[Congressional Record: October 12, 1998 (Senate)]
[Page S12375-S12377]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]
[DOCID:cr12oc98-158]


HOUSE-PASSAGE OF THE DIGITAL MILLENNIUM COPYRIGHT ACT CONFERENCE REPORT

  Mr. HATCH. Mr. President, last Thursday the Senate approved, by
unanimous consent, the conference report on H.R. 2281, the Digital
Millennium Copyright Act (DMCA). I rise today to laud the House's
action in adding its vote of approval to that of the Senate. The bill
now goes to the President, who I expect will move

[[Page S12376]]

swiftly to sign this important legislation into law.
  As I said last Thursday, and on many other occasions, I believe the
DMCA is one of the most important pieces of legislation to be
considered by Congress this year, even in recent memory. It has been
over twenty years since such significant copyright law reforms have
been enacted in this country, and this vote has come at a critical
juncture in our nation's transition to a ``digital millennium.''
  But all this would not have happened without the critical support of
countless parties who have come together in negotiations to refine the
bill and reach a compromise that best promotes American interests at
home and abroad. Once again, I want to thank all of the conferees who
participated in bringing this legislation to closure.
  In particular, I want to recognize the efforts of my counterparts on
the Senate side, Senator Leahy and Senator Thurmond. I also want to
convey my appreciation for the dedicated efforts of Congressman Henry
Hyde, the distinguished Chairman of the House Judiciary Committee,
Congressman John Conyers, the distinguished Ranking Member of the House
Judiciary Committee, and Congressman Howard Coble, the distinguished
Chairman of the House Subcommittee on Courts and Intellectual Property.
They have been committed to seeing this bill through from the start and
have been wholly undeterred by other pressing business that has
occupied the House Judiciary Committee in recent weeks. I also want to
recognize Congressman Tom Bliley, the distinguished Chairman of the
Commerce Committee, for his willingness to consider the Senate's views
objectively and dispassionately.
  In addition, I want to acknowledge once again the hard work done by
staff. In particular I want to recognize the efforts of Manus Cooney,
Edward Damich, and Troy Dow of my staff, whose long hours and tireless
efforts were key to guiding this bill through every stage of the
legislative process. Bruce Cohen, Beryl Howell, and Marla Grossman, of
Senator Leahy's staff, likewise provided invaluable assistance on all
levels. I also want to thank Garry Malphrus of Senator Thurmond's staff
for his work in conference, as well as Paul Clement and Bartlett
Cleland of Senator Ashcroft's staff for their invaluable assistance in
reaching key compromises in the Judiciary Committee. Finally, I want to
thank the House staff, including Mitch Glazier, Debra Laman, Robert
Raben, David Lehman, Bari Schwartz, Justin Lilley, Andrew Levin, Mike
O'Rielly, and Whitney Fox.
  I also want to recognize the long hours and persistent dedication of
the many people who engaged in hard-fought, but ultimately fruitful,
private-sector negotiations on related issues. Many of the compromises
embodied in this legislation would not have been reached without the
support of these parties. For example, we would not be lauding the
passage of a bill today at all were it not for the willingness of the
copyright industries, Internet service providers, educators, libraries,
and others in the fair use community to come together at the direction
and under the supervision of the Judiciary Committee to arrive at a
consensus position regarding standards for limiting the copyright
infringement liability of Internet service providers.
  Many other negotiations were conducted and agreements reached that
made this legislation possible, including agreements between copyright
owners and manufacturers of the consumer electronics devices that make
the use of their works by the public possible. One such agreement
reflects the understanding of the motion picture industry and consumer
electronics manufacturers regarding standards for the incorporation of
certain copyright protection technologies in analog videocassette
recorders. This agreement was the basis for the new section 1201(k) of
the Copyright Act, as added by the DMCA, which requires analog
videocassette recorders to accommodate specific copy control
technologies in wide use in the market today. I have received a letter
from Mr. William A. Krepick, President and Chief Operating Officer of
Macrovision Corporation--the producer of such copy protection
technology--assuring me of his commitment to adhere to the spirit of
this agreement by making such technology available on reasonable and
nondiscriminatory terms, which in some circumstances will include
royalty-free licenses. I would ask unanimous consent that the text of
this letter be incorporated in the Record immediately after my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See Exhibit 1.)
  Mr. HATCH. Mr. President, the DMCA is a remarkable bill that is the
result of a remarkable process. By enacting this legislation in a
timely fashion, the United States has set the marker for the rest of
the world with respect to the implementation of the new WIPO treaties.
As a result, the United States can look forward to stronger world-wide
protection of our intellectual property and a stronger balance of trade
as inbound revenues from foreign uses of our intellectual property
continue to increase. I am pleased to have been a part of this great
effort, and I look forward to the President's signing of H.R. 2281.

