[DOCID: f:h2281enr.txt]
        H.R.2281

                       One Hundred Fifth Congress

                                 of the

                        United States of America

                          AT THE SECOND SESSION

          Begun and held at the City of Washington on Tuesday,
the twenty-seventh day of January, one thousand nine hundred and ninety-
                                  eight

                                 An Act


     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.

    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 TREATIES IMPLEMENTATION

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

      TITLE III--COMPUTER MAINTENANCE OR REPAIR COPYRIGHT EXEMPTION

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

                   TITLE IV--MISCELLANEOUS PROVISIONS

Sec. 401. Provisions Relating to the Commissioner of Patents and
          Trademarks and the Register of Copyrights.
Sec. 402. Ephemeral recordings.
Sec. 403. Limitations on exclusive rights; distance education.
Sec. 404. Exemption for libraries and archives.
Sec. 405. Scope of exclusive rights in sound recordings; ephemeral
          recordings.
Sec. 406. Assumption of contractual obligations related to transfers of
          rights in motion pictures.
Sec. 407. Effective date.

             TITLE V--PROTECTION OF CERTAIN ORIGINAL DESIGNS

Sec. 501. Short title.
Sec. 502. Protection of certain original designs.
Sec. 503. Conforming amendments.
Sec. 504. Joint study of the effect of this title.
Sec. 505. Effective date.

                 TITLE I--WIPO TREATIES IMPLEMENTATION

SEC. 101. SHORT TITLE.

    This title may be cited as the ``WIPO Copyright and Performances
and Phonograms Treaties Implementation Act of 1998''.

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.

