[Congressional Record: August 4, 1998 (House)]
[Page H7074-H7103]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]
[DOCID:cr04au98-101]


                    DIGITAL MILLENNIUM COPYRIGHT ACT

  Mr. COBLE. Madam Speaker, I move to suspend the rules and pass the
bill (H.R. 2281) to amend title 17, United States Code, to implement
the World Intellectual Property Organization Copyright Treaty and
Performances and Phonograms Treaty, as amended.
  The Clerk read as follows:

                               H.R. 2281

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

     SECTION 1. SHORT TITLE.

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

     SEC. 2. TABLE OF CONTENTS.

Sec. 1. Short title.
Sec. 2. Table of contents.

            TITLE I--WIPO COPYRIGHT TREATIES IMPLEMENTATION

Sec. 101. Short title.
Sec. 102. Technical amendments.
Sec. 103. Copyright protection systems and copyright management
              information.
Sec. 104. Development and implementation of technological protection
              measures.
Sec. 105. Evaluation of impact of copyright law and amendments on
              electronic commerce and technological development.
Sec. 106. Effective date.

      TITLE II--ONLINE COPYRIGHT INFRINGEMENT LIABILITY LIMITATION

Sec. 201. Short title.
Sec. 202. Limitations on liability for copyright infringement.
Sec. 203. Effective date.

[[Page H7075]]

      TITLE III-COMPUTER MAINTENANCE OR REPAIR COPYRIGHT EXEMPTION

Sec. 301. Short title.
Sec. 302. Limitations on exclusive rights; computer programs.

                   TITLE IV--MISCELLANEOUS PROVISIONS

   Subtitle A--Establishment of the Under Secretary of Commerce for
                      Intellectual Property Policy

Sec. 401. Under Secretary of Commerce for Intellectual Property Policy.
Sec. 402. Relationship with existing authorities.

                     Subtitle B--Related Provisions

Sec. 411. Ephemeral recordings.
Sec. 412. Limitations on exclusive rights; distance education.
Sec. 413. Exemption for libraries and archives.
Sec. 414. Fair use.
Sec. 415. Scope of exclusive rights in sound recordings; ephemeral
              recordings.
Sec. 416. Assumption of contractual obligations related to transfers of
              rights in motion pictures.
Sec. 417. First sale clarification.

           TITLE V--COLLECTIONS OF INFORMATION ANTIPIRACY ACT

Sec. 501. Short title.
Sec. 502. Misappropriation of collections of information.
Sec. 503. Conforming amendment.
Sec. 504. Conforming amendments to title 28, United States Code.
Sec. 505. Effective date.

            TITLE VI--PROTECTION OF CERTAIN ORIGINAL DESIGNS

Sec. 601. Short title.
Sec. 602. Protection of certain original designs.
Sec. 603. Conforming amendments.
Sec. 604. Effective date.
            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 PROTECTION SYSTEMS AND COPYRIGHT
                   MANAGEMENT INFORMATION.

       (a) In General.--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.
``1205. Savings clause.
``1203. Civil remedies.

     ``Sec. 1201. Circumvention of copyright protection systems

       ``(a) Violations Regarding Circumvention of Technological
     Measures.--(1)(A) No person shall circumvent a technological
     measure that effectively controls access to a work protected
     under this title. The prohibition contained in the preceding
     sentence shall take effect at the end of the 2-year period
     beginning on the date of the enactment of this chapter.
       ``(B)(i) The prohibition contained in subparagraph (A)
     shall not apply to persons

[[Page H7076]]

     with respect to a copyrighted work which is in a particular
     class of works and to which such persons have gained initial
     lawful access, if such persons are, or are likely to be in
     the succeeding 3-year period, adversely affected by virtue of
     such prohibition in their ability to make noninfringing uses
     of that particular class of works under this title, as
     determined under subparagraph (C).
       ``(ii) The prohibition contained in subparagraph (A) shall
     not apply to nonprofit libraries, archives, or educational
     institutions, or to any entity described in section
     501(c)(3), (4), or (6) of the Internal Revenue Code of 1986
     that is exempt from tax under section 501(a) of such Code,
     with respect to a particular class of works, if such entities
     are, or are likely to be in the succeeding 3-year period,
     adversely affected by virtue of such prohibition in their
     ability to make noninfringing uses of that particular class
     of works under this title, as determined under subparagraph
     (C).
       ``(C) During the 2-year period described in subparagraph
     (A), and during each succeeding 3-year period, the Secretary
     of Commerce, in consultation with the Under Secretary of
     Commerce for Intellectual Property Policy, the Assistant
     Secretary of Commerce for Communications and Information, and
     the Register of Copyrights, shall conduct a rulemaking on the
     record to make the determination for purposes of subparagraph
     (B) of whether nonprofit libraries, archives, or educational
     institutions and other entities described in subparagraph (B)
     or persons who have gained initial lawful access to a
     copyrighted work are, or are likely to be in the succeeding
     3-year period, adversely affected by the prohibition under
     subparagraph (A) in their ability to make noninfringing uses
     under this title of a particular class 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 nonprofit
     archival, preservation, and educational purposes;
       ``(iii) the impact of the prohibition on the circumvention
     of technological measures applied to copyrighted works on
     criticism, comment, news reporting, teaching, scholarship, or
     research;
       ``(iv) the effect of circumvention of technological
     measures on the market for or value of copyrighted works; and
       ``(v) such other factors as the Secretary, in consultation
     with the Under Secretary of Commerce for Intellectual
     Property Policy, the Assistant Secretary of Commerce for
     Communications and Information, and the Register of
     Copyrights, considers appropriate.
       ``(D) The Secretary shall publish any class of copyrighted
     works for which the Secretary has determined, pursuant to the
     rulemaking conducted under subparagraph (C), that
     noninfringing uses by nonprofit libraries, archives, or
     educational institutions and other entities described in
     subparagraph (B) or by persons who have gained initial lawful
     access to a copyrighted work are, or are likely to be,
     adversely affected, and the prohibition contained in
     subparagraph (A) shall not apply to such entities with
     respect to such class of works, or to such persons with
     respect to such copyrighted work, for the ensuing 3-year
     period.
       ``(E) Neither the exception under subparagraph (B) from the
     applicability of the prohibition contained in subparagraph
     (A), nor any determination made in a rulemaking conducted
     under subparagraph (C), may be used as a defense in any
     action to enforce any provision of this title 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 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 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 measure that effectively
     controls access to a work protected under this title.
       ``(3) As used in this subsection--
       ``(A) to `circumvent a technological measure' means to
     descramble a scrambled work, to decrypt an encrypted work, or
     otherwise to avoid, bypass, remove, deactivate, or impair a
     technological measure, without the authority of the copyright
     owner; and
       ``(B) a technological 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 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 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
     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) to `circumvent protection afforded by a technological
     measure' means avoiding, bypassing, removing, deactivating,
     or otherwise impairing a technological measure; and
       ``(B) a technological 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) Other Rights, Etc., Not Affected.--(1) Nothing in
     this section shall affect rights, remedies, limitations, or
     defenses to copyright infringement, including fair use, under
     this title.
       ``(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 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 this title shall not be in violation of
     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 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, product,
     service, component, or part thereof, which circumvents a
     technological 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
     provisions of subsection (a)(1)(A), a person who has lawfully
     obtained the right to use a copy of a computer program may
     circumvent a technological 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 this title.
       ``(2) Notwithstanding the provisions of subsections (a)(2)
     and (b), a person may develop and employ technological means
     to circumvent a technological measure, or to circumvent
     protection afforded by a technological measure, in order for
     that person to make the identification and analysis permitted
     under paragraph (1), or for the limited purpose of that
     person 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 this
     title.

[[Page H7077]]

       ``(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 paragraphs (1) and (2) 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 this title 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 that subsection for a person to circumvent
     a technological 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 this
     title or a violation of applicable law other than this
     section, including section 1030 of title 18 and those
     provisions of title 18 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 this title 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 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 measure for the sole purpose of that person
     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 chapter, the Under Secretary of
     Commerce for Intellectual Property Policy, the Assistant
     Secretary of Commerce for Communications and Information, and
     the Register of Copyrights shall jointly 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
     measures designed to protect copyrighted works; and
       ``(C) protection of copyright owners against the
     unauthorized access to their encrypted copyrighted works.
     The report shall include legislative recommendations, if any.
       ``(h) Excpetions Regarding Minors.--(1) In applying
     subsection (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--
       ``(A) does not itself violate the provisions of this title;
     and
       ``(B) has the sole purpose to prevent the access of minors
     to material on the Internet.
       ``(2) Notwithstanding the provisions of subsection
     (a)(1)(A), it is not a violation of that subsection for a
     parent to circumvent a technological measure that effectively
     controls access to a test, examination, or other evaluation
     of his or her minor child's abilities that is given by a
     nonprofit educational institution if--
       ``(A) the parent made a good faith effort to obtain
     authorization before the circumvention; and
       ``(B) such act is necessary to obtain a copy of such test,
     examination, or other evaluation.
       ``(i) Protection of Personally Identifying Information.--
       (1) Circumvention permitted.--Notwithstanding the
     provisions of subsection (a)(1)(A), it is not a violation of
     that subsection for a person to circumvent a technological
     measure that effectively controls access to a work protected
     under this title, if--
       ``(A) the technological 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 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 measures.--
     This subsection does not apply to a technological 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. 1202. 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
     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 section, 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:
       ``(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) Terms and conditions for use of the work.
       ``(7) Identifying numbers or symbols referring to such
     information or links to such information.
       ``(8) 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,

[[Page H7078]]

     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, 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 this title.
       ``(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 this title.
       ``(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 this title, 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 chapter; 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. 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, 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 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
     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. 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.--No criminal proceeding shall
     be brought under this section unless such proceeding is
     commenced within five years after the cause of action arose.

     ``Sec. 1205. Savings clause

       ``Nothing in this chapter 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.''.
       (b) Conforming amendment.--The table of chapters for title
     17, United States Code, is amended by adding after the item
     relating to chapter 11 the following:

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

     SEC. 104. DEVELOPMENT AND IMPLEMENTATION OF TECHNOLOGICAL
                   PROTECTION MEASURES.

       (a) Statement of Congressional Policy and Objective.--It is
     the sense of the Congress that technological measures that
     effectively control access to works protected under title 17,
     United States Code, or that effectively protect a right of a
     copyright owner under such title 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 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 Measures.--The technological 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.

[[Page H7079]]

       (c) Procedures for Developing and Implementing
     Technological Measures.--The technological measures whose
     development and implementation the Congress anticipates
     include, but are not limited to, 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 Under Secretary of
     Commerce for Intellectual Property Policy, the Assistant
     Secretary of Commerce for Communications and Information, and
     the Register of Copyrights shall jointly review the impact of
     the enactment of section 1201 of title 17, United States
     Code, on the access of individual users to copyrighted works
     in digital formats and shall jointly report annually thereon
     to the Committees on the Judiciary and on Commerce of the
     House of Representatives and the Committees on the Judiciary
     and on Commerce, Science, and Transportation of the Senate.
       (2) Each report under paragraph (1) shall address the
     following issues:
       (A) The status of the development and implementation of
     technological measures described in this section, including
     measures that advance the objectives of this section, and the
     effectiveness of such technological 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 1201 of title
     17, United States Code, is 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 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 Under Secretary of Commerce
     for Intellectual Property Policy, the Assistant Secretary of
     Commerce for Communications and Information, and the Register
     of Copyrights identify as relevant to the impact of the
     enactment of section 1201 of title 17, United States Code, 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
     Under Secretary of Commerce for Intellectual Property Policy,
     the Assistant Secretary of Commerce for Communications and
     Information, and the Register of Copyrights consider
     advisable in order to further the objectives of this section.

     SEC. 105. EVALUATION OF IMPACT OF COPYRIGHT LAW AND
                   AMENDMENTS ON ELECTRONIC COMMERCE AND
                   TECHNOLOGICAL DEVELOPMENT.

       (a) Evaluation by Under Secretary of Commerce and Register
     of Copyrights.--The Under Secretary of Commerce for
     Intellectual Property Policy, the Assistant Secretary of
     Commerce for Communications and Information, and the Register
     of Copyrights shall jointly evaluate--
       (1) the effects of the amendments made by this title and
     the development of electronic commerce and associated
     technology on the operation of sections 109 and 117 of title
     17, United States Code; and
       (2) the relationship between existing and emergent
     technology and the operation of sections 109 and 117 of title
     17, United States Code.
       (c) Report to Congress.--The Under Secretary of Commerce
     for Intellectual Property Policy, the Assistant Secretary of
     Commerce for Communications and Information, and the Register
     of Copyrights shall, not later than 24 months after the date
     of the enactment of this Act, submit to the Congress a joint
     report on the evaluation conducted under subsection (b),
     including any legislative recommendations the Under
     Secretary, the Assistant Secretary, and the Register may
     have.

     SEC. 106. EFFECTIVE DATE.

       (a) In General.--Subject to subsection (b), this title and
     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 104A(h)(1) of title 17,
     United States Code, as amended by section 102(c)(1) of this
     Act.
       (D) Subparagraph (C) of section 104A(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 104A(h)(1) of title 17,
     United States Code, as amended by section 102(c)(1) of this
     Act.
       (E) Subparagraph (D) of section 104A(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--ONLINE COPYRIGHT INFRINGEMENT LIABILITY LIMITATION

     SEC. 201. SHORT TITLE.

       This title may be cited as the ``Online 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
       online

       ``(a) Transitory 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 of copyright by reason of
     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 by
     reason of the intermediate and transient storage of that
     material in the course of such transmitting, routing, or
     providing connections, if--
       ``(1) the transmission of the material was initiated by or
     at the direction of a person other than the service provider;
       ``(2) the transmission, routing, provision of connections,
     or storage is carried out through an automatic technical
     process without selection of the material by the service
     provider;
       ``(3) the service provider does not select the recipients
     of the material except as an automatic response to the
     request of another person;
       ``(4) no copy of the material made by the service provider
     in the course of such intermediate or transient storage 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 such anticipated recipients
     for a longer period than is reasonably necessary for the
     transmission, routing, or provision of connections; and
       ``(5) the material is transmitted through the system or
     network without modification of its content.
       ``(b) System Caching.--
       ``(1) Limitation on liability.--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 of copyright by reason of the intermediate and
     temporary storage of material on a system or network
     controlled or operated by or for the service provider in a
     case in which--
       ``(A) the material is made available online by a person
     other than the service provider,
       ``(B) the material is transmitted from the person described
     in subparagraph (A) through the system or network to a person
     other than the person described in subparagraph (A) at the
     direction of that other person, and
       ``(C) the storage is carried out through an automatic
     technical process for the purpose of making the material
     available to users of the system or network who, after the
     material is transmitted as described in subparagraph (B),
     request access to the material from the person described in
     subparagraph (A),

     if the conditions set forth in paragraph (2) are met.
       (2) Conditions.--The conditions referred to in paragraph
     (1) are that--
       ``(A) the material described in paragraph (1) is
     transmitted to the subsequent users described in paragraph
     (1)(C) without modification to its content from the manner in
     which

[[Page H7080]]

     the material was transmitted from the person described in
     paragraph (1)(A);
       ``(B) the service provider described in paragraph (1)
     complies with rules concerning the refreshing, reloading, or
     other updating of the material when specified by the person
     making the material available online in accordance with a
     generally accepted industry standard data communications
     protocol for the system or network through which that person
     makes the material available, except that this subparagraph
     applies only if those rules are not used by the person
     described in paragraph (1)(A) to prevent or unreasonably
     impair the intermediate storage to which this subsection
     applies;
       ``(C) the service provider does not interfere with the
     ability of technology associated with the material to return
     to the person described in paragraph (1)(A) the information
     that would have been available to that person if the material
     had been obtained by the subsequent users described in
     paragraph (1)(C) directly from that person, except that this
     subparagraph applies only if that technology--
       ``(i) does not significantly interfere with the performance
     of the provider's system or network or with the intermediate
     storage of the material;
       ``(ii) is consistent with generally accepted industry
     standard communications protocols; and
       ``(iii) does not extract information from the provider's
     system or network other than the information that would have
     been available to the person described in paragraph (1)(A) if
     the subsequent users had gained access to the material
     directly from that person;
       ``(D) if the person described in paragraph (1)(A) has in
     effect a condition that a person must meet prior to having
     access to the material, such as a 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 met those conditions and only in accordance with those
     conditions; and
       ``(E) if the person described in paragraph (1)(A) makes
     that material available online without the authorization of
     the copyright owner of the material, the service provider
     responds expeditiously to remove, or disable access to, the
     material that is claimed to be infringing upon notification
     of claimed infringement as described in subsection (c)(3),
     except that this subparagraph applies only if--
       ``(i) the material has previously been removed from the
     originating site or access to it has been disabled, or a
     court has ordered that the material be removed from the
     originating site or that access to the material on the
     originating site be disabled; and
       ``(ii) the party giving the notification includes in the
     notification a statement confirming that the material has
     been removed from the originating site or access to it has
     been disabled or that a court has ordered that the material
     be removed from the originating site or that access to the
     material on the originating site be disabled.
       ``(c) Information Residing on Systems or Networks at
     Direction of Users.--
       ``(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 of copyright by reason of 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 an activity using the material on the system or network 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) upon obtaining such knowledge or awareness, acts
     expeditiously to remove, or disable access to, the material;
       ``(B) does not receive a financial benefit directly
     attributable to the infringing activity, in a case in which
     the service provider has the right and ability to control
     such activity; and
       ``(C) upon notification of claimed infringement as
     described in paragraph (4), 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) Limitation on liability of nonprofit educational
     institutions.--A nonprofit educational institution that is a
     service provider shall not be liable for monetary relief, or,
     except as provided in subsection (i), for injunctive or other
     equitable relief, by reason of the acts or omissions of a
     faculty member, administrative employee, student, or graduate
     student, unless such faculty member, administrative employee,
     student, or graduate student is exercising managerial or
     operational responsibilities that directly relate to the
     institution's function as a service provider.
       ``(3) Designated agent.--The limitations on liability
     established in this subsection apply to a service provider
     only if the service provider has designated an agent to
     receive notifications of claimed infringement described in
     paragraph (4), by making available through its service,
     including on its website in a location accessible to the
     public, and by providing to the Copyright Office,
     substantially the following information:
       ``(A) the name, address, phone number, and electronic mail
     address of the agent.
       ``(B) other contact information which the Register of
     Copyrights may deem appropriate.

     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, and may require payment of a fee by service
     providers to cover the costs of maintaining the directory.
       ``(4) Elements of notification.--
       ``(A) To be effective under this subsection, a notification
     of claimed infringement must be a written communication
     provided to the designated agent of a service provider 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 copyrighted 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 and
     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, its
     agent, or the law.
       ``(vi) A statement that the information in the notification
     is accurate, and under penalty of perjury, that the
     complaining party is authorized to act on behalf of the owner
     of an exclusive right that is allegedly infringed.
       ``(B)(i) Subject to clause (ii), a notification from a
     copyright owner or from a person authorized to act on behalf
     of the copyright owner that fails to comply substantially
     with the provisions of subparagraph (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.
       ``(ii) In a case in which the notification that is provided
     to the service provider's designated agent fails to comply
     substantially with all the provisions of subparagraph (A) but
     substantially complies with clauses (ii), (iii), and (iv) of
     subparagraph (A), clause (i) of this subparagraph applies
     only if the service provider promptly attempts to contact the
     person making the notification or takes other reasonable
     steps to assist in the receipt of notification that
     substantially complies with all the provisions of
     subparagraph (A).
       ``(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 of copyright by reason of the provider referring
     or linking users to an online location containing infringing
     material or infringing activity, by using information
     location tools, including a directory, index, reference,
     pointer, or hypertext link, if the service provider--
       ``(1)(A) does not have actual knowledge that the material
     or activity is infringing;
       ``(B) in the absence of such actual knowledge, is not aware
     of facts or circumstances from which infringing activity is
     apparent; or
       ``(C) upon obtaining such knowledge or awareness, acts
     expeditiously to remove, or disable access to, the material;
       ``(2) does not receive a financial benefit directly
     attributable to the infringing activity, in a case in which
     the service provider has the right and ability to control
     such activity; and
       ``(3) upon notification of claimed infringement as
     described in subsection (c)(4), responds expeditiously to
     remove, or disable access to, the material that is claimed to
     be infringing or to be the subject of infringing activity,
     except that, for purposes of this paragraph, the information
     described in subsection (c)(4)(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 that
     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 a 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.

[[Page H7081]]

       ``(f) Replacement of Removed or Disabled Material and
     Limitation on Other Liability.--
       ``(1) No liability for taking down generally.--Subject to
     paragraph (2), 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) Exception.--Paragraph (1) 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 notification described in
     paragraph (3), promptly provides the person who provided the
     notification under subsection (c)(1)(C) with a copy of the
     counter notification, and informs that person that it will
     replace the removed material or cease disabling access to it
     in 10 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) Contents of counter notification.--To be effective
     under this subsection, a counter notification must be a
     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 the material appeared before it was removed or access
     to it 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 District 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 notification under subsection
     (c)(1)(C) or an agent of such person.
       ``(4) Limitation on other liability.--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) Subpoena To Identify Infringer.--
       ``(1) Request.--A copyright owner or a person authorized to
     act on the owner's behalf may request the clerk of any United
     States district court to issue a subpoena to a service
     provider for identification of an alleged infringer in
     accordance with this subsection.
       ``(2) Contents of request.--The request may be made by
     filing with the clerk--
       ``(A) a copy of a notification described in subsection
     (c)(4)(A);
       ``(B) a proposed subpoena; and
       ``(C) a sworn declaration to the effect that the purpose
     for which the subpoena is sought is to obtain the identity of
     an alleged infringer and that such information will only be
     used for the purpose of protecting rights under this title.
       ``(3) Contents of subpoena.--The subpoena shall authorize
     and order the service provider receiving the notification and
     the subpoena to expeditiously disclose to the copyright owner
     or person authorized by the copyright owner information
     sufficient to identify the alleged infringer of the material
     described in the notification to the extent such information
     is available to the service provider.
       ``(4) Basis for granting subpoena.--If the notification
     filed satisfies the provisions of subsection (c)(4)(A), the
     proposed subpoena is in proper form, and the accompanying
     declaration is properly executed, the clerk shall
     expeditiously issue and sign the proposed subpoena and return
     it to the requester for delivery to the service provider.
       ``(5) Actions of service provider receiving subpoena.--Upon
     receipt of the issued subpoena, either accompanying or
     subsequent to the receipt of a notification described in
     subsection (c)(4)(A), the service provider shall
     expeditiously disclose to the copyright owner or person
     authorized by the copyright owner the information required by
     the subpoena, notwithstanding any other provision of law and
     regardless of whether the service provider responds to the
     notification.
       ``(6) Rules applicable to subpoena.--Unless otherwise
     provided by this section or by applicable rules of the court,
     the procedure for issuance and delivery of the subpoena, and
     the remedies for noncompliance with the subpoena, shall be
     governed to the greatest extent practicable by those
     provisions of the Federal Rules of Civil Procedure governing
     the issuance, service, and enforcement of a subpoena duces
     tecum.
       ``(h) Conditions for Eligibility.--
       ``(1) Accommodation of technology.--The limitations on
     liability established by this section shall apply to a
     service provider only if the service provider--
       ``(A) has adopted and reasonably implemented, and informs
     subscribers and account holders of the service provider's
     system or network of, a policy that provides for the
     termination in appropriate circumstances of subscribers and
     account holders of the service provider's system or network
     who are repeat infringers; and
       ``(B) accommodates and does not interfere with standard
     technical measures.
       ``(2) Definition.--As used in this subsection, the term
     `standard technical measures' means technical measures that
     are used by copyright owners to identify or protect
     copyrighted works and--
       ``(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 under this section:
       ``(1) Scope of relief.--(A) With respect to conduct other
     than that which qualifies for the limitation on remedies set
     forth in subsection (a), the court may grant injunctive
     relief with respect to a service provider only in one or more
     of the following forms:
       ``(i) An order restraining the service provider 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 the service provider from
     providing access to a subscriber or account holder of the
     service provider's system or network who is engaging in
     infringing activity and is identified in the order, by
     terminating the accounts of the subscriber or account holder
     that are specified in the order.
       ``(iii) Such other injunctive relief as the court may
     consider necessary to prevent or restrain infringement of
     copyrighted material specified in the order of the court at a
     particular online location, if such relief is the least
     burdensome to the service provider among the forms of relief
     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 the service provider from
     providing access to a subscriber or account holder of the
     service provider's system or network who is using the
     provider's service to engage in infringing activity and is
     identified in the order, by terminating the accounts of the
     subscriber or account holder that are specified in the order.
       ``(ii) An order restraining the service provider from
     providing access, by taking reasonable steps specified in the
     order to block access, to a specific, identified, online
     location outside the United States.
       ``(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 be available only after notice to the
     service provider and an opportunity for the service provider
     to appear are provided, 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) Service provider.--(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 this section, other than subsection (a),
     the term `service provider' means a provider of online
     services or network access, or the operator of facilities

[[Page H7082]]

     therefor, and includes an entity described in subparagraph
     (A).
       ``(2) Monetary relief.--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 gaining access to, removing, or
     disabling access to material in cases in which such conduct
     is prohibited by law.
       ``(m) Construction.--Subsections (a), (b), (c), and (d)
     describe separate and distinct functions for purposes of
     applying this section. Whether a service provider qualifies
     for the limitation on liability in any one of those
     subsections shall be based solely on the criteria in that
     subsection, and shall not affect a determination of whether
     that 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. Limitations on liability relating to material online.''.