                               Exhibit 1

                                      Macrovision Corporation,

                                   Sunnyvale, CA, October 7, 1998.
     Hon. Orrin Hatch,
     Chairman, Committee on the Judiciary, U.S. Senate,
         Washington, DC.
       Dear Chairman Hatch: I am writing this letter to you in
     your capacity as Chairman of the Senate-House Conference
     Committee on the Digital Millennium Copyright Act of 1998. We
     understand that the Conference Committee is prepared to
     include in the final legislation to be reported to the Senate
     and House of Representatives a provision that requires that
     analog videocassette recorders manufactured and/or sold in
     the United States must conform to two analog copy control
     technologies certain aspects of which are proprietary to
     Macrovision Corporation. As you may know, Macrovision
     Corporation has been in business for 15 years providing
     various copy control technologies to help copyright owners
     protect their valuable intellectual property. We license
     various technologies to hardware manufacturers, including
     manufacturers of consumer electronics and various computer-
     based products, and to Hollywood movie studios and other
     independent video producers.
       We are a small company and have worked very hard over the
     past two-and-a-half years to demonstrate to the consumer
     electronics, computer, and motion picture companies and
     industries that our copy control technologies offer the best
     solution to digital-to-analog copy protection for the DVD
     format, as well as in its traditional analog videocassette
     application. We have worked with the companies and industries
     to ensure that compatability and effectiveness are assured,
     and, as a result, our technologies have been required for use
     to provide protection of the analog outputs of DVD playback
     devices implementing the two encryption-based copy protection
     systems now in the market--the Content Scramble System (CSS)
     and DIVX.
       We support the legislative proposals that are being
     considered by the Conference Committee, in the form of
     Subsection ``k'' and its corresponding legislative history as
     attached to this letter. We also recognize the unique
     position that such legislation provides to our technology and
     our company. Accordingly, we are writing to assure you and
     your colleagues on the Conference Committee that we will not
     abuse our position in our licenses for the technologies for
     which responses are being required by this legislation.
     Specifically, we are willing to assure you and the Committee
     that any licenses that may be necessary to implement these
     technologies will be offered on reasonable and non-
     discriminatory terms, as that phrase is commonly used and
     understood in industry standards processes. We will modify
     certain terms and conditions of our baseline analog copy
     control license agreements--and offer the same modifications
     to existing licensees--if this legislation is enacted in
     order to eliminate our contractual requirements that analog
     videocassette recorders manufactured in or sold in the United
     States respond to our technologies and that certain display
     device manufacturers ensure that their products are
     compatible with our technologies, in the sense of not
     displaying visible artifacts or distortions in the authorized
     playback of material protected using our analog copy control
     technologies. The first of these requirements will now be the
     subject of the statutory requirement that is the subject of
     the legislative provision.
       The second requirement will now be the subject of an inter-
     industry forum on compatability issues, that will afford all
     interested parties an opportunity to work together to resolve
     such issues as they arise. We hasten to add that we do not
     expect such problems to arise, since our technologies have
     been proven to the satisfaction of the manufacturers that
     they do not cause problems, and we do not expect to make any
     material modifications to them in the future. Manufacturers
     already know what the technologies are and can test their
     products before finalizing their design. We commit to you and
     your colleagues that any changes that are made to our
     technologies will be the result of inter and intra industry
     consensus on the changes before they are made. Nevertheless,
     in order to reassure everyone involved, we are prepared to
     cooperate in the

[[Page S12377]]

     inter-industry forum that is being established. We have been
     assured that this forum will be established within six months
     after passage of this legislation and will include equal
     representation from the consumer electronics, computer, and
     movie studio industries.
       With regard to our licensing terms, we commit to you and
     your colleagues that we will from the date of enactment
     adhere to the following points--which are essentially
     reflective of our current licensing policies. First, as
     stated above, our proprietary analog copy protection
     technology will be offered on reasonable and non-
     discriminatory terms, as that phrase is used in the normal
     industry parlance. Second, in relation to certain specific
     circumstances:
       (a) Manufacturers of consumer-grade analog VHS and 8mm
     analog video cassette recorders/camcorders that are required
     by the legislation to conform to our proprietary analog copy
     protection technologies (and any new format analog
     videocassette recorder that is covered by paragraph (1)(A)(v)
     of the legislation and thereby required to conform to our
     proprietary analog copy control technologies) will be
     provided royalty-free licenses for the use of our relevant
     intellectual property in any device that plays back packaged,
     prerecorded content, or that reads and responds to or
     generates or carries forward the elements of these
     technologies associated with such content;
       (b) In the same circumstances as described in (a), other
     manufacturers of devices that generate, carry forward, and/or
     read and respond to the elements of these technologies will
     be provided with licenses carrying only modest fees (in the
     current dollar range of $25,000 initial payment and lesser
     amounts as recurring annual fees);
       (c) Manufacturers of other products, including set-top-
     boxes and other devices that perform similar functions
     (including integrated devices containing such functionality),
     will be provided with licenses on reasonable and non-
     discriminatory terms, including royalty and other
     considerations.
       In the absence of the specific attached legislative and
     explanatory language, Macrovision would not have made the
     above referenced commitments regarding our licensing terms
     and our contract clauses on VCR responsiveness and
     playability issues. We very much appreciate the work of you
     and your colleagues in helping to draft and, hopefully,
     ultimately enact this legislation. We also appreciate and
     acknowledge the leadership and cooperation of certain
     companies and individuals in getting this proposal to this
     point.
       I understand that this letter will be incorporated into the
     official report of the Conference Committee and that the
     Conferees are relying on our representation herein. If you or
     other members of the Conference have any questions or need
     any clarification on any point, please do not hesitate to
     contact me, or have one of your staff contact me.
           Sincerely,
                                               William A. Krepick,
     President/COO.

                          ____________________