``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) The prohibition contained in subparagraph (A) shall not apply
to persons who are users of a copyrighted work which is in a particular
class of works, 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).
    ``(C) During the 2-year period described in subparagraph (A), and
during each succeeding 3-year period, the Librarian of Congress, upon
the recommendation of the Register of Copyrights, who shall consult
with the Assistant Secretary for Communications and Information of the
Department of Commerce and report and comment on his or her views in
making such recommendation, shall make the determination in a
rulemaking proceeding on the record for purposes of subparagraph (B) of
whether persons who are users of 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 Librarian 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 that the prohibition on the circumvention of
    technological measures applied to copyrighted works has 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 Librarian considers
    appropriate.
    ``(D) The Librarian shall publish any class of copyrighted works
for which the Librarian has determined, pursuant to the rulemaking
conducted under subparagraph (C), that noninfringing uses by persons
who are users of a copyrighted work are, or are likely to be, adversely
affected, and the prohibition contained in subparagraph (A) shall not
apply to such users with respect to such class of works 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, so long as such part
or component, or the product in which such part or component is
integrated, does not otherwise fall within the prohibitions of
subsection (a)(2) or (b)(1).
    ``(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, Intelligence, and Other Government
Activities.--This section does not prohibit any lawfully authorized
investigative, protective, information security, 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. For purposes of this subsection, the term
`information security' means activities carried out in order to
identify and address the vulnerabilities of a government computer,
computer system, or computer network.
    ``(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 to enable the identification and
analysis under paragraph (1), or for the purpose of enabling
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.
    ``(3) The information acquired through the acts permitted under
paragraph (1), and the means permitted under paragraph (2), may be made
available to others if the person referred to in paragraph (1) or (2),
as the case may be, provides such information or means solely for the
purpose of enabling 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 applicable
law other than this section.
    ``(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 Register of Copyrights and
    the Assistant Secretary for Communications and Information of the
    Department of Commerce 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) Exceptions Regarding Minors.--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--
        ``(1) does not itself violate the provisions of this title; and
        ``(2) has the sole purpose to prevent the access of minors to
    material on the Internet.
    ``(i) Protection of Personally Identifying Information.--
        (1) Circumvention permitted.--Notwithstanding the provisions of
    subsection (a)(1)(A), it is not a violation of 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.
    ``(j) Security Testing.--
        ``(1) Definition.--For purposes of this subsection, the term
    `security testing' means accessing a computer, computer system, or
    computer network, solely for the purpose of good faith testing,
    investigating, or correcting, a security flaw or vulnerability,
    with the authorization of the owner or operator of such computer,
    computer system, or computer network.
        ``(2) Permissible acts of security testing.--Notwithstanding
    the provisions of subsection (a)(1)(A), it is not a violation of
    that subsection for a person to engage in an act of security
    testing, if 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 security
        testing was used solely to promote the security of the owner or
        operator of such computer, computer system or computer network,
        or shared directly with the developer of such computer,
        computer system, or computer network; and
            ``(B) whether the information derived from the security
        testing was used or maintained in a manner that does not
        facilitate infringement under this title or a violation of
        applicable law other than this section, including a violation
        of privacy or breach of security.
        ``(4) Use of technological means for security testing.--
    Notwithstanding the provisions of subsection (a)(2), it is not a
    violation of that subsection for a person to develop, produce,
    distribute or employ technological means for the sole purpose of
    performing the acts of security testing described in subsection
    (2), provided such technological means does not otherwise violate
    section (a)(2).
    ``(k) Certain Analog Devices and Certain Technological Measures.--
        ``(1) Certain analog devices.--
            ``(A) Effective 18 months after the date of the enactment
        of this chapter, no person shall manufacture, import, offer to
        the public, provide or otherwise traffic in any--
                ``(i) VHS format analog video cassette recorder unless
            such recorder conforms to the automatic gain control copy
            control technology;
                ``(ii) 8mm format analog video cassette camcorder
            unless such camcorder conforms to the automatic gain
            control technology;
                ``(iii) Beta format analog video cassette recorder,
            unless such recorder conforms to the automatic gain control
            copy control technology, except that this requirement shall
            not apply until there are 1,000 Beta format analog video
            cassette recorders sold in the United States in any one
            calendar year after the date of the enactment of this
            chapter;
                ``(iv) 8mm format analog video cassette recorder that
            is not an analog video cassette camcorder, unless such
            recorder conforms to the automatic gain control copy
            control technology, except that this requirement shall not
            apply until there are 20,000 such recorders sold in the
            United States in any one calendar year after the date of
            the enactment of this chapter; or
                ``(v) analog video cassette recorder that records using
            an NTSC format video input and that is not otherwise
            covered under clauses (i) through (iv), unless such device
            conforms to the automatic gain control copy control
            technology.
            ``(B) Effective on the date of the enactment of this
        chapter, no person shall manufacture, import, offer to the
        public, provide or otherwise traffic in--
                ``(i) any VHS format analog video cassette recorder or
            any 8mm format analog video cassette recorder if the design
            of the model of such recorder has been modified after such
            date of enactment so that a model of recorder that
            previously conformed to the automatic gain control copy
            control technology no longer conforms to such technology;
            or
                ``(ii) any VHS format analog video cassette recorder,
            or any 8mm format analog video cassette recorder that is
            not an 8mm analog video cassette camcorder, if the design
            of the model of such recorder has been modified after such
            date of enactment so that a model of recorder that
            previously conformed to the four-line colorstripe copy
            control technology no longer conforms to such technology.
        Manufacturers that have not previously manufactured or sold a
        VHS format analog video cassette recorder, or an 8mm format
        analog cassette recorder, shall be required to conform to the
        four-line colorstripe copy control technology in the initial
        model of any such recorder manufactured after the date of the
        enactment of this chapter, and thereafter to continue
        conforming to the four-line colorstripe copy control
        technology. For purposes of this subparagraph, an analog video
        cassette recorder `conforms to' the four-line colorstripe copy
        control technology if it records a signal that, when played
        back by the playback function of that recorder in the normal
        viewing mode, exhibits, on a reference display device, a
        display containing distracting visible lines through portions
        of the viewable picture.
        ``(2) Certain encoding restrictions.--No person shall apply the
    automatic gain control copy control technology or colorstripe copy
    control technology to prevent or limit consumer copying except such
    copying--
            ``(A) of a single transmission, or specified group of
        transmissions, of live events or of audiovisual works for which
        a member of the public has exercised choice in selecting the
        transmissions, including the content of the transmissions or
        the time of receipt of such transmissions, or both, and as to
        which such member is charged a separate fee for each such
        transmission or specified group of transmissions;
            ``(B) from a copy of a transmission of a live event or an
        audiovisual work if such transmission is provided by a channel
        or service where payment is made by a member of the public for
        such channel or service in the form of a subscription fee that
        entitles the member of the public to receive all of the
        programming contained in such channel or service;
            ``(C) from a physical medium containing one or more
        prerecorded audiovisual works; or
            ``(D) from a copy of a transmission described in
        subparagraph (A) or from a copy made from a physical medium
        described in subparagraph (C).
    In the event that a transmission meets both the conditions set
    forth in subparagraph (A) and those set forth in subparagraph (B),
    the transmission shall be treated as a transmission described in
    subparagraph (A).
        ``(3) Inapplicability.--This subsection shall not--
            ``(A) require any analog video cassette camcorder to
        conform to the automatic gain control copy control technology
        with respect to any video signal received through a camera
        lens;
            ``(B) apply to the manufacture, importation, offer for
        sale, provision of, or other trafficking in, any professional
        analog video cassette recorder; or
            ``(C) apply to the offer for sale or provision of, or other
        trafficking in, any previously owned analog video cassette
        recorder, if such recorder was legally manufactured and sold
        when new and not subsequently modified in violation of
        paragraph (1)(B).
        ``(4) Definitions.--For purposes of this subsection:
            ``(A) An `analog video cassette recorder' means a device
        that records, or a device that includes a function that
        records, on electromagnetic tape in an analog format the
        electronic impulses produced by the video and audio portions of
        a television program, motion picture, or other form of
        audiovisual work.
            ``(B) An `analog video cassette camcorder' means an analog
        video cassette recorder that contains a recording function that
        operates through a camera lens and through a video input that
        may be connected with a television or other video playback
        device.
            ``(C) An analog video cassette recorder `conforms' to the
        automatic gain control copy control technology if it--
                ``(i) detects one or more of the elements of such
            technology and does not record the motion picture or
            transmission protected by such technology; or
                ``(ii) records a signal that, when played back,
            exhibits a meaningfully distorted or degraded display.
            ``(D) The term `professional analog video cassette
        recorder' means an analog video cassette recorder that is
        designed, manufactured, marketed, and intended for use by a
        person who regularly employs such a device for a lawful
        business or industrial use, including making, performing,
        displaying, distributing, or transmitting copies of motion
        pictures on a commercial scale.
            ``(E) The terms `VHS format', `8mm format', `Beta format',
        `automatic gain control copy control technology', `colorstripe
        copy control technology', `four-line version of the colorstripe
        copy control technology', and `NTSC' have the meanings that are
        commonly understood in the consumer electronics and motion
        picture industries as of the date of the enactment of this
        chapter.
        ``(5) Violations.--Any violation of paragraph (1) of this
    subsection shall be treated as a violation of subsection (b)(1) of
    this section. Any violation of paragraph (2) of this subsection
    shall be deemed an `act of circumvention' for the purposes of
    section 1203(c)(3)(A) of this chapter.

