[DOCID: f:h2281rh.txt]

                                                 Union Calendar No. 362

105th CONGRESS

  2d Session

                               H. R. 2281

                  [Report No. 105-551, Parts I and II]

_______________________________________________________________________

                                 A BILL

     To amend title 17, United States Code, to implement the World
 Intellectual Property Organization Copyright Treaty and Performances
                         and Phonograms Treaty.

_______________________________________________________________________

                             July 22, 1998

       Reported from the Committee on Commerce with an amendment

                             July 22, 1998

The Committee on Ways and Means discharged; committed to the Committee
 of the Whole House on the State of the Union and ordered to be printed

                                                 Union Calendar No. 362
105th CONGRESS
  2d Session
                                H. R. 2281

                  [Report No. 105-551, Parts I and II]

     To amend title 17, United States Code, to implement the World
 Intellectual Property Organization Copyright Treaty and Performances
                         and Phonograms Treaty.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             July 29, 1997

    Mr. Coble (for himself, Mr. Hyde, Mr. Conyers, and Mr. Frank of
Massachusetts) introduced the following bill; which was referred to the
                       Committee on the Judiciary

                              May 22, 1998

Reported with an amendment, referred to the Committees on Commerce and
 Ways and Means for a period ending not later than June 19, 1998, for
  consideration of such provisions of the bill and amendment as fall
 within the jurisdictions of those committees pursuant to clause 1(e)
                     and (s), rule X, respectively
 [Strike out all after the enacting clause and insert the part printed
                               in italic]

                             June 19, 1998

Referral to the Committees on Commerce and Ways and Means extended for
              a period ending not later than June 26, 1998

                             June 25, 1998

Referral to the Committees on Commerce and Ways and Means extended for
              a period ending not later than July 21, 1998

                             July 21, 1998

Referral to the Committees on Commerce and Ways and Means extended for
              a period ending not later than July 22, 1998

                             July 22, 1998

       Reported from the Committee on Commerce with an amendment
 [Strike out all after the enacting clause and insert the part printed
                           in boldface roman]

                             July 22, 1998

Additional sponsors: Mr. Bono, Mr. McCollum, Mr. Berman, Mrs. Bono, Mr.
                        Paxon, and Mr. Pickering

                             July 22, 1998

The Committee on Ways and Means discharged; committed to the Committee
 of the Whole House on the State of the Union and ordered to be printed
 [For text of introduced bill, see copy of bill as introduced on July
                               29, 1997]

_______________________________________________________________________

                                 A BILL


     To amend title 17, United States Code, to implement the World
 Intellectual Property Organization Copyright Treaty and Performances
                         and Phonograms Treaty.

    Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,

            TITLE I--WIPO COPYRIGHT TREATIES IMPLEMENTATION

SEC. 101. SHORT TITLE.

    This title may be cited as the ``WIPO Copyright Treaties
Implementation Act''.

SEC. 102. TECHNICAL AMENDMENTS.

    (a) Definitions.--Section 101 of title 17, United States Code, is
amended--
            (1) by striking the definition of ``Berne Convention
        work'';
            (2) in the definition of ``The `country of origin' of a
        Berne Convention work''--
                    (A) by striking ``The `country of origin' of a
                Berne Convention work, for purposes of section 411, is
                the United States if'' and inserting ``For purposes of
                section 411, a work is a `United States work' only
                if'';
                    (B) in paragraph (1)--
                            (i) in subparagraph (B) by striking
                        ``nation or nations adhering to the Berne
                        Convention'' and inserting ``treaty party or
                        parties'';
                            (ii) in subparagraph (C) by striking ``does
                        not adhere to the Berne Convention'' and
                        inserting ``is not a treaty party''; and
                            (iii) in subparagraph (D) by striking
                        ``does not adhere to the Berne Convention'' and
                        inserting ``is not a treaty party''; and
                    (C) in the matter following paragraph (3) by
                striking ``For the purposes of section 411, the
                `country of origin' of any other Berne Convention work
                is not the United States.'';
            (3) by inserting after the definition of ``fixed'' the
        following:
            ``The `Geneva Phonograms Convention' is the Convention for
        the Protection of Producers of Phonograms Against Unauthorized
        Duplication of Their Phonograms, concluded at Geneva,
        Switzerland, on October 29, 1971.'';
            (4) by inserting after the definition of ``including'' the
        following:
            ``An `international agreement' is--
                    ``(1) the Universal Copyright Convention;
                    ``(2) the Geneva Phonograms Convention;
                    ``(3) the Berne Convention;
                    ``(4) the WTO Agreement;
                    ``(5) the WIPO Copyright Treaty;
                    ``(6) the WIPO Performances and Phonograms Treaty;
                and
                    ``(7) any other copyright treaty to which the
                United States is a party.'';
            (5) by inserting after the definition of ``transmit'' the
        following:
            ``A `treaty party' is a country or intergovernmental
        organization other than the United States that is a party to an
        international agreement.'';
            (6) by inserting after the definition of ``widow'' the
        following:
            ``The `WIPO Copyright Treaty' is the WIPO Copyright Treaty
        concluded at Geneva, Switzerland, on December 20, 1996.'';
            (7) by inserting after the definition of ``The `WIPO
        Copyright Treaty''' the following:
            ``The `WIPO Performances and Phonograms Treaty' is the WIPO
        Performances and Phonograms Treaty concluded at Geneva,
        Switzerland, on December 20, 1996.''; and
            (8) by inserting after the definition of ``work made for
        hire'' the following:
            ``The terms `WTO Agreement' and `WTO member country' have
        the meanings given those terms in paragraphs (9) and (10),
        respectively, of section 2 of the Uruguay Round Agreements
        Act.''.
    (b) Subject Matter of Copyright; National Origin.--Section 104 of
title 17, United States Code, is amended--
            (1) in subsection (b)--
                    (A) in paragraph (1) by striking ``foreign nation
                that is a party to a copyright treaty to which the
                United States is also a party'' and inserting ``treaty
                party'';
                    (B) in paragraph (2) by striking ``party to the
                Universal Copyright Convention'' and inserting ``treaty
                party'';
                    (C) by redesignating paragraph (5) as paragraph
                (6);
                    (D) by redesignating paragraph (3) as paragraph (5)
                and inserting it after paragraph (4);
                    (E) by inserting after paragraph (2) the following:
            ``(3) the work is a sound recording that was first fixed in
        a treaty party; or'';
                    (F) in paragraph (4) by striking ``Berne Convention
                work'' and inserting ``pictorial, graphic, or
                sculptural work that is incorporated in a building or
                other structure, or an architectural work that is
                embodied in a building and the building or structure is
                located in the United States or a treaty party''; and
                    (G) by inserting after paragraph (6), as so
                redesignated, the following:
``For purposes of paragraph (2), a work that is published in the United
States or a treaty party within 30 days after publication in a foreign
nation that is not a treaty party shall be considered to be first
published in the United States or such treaty party, as the case may
be.''; and
            (2) by adding at the end the following new subsection:
    ``(d) Effect of Phonograms Treaties.--Notwithstanding the
provisions of subsection (b), no works other than sound recordings
shall be eligible for protection under this title solely by virtue of
the adherence of the United States to the Geneva Phonograms Convention
or the WIPO Performances and Phonograms Treaty.''.
    (c) Copyright in Restored Works.--Section 104A(h) of title 17,
United States Code, is amended--
            (1) in paragraph (1), by striking subparagraphs (A) and (B)
        and inserting the following:
                    ``(A) a nation adhering to the Berne Convention;
                    ``(B) a WTO member country;
                    ``(C) a nation adhering to the WIPO Copyright
                Treaty;
                    ``(D) a nation adhering to the WIPO Performances
                and Phonograms Treaty; or
                    ``(E) subject to a Presidential proclamation under
                subsection (g).'';
            (2) by amending paragraph (3) to read as follows:
            ``(3) The term `eligible country' means a nation, other
        than the United States, that--
                    ``(A) becomes a WTO member country after the date
                of the enactment of the Uruguay Round Agreements Act;
                    ``(B) on such date of enactment is, or after such
                date of enactment becomes, a nation adhering to the
                Berne Convention;
                    ``(C) adheres to the WIPO Copyright Treaty;
                    ``(D) adheres to the WIPO Performances and
                Phonograms Treaty; or
                    ``(E) after such date of enactment becomes subject
                to a proclamation under subsection (g).'';
            (3) in paragraph (6)--
                    (A) in subparagraph (C)(iii) by striking ``and''
                after the semicolon;
                    (B) at the end of subparagraph (D) by striking the
                period and inserting ``; and''; and
                    (C) by adding after subparagraph (D) the following:
                    ``(E) if the source country for the work is an
                eligible country solely by virtue of its adherence to
                the WIPO Performances and Phonograms Treaty, is a sound
                recording.'';
            (4) in paragraph (8)(B)(i)--
                    (A) by inserting ``of which'' before ``the
                majority''; and
                    (B) by striking ``of eligible countries''; and
            (5) by striking paragraph (9).
    (d) Registration and Infringement Actions.--Section 411(a) of title
17, United States Code, is amended in the first sentence--
            (1) by striking ``actions for infringement of copyright in
        Berne Convention works whose country of origin is not the
        United States and''; and
            (2) by inserting ``United States'' after ``no action for
        infringement of the copyright in any''.
    (e) Statute of Limitations.--Section 507(a) of title 17, United
State Code, is amended by striking ``No'' and inserting ``Except as
expressly provided otherwise in this title, no''.

SEC. 103. COPYRIGHT PROTECTIONS SYSTEMS AND COPYRIGHT MANAGEMENT
              INFORMATION.

    Title 17, United States Code, is amended by adding at the end the
following new chapter:

