will be pleased to proVlde them. The · CBO staff contact is Martha Morgan, who can be reached at 226-2860.

Sincerely. RoBERT F. H.u.z

(For Robert D. Reischauer).

lNPLATIONARY IMPACT STATEMENT

Pursuant to clause 2(1)(4) of rule XI of the Rules of the House of Representatives, the Committee estimates that H.R. 2006 will have no s~~cant· inflationary impact on pricea .. ~sJ_,{~~-~ tbe -~atiQn~ al economy. .. .\ "!':·• .; '!""'~y .

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