``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, Intelligence, and Other Government
Activities.--This section does not prohibit any lawfully authorized
investigative, protective, information security, 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. For purposes of this subsection, the term
`information security' means activities carried out in order to
identify and address the vulnerabilities of a government computer,
computer system, or computer network.
    ``(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 3 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 5
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. EVALUATION OF IMPACT OF COPYRIGHT LAW AND AMENDMENTS ON
              ELECTRONIC COMMERCE AND TECHNOLOGICAL DEVELOPMENT.

    (a) Evaluation by the Register of Copyrights and the Assistant
Secretary for Communications and Information.--The Register of
Copyrights and the Assistant Secretary for Communications and
Information of the Department of Commerce 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.
    (b) Report to Congress.--The Register of Copyrights and the
Assistant Secretary for Communications and Information of the
Department of Commerce 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 (a), including any
legislative recommendations the Register and the Assistant Secretary
may have.

SEC. 105. EFFECTIVE DATE.

    (a) In General.--Except as otherwise provided in this title, 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 (j), 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
    (j), 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 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 (j), 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 (3), responds expeditiously to remove,
        or disable access to, the material that is claimed to be
        infringing or to be the subject of infringing activity.
        ``(2) Designated agent.--The limitations on liability
    established in this subsection apply to a service provider only if
    the service provider has designated an agent to receive
    notifications of claimed infringement described in paragraph (3),
    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.
        ``(3) 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 (j),
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)(3), responds expeditiously to remove, or disable
    access to, the material that is claimed to be infringing or to be
    the subject of infringing activity, except that, for purposes of
    this paragraph, the information described in subsection
    (c)(3)(A)(iii) shall be identification of the reference or link, to
    material or activity claimed to be infringing, that is to be
    removed or access to which is to be disabled, and information
    reasonably sufficient to permit the service provider to locate that
    reference or link.
    ``(e) Limitation on liability of nonprofit educational
institutions.--(1) When a public or other nonprofit institution of
higher education is a service provider, and when a faculty member or
graduate student who is an employee of such institution is performing a
teaching or research function, for the purposes of subsections (a) and
(b) such faculty member or graduate student shall be considered to be a
person other than the institution, and for the purposes of subsections
(c) and (d) such faculty member's or graduate student's knowledge or
awareness of his or her infringing activities shall not be attributed
to the institution, if--
        ``(A) such faculty member's or graduate student's infringing
    activities do not involve the provision of online access to
    instructional materials that are or were required or recommended,
    within the preceding 3-year period, for a course taught at the
    institution by such faculty member or graduate student;
        ``(B) the institution has not, within the preceding 3-year
    period, received more than two notifications described in
    subsection (c)(3) of claimed infringement by such faculty member or
    graduate student, and such notifications of claimed infringement
    were not actionable under subsection (f); and
        ``(C) the institution provides to all users of its system or
    network informational materials that accurately describe, and
    promote compliance with, the laws of the United States relating to
    copyright.
    ``(2) Injunctions.--For the purposes of this subsection, the
limitations on injunctive relief contained in subsections (j)(2) and
(j)(3), but not those in (j)(1), shall apply.
    ``(f) 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.
    ``(g) 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).
    ``(h) 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)(3)(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)(3)(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)(3)(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.
    ``(i) 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.
    ``(j) 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.
    ``(k) 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 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.
    ``(l) 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.
    ``(m) 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 (i); or
        ``(2) a service provider gaining access to, removing, or
    disabling access to material in cases in which such conduct is
    prohibited by law.
    ``(n) 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.''.