       ``CHAPTER 12--COPYRIGHT PROTECTION AND MANAGEMENT SYSTEMS

``Sec.
``1201. Circumvention of copyright protection systems.
``1202. Integrity of copyright management information.
``1203. Civil remedies.
``1204. Criminal offenses and penalties.
``Sec. 1201. Circumvention of copyright protection systems
    ``(a) Violations Regarding Circumvention of Technological
Protection Measures.--(1) No person shall circumvent a technological
protection measure that effectively controls access to a work protected
under this title.
    ``(2) No person shall manufacture, import, offer to the public,
provide, or otherwise traffic in any technology, product, service,
device, component, or part thereof, that--
            ``(A) is primarily designed or produced for the purpose of
        circumventing a technological protection measure that
        effectively controls access to a work protected under this
        title;
            ``(B) has only limited commercially significant purpose or
        use other than to circumvent a technological protection measure
        that effectively controls access to a work protected under this
        title; or
            ``(C) is marketed by that person or another acting in
        concert with that person with that person's knowledge for use
        in circumventing a technological protection measure that
        effectively controls access to a work protected under this
        title.
    ``(3) As used in this subsection--
            ``(A) to `circumvent a technological protection measure'
        means to descramble a scrambled work, to decrypt an encrypted
        work, or otherwise to avoid, bypass, remove, deactivate, or
        impair a technological protection measure, without the
        authority of the copyright owner; and
            ``(B) a technological protection measure `effectively
        controls access to a work' if the measure, in the ordinary
        course of its operation, requires the application of
        information, or a process or a treatment, with the authority of
        the copyright owner, to gain access to the work.
    ``(b) Additional Violations.--(1) No person shall manufacture,
import, offer to the public, provide, or otherwise traffic in any
technology, product, service, device, component, or part thereof,
that--
            ``(A) is primarily designed or produced for the purpose of
        circumventing protection afforded by a technological protection
        measure that effectively protects a right of a copyright owner
        under this title in a work or a portion thereof;
            ``(B) has only limited commercially significant purpose or
        use other than to circumvent protection afforded by a
        technological protection measure that effectively protects a
        right of a copyright owner under this title in a work or a
        portion thereof; or
            ``(C) is marketed by that person or another acting in
        concert with that person with that person's knowledge for use
        in circumventing protection afforded by a technological
        protection measure that effectively protects a right of a
        copyright owner under this title in a work or a portion
        thereof.
    ``(2) As used in this subsection--
            ``(A) the term `circumvent protection afforded by a
        technological protection measure' means avoiding, bypassing,
        removing, deactivating, or otherwise impairing a technological
        protection measure; and
            ``(B) a technological protection measure `effectively
        protects a right of a copyright owner' under this title if the
        measure, in the ordinary course of its operation, prevents,
        restricts, or otherwise limits the exercise of a right of a
        copyright owner under this title.
    ``(c) Importation.--The importation into the United States, the
sale for importation, or the sale within the United States after
importation by the owner, importer, or consignee of any technology,
product, service, device, component, or part thereof as described in
subsection (a) or (b) shall be actionable under section 337 of the
Tariff Act of 1930 (19 U.S.C. 1337).
    ``(d) Other Rights, Etc., Not Affected.--Nothing in this section
shall affect rights, remedies, limitations, or defenses to copyright
infringement, including fair use, under this title.
    ``(e) Exemption for Nonprofit Libraries, Archives, and Educational
Institutions.--(1) A nonprofit library, archives, or educational
institution which gains access to a commercially exploited copyrighted
work solely in order to make a good faith determination of whether to
acquire a copy of that work for the sole purpose of engaging in conduct
permitted under this title shall not be in violation of subsection
(a)(1). A copy of a work to which access has been gained under this
paragraph--
            ``(A) may not be retained longer than necessary to make
        such good faith determination; and
            ``(B) may not be used for any other purpose.
    ``(2) The exemption available under paragraph (1) shall only apply
with respect to a work when an identical copy of that work is not
reasonably available in another form.
    ``(3) A nonprofit library, archives, or educational institution
that willfully for the purpose of commercial advantage or financial
gain violates paragraph (1)--
            ``(A) shall, for the first offense, be subject to the civil
        remedies under section 1203; and
            ``(B) shall, for repeated or subsequent offenses, in
        addition to the civil remedies under section 1203, forfeit the
        exemption provided under paragraph (1).
    ``(4) This subsection may not be used as a defense to a claim under
subsection (a)(2) or (b), nor may this subsection permit a nonprofit
library, archives, or educational institution to manufacture, import,
offer to the public, provide, or otherwise traffic in any technology
which circumvents a technological protection measure.
    ``(5) In order for a library or archives to qualify for the
exemption under this subsection, the collections of that library or
archives shall be--
            ``(A) open to the public; or
            ``(B) available not only to researchers affiliated with the
        library or archives or with the institution of which it is a
        part, but also to other persons doing research in a specialized
        field.
    ``(f) Law Enforcement and Intelligence Activities.--This section
does not prohibit any lawfully authorized investigative, protective, or
intelligence activity of a law enforcement agency of the United States,
a State, or a political subdivision of a State, or of an intelligence
agency of the United States.
``Sec. 1202. Integrity of copyright management information
    ``(a) False Copyright Management Information.--No person shall
knowingly--
            ``(1) provide copyright management information that is
        false, or
            ``(2) distribute or import for public distribution
        copyright management information that is false,
with the intent to induce, enable, facilitate, or conceal infringement.
    ``(b) Removal or Alteration of Copyright Management Information.--
No person shall, without the authority of the copyright owner or the
law--
            ``(1) intentionally remove or alter any copyright
        management information,
            ``(2) distribute or import for distribution copyright
        management information, knowing that the copyright management
        information has been removed or altered without authority of
        the copyright owner or the law, or
            ``(3) distribute, import for distribution, or publicly
        perform works, copies of works, or phonorecords, knowing that
        the copyright management information has been removed or
        altered without authority of the copyright owner or the law,
knowing or, with respect to civil remedies under section 1203, having
reasonable grounds to know, that it will induce, enable, facilitate, or
conceal an infringement of any right under this title.
    ``(c) Definition.--As used in this chapter, the term `copyright
management information' means the following information conveyed in
connection with copies or phonorecords of a work or performances or
displays of a work, including in digital form:
            ``(1) The title and other information identifying the work,
        including the information set forth on a notice of copyright.
            ``(2) The name of, and other identifying information about,
        the author of a work.
            ``(3) The name of, and other identifying information about,
        the copyright owner of the work, including the information set
        forth in a notice of copyright.
            ``(4) With the exception of public performances of works by
        radio and television broadcast stations, the name of, and other
        identifying information about, a performer whose performance is
        fixed in a work other than an audiovisual work.
            ``(5) With the exception of public performances of works by
        radio and television broadcast stations, in the case of an
        audiovisual work, the name of, and other identifying
        information about, a writer, performer, or director who is
        credited in the audiovisual work.
            ``(6) Identifying numbers or symbols referring to such
        information or links to such information.
            ``(7) Such other information as the Register of Copyrights
        may prescribe by regulation, but not including any information
        concerning the user of a copyrighted work.
    ``(d) Law Enforcement and Intelligence Activities.--This section
does not prohibit any lawfully authorized investigative, protective, or
intelligence activity of a law enforcement agency of the United States,
a State, or a political subdivision of a State, or of an intelligence
agency of the United States.
``Sec. 1203. Civil remedies
    ``(a) Civil Actions.--Any person injured by a violation of section
1201 or 1202 may bring a civil action in an appropriate United States
district court for such violation.
    ``(b) Powers of the Court.--In an action brought under subsection
(a), the court--
            ``(1) may grant temporary and permanent injunctions on such
        terms as it deems reasonable to prevent or restrain a
        violation;
            ``(2) at any time while an action is pending, may order the
        impounding, on such terms as it deems reasonable, of any device
        or product that is in the custody or control of the alleged
        violator and that the court has reasonable cause to believe was
        involved in a violation;
            ``(3) may award damages under subsection (c);
            ``(4) in its discretion may allow the recovery of costs by
        or against any party other than the United States or an officer
        thereof;
            ``(5) in its discretion may award reasonable attorney's
        fees to the prevailing party; and
            ``(6) may, as part of a final judgment or decree finding a
        violation, order the remedial modification or the destruction
        of any device or product involved in the violation that is in
        the custody or control of the violator or has been impounded
        under paragraph (2).
    ``(c) Award of Damages.--
            ``(1) In general.--Except as otherwise provided in this
        chapter, a person committing a violation of section 1201 or
        1202 is liable for either--
                    ``(A) the actual damages and any additional profits
                of the violator, as provided in paragraph (2); or
                    ``(B) statutory damages, as provided in paragraph
                (3).
            ``(2) Actual damages.--The court shall award to the
        complaining party the actual damages suffered by the party as a
        result of the violation, and any profits of the violator that
        are attributable to the violation and are not taken into
        account in computing the actual damages, if the complaining
        party elects such damages at any time before final judgment is
        entered.
            ``(3) Statutory damages.--(A) At any time before final
        judgment is entered, a complaining party may elect to recover
        an award of statutory damages for each violation of section
        1201 in the sum of not less than $200 or more than $2,500 per
        act of circumvention, device, product, component, offer, or
        performance of service, as the court considers just.
            ``(B) At any time before final judgment is entered, a
        complaining party may elect to recover an award of statutory
        damages for each violation of section 1202 in the sum of not
        less than $2,500 or more than $25,000.
            ``(4) Repeated violations.--In any case in which the
        injured party sustains the burden of proving, and the court
        finds, that a person has violated section 1201 or 1202 within 3
        years after a final judgment was entered against that person
        for another such violation, the court may increase the award
of damages up to triple the amount that would otherwise be awarded, as
the court considers just.
            ``(5) Innocent violations.--
                    ``(A) In general.--The court in its discretion may
                reduce or remit the total award of damages in any case
                in which the violator sustains the burden of proving,
                and the court finds, that the violator was not aware
                and had no reason to believe that its acts constituted
                a violation.
                    ``(B) Nonprofit library, archives, or educational
                institution.--In the case of a nonprofit library,
                archives, or educational institution, the court shall
                remit damages in any case in which the library,
                archives, or educational institution sustains the
                burden of proving, and the court finds, that the
                library, archives, or educational institution was not
                aware and had no reason to believe that its acts
                constituted a violation.
``Sec. 1204. Criminal offenses and penalties
    ``(a) In General.--Any person who violates section 1201 or 1202
willfully and for purposes of commercial advantage or private financial
gain--
            ``(1) shall be fined not more than $500,000 or imprisoned
        for not more than 5 years, or both, for the first offense; and
            ``(2) shall be fined not more than $1,000,000 or imprisoned
        for not more than 10 years, or both, for any subsequent
        offense.
    ``(b) Limitation for Nonprofit Library, Archives, or Educational
Institution.--Subsection (a) shall not apply to a nonprofit library,
archives, or educational institution.
    ``(c) Statute of Limitations.--Notwithstanding section 507(a) of
this title, no criminal proceeding shall be maintained under subsection
(a) unless such proceeding is commenced within 5 years after the cause
of action arose.''.

SEC. 104. CONFORMING AMENDMENT.

    The table of chapters for title 17, United States Code, is amended
by adding at the end the following:

``12. Copyright Protection and Management Systems...........    1201''.

SEC. 105. EFFECTIVE DATE.

    (a) In General.--Subject to subsection (b), the amendments made by
this title shall take effect on the date of the enactment of this Act.
    (b) Amendments Relating to Certain International Agreements.--(1)
The following shall take effect upon the entry into force of the WIPO
Copyright Treaty with respect to the United States:
            (A) Paragraph (5) of the definition of ``international
        agreement'' contained in section 101 of title 17, United States
        Code, as amended by section 102(a)(4) of this Act.
            (B) The amendment made by section 102(a)(6) of this Act.
            (C) Subparagraph (C) of section 104(h)(1) of title 17,
        United States Code, as amended by section 102(c)(1) of this
        Act.
            (D) Subparagraph (C) of section 104(h)(3) of title 17,
        United States Code, as amended by section 102(c)(2) of this
        Act.
    (2) The following shall take effect upon the entry into force of
the WIPO Performances and Phonograms Treaty with respect to the United
States:
            (A) Paragraph (6) of the definition of ``international
        agreement'' contained in section 101 of title 17, United States
        Code, as amended by section 102(a)(4) of this Act.
            (B) The amendment made by section 102(a)(7) of this Act.
            (C) The amendment made by section 102(b)(2) of this Act.
            (D) Subparagraph (D) of section 104(h)(1) of title 17,
        United States Code, as amended by section 102(c)(1) of this
        Act.
            (E) Subparagraph (D) of section 104(h)(3) of title 17,
        United States Code, as amended by section 102(c)(2) of this
        Act.
            (F) The amendments made by section 102(c)(3) of this Act.

     TITLE II--ON-LINE COPYRIGHT INFRINGEMENT LIABILITY LIMITATION

SEC. 201. SHORT TITLE.

    This title may be cited as the ``On-Line Copyright Infringement
Liability Limitation Act''.

SEC. 202. LIMITATIONS ON LIABILITY FOR COPYRIGHT INFRINGEMENT.