       (c) Effective Date.--The amendments made by this section
     take effect on the date of the enactment of this Act.

     SEC. 203. 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--COMPUTER MAINTENANCE OR REPAIR COPYRIGHT EXEMPTION

     SEC. 301. SHORT TITLE.

       This title may be cited as the ``Computer Maintenance
     Competition Assurance Act''.

     SEC. 302. 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.''.
                   TITLE IV--MISCELLANEOUS PROVISIONS
   Subtitle A--Establishment of the Under Secretary of Commerce for
                      Intellectual Property Policy

     SEC. 401. UNDER SECRETARY OF COMMERCE FOR INTELLECTUAL
                   PROPERTY POLICY.

       (a) Appointment.--There shall be within the Department of
     Commerce an Under Secretary of Commerce for Intellectual
     Property Policy, who shall be appointed by the President, by
     and with the advice and consent of the Senate, at level II of
     the Executive Schedule. On or after the effective date of
     this subtitle, the President may designate an individual to
     serve as the Acting Under Secretary until the date on which
     an Under Secretary qualifies under this subsection.
       (b) Duties.--The Under Secretary of Commerce for
     Intellectual Property Policy, under the direction of the
     Secretary of Commerce, shall perform the following functions
     with respect to intellectual property policy:
       (1) In coordination with the Under Secretary of Commerce
     for International Trade, promote exports of goods and
     services of the United States industries that rely on
     intellectual property.
       (2) Advise the President, through the Secretary of
     Commerce, on national and certain international issues
     relating to intellectual property policy, including issues in
     the areas of patents, trademarks, and copyrights.
       (3) Advise Federal departments and agencies on matters of
     intellectual property protection in other countries.
       (4) Provide guidance, as appropriate, with respect to
     proposals by agencies to assist foreign governments and
     international intergovernmental organizations on matters of
     intellectual property protection.
       (5) Conduct programs and studies related to the
     effectiveness of intellectual property protection throughout
     the world.
       (6) Advise the Secretary of Commerce on programs and
     studies relating to intellectual property policy that are
     conducted, or authorized to be conducted, cooperatively with
     foreign patent and trademark offices and international
     intergovernmental organizations.
       (7) In coordination with the Department of State, conduct
     programs and studies cooperatively with foreign intellectual
     property offices and international intergovernmental
     organizations.
       (c) Deputy Under Secretaries.--To assist the Under
     Secretary of Commerce for Intellectual Property Policy, the
     Under Secretary shall appoint a Deputy Under Secretary for
     Patent Policy and a Deputy Under Secretary for Trademark
     Policy, as members of the Senior Executive Service in
     accordance with the provisions of title 5, United States
     Code. The Deputy Under Secretaries shall perform such duties
     and functions as the Under Secretary shall prescribe.
       (d) Compensation.--Section 5313 of title 5, United States
     Code, is amended by adding at the end the following: ``Under
     Secretary of Commerce for Intellectual Property Policy.''
       (e) Funding.--Funds available to the Patent and Trademark
     Office shall be made available for all expenses of the Office
     of the Under Secretary of Commerce for Intellectual Property
     Policy, subject to prior approval in appropriations Acts.
     Amounts made available under this subsection shall not exceed
     2 percent of the projected annual revenues of the Patent and
     Trademark Office from fees for services and goods of that
     Office. The Secretary of Commerce shall determine the budget
     requirements of the Office of the Under Secretary for
     Intellectual Property Policy.
       (f) Consultation.--In connection with the performance of
     his or her duties under this section, the Under Secretary
     shall, on appropriate matters, consult with the Register of
     Copyrights.

     SEC. 402. RELATIONSHIP WITH EXISTING AUTHORITIES.

       (a) No Derogation.--Nothing in section 401 shall derogate
     from the duties of the United States Trade Representative or
     from the duties of the Secretary of State. In addition,
     nothing in this subtitle shall derogate from the duties and
     functions of the Register of Copyrights or otherwise alter
     current authorities relating to copyright matters.
       (b) Clarification of Authority of the Copyright Office.--
     Section 701 of title 17, United States Code, is amended--
       (1) by redesignating subsections (b) through (e) as
     subsections (c) through (f), respectively; and
       (2) by inserting after subsection (a) the following:
       ``(b) In addition to the functions and duties set out
     elsewhere in this chapter, the Register of Copyrights shall
     perform the following functions:
       ``(1) Advise Congress on national and international issues
     relating to copyright, other matters arising under chapters
     9, 12, 13, and 14 of this title, and related matters.
       ``(2) Provide information and assistance to Federal
     departments and agencies and the Judiciary on national and
     international issues relating to copyright, other matters
     arising under chapters 9, 12, 13, and 14 of this title, and
     related matters.
       ``(3) Participate in meetings of international
     intergovernmental organizations and meetings with foreign
     government officials relating to copyright, other matters
     arising under chapters 9, 12, 13, and 14 of this title, and
     related matters, including as a member of United States
     delegations as authorized by the appropriate Executive Branch
     authority.
       ``(4) Conduct studies and programs regarding copyright,
     other matters arising under chapters 9, 12, 13, and 14 of
     this title, and related matters, the administration of the
     Copyright Office, or any function vested in the Copyright
     Office by law, including educational programs conducted
     cooperatively with foreign intellectual property offices and
     international intergovernmental organizations.
       ``(5) Perform such other functions as Congress may direct,
     or as may be appropriate in furtherance of the functions and
     duties specifically set forth in this title.''
                     Subtitle B--Related Provisions

     SEC. 411. 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

[[Page H7083]]

       (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 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
     as permitted under 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 section 1201(a)(1) of this
     title for engaging in such activities as are necessary to
     make such copies or phonorecords as permitted under paragraph
     (1) of this subsection.''.

     SEC. 412. LIMITATIONS ON EXCLUSIVE RIGHTS; DISTANCE
                   EDUCATION.

       (a) Recommendations by Register of Copyrights.--Not later
     than 6 months after the date of the enactment of this Act,
     the Register of Copyrights, 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 Register of
     Copyrights considers appropriate to achieve the objective
     described in the preceding sentence.
       (b) Factors.--In formulating recommendations under
     subsection (a), the Register of Copyrights 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 of 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 Register
     considers appropriate.

     SEC. 413. 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 outside 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.''.

     SEC. 414. FAIR USE.

       Section 107 of title 17, United States Code, is amended in
     the first sentence by striking ``, including such use'' and
     all that follows through ``section,''.

     SEC. 415. SCOPE OF EXCLUSIVE RIGHTS IN SOUND RECORDINGS;
                   EPHEMERAL RECORDINGS.

       (a) Scope of Exclusive Rights in Sound Recordings.--Section
     114 of title 17, United States Code, is amended as follows:
       (1) Subsection (d) is amended--
       (A) by striking subparagraph (A) and inserting the
     following:
       ``(A) a nonsubscription broadcast transmission;''; and
       (B) by amending paragraph (2) to read as follows:
       ``(2) Statutory Licensing of Certain Transmissions.--The
     performance of a sound recording publicly by means of a
     subscription digital audio transmission not exempt under
     paragraph (1) or an eligible nonsubscription digital audio
     transmission shall be subject to statutory licensing, in
     accordance with subsection (f) if--
       ``(A) in the case of a subscription transmission not exempt
     under paragraph (1) or an eligible nonsubscription
     transmission--
       ``(i) the transmission is not part of an interactive
     service;
       ``(ii) except in the case of a transmission to a business
     establishment, the transmitting entity does not automatically
     and intentionally cause any device receiving the transmission
     to switch from one program channel to another; and
       ``(iii) except as provided in section 1002(e), the
     transmission of the sound recording is accompanied by the
     information encoded in that sound recording, if any, by or
     under the authority of the copyright owner of that sound
     recording, that identifies the title of the sound recording,
     the featured recording artist who performs on the sound
     recording, and related information, including information
     concerning the underlying musical work and its writer;
       ``(B) in the case of a subscription transmission not exempt
     under paragraph (1) by a preexisting subscription service in
     the same transmission medium used by such service on July 31,
     1998--
       ``(i) the transmission does not exceed the sound recording
     performance complement;
       ``(ii) the transmitting entity does not cause to be
     published by means of an advance program schedule or prior
     announcement the titles of the specific sound recordings or
     phonorecords embodying such sound recordings to be
     transmitted; and
       ``(C) in the case of an eligible nonsubscription
     transmission or a subscription transmission not exempt under
     paragraph (1) by a new subscription service or by a
     preexisting subscription service other than in the same
     transmission medium used by such service on July 31, 1998--
       ``(i) the transmission does not exceed the sound recording
     performance complement, except that this requirement shall
     not apply in the case of a retransmission of a broadcast
     transmission if the retransmission is made by a transmitting
     entity that does not have the right or ability to control the
     programming of the broadcast station making the broadcast
     transmission, unless the broadcast station makes broadcast
     transmissions--

       ``(I) in digital format that regularly exceed the sound
     recording performance complement; or
       ``(II) in analog format, a substantial portion of which, on
     a weekly basis, exceed the sound recording performance
     complement;

     Provided, however, That the sound recording copyright owner
     or its representative has notified the transmitting entity in
     writing that broadcast transmissions of the copyright owner's
     sound recordings exceed the sound recording complement as
     provided in this clause;
       ``(ii) the transmitting entity does not cause to be
     published, or induce or facilitate the publication, by means
     of an advance program schedule or prior announcement, the
     titles of the specific sound recordings to be transmitted,
     the phonorecords embodying such sound recordings, or, other
     than for illustrative purposes, the names of the featured
     recording artists, except that this clause does not
     disqualify a transmitting entity that makes a prior
     announcement that a particular artist will be featured within
     an unspecified future time period and, in any 1-hour period,
     no more than 3 such announcements are made with respect to no
     more than 2 artists in each announcement;
       ``(iii) the transmission is not part of--

       ``(I) an archived program of less than 5 hours duration;
       ``(II) an archived program of greater than 5 hours duration
     that is made available for a period exceeding 2 weeks;

[[Page H7084]]

       ``(III) a continuous program which is of less than 3 hours
     duration; or
       ``(IV) a program, other than an archived or continuous
     program, that is transmitted at a scheduled time more than 3
     additional times in a 2-week period following the first
     transmission of the program and for an additional 2-week
     period more than 1 month following the end of the first such
     2-week period;

       ``(iv) the transmitting entity does not knowingly perform
     the sound recording in a manner that is likely to cause
     confusion, to cause mistake, or to deceive, as to the
     affiliation, connection, or association of the copyright
     owner or featured recording artist with the transmitting
     entity or a particular product or service advertised by the
     transmitting entity, or as to the origin, sponsorship, or
     approval by the copyright owner or featured recording artist
     of the activities of the transmitting entity other than the
     performance of the sound recording itself;
       ``(v) the transmitting entity cooperates to prevent, to the
     extent feasible without imposing substantial costs or
     burdens, a transmission recipient or any other person or
     entity from automatically scanning the transmitting entity's
     transmissions together with transmissions by other
     transmitting entities to select a particular sound recording
     to be transmitted to the transmission recipient;
       ``(vi) the transmitting entity takes reasonable steps to
     ensure, to the extent within its control, that the
     transmission recipient cannot make a phonorecord in a digital
     format of the transmission, and the transmitting entity takes
     no affirmative steps to cause or induce the making of a
     phonorecord by the transmission recipient;
       ``(vii) phonorecords of the sound recording have been
     distributed to the public in the United States under the
     authority of the copyright owner or the copyright owner
     authorizes the transmitting entity to transmit the sound
     recording, and the transmitting entity makes the transmission
     from a phonorecord lawfully made under this title;
       ``(viii) the transmitting entity accommodates and does not
     interfere with the transmission of technical measures that
     are widely used by sound recording copyright owners to
     identify or protect copyrighted works, and that are
     technically feasible of being transmitted by the transmitting
     entity without imposing substantial costs on the transmitting
     entity or resulting in perceptible aural or visual
     degradation of the digital signal; and
       ``(ix) in the case of an eligible nonsubscription
     transmission, the transmitting entity identifies the sound
     recording during, but not before, the time it is performed,
     including the title of the sound recording, the title of the
     phonorecord embodying such sound recording, if any, and the
     featured recording artist in a manner to permit it to be
     perceived by the transmission recipient, except that the
     obligation in this clause shall not take effect until 1 year
     after the date of the enactment of the Digital Millennium
     Copyright Act.''.
       (2) Subsection (f) is amended to read as follows:
       (A) in paragraph (1)--
       (i) in the first sentence--

       (I) by striking ``(1) No'' and inserting ``(1)(A) No'';
       (II) by striking ``the activities'' and inserting
     ``subscription transmissions by preexisting subscription
     services''; and
       (III) by striking ``2000'' and inserting ``2001''; and

       (ii) by amending the third sentence to read as follows:
     ``Any copyright owners of sound recordings or any preexisting
     subscription services may submit to the Librarian of Congress
     licenses covering such subscriptions transmissions with
     respect to such sound recordings.''; and
       (B) by striking paragraphs (2), (3), (4), and (5) and
     inserting the following:
       ``(B) In the absence of license agreements negotiated under
     subparagraph (A), during the 60-day period commencing 6
     months after publication of the notice specified in
     subparagraph (A), and upon the filing of a petition in
     accordance with section 803(a)(1), the Librarian of Congress
     shall, pursuant to chapter 8, convene a copyright arbitration
     royalty panel to determine and publish in the Federal
     Register a schedule of rates and terms which, subject to
     paragraph (3), shall be binding on all copyright owners of
     sound recordings and preexisting subscription services. In
     establishing rates and terms for preexisting subscription
     services, in addition to the objectives set forth in section
     801(b)(1), the copyright arbitration royalty panel may
     consider the rates and terms for comparable types of
     subscription digital audio transmission services and
     comparable circumstances under voluntary license agreements
     negotiated as provided in subparagraph (A).
       ``(C)(i) Publication of a notice of the initiation of
     voluntary negotiation proceedings as specified in
     subparagraph (A) shall be repeated, in accordance with
     regulations that the Librarian of Congress shall prescribe--
       ``(I) no later than 30 days after a petition is filed by
     any copyright owners of sound recordings or any preexisting
     subscription services indicating that a new type of
     subscription digital audio transmission service on which
     sound recordings are performed is or is about to become
     operational; and
       ``(II) in the first week of January, 2001, and at 5-year
     intervals thereafter.
       ``(ii) The procedures specified in subparagraph (B) shall
     be repeated, in accordance with regulations that the
     Librarian of Congress shall prescribe, upon filing of a
     petition in accordance with section 803(a)(1) during a 60-day
     period commencing--
       ``(I) 6 months after publication of a notice of the
     initiation of voluntary negotiation proceedings under
     subparagraph (A) pursuant to a petition under clause (i)(I)
     of this subparagraph; or
       ``(II) on July 1, 2001, and at 5-year intervals thereafter.
       ``(iii) The procedures specified in subparagraph (B) shall
     be concluded in accordance with section 802.
       ``(2)(A) No later than 30 days after the date of the
     enactment of the Digital Millennium Copyright Act, the
     Librarian of Congress shall cause notice to be published in
     the Federal Register of the initiation of voluntary
     negotiation proceedings for the purpose of determining
     reasonable terms and rates of royalty payments for eligible
     nonsubscription transmissions and transmissions by new
     subscription services specified by subsection (d)(2) during
     the period beginning on the date of the enactment of such Act
     and ending on December 31, 2000, or such other date as the
     parties may agree. Such rates and terms shall distinguish
     among the different types of eligible nonsubscription
     transmission services then in operation and shall include a
     minimum fee for each such type of service. Any copyright
     owners of sound recordings or any entities performing sound
     recordings affected by this section may submit to the
     Librarian of Congress licenses covering such eligible
     nonsubscription transmissions with respect to such sound
     recordings. The parties to each negotiation proceeding shall
     bear their own costs.
       ``(B) In the absence of license agreements negotiated under
     subparagraph (A), during the 60-day period commencing 6
     months after publication of the notice specified in
     subparagraph (A), and upon the filing of a petition in
     accordance with section 803(a)(1), the Librarian of Congress
     shall, pursuant to chapter 8, convene a copyright arbitration
     royalty panel to determine and publish in the Federal
     Register a schedule of rates and terms which, subject to
     paragraph (3), shall be binding on all copyright owners of
     sound recordings and entities performing sound recordings
     during the period beginning on the date of the enactment of
     the Digital Millennium Copyright Act and ending on December
     31, 2000, or such other date as the parties may agree. Such
     rates and terms shall distinguish among the different types
     of eligible nonsubscription, transmission services then in
     operation and shall include a minimum fee for each such type
     of service, such differences to be based on criteria,
     including, but not limited to, the quantity and nature of the
     use of sound recordings and the degree to which use of the
     service may substitute for or may promote the purchase of
     phonorecords by consumers. In establishing rates and terms
     for transmissions by eligible nonsubscription services and
     new subscription services, the copyright arbitration royalty
     panel shall establish rates and terms that most clearly
     represent the rates and terms that would have been negotiated
     in the marketplace between a willing buyer and a willing
     seller. In determining such rates and terms, the copyright
     arbitration royalty panel shall base its decision on
     economic, competitive and programming information presented
     by the parties, including--
       ``(i) whether use of the service may substitute for or may
     promote the sales of phonorecords or otherwise may interfere
     with or may enhance the sound recording copyright owner's
     other streams of revenue from its sound recordings; and
       ``(ii) the relative roles of the copyright owner and the
     copyright user in the copyrighted work and the service made
     available to the public with respect to relative creative
     contribution, technological contribution, capital investment,
     cost, and risk.
       ``(C)(i) Publication of a notice of the initiation of
     voluntary negotiation proceedings as specified in
     subparagraph (A) shall be repeated in accordance with
     regulations that the Librarian of Congress shall prescribe--
       ``(I) no later than 30 days after a petition if filed by
     any copyright owners of sound recordings or any eligible
     nonsubscription service or new subscription service
     indicating that a new type of eligible nonsubscription
     service or new subscription service on which sound recordings
     are performed is or is about to become operational; and
       ``(II) in the first week of January 2000, and at 2-year
     intervals thereafter, except to the extent that different
     years for the repeating of such proceedings may be determined
     in accordance with subparagraph (A).
       ``(ii) The procedures specified in subparagraph (B) shall
     be repeated, in accordance with regulations that the
     Librarian of Congress shall prescribe, upon filing of a
     petition in accordance with section 803(a)(1) during a 60-day
     period commencing--
       ``(I) 6 months after publication of a notice of the
     initiation of voluntary negotiation proceedings under
     subparagraph (A) pursuant to a petition under clause (i)(I);
     or
       ``(II) on July 1, 2000, and at 2-year intervals thereafter,
     except to the extent that different years for the repeating
     of such proceedings may be determined in accordance with
     subparagraph (A).
       ``(iii) The procedures specified in subparagraph (B) shall
     be concluded in accordance with section 802.
       ``(3) License agreements voluntarily negotiated at any time
     between 1 or more copyright owners of sound recordings and 1
     or more entities performing sound recordings

[[Page H7085]]