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

SEC. 401. PROVISIONS RELATING TO THE COMMISSIONER OF PATENTS AND
              TRADEMARKS AND THE REGISTER OF COPYRIGHTS

    (a) Compensation.--(1) Section 3(d) of title 35, United States
Code, is amended by striking ``prescribed by law for Assistant
Secretaries of Commerce'' and inserting ``in effect for level III of
the Executive Schedule under section 5314 of title 5, United States
Code''.
    (2) Section 701(e) of title 17, United States Code, is amended--
        (A) by striking ``IV'' and inserting ``III''; and
        (B) by striking ``5315'' and inserting ``5314''.
    (3) Section 5314 of title 5, United States Code, is amended by
adding at the end the following:
        ``Assistant Secretary of Commerce and Commissioner of Patents
    and Trademarks.
        ``Register of Copyrights.''.
    (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 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 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 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 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.''.

SEC. 402. 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)'';
        (3) by inserting after ``under a license'' the following: ``,
    including a statutory license under section 114(f),'';
        (4) 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
    and that makes a broadcast transmission of a performance of a sound
    recording in a digital format on a nonsubscription basis,''; and
        (5) 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. 403. 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. 404. 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,'';
            (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. 405. 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) in paragraph (1) 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), an eligible nonsubscription transmission, or a transmission
    not exempt under paragraph (1) that is made by a preexisting
    satellite digital audio radio service shall be subject to statutory
    licensing, in accordance with subsection (f) if--
            ``(A)(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, if
        technically feasible, 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) that is made by a preexisting subscription
        service in the same transmission medium used by such service on
        July 31, 1998, or in the case of a transmission not exempt
        under paragraph (1) that is made by a preexisting satellite
        digital audio radio service--
                ``(i) the transmission does not exceed the sound
            recording performance complement; and
                ``(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) that is made 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--

                    ``(I) the broadcast station makes broadcast
                transmissions--

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

                    ``(II) 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
                performance 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
            the case of a retransmission of a broadcast transmission by
            a transmitting entity that does not have the right or
            ability to control the programming of the broadcast
            transmission, the requirement of this clause shall not
            apply to a prior oral announcement by the broadcast
            station, or to an advance program schedule published,
            induced, or facilitated by the broadcast station, if the
            transmitting entity does not have actual knowledge and has
            not received written notice from the copyright owner or its
            representative that the broadcast station publishes or
            induces or facilitates the publication of such advance
            program schedule, or if such advance program schedule is a
            schedule of classical music programming published by the
            broadcast station in the same manner as published by that
            broadcast station on or before September 30, 1998;
                ``(iii) the transmission--

                    ``(I) is not part of an archived program of less
                than 5 hours duration;
                    ``(II) is not part of an archived program of 5
                hours or greater in duration that is made available for
                a period exceeding 2 weeks;
                    ``(III) is not part of a continuous program which
                is of less than 3 hours duration; or
                    ``(IV) is not part of an identifiable program in
                which performances of sound recordings are rendered in
                a predetermined order, other than an archived or
                continuous program, that is transmitted at--