    (a) In General.--Chapter 5 of title 17, United States Code, is
amended by adding after section 511 the following new section:
``Sec. 512. Limitations on liability relating to material on-line
    ``(a) Limitation.--Notwithstanding the provisions of section 106, a
provider shall not be liable for--
            ``(1) direct infringement, based solely on the intermediate
        storage and transmission of material through a system or
network controlled or operated by or for that provider, if--
                    ``(A) the transmission was initiated by another
                person;
                    ``(B) the storage and transmission is carried out
                through an automatic technological process, without any
                selection of that material by the provider; and
                    ``(C) no copy of the material thereby made by the
                provider is maintained on the provider's system or
                network in a manner ordinarily accessible to anyone
                other than the recipients anticipated by the person who
                initiated the transmission, and no such copy is
                maintained on the system or network in a manner
                ordinarily accessible to such recipients for a longer
                period than is reasonably necessary for the
                transmission;
            ``(2) monetary relief under section 504 or 505 for
        contributory infringement or vicarious liability, based solely
        on conduct described in paragraph (1); or
            ``(3) monetary relief under section 504 or 505 for
        contributory infringement or vicarious liability, based solely
        on transmitting or providing access to material over that
        provider's system or network, other than conduct described in
        paragraph (1), if the provider--
                    ``(A) does not have actual knowledge that the
                material is infringing or, in the absence of such
                actual knowledge, is not aware of facts or
                circumstances from which infringing activity is
                apparent; and
                    ``(B) does not receive a financial benefit directly
                attributable to the infringing activity, if the
                provider has the right and ability to control such
                activity.
    ``(b) Protection of Privacy.--Nothing in subsection (a) shall be
construed to condition the applicability of subsection (a) on a
provider--
            ``(1) monitoring its service or affirmatively seeking facts
        indicating infringing activity, or
            ``(2) accessing, removing, or disabling access to material,
        if such conduct is prohibited by law.
    ``(c) Limitation Based Upon Removing or Disabling Access to
Infringing Material.--A provider shall not be liable to any person for
any claim based on that provider's good faith disabling of access to or
removal of material claimed to be infringing or based on facts or
circumstances from which infringing activity is apparent, regardless of
whether the material or activity is ultimately determined to be
infringing.
    ``(d) Other Defenses Not Affected.--Removing or disabling access to
material which a provider transmits on-line or to which a provider
provides on-line access, or the failure to do so, shall not adversely
bear upon the consideration by a court of a defense to infringement
asserted by that provider on the basis of section 107 or any other
provision of law.
    ``(e) Misrepresentations.--Any person who knowingly materially
misrepresents to a provider that material on-line is infringing shall
be liable for any damages, including costs and attorneys' fees,
incurred by the provider, by the alleged infringer, or by any copyright
owner or copyright owner's authorized licensee, who is injured by such
misrepresentation, as a result of the provider relying upon such
misrepresentation in removing or disabling access to the material
claimed to be infringing.
    ``(f) Definition.--As used in this section, the term `provider'
means a provider of on-line services or network access.''.
    (b) Conforming Amendment.--The table of sections for chapter 5 of
title 17, United States Code, is amended by adding at the end the
following:

``512. Limitations on liability relating to material on-line.''.

SEC. 203. LIMITATIONS ON EXCLUSIVE RIGHTS; COMPUTER PROGRAMS.

    Section 117 of title 17, United States Code, is amended--
    (1) by striking ``Notwithstanding'' and inserting the following:
    ``(a) Making of Additional Copy or Adaptation by Owner of Copy.--
Notwithstanding'';
    (2) by striking ``Any exact'' and inserting the following:
    ``(b) Lease, Sale, or Other Transfer of Additional Copy or
Adaptation.--Any exact''; and
    (3) by adding at the end the following:
    ``(c) Machine Maintenance or Repair.--Notwithstanding the
provisions of section 106, it is not an infringement for the owner or
lessee of a machine to make or authorize the making of a copy of a
computer program if such copy is made solely by virtue of the
activation of a machine that lawfully contains an authorized copy of
the computer program, for purposes only of maintenance or repair of
that machine, if--
            ``(1) such new copy is used in no other manner and is
        destroyed immediately after the maintenance or repair is
        completed; and
            ``(2) with respect to any computer program or part thereof
        that is not necessary for that machine to be activated, such
        program or part thereof is not accessed or used other than to
        make such new copy by virtue of the activation of the machine.
    ``(d) Definitions.--For purposes of this section--
            ``(1) the `maintenance' of a machine is the servicing of
        the machine in order to make it work in accordance with its
        original specifications and any changes to those specifications
        authorized for that machine; and
            ``(2) the `repair' of a machine is the restoring of the
        machine to the state of working in accordance with its original
        specifications and any changes to those specifications
        authorized for that machine.''.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Digital Millennium Copyright Act of
1998''.

SEC. 2. TABLE OF CONTENTS.

Sec. 1. Short title.
Sec. 2. Table of contents.
                 TITLE I--WIPO TREATIES IMPLEMENTATION

Sec. 101. Short title.
Sec. 102. Circumvention of copyright protection systems.
Sec. 103. Integrity of copyright management information.
Sec. 104. Civil remedies.
Sec. 105. Criminal offenses and penalties.
Sec. 106. Savings clause.
Sec. 107. Development and implementation of technological protection
                            measures.
Sec. 108. Technical amendments.
Sec. 109. Effective date.
          TITLE II--INTERNET COPYRIGHT INFRINGEMENT LIABILITY

Sec. 201. Short title.
Sec. 202. Limitations on liability for Internet copyright infringement.
Sec. 203. Limitations on exclusive rights; computer programs.
Sec. 204. Liability of educational institutions for online infringement
                            of copyright.
Sec. 205. Evaluation of impact of copyright law and amendments on
                            electronic commerce and technological
                            development.
Sec. 206. Effective date.
  TITLE III--EPHEMERAL RECORDINGS; DISTANCE EDUCATION; EXEMPTION FOR
                         LIBRARIES AND ARCHIVES

Sec. 301. Ephemeral recordings.
Sec. 302. Limitations on exclusive rights; distance education.
Sec. 303. Exemption for libraries and archives.
                      TITLE IV--RELATED PROVISIONS

Sec. 401. Report by National Telecommunications and Information
                            Administration.

                 TITLE I--WIPO TREATIES IMPLEMENTATION

SEC. 101. SHORT TITLE.

    This title may be cited as the ``WIPO Copyright Treaties
Implementation Act''.

SEC. 102. CIRCUMVENTION OF COPYRIGHT PROTECTION SYSTEMS.