     shall be given effect in lieu of any determination by a
     copyright arbitration royalty panel or decision by the
     Librarian of Congress.
       ``(4)(A) The Librarian of Congress shall also establish
     requirements by which copyright owners may receive reasonable
     notice of the use of their sound recordings under this
     section, and under which records of such use shall be kept
     and made available by entities performing sound recordings.
       ``(B) Any person who wishes to perform a sound recording
     publicly by means of a transmission eligible for statutory
     licensing under this subsection may do so without infringing
     the exclusive right of the copyright owner of the sound
     recording--
       ``(i) by complying with such notice requirements as the
     Librarian of Congress shall prescribe by regulation and by
     paying royalty fees in accordance with this subsection; or
       ``(ii) if such royalty fees have not been set, by agreeing
     to pay such royalty fees as shall be determined in accordance
     with this subsection.
       ``(C) Any royalty payments in arrears shall be made on or
     before the twentieth day of the month next succeeding the
     month in which the royalty fees are set.''.
       (3) Subsection (g) is amended--
       (A) in the subsection heading by striking ``Subscription'';
       (B) in paragraph (1) in the matter preceding subparagraph
     (A), by striking ``subscription transmission licensed'' and
     inserting ``transmission licensed under a statutory
     license'';
       (C) in subparagraphs (A) and (B) by striking
     ``subscription''; and
       (D) in paragraph (2) by striking ``subscription''.
       (4) Subsection (j) is amended--
       (A) by redesignating paragraphs (2), (3), (5), (6), (7),
     and (8) as paragraphs (3), (5), (9), (11), (12), and (13),
     respectively;
       (B) by inserting after paragraph (1) the following:
       ``(2) An `archived program' is a prerecorded program that
     is available repeatedly on demand and that is performed in
     the same predetermined order from the beginning.'';
       (C) by inserting after paragraph (3), as so redesignated,
     the following:
       ``(4) A `continuous program' is a prerecorded program that
     is continuously performed in the same predetermined order and
     the point in the program at which it is accessed is beyond
     the control of the transmission recipient.'';
       (D) by inserting after paragraph (5), as so redesignated,
     the following:
       ``(6) An `eligible nonsubscription transmission' is a
     noninteractive, nonsubscription transmission made as part of
     a service that provides audio programming consisting, in
     whole or in part, of performances of sound recordings,
     including retransmissions of broadcast transmissions, if the
     primary purpose of the service is to provide to the public
     such audio or other entertainment programming, and the
     primary purpose of the service is not to sell, advertise, or
     promote particular products or services other than sound
     recordings, live concerts, or other music-related events.
       ``(7) An `interactive service' is one that enables a member
     of the public to receive a transmission of a program
     specially created for the recipient, or on request, a
     transmission of a particular sound recording, whether or not
     as part of a program, which is selected by or on behalf of
     the recipient. The ability of individuals to request that
     particular sound recordings be performed for reception by the
     public at large does not make a service interactive, if the
     programming on each channel of the service does not
     substantially consist of sound recordings that are performed
     within 1 hour of the request or at a time designated by
     either the transmitting entity or the individual making such
     request. If an entity offers both interactive and
     noninteractive services (either concurrently or at different
     times), the noninteractive component shall not be treated as
     part of an interactive service.
       ``(8) A `new subscription service' is a service that
     performs sound recordings by means of subscription digital
     audio transmissions and that is not a preexisting
     subscription service.'';
       (E) by inserting after paragraph (9), as so redesignated,
     the following:
       ``(10) A `preexisting subscription service' is a service
     that performs sound recordings by means of noninteractive
     audio-only subscription digital audio transmissions, which
     was in existence and was making such transmission to the
     public for a fee on or before July 31, 1998.''; and
       (F) by adding at the end the following:
       ``(14) A `transmission' is either an initial transmission
     or a retransmission.''.
       (b) Ephemeral Recordings.--Section 112 of title 17, United
     States Code, is amended by adding at the end the following:
       ``(f) Statutory License.--(1) An ephemeral recording of a
     sound recording by a transmitting organization entitled to
     transmit to the public a performance of that sound recording
     by means of a digital audio transmission under a statutory
     license in accordance with section 114(f) or an exemption
     provided in section 114(d)(1)(B) or (C) is subject to
     statutory licensing under the conditions specified by this
     subsection.
       ``(2) A statutory license under this subsection grants a
     transmitting organization entitled to transmit to the public
     a performance of a sound recording by means of a digital
     audio transmission under a statutory license in accordance
     with section 114(f) or an exemption provided in section
     114(d)(1)(B) or (C) the privilege of making no more than 1
     phonorecord of the sound recording (unless the terms and
     conditions of the statutory license allow for more), if--
       ``(A) the phonorecord is retained and used solely by the
     transmitting organization that made it, and no further
     phonorecords are reproduced from it; and
       ``(B) the phonorecord is used solely for the transmitting
     organization's own transmissions in the United States under a
     statutory license in accordance with section 114(f) or an
     exemption provided in section 114(d)(1)(B) or (C);
       ``(C) unless preserved exclusively for purposes of archival
     preservation, the phonorecord is destroyed within 6 months
     from the date the sound recording was first transmitted to
     the public using the phonorecord; and
       ``(D) phonorecords of the sound recording have been
     distributed to the public in the United States under the
     authority of the copyright owner or the copyright owner
     authorizes the transmitting entity to transmit the sound
     recording, and the transmitting entity makes the transmission
     from a phonorecord lawfully made and acquired under this
     title.
       ``(3) Notwithstanding any provision of the antitrust laws,
     any copyright owners of sound recordings and any transmitting
     organizations entitled to obtain a statutory license under
     this subsection may negotiate and agree upon royalty rates
     and license terms and conditions for ephemeral recordings of
     such sound recordings and the proportionate division of fees
     paid among copyright owners, and may designate common agents
     to negotiate, agree to, pay, or receive such royalty
     payments.
       ``(4) No later than 30 days after the date of the enactment
     of the Digital Millennium Copyright Act, the Librarian of
     Congress shall cause notice to be published in the Federal
     Register of the initiation of voluntary negotiation
     proceedings for the purpose of determining reasonable terms
     and rates of royalty payments for the activities specified by
     paragraph (2) of this subsection during the period beginning
     on the date of the enactment of such Act and ending on
     December 31, 2000, or such other date as the parties may
     agree. Such rates shall include a minimum fee for each type
     of service. Any copyright owners of sound recordings or any
     transmitting organizations entitled to obtain a statutory
     license under this subsection may submit to the Librarian of
     Congress licenses covering such activities with respect to
     such sound recordings. The parties to each negotiation
     proceeding shall bear their own costs.
       ``(5) In the absence of license agreements negotiated under
     paragraph (3), during the 60-day period commencing 6 months
     after publication of the notice specified in paragraph (4),
     and upon the filing of a petition in accordance with section
     803(a)(1), the Librarian of Congress shall, pursuant to
     chapter 8, convene a copyright arbitration royalty panel to
     determine and publish in the Federal Register a schedule of
     reasonable rates and terms which, subject to paragraph (6),
     shall be binding on all copyright owners of sound recordings
     and transmitting organizations entitled to obtain a statutory
     license under this subsection during the period beginning on
     the date of the enactment of the Digital Millennium Copyright
     Act and ending on December 31, 2000, or such other date as
     the parties may agree. Such rates shall include a minimum fee
     for each type of service. The copyright arbitration royalty
     panel shall establish rates that most clearly represent the
     fees that would have been negotiated in the marketplace
     between a willing buyer and a willing seller. In determining
     such rates and terms, the copyright arbitration royalty panel
     shall base its decision on economic, competitive, and
     programming information presented by the parties, including--
       ``(A) whether use of the service may substitute for or may
     promote the sales of phonorecords or otherwise interferes
     with or enhances the copyright owner's traditional streams of
     revenue;
       ``(B) the relative rules of the copyright owner and the
     copyright user in the copyrighted work and the service made
     available to the public with respect to relative creative
     contribution, technological contribution, capital investment,
     cost, and risk.

     In establishing such rates and terms, the copyright
     arbitration royalty panel may consider the rates and terms
     under voluntary license agreements negotiated as provided in
     paragraphs (3) and (4). The Librarian of Congress shall also
     establish requirements by which copyright owners may receive
     reasonable notice of the use of their sound recordings under
     this section, and under which records of such use shall be
     kept and made available by transmitting organizations
     entitled to obtain a statutory license under this subsection.
       ``(6) License agreements voluntarily negotiated at any time
     between 1 or more copyright owners of sound recordings and 1
     or more transmitting organizations entitled to obtain a
     statutory license under this subsection shall be given effect
     in lieu of any determination by a copyright arbitration
     royalty panel or decision by the Librarian of Congress.
       ``(7) Publication of a notice of the initiation of
     voluntary negotiation proceedings as specified in paragraph
     (4) shall be repeated, in accordance with regulations that
     the Librarian of Congress shall prescribe, in

[[Page H7086]]

     the first week of January 2000, and at 2-year intervals
     thereafter, except to the extent that different years for the
     repeating of such proceedings may be determined in accordance
     with paragraph (4). The procedures specified in paragraph (5)
     shall be repeated, in accordance with regulations that the
     Librarian of Congress shall prescribe, upon filing of a
     petition in accordance with section 803(a)(1) during a 60-day
     period commencing on July 1, 2000, and at 2-year intervals
     thereafter, except to the extent that different years for the
     repeating of such proceedings may be determined in accordance
     with paragraph (4). The procedures specified in paragraph (5)
     shall be concluded in accordance with section 802.
       ``(8)(A) Any person who wishes to make an ephemeral
     recording of a sound recording under a statutory license in
     accordance with this subsection may do so without infringing
     the exclusive right of the copyright owner of the sound
     recording under section 106(1)--
       ``(i) by complying with such notice requirements as the
     Librarian of Congress shall prescribe by regulation and by
     paying royalty fees in accordance with this subsection; or
       ``(ii) if such royalty fees have not been set, by agreeing
     to pay such royalty fees as shall be determined in accordance
     with this subsection.
       ``(B) Any royalty payments in arrears shall be made on or
     before the 20th day of the month next succeeding the month in
     which the royalty fees are set.
       ``(9) If a transmitting organization entitled to make a
     phonorecord under this subsection is prevented from making
     such phonorecord by reason of the application by the
     copyright owner of technical measures that prevent the
     reproduction of the sound recording, the copyright owner
     shall make available to the transmitting organization the
     necessary means for permitting the making of such phonorecord
     within the meaning of this subsection, 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 section 1201(a)(1) of this title for engaging in such
     activities as are necessary to make such phonorecords as
     permitted under this subsection.''.

     SEC. 416. ASSUMPTION OF CONTRACTUAL OBLIGATIONS RELATED TO
                   TRANSFERS OF RIGHTS IN MOTION PICTURES.

       (a) In General.--Part VI of title 28, United States Code,
     is amended by adding at the end the following new chapter:

      ``CHAPTER 180--ASSUMPTION OF CERTAIN CONTRACTUAL OBLIGATIONS

``Sec.
``4001. Assumption of contractual obligations related to transfers of
              rights in motion pictures.

     ``Sec. 4001. Assumption of contractual obligations related to
       transfers of rights in motion pictures

       ``(a) Assumption of Obligations.--In the case of a transfer
     of copyright ownership in a motion picture (as defined in
     section 101 of title 17) that is produced subject to 1 or
     more collective bargaining agreements negotiated under the
     laws of the United States, if the transfer is executed on or
     after the effective date of this chapter and is not limited
     to public performance rights, the transfer instrument shall
     be deemed to incorporate the assumption agreements applicable
     to the copyright ownership being transferred that are
     required by the applicable collective bargaining agreement,
     and the transferee shall be subject to the obligations under
     each such assumption agreement to make residual payments and
     provide related notices, accruing after the effective date of
     the transfer and applicable to the exploitation of the rights
     transferred, and any remedies under each such assumption
     agreement for breach of those obligations, as those
     obligations and remedies are set forth in the applicable
     collective bargaining agreement, if--
       ``(1) the transferee knows or has reason to know at the
     time of the transfer that such collective bargaining
     agreement was or will be applicable to the motion picture; or
       ``(2) in the event of a court order confirming an
     arbitration award against the transferor under the collective
     bargaining agreement, the transferor does not have the
     financial ability to satisfy the award within 90 days after
     the order is issued.
       ``(b) Failure To Notify.--If the transferor under
     subsection (a) fails to notify the transferee under
     subsection (a) of applicable collective bargaining
     obligations before the execution of the transfer instrument,
     and subsection (a) is made applicable to the transferee
     solely by virtue of subsection (a)(2), the transferor shall
     be liable to the transferee for any damages suffered by the
     transferee as a result of the failure to notify.
       ``(c) Determination of Disputes and Claims.--Any dispute
     concerning the application of subsection (a) and any claim
     made under subsection (b) shall be determined by an action in
     United States district court, and the court in its discretion
     may allow the recovery of full costs by or against any party
     and may also award a reasonable attorney's fee to the
     prevailing party as part of the costs.''.
       (b) Conforming Amendment.--The table of chapters for part
     VI of title 28, United States Code, is amended by adding at
     the end the following:

``180. Assumption of Certain Contractual Obligations........4001''.....



     SEC. 417. FIRST SALE CLARIFICATION.

       Section 109(a) of title 17, United States Code, is amended
     by striking the first sentence and inserting the following:
     ``Notwithstanding the provisions of section 106(3), the owner
     of a particular lawfully made copy or phonorecord that has
     been distributed in the United States by the authority of the
     copyright owner, or any person authorized by the owner of
     that copy or phonorecord, is entitled, without the authority
     of the copyright owner, to sell or otherwise dispose of the
     possession of that copy or phonorecord.''.
           TITLE V--COLLECTIONS OF INFORMATION ANTIPIRACY ACT

     SEC. 501. SHORT TITLE.

       This title may be cited as the ``Collections of Information
     Antipiracy Act''.

     SEC. 502. MISAPPROPRIATION OF COLLECTIONS OF INFORMATION.

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

      ``CHAPTER 13--MISAPPROPRIATION OF COLLECTIONS OF INFORMATION

``Sec.
``1301. Definitions.
``1302. Prohibition against misappropriation.
``1303. Permitted acts.
``1304. Exclusions.
``1305. Relationship to other laws.
``1306. Civil remedies.
``1307. Criminal offenses and penalties.
``1308. Limitations on actions.

     ``Sec. 1301. Definitions

       ``As used in this chapter:
       ``(1) Collection of information.--The term `collection of
     information' means information that has been collected and
     has been organized for the purpose of bringing discrete items
     of information together in one place or through one source so
     that users may access them.
       ``(2) Information.--The term `information' means facts,
     data, works of authorship, or any other intangible material
     capable of being collected and organized in a systematic way.
       ``(3) Potential market.--The term `potential market' means
     any market that a person claiming protection under section
     1302 has current and demonstrable plans to exploit or that is
     commonly exploited by persons offering similar products or
     services incorporating collections of information.
       ``(4) Commerce.--The term `commerce' means all commerce
     which may be lawfully regulated by the Congress.
       ``(5) Product or service.--A product or service
     incorporating a collection of information does not include a
     product or service incorporating a collection of information
     gathered, organized, or maintained to address, route,
     forward, transmit, or store digital online communications or
     provide or receive access to connections for digital online
     communications.

     ``Sec. 1302. Prohibition against misappropriation

       ``Any person who extracts, or uses in commerce, all or a
     substantial part, measured either quantitatively or
     qualitatively, of a collection of information gathered,
     organized, or maintained by another person through the
     investment of substantial monetary or other resources, so as
     to cause harm to the actual or potential market of that other
     person, or a successor in interest of that other person, for
     a product or service that incorporates that collection of
     information and is offered or intended to be offered for sale
     or otherwise in commerce by that other person, or a successor
     in interest of that person, shall be liable to that person or
     successor in interest for the remedies set forth in section
     1306.

     ``Sec. 1303. Permitted acts

       ``(a) Individual Items of Information and Other
     Insubstantial Parts.--Nothing in this chapter shall prevent
     the extraction or use of an individual item of information,
     or other insubstantial part of a collection of information,
     in itself. An individual item of information, including a
     work of authorship, shall not itself be considered a
     substantial part of a collection of information under section
     1302. Nothing in this subsection shall permit the repeated or
     systematic extraction or use of individual items or
     insubstantial parts of a collection of information so as to
     circumvent the prohibition contained in section 1302.
       ``(b) Gathering or Use of Information Obtained Through
     Other Means.--Nothing in this chapter shall restrict any
     person from independently gathering information or using
     information obtained by means other than extracting it from a
     collection of information gathered, organized, or maintained
     by another person through the investment of substantial
     monetary or other resources.
       ``(c) Use of Information for Verification.--Nothing in this
     chapter shall restrict any person from extracting or using a
     collection of information within any entity or organization,
     for the sole purpose of verifying the accuracy of information
     independently gathered, organized, or maintained by that
     person. Under no circumstances shall the information so used
     be extracted from the original collection and made available
     to others in a manner that harms the actual or potential
     market for the collection of information from which it is
     extracted or used.
       ``(d) Nonprofit Educational, Scientific, or Research
     Uses.--Notwithstanding section 1302, no person shall be
     restricted from extracting or using information for nonprofit
     educational, scientific, or research purposes in a manner
     that does not harm directly the

[[Page H7087]]

     actual market for the product or service referred to in
     section 1302.
       ``(e) News Reporting.--Nothing in this chapter shall
     restrict any person from extracting or using information for
     the sole purpose of news reporting, including news gathering,
     dissemination, and comment, unless the information so
     extracted or used is time sensitive and has been gathered by
     a news reporting entity, and the extraction or use is part of
     a consistent pattern engaged in for the purpose of direct
     competition.
       ``(f) Transfer of Copy.--Nothing in this chapter shall
     restrict the owner of a particular lawfully made copy of all
     or part of a collection of information from selling or
     otherwise disposing of the possession of that copy.

     ``Sec. 1304. Exclusions

       ``(a) Government Collections of Information.--
       ``(1) Exclusion.--Protection under this chapter shall not
     extend to collections of information gathered, organized, or
     maintained by or for a government entity, whether Federal,
     State, or local, including any employee or agent of such
     entity, or any person exclusively licensed by such entity,
     within the scope of the employment, agency, or license.
     Nothing in this subsection shall preclude protection under
     this chapter for information gathered, organized,
     or maintained by such an agent or licensee that is not
     within the scope of such agency or license, or by a
     Federal or State educational institution in the course of
     engaging in education or scholarship.
       ``(2) Exception.--The exclusion under paragraph (1) does
     not apply to any information required to be collected and
     disseminated--
       ``(A) under the Securities Exchange Act of 1934 by a
     national securities exchange, a registered securities
     association, or a registered securities information
     processor, subject to section 1305(g) of this title; or
       ``(B) under the Commodity Exchange Act by a contract
     market, subject to section 1305(g) of this title.
       ``(b) Computer Programs.--
       ``(1) Protection not extended.--Subject to paragraph (2),
     protection under this chapter shall not extend to computer
     programs, including, but not limited to, any computer program
     used in the manufacture, production, operation, or
     maintenance of a collection of information, or any element of
     a computer program necessary to its operation.
       ``(2) Incorporated collections of information.--A
     collection of information that is otherwise subject to
     protection under this chapter is not disqualified from such
     protection solely because it is incorporated into a computer
     program.

     ``Sec. 1305. Relationship to other laws

       ``(a) Other Rights Not Affected.--Subject to subsection
     (b), nothing in this chapter shall affect rights,
     limitations, or remedies concerning copyright, or any other
     rights or obligations relating to information, including laws
     with respect to patent, trademark, design rights, antitrust,
     trade secrets, privacy, access to public documents, and the
     law of contract.
       ``(b) Preemption of State Law.--On or after the effective
     date of this chapter, all rights that are equivalent to the
     rights specified in section 1302 with respect to the subject
     matter of this chapter shall be governed exclusively by
     Federal law, and no person is entitled to any equivalent
     right in such subject matter under the common law or statutes
     of any State. State laws with respect to trademark, design
     rights, antitrust, trade secrets, privacy, access to public
     documents, and the law of contract shall not be deemed to
     provide equivalent rights for purposes of this subsection.
       ``(c) Relationship to Copyright.--Protection under this
     chapter is independent of, and does not affect or enlarge the
     scope, duration, ownership, or subsistence of, any copyright
     protection or limitation, including, but not limited to, fair
     use, in any work of authorship that is contained in or
     consists in whole or part of a collection of information.
     This chapter does not provide any greater protection to a
     work of authorship contained in a collection of information,
     other than a work that is itself a collection of information,
     than is available to that work under any other chapter of
     this title.
       ``(d) Antitrust.--Nothing in this chapter shall limit in
     any way the constraints on the manner in which products and
     services may be provided to the public that are imposed by
     Federal and State antitrust laws, including those regarding
     single suppliers of products and services.
       ``(e) Licensing.--Nothing in this chapter shall restrict
     the rights of parties freely to enter into licenses or any
     other contracts with respect to the use of collections of
     information.
       ``(f) Communications Act of 1934.--Nothing in this chapter
     shall affect the operation of the provisions of the
     Communications Act of 1934 (47 U.S.C. 151 et seq.), or shall
     restrict any person from extracting or using subscriber list
     information, as such term is defined in section 222(f)(3) of
     the Communications Act of 1934 (47 U.S.C. 222(f)(3)), for the
     purpose of publishing telephone directories in any format.
       ``(g) Securities and Commodities Market Information.--
       ``(1) Federal agencies and acts.--Nothing in this Act shall
     affect:
       ``(A) the operation of the provisions of the Securities
     Exchange Act of 1934 (15 U.S.C. 78a et seq.) or the Commodity
     Exchange Act (7 U.S.C. 1 et seq.);
       ``(B) the jurisdiction or authority of the Securities and
     Exchange Commission and the Commodity Futures Trading
     Commission; or
       ``(C) the functions and operations of self-regulatory
     organizations and securities information processors under the
     provisions of the Securities Exchange Act of 1934 and the
     rules and regulations thereunder, including making market
     information available pursuant to the provisions of that Act
     and the rules and regulations promulgated thereunder.
       ``(2) Prohibition.--Notwithstanding any provision in
     subsection (a), (b), (c), (d), or (f) of section 1303,
     nothing in this chapter shall permit the extraction, use,
     resale, or other disposition of real-time market information
     except as the Securities Exchange Act of 1934, the Commodity
     Exchange Act, and the rules and regulations thereunder may
     otherwise provide. In addition, nothing in subsection (e) of
     section 1303 shall be construed to permit any person to
     extract or use real-time market information in a manner that
     constitutes a market substitute for a real-time market
     information service (including the real-time systematic
     updating of or display of a substantial part of market
     information) provided on a real-time basis.
       ``(3) Definition.--As used in this subsection, the term
     `market information' means information relating to quotations
     and transactions that is collected, processed, distributed,
     or published pursuant to the provisions of the Securities
     Exchange Act of 1934 or by a contract market that is
     designated by the Commodity Futures Trading Commission
     pursuant to the Commodity Exchange Act and the rules and
     regulations thereunder.

     ``Sec. 1306. Civil remedies

       ``(a) Civil Actions.--Any person who is injured by a
     violation of section 1302 may bring a civil action for such a
     violation in an appropriate United States district court
     without regard to the amount in controversy, except that any
     action against a State governmental entity may be brought in
     any court that has jurisdiction over claims against such
     entity.
       ``(b) Temporary and Permanent Injunctions.--Any court
     having jurisdiction of a civil action under this section
     shall have the power to grant temporary and permanent
     injunctions, according to the principles of equity and upon
     such terms as the court may deem reasonable, to prevent a
     violation of section 1302. Any such injunction may be served
     anywhere in the United States on the person enjoined, and may
     be enforced by proceedings in contempt or otherwise by any
     United States district court having jurisdiction over that
     person.
       ``(c) Impoundment.--At any time while an action under this
     section is pending, the court may order the impounding, on
     such terms as it deems reasonable, of all copies of contents
     of a collection of information extracted or used in violation
     of section 1302, and of all masters, tapes, disks, diskettes,
     or other articles by means of which such copies may be
     reproduced. The court may, as part of a final judgment or
     decree finding a violation of section 1302, order the
     remedial modification or destruction of all copies of
     contents of a collection of information extracted or used in
     violation of section 1302, and of all masters, tapes, disks,
     diskettes, or other articles by means of which such copies
     may be reproduced.
       ``(d) Monetary Relief.--When a violation of section 1302
     has been established in any civil action arising under this
     section, the plaintiff shall be entitled to recover any
     damages sustained by the plaintiff and defendant's profits
     not taken into account in computing the damages sustained by
     the plaintiff. The court shall assess such profits or damages
     or cause the same to be assessed under its direction. In
     assessing profits the plaintiff shall be required to prove
     defendant's gross revenue only and the defendant shall be
     required to prove all elements of cost or deduction claims.
     In assessing damages the court may enter judgment, according
     to the circumstances of the case, for any sum above the
     amount found as actual damages, not exceeding three times
     such amount. The court in its discretion may award reasonable
     costs and attorney's fees to the prevailing party and shall
     award such costs and fees where it determines that an action
     was brought under this chapter in bad faith against a
     nonprofit educational, scientific, or research institution,
     library, or archives, or an employee or agent of such an
     entity, acting within the scope of his or her employment.
       ``(e) Reduction or Remission of Monetary Relief for
     Nonprofit Educational, Scientific, or Research
     Institutions.--The court shall reduce or remit entirely
     monetary relief under subsection (d) in any case in which a
     defendant believed and had reasonable grounds for believing
     that his or her conduct was permissible under this chapter,
     if the defendant was an employee or agent of a nonprofit
     educational, scientific, or research institution, library, or
     archives acting within the scope of his or her employment.
       ``(f) Actions Against United States Government.--
     Subsections (b) and (c) shall not apply to any action against
     the United States Government.
       ``(g) Relief Against State Entities.--The relief provided
     under this section shall be available against a State
     governmental entity to the extent permitted by applicable
     law.

     ``Sec. 1307. Criminal offenses and penalties

       ``(a) Violation.--

[[Page H7088]]

       ``(1) In general.--Any person who violates section 1302
     willfully, and--
       ``(A) does so for direct or indirect commercial advantage
     or financial gain; or
       ``(B) causes loss or damage aggregating $10,000 or more in
     any 1-year period to the person who gathered, organized, or
     maintained the information concerned,

     shall be punished as provided in subsection (b).
       ``(2) Inapplicability.--This section shall not apply to an
     employee or agent of a nonprofit educational, scientific, or
     research institution, library, or archives acting within the
     scope of his or her employment.
       ``(b) Penalties.--An offense under subsection (a) shall be
     punishable by a fine of not more than $250,000 or
     imprisonment for not more than 5 years, or both. A second or
     subsequent offense under subsection (a) shall be punishable
     by a fine of not more than $500,000 or imprisonment for not
     more than 10 years, or both.

     ``Sec. 1308. Limitations on actions

       ``(a) Criminal Proceedings.--No criminal proceeding shall
     be maintained under this chapter unless it is commenced
     within three years after the cause of action arises.
       ``(b) Civil Actions.--No civil action shall be maintained
     under this chapter unless it is commenced within three years
     after the cause of action arises or claim accrues.
       ``(c) Additional Limitation.--No criminal or civil action
     shall be maintained under this chapter for the extraction or
     use of all or a substantial part of a collection of
     information that occurs more than 15 years after the
     investment of resources that qualified the portion of the
     collection of information for protection under this chapter
     that is extracted or used.''.

     SEC. 503. CONFORMING AMENDMENT.

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

``13. Misappropriation of Collections of Information........1301''.....

     SEC. 504. CONFORMING AMENDMENTS TO TITLE 28, UNITED STATES
                   CODE.