    (a) Violations Regarding Circumvention of Technological Protection
Measures.--(1)(A) The Secretary of Commerce shall issue regulations
prohibiting any person from circumventing a technological protection
measure that effectively controls access to a work protected under
title 17, United States Code, to the extent provided in this
subsection, effective at the end of the 2-year period beginning on the
date of the enactment of this Act.
    (B) During the 2-year period described in subparagraph (A), and in
each succeeding 2-year period, the Secretary of Commerce, in
consultation with the Assistant Secretary of Commerce for
Communications and Information, the Commissioner of Patents and
Trademarks, and the Register of Copyrights, shall conduct a rulemaking
on the record to determine whether users of copyrighted works have
been, or are likely to be in the succeeding 2-year period, adversely
affected by the implementation of technological protection measures
that effectively control access to works protected under title 17,
United States Code, in their ability to make lawful uses under title
17, United States Code, of copyrighted works. In conducting such
rulemaking, the Secretary shall examine--
            (i) the availability for use of copyrighted works;
            (ii) the availability for use of works for archival,
        preservation, and educational purposes;
            (iii) the impact of the application of technological
        protection measures to copyrighted works on criticism, comment,
        news reporting, teaching, scholarship, or research;
            (iv) the effect of circumvention of technological
        protection measures on the market for or value of copyrighted
        works; and
            (v) such other factors as the Secretary, in consultation
        with the Assistant Secretary of Commerce for Communications and
        Information, the Commissioner of Patents and Trademarks, and
        the Register of Copyrights, considers appropriate.
    (C) The Secretary, with respect to each particular class of
copyrighted works for which the Secretary has determined, pursuant to
the rulemaking conducted under subparagraph (B), that lawful uses have
been, or are likely to be, adversely affected, shall waive the
applicability of the regulations issued under subparagraph (A) for the
ensuing 2-year period. The determinations made in the rulemaking shall
not be admissible in any action to enforce any provision of this Act
other than this paragraph.
    (2) No person shall manufacture, import, offer to the public,
provide, or otherwise traffic in any technology, product, service,
device, component, or part thereof, that--
            (A) is primarily designed or produced for the purpose of
        circumventing a technological protection measure that
        effectively controls access to a work protected under title 17,
        United States Code;
            (B) has only limited commercially significant purpose or
        use other than to circumvent a technological protection measure
        that effectively controls access to a work protected under
        title 17, United States Code; or
            (C) is marketed by that person or another acting in concert
        with that person with that person's knowledge for use in
        circumventing a technological protection measure that
        effectively controls access to a work protected under title 17,
        United States Code.
    (3) As used in this subsection--
            (A) to ``circumvent a technological protection measure''
        means to descramble a scrambled work, to decrypt an encrypted
        work, or otherwise to avoid, bypass, remove, deactivate, or
        impair a technological protection measure, without the
        authority of the copyright owner; and
            (B) a technological protection measure ``effectively
        controls access to a work'' if the measure, in the ordinary
        course of its operation, requires the application of
        information, or a process or a treatment, with the authority of
        the copyright owner, to gain access to the work.
    (b) Additional Violations.--(1) No person shall manufacture,
import, offer to the public, provide, or otherwise traffic in any
technology, product, service, device, component, or part thereof,
that--
            (A) is primarily designed or produced for the purpose of
        circumventing protection afforded by a technological protection
        measure that effectively protects a right of a copyright owner
        under title 17, United States Code, in a work or a portion
        thereof;
            (B) has only limited commercially significant purpose or
        use other than to circumvent protection afforded by a
        technological protection measure that effectively protects a
        right of a copyright owner under title 17, United States Code,
        in a work or a portion thereof; or
            (C) is marketed by that person or another acting in concert
        with that person with that person's knowledge for use in
        circumventing protection afforded by a technological protection
        measure that effectively protects a right of a copyright owner
        under title 17, United States Code, in a work or a portion
        thereof.
    (2) As used in this subsection--
            (A) to ``circumvent protection afforded by a technological
        protection measure'' means avoiding, bypassing, removing,
        deactivating, or otherwise impairing a technological protection
        measure; and
            (B) a technological protection measure ``effectively
        protects a right of a copyright owner under title 17, United
        States Code'' if the measure, in the ordinary course of its
        operation, prevents, restricts, or otherwise limits the
        exercise of a right of a copyright owner under title 17, United
        States Code.
    (c) Other Rights, Etc., Not Affected.--(1) Nothing in this section
shall affect rights, remedies, limitations, or defenses to copyright
infringement, including fair use, under title 17, United States Code.
    (2) Nothing in this section shall enlarge or diminish vicarious or
contributory liability for copyright infringement in connection with
any technology, product, service, device, component, or part thereof.
    (3) Nothing in this section shall require that the design of, or
design and selection of parts and components for, a consumer
electronics, telecommunications, or computing product provide for a
response to any particular technological protection measure.
    (4) Nothing in this section shall enlarge or diminish any rights of
free speech or the press for activities using consumer electronics,
telecommunications, or computing products.
    (d) Exemption for Nonprofit Libraries, Archives, and Educational
Institutions.--(1) A nonprofit library, archives, or educational
institution which gains access to a commercially exploited copyrighted
work solely in order to make a good faith determination of whether to
acquire a copy of that work for the sole purpose of engaging in conduct
permitted under title 17, United States Code, shall not be in violation
of the regulations issued under subsection (a)(1)(A). A copy of a work
to which access has been gained under this paragraph--
            (A) may not be retained longer than necessary to make such
        good faith determination; and
            (B) may not be used for any other purpose.
    (2) The exemption made available under paragraph (1) shall only
apply with respect to a work when an identical copy of that work is not
reasonably available in another form.
    (3) A nonprofit library, archives, or educational institution that
willfully for the purpose of commercial advantage or financial gain
violates paragraph (1)--
            (A) shall, for the first offense, be subject to the civil
        remedies under section 104; and
            (B) shall, for repeated or subsequent offenses, in addition
        to the civil remedies under section 104, forfeit the exemption
        provided under paragraph (1).
    (4) This subsection may not be used as a defense to a claim under
subsection (a)(2) or (b), nor may this subsection permit a nonprofit
library, archives, or educational institution to manufacture, import,
offer to the public, provide, or otherwise traffic in any technology,
product, service, component, or part thereof, which circumvents a
technological protection measure.
    (5) In order for a library or archives to qualify for the exemption
under this subsection, the collections of that library or archives
shall be--
            (A) open to the public; or
            (B) available not only to researchers affiliated with the
        library or archives or with the institution of which it is a
        part, but also to other persons doing research in a specialized
        field.
    (e) Law Enforcement and Intelligence Activities.--This section does
not prohibit any lawfully authorized investigative, protective, or
intelligence activity of an officer, agent, or employee of the United
States, a State, or a political subdivision of a State, or a person
acting pursuant to a contract with the United States, a State, or a
political subdivision of a State.
    (f) Reverse Engineering.--(1) Notwithstanding the regulations
issued under subsection (a)(1)(A), a person who has lawfully obtained
the right to use a copy of a computer program may circumvent a
technological protection measure that effectively controls access to a
particular portion of that program for the sole purpose of identifying
and analyzing those elements of the program that are necessary to
achieve interoperability of an independently created computer program
with other programs, and that have not previously been readily
available to the person engaging in the circumvention, to the extent
any such acts of identification and analysis do not constitute
infringement under title 17, United States Code.
    (2) Notwithstanding the provisions of subsections (a)(2) and (b), a
person may develop and employ technological means to circumvent a
technological protection measure, or to circumvent protection afforded
by a technological protection measure, in order to make the
identification and analysis permitted under paragraph (1), or for the
limited purpose of achieving interoperability of an independently
created computer program with other programs, if such means are
necessary to achieve such interoperability, to the extent that doing so
does not constitute infringement under title 17, United States Code.
    (3) The information acquired through the acts permitted under
paragraph (1), and the means permitted under paragraph (2), may be made
available to others if the person referred to in paragraph (1) or (2),
as the case may be, provides such information or means solely for the
purpose of achieving interoperability of an independently created
computer program with other programs, and to the extent that doing so
does not constitute infringement under title 17, United States Code, or
violate other applicable law.
    (4) For purposes of this subsection, the term ``interoperability''
means the ability of computer programs to exchange information, and of
such programs mutually to use the information which has been exchanged.
    (g) Encryption Research.--
            (1) Definitions.--For purposes of this subsection--
                    (A) the term ``encryption research'' means
                activities necessary to identify and analyze flaws and
                vulnerabilities of encryption technologies applied to
                copyrighted works, if these activities are conducted to
                advance the state of knowledge in the field of
                encryption technology or to assist in the development
                of encryption products; and
                    (B) the term ``encryption technology'' means the
                scrambling and descrambling of information using
                mathematical formulas or algorithms.
            (2) Permissible acts of encryption research.--
        Notwithstanding the provisions of subsection (a)(1)(A), it is
        not a violation of the regulations issued under that subsection
        for a person to circumvent a technological protection measure
        as applied to a copy, phonorecord, performance, or display of a
        published work in the course of an act of good faith encryption
        research if--
                    (A) the person lawfully obtained the encrypted
                copy, phonorecord, performance, or display of the
                published work;
                    (B) such act is necessary to conduct such
                encryption research;
                    (C) the person made a good faith effort to obtain
                authorization before the circumvention; and
                    (D) such act does not constitute infringement under
                title 17, United States Code, or a violation of
                applicable law other than this section, including
                section 1030 of title 18, United States Code, and those
                provisions of title 18, United States Code, amended by
                the Computer Fraud and Abuse Act of 1986.
            (3) Factors in determining exemption.--In determining
        whether a person qualifies for the exemption under paragraph
        (2), the factors to be considered shall include--
                    (A) whether the information derived from the
                encryption research was disseminated, and if so,
                whether it was disseminated in a manner reasonably
                calculated to advance the state of knowledge or
                development of encryption technology, versus whether it
                was disseminated in a manner that facilitates
                infringement under title 17, United States Code, or a
                violation of applicable law other than this section,
                including a violation of privacy or breach of security;
                    (B) whether the person is engaged in a legitimate
                course of study, is employed, or is appropriately
                trained or experienced, in the field of encryption
                technology; and
                    (C) whether the person provides the copyright owner
                of the work to which the technological protection
                measure is applied with notice of the findings and
                documentation of the research, and the time when such
                notice is provided.
            (4) Use of technological means for research activities.--
        Notwithstanding the provisions of subsection (a)(2), it is not
        a violation of that subsection for a person to--
                    (A) develop and employ technological means to
                circumvent a technological protection measure for the
                sole purpose of performing the acts of good faith
                encryption research described in paragraph (2); and
                    (B) provide the technological means to another
                person with whom he or she is working collaboratively
                for the purpose of conducting the acts of good faith
                encryption research described in paragraph (2) or for
                the purpose of having that other person verify his or
                her acts of good faith encryption research described in
                paragraph (2).
            (5) Report to congress.--Not later than 1 year after the
        date of the enactment of this Act, the Assistant Secretary of
        Commerce for Communications and Information shall report to the
        Congress on the effect this subsection has had on--
                    (A) encryption research and the development of
                encryption technology;
                    (B) the adequacy and effectiveness of technological
                protection for copyrighted works; and
                    (C) protection of copyright owners against the
                unauthorized access to their encrypted copyrighted
                works.
        The Assistant Secretary shall include in such report
        recommendations, if any, on proposed amendments to this Act.
    (h) Components or Parts to Prevent Access of Minors to the
Internet.--In applying subsection (a) and the regulations issued under
subsection (a)(1)(A) to a component or part, the court may consider the
necessity for its intended and actual incorporation in a technology,
product, service, or device, which--
            (1) does not itself violate the provisions of title 17,
        United States Code; and
            (2) has the sole purpose to prevent the access of minors to
        material on the Internet.
    (i) Protection of Personally Identifying Information.--
            (1) Circumvention permitted.--Notwithstanding the
        provisions of subsection (a)(1)(A), it is not a violation of
        the regulations issued under that subsection for a person to
        circumvent a technological protection measure that effectively
        controls access to a work protected under title 17, United
        States Code, if--
                    (A) the technological protection measure, or the
                work it protects, contains the capability of collecting
                or disseminating personally identifying information
                reflecting the online activities of a natural person
                who seeks to gain access to the work protected;
                    (B) in the normal course of its operation, the
                technological protection measure, or the work it
                protects, collects or disseminates personally
                identifying information about the person who seeks to
                gain access to the work protected, without providing
                conspicuous notice of such collection or dissemination
                to such person, and without providing such person with
                the capability to prevent or restrict such collection
or dissemination;
                    (C) the act of circumvention has the sole effect of
                identifying and disabling the capability described in
                subparagraph (A), and has no other effect on the
                ability of any person to gain access to any work; and
                    (D) the act of circumvention is carried out solely
                for the purpose of preventing the collection or
                dissemination of personally identifying information
                about a natural person who seeks to gain access to the
                work protected, and is not in violation of any other
                law.
            (2) Inapplicability to certain technological protection
        measures.--This subsection does not apply to a technological
        protection measure, or a work it protects, that does not
        collect or disseminate personally identifying information and
        that is disclosed to a user as not having or using such
        capability.

SEC. 103. INTEGRITY OF COPYRIGHT MANAGEMENT INFORMATION.

    (a) False Copyright Management Information.--No person shall
knowingly and with the intent to induce, enable, facilitate, or conceal
infringement--
            (1) provide copyright management information that is false,
        or
            (2) distribute or import for distribution copyright
        management information that is false.
    (b) Removal or Alteration of Copyright Management Information.--No
person shall, without the authority of the copyright owner or the law--
            (1) intentionally remove or alter any copyright management
        information,
            (2) distribute or import for distribution copyright
        management information knowing that the copyright management
        information has been removed or altered without authority of
        the copyright owner or the law, or
            (3) distribute, import for distribution, or publicly
        perform works, copies of works, or phonorecords, knowing that
        copyright management information has been removed or altered
        without authority of the copyright owner or the law,
knowing, or, with respect to civil remedies under section 104, having
reasonable grounds to know, that it will induce, enable, facilitate, or
conceal an infringement of any right under title 17, United States
Code.
    (c) Definitions.--As used in this section--
            (1) the terms ``distribute'', ``publicly perform'',
        ``copies'', and ``phonorecords'' have the meanings given those
        terms in title 17, United States Code; and
            (2) the term ``copyright management information'' means any
        of the following information conveyed in connection with copies
        or phonorecords of a work or performances or displays of a
        work, including in digital form, except that such term does not
        include any personally identifying information about a user of
        a work or of a copy, phonorecord, performance, or display of a
        work:
                    (A) The title and other information identifying the
                work, including the information set forth on a notice
                of copyright.
                    (B) The name of, and other identifying information
                about, the author of a work.
                    (C) The name of, and other identifying information
                about, the copyright owner of the work, including the
                information set forth in a notice of copyright.
                    (D) With the exception of public performances of
                works by radio and television broadcast stations, the
                name of, and other identifying information about, a
                performer whose performance is fixed in a work other
                than an audiovisual work.
                    (E) With the exception of public performances of
                works by radio and television broadcast stations, in
                the case of an audiovisual work, the name of, and other
                identifying information about, a writer, performer, or
                director who is credited in the audiovisual work.
                    (F) Terms and conditions for use of the work.
                    (G) Identifying numbers or symbols referring to
                such information or links to such information.
                    (H) Such other information as the Register of
                Copyrights may prescribe by regulation, except that the
                Register of Copyrights may not require the provision of
                any information concerning the user of a copyrighted
                work.
    (d) Law Enforcement and Intelligence Activities.--This section does
not prohibit any lawfully authorized investigative, protective, or
intelligence activity of an officer, agent, or employee of the United
States, a State, or a political subdivision of a State, or a person
acting pursuant to a contract with the United States, a State, or a
political subdivision of a State.
    (e) Limitations on Liability.--
            (1) Analog transmissions.--In the case of an analog
        transmission, a person who is making transmissions in its
        capacity as a broadcast station, or as a cable system (as
        defined in section 602 of the Communications Act of 1934), or
        someone who provides programming to such station or system,
        shall not be liable for a violation of subsection (b) if--
                    (A) avoiding the activity that constitutes such
                violation is not technically feasible or would create
                an undue financial hardship on such person; and
                    (B) such person did not intend, by engaging in such
                activity, to induce, enable, facilitate, or conceal
                infringement of a right under title 17, United States
                Code.
            (2) Digital transmissions.--
                    (A) If a digital transmission standard for the
                placement of copyright management information for a
                category of works is set in a voluntary, consensus
                standard-setting process involving a representative
                cross-section of broadcast stations or cable systems
                and copyright owners of a category of works that are
                intended for public performance by such stations or
                systems, a person identified in paragraph (1) shall not
                be liable for a violation of subsection (b) with
                respect to the particular copyright management
                information addressed by such standard if--
                            (i) the placement of such information by
                        someone other than such person is not in
                        accordance with such standard; and
                            (ii) the activity that constitutes such
                        violation is not intended to induce, enable,
                        facilitate, or conceal infringement of a right
                        under title 17, United States Code.
                    (B) Until a digital transmission standard has been
                set pursuant to subparagraph (A) with respect to the
                placement of copyright management information for a
                category or works, a person identified in paragraph (1)
                shall not be liable for a violation of subsection (b)
                with respect to such copyright management information,
                if the activity that constitutes such violation is not
                intended to induce, enable, facilitate, or conceal
                infringement of a right under title 17, United States
                Code, and if--
                            (i) the transmission of such information by
                        such person would result in a perceptible
                        visual or aural degradation of the digital
                        signal; or
                            (ii) the transmission of such information
                        by such person would conflict with--
                                    (I) an applicable government
                                regulation relating to transmission of
                                information in a digital signal;
                                    (II) an applicable industry-wide
                                standard relating to the transmission
                                of information in a digital signal that
                                was adopted by a voluntary consensus
                                standards body prior to the effective
                                date of this title; or
                                    (III) an applicable industry-wide
                                standard relating to the transmission
                                of information in a digital signal that
                                was adopted in a voluntary, consensus
                                standards-setting process open to
                                participation by a representative
                                cross-section of broadcast stations or
                                cable systems and copyright owners of a
                                category of works that are intended for
                                public performance by such stations or
                                systems.
            (3) Definitions.--As used in this subsection--
                    (A) the term ``broadcast station'' has the meaning
                given that term in section 3 of the Communications Act
                of 1934 (47 U.S.C. 153)); and
                    (B) the term ``cable system'' has the meaning given
                that term in section 602 of the Communications Act of
                1934 (47 U.S.C. 522)).

SEC. 104. CIVIL REMEDIES.

    (a) Civil Actions.--Any person injured by a violation of section
102 or 103, or of any regulation issued under section 102(a)(1), may
bring a civil action in an appropriate United States district court for
such violation.
    (b) Powers of the Court.--In an action brought under subsection
(a), the court--
            (1) may grant temporary and permanent injunctions on such
        terms as it deems reasonable to prevent or restrain a
        violation, but in no event shall impose a prior restraint on
        free speech or the press protected under the 1st amendment to
        the Constitution;
            (2) at any time while an action is pending, may order the
        impounding, on such terms as it deems reasonable, of any device
        or product that is in the custody or control of the alleged
        violator and that the court has reasonable cause to believe was
        involved in a violation;
            (3) may award damages under subsection (c);
            (4) in its discretion may allow the recovery of costs by or
        against any party other than the United States or an officer
        thereof;
            (5) in its discretion may award reasonable attorney's fees
        to the prevailing party; and
            (6) may, as part of a final judgment or decree finding a
        violation, order the remedial modification or the destruction
        of any device or product involved in the violation that is in
        the custody or control of the violator or has been impounded
        under paragraph (2).
    (c) Award of Damages.--
            (1) In general.--Except as otherwise provided in this
        title, a person committing a violation of section 102 or 103,
        or of any regulation issued under section 102(a)(1), is liable
        for either--
                    (A) the actual damages and any additional profits
                of the violator, as provided in paragraph (2), or
                    (B) statutory damages, as provided in paragraph
                (3).
            (2) Actual damages.--The court shall award to the
        complaining party the actual damages suffered by the party as a
        result of the violation, and any profits of the violator that
        are attributable to the violation and are not taken into
        account in computing the actual damages, if the complaining
        party elects such damages at any time before final judgment is
        entered.
            (3) Statutory damages.--
                    (A) At any time before final judgment is entered, a
                complaining party may elect to recover an award of
                statutory damages for each violation of section 102, or
                of a regulation issued under section 102(a)(1), in the
                sum of not less than $200 or more than $2,500 per act
                of circumvention, device, product, component, offer, or
                performance of service, as the court considers just.
                    (B) At any time before final judgment is entered, a
                complaining party may elect to recover an award of
                statutory damages for each violation of section 103 in
                the sum of not less than $2,500 or more than $25,000.
            (4) Repeated violations.--In any case in which the injured
        party sustains the burden of proving, and the court finds, that
        a person has violated section 102 or 103, or any regulation
        issued under section 102(a)(1), within three years after a
        final judgment was entered against the person for another such
        violation, the court may increase the award of damages up to
        triple the amount that would otherwise be awarded, as the court
        considers just.
            (5) Innocent violations.--
                    (A) In general.--The court in its discretion may
                reduce or remit the total award of damages in any case
                in which the violator sustains the burden of proving,
                and the court finds, that the violator was not aware
                and had no reason to believe that its acts constituted
                a violation.
                    (B) Nonprofit library, archives, or educational
                institutions.--In the case of a nonprofit library,
                archives, or educational institution, the court shall
                remit damages in any case in which the library,
                archives, or educational institution sustains the
                burden of proving, and the court finds, that the
                library, archives, or educational institution was not
                aware and had no reason to believe that its acts
                constituted a violation.

SEC. 105. CRIMINAL OFFENSES AND PENALTIES.

    (a) In General.--Any person who violates section 102 or 103, or any
regulation issued under section 102(a)(1), willfully and for purposes
of commercial advantage or private financial gain--
            (1) shall be fined not more than $500,000 or imprisoned for
        not more than 5 years, or both, for the first offense; and
            (2) shall be fined not more than $1,000,000 or imprisoned
        for not more than 10 years, or both, for any subsequent
        offense.
    (b) Limitation for Nonprofit Library, Archives, or Educational
Institution.--Subsection (a) shall not apply to a nonprofit library,
archives, or educational institution.
    (c) Statute of Limitations.--No criminal proceeding shall be
brought under this section unless such proceeding is commenced within
five years after the cause of action arose.

SEC. 106. SAVINGS CLAUSE.

    Nothing in this title abrogates, diminishes, or weakens the
provisions of, nor provides any defense or element of mitigation in a
criminal prosecution or civil action under, any Federal or State law
that prevents the violation of the privacy of an individual in
connection with the individual's use of the Internet.

SEC. 107. DEVELOPMENT AND IMPLEMENTATION OF TECHNOLOGICAL PROTECTION
              MEASURES.

    (a) Statement of Congressional Policy and Objective.--It is the
sense of the Congress that technological protection measures play a
crucial role in safeguarding the interests of both copyright owners and
lawful users of copyrighted works in digital formats, by facilitating
lawful uses of such works while protecting the private property
interests of holders of rights under title 17, United States Code.
Accordingly, the expeditious implementation of such measures, developed
by the private sector through voluntary industry-led processes, is a
key factor in realizing the full benefits of making available
copyrighted works through digital networks, including the benefits set
forth in this section.
    (b) Technological Protection Measures.--The technological
protection measures referred to in subsection (a) shall include, but
not be limited to, those which--
            (1) enable nonprofit libraries, for nonprofit purposes, to
        continue to lend to library users copies or phonorecords that
        such libraries have lawfully acquired, including the lending of
        such copies or phonorecords in digital formats in a manner that
        prevents infringement;
            (2) effectively protect against the infringement of
        exclusive rights under title 17, United States Code, and
        facilitate the exercise of those exclusive rights; and
            (3) promote the development and implementation of diverse
        methods, mechanisms, and arrangements in the marketplace for
        making available copyrighted works in digital formats which
        provide opportunities for individual members of the public to
        make lawful uses of copyrighted works in digital formats.
    (c) Procedures for Developing and Implementing Technological
Protection Measures.--The technological protection measures whose
development and implementation the Congress anticipates are those
which--
            (1) are developed pursuant to a broad consensus in an open,
        fair, voluntary, and multi-industry process;
            (2) are made available on reasonable and nondiscriminatory
        terms; and
            (3) do not impose substantial costs or burdens on copyright
        owners or on manufacturers of hardware or software used in
        conjunction with copyrighted works in digital formats.
    (d) Oversight and Reporting.--(1) The Secretary of Commerce, in
consultation with the Assistant Secretary of Commerce for
Communications and Information and the Register of Copyrights, shall
review the impact of the enactment of section 102 of this Act on the
access of individual users to copyrighted works in digital formats and
shall report annually thereon to the Committees on Commerce and on the
Judiciary of the House of Representatives and the Committees on
Commerce, Science, and Transportation and on the Judiciary of the
Senate.
    (2) Each report under paragraph (1) shall address the following
issues:
            (A) The status of the development and implementation of
        technological protection measures, including measures that
        advance the objectives of this section, and the effectiveness
        of technological protection measures in protecting the private
        property interests of copyright owners under title 17, United
        States Code.
            (B) The degree to which individual lawful users of
        copyrighted works--
                    (i) have access to the Internet and digital
                networks generally;
                    (ii) are dependent upon such access for their use
                of copyrighted works;
                    (iii) have available to them other channels for
                obtaining and using copyrighted works, other than the
                Internet and digital networks generally;
                    (iv) are required to pay copyright owners or
                intermediaries for each lawful use of copyrighted works
                in digital formats to which they have access; and
                    (v) are able to utilize nonprofit libraries to
                obtain access, through borrowing without payment by the
                user, to copyrighted works in digital formats.
            (C) The degree to which infringement of copyrighted works
        in digital formats is occurring.
            (D) Whether and the extent to which section 102, and the
        regulations issued under section 102(a)(1), are asserted as a
        basis for liability in claims brought against persons
        conducting research and development, including reverse
        engineering of copyrighted works, and the extent to which such
        claims constitute a serious impediment to the development and
        production of competitive goods and services.
            (E) The degree to which individual users of copyrighted
        materials in digital formats are able effectively to protect
        themselves against the use of technological protection measures
        to carry out or facilitate the undisclosed collection and
        dissemination of personally identifying information concerning
        the access to and use of such materials by such users.
            (F) Such other issues as the Secretary of Commerce, in
        consultation with the Assistant Secretary of Commerce for
Communications and Information and the Register of Copyrights,
identifies as relevant to the impact of the enactment of section 102 on
the access of individual users to copyrighted works in digital formats.
    (3) The first report under this subsection shall be submitted not
later than one year after the date of the enactment of this Act, and
the last such report shall be submitted not later than three years
after the date of the enactment of this Act.
    (4) The reports under this subsection may include such
recommendations for additional legislative action as the Secretary of
Commerce and the Register of Copyrights consider advisable in order to
further the objectives of this section.

SEC. 108. TECHNICAL AMENDMENTS.