       (a) District Court Jurisdiction.--Section 1338 of title 28,
     United States Code, is amended--
       (1) in the section heading by inserting ``misappropriations
     of collections of information,'' after ``trade-marks,''; and
       (2) by adding at the end the following:
       ``(d) The district courts shall have original jurisdiction
     of any civil action arising under chapter 13 of title 17,
     relating to misappropriation of collections of information.
     Such jurisdiction shall be exclusive of the courts of the
     States, except that any action against a State governmental
     entity may be brought in any court that has jurisdiction over
     claims against such entity.''.
       (b) Conforming Amendment.--The item relating to section
     1338 in the table of sections for chapter 85 of title 28,
     United States Code, is amended by inserting
     ``misappropriations of collections of information,'' after
     ``trade-marks,''.
       (c) Court of Federal Claims Jurisdiction.--Section 1498(e)
     of title 28, United States Code, is amended by inserting
     ``and to protections afforded collections of information
     under chapter 13 of title 17'' after ``chapter 9 of title
     17''.

     SEC. 505. EFFECTIVE DATE.

       (a) In General.--This title and the amendments made by this
     title shall take effect on the date of the enactment of this
     Act, and shall apply to acts committed on or after that date.
       (b) Prior Acts Not Affected.--No person shall be liable
     under chapter 13 of title 17, United States Code, as added by
     section 502 of this Act, for the use of information lawfully
     extracted from a collection of information prior to the
     effective date of this Act, by that person or by that
     person's predecessor in interest.
            TITLE VI--PROTECTION OF CERTAIN ORIGINAL DESIGNS

     SEC. 601. SHORT TITLE.

       This Act may be referred to as the ``Vessel Hull Design
     Protection Act''.

     SEC. 602. PROTECTION OF CERTAIN ORIGINAL DESIGNS.

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

              ``CHAPTER 14--PROTECTION OF ORIGINAL DESIGNS

``Sec.
``1401. Designs protected.
``1402. Designs not subject to protection.
``1403. Revisions, adaptations, and rearrangements.
``1404. Commencement of protection.
``1405. Term of protection.
``1406. Design notice.
``1407. Effect of omission of notice.
``1408. Exclusive rights.
``1409. Infringement.
``1410. Application for registration.
``1411. Benefit of earlier filing date in foreign country.
``1412. Oaths and acknowledgments.
``1413. Examination of application and issue or refusal of
              registration.
``1414. Certification of registration.
``1415. Publication of announcements and indexes.
``1416. Fees.
``1417. Regulations.
``1418. Copies of records.
``1419. Correction of errors in certificates.
``1420. Ownership and transfer.
``1421. Remedy for infringement.
``1422. Injunctions.
``1423. Recovery for infringement.
``1424. Power of court over registration.
``1425. Liability for action on registration fraudulently obtained.
``1426. Penalty for false marking.
``1427. Penalty for false representation.
``1428. Enforcement by Treasury and Postal Service .
``1429. Relation to design patent law.
``1430. Common law and other rights unaffected.
``1431. Administrator; Office of the Administrator.
``1432. No retroactive effect.

     ``Sec. 1401. Designs protected

       ``(a) Designs Protected.--
       ``(1) In general.--The designer or other owner of an
     original design of a useful article which makes the article
     attractive or distinctive in appearance to the purchasing or
     using public may secure the protection provided by this
     chapter upon complying with and subject to this chapter.
       ``(2) Vessel hulls.--The design of a vessel hull, including
     a plug or mold, is subject to protection under this chapter,
     notwithstanding section 1402(4).
       ``(b) Definitions.--For the purpose of this chapter, the
     following terms have the following meanings:
       ``(1) A design is `original' if it is the result of the
     designer's creative endeavor that provides a distinguishable
     variation over prior work pertaining to similar articles
     which is more than merely trivial and has not been copied
     from another source.
       ``(2) A `useful article' is a vessel hull, including a plug
     or mold, which in normal use has an intrinsic utilitarian
     function that is not merely to portray the appearance of the
     article or to convey information. An article which normally
     is part of a useful article shall be deemed to be a useful
     article.
       ``(3) A `vessel' is a craft, especially one larger than a
     rowboat, designed to navigate on water, but does not include
     any such craft that exceeds 200 feet in length.
       ``(4) A `hull' is the frame or body of a vessel, including
     the deck of a vessel, exclusive of masts, sails, yards, and
     rigging.
       ``(5) A `plug' means a device or model used to make a mold
     for the purpose of exact duplication, regardless of whether
     the device or model has an intrinsic utilitarian function
     that is not only to portray the appearance of the product or
     to convey information.
       ``(6) A `mold' means a matrix or form in which a substance
     for material is used, regardless of whether the matrix or
     form has an intrinsic utilitarian function that is not only
     to portray the appearance of the product or to convey
     information.

     ``Sec. 1402. Designs not subject to protection

       ``Protection under this chapter shall not be available for
     a design that is--
       ``(1) not original;
       ``(2) staple or commonplace, such as a standard geometric
     figure, a familiar symbol, an emblem, or a motif, or another
     shape, pattern, or configuration which has become standard,
     common, prevalent, or ordinary;
       ``(3) different from a design excluded by paragraph (2)
     only in insignificant details or in elements which are
     variants commonly used in the relevant trades;
       ``(4) dictated solely by a utilitarian function of the
     article that embodies it; or
       ``(5) embodied in a useful article that was made public by
     the designer or owner in the United States or a foreign
     country more than 1 year before the date of the application
     for registration under this chapter.

     ``Sec. 1403. Revisions, adaptations, and rearrangements

       ``Protection for a design under this chapter shall be
     available notwithstanding the employment in the design of
     subject matter excluded from protection under section 1402 if
     the design is a substantial revision, adaptation, or
     rearrangement of such subject matter. Such protection shall
     be independent of any subsisting protection in subject matter
     employed in the design, and shall not be construed as
     securing any right to subject matter excluded from protection
     under this chapter or as extending any subsisting protection
     under this chapter.

     ``Sec. 1404. Commencement of protection

       ``The protection provided for a design under this chapter
     shall commence upon the earlier of the date of publication of
     the registration under section 1413(a) or the date the design
     is first made public as defined by section 1410(b).

     ``Sec. 1405. Term of protection

       ``(a) In General.--Subject to subsection (b), the
     protection provided under this chapter for a design shall
     continue for a term of 10 years beginning on the date of the
     commencement of protection under section 1404.
       ``(b) Expiration.--All terms of protection provided in this
     section shall run to the end of the calendar year in which
     they would otherwise expire.
       ``(c) Termination of Rights.--Upon expiration or
     termination of protection in a particular design under this
     chapter, all rights under this chapter in the design shall
     terminate, regardless of the number of different articles in
     which the design may have been used during the term of its
     protection.

     ``Sec. 1406. Design notice

       ``(a) Contents of Design Notice.--(1) Whenever any design
     for which protection is sought under this chapter is made
     public under section 1410(b), the owner of the design shall,
     subject to the provisions of section 1407, mark it or have it
     marked legibly with a design notice consisting of--

[[Page H7089]]

       ``(A) the words `Protected Design', the abbreviation
     `Prot'd Des.', or the letter `D' with a circle, or the symbol
     *D*;
       ``(B) the year of the date on which protection for the
     design commenced; and
       ``(C) the name of the owner, an abbreviation by which the
     name can be recognized, or a generally accepted alternative
     designation of the owner.

     Any distinctive identification of the owner may be used for
     purposes of subparagraph (C) if it has been recorded by the
     Administrator before the design marked with such
     identification is registered.
       ``(2) After registration, the registration number may be
     used instead of the elements specified in subparagraphs (B)
     and (C) of paragraph (1).
       ``(b) Location of Notice.--The design notice shall be so
     located and applied as to give reasonable notice of design
     protection while the useful article embodying the design is
     passing through its normal channels of commerce.
       ``(c) Subsequent Removal of Notice.--When the owner of a
     design has complied with the provisions of this section,
     protection under this chapter shall not be affected by the
     removal, destruction, or obliteration by others of the design
     notice on an article.

     ``Sec. 1407. Effect of omission of notice

       ``(a) Actions With Notice.--Except as provided in
     subsection (b), the omission of the notice prescribed in
     section 1406 shall not cause loss of the protection under
     this chapter or prevent recovery for infringement under this
     chapter against any person who, after receiving written
     notice of the design protection, begins an undertaking
     leading to infringement under this chapter.
       ``(b) Actions Without Notice.--The omission of the notice
     prescribed in section 1406 shall prevent any recovery under
     section 1423 against a person who began an undertaking
     leading to infringement under this chapter before receiving
     written notice of the design protection. No injunction shall
     be issued under this chapter with respect to such undertaking
     unless the owner of the design reimburses that person for any
     reasonable expenditure or contractual obligation in
     connection with such undertaking that was incurred before
     receiving written notice of the design protection, as the
     court in its discretion directs. The burden of providing
     written notice of design protection shall be on the owner of
     the design.

     ``Sec. 1408. Exclusive rights

       ``The owner of a design protected under this chapter has
     the exclusive right to--
       ``(1) make, have made, or import, for sale or for use in
     trade, any useful article embodying that design; and
       ``(2) sell or distribute for sale or for use in trade any
     useful article embodying that design.

     ``Sec. 1409. Infringement

       ``(a) Acts of Infringement.--Except as provided in
     subjection (b), it shall be infringement of the exclusive
     rights in a design protected under this chapter for any
     person, without the consent of the owner of the design,
     within the United States and during the term of such
     protection, to--
       ``(1) make, have made, or import, for sale or for use in
     trade, any infringing article as defined in subsection (e);
     or
       ``(2) sell or distribute for sale or for use in trade any
     such infringing article.
       ``(b) Acts of Sellers and Distributors.--A seller or
     distributor of an infringing article who did not make or
     import the article shall be deemed to have infringed on a
     design protected under this chapter only if that person--
       ``(1) induced or acted in collusion with a manufacturer to
     make, or an importer to import such article, except that
     merely purchasing or giving an order to purchase such article
     in the ordinary course of business shall not of itself
     constitute such inducement or collusion; or
       ``(2) refused or failed, upon the request of the owner of
     the design, to make a prompt and full disclosure of that
     person's source of such article, and that person orders or
     reorders such article after receiving notice by registered or
     certified mail of the protection subsisting in the design.
       ``(c) Acts Without Knowledge.--It shall not be infringement
     under this section to make, have made, import, sell, or
     distribute, any article embodying a design which was created
     without knowledge that a design was protected under this
     chapter and was copied from such protected design.
       ``(d) Acts in Ordinary Course of Business.--A person who
     incorporates into that person's product of manufacture an
     infringing article acquired from others in the ordinary
     course of business, or who, without knowledge of the
     protected design embodied in an infringing article, makes or
     processes the infringing article for the account of another
     person in the ordinary course of business, shall not be
     deemed to have infringed the rights in that design under this
     chapter except under a condition contained in paragraph (1)
     or (2) of subsection (b). Accepting an order or reorder from
     the source of the infringing article shall be deemed ordering
     or reordering within the meaning of subsection (b)(2).
       ``(e) Infringing Article Defined.--As used in this section,
     an `infringing article' is any article the design of which
     has been copied from a design protected under this chapter,
     without the consent of the owner of the protected design. An
     infringing article is not an illustration or picture of a
     protected design in an advertisement, book, periodical,
     newspaper, photograph, broadcast, motion picture, or similar
     medium. A design shall not be deemed to have been copied from
     a protected design if it is original and not substantially
     similar in appearance to a protected design.
       ``(f) Establishing Originality.--The party to any action or
     proceeding under this chapter who alleges rights under this
     chapter in a design shall have the burden of establishing the
     design's originality whenever the opposing party introduces
     an earlier work which is identical to such design, or so
     similar as to make prima facie showing that such design was
     copied from such work.
       ``(g) Reproduction for Teaching or Analysis.--It is not an
     infringement of the exclusive rights of a design owner for a
     person to reproduce the design in a useful article or in any
     other form solely for the purpose of teaching, analyzing, or
     evaluating the appearance, concepts, or techniques embodied
     in the design, or the function of the useful article
     embodying the design.

     ``Sec. 1410. Application for registration

       ``(a) Time Limit for Application for Registration.--
     Protection under this chapter shall be lost if application
     for registration of the design is not made within two years
     after the date on which the design is first made public.
       ``(b) When Design Is Made Public.--A design is made public
     when an existing useful article embodying the design is
     anywhere publicly exhibited, publicly distributed, or offered
     for sale or sold to the public by the owner of the design or
     with the owner's consent.
       ``(c) Application by Owner of Design.--Application for
     registration may be made by the owner of the design.
       ``(d) Contents of Application.--The application for
     registration shall be made to the Administrator and shall
     state--
       ``(1) the name and address of the designer or designers of
     the design;
       ``(2) the name and address of the owner if different from
     the designer;
       ``(3) the specific name of the useful article embodying the
     design;
       ``(4) the date, if any, that the design was first made
     public, if such date was earlier than the date of the
     application;
       ``(5) affirmation that the design has been fixed in a
     useful article; and
       ``(6) such other information as may be required by the
     Administrator.

     The application for registration may include a description
     setting forth the salient features of the design, but the
     absence of such a description shall not prevent registration
     under this chapter.

       ``(e) Sworn Statement.--The application for registration
     shall be accompanied by a statement under oath by the
     applicant or the applicant's duly authorized agent or
     representative, setting forth, to the best of the applicant's
     knowledge and belief--
       ``(1) that the design is original and was created by the
     designer or designers named in the application;
       ``(2) that the design has not previously been registered on
     behalf of the applicant or the applicant's predecessor in
     title; and
       ``(3) that the applicant is the person entitled to
     protection and to registration under this chapter.
     If the design has been made public with the design notice
     prescribed in section 1406, the statement shall also describe
     the exact form and position of the design notice.
       ``(f) Effect of Errors.--(1) Error in any statement or
     assertion as to the utility of the useful article named in
     the application under this section, the design of which is
     sought to be registered, shall not affect the protection
     secured under this chapter.
       ``(2) Errors in omitting a joint designer or in naming an
     alleged joint designer shall not affect the validity of the
     registration, or the actual ownership or the protection of
     the design, unless it is shown that the error occurred with
     deceptive intent.
       ``(g) Design Made in Scope of Employment.--In a case in
     which the design was made within the regular scope of the
     designer's employment and individual authorship of the design
     is difficult or impossible to ascribe and the application so
     states, the name and address of the employer for whom the
     design was made may be stated instead of that of the
     individual designer.
       ``(h) Pictorial Representation of Design.--The application
     for registration shall be accompanied by two copies of a
     drawing or other pictorial representation of the useful
     article embodying the design, having one or more views,
     adequate to show the design, in a form and style suitable for
     reproduction, which shall be deemed a part of the
     application.
       ``(i) Design in More Than One Useful Article.--If the
     distinguishing elements of a design are in substantially the
     same form in different useful articles, the design shall be
     protected as to all such useful articles when protected as to
     one of them, but not more than one registration shall be
     required for the design.
       ``(j) Application for More Than One Design.--More than one
     design may be included in the same application under such
     conditions as may be prescribed by the Administrator. For
     each design included in an application the fee prescribed for
     a single design shall be paid.

     ``Sec. 1411. Benefit of earlier filing date in foreign
       country

       ``An application for registration of a design filed in the
     United States by any person who has, or whose legal
     representative or predecessor or successor in title has,
     previously

[[Page H7090]]

     filed an application for registration of the same design in a
     foreign country which extends to designs of owners who are
     citizens of the United States, or to applications filed under
     this chapter, similar protection to that provided under this
     chapter shall have that same effect as if filed in the United
     States on the date on which the application was first filed
     in such foreign country, if the application in the United
     States is filed within 6 months after the earliest date on
     which any such foreign application was filed.

     ``Sec. 1412. Oaths and acknowledgments

       ``(a) In General.--Oaths and acknowledgments required by
     this chapter--
       ``(1) may be made--
       ``(A) before any person in the United States authorized by
     law to administer oaths; or
       ``(B) when made in a foreign country, before any diplomatic
     or consular officer of the United States authorized to
     administer oaths, or before any official authorized to
     administer oaths in the foreign country concerned, whose
     authority shall be proved by a certificate of a diplomatic or
     consular officer of the United States; and
       ``(2) shall be valid if they comply with the laws of the
     State or country where made.
       ``(b) Written Declaration in Lieu of Oath.--(1) The
     Administrator may by rule prescribe that any document which
     is to be filed under this chapter in the Office of the
     Administrator and which is required by any law, rule, or
     other regulation to be under oath, may be subscribed to by a
     written declaration in such form as the Administrator may
     prescribe, and such declaration shall be in lieu of the oath
     otherwise required.
       ``(2) Whenever a written declaration under paragraph (1) is
     used, the document containing the declaration shall state
     that willful false statements are punishable by fine or
     imprisonment, or both, pursuant to section 1001 of title 18,
     and may jeopardize the validity of the application or
     document or a registration resulting therefrom.

     ``Sec. 1413. Examination of application and issue or refusal
       of registration

       ``(a) Determination of Registrability of Design;
     Registration.--Upon the filing of an application for
     registration in proper form under section 1410, and upon
     payment of the fee prescribed under section 1416, the
     Administrator shall determine whether or not the application
     relates to a design which on its face appears to be subject
     to protection under this chapter, and, if so, the Register
     shall register the design. Registration under this subsection
     shall be announced by publication. The date of registration
     shall be the date of publication.
       ``(b) Refusal To Register; Reconsideration.--If, in the
     judgment of the Administrator, the application for
     registration relates to a design which on its face is not
     subject to protection under this chapter, the Administrator
     shall send to the applicant a notice of refusal to register
     and the grounds for the refusal. Within 3 months after the
     date on which the notice of refusal is sent, the applicant
     may, by written request, seek reconsideration of the
     application. After consideration of such a request, the
     Administrator shall either register the design or send to the
     applicant a notice of final refusal to register.
       ``(c) Application To Cancel Registration.--Any person who
     believes he or she is or will be damaged by a registration
     under this chapter may, upon payment of the prescribed fee,
     apply to the Administrator at any time to cancel the
     registration on the ground that the design is not subject to
     protection under this chapter, stating the reasons for the
     request. Upon receipt of an application for cancellation, the
     Administrator shall send to the owner of the design, as shown
     in the records of the Office of the Administrator, a notice
     of the application, and the owner shall have a period of 3
     months after the date on which such notice is mailed in which
     to present arguments to the Administrator for support of the
     validity of the registration. The Administrator shall also
     have the authority to establish, by regulation, conditions
     under which the opposing parties may appear and be heard in
     support of their arguments. If, after the periods provided
     for the presentation of arguments have expired, the
     Administrator determines that the applicant for cancellation
     has established that the design is not subject to protection
     under this chapter, the Administrator shall order the
     registration stricken from the record. Cancellation under
     this subsection shall be announced by publication, and notice
     of the Administrator's final determination with respect to
     any application for cancellation shall be sent to the
     applicant and to the owner of record.

     ``Sec. 1414. Certification of registration

       ``Certificates of registration shall be issued in the name
     of the United States under the seal of the Office of the
     Administrator and shall be recorded in the official records
     of the Office. The certificate shall state the name of the
     useful article, the date of filing of the application, the
     date of registration, and the date the design was made
     public, if earlier than the date of filing of the
     application, and shall contain a reproduction of the drawing
     or other pictorial representation of the design. If a
     description of the salient features of the design appears in
     the application, the description shall also appear in the
     certificate. A certificate of registration shall be admitted
     in any court as prima facie evidence of the facts stated in
     the certificate.

     ``Sec. 1415. Publication of announcements and indexes

       ``(a) Publications of the Administrator.--The Administrator
     shall publish lists and indexes of registered designs and
     cancellations of designs and may also publish the drawings or
     other pictorial representations of registered designs for
     sale or other distribution.
       ``(b) File of Representatives of Registered Designs.--The
     Administrator shall establish and maintain a file of the
     drawings or other pictorial representations of registered
     designs. The file shall be available for use by the public
     under such conditions as the Administrator may prescribe.

     ``Sec. 1416. Fees

       ``The Administrator shall by regulation set reasonable fees
     for the filing of applications to register designs under this
     chapter and for other services relating to the administration
     of this chapter, taking into consideration the cost of
     providing these services and the benefit of a public record.

     ``Sec. 1417. Regulations

       ``The Administrator may establish regulations for the
     administration of this chapter.

     ``Sec. 1418. Copies of records

       ``Upon payment of the prescribed fee, any person may obtain
     a certified copy of any official record of the Office of the
     Administrator that relates to this chapter. That copy shall
     be admissible in evidence with the same effect as the
     original.

     ``Sec. 1419. Correction of errors in certificates

       ``The Administrator may, by a certificate of correction
     under seal, correct any error in a registration incurred
     through the fault of the Office, or, upon payment of the
     required fee, any error of a clerical or typographical nature
     occurring in good faith but not through the fault of the
     Office. Such registration, together with the certificate,
     shall thereafter have the same effect as if it had been
     originally issued in such corrected form.

     ``Sec. 1420. Ownership and transfer

       ``(a) Property Right in Design.--The property right in a
     design subject to protection under this chapter shall vest in
     the designer, the legal representatives of a deceased
     designer or of one under legal incapacity, the employer for
     whom the designer created the design in the case of a design
     made within the regular scope of the designer's employment,
     or a person to whom the rights of the designer or of such
     employer have been transferred. The person in whom the
     property right is vested shall be considered the owner of the
     design.
       ``(b) Transfer of Property Right.--The property right in a
     registered design, or a design for which an application for
     registration has been or may be filed, may be assigned,
     granted, conveyed, or mortgaged by an instrument in writing,
     signed by the owner, or may be bequeathed by will.
       ``(c) Oath or Acknowledgement of Transfer.--An oath or
     acknowledgment under section 1412 shall be prima facie
     evidence of the execution of an assignment, grant,
     conveyance, or mortgage under subsection (b).
       ``(d) Recordation of Transfer.--An assignment, grant,
     conveyance, or mortgage under subsection (b) shall be void as
     against any subsequent purchaser or mortgagee for a valuable
     consideration, unless it is recorded in the Office of the
     Administrator within 3 months after its date of execution or
     before the date of such subsequent purchase or mortgage.

     ``Sec. 1421. Remedy for infringement

       ``(a) In General.--The owner of a design is entitled, after
     issuance of a certificate of registration of the design under
     this chapter, to institute an action for any infringement of
     the design.
       ``(b) Review of Refusal To Register.--(1) Subject to
     paragraph (2), the owner of a design may seek judicial review
     of a final refusal of the Administrator to register the
     design under this chapter by bringing a civil action, and may
     in the same action, if the court adjudges the design subject
     to protection under this chapter, enforce the rights in that
     design under this chapter.
       ``(2) The owner of a design may seek judicial review under
     this section if--
       ``(A) the owner has previously duly filed and prosecuted to
     final refusal an application in proper form for registration
     of the design;
       ``(B) the owner causes a copy of the complaint in the
     action to be delivered to the Administrator within 10 days
     after the commencement of the action; and
       ``(C) the defendant has committed acts in respect to the
     design which would constitute infringement with respect to a
     design protected under this chapter.
       ``(c) Administrator as Party to Action.--The Administrator
     may, at the Administrator's option, become a party to the
     action with respect to the issue of registrability of the
     design claim by entering an appearance within 60 days after
     being served with the complaint, but the failure of the
     Administrator to become a party shall not deprive the court
     of jurisdiction to determine that issue.
       ``(d) Use of Arbitration To Resolve Dispute.--The parties
     to an infringement dispute under this chapter, within such
     time as may be specified by the Administrator by regulation,
     may determine the dispute, or any aspect of the dispute, by
     arbitration. Arbitration shall be governed by title 9. The
     parties shall give notice of any arbitration award to the
     Administrator, and such award shall, as between the parties
     to the arbitration, be dispositive of the issues to which it

[[Page H7091]]

     relates. The arbitration award shall be unenforceable until
     such notice is given. Nothing in this subsection shall
     preclude the Administrator from determining whether a design
     is subject to registration in a cancellation proceeding under
     section 1413(c).

     Sec. 1422. Injunctions

       ``(a) In General.--A court having jurisdiction over actions
     under this chapter may grant injunctions in accordance with
     the principles of equity to prevent infringement of a design
     under this chapter, including, in its discretion, prompt
     relief by temporary restraining orders and preliminary
     injunctions.
       ``(b) Damages for Injunctive Relief Wrongfully Obtained.--A
     seller or distributor who suffers damage by reason of
     injunctive relief wrongfully obtained under this section has
     a cause of action against the applicant for such injunctive
     relief and may recover such relief as may be appropriate,
     including damages for lost profits, cost of materials, loss
     of good will, and punitive damages in instances where the
     injunctive relief was sought in bad faith, and, unless the
     court finds extenuating circumstances, reasonable attorney's
     fees.

     ``Sec. 1423. Recovery for infringement

       ``(a) Damages.--Upon a finding for the claimant in an
     action for infringement under this chapter, the court shall
     award the claimant damages adequate to compensate for the
     infringement. In addition, the court may increase the damages
     to such amount, not exceeding $50,000 or $1 per copy,
     whichever is greater, as the court determines to be just. The
     damages awarded shall constitute compensation and not a
     penalty. The court may receive expert testimony as an aid to
     the determination of damages.
       ``(b) Infringer's Profits.--As an alternative to the
     remedies provided in subsection (a), the court may award the
     claimant the infringer's profits resulting from the sale of
     the copies if the court finds that the infringer's sales are
     reasonably related to the use of the claimant's design. In
     such a case, the claimant shall be required to prove only the
     amount of the infringer's sales and the infringer shall be
     required to prove its expenses against such sales.
       ``(c) Statute of Limitations.--No recovery under subsection
     (a) or (b) shall be had for any infringement committed more
     than 3 years before the date on which the complaint is filed.
       ``(d) Attorney's Fees.--In an action for infringement under
     this chapter, the court may award reasonable attorney's fees
     to the prevailing party.
       ``(e) Disposition of Infringing and Other Articles.--The
     court may order that all infringing articles, and any plates,
     molds, patterns, models, or other means specifically adapted
     for making the articles, be delivered up for destruction or
     other disposition as the court may direct.

     ``Sec. 1424. Power of court over registration

       ``In any action involving the protection of a design under
     this chapter, the court, when appropriate, may order
     registration of a design under this chapter or the
     cancellation of such a registration. Any such order shall be
     certified by the court to the Administrator, who shall make
     an appropriate entry upon the record.

     ``Sec. 1425. Liability for action on registration
       fraudulently obtained

       ``Any person who brings an action for infringement knowing
     that registration of the design was obtained by a false or
     fraudulent representation materially affecting the rights
     under this chapter, shall be liable in the sum of $10,000, or
     such part of that amount as the court may determine. That
     amount shall be to compensate the defendant and shall be
     charged against the plaintiff and paid to the defendant, in
     addition to such costs and attorney's fees of the defendant
     as may be assessed by the court.

     ``Sec. 1426. Penalty for false marking

       ``(a) In General.--Whoever, for the purpose of deceiving
     the public, marks upon, applies to, or uses in advertising in
     connection with an article made, used, distributed, or sold,
     a design which is not protected under this chapter, a design
     notice specified in section 1406, or any other words or
     symbols importing that the design is protected under this
     chapter, knowing that the design is not so protected, shall
     pay a civil fine of not more than $500 for each such offense.
       ``(b) Suit by Private Persons.--Any person may sue for the
     penalty established by subsection (a), in which event one-
     half of the penalty shall be awarded to the person suing and
     the remainder shall be awarded to the United States.

     ``Sec. 1427. Penalty for false representation

       ``Whoever knowingly makes a false representation materially
     affecting the rights obtainable under this chapter for the
     purpose of obtaining registration of a design under this
     chapter shall pay a penalty of not less than $500 and not
     more than $1,000, and any rights or privileges that
     individual may have in the design under this chapter shall be
     forfeited.

     ``Sec. 1428. Enforcement by Treasury and Postal Service

       ``(a) Regulations.--The Secretary of the Treasury and the
     United States Postal Service shall separately or jointly
     issue regulations for the enforcement of the rights set forth
     in section 1408 with respect to importation. Such regulations
     may require, as a condition for the exclusion of articles
     from the United States, that the person seeking exclusion
     take any one or more of the following actions:
       ``(1) Obtain a court order enjoining, or an order of the
     International Trade Commission under section 337 of the
     Tariff Act of 1930 excluding, importation of the articles.
       ``(2) Furnish proof that the design involved is protected
     under this chapter and that the importation of the articles
     would infringe the rights in the design under this chapter.
       ``(3) Post a surety bond for any injury that may result if
     the detention or exclusion of the articles proves to be
     unjustified.
       ``(b) Seizure and Forfeiture.--Articles imported in
     violation of the rights set forth in section 1408 are subject
     to seizure and forfeiture in the same manner as property
     imported in violation of the customs laws. Any such forfeited
     articles shall be destroyed as directed by the Secretary of
     the Treasury or the court, as the case may be, except that
     the articles may be returned to the country of export
     whenever it is shown to the satisfaction of the Secretary of
     the Treasury that the importer had no reasonable grounds for
     believing that his or her acts constituted a violation of the
     law.

     ``Sec. 1429. Relation to design patent law

       ``The issuance of a design patent under title 35 for an
     original design for an article of manufacture shall terminate
     any protection of the original design under this chapter.

     ``Sec. 1430. Common law and other rights unaffected

       ``Nothing in this chapter shall annul or limit--
       ``(1) common law or other rights or remedies, if any,
     available to or held by any person with respect to a design
     which has not been registered under this chapter; or
       ``(2) any right under the trademark laws or any right
     protected against unfair competition.

     ``Sec. 1431. Administrator; Office of the Administrator

       ``In this chapter, the `Administrator' is the Register of
     Copyrights, and the `Office of the Administrator' and the
     `Office' refer to the Copyright Office of the Library of
     Congress.

     ``Sec. 1432. No retroactive effect

       ``Protection under this chapter shall not be available for
     any design that has been made public under section 1410(b)
     before the effective date of this chapter.''.

     SEC. 603. CONFORMING AMENDMENTS.

       (a) Table of Chapters.--The table of chapters for title 17,
     United States Code, is amended by adding at the end the
     following:

``14. Protection of Original Designs........................1401''.....

       (b) Jurisdiction of District Courts Over Design Actions.--
     (1) Section 1338(c) of title 28, United States Code, is
     amended by inserting ``, and to exclusive rights in designs
     under chapter 14 of title 17,'' after ``title 17''.
       (2)(A) The section heading for section 1338 of title 28,
     United States Code, is amended by inserting ``designs,''
     after ``mask works,''.
       (B) The item relating to section 1338 in the table of
     sections at the beginning of chapter 85 of title 28, United
     States Code, is amended by inserting ``designs,'' after
     ``mask works,''.
       (c) Place for Bringing Design Actions.--Section 1400(a) of
     title 28, United States Code, is amended by inserting ``or
     designs'' after ``mask works''.
       (d) Actions Against the United States.--Section 1498(e) of
     title 28, United States Code, is amended by inserting ``, and
     to exclusive rights in designs under chapter 14 of title
     17,'' after ``title 17''.

     SEC. 604. EFFECTIVE DATE.

       The amendments made by sections 602 and 603 shall take
     effect one year after the date of the enactment of this Act.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
North Carolina (Mr. Coble) and the gentleman from Massachusetts (Mr.
Frank) each will control 20 minutes.
  The Chair recognizes the gentleman from North Carolina (Mr. Coble).

                             General Leave

  Mr. COBLE. Madam Speaker, I ask unanimous consent that all Members
may have 10 legislative days within which to revise and extend their
remarks on the bill under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the
gentleman from North Carolina?
  There was no objection.
  Mr. COBLE. Madam Speaker, I ask unanimous consent that the gentleman
from Virginia (Mr. Bliley), the chairman of the Committee on Commerce,
be allowed to control 10 of my 20 minutes.
  The SPEAKER pro tempore. Is there objection to the request of the
gentleman from North Carolina?
  There was no objection.
  Mr. COBLE. Madam Speaker, I yield myself such time as I may consume.
Oftentimes when significant legislation comes to the floor, it is
described as landmark legislation. At the risk of being presumptuous
and immodest, I think this may well indeed be landmark legislation.
  This bill will implement two treaties which are extremely important
to ensure the adequate protection for American works in countries
around the world, particularly at a time when the

[[Page H7092]]

digital environment now allows users to send and retrieve perfect
copies of copyrighted material over the Internet. While digital
dissemination of copies will benefit owners and consumers, it will
unfortunately also facilitate pirates who aim to destroy the value of
American intellectual property. In compliance with the treaties, H.R.
2281 makes it unlawful to defeat technological protections used by
copyright owners to protect their works, including preventing unlawful
access and targeting devices made to circumvent encrypted copyrighted
material. It also makes it unlawful to deliberately alter or delete
information provided by a copyright owner which identifies a work, its
owners, and its permissible use.
  H.R. 2281, Madam Speaker, is a comprehensive copyright bill that adds
substantial value to our copyright law. It represents five years of
research, debate, hearings and negotiations. It is only the beginning
of Congress' evaluation of the impact of the digital age on copyrighted
works. Although it is just a beginning, it is essential to maintain the
United States' position as the world leader in the protection of
intellectual property in the digital environment.
  H.R. 2281 also represents the collective efforts of many. In
particular I want to commend the gentleman from Illinois (Mr. Hyde),
the chairman of the Committee on the Judiciary; the gentleman from
Michigan (Mr. Conyers), the ranking member of the Committee on the
Judiciary; and the gentleman from Massachusetts (Mr. Frank), the
ranking member of the Subcommittee on Courts and Intellectual Property.
  H.R. 2281, Madam Speaker, in my opinion is necessary legislation to
ensure the protection of copyrighted works as the world moves into the
digital environment. I urge its passage.
  Madam Speaker, I reserve the balance of my time.
  Mr. FRANK of Massachusetts. Madam Speaker, I yield myself such time
as I may consume.
  Madam Speaker, I first want to note that this is a matter that the
Committee on the Judiciary has been working on for some time. It then
went, under our rules, to the Committee on Commerce. Both committees
and indeed both parties in both committees bring this bill forward. I
note that because people who have been unduly addicted to the media
would not, I think, have an understanding of what has been happening.
We have here some very complex issues dealing with the economy and how
we adapt some fundamental principles, intellectual property principles
which are very important to us, to modern technology. There were some
sharp disagreements. There were some conflicting and competing values,
as is often the case. What has happened is for a period of some time,
first in the Committee on the Judiciary and then in the Committee on
Commerce, people have worked on this and come up with what I believe is
a very good set of solutions.
  I note that because I do think the public is entitled to know that
the portrayals of the Congress in general, the Committee on the
Judiciary in particular as somehow the set of a Three Stooges movie or
the scene of ferocious battles simply is not true. One of the problems
we have today is that there is an inattention on the part of our
friends in the media to what is the actual business of this place. I
think it is important for people to understand. These are very serious
issues that had to be dealt with, conflicting values.
  For example, many of us feel very strongly on the need to protect
intellectual property. If we do not see that authors and composers and
singers and musicians and other creative people are rewarded for their
work, not only is that unfair, to many of us, but the amount of work we
get will diminish.

                              {time}  1345

  There may be some people fortunate enough to be able to create out of
love without regard to compensation. We cannot depend only on the
independently wealthy to be our creative people. It is important for us
as a vibrant society to sustain that, and one way to sustain that is to
recognize the property that people have in the product of their
intellectual labors, their creative intellectual labors.
  That was, to some extent, threatened by modern technology, by
technological change which makes it easier for that minority of people
who do not respect others' intellectual property to steal it because of
the collection of technology we now use, the short end of the Internet.
What we wanted to do was to come up with ways to adapt the protection
of intellectual property to a modern technological era without unduly
diminishing people's rights to enjoy things. We do not want to prevent
the public from having the enjoyment of these products.
  Madam Speaker, I have one thing that bothered me in particular, and I
am pleased that this bill addresses it in a reasonable way because
there was no guarantee that it would.
  One of the things we do here is to say:

       ``If you are an on-line service provider, if you are
     responsible for the production of all of this out to the
     public, you will not be held automatically responsible if
     someone misuses the electronic airway you provide to steal
     other people's property.

  There is a balance here. We want to protect property, but we do not
want to deter people from making this widely available. We have a
problem here of making sure that intellectual property is protected,
but we do not want freedom of expression impinged upon.
  Madam Speaker, I found that particularly important for this reason,
and I think this is a point that I want very much to stress:
  We live in as free a society from the standpoint of expression as I
believe has ever existed in the world. The level of freedom of
expression which Americans enjoy is very, very profound, and that is
very important to us.
  The problem is we have had two doctrines of freedom of expression. We
have had one which covered all speech and written speech, newspapers,
magazines, theater, billboards; that has been very free.
  Beginning in the 1930s when radio came to play, we started a new form
of speech, and that was speech electronically transmitted. And because
we started with a limited spectrum, because we started with physical
limitations on the amount of speech that could go out, we began with
electronically-communicated speech in the 1930s to develop a parallel
doctrine which gave less protection to speech electronically
transmitted. Over time we had a tradition of constitutionally very
protected speech, and then speech transmitted electronically that was
less protected.
  The problem here is that as this society goes forward, an
increasingly high percentage of what we say to each other will be
electronically transmitted through E-mail and through other ways. It
seems to me important for us to reverse this notion that
electronically-transmitted speech is entitled to a lesser degree of
protection in the area of freedom of expression than all other forms of
speech or we will be, 30 years from now, a less free society. That has
application to legislation of various kinds, and we will deal with that
in another context.
  But one of the things that was a potential danger here was that by
protecting intellectual property, a very important job, we would have
imposed on the on-line service providers such a degree of liability as,
in fact, to diminish to some extent the freedom they felt in presenting
things.
  What I am most happy about in this bill is I think we have hit about
the right balance. We have hit a balance which fully protects
intellectual property, which is essential to the creative life of
America, to the quality of our life, because if we do not protect the
creators, there will be less creation. But at the same time we have
done this in a way that will not give to the people in the business of
running the on-line service entities and running Internet, it will not
give them either an incentive or an excuse to censor.
  No bill is perfect. There are some tensions here. This will go to
conference, and then there will be room for some further changes.
  But for achieving that essential balance I am very pleased, and I
want to note again the two committees of this House and the parties
represented in both committees worked very closely together to bring
forward legislation without rancor, without partisanship, in fact
serving very well the needs of this country.
  Madam Speaker, I reserve the balance of the time.

[[Page H7093]]

  Mr. BLILEY. Madam Speaker, I yield myself 2 minutes.
  (Mr. BLILEY asked and was given permission to revise and extend his
remarks and include extraneous material.)
  Mr. BLILEY. Madam Speaker, I rise in support of H.R. 2281, and would
like to begin by commending my good friend and colleague, the gentleman
from Illinois (Mr. Hyde), the chairman of the House Committee on the
Judiciary, and his very able subcommittee chairman, the gentleman from
Greensboro, North Carolina (Mr. Coble), the chairman of the
Subcommittee on Courts and Intellectual Property of the Committee on
the Judiciary.
  And I would also like to thank two members of the Committee on
Commerce in addition to my ranking member, the gentleman from Michigan
(Mr. Dingell), but I would also like to thank the gentleman from
Wisconsin (Mr. Klug) and the gentleman from Virginia (Mr. Boucher) whom
I believe through their work have improved this legislation. It is
because of the steadfast commitment to enacting this important
legislation that we are here today on the brink of enactment.
  I would like to thank the gentleman from Massachusetts (Mr. Frank),
the ranking member of the subcommittee, for his work, as well as the
gentleman from Massachusetts (Mr. Markey) for his contributions. It
shows that we can work together and we can achieve very important
legislation.
  As my colleagues know, Madam Speaker, with the growth of electronic
commerce having such a profound effect on the economy, the Committee on
Commerce has been engaged in a wide-ranging review of the subject,
including the issues raised by H.R. 2281. The Committee on Commerce's
version of this bill strikes an appropriate balance between the goal of
promoting electronic commerce and the interests of copyright owners.
  Let me specifically highlight two of the most important changes that
the Committee on Commerce added to the bill before us today:
  First, the Committee on Commerce included a strong fair use provision
to ensure that consumers as well as libraries and institutions of
higher learning will be able to continue to exercise their historical
fair use rights. The bill before us today contains the substance of the
Committee on Commerce provision on fair use, and I am pleased to say
that major newspapers such as the New York Times and the Washington
Post have strongly endorsed the Committee on Commerce's language on
fair use.
  Madam Speaker, I include those editorials following my statement in
the RECORD.
  The editorials referred to are as follows:

                [From the New York Times, July 24, 1998]

                     Protecting Digital Copyrights

       Traditional copyright concepts that have served this nation
     well for centuries should guide the debate on copyright in
     the digital universe. As Congress fashions ways to protect
     commercial interests in the digital realm, it must be careful
     also to protect the larger public interest in broad access to
     information.
       Digital copyright legislation, required to institute two
     international treaties that would protect movies, music and
     other intellectual property from piracy, passed the Senate
     and the House Judiciary Committee this spring. But
     controversy continues to swirl around a provision in the
     legislation that would make it a crime to circumvent
     encryption used to control access to digital material or to
     manufacture or sell devices that could be used to circumvent
     protection measures.
       Movie and music producers argue that making circumvention
     illegal is the only way to prevent consumer theft of on-line
     movies, recordings and other products. But libraries and
     schools believe that the prohibition is so broad that it
     could greatly limit access to electronic information that
     copyright law would otherwise allow.
       Existing law assures producers the right to profit from
     their creative works. But the law does not allow a creator to
     control who looks at the material or prevent the material
     from being circulated or lent to others. It specifically
     allows the ``fair use'' of copyrighted materials for
     commentary, criticism, teaching, news reporting, scholarship
     and research under certain circumstances without permission
     from the copyright owner.
       Thus a library can purchase a book, allow hundreds of
     patrons to borrow it and let teachers make copies of material
     in it for classroom use, all without infringing the
     copyright. Preserving these user rights is important in the
     digital world where copyright owners, with the right
     technology, could limit or prevent access to information.
       The content producers dismiss fears that the Internet could
     become a strictly pay-for-use world as unrealistic, but
     neither they nor Congress can predict how the Internet will
     develop. That is why legislation needs to be flexible enough
     to deal with rapid evolution in technology and electronic
     commerce.
       A prudent compromise approved by the House Commerce
     Committee last week would delay the anti-circumvention rule
     for two years while the Commerce Department and the Federal
     patent and copyright officers study the effect of the
     prohibition on users. The Commerce Secretary could waive the
     rule for any class of works where technological shields were
     impeding the lawful use of copyrighted matter. The situation
     would be reviewed every two years. Both the content producers
     and the libraries and schools are willing to accept this more
     fluid approach. Congress should adopt this plan in the final
     version of the digital copyright legislation.
                                  ____

                [From The Washington Post, Aug. 4, 1998]

                          A Pay-Per-View World

       Congress has been trying for most of this year to ratify
     the international treaties that are supposed to bring
     copyright law into the digital age. It's been a large and
     complicated endeavor, requiring people to rethink such
     fundamental aspects of intellectual property rights as what
     constitutes ``copying'' in a digital environment (is it
     copying a document just to read it on your computer? To print
     it out to read later?) and when such copying represents a
     copyright violation. But the major snag is none of these
     weighty issues but, rather, a fierce face-off between
     libraries and big-time copyright-holding interests over a
     seemingly minor provision that would make it a crime to break
     any technological locking device designed to prevent
     unauthorized copying.
       This debate over the ``anti-circumvention'' provision is
     now the main item of disagreement between versions of the
     copyright bill produced by the Judiciary and Commerce
     committees. (The Senate passed copyright legislation in May.)
     Those who expect movies, songs, software and even books to be
     eventually delivered mainly over the Internet want to make
     sure that this will not mean widespread unauthorized copying
     and the subsequent collapse of any market for the work.
     (Newspapers, as creators of copyrighted material, have an
     interest here as well.) They picture every piece of
     intellectual property being distributed with some kind of
     ``lock'' that would permit, say, just one viewing of a
     downloaded movie. It's the disabling of this lock that would
     be made a crime, except in specified circumstances.
       There's room for doubt whether it makes sense to make the
     lock-breaking a crime here rather than merely, as till now,
     the actual copyright violation. But the real problem is more
     pragmatic. This ``transition to a pay-per-view world,'' as
     one enthusiastic movie distributor put it, works fine for the
     entertainment industries and the commercial market. Where it
     doesn't work is in libraries and other places where use of
     books and research material is not pay-per-view but, till
     now, free.
       Libraries are worried that the ``fair use'' exemption that
     allows limited use of copyrighted material without permission
     for such purposes as comment, criticism, education or
     research--though technically unchanged in the law--would
     become sharply limited in practice if all material were
     distributed with ``locks'' and libraries were prohibited from
     ``unlocking'' it. What happens, they ask if a chart of
     environmental data that now can be photocopied for use in a
     class were made available only on a CD from which printouts
     can't be made? What if research journals are provided to
     libraries on a pay-per-view basis that keeps independent
     researchers from making photocopies for their own use?
       Language in the Commerce bill sought to address this
     problem by creating a mandatory review every two years of the
     provision's effect on ``fair use'' in various contexts. On
     the floor or in conference, these protections from a
     permanent ``pay-per-review world'' ought to be maintained.