    (a) Definitions.--Section 101 of title 17, United States Code, is
amended--
            (1) by striking the definition of ``Berne Convention
        work'';
            (2) in the definition of ``The `country of origin' of a
        Berne Convention work''--
                    (A) by striking ``The `country of origin' of a
                Berne Convention work, for purposes of section 411, is
                the United States if'' and inserting ``For purposes of
                section 411, a work is a `United States work' only
                if'';
                    (B) in paragraph (1)--
                            (i) in subparagraph (B) by striking
                        ``nation or nations adhering to the Berne
                        Convention'' and inserting ``treaty party or
                        parties'';
                            (ii) in subparagraph (C) by striking ``does
                        not adhere to the Berne Convention'' and
                        inserting ``is not a treaty party''; and
                            (iii) in subparagraph (D) by striking
                        ``does not adhere to the Berne Convention'' and
                        inserting ``is not a treaty party''; and
                    (C) in the matter following paragraph (3) by
                striking ``For the purposes of section 411, the
                `country of origin' of any other Berne Convention work
                is not the United States.'';
            (3) by inserting after the definition of ``fixed'' the
        following:
            ``The `Geneva Phonograms Convention' is the Convention for
        the Protection of Producers of Phonograms Against Unauthorized
        Duplication of Their Phonograms, concluded at Geneva,
        Switzerland, on October 29, 1971.'';
            (4) by inserting after the definition of ``including'' the
        following:
            ``An `international agreement' is--
                    ``(1) the Universal Copyright Convention;
                    ``(2) the Geneva Phonograms Convention;
                    ``(3) the Berne Convention;
                    ``(4) the WTO Agreement;
                    ``(5) the WIPO Copyright Treaty;
                    ``(6) the WIPO Performances and Phonograms Treaty;
                and
                    ``(7) any other copyright treaty to which the
                United States is a party.'';
            (5) by inserting after the definition of ``transmit'' the
        following:
            ``A `treaty party' is a country or intergovernmental
        organization other than the United States that is a party to an
        international agreement.'';
            (6) by inserting after the definition of ``widow'' the
        following:
            ``The `WIPO Copyright Treaty' is the WIPO Copyright Treaty
        concluded at Geneva, Switzerland, on December 20, 1996.'';
            (7) by inserting after the definition of ``The `WIPO
        Copyright Treaty''' the following:
            ``The `WIPO Performances and Phonograms Treaty' is the WIPO
        Performances and Phonograms Treaty concluded at Geneva,
        Switzerland, on December 20, 1996.''; and
            (8) by inserting after the definition of ``work made for
        hire'' the following:
            ``The terms `WTO Agreement' and `WTO member country' have
        the meanings given those terms in paragraphs (9) and (10),
        respectively, of section 2 of the Uruguay Round Agreements
        Act.''.
    (b) Subject Matter of Copyright; National Origin.--Section 104 of
title 17, United States Code, is amended--
            (1) in subsection (b)--
                    (A) in paragraph (1) by striking ``foreign nation
                that is a party to a copyright treaty to which the
                United States is also a party'' and inserting ``treaty
                party'';
                    (B) in paragraph (2) by striking ``party to the
                Universal Copyright Convention'' and inserting ``treaty
                party'';
                    (C) by redesignating paragraph (5) as paragraph
                (6);
                    (D) by redesignating paragraph (3) as paragraph (5)
                and inserting it after paragraph (4);
                    (E) by inserting after paragraph (2) the following:
            ``(3) the work is a sound recording that was first fixed in
        a treaty party; or'';
                    (F) in paragraph (4) by striking ``Berne Convention
                work'' and inserting ``pictorial, graphic, or
                sculptural work that is incorporated in a building or
                other structure, or an architectural work that is
                embodied in a building and the building or structure is
                located in the United States or a treaty party''; and
                    (G) by inserting after paragraph (6), as so
                redesignated, the following:
``For purposes of paragraph (2), a work that is published in the United
States or a treaty party within 30 days after publication in a foreign
nation that is not a treaty party shall be considered to be first
published in the United States or such treaty party, as the case may
be.''; and
            (2) by adding at the end the following new subsection:
    ``(d) Effect of Phonograms Treaties.--Notwithstanding the
provisions of subsection (b), no works other than sound recordings
shall be eligible for protection under this title solely by virtue of
the adherence of the United States to the Geneva Phonograms Convention
or the WIPO Performances and Phonograms Treaty.''.
    (c) Copyright in Restored Works.--Section 104A(h) of title 17,
United States Code, is amended--
            (1) in paragraph (1), by striking subparagraphs (A) and (B)
        and inserting the following:
                    ``(A) a nation adhering to the Berne Convention;
                    ``(B) a WTO member country;
                    ``(C) a nation adhering to the WIPO Copyright
                Treaty;
                    ``(D) a nation adhering to the WIPO Performances
                and Phonograms Treaty; or
                    ``(E) subject to a Presidential proclamation under
                subsection (g).'';
            (2) by amending paragraph (3) to read as follows:
            ``(3) The term `eligible country' means a nation, other
        than the United States, that--
                    ``(A) becomes a WTO member country after the date
                of the enactment of the Uruguay Round Agreements Act;
                    ``(B) on such date of enactment is, or after such
                date of enactment becomes, a nation adhering to the
                Berne Convention;
                    ``(C) adheres to the WIPO Copyright Treaty;
                    ``(D) adheres to the WIPO Performances and
                Phonograms Treaty; or
                    ``(E) after such date of enactment becomes subject
                to a proclamation under subsection (g).'';
            (3) in paragraph (6)--
                    (A) in subparagraph (C)(iii) by striking ``and''
                after the semicolon;
                    (B) at the end of subparagraph (D) by striking the
                period and inserting ``; and''; and
                    (C) by adding after subparagraph (D) the following:
                    ``(E) if the source country for the work is an
                eligible country solely by virtue of its adherence to
                the WIPO Performances and Phonograms Treaty, is a sound
                recording.'';
            (4) in paragraph (8)(B)(i)--
                    (A) by inserting ``of which'' before ``the
                majority''; and
                    (B) by striking ``of eligible countries''; and
            (5) by striking paragraph (9).
    (d) Registration and Infringement Actions.--Section 411(a) of title
17, United States Code, is amended in the first sentence--
            (1) by striking ``actions for infringement of copyright in
        Berne Convention works whose country of origin is not the
        United States and''; and
            (2) by inserting ``United States'' after ``no action for
        infringement of the copyright in any''.
    (e) Statute of Limitations.--Section 507(a) of title 17, United
State Code, is amended by striking ``No'' and inserting ``Except as
expressly provided otherwise in this title, no''.

SEC. 109. EFFECTIVE DATE.

    (a) In General.--Subject to subsection (b), the amendments made by
this title shall take effect on the date of the enactment of this Act.
    (b) Amendments Relating to Certain International Agreements.--(1)
The following shall take effect upon the entry into force of the WIPO
Copyright Treaty with respect to the United States:
            (A) Paragraph (5) of the definition of ``international
        agreement'' contained in section 101 of title 17, United States
        Code, as amended by section 108(a)(4) of this Act.
            (B) The amendment made by section 108(a)(6) of this Act.
            (C) Subparagraph (C) of section 104A(h)(1) of title 17,
        United States Code, as amended by section 108(c)(1) of this
        Act.
            (D) Subparagraph (C) of section 104A(h)(3) of title 17,
        United States Code, as amended by section 108(c)(2) of this
        Act.
    (2) The following shall take effect upon the entry into force of
the WIPO Performances and Phonograms Treaty with respect to the United
States:
            (A) Paragraph (6) of the definition of ``international
        agreement'' contained in section 101 of title 17, United States
        Code, as amended by section 108(a)(4) of this Act.
            (B) The amendment made by section 108(a)(7) of this Act.
            (C) The amendment made by section 108(b)(2) of this Act.
            (D) Subparagraph (D) of section 104A(h)(1) of title 17,
        United States Code, as amended by section 108(c)(1) of this
        Act.
            (E) Subparagraph (D) of section 104A(h)(3) of title 17,
        United States Code, as amended by section 108(c)(2) of this
        Act.
            (F) The amendments made by section 108(c)(3) of this Act.

          TITLE II--INTERNET COPYRIGHT INFRINGEMENT LIABILITY

SEC. 201. SHORT TITLE.

    This title may be cited as the ``Internet Copyright Infringement
Liability Clarification Act of 1998''.

SEC. 202. LIMITATIONS ON LIABILITY FOR INTERNET COPYRIGHT INFRINGEMENT.