  As the Chairman of the Committee which was principally responsible
for rewriting H.R. 2281 and eliminating the most harmful aspects of the
bill as proposed by the Administration, I want to share with my
colleagues the Committee's perspective on the scope of this legislation
and to note, where appropriate, the instances in which we sought to
clarify the bills as reported by the Committee on the Judiciary and as
approved by the Senate.
  As noted at the outset, the Committee has been engaged in a wide-
ranging review of all the issues affecting the growth of electronic
commerce. Our Committee has a long-standing, well-established role in
assessing the impact of possible changes in law on the use and
availability of the products and services that have made our
information technology industry the envy of the world. We therefore
paid particular attention to the potential harmful impacts on
electronic commerce of the bill as reported by the Committee on the
Judiciary.
  Today, the U.S. information technology industry is developing
exciting new products to enhance the lives of individuals throughout
the world, and our telecommunications industry is developing new means
of distributing information to these consumers in every part of the

[[Page H7094]]

globe. In this environment, the development of new laws and regulations
could well have a profound impact on the growth of electronic commerce.
  In recognition of these developments and as part of the effort to
begin updating national laws for the digital era, delegates from over
150 countries (including the United States) convened in December 1996
to negotiate two separate treaties under the auspices of the World
Intellectual Property Organization: the Copyright Treaty and the
Performance and Phonograms Treaty. In July 1997, the Clinton
Administration submitted the treaties to the Senate for ratification
and submitted proposed implementing legislation to both the House and
the Senate. The Committee on the Judiciary largely reported out the
bill as proposed by the Administration.
  In holding hearings, it became apparent to our Committee that this
and the Senate version of the legislation contained serious flaws. Not
surprisingly, these bills were opposed by significant private and
public sector interests, including libraries, institutions of higher
learning, consumer electronics and computer product manufacturers, and
others with a vital stake in the growth of electronic commerce. It also
became apparent that the main provisions of the treaties to be
implemented have little to do with copyright law. In fact, the ``anti-
circumvention'' provisions of the Administration's bill created
entirely new rights for content providers that are wholly divorced from
copyright law. These new provisions (and the accompanying penalty
provisions for violations of them) would be separate from, and
cumulative to, the claims available to copyright owners under the
Copyright Act.
  In carrying out its responsibilities under the Constitution. Congress
has historically regulated the use of information--not the devices or
means by which information is delivered or used by information
consumers--and has ensured an appropriate balance between the interests
of copyright owners and information users. Section 106 of the Copyright
Act of 1976, for example, establishes certain rights copyright owners
have in their works, including limitations on the use of these works
without their authorization. Sections 107 through 121 of the Copyright
Act set forth the circumstances in which such uses are deemed lawful
even though unauthorized.
  In general, all of these provisions are technology neutral. They do
not regulate commerce in information technology, i.e., products and
devices for transmitting, storing, and using information. Instead, they
prohibit certain actions and create exceptions to permit certain
conduct deemed to be in the greater public interest, all in a way that
balances the interests of copyright owners and users of copyrighted
works.
  In writing its bill, the Committee sought to preserve that tradition.
We worked hard to reduce the risk that enactment of H.R. 2281 could
establish the legal framework that would inexorably create a ``pay-per-
use'' society. In short, the Committee endeavored to specify, with as
much clarity as possible, how the anti-circumvention right in
particular would be qualified to maintain balance between the interests
of content creators and information users.
  The Committee considered it particularly important to ensure that the
concept of fair use would remain firmly established in the law. Section
1201(a)(1) is one of the most important provisions of this legislation,
and one that must be included in any version of this bill eventually
sent to the President for signature. It was crafted by the Commerce
Committee to protect ``fair use'' and other users of information now
lawful under the Copyright Act. Let us make no mistake about the scope
of what we are doing here today in adopting H.R. 2281, about the
tremendously powerful new right to control access to information that
we are granting to information owners for the very first time.
  If left unqualified, this new right, as the Commerce Committee heard
in testimony from the public and private sectors alike, could well
prove to be the legal foundation for a society in which information
becomes available only on a ``pay-per-use'' basis. That's why this bill
assures that institutions like schools and libraries, and the public,
will have an opportunity in a credible and permanent process to make
the case that the new right we've adopted is interfering with fair use
and other rights now enjoyed by information users under current law.
Moreover, the Commerce Committee's report, I note for the record makes
clear that the showing that must be made in this process is not
intended to be unduly burdensome for either institutions or the public.
Indeed, the Committee took pains to make clear that evidence of loss of
access to a ``particular class of works''--intended to be gauged
narrowly--would result in relief from the prohibition otherwise imposed
on access to information by this legislation.
  That's also why--in express recognition of the importance of the
Commerce Committee's work--today's Washington Post carries an editorial
urging that ``on the floor, or in conference, these protections from a
permanent `pay-per-view world ought to be maintained.' '' Copyright law
is not just about protecting information. It's just as much about
affording reasonable access to it as a means of keeping our democracy
healthy and doing what the Constitution says copyright law is all
about: promoting ``Progress in Science and the useful Arts.'' If this
bill ceases to strike that balance, it will no longer deserve Congress'
or the public's support.
  Section 1201(a)(2) makes it illegal to manufacture, import, offer to
the public, provide, or otherwise traffic in any technology, product,
service, device, component, or part thereof that is primarily designed
or produced for the purpose of circumventing a technological measure
that effectively controls access to certain works; has only limited
commercially significant purposes or uses other than to circumvent such
a measure; or is marketed for use in circumventing such a measure.
Section 1201(b)(1) similarly makes it illegal to manufacture, import,
offer to the public, provide, or otherwise traffic in any technology,
product, service, device, component, or part thereof that is primarily
designed or produced for the purpose of circumventing a protection
measure that protects certain rights of copyright owners under title
17, United States Code; has only limited commercially significant
purposes or uses other than to circumvent such a measure; or is
marketed for use in circumventing such a measure.
  In our report, the Committee stressed that section 1201(a)(2) is
aimed fundamentally at outlaying so-called ``black boxes'' that are
expressly intended to facilitate circumvention of protection measures
for purposes of gaining access to a work. This provision is not aimed
at products that are capable of commercially significant noninfringing
uses, such as the consumer electronics, telecommunications, and
computer products--including videocassette recorders,
telecommunications switches, personal computers, and servers--used by
businesses and consumers everyday for perfectly legitimate purposes.
Moreover, as section 1201(c)(3) makes clear, such a device does not
need to be designed or assembled, or parts or components for inclusion
in a device be designed, selected, or assembled, so as affirmatively to
accommodate or respond to any particular technological measure.
  Section 2101(a)(3) of H.R. 2281 defines certain terms used throughout
Section 1201(a). As we made clear in our report, the measures that
would be deemed to ``effectively control access to a work'' would be
those based on encryption, scrambling, authentication, or some other
measure which requires the use of a ``key'' provided by a copyright
owner to gain access to a work.
  Section 2101(b)(1) of H.R. 2281 makes it illegal to manufacture,
import, offer to the public, provide, or otherwise traffic in any
technology, product, service, device, component, or part thereof that
is primarily designed or produced for the purpose of circumventing a
protection measure that protects certain rights of copyright owners
under title 17, United States Code; has only limited commercially
significant purposes or uses other than to circumvent such a measure;
or is marketed for use in circumventing such a measure. The Committee
believes it is very important to emphasize that this section, like
section 1201(a)(2), is aimed fundamentally at outlawing so-called
``black boxes'' that are expressly intended to facilitate circumvention
of protection measures. Thus, this section similarly would not outlaw
the manufacturing, importing, or distributing of standard videocassette
recorders and computer products.
  Section 1201(b)(2) of H.R. 2281 defines important phrases, including
when a protection measure ``effectively protects a right of a copyright
owner under title 17, United States Code.'' In our view, the measures
that would be deemed to ``effectively'' protect such rights would be
those based on encryption, scrambling, authentication, or some other
measure which requires the use of a ``key'' to copy a work.
  With respect to the effectiveness of the measures covered by the
legislation, the Committee stressed in its report that those measures
that cause noticeable and recurring adverse effects on the authorized
display or performance of works should not be deemed to be effective.
Given our keen interest in the development of new products, in
particular digital television monitors, the Committee is particularly
concerned that the introduction of such measures not frustrate consumer
expectations and that this legislation not be interpreted to in any way
limit the authority of manufacturers and retailers to address the
legitimate concerns of their customers.
  Based on prior experience, the Committee on Commerce was concerned
that manufacturers, retailers, and consumers may be adversely affected
by the introduction of some technological measures and systems for
preserving copyright management information. In fact, the Committee
learned as part of its review of H.R. 2281 that, as initially proposed,
a

[[Page H7095]]

proprietary copy protection scheme that is today widely used to protect
analog motion pictures could have caused significant view-ability
problems, including noticeable artifacts, with certain television sets
until it was modified with the cooperation of the consumer electronics
industry.
  As advances in technology occur, consumers will enjoy additional
benefits if devices are able to interact and share information.
Achieving interoperability in the consumer electronics environment will
be a critical factor in the growth of electronic commerce. In our view,
manufacturers, consumers, retailers, and servicers should not be
prevented from correcting an interoperability problem resulting from a
protection measure causing one or more devices in the home or in a
business to fail to interoperate with other technologies.

  Under the bill under consideration today, nothing would make it
illegal for a manufacturer of a product or device (to which section
1201 would otherwise apply) to design or modify the product or device
solely to the extent necessary to mitigate a frequently occurring and
noticeable adverse effect on the authorized performance or display of a
work that is caused by a protection measure in the ordinary course of
its design and operation. Similarly, recognizing that a technological
measure may cause a problem with a particular device, or combination of
devices, used by a consumer, it is our view that nothing in the bill
should be interpreted to make it illegal for a retailer or individual
consumer to modify a product or device solely to the extent necessary
to mitigate a noticeable adverse effect on the authorized performance
or display of a work that is communicated to or received by that
particular product or device if that adverse effect is caused by a
protection measure in the ordinary course of its design and operation.
I might add that nothing in section 1202 makes it illegal for such a
person to design or modify a product or device solely to the extent
necessary to mitigate a frequently occurring and noticeable adverse
effect on the authorized performance or display of a work that is
caused by the use of copyright management information.
  I wish to stress that I and other Members of the Committee on
Commerce believe that the affected industries should be able to work
together to avoid such problems. We know that multi-industry efforts to
develop copy control technologies that are both effective and avoid
such noticeable and recurring adverse effects have been underway over
the past two years. We strongly encourage the continuation of those
efforts, which should offer substantial benefits to copyright owners in
whose interest it is to achieve the introduction of effective
protection (and copyright management information) measures that do not
interfere with the normal operations of affected products. We look
forward to working with interested parties to the extent additional
legislation is required to implement such technologies or to avoid
their circumvention.
  As the Chairman of the Committee that eliminated the inherent
ambiguity in the Senate's version of this legislation, I also want to
put section 1201(c)(3) in context. It provides that nothing in section
1201 requires that the design of, or design and selection of parts and
components for, a consumer electronics, telecommunications, or computer
product provide for a response to any particular protection measure. We
specifically modified the Senate version of this provision because of
our strong belief that product manufacturers should remain free to
design and produce consumer electronics, telecommunications, and
computing products without the threat of incurring liability for their
design decisions. Imposing design requirements on product and component
manufacturers would have a dampening effect on innovation, on the
research and development of new products, and hence on the growth of
electronic commerce.
  As the hearing record demonstrates, there is a fundamental difference
between a device that does not respond to a protection measure and one
that affirmatively removes such a measure. Section 1202(c)(3) is
intended to make clear that nothing in section 1201 requires 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 measure that might be
used to control access to or the copying of a work protected under
title 17, United States Code. Of course, this provision is not intended
to create a loophole to remove from the proscriptions of section 1201
devices, or components or parts thereof, that circumvent by, for
example, affirmatively decrypting an encrypted work or descrambling a
scrambled work.
  Mr. BLILEY. Madam Speaker, I reserve the balance of my time.
  Mr. COBLE. Madam Speaker, I yield 3\1/2\ minutes to the gentleman
from Virginia (Mr. Goodlatte) a member of the subcommittee and the full
committee.
  (Mr. GOODLATTE asked and was given permission to revise and extend
his remarks.)
  Mr. GOODLATTE. Madam Speaker, I rise today in support of H.R. 2281,
the World Intellectual Property Organization Copyright Treaties
Implementation Act. I would like to thank the gentleman from North
Carolina (Mr. Coble) and the gentleman from Illinois (Mr. Hyde), as
well as the gentleman from Virginia (Mr. Bliley) and the gentleman from
Massachusetts (Mr. Frank) for their leadership on this issue.
  Additionally, I would like to thank the gentleman from North Carolina
(Mr. Coble) for asking me to lead the negotiations between the various
parties on the issue of on-line service provider liability for
copyright infringement which is included in this important bill. Madam
Speaker, the issue of liability for on-line copyright infringement,
especially where it involves third parties, is difficult and complex.
  For me personally this issue is not a new one. During the 104th
Congress then-Chairman Carlos Moorhead asked me to lead negotiations
between the parties. Although I held numerous meetings involving
members of the content community and members of the service provider
community, unfortunately we were not able to resolve this issue.
  At the beginning of the 105th Congress the gentleman from North
Carolina (Mr. Coble) asked me to again lead the negotiations between
the parties on this issue. After a great deal of meetings and
negotiation sessions, the copyright community and the service provider
community were able to successfully reach agreement. That agreement is
included in the bill we are considering today. No one is happier,
except maybe those in each community who spent countless hours and a
great deal of effort trying to reach agreement, than I am with the
agreement contained in this bill.
  Madam Speaker, this is a critical issue to the development of the
Internet, and I believe that both sides in this debate need each other.
If America's creators do not believe that their works will be protected
when they put them on-line, then the Internet will lack the creative
content it needs to reach its true potential; and if America's service
providers are subject to litigation for the acts of third parties at
the drop of a hat, they will lack the incentive to provide quick and
sufficient access to the Internet.
  The provisions of H.R. 2281 will allow the Internet to flourish and I
believe will prove to be a win-win not only for both sides, but for
consumers and Internet users throughout the Nation.
  I would also like to discuss the importance of the World Intellectual
Property Organization treaties and this accompanying implementing
legislation which are critical to protecting U.S. copyrights overseas.
  The United States is the world leader in intellectual property. We
export billions of dollars worth of creative works every year in the
form of software books, tapes, videotapes and records. Our ability to
create so many quality products has become a bulwark of our national
economy, and it is vital that copyright protection for these products
not stop at our borders. International protection of U.S. copyrights
will be of tremendous benefit to our economy, but we need to ratify the
WIPO treaties for this to happen.
  I would like to state for the record my understanding that sections
102(a)(2) and 102(b)(1) of this bill are not intended to address
computer system security, such as devices used to crack into computer
security systems such as firewalls or discover log-on passwords that
protect an entire system. The ban contained in these provisions is
intended to cover circumvention devices aimed at technological
protection measures that protect particular works covered under Title
17 such as movies, songs or computer programs. Unauthorized hacking
into computer programs is already covered by other laws.
  This bill is critical not only because it will allow the Internet to
flourish but also because it ensures that America will remain the world
leader in the development of intellectual property. I urge each of my
colleagues to support this legislation.
  Mr. FRANK of Massachusetts. Madam Speaker, I yield 4 minutes to the
gentleman from Virginia (Mr. Boucher).
  (Mr. BOUCHER asked and was given permission to revise and extend his
remarks.)

[[Page H7096]]

  Mr. BOUCHER. Madam Speaker, I thank the gentleman from Massachusetts
(Mr. Frank) for yielding this time to me, and I am pleased to rise
today in support of the passage of H.R. 2281, which will extend new
protections against the theft of their works to copyright owners.
  Madam Speaker, new protections are needed due to the ease with which
flawless copies of copyrighted materials can both be made and
transmitted in the digital network environment. Essential, however, to
the creation of new guarantees for copyright owners is the retention of
the traditional rights of the users of intellectual property. A balance
has always existed in our law between these conflicting interests, and
the major challenge in the writing of this legislation is to assure
that no fundamental altering of that delicate balance takes place.
  Another challenge is to ensure that in the effort to eliminate
devices that are designed and produced to make illegal copies of
copyrighted materials, that legitimate consumer electronics products
are not also placed in a category of legal uncertainty.
  Today I want to offer congratulations primarily to the Members of the
House Committee on Commerce who have devoted long hours in the effort
to assure that these challenges are met. Specifically, the Committee on
Commerce has added provisions that protect personal privacy by clearly
permitting personal computer owners to disable cookies that are placed
on their disks by others; that allow the encryption research that will
lead to a new generation of trusted and secure systems; that give
equipment manufacturers the certainty that their consumer electronics
products need not affirmatively accommodate all technological
protection measures; and that creative procedure for assuring the
continuation of the fair use rights of the American public, a procedure
that will prevent material that is generally available today under fair
use being locked away in a pay-per-use regime in future years.

                              {time}  1400

  Report language also specifies that the technological protection
measure circumvention restrictions will not apply when manufacturers,
retailers and technicians need to make adjustments to devices to ensure
that their performance is not degraded as a consequence of the
installation of a technological protection measure. These changes,
taken together, significantly improve the original legislation.
  The gentleman from Virginia (Chairman Bliley), the gentleman from
Michigan (Mr. Dingell), the gentleman from Wisconsin (Mr. Klug), the
gentleman from Florida (Mr. Stearns) and the gentleman from
Massachusetts (Mr. Markey), among others, deserve thanks for their
successful efforts to create new copyright protections, while ensuring
that traditional user rights are not undermined.
  The Committee on Commerce has, in the manner for which it is known,
mastered the intricate details of this complex subject and has produced
a balanced result. I want to offer my congratulations to all who have
been involved in that outstanding effort.
  It is my pleasure to urge passage of H.R. 2281.
  Madam Speaker, I will insert in the record correspondence from the
subcommittee chairman, the gentleman from North Carolina (Mr. Coble),
to the gentleman from California (Mr. Campbell) and myself, which
further defines the terminology that is used in the statute.
                                         House of Representatives,

                                   Committee on the Judiciary,

                                    Washington, DC, June 16, 1998.
     Hon. Tom Campbell,
     U.S. Representative for the 15th District of California,
         Washington, DC.

     Hon. Rick Boucher,
     U.S. Representative for the 9th District of Virginia,
         Washington, DC.
       Dear Tom and Rick: Thank you for visiting with me in my
     office recently regarding H.R. 2281, the ``WIPO Copyright
     Treaties Implementation Act.'' I appreciate the concerns you
     expressed with respect to H.R. 2281 as it was reported from
     the House Committee on the Judiciary.
       I expressed to you that I would consider your thoughts and
     respond to you in detail, and am pleased to do so in this
     letter.
       I believe that many of your concerns, which are enumerated
     in your substitute bill, H.R. 3048, have been addressed
     already in a reasonable manner in amendments to the bill
     adopted by the Subcommittee on Courts and Intellectual
     Property and the Committee on the Judiciary in the House and
     by the Committee on the Judiciary and on the floor in the
     Senate (regarding the Senate companion bill, S. 2037). Others
     have been addressed in legislative history in House Report
     105-551 (Part I) which accompanies the bill, as well as in
     Senate Report 105-190, which accompanies the Senate companion
     bill. Still others may be addressed as the House Committee on
     Commerce exercises its sequential jurisdiction over limited
     portions of the bill and as I work with interested members on
     developing a manager's amendment to be considered by the
     whole House. I anticipate including many of the amendments
     made by the Senate in the manager's amendment, along with
     other provisions. I also anticipate that a conference will be
     necessary to reconcile the House and Senate versions of the
     bills.
       While I am unable to support the specific provisions of
     H.R. 3048, for reasons I will explain in this letter, I am
     willing to work with you in the coming weeks to address
     additional concerns regarding the impact of this legislation
     on the application of the ``fair use'' doctrine in the
     digital environment and on the consumer electronics industry.
     I wish to stress, however, that I believe the bill, as
     amended by the House and Senate thus far, and explained by
     both the House and the Senate Judiciary Committee reports,
     already addresses these issues in several constructive ways.
       I believe it is important, in order to recognize properly
     the efforts undertaken by the Congress and the Administration
     to address the concerns of the consumer electronics and fair
     use communities, to review the history of H.R. 2281 and to
     evaluate all of the provisions that have been either added to
     or deleted from the bill since its development leading to
     introduction in this Congress. As I am sure you will
     appreciate, I am sensitive to your concerns and have worked
     diligently with members and all parties involved to create a
     balanced and fair proposal that will result in the enactment
     of legislation this Congress.
       In February, 1993, the Administration formed the
     Information Infrastructure Task Force to implement
     Administration policies regarding the emergence of the
     Internet and other digital technologies. This task force
     formed a Working Group on Intellectual Property Rights to
     investigate and report on the effect of this new technology
     on copyright and other rights and to recommend any changes in
     law or policy. The working group held a public hearing in
     November, 1993, at which 30 witnesses testified. These
     witnesses represented the views of copyright owners,
     libraries and archives, educators, and other interested
     parties. The working group also solicited written comments
     and received over 70 statements during a public comment
     period. Based on oral and written testimony, the working
     group released a ``Green Paper'' on July 7, 1994. After
     releasing the Green Paper, the working group again heard
     testimony from the public through four days of hearings held
     around the country. More than 1,500 pages of written
     testimony were filed during a four-month comment period by
     more than 150 individuals and organizations.
       In March, 1995, then-Chairman Carlos Moorhead solicited
     informal comments from parties who had submitted testimony
     regarding the Green Paper, including library and university
     groups, and computer and electronics group, in order to work
     effectively with the Administration on jointly developing any
     proposed updates to U.S. copyright law that might be
     necessary in light of emerging technologies.
       In summer, 1995, the working group released a ``White
     Paper'' based on the oral and written testimony it has
     received after releasing the Green Paper. The White Paper
     contained legislative recommendations which were developed
     from public comment in conjunction with consultations between
     the House and Senate Judiciary Committees, the Copyright
     Office and the Administration.
       In September, 1995, Chairman Moorhead in the House and
     Chairman Hatch in the Senate introduced legislation which
     embodied the recommendations contained in the White Paper and
     held a joint hearing on November 15, 1995. Testimony was
     received from the Administration, the World Intellectual
     Property Organization and the Copyright Office. The House
     Subcommittee on Courts and Intellectual Property held two
     days of further hearings in February, 1996. Testimony was
     received from copyright owners, libraries and archives,
     educators and other interested parties. in May, 1996, the
     Senate Judiciary Committee held a further hearing.
     Testimony was received from copyright owners, libraries
     and other interested parties. These hearings were
     supplemented with negotiations in both bodies led by
     Representative Goodlatte (as authorized by Chairman
     Moorhead) in the House and by Chairman Hatch in the
     Senate. Further negotiations were held by the
     Administration in late summer and fall of 1996.
       During consideration of the ``NII Copyright Protection Act
     of 1995,'' Chairman Moorhead requested that Mr. Boucher and
     Mr. Berman of California lead negotiations between interested
     parties regarding the issue of circumvention. While these
     negotiations were helpful in streamlining and clarifying the
     issues to be discussed, they ultimately did not result in an
     agreement.
       It is important to note that shortly after its
     establishment, the Administration task force's working group
     convened, as part of its consideration, a Conference on Fair
     Use (CONFU) to explore the effect of digital technologies on
     the doctrine of fair use, and to

[[Page H7097]]

     develop guidelines for uses of works by libraries and
     educators. Because of the complexities involved in developing
     broad-based policies for the adaptation of the fair use
     doctrine to the digital environment, and due to much
     disagreement among the participants (including within the
     library and educational communities), CONFU did not issue its
     full report until nearly two years after it was convened. An
     Interim Report was released by CONFU in September 1997 on the
     first phase of its work. No consensus was reached on how to
     apply the fair use doctrine to the digital age. In fact, the
     CONFU working group on interlibrary loan and document
     delivery concluded in a report to its Chair that it is
     ``premature to draft guidelines for digital transmission of
     digital documents.'' The work of CONFU continues today and a
     final report should be released soon with no agreed
     conclusions. As you can see, developing sweeping legislation,
     rather than relying on court-based ``case or controversy''
     applications of the doctrine, is exceedingly difficult to do.
       Since before the debate began with the establishment of a
     task force in the United States in 1993, the international
     community had also been considering what updates should be
     made to the Berne Convention on Artistic and Literary Works
     in order to provide adequate and balanced protection to
     copyrighted works in the digital age. This culminated in a
     Diplomatic Conference hosted by the World Intellectual
     Property Organization at which over 150 countries agreed on
     changes needed to accomplish this goal.
       This goal was not reached easily, however, and many of the
     issues being debated by the Administration and the Congress
     in the United States concerning fair use and circumvention
     were aired at the Diplomatic Conference, with significant
     changes made to accommodate fair use concerns and the effect
     on the consumer electronic industries. Representatives of
     both groups participated in the Conference and aggressively
     sought to maintain proper limitations on copyright. They
     succeeded. For example, language was added to ensure that
     exceptions such as fair use could be extended into the
     digital environment. The treaty also originally contained
     very specific language regarding obligations to outlaw
     circumvention. It was changed to state that all member
     countries ``shall provide adequate legal protection and
     effective legal remedies against the circumvention of
     effective technological measures that are used by authors in
     connection with the exercise of their rights under this
     Treaty.'' This left to each country the development of
     domestic legislation to accomplish this goal.
       After the United States signed the WIPO Treaties, the
     Administration again began negotiations led by the Department
     of Commerce and the Patent and Trademark Office, in
     consultiation with the Copyright Office and the Congress, to
     develop domestic implementing legislation for the treaties.
     It built upon the efforts already accomplished by the release
     of the Green Paper and the White Paper and all of the
     testimony and comments heard as part of that process, the
     House and Senate bills introduced in the 104th Congress and
     all of the hearing testimony and negotiations associated with
     them, and the negotiations held by the Administration leading
     up to and during the Diplomatic Conference. Again, comments
     were solicited from fair use and consumer electronics groups.
     In the summer of 1997, the Administration submitted to the
     Congress draft legislation to implement the treaties. In
     July, 1997, Chairman Hatch and I introduced the current
     pending legislation in each house. Importantly, the
     legislation was tailored to match the treaty language by
     establishing legal protection and remedies not against any
     technological measures whatsoever, but only ``against the
     circumvention of effective technological measures that are
     used by authors in connection with the exercise of their
     rights.''
       The fair use and consumer electronics groups succeeded,
     just as they had at the Diplomatic Conference, in assuring in
     the introduced version of the bills the maintenance of proper
     limitations on copyright. The Administration had considered
     originally banning both the manufacture and use of devices
     which circumvent effective technological measures and had no
     specific provision on fair use, since Section 107 of the
     Copyright Act would, of course, continue to exist after
     enactment of the legislation. The word ``use'' was eliminated
     in the device provision and a specific provision relating to
     the adoption of the fair use doctrine in the digital
     environment was added.
       As it was introduced, H.R. 2281 contained two important
     safeguards for fair use. First, the bill dealt separately
     with technological measures that prevent access and
     technological measures that prevent copying. As to the
     latter, the bill contained no prohibition on the act of
     circumbention itself, leaving users free to circumvent such
     measures in order to make fair use copies. Second, the
     savings clause in subsection 1201(d) ensures that defenses to
     copyright protection, including fair use, are unaffected by
     the prohibitions on circumvention. For example, circumvention
     of an effective technological measure that controls access to
     a work does not preclude, or affect in any way, a defense of
     fair use for copying the work. Moreover, the bill as
     introduced did not expand exclusive rights or diminish
     exceptions and limitations on exclusive rights.
       Again, a series of legislative hearings were held by the
     House and Senate Judiciary Committees at which testimony was
     again heard from copyright owners, libraries and archives,
     educators, consumer electronics groups and other interested
     parties. In February, 1998, almost five years to the date of
     the establishment of the Administration's working group,
     taking into account all of the concessions and negotiations
     leading up to it, the first markup was finally held in
     Congress by the Subcommittee on Courts and Intellectual
     Property on this important legislation. As is evident by the
     timetable involved in the development of this legislation,
     and considering the number of hearings, negotiations and
     conferences dedicated to its contents, this bill certainly
     has not been placed on any ``fast-track.''
       In the course of Subcommittee and Committee consideration
     of the bill in the House, the gentleman from Massachusetts,
     the Ranking Democratic member of the Subcommittee, Mr. Frank,
     and I, proposed a number of improvements to the bill, which
     were adopted by the Committee, that benefit libraries and
     nonprofit educational institutions. We introduced a special
     ``shopping privilege'' exemption that permits nonprofit
     libraries and archives to circumvent effective technological
     measures in order to decide whether they wish to acquire
     lawfully a copy of the work. We added a provision that
     requires a court to remit monetary damages for innocent
     violations of sections 1201 or 1202. And we eliminated any
     possibility that nonprofit libraries and archives or
     educational institutions can be held criminally liable for
     any violation of sections 1201 or 1202, even when such
     violations are willful.
       These changes add protection to language already included
     in the bill which safeguard manufacturers of legitimate
     consumer electronic devices. Unlike the ``NII Copyright
     Protection Act of 1995,'' which would have prohibited devices
     ``the primary purpose or effect of which is to circumvent,''
     H.R. 2281 sets out three narrow bases for prohibiting
     devices. A device is prohibited under section 1201 only if it
     is primarily designed or produced to circumvent, has limited
     commercially significant use other than to circumvent, or is
     marketed specifically for use in circumventing. This
     formulation means that under H.R. 2281, it is not enough for
     the primary effect of the device to be circumvention. It
     therefore excludes legitimate multi-purpose devices from the
     prohibition of section 1201. Devices such as VCRs, and
     personal computers do not fall within any of these three
     categories (unless they are, in reality, black boxes
     masquerading as VCRs or PCs).
       In addition, H.R. 2281 as introduced does not require any
     manufacturer of a consumer electronic device to accommodate
     existing or future technological protection measures.
     ``Circumvention,'' as defined in the bill, requires an
     affirmative step of ``avoiding, bypassing, removing,
     deactivating, or otherwise impairing a technological
     protection measure.'' Language added in the Senate, referred
     to below, clarified this even further.
       In addition to all of the foregoing, there are a number of
     amendments that were made in the Senate bill that will be
     included in the manager's amendment to H.R. 2281. These
     include:
       An expansion of the exemptions of nonprofit libraries and
     archives in 17 U.S.C. Sec. 108 to cover the making of digital
     copies without authorization, for purposes of preservation,
     security or replacement of damaged, lost or stolen copies;
       An expansion of section 108 to cover the making of digital
     copies without authorization in order to replace copies in
     the collection that are in an obsolete format;
       A provision directing the Register of Copyrights to make
     recommendations as to any statutory changes needed to apply
     the limitations on liability of online service providers to
     nonprofit educational institutions that act in the capacity
     of service providers;
       A provision directing the Register of Copyrights to consult
     with nonprofit libraries and nonprofit educational
     institutions and submit recommendations on how to promote
     distance education through digital technologies, including
     any appropriate statutory changes;
       A savings provision stating that nothing in section 1201
     enlarges or diminishes vicarious or contributory liability
     for copyright infringement in connection with any technology,
     product, service, device, component or part thereof;
       A provision that states explicitly that nothing in section
     1201 requires accommodation of present or future
     technological protection measures;
       A provision to ensure that the prohibition on circumvention
     does not limit the ability to decompile computer programs to
     the extent permitted currently under the doctrine of fair
     use; and
       A provision ensuring that technology will be available to
     enable parents to prevent children's access to indecent
     material on the Internet.
       I believe that these are constructive provisions that
     precisely and carefully address specific concerns you have
     raised in H.R. 3048. In order to assure that fair use applies
     in the digital environment, in addition to the above changes,
     I have also agreed to include in the manager's amendment an
     amendment to Section 107 of the Copyright Act to make it
     continue to be technology-neutral with respect to means of
     exploitation.
       It may be helpful, in addition to discussing what is
     contained in H.R. 2281 and the Senate companion, and what
     will be included in the

[[Page H7098]]

     manager's amendment, to raise directly with you some of the
     identifiable problems I see associated with H.R. 3048 as
     introduced.
       In my opinion, this extension of the first sale doctrine is
     antithetical to the policies the doctrine was intended to
     further. The alienability of tangible property is not at
     issue, since no tangible property changes hands in a
     transmission. Further, it does not address specifically the
     ability to control the after-market for resales of the same
     copy of a work, since in this case distribution of a work by
     digital transmission necessarily requires a reproduction--it
     is not the same copy. The bill's answer to this quandary--
     that the original copy must be destroyed--is unenforceable
     and certainly not a substitute for disposition of a tangible
     copy. Destruction involves an affirmative act, generally in
     the privacy of a home, that is difficult to police and would
     involve significant invasions of privacy if it were policed
     effectively.
       Further, regardless of whether the original copy is
     destroyed, the new copy would be free of contractual or other
     controls placed on the original copy by the copyright owner.
     It is also likely that this provision would have a much
     greater impact on an owner's primary market for new copies of
     a work than the current first sale doctrine has on the
     primary market for physical copies. Unlike used books,
     digital information is not subject to wear and tear. The
     ``used'' copy is just as desirable as the new one because
     they are indistinguishable. For this reason, Congress has
     curtailed the first sale doctrine as it applies to the rental
     of sound recordings and software in the past, to prevent
     posing so great a burden on a copyright owner so as to
     undermine the incentive to create works which is the driving
     force behind the Copyright Act.
       H.R. 3048 would also broaden Section 110(2) of the
     Copyright Act so that the performance, display, or
     distribution of any work (rather than just the performance of
     a nondramatic literary or musical work and the display of any
     work) through digital transmission (rather than just through
     audio broadcasts) would be allowed without the permission of
     the copyright holder, as long as it is received by students,
     or by government employees as part of their duties. This
     broad expansion of the distance learning provisions currently
     codified in the Copyright Act would permit the transmission
     of a wide variety of Internet-based or other remote-access
     digital transmission formats for distance education and
     raises serious questions about safeguards to prevent such
     transmissions from unauthorized access. In other words, it
     may facilitate piracy.
       Both CONFU and the Senate have discussed the intricacies
     involved in safeguarding transmissions used for distance
     learning purposes and have agreed that it is premature to
     enact specific legislation at this time. As discussed
     earlier, the Senate has included a provision in its companion
     bill, which I plan to include in the House manager's
     amendment, that will provide for a study with legislative
     recommendations on this issue, within a six-month time frame.
     This study will be better able to address the complex
     problems I have identified.
       Section 7 of H.R. 3048 would amend Section 301(a) of the
     Copyright Act to preempt enforcement of certain license terms
     under state law. Specifically, it would preempt any state
     statute or common law that would enforce a ``non-negotiable
     license term'' governing a ``work distributed to the public''
     if such term limited the copying of material that is not
     subject to copyright protection or if it restricted the
     limitations to copyright contained in the Copyright Act. In
     effect, it would prohibit standard form agreements, used in
     the context of copies distributed to the public, that purport
     to govern use of noncopyrightable subject matter or limit
     certain exceptions and limitations, such as fair use.
       The use of standard form licensing agreements has become
     prevalent in the software and information industries, as
     owners seek to protect their investment in these products
     against the risk of unauthorized copying. Section 7 would
     result in destroying the ability of the producer of a work to
     create specific licenses tailored to the circumstances of the
     marketplace, or, in the case of factual databases and other
     valuable but noncopyrightable works, destroy the most
     significant form of protection currently available. This
     could result, for example, in the loss of crucial revenues to
     stock and commodity exchanges who rely on such contracts to
     disseminate information.
       Attempts to introduce language similar to Section 7 of H.R.
     3048 into Article 2B of the Uniform Commercial Code (UCC)
     have been rejected repeatedly by the UCC Article 2B Drafting
     Committee on several occasions. The National Conference of
     Commissioners on Uniform State Laws also rejected a proposal
     similar to the one you propose as has the American Law
     Institute. I agree with these bodies that restricting the
     freedom to contract in the manner proposed in H.R. 3048 would
     have a negative effect on the availability of information to
     consumers.
       H.R. 3048 also proposes several changes to Section 108 of
     the Copyright Act regarding archiving and library activities.
     As you are aware, library groups and copyright owners have
     come to an agreement regarding changes in this section to
     update the Act for the digital environment and those changes
     were incorporated by the Senate in the companion bill. I will
     include those same provisions in the manager's amendment in
     the House.
       Finally, the new Section 1201 contained in H.R. 3048 would
     not prohibit manufacturing or trafficking in devices
     purposely created to gain unauthorized access to copyrighted
     works, and insofar as it prohibits conduct, would permit
     circumvention in the fist instance for purposes of fair use.
     In other words, H.R. 3048, as I discussed earlier, would
     grant to users a right never before allowed--free access to
     copyrighted works in order to make a fair use. I believe that
     is unwise policy and tilts the balance away from the
     protection of works in a free market economy toward the free
     provision of works to anyone claiming to make a fair use.
     This would, I believe, ultimately lead to much more
     litigation against libraries and others who lawfully engage
     in fair use and ultimately would diminish the number of works
     made available over new media.
       While it would be impossible to communicate to you all of
     the problems contained in the exact language of H.R. 3048, I
     wanted to, in truncated form, reveal my serious concerns with
     the bill. In its current form, for the above reasons and
     others, I would oppose it as a substitute to H.R. 2281, as
     amended. I remain dedicated, however, to working with you, as
     I have in the past, to address your concerns in a reasonable
     manner that will result successfully in changes to our
     nation's copyright law that will benefit both owners and
     users of works.
       I truly believe that we are at the beginning of a long
     process of addressing adaptation to the digital environment.
     It is not possible at this point to enact legislation that
     will contemplate all uses of a work and, as CONFU members
     aptly point out, many will have to be addressed as we move
     forward. I am committed, however, to preserving fair use in
     the digital age and thank you for your valuable and
     continuing insight and interest.
           Sincerely,

                                                 Howard Coble,

                                  Chairman, Subcommittee on Courts
                                        and Intellectual Property.

  Mr. BLILEY. Madam Speaker, I yield one minute to the gentleman from
Colorado (Mr. Dan Schaefer).
  (Mr. DAN SCHAEFER of Colorado asked and was given permission to
revise and extend his remarks.)
  Mr. DAN SCHAEFER of Colorado. Madam Speaker, I thank the gentleman
for yielding me time.
  Madam Speaker, the webcasting is a new use of the digital works this
bill deals with, and even most recent copyright amendments in 1995 do
not really address it clearly. Under current law it is difficult for
webcasters and record companies to know their rights and their
responsibilities for negotiating new licenses. This provision makes it
clear what each party must do and sets a statutory licensing program to
make it as easy as possible to comply with.
  I want to thank the gentleman from Washington (Mr. White) and the
gentleman from North Carolina (Mr. Coble) for working with them to make
sure this was all included, and I strictly urge my colleagues to
carefully respect and preserve the delicate compromise that we have
worked so hard to agree on as we move through this legislative process
in the conference committee.
  Mr. COBLE. Madam Speaker, I yield 1\1/2\ minutes to the gentleman
from Florida (Mr. Foley), the chairman of the House Entertainment Task
Force.
  Mr. FOLEY. Madam Speaker, I thank the chairman and also all the
Members who have participated in this very, very important debate, and
particularly the leadership, the gentleman from Georgia (Mr. Gingrich),
the gentleman from Texas (Mr. Armey), and others who have helped bring
this platter to the floor today for full and fair debate.
  Businesses and industries that depend on copyright protection,
including publishing, music and recording, film and video and computer
software companies, are among the fastest growing segment of our
society. These creative industries contribute nearly $280 billion to
the gross domestic product yearly and provide jobs for some 3.5 million
Americans. Moreover, they are among our biggest export earners,
accounting for some $60 billion in foreign sales.
  What has been plaguing this huge and important industry is piracy,
the outright theft of copyrighted works. Not piracy on the high seas,
it is today's version, piracy on the Internet. American companies are
losing nearly $20 billion yearly because of the international piracy of
these copyrighted on-line works, and that is what this bill helps to
stop.
  It has been a long process which has been carefully and thoughtfully
negotiated. What we now have is a balanced

[[Page H7099]]

measure that protects both the interests of the users and the
consumers, and the property rights of the creators.
  As chairman of the Entertainment Industry Task Force, I know how
important the enactment of this bill is to one of America's most
promising industries. I would like it thank the chairman of the
Committee on the Judiciary, the chairman of the Committee on Commerce,
the gentleman from North Carolina (Mr. Coble) and others who have
worked tirelessly on this effort, as well as Members of the other side
of the aisle, the gentleman from Massachusetts (Mr. Frank) and others,
who have taken into consideration all the concerns of both the users
and end users of the product, as well as those who provide the
intellectual content, if you will, to striking what is a fair balance
for Americans, a fair balance for consumers, but, more importantly,
will allow the very appropriate and important works to be put on the
Internet for future generations to come.
  Mr. FRANK of Massachusetts. Madam Speaker, I yield three minutes to
the gentleman from California (Mr. Berman).
  Mr. BERMAN. Madam Speaker, this day has been a long time coming.
Going back nine years as the technological capacity to make
unauthorized copies of copyrights works was rapidly expanding, some of
us anticipated the need to enact legislation to protect technological
measures used by copyright holders to protect their works.
  Last Congress, our former colleagues, Carlos Moorehead and Pat
Schroeder, laid further groundwork for today's WIPO bill with their
efforts to enact national information infrastructure legislation. Then
in December 1996, the U.S. victory that produced two new international
treaties, made the enactment of implementing legislation an urgent
task.
  Today, under the leadership of the gentleman from North Carolina (Mr.
Coble) and the gentleman from Massachusetts (Mr. Frank), the gentleman
from Illinois (Mr. Hyde) and the gentleman from Michigan (Mr. Conyers),
our efforts have come top fruition.
  Passage of this bill is essential to implementation of the treaties
around the world. Our leadership is necessary in order to gain passage
of the treaties in other countries where the standards for intellectual
property is much lower than our own.
  Make no mistake, American intellectual property and the almost
unsurpassed contribution it makes to our balance of trade is at risk
around the world. Piracy costs American creators $15 billion in sales.
In a digital era which brings the capacity to make perfect copies of
copyrighted works, we must enact this legislation to fight overseas
piracy and the toll it takes in export revenues and American jobs.
  Madam Speaker, I think the gentleman from Massachusetts (Mr. Frank)
had it right. In the context of trying to protect this property, we
needed to come to reasonable balances with providers of these services,
with people who have legitimate interests in the fair use. This is, at
least at this particular point, the best effort we can make to try to
come to those kinds of balances and still provide the essential
protection that this bill provides. I urge its adoption.
  Mr. BLILEY. Madam Speaker, I yield such time as he may consume to the
gentleman from Michigan (Mr. Dingell).
  (Mr. DINGELL asked and was given permission to revise and extend his
remarks.)
  Mr. DINGELL. Madam Speaker, I thank my good friend for yielding to
me.
  Because of an act of extraordinary lack of comity of the part of the
managers of the bill on this side, and because of some extraordinary
discourtesy, the Committee on Commerce has not been afforded our share
of the time on this bill. I am therefore compelled to request time from
the Republicans for this unanimous consent request. I express my
thanks.
  I hope that the next time our two committees deal with each other,
there will be more courtesy shown by the Committee on the Judiciary. I
intend to remember this event.
  Mr. DINGELL. Mr. Speaker, I rise in support of H.R. 2281, the
``Digital Millennium Copyright Act,'' and I urge my colleagues to join
me. This legislation is vitally important to the livelihoods of
authors, musicians, filmmakers, software developers, and countless
other creators of copyrighted works. However, just as important, this
bill will preserve the legal right of information consumers to make
``fair use'' of copyrighted works just as they have done for over one
hundred years.
  Why is this treaty and its implementing legislation important? The
digital age has vastly improved the quality of these works that we all
enjoy. Today limitless copies can be made with virtually no reduction
in quality. Unfortunately, these improvements in technology do not come
without a cost. Piracy of copyrighted works, particularly overseas, has
increased dramatically, and copyright owners are desperately in need of
additional protection to protect their property from thieves who
increasingly prey on their creative ingenuity.
  However, there is another side to this story. As copyrighted works
are afforded more protection, they will be encrypted in ``digital
wrappers'' that make them impenetrable to anyone other than those who
are willing to pay the going rate. While that may sound like the
American way, it is not. United States copyright law historically has
carved out important exceptions to the rights of copyright owners to
have exclusive control over the use of their property.
  The most notable exception is ``fair use.'' Libraries and
universities, for example, are permitted to freely use portions of
copyrighted works legally for research and study. This practice has
been a bedrock of our copyright law for over a century. Both Congress
and the courts repeatedly have recognized this important balance in the
law between the right of copyright owners to be compensated for their
efforts, and the right of information consumers to use these works in
limited ways to increase knowledge and understanding for the benefit of
our whole society.
  We can now take great comfort in the fact that H.R. 2281 will
continue to recognize this important balance. The ``fair use'' debate,
though heated at times, was negotiated to an acceptable conclusion in
the Commerce Committee, and this key compromise between the content and
``fair use'' communities is reflected in the bill on the floor today.
Other critical matters were also resolved, such as protecting consumer
privacy interests, electronic device manufacturing, and encryption
research.
  I would like to commend my good friend from Virginia, Chairman
Bliley, for his fine work on this bill. In addition, I would also like
to give special thanks to Mr. Boucher and Mr. Klug who contributed so
much to the resolution of the ``fair use'' issue, as well as Mr. Markey
and Mr. Tauzin for their important efforts. Also, special thanks goes
to all the staff who worked so hard on this legislation, in particular
Justin Lilley with the Commerce Committee majority, Andy Levin and Kyra
Fischbeck with the Commerce Committee minority, Ann Morton with Mr.
Boucher, Kathy Hahn with Mr. Klug, Whitney Fox with Mr. Tauzin, and
Colin Crowell with Mr. Markey, to name just a few.
  Thank you, Mr. Speaker. I yield back the balance of my time.
  Mr. BLILEY. Madam Speaker, I yield one minute to the gentleman from
Ohio (Mr. Oxley).
  (Mr. OXLEY asked and was given permission to revise and extend his
remarks.)
  Mr. OXLEY. Madam Speaker, I rise in strong support of H.R. 2281, the
WIPO enabling legislation. I want to pay special tribute to the
chairman of the full committee, the gentleman from Virginia (Mr.
Bliley), as well as the gentleman from Illinois (Chairman Hyde), for
their work as well, as my good friend the gentleman from Michigan (Mr.
Dingell) on the other side of the aisle.
  The digital revolution presents special opportunities and special
challenges for copyright holders and users of copyrighted works.
Working with the Committee on the Judiciary, I think we put together a
bill that we can all be proud of that deals with issues like fair use,
encryption research and temporary and ephemeral copies.
  This legislation will extend copyright protections for intellectual
property into the digital age, while simultaneously protecting fair use
of such works. It will provide an important foundation for the growth
of electronic commerce on the Internet.
  The bill also includes an important provision preserving the
authority of the SEC over the mechanisms by which the public obtains
information about our securities markets, including stock quotes. This
ensures that the commission will be able to ensure that investors have
ready access to the information they need to make their investment
decisions.

[[Page H7100]]

  I again thank the work of both the Committee on Commerce and the
Committee on the Judiciary for bringing us where we are today.
  Mr. FRANK of Massachusetts. Madam Speaker, I yield myself such time
as I may consume.
  Madam Speaker, I had intended to stick to the merits, but I did want
to respond to the ranking member of the Committee on Commerce.
Unfortunately, the public got a look at some of the turf battles that I
do not think serve us very well.
  The gentleman made some reference to comity. I do not know how that
was spelled. But had the gentleman wanted me to yield him some time, I
would have been glad to do it. I did not, because I had not been
instructed by the ranking member of my full committee to split the time
in terms of control. But I am glad to yield time to anyone who wants.
Indeed, I yielded four minutes right away to the gentleman from
Virginia. Now, the gentleman serves on both the Committee on the
Judiciary and the Committee on Commerce, but he used his four minutes
for a tribute to the work of the Committee on Commerce that was lyrical
in its composition, and I am sure will go down in the annals as one of
the best tributes to a committee ever given.
  So, at this point I would reserve the balance of my time, but if
Members want to speak, I would be glad to yield them time.
  Mr. BLILEY. Madam Speaker, I yield one minute to the gentleman from
Wisconsin (Mr. Klug), who did an extraordinary amount of work on this
piece of legislation.
  Mr. KLUG. Madam Speaker, I thank the gentleman for yielding me time.
  Madam Speaker, we have in front of us a very difficult balancing act,
essentially trying to protect the American creative community across
the world, people who make movies and television shows, book publishers
and the recording industry. But in an era of exploding information, we
also have to guarantee access to libraries and also university
researchers, to make sure we do not enter a new era of pay per view,
where the use of a library card always carries a fee and where the flow
of information comes with a meter that rings up a charge every time the
Internet is accessed.
  Today we have a reasonable compromise in front of us, and I want to
thank the gentleman from Virginia (Mr. Bliley) and the gentleman from
Michigan (Mr. Dingell) for their leadership.
  If I also could indulge the committee to single out several other
people, Justin Lilley of the committee staff, Kathy Hahn of my staff,
for working so hard on this compromise, and in particular the support
of my colleague, the gentleman from Virginia (Mr. Boucher). I urge
adoption of the bill.
  I rise in support of H.R. 2281, the Digital Millennium Copyright Act
of 1998 and request permission to revise and extend my remarks and to
submit additional materials into the record.
  I especially want to acknowledge the many significant contributions
that the Commerce Committee has made to this bill, under the leadership
of Chairmen Bliley and Tauzin and Representatives Dingell and Markey,
and Justin Lilly, Kathy Hahn on my staff.
  The bill that came to the Commerce Committee for consideration was a
flawed bill in a number of respects: Most important, it created a flat
prohibition against circumventing ``technological protection measures''
for any reason.
  This original prohibition passed by the Judiciary Committee sharply
skews the balance in favor of copyright owners. It would have required
each user of information to negotiate with the copyright owner for
access to information. I assume that the copyright owner would grant
that permission, but would extract a price in exchange.
  The Copyright Clause of the Constitution grants a limited preference
to copyright owners. But this clause has consistently been interpreted
to grant an incentive for the purposes of advancing knowledge or, in
the words of the Constitution, ``to promote the Progress of Science and
the Useful Arts.''
  This incentive has always been interpreted to be of secondary
importance to ``allow the public access to the products of genius.''
  As the New York Times noted recently:

       As Congress fashions ways to protect commercial interests
     in the digital realm, it must be careful also to protect the
     larger public interests in broad access to information. * * *
     The law does not allow a creator to control who looks at the
     material or prevent the material from being circulated or
     lent to others. It specifically allows the ``fair use'' of
     copyrighted materials for commentary, criticism, teaching,
     news reporting, scholarship and research under certain
     circumstances without permission from the copyright owner.