    (a) In General.--Chapter 5 of title 17, United States Code, is
amended by adding after section 511 the following new section:
``Sec. 512. Liability of service providers for online infringement of
              copyright
    ``(a) Digital Network Communications.--A service provider shall not
be liable for monetary relief, or except as provided in subsection (i)
for injunctive or other equitable relief, for infringement for the
provider's transmitting, routing, or providing connections for,
material through a system or network controlled or operated by or for
the service provider, or the intermediate and transient storage of such
material in the course of such transmitting, routing or providing
connections, if--
            ``(1) it was initiated by or at the direction of a person
        other than the service provider;
            ``(2) it is carried out through an automatic technical
        process without selection of such material by the service
        provider;
            ``(3) the service provider does not select the recipients
        of such material except as an automatic response to the request
        of another;
            ``(4) no such copy of such material made by the service
        provider is maintained on the system or network in a manner
        ordinarily accessible to anyone other than anticipated
        recipients, and no such copy is maintained on the system or
        network in a manner ordinarily accessible to the anticipated
        recipients for a longer period than is reasonably necessary for
        the communication; and
            ``(5) the material is transmitted without modification to
        its content.
    ``(b) System Caching.--A service provider shall not be liable for
monetary relief, or except as provided in subsection (i) for injunctive
or other equitable relief, for infringement for the intermediate and
temporary storage of material on the system or network controlled or
operated by or for the service provider: Provided, That--
            ``(1) such material is made available online by a person
        other than such service provider,
            ``(2) such material is transmitted from the person
        described in paragraph (1) through such system or network to
        someone other than that person at the direction of such other
        person,
            ``(3) the storage is carried out through an automatic
        technical process for the purpose of making such material
        available to users of such system or network who subsequently
        request access to that material from the person described in
        paragraph (1):
Provided further, That--
            ``(4) such material is transmitted to such subsequent users
        without modification to its content from the manner in which
        the material otherwise was transmitted from the person
        described in paragraph (1);
            ``(5) such service provider complies with rules concerning
        the refreshing, reloading or other updating of such material
        when specified by the person making that material available
        online in accordance with an accepted industry standard data
        communications protocol for the system or network through which
        that person makes the material available: Provided further,
        That the rules are not used by the person described in
        paragraph (1) to prevent or unreasonably impair such
        intermediate storage;
            ``(6) such service provider does not interfere with the
        ability of technology associated with such material that
        returns to the person described in paragraph (1) the
        information that would have been available to such person if
        such material had been obtained by such subsequent users
        directly from such person: Provided further, That such
        technology--
                    ``(A) does not significantly interfere with the
                performance of the provider's system or network or with
                the intermediate storage of the material;
                    ``(B) is consistent with accepted industry standard
                communications protocols; and
                    ``(C) does not extract information from the
                provider's system or network other than the information
                that would have been available to such person if such
                material had been accessed by such users directly from
                such person;
            ``(7) either--
                    ``(A) the person described in paragraph (1) does
                not currently condition access to such material; or
                    ``(B) if access to such material is so conditioned
                by such person, by a current individual pre-condition,
                such as a pre-condition based on payment of a fee, or
                provision of a password or other information, the
                service provider permits access to the stored material
                in significant part only to users of its system or
                network that have been so authorized and only in
                accordance with those conditions; and
            ``(8) if the person described in paragraph (1) makes that
        material available online without the authorization of the
        copyright owner, then the service provider responds
        expeditiously to remove, or disable access to, the material
        that is claimed to be infringing upon notification of claimed
        infringements described in subsection (c)(3): Provided further,
        That the material has previously been removed from the
        originating site, and the party giving the notification
        includes in the notification a statement confirming that such
        material has been removed or access to it has been disabled or
        ordered to be removed or have access disabled.
    ``(c) Information Stored on Service Providers.--
            ``(1) In general.--A service provider shall not be liable
        for monetary relief, or except as provided in subsection (i)
        for injunctive or other equitable relief, for infringement for
        the storage at the direction of a user of material that resides
        on a system or network controlled or operated by or for the
        service provider, if the service provider--
                    ``(A)(i) does not have actual knowledge that the
                material or activity is infringing,
                    ``(ii) in the absence of such actual knowledge, is
                not aware of facts or circumstances from which
                infringing activity is apparent, or
                    ``(iii) if upon obtaining such knowledge or
                awareness, the service provider acts expeditiously to
                remove or disable access to, the material;
                    ``(B) does not receive a financial benefit directly
                attributable to the infringing activity, where the
                service provider has the right and ability to control
                such activity; and
                    ``(C) in the instance of a notification of claimed
                infringement as described in paragraph (3), responds
                expeditiously to remove, or disable access to, the
                material that is claimed to be infringing or to be the
                subject of infringing activity.
            ``(2) Designated agent.--The limitations on liability
        established in this subsection apply only if the service
        provider has designated an agent to receive notifications of
        claimed infringement described in paragraph (3), by
        substantially making the name, address, phone number,
        electronic mail address of such agent, and other contact
        information deemed appropriate by the Register of Copyrights,
        available through its service, including on its website, and by
        providing such information to the Copyright Office. The
        Register of Copyrights shall maintain a current directory of
        agents available to the public for inspection, including
        through the Internet, in both electronic and hard copy formats.
            ``(3) Elements of notification.--
                    ``(A) To be effective under this subsection, a
                notification of claimed infringement means any written
                communication provided to the service provider's
                designated agent that includes substantially the
                following--
                            ``(i) a physical or electronic signature of
                        a person authorized to act on behalf of the
                        owner of an exclusive right that is allegedly
                        infringed;
                            ``(ii) identification of the copyrighted
                        work claimed to have been infringed, or, if
                        multiple such works at a single online site are
                        covered by a single notification, a
                        representative list of such works at that site;
                            ``(iii) identification of the material that
                        is claimed to be infringing or to be the
                        subject of infringing activity that is to be
                        removed or access to which is to be disabled,
                        and information reasonably sufficient to permit
                        the service provider to locate the material;
                            ``(iv) information reasonably sufficient to
                        permit the service provider to contact the
                        complaining party, such as an address,
                        telephone number, and, if available an
                        electronic mail address at which the
                        complaining party may be contacted;
                            ``(v) a statement that the complaining
                        party has a good faith belief that use of the
                        material in the manner complained of is not
                        authorized by the copyright owner, or its
                        agent, or the law; and
                            ``(vi) a statement that the information in
                        the notification is accurate, and under penalty
                        of perjury, that the complaining party has the
                        authority to enforce the owner's rights that
                        are claimed to be infringed.
                    ``(B) A notification from the copyright owner or
                from a person authorized to act on behalf of the
                copyright owner that fails substantially to conform to
                the provisions of paragraph (3)(A) shall not be
                considered under paragraph (1)(A) in determining
                whether a service provider has actual knowledge or is
                aware of facts or circumstances from which infringing
                activity is apparent: Provided, That the provider
                promptly attempts to contact the complaining party or
                takes other reasonable steps to assist in the receipt
                of notice under paragraph (3)(A) when the notice is
                provided to the service provider's designated agent and
                substantially satisfies the provisions of paragraphs
                (3)(A) (ii), (iii), and (iv).
    ``(d) Information Location Tools.--A service provider shall not be
liable for monetary relief, or except as provided in subsection (i) for
injunctive or other equitable relief, for infringement for the provider
referring or linking users to an online location containing infringing
material or activity by using information location tools, including a
directory, index, reference, pointer or hypertext link, if the
provider--
            ``(1) does not have actual knowledge that the material or
        activity is infringing or, in the absence of such actual
        knowledge, is not aware of facts or circumstances from which
        infringing activity is apparent;
            ``(2) does not receive a financial benefit directly
        attributable to the infringing activity, where the service
        provider has the right and ability to control such activity;
        and
            ``(3) responds expeditiously to remove or disable the
        reference or link upon notification of claimed infringement as
        described in subsection (c)(3): Provided, That for the purposes
        of this paragraph, the element in subsection (c)(3)(A)(iii)
        shall be identification of the reference or link, to material
        or activity claimed to be infringing, that is to be removed or
        access to which is to be disabled, and information reasonably
        sufficient to permit the service provider to locate such
        reference or link.
    ``(e) Misrepresentations.--Any person who knowingly materially
misrepresents under this section--
            ``(1) that material or activity is infringing, or
            ``(2) that material or activity was removed or disabled by
        mistake or misidentification,
shall be liable for any damages, including costs and attorneys' fees,
incurred by the alleged infringer, by any copyright owner or copyright
owner's authorized licensee, or by the service provider, who is injured
by such misrepresentation, as the result of the service provider
relying upon such misrepresentation in removing or disabling access to
the material or activity claimed to be infringing, or in replacing the
removed material or ceasing to disable access to it.
    ``(f) Replacement of Removed or Disabled Material and Limitation on
Other Liability.--
            ``(1) Subject to paragraph (2) of this subsection, a
        service provider shall not be liable to any person for any
        claim based on the service provider's good faith disabling of
        access to, or removal of, material or activity claimed to be
        infringing or based on facts or circumstances from which
        infringing activity is apparent, regardless of whether the
        material or activity is ultimately determined to be infringing.
            ``(2) Paragraph (1) of this subsection shall not apply with
        respect to material residing at the direction of a subscriber
        of the service provider on a system or network controlled or
        operated by or for the service provider that is removed, or to
        which access is disabled by the service provider pursuant to a
        notice provided under subsection (c)(1)(C), unless the service
        provider--
                    ``(A) takes reasonable steps promptly to notify the
                subscriber that it has removed or disabled access to
                the material;
                    ``(B) upon receipt of a counter notice as described
                in paragraph (3), promptly provides the person who
                provided the notice under subsection (c)(1)(C) with a
                copy of the counter notice, and informs such person
                that it will replace the removed material or cease
                disabling access to it in ten business days; and
                    ``(C) replaces the removed material and ceases
                disabling access to it not less than 10, nor more than
                14, business days following receipt of the counter
                notice, unless its designated agent first receives
                notice from the person who submitted the notification
                under subsection (c)(1)(C) that such person has filed
                an action seeking a court order to restrain the
                subscriber from engaging in infringing activity
                relating to the material on the service provider's
                system or network.
            ``(3) To be effective under this subsection, a counter
        notification means any written communication provided to the
        service provider's designated agent that includes substantially
        the following:
                    ``(A) A physical or electronic signature of the
                subscriber.
                    ``(B) Identification of the material that has been
                removed or to which access has been disabled and the
                location at which such material appeared before it was
                removed or access was disabled.
                    ``(C) A statement under penalty of perjury that the
                subscriber has a good faith belief that the material
                was removed or disabled as a result of mistake or
                misidentification of the material to be removed or
                disabled.
                    ``(D) The subscriber's name, address and telephone
                number, and a statement that the subscriber consents to
                the jurisdiction of Federal Court for the judicial
                district in which the address is located, or if the
                subscriber's address is outside of the United States,
                for any judicial district in which the service provider
                may be found, and that the subscriber will accept
                service of process from the person who provided notice
                under subsection (c)(1)(C) or agent of such person.
            ``(4) A service provider's compliance with paragraph (2)
        shall not subject the service provider to liability for
        copyright infringement with respect to the material identified
        in the notice provided under subsection (c)(1)(C).
    ``(g) Identification of Direct Infringer.--The copyright owner or a
person authorized to act on the owner's behalf may request an order for
release of identification of an alleged infringer by filing--
            ``(1) a copy of a notification described in subsection
        (c)(3)(A), including a proposed order, and
            ``(2) a sworn declaration that the purpose of the order is
        to obtain the identity of an alleged infringer and that such
        information will only be used for the purpose of this title,
        with the clerk of any United States district court.
The order shall authorize and order the service provider receiving the
notification to disclose expeditiously to the copyright owner or person
authorized by the copyright owner information sufficient to identify
the alleged direct infringer of the material described in the
notification to the extent such information is available to the service
provider. The order shall be expeditiously issued if the accompanying
notification satisfies the provisions of subsection (c)(3)(A) and the
accompanying declaration is properly executed. Upon receipt of the
order, either accompanying or subsequent to the receipt of a
notification described in subsection (c)(3)(A), a service provider
shall expeditiously give to the copyright owner or person authorized by
the copyright owner the information required by the order,
notwithstanding any other provision of law and regardless of whether
the service provider responds to the notification.
    ``(h) Conditions for Eligibility.--
            ``(1) Accommodation of technology.--The limitations on
        liability established by this section shall apply only if the
        service provider--
                    ``(A) has adopted and reasonably implemented, and
                informs subscribers of the service of, a policy for the
                termination of subscribers of the service who are
                repeat infringers; and
                    ``(B) accommodates and does not interfere with
                standard technical measures as defined in this
                subsection.
            ``(2) Definition.--As used in this section, `standard
        technical measures' are technical measures, used by copyright
        owners to identify or protect copyrighted works, that--
                    ``(A) have been developed pursuant to a broad
                consensus of copyright owners and service providers in
                an open, fair, voluntary, multi-industry standards
                process;
                    ``(B) are available to any person on reasonable and
                nondiscriminatory terms; and
                    ``(C) do not impose substantial costs on service
                providers or substantial burdens on their systems or
                networks.
    ``(i) Injunctions.--The following rules shall apply in the case of
any application for an injunction under section 502 against a service
provider that is not subject to monetary remedies by operation of this
section.
            ``(1) Scope of relief.--
                    ``(A) With respect to conduct other than that which
                qualifies for the limitation on remedies as set forth
                in subsection (a), the court may only grant injunctive
                relief with respect to a service provider in one or
                more of the following forms--
                            ``(i) an order restraining it from
                        providing access to infringing material or
                        activity residing at a particular online site
                        on the provider's system or network;
                            ``(ii) an order restraining it from
                        providing access to an identified subscriber of
                        the service provider's system or network who is
                        engaging in infringing activity by terminating
                        the specified accounts of such subscriber; or
                            ``(iii) such other injunctive remedies as
                        the court may consider necessary to prevent or
                        restrain infringement of specified copyrighted
                        material at a particular online location:
                        Provided, That such remedies are the least
                        burdensome to the service provider that are
                        comparably effective for that purpose.
                    ``(B) If the service provider qualifies for the
                limitation on remedies described in subsection (a), the
                court may only grant injunctive relief in one or both
                of the following forms--
                            ``(i) an order restraining it from
                        providing access to an identified subscriber of
                        the service provider's system or network who is
                        using the provider's service to engage in
                        infringing activity by terminating the
                        specified accounts of such subscriber; or
                            ``(ii) an order restraining it from
                        providing access, by taking specified
                        reasonable steps to block access, to a
                        specific, identified, foreign online location.
            ``(2) Considerations.--The court, in considering the
        relevant criteria for injunctive relief under applicable law,
        shall consider--
                    ``(A) whether such an injunction, either alone or
                in combination with other such injunctions issued
                against the same service provider under this
                subsection, would significantly burden either the
                provider or the operation of the provider's system or
                network;
                    ``(B) the magnitude of the harm likely to be
                suffered by the copyright owner in the digital network
                environment if steps are not taken to prevent or
                restrain the infringement;
                    ``(C) whether implementation of such an injunction
                would be technically feasible and effective, and would
                not interfere with access to noninfringing material at
                other online locations; and
                    ``(D) whether other less burdensome and comparably
                effective means of preventing or restraining access to
                the infringing material are available.
            ``(3) Notice and ex parte orders.--Injunctive relief under
        this subsection shall not be available without notice to the
        service provider and an opportunity for such provider to
        appear, except for orders ensuring the preservation of evidence
        or other orders having no material adverse effect on the
        operation of the service provider's communications network.
    ``(j) Definitions.--
            ``(1)(A) As used in subsection (a), the term `service
        provider' means an entity offering the transmission, routing or
        providing of connections for digital online communications,
        between or among points specified by a user, of material of the
        user's choosing, without modification to the content of the
        material as sent or received.
            ``(B) As used in any other subsection of this section, the
        term `service provider' means a provider of online services or
        network access, or the operator of facilities therefor, and
        includes an entity described in the preceding paragraph of this
        subsection.
            ``(2) As used in this section, the term `monetary relief'
        means damages, costs, attorneys' fees, and any other form of
        monetary payment.
    ``(k) Other Defenses Not Affected.--The failure of a service
provider's conduct to qualify for limitation of liability under this
section shall not bear adversely upon the consideration of a defense by
the service provider that the service provider's conduct is not
infringing under this title or any other defense.
    ``(l) Protection of Privacy.--Nothing in this section shall be
construed to condition the applicability of subsections (a) through (d)
on--
            ``(1) a service provider monitoring its service or
        affirmatively seeking facts indicating infringing activity
        except to the extent consistent with a standard technical
        measure complying with the provisions of subsection (h); or
            ``(2) a service provider accessing, removing, or disabling
        access to material where such conduct is prohibited by law.
    ``(m) Rule of Construction.--Subsections (a), (b), (c), and (d) are
intended to describe separate and distinct functions for purposes of
analysis under this section. Whether a service provider qualifies for
the limitation on liability in any one such subsection shall be based
solely on the criteria in each such subsection and shall not affect a
determination of whether such service provider qualifies for the
limitations on liability under any other such subsection.''.
    (b) Conforming Amendment.--The table of sections for chapter 5 of
title 17, United States Code, is amended by adding at the end the
following:

``512. Liability of service providers for online infringement of
                            copyright.''.