  And, as the Washington Post notes this morning:

     this transition to a pay-per-view world, * * * works fine for
     the entertainment industries and the commercial market. Where
     it doesn't work is in libraries and other places where use of
     books and research material is not pay-per-view but, till
     now, free.

  The Commerce Committee corrected this automatic transition to a pay-
per-view world by creating an exception for persons having gained
lawful access who are or are likely to be adversely affected by the
prohibition. In interpreting ``lawful access'', it is my hope that this
term is broadly construed to include students at a university, patrons
in a library, and investigative journalists who obtain critical
information, among others.
  Unlike the version reported by the Judiciary Committee, the approach
taken by the Commerce Committee and reflected in the bill before us not
only is an appropriate balance between the rights of copyright owners
and users of information, it is also strongly supported by the treaty
preamble that recognizes, ``the need to maintain balance between the
rights of authors and the larger public interest, particularly
education, research, and access to information.''
  I also want to single out several other important contributions of
the Commerce Committee. We have clarified that product designers and
manufacturers should be able to design their products based on consumer
demand. In so doing, we have eliminated any ambiguity or presumption
that products must be designed to affirmatively respond to or
accommodate any technological measures. It also ensures that lawyers,
judges and juries do not become the principal designers of consumer
products in this country. In the end, this language ensures that
product designers and manufacturers will have the freedom to innovate.
  As a related matter, consumers will continue to expect that the
products they buy will perform to expectations, whether that be high
resolution on high definition television or sound on-key for compact
disks and digital video disks. Nothing in this bill, as clarified by
the Commerce Committee in its report, should be read as interfering
with a product manufacturer, designer, or retailer's ability to adjust
any product that is experiencing material distortions caused by
technological measures. We have an obligation up here to protect
consumer interests, and ensuring that products play as promised is a
critical step for consumer protection.
  The compromise that is before us today is a thoughtful, well-crafted
approach to a complicated problem. I not only urge my colleagues to
vote for this compromise legislation, I strongly urge Chairman Hyde to
adhere to this compromise language in its entirety, not just today, but
when the House meets in conference with the Senate.
  Mr. FRANK of Massachusetts. Madam Speaker, I yield myself such time
as I may consume.
  Madam Speaker, I did want to say that the ranking member of the full
Committee on the Judiciary, the gentleman from Michigan (Mr. Conyers),
is in Michigan today because it is primary day in Michigan, and only
that kept him from being here. The gentleman has been for a long time
now one of the staunchest advocates of intellectual property rights. He
is a man who has a great feel for American culture, and fully
understands the role of intellectual property correctly understood in
fostering our cultural traditions.
  So I did want to express the strong support of the gentleman from
Michigan and note that his leadership in this was very, very important,
and to explain his absence as being due entirely to the fact that he
had to be in Michigan for his primary.
  Mr. BLILEY. Madam Speaker, I yield one minute to the gentleman from
Washington (Mr. White), who also put in a lot of work on this piece of
legislation.
  Mr. WHITE. Madam Speaker, I thank the chairman for yielding me time.
  Madam Speaker, pretty much no matter what we do, this bill would be a
big win for our country, because what this bill does in essence is it
implements a treaty under which the rest of the world finally adopts
our view of intellectual property. That is a big win for the United
States.
  But we also have the advantage that this bill actually turned out to
be a pretty good bill, thanks to the gentleman from Virginia (Chairman
Bliley) and the gentleman from North

[[Page H7101]]

Carolina (Chairman Coble), the gentleman from Illinois (Chairman Hyde),
and many of the other people who worked on it.
  The thing I like the most about it is that it moves intellectual
property protection into the digital age. I was proud to play a small
part in improving the bill. We adopted a special program for
webcasting, this is broadcasting on the Internet. We will now have
clear rules for how those sorts of things are supposed to be done.
  I think this should be a day when all of us are very pleased that we
are moving through the House a bill that will make big progress around
the world for intellectual property, which is a big improvement for
things in the United States.
  Mr. BLILEY. Madam Speaker, I yield one minute to the gentleman from
Florida (Mr. Stearns), a member of the committee.
  (Mr. STEARNS asked and was given permission to revise and extend his
remarks.)
  Mr. STEARNS. Madam Speaker, I also rise in support of the bill and
compliment our chairman, the gentleman from Virginia (Mr. Bliley), and,
of course, I compliment my good friend the gentleman from North
Carolina (Mr. Coble), for their activities.
  I participated in some of the areas dealing with technological
protection measures, defining this actually: The no-mandate provision,
which makes clear that manufacturers need not design their products to
respond to any particular technological protection measure was included
in the report; language to the compromise on ``fair use'' which seeks
to protect consumers from a pay-per-view world in the digital area;
and, three, provisions ensuring activities important to our economy and
national security such as reversed engineering and encryption research
will not be stifled by the new prohibition on circumventing
technological protection measure.
  I appreciate also the gentleman from Virginia (Mr. Boucher), who was
very helpful and diligent in approving our amendments and working
together. I recognize his efforts, and I rise in strong support of the
bill.
  Mr. Speaker, I rise in support of the final legislative product to
implement the World Intellectual Property Organization Treaty to
provide legal protection to the millions of American copyright holders
and American companies.
  I would also like to congratulate the efforts and the hard work of
the key players to forge a compromise and bring this bill to the floor:
Chairman Bliley of the Commerce Committee and Chairman Coble of the
Intellectual Property Subcommittee deserve particular praise.
  It has been a long and hard process to get us to this point. I had
numerous concerns with the original bill that I believed needed
correction.
  During consideration of H.R. 2281, the Commerce Committee heard from
many concerned groups including libraries, educators, researchers,
consumer groups, advocates for families such as Eagle Forum and the
Christian Coalition, and representatives of manufacturers of legitimate
consumer electronics products. All of these groups raised legitimate
concerns which the Commerce Committee has sought to address.
  The bill we consider today represents many hours of debate and
compromise.
  It is not a perfect solution, but it includes important provisions
designed to protect consumers and legitimate manufacturers of consumer
electronics while providing important new protections to copyright
owners so that their works may thrive in the digital environment.
  Among the important provisions in the legislation are:
  (1) The ``no mandate'' provision which makes clear that manufacturers
need not design their products to respond to any particular
technological protection measure;
  (2) The compromise on ``fair use'' which seeks to protect consumers
from a ``pay-per-view'' world in the digital era; and
  (3) Provisions ensuring that activities important to our economy and
national security such as reverse engineering and encryption research
will not be stifled by the new prohibition on circumventing
technological protection measures.
  I would also like to note that during consideration of the WIPO
legislation in the Commerce Committee, I had joined with my good friend
from Virginia, Mr. Boucher, in offering an amendment that would have
defined the term ``technological protection measure,'' because such a
definition was lacking in the original bill.
  Mr. Boucher and I worked diligently to improve our amendment and to
seek a compromise position for a definition that would have enjoyed the
support of the content community, as well as from the product
manufacturers. We succeeded.
  In order to push the bill forward and out of the Commerce Committee,
we agreed to withdraw the amendment in exchange for Chairman Bliley's
support of report language that would have expanded on the proper
definition of a ``technological protection measure.''
  Although I believe the bill could have been further improved had we
had the chance to define this term before bringing the bill to the
floor, I believe the report of the Commerce Committee very clearly
identifies the types of technological protection measures which are
entitled to the special protections of this legislation.
  In addition, I am confident that the federal courts that consider the
meaning of the term ``technological protection measure'' will find
sufficient guidance in the Commerce Committee's report.
  I thank Chairman Bliley for following through on his commitment and
allowing such report language to be drafted, inserted, and negotiated
with the Judiciary Committee.
  I ask unanimous consent that my extended and revised remarks appear
in the Record as if spoken.
  Mr. BLILEY. Madam Speaker, I yield one minute to the gentleman from
Massachusetts (Mr. Markey).

                              {time}  1415

  Mr. MARKEY. Madam Speaker, I thank the gentleman for yielding me the
time.
  I want to congratulate all of the Members who have worked on this
legislation, Madam Speaker. As the digital revolution sweeps over
countries and industries, we are going to see a dramatic change in the
nature of the American economy, because we are the clearcut leader in
the post-GATT post-NAFTA world.
  As we cut this implicit deal with the American people where we are
going to let the low-end jobs go, it is critical for us to garner the
lion's share of the high-end jobs. We are the world's leader in
software, without question. In these computer, movie, books, video
areas, we are the unquestioned dominant leader. It is our job to make
sure that we construct treaties, laws, that protect our high end, our
products that are related to the high education level which we are
giving the citizens of the United States.
  Built into this law are protections for the privacy of Americans, as
well. We do not want corporations being able to insinuate themselves
into the privacy of Americans, finding out where they go, what they do,
as they use these new software technologies.
  I think we have struck a nice balance, which is going to give
marketplace incentives to industries to ensure that individuals have
the knowledge on information that is being gathered about them, know
that it may be reused, but also have the right to say no. I think it is
going to be a good compromise forged.
  I urge a very strong yes for all Members of Congress on this very
important piece of legislation.
  Mr. FRANK of Massachusetts. Madam Speaker, I yield myself such time
as I may consume.
  I am glad to turn away from the turf battles, which are to be of
interest to no one outside this Chamber and very few inside, to talk a
little more about substance.
  Madam Speaker, I said earlier that one of the things I liked about
this bill was that we reversed or at least stopped this trend to
impinge on free speech. We have reduced the tendency to restrict speech
which is electronically transmitted to a lesser degree of
constitutional protection. But this is not the only bill relevant. I
want to talk here about the danger in some other legislation of our
continuing the unfortunate tendency of holding electronically
transmitted speech to a lesser standard of protection.
  I am told working its way through this body is legislation which
would deny Federal aid to libraries and schools which do not impose
various kinds of filtering devices on their own equipment. That it
seems to me a very grave error. Of course, it makes a mockery of this
profession of respect for States' rights which we occasionally hear,
particularly when those who claim to be for States' rights do not like
what the States are doing.
  But the notion that we would impose a Federal judgment on schools and
libraries, and make them use this very

[[Page H7102]]

admittedly imperfect technology of filtration so that they would be
less than fully free in what they gave people, is an example of this
unfortunate tendency to say that electronically transmitted speech has
a lesser order of protection.
  I hope no one would propose that Congress would say libraries would
not get any money unless they censored books, unless they censored
public speeches. Why, then, do we insist, and I hope we do not, that
libraries can only get Federal funds if they agree to censure their
electronic devices?
  We already passed as part of the Telecommunications Act something
called the Communications Decency Act, which was stricken by a 9 to
nothing vote in the Supreme Court as unconstitutional. Indeed, some of
the most ardent defenders of free speech during the campaign finance
debate enthusiastically supported this, which was obviously
unconstitutional at the time, and the Supreme Court held it to be.
  I would just say in closing, Madam Speaker, that while I am pleased
that here we took great pains to protect intellectual property while
avoiding giving any additional incentive to censor, we may be undoing
that in other pieces of legislation.
  I would urge my colleagues to follow elsewhere the guide that I think
we have set forth here: Do not adopt restrictions on electronically
transmitted speech that we would not apply to written speech and to
oral speech, to newspapers, to magazines, to theater, to other forums
of public debate.
  As this society continues to increase the percentage of our
communication with each other that is electronically transmitted, it is
essential that we give electronically transmitted speech the same high
degree of protection from censorship and regulation that we give other
speech, or we will be a less free society in consequence.
  Madam Speaker, I reserve the balance of my time.
  Mr. BLILEY. Madam Speaker, I yield 1\1/2\ minutes to the gentleman
from Michigan (Mr. Knollenberg).
  (Mr. KNOLLENBERG asked and was given permission to revise and extend
his remarks.)
  Mr. KNOLLENBERG. Madam Speaker, I thank the chairman for being so
gracious in relinquishing that time. I will not take all of it.
  I will say, Madam Speaker, that I rise in full support of this bill.
I want to thank the gentleman from North Carolina (Mr. Coble) for his
work in helping bring about the confection of this language. Included
in the bill is a provision that I introduced to ensure that a computer
owner may authorize the activation of their computer by a third party
for the limited purpose of servicing computer hardware components. The
bill provides language that authorizes third parties to make such a
copy for the limited use of servicing computer hardware, the hardware
components.
  This provision does nothing to threaten the integrity of the
Copyright Act, and maintains all the protections under the Act. The
intent of the Copyright Act is to protect and encourage a free
marketplace of ideas. However, without this provision, it hurts the
free market by preventing the ISOs from servicing computers.
Furthermore, it limits the computer users' choice of who can service
their computer and how competitive a fee can be charged.
  Again, I want to thank the gentleman from North Carolina (Mr. Coble)
for all of his work in helping us along on this.
  Mr. COBLE. Madam Speaker, I yield myself such time as I may consume.
  Madam Speaker, I thank everybody who has contributed to this exercise
today. The creative ingenuity of the people of this country is
responsible for our identification, culture, and not insignificantly
large trade surplus. This has only come about because this country,
through the work of the congressional judiciary committees down through
the years, has enacted laws which protect intellectual property.
  Our Founding Fathers, Madam Speaker, knew that a constitutional
protection would be necessary in order to encourage Congress to create
an incentive for creators. I am proud that this Congress and our
subcommittee on the Committee on the Judiciary specifically have stood
up for property rights of all kinds, both real property and
intellectual property. I urge passage of the bill.
  Madam Speaker, I reserve the balance of my time.
  Mr. FRANK of Massachusetts. Madam Speaker, I yield the balance of my
time to the gentleman from California (Mr. Dreier), and hope that he
will remember me when he becomes chairman.
  The SPEAKER pro tempore (Mrs. Emerson). The gentleman from California
(Mr. Dreier) is recognized for 2 minutes.
  Mr. DREIER. Madam Speaker, I appreciate the gentleman yielding time
to me, and I will, as we have amendments that conceivably could come
forward from the gentleman from Massachusetts next year, consider them.
I very much appreciate his acknowledging that I will be chairman next
year.
  Madam Speaker, let me rise in very strong support of this agreement.
One of the most troubling aspects to this issue of global trade which
is very important to the survival of our economy has been the issue of
piracy. When we look at the impact that this has had on the
entertainment industry and the biotechnology industry in my State of
California, it is very, very troubling.
  When we have ideas that emanate from individuals, the right to make
sure that that is their property must be ensured. This WIPO agreement
is in fact the best hope that we have to ensure that it will be
acknowledged.
  I simply rise to congratulate my friends who have been involved in
this, the gentleman from North Carolina (Mr. Coble), the gentleman from
Illinois (Mr. Hyde), and of course, the Committee on Commerce, under
the able leadership of the gentleman from Virginia (Mr. Bliley), and a
wide range of individuals in other industries, and of course, the
gentleman from Massachusetts (Mr. Frank).
  This is a very important agreement, and I urge my colleagues to
strongly support it.
  Mr. BLILEY. Madam Speaker, I yield myself such time as I may consume.
  Madam Speaker, I urge adoption of the bill.
  Mr. COBLE. Madam Speaker, I yield myself such time as I may consume.
  Madam Speaker, I want to say to the gentleman from California, he
said he would remember the gentleman from Massachusetts (Mr. Frank). I
hope he remembers that both of us worked to accommodate him today when
he has the gavel in his hand next year.
  Finally, this has obviously been a team effort, Madam Speaker.
Oftentimes we hear charges accusing us of being a do-nothing Congress.
I think this piece of legislation today pretty well refutes that
charge. Much good has been done in this session of the Congress, and
today has been no exception. I thank everyone again for having
contributed very favorably to this dialogue today.
  Mr. HASTERT. Mr. Speaker, I am proud to rise in support of H.R. 2281,
the Digital Millennium Copyright Act.
  I am very pleased that Chairmen Bliley, Hyde, Coble and Tauzin were
able to reach a compromise on this bipartisan bill.
  We all know that the strength of our copyright laws is fundamental to
making our economy a success, while also allowing ``fair use'' of
protected works for the common good.
  Just because an authorized product is in a digitized form, we should
not hinder a child's learning at St. Charles Public Library, or
complicate an academic's research at Northern Illinois University, or
prevent a high-tech engineer in Illinois from improving innovative
products.
  Specifically, this legislation includes new terminology vital to
better resolving the issues ahead of us. The bill language on . . .
``no mandates on design'' . . . . reverse engineering'' . . .
``playability'' . . . and ``definition of protection measures'' . . .
will provide the framework for continuing the proper balance in the
law.
  By adopting these new terms, we can anticipate future policy
concerns, and create a fair and balanced approach to solving the
questions of the digital revolution.
  Ms. SLAUGHTER. Mr. Speaker, I rise in support of H.R. 2281, the
Digital Millennium Copyright Act, which would raise the international
standards of copyright protection so that we can help combat the
devastating losses to American companies that are being caused by the
international piracy of copyrighted works.
  As Chair of the Congressional Member Organization for the Arts, I am
greatly concerned about the grave effects of copyright violations on
America's artists, writers, and software engineers. The dramatic growth
of the Internet is

[[Page H7103]]

providing us with tremendous new opportunities for electronic commerce
and communication. But these same technological developments also carry
significant risks, especially in the area of international copyright
piracy. Today, American companies are losing $18-20 billion annual
because copyrighted works can be stolen and distributed around the
world by anyone capable of using a computer.
  This legislation protects our nation's movie producers, record
makers, and software designers from being forced to absorb more of
these losses. At the same time, it protects lawful use of materials by
classrooms and libraries, and allows individuals who perform encryption
research to continue with their work. However, it does prohibit the
sale, manufacture and use of devices and component parts that are
specifically designed to gain unauthorized access to copyrighted works.
It also addresses the issue of online service provider liability,
incorporating language based on a compromise that has been reached
among groups on all sides of the debate.
  I urge my colleagues to vote yes on passage of H.R. 2281 so that we
can protect the work of our nation's talented individuals from
copyright violations while encouraging the growth of electronic
commerce.
  Mrs. MORELLA. Mr. Speaker, although the Commerce Committee changes to
H.R. 2281, the WIPO Copyright Treaties Implementation Act, vastly
improved the bill from the original Judiciary Committee passed version,
I am still deeply troubled that H.R. 2281 is being considered on the
suspension calendar. As I indicated in a July 31 letter to the Majority
Leader, signed by several other Members of the House, I was very
interested in offering a distance education amendment to H.R. 2281 that
has the support of every educational group, from the National Education
Association to the National Center for Home Education.
  As we enter the 21st Century, distance education will play an even
more pivotal role in educating our children, and those individuals
interested in life long learning. Distance education will fill an
important gap for those individuals, either because of family
obligations, work obligations, or other barriers, who are prevented
from attending traditional classes. It will also allow educational
institutions, from outlying rural towns to the heart of America's inner
cities, to access a full range of academic subjects that would
otherwise not be available to them.
  The amendment that I was planning to offer would have updated the
exceptions to copyright law regarding distance education to meet the
new challenges and allow for the use of new and exciting technologies
that will improve the education of our citizens, so that we are better
prepared to compete in this more competitive global economy. This is
particularly important in my district where we currently have a
shortage of high-technology workers that is hindering our economic
growth.
  In 1976, as part of the general revision of the Copyright Law, the
Congress recognized the importance of the burgeoning practice of
distance learning. As the House Report on Copyright Law Revision (No.
94-1476) put it, in the context of higher education, these
``telecourses are fast becoming a valuable adjunct of the normal
college curriculum.'' (p. 84). The use of the term ``telecourses'' is,
of course, significant. At the time, the only technology by means of
which distance education could be conducted was that of television
(either ``open'' or ``closed-circuit'') and in providing an exemption
from copyright liability for illustrative uses of certain works in the
course of distance learning lessons; typically, moreover, these lessons
involved the transmission of text material, still images, or music.
Against this background, the Congress proceeded to fashion the
provisions of 17 U.S.C. 110(2).

  The Copyright Act, in Section 106, provides for the various
``exclusive rights'' of the copyright owner. Because, as a matter of
definition, TV broadcasting implicates only Section 106(4) ``public
performance'' and the Section 106(5) ``public display,'' the distance
education exemption in Section 110(2) relieves educators of liability
with respect to those two rights. Moreover, since educational TV
broadcasts typically at assembled groups of students, Section 110(2)
was drafted to apply to ``reception in classrooms of similar places''
(extending to home reception only in the case of disabled persons and
others in ``special circumstances''). Finally, Section 110(2) was
written to apply only to performances of ``non-dramatic literary or
musical works,'' categories from which the overwhelming proportion of
illustrative excerpts required by teachers would have been drawn.
  More than 20 years later, distance education practice has changed
dramatically. Increasingly, distance learning has become a staple of K-
12 as well as higher education, and digital networks have become the
favored technology for the delivery of distance learning lessons. As a
technical matter, network transmissions generally become available to
recipients only because a temporary copy of their content is made in
the so-called ``random access memory'' of those recipients' computer
terminals; thus, network transmission of an excerpt from a copyrighted
work in the course of a distance learning lesson may involve not only
the performance or display of that work, but also its ``distribution''
(another right which is reserved to the copyright owner in Section
106(2), and not covered by existing Section 110(2)). Moreover, many
contemporary distance learning transmissions are intended primarily for
reception in the homes or offices of students who are neither disabled
nor exhibit other ``special circumstances''; indeed, many such
transmissions are offered by institutions (like the Western Governors'
University or various home-school networks) which have few or no
physical ``classrooms or similar places.'' Again, existing Section
110(2) would not appear to cover such instructional programs. Finally,
in the age of multimedia, instructors must be able to illustrate their
lessons with relevant excerpts not only from the conventional literary
and musical works covered in existing Section 110(2), but from the full
range of cultural materials to which protection under the Copyright Act
extends.
  As I mentioned before, the proposed amendment would legitimize the
best current practice in the field of distance education and encourage
further innovation in this important area by eliminating
technologically or educationally outdated restrictions from Section
110(2). By adopting such an amendment, the Congress would be following
through on the decision it took in 1976 to encourage the practice of
distance education by providing educators with a clearly defined ``safe
harbor'' within which they could design lessons with enhanced learning
value, free from concerns about potential legal liability.
  As amended, the Section 110(2) exemption would apply only to
qualified not-for-profit institutions and home-schools. ``Fly-by-
night'' commercial trade schools and sham entities without demonstrable
educational purposes would not qualify. Moreover, the amended sections
would retain crucial restrictive language from the original, which
limits its applicability to situations in which excerpts from
copyrighted works are used ``for purposes of illustration, and [are]
directly related and of material assistance to the teaching content''
of a distance learning lesson; indeed, the amended section would
amplify that restriction with a new provision stating that the material
used for illustrative purposes must be ``limited to that portion of the
work reasonably necessary to accomplish the teaching purpose.'' In
other words, the amended section would not permit educators to put
entire copyrighted textbooks on line; such conduct is an infringement
of copyright today, and it would continue to be under the amended
section.
  Nor would the section allow distance education programming to become
a gateway through which valuable copyrighted works, in their entirety,
could flow out into the Internet and become generally available. This
is all the more so because the amended section applies only to
educators who had not taken reasonable steps to provide safeguards
against distance education transmissions being received by non-students
or copied for redistribution. Thus, the amended section actually would
give distance educators a new incentive to upgrade the security
features of their networks to discourage copyright infringement.
  It also is noteworthy that the exemption which would be defined in
the amended section would be available only in connection with the
actual delivery of educational materials by educators and their
institutions, or (in the case of home schools) by parents. It would not
deprive copyright owners of revenues in connection with the licensing
of their works for inclusion in ``packaged'' materials designed for use
in connection with distance education. Just as textbook authors and
publishers today must obtain appropriate copyright clearances in order
to include excerpts from copyrighted works, so would the creators of
tomorrow's ``electronic texts.''
  Mr. COBLE. Madam Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from North Carolina (Mr. Coble) that the House suspend the
rules and pass the bill, H.R. 2281, as amended.
  The question was taken; and (two-thirds having voted in favor
thereof) the rules were suspended and the bill, as amended, was passed.
  The title of the bill was amended so as to read:

       ``A bill to amend title 17, United States Code, to
     implement the World Intellectual Property Organization
     Copyright Treaty and Performances and Phonograms Treaty, and
     for other purposes.''.

  A motion to reconsider was laid on the table.

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