SEC. 203. LIMITATIONS ON EXCLUSIVE RIGHTS; COMPUTER PROGRAMS.

    Section 117 of title 17, United States Code, is amended--
    (1) by striking ``Notwithstanding'' and inserting the following:
    ``(a) Making of Additional Copy or Adaptation by Owner of Copy.--
Notwithstanding'';
    (2) by striking ``Any exact'' and inserting the following:
    ``(b) Lease, Sale, or Other Transfer of Additional Copy or
Adaptation.--Any exact''; and
    (3) by adding at the end the following:
    ``(c) Machine Maintenance or Repair.--Notwithstanding the
provisions of section 106, it is not an infringement for the owner or
lessee of a machine to make or authorize the making of a copy of a
computer program if such copy is made solely by virtue of the
activation of a machine that lawfully contains an authorized copy of
the computer program, for purposes only of maintenance or repair of
that machine, if--
            ``(1) such new copy is used in no other manner and is
        destroyed immediately after the maintenance or repair is
        completed; and
            ``(2) with respect to any computer program or part thereof
        that is not necessary for that machine to be activated, such
        program or part thereof is not accessed or used other than to
        make such new copy by virtue of the activation of the machine.
    ``(d) Definitions.--For purposes of this section--
            ``(1) the `maintenance' of a machine is the servicing of
        the machine in order to make it work in accordance with its
        original specifications and any changes to those specifications
        authorized for that machine; and
            ``(2) the `repair' of a machine is the restoring of the
        machine to the state of working in accordance with its original
        specifications and any changes to those specifications
        authorized for that machine.''.

 SEC. 204. LIABILITY OF EDUCATIONAL INSTITUTIONS FOR ONLINE
              INFRINGEMENT OF COPYRIGHT.

    (a) Recommendations by Register of Copyrights.--Not later than six
months after the date of the enactment of this Act, the Register of
Copyrights, after consultation with representatives of copyright owners
and nonprofit educational institutions, shall submit to the Congress
recommendations regarding the liability of nonprofit educational
institutions for copyright infringement committed with the use of
computer systems for which such an institution is a service provider,
as that term is defined in section 512 of title 17, United States Code
(as added by section 202 of this Act), including recommendations for
legislation that the Register of Copyrights considers appropriate
regarding such liability, if any.
    (b) Factors.--In formulating recommendations under subsection (a),
the Register of Copyrights shall consider, where relevant--
            (1) current law regarding the direct, vicarious, and
        contributory liability of nonprofit educational institutions
        for infringement by faculty, administrative employees,
        students, graduate students, and students who are employees of
        such nonprofit educational institutions;
            (2) other users of their computer systems for whom
        nonprofit educational institutions may be responsible;
            (3) the unique nature of the relationship between nonprofit
        educational institutions and faculty;
            (4) what policies nonprofit educational institutions should
        adopt regarding copyright infringement by users of their
        computer systems;
            (5) what technological measures are available to monitor
        infringing uses;
            (6) what monitoring of their computer systems by nonprofit
        educational institutions is appropriate;
            (7) what due process nonprofit educational institutions
        should afford in disabling access by users of their computer
        systems who are alleged to have committed copyright
        infringement;
            (8) what distinctions, if any, should be drawn between
        computer systems which may be accessed from outside the
        nonprofit educational systems, those which may not, and
        combinations thereof;
            (9) the tradition of academic freedom; and
            (10) such other issues relating to the liability of
        nonprofit educational institutions for copyright infringement
        committed with the use of computer systems for which such an
        institution is a service provider that the Register considers
        appropriate.

SEC. 205. EVALUATION OF IMPACT OF COPYRIGHT LAW AND AMENDMENTS ON
              ELECTRONIC COMMERCE AND TECHNOLOGICAL DEVELOPMENT.

    (a) Findings.--In order to maintain strong protection for
intellectual property and promote the development of electronic
commerce and the technologies to support that commerce, the Congress
must have accurate and current information on the effects of
intellectual property protection on electronic commerce and technology.
The emergence of digital technology and the proliferation of
copyrighted works in digital media, along with the amendments to
copyright law contained in this Act, make it appropriate for the
Congress to review these issues to ensure that neither copyright law
nor electronic commerce inhibits the development of the other.
    (b) Evaluation by Secretary of Commerce.--The Secretary of
Commerce, in consultation with the Assistant Secretary of Commerce for
Communications and Information and the Register of Copyrights, shall
evaluate--
            (1) the effects of this Act and the amendments made by this
        Act on the development of electronic commerce and associated
        technology; and
            (2) the relationship between existing and emergent
        technology and existing copyright law.
    (c) Report to Congress.--The Secretary of Commerce shall, not later
than 1 year after the date of the enactment of this Act, submit to the
Congress a report on the evaluation conducted under subsection (b),
including any legislative recommendations the Secretary may have.

SEC. 206. EFFECTIVE DATE.

    This title and the amendments made by this title shall take effect
on the date of the enactment of this Act.

  TITLE III--EPHEMERAL RECORDINGS; DISTANCE EDUCATION; EXEMPTION FOR
                         LIBRARIES AND ARCHIVES

SEC. 301. EPHEMERAL RECORDINGS.

    Section 112(a) of title 17, United States Code, is amended--
            (1) by redesignating paragraphs (1), (2), and (3) as
        subparagraphs (A), (B), and (C), respectively;
            (2) by inserting ``(1)'' after ``(a)''; and
            (3) by inserting after ``114(a),'' the following: ``or for
        a transmitting organization that is a broadcast radio or
        television station licensed as such by the Federal
        Communications Commission that broadcasts a performance of a
        sound recording in a digital format on a nonsubscription
        basis,''; and
            (4) by adding at the end the following:
    ``(2) In a case in which a transmitting organization entitled to
make a copy or phonorecord under paragraph (1) in connection with the
transmission to the public of a performance or display of a work
described in that paragraph is prevented from making such copy or
phonorecord by reason of the application by the copyright owner of
technical measures that prevent the reproduction of the work, the
copyright owner shall make available to the transmitting organization
the necessary means for permitting the making of such copy or
phonorecord within the meaning of that paragraph, if it is
technologically feasible and economically reasonable for the copyright
owner to do so. If the copyright owner fails to do so in a timely
manner in light of the transmitting organization's reasonable business
requirements, the transmitting organization shall not be liable for a
violation of the regulations issued under section 102(a)(1)(A) of the
WIPO Copyright Treaties Implementation Act for engaging in such
activities as are necessary to make such copies or phonorecords as
permitted under paragraph (1) of this subsection.''.

SEC. 302. LIMITATIONS ON EXCLUSIVE RIGHTS; DISTANCE EDUCATION.

    (a) Recommendations by National Telecommunications and Information
Administration.--Not later than 6 months after the date of the
enactment of this Act, the Assistant Secretary of Commerce for
Communications and Information, after consultation with representatives
of copyright owners, nonprofit educational institutions, and nonprofit
libraries and archives, shall submit to the Congress recommendations on
how to promote distance education through digital technologies,
including interactive digital networks, while maintaining an
appropriate balance between the rights of copyright owners and the
needs of users of copyrighted works. Such recommendations shall include
any legislation the Assistant Secretary considers appropriate to
achieve the foregoing objective.
    (b) Factors.--In formulating recommendations under subsection (a),
the Assistant Secretary of Commerce for Communications and Information
shall consider--
            (1) the need for an exemption from exclusive rights of
        copyright owners for distance education through digital
        networks;
            (2) the categories of works to be included under any
        distance education exemption;
            (3) the extent of appropriate quantitative limitations on
        the portions of works that may be used under any distance
        education exemption;
            (4) the parties who should be entitled to the benefits of
        any distance education exemption;
            (5) the parties who should be designated as eligible
        recipients of distance education materials under any distance
        education exemption;
            (6) whether and what types of technological measures can or
        should be employed to safeguard against unauthorized access to,
        and use or retention of, copyrighted materials as a condition
        to eligibility for any distance education exemption, including,
        in light of developing technological capabilities, the
        exemption set out in section 110(2) of title 17, United States
        Code;
            (7) the extent to which the availability of licenses for
        the use of copyrighted works in distance education through
        interactive digital networks should be considered in assessing
        eligibility for any distance education exemption; and
            (8) such other issues relating to distance education
        through interactive digital networks that the Assistant
        Secretary considers appropriate.

SEC. 303. EXEMPTION FOR LIBRARIES AND ARCHIVES.

    Section 108 of title 17, United States Code, is amended--
            (1) in subsection (a)--
                    (A) by striking ``Notwithstanding'' and inserting
                ``Except as otherwise provided in this title and
                notwithstanding'';
                    (B) by inserting after ``no more than one copy or
                phonorecord of a work'' the following: ``, except as
                provided in subsections (b) and (c)''; and
                    (C) in paragraph (3) by inserting after
                ``copyright'' the following: ``that appears on the copy
                or phonorecord that is reproduced under the provisions
                of this section, or includes a legend stating that the
                work may be protected by copyright if no such notice
                can be found on the copy or phonorecord that is
                reproduced under the provisions of this section'';
            (2) in subsection (b)--
                    (A) by striking ``a copy or phonorecord'' and
                inserting ``three copies or phonorecords'';
                    (B) by striking ``in facsimile form''; and
                    (C) by striking ``if the copy or phonorecord
                reproduced is currently in the collections of the
                library or archives.'' and inserting ``if--
            ``(1) the copy or phonorecord reproduced is currently in
        the collections of the library or archives; and
            ``(2) any such copy or phonorecord that is reproduced in
        digital format is not otherwise distributed in that format and
        is not made available to the public in that format outside the
        premises of the library or archives.''; and
            (3) in subsection (c)--
                    (A) by striking ``a copy or phonorecord'' and
                inserting ``three copies or phonorecords'';
                    (B) by striking ``in facsimile form'';
                    (C) by inserting ``or if the existing format in
                which the work is stored has become obsolete,'' after
                ``stolen,''; and
                    (D) by striking ``if the library or archives has,
                after a reasonable effort, determined that an unused
                replacement cannot be obtained at a fair price.'' and
                inserting ``if--
            ``(1) the library or archives has, after a reasonable
        effort, determined that an unused replacement cannot be
        obtained at a fair price; and
            ``(2) any such copy or phonorecord that is reproduced in
        digital format is not made available to the public in that
        format except for use on the premises of the library or
        archives in lawful possession of such copy.''; and
                    (E) by adding at the end the following:
``For purposes of this subsection, a format shall be considered
obsolete if the machine or device necessary to render perceptible a
work stored in that format is no longer manufactured or is no longer
reasonably available in the commercial marketplace.''.

                      TITLE IV--RELATED PROVISIONS

SEC. 401. REPORT BY NATIONAL TELECOMMUNICATIONS AND INFORMATION
              ADMINISTRATION.

    Not later than 6 months after the date of the enactment of this
Act, the Assistant Secretary of Commerce for Communications and
Information shall report to the Congress on appropriate mechanisms to
encourage the development of access protocols, encryption testing
methods, and security testing methods which would allow lawful access
to, with appropriate safeguards to prevent the unlawful copying of,
encrypted works. The Assistant Secretary shall include in such report
recommendations on proposed amendments to this Act, if any, for
achieving such result and for mechanisms to ensure that such
safeguards--
            (1) would be developed pursuant to a broad consensus of
        copyright owners and cryptographic researchers and security
        administrators in an open, fair, voluntary standards-setting
        process;
            (2) to the extent feasible, would protect copyright owners
        against the unauthorized distribution or reproduction of their
        encrypted works; and
            (3) would not limit encryption research, to the extent such
        research is permitted by law as of the enactment of this Act.