                        ``(aa) more than 3 times in any 2-week period
                    that have been publicly announced in advance, in
                    the case of a program of less than 1 hour in
                    duration, or
                        ``(bb) more than 4 times in any 2-week period
                    that have been publicly announced in advance, in
                    the case of a program of 1 hour or more in
                    duration,

                except that the requirement of this subclause shall not
                apply in the case of a retransmission of a broadcast
                transmission by a transmitting entity that does not
                have the right or ability to control the programming of
                the broadcast transmission, unless the transmitting
                entity is given notice in writing by the copyright
                owner of the sound recording that the broadcast station
                makes broadcast transmissions that regularly violate
                such requirement;

                ``(iv) the transmitting entity does not knowingly
            perform the sound recording, as part of a service that
            offers transmissions of visual images contemporaneously
            with transmissions of sound recordings, 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 alone or together with transmissions
            by other transmitting entities in order to select a
            particular sound recording to be transmitted to the
            transmission recipient, except that the requirement of this
            clause shall not apply to a satellite digital audio service
            that is in operation, or that is licensed by the Federal
            Communications Commission, on or before July 31, 1998;
                ``(vi) the transmitting entity takes no affirmative
            steps to cause or induce the making of a phonorecord by the
            transmission recipient, and if the technology used by the
            transmitting entity enables the transmitting entity to
            limit the making by the transmission recipient of
            phonorecords of the transmission directly in a digital
            format, the transmitting entity sets such technology to
            limit such making of phonorecords to the extent permitted
            by such technology;
                ``(vii) phonorecords of the sound recording have been
            distributed to the public 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 the authority of the
            copyright owner, except that the requirement of this clause
            shall not apply to a retransmission of a broadcast
            transmission by a transmitting entity that does not have
            the right or ability to control the programming of the
            broadcast transmission, unless the transmitting entity is
            given notice in writing by the copyright owner of the sound
            recording that the broadcast station makes broadcast
            transmissions that regularly violate such requirement;
                ``(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, except that
            the requirement of this clause shall not apply to a
            satellite digital audio service that is in operation, or
            that is licensed under the authority of the Federal
            Communications Commission, on or before July 31, 1998, to
            the extent that such service has designed, developed, or
            made commitments to procure equipment or technology that is
            not compatible with such technical measures before such
            technical measures are widely adopted by sound recording
            copyright owners; and
                ``(ix) the transmitting entity identifies in textual
            data 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 displayed to the
            transmission recipient by the device or technology intended
            for receiving the service provided by the transmitting
            entity, 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 and shall not apply in
            the case of a retransmission of a broadcast transmission by
            a transmitting entity that does not have the right or
            ability to control the programming of the broadcast
            transmission, or in the case in which devices or technology
            intended for receiving the service provided by the
            transmitting entity that have the capability to display
            such textual data are not common in the marketplace.''.
        (2) Subsection (f) is amended--
            (A) in the subsection heading by striking ``Nonexempt
        Subscription'' and inserting ``Certain Nonexempt'';
            (B) 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 transmissions by preexisting
                satellite digital audio radio 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, preexisting
            subscription services, or preexisting satellite digital
            audio radio services may submit to the Librarian of
            Congress licenses covering such subscription transmissions
            with respect to such sound recordings.''; and
            (C) 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 entities performing sound recordings affected by
    this paragraph. In establishing rates and terms for preexisting
    subscription services and preexisting satellite digital audio radio
    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, any preexisting
        subscription services, or any preexisting satellite digital
        audio radio 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
    public performances of sound recordings by means of 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 and new subscription 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 paragraph may
    submit to the Librarian of Congress licenses covering such eligible
    nonsubscription transmissions and new subscription services 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 affected by
    this paragraph 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
        transmitting entity 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 for comparable types
    of digital audio transmission services and comparable circumstances
    under voluntary license agreements negotiated under 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 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 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 ``Sub-
        scription'';
            (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 striking paragraphs (4) and (9) and redesignating
        paragraphs (2), (3), (5), (6), (7), and (8) as paragraphs (3),
        (5), (9), (12), (13), and (14), respectively;
            (B) by inserting after paragraph (1) the following:
        ``(2) An `archived program' is a predetermined program that is
    available repeatedly on the demand of the transmission recipient
    and that is performed in the same order from the beginning, except
    that an archived program shall not include a recorded event or
    broadcast transmission that makes no more than an incidental use of
    sound recordings, as long as such recorded event or broadcast
    transmission does not contain an entire sound recording or feature
    a particular sound recording.'';
            (C) by inserting after paragraph (3), as so redesignated,
        the following:
        ``(4) A `continuous program' is a predetermined program that is
    continuously performed in the same order and that is accessed at a
    point in the program that 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 digital audio transmission not
    exempt under subsection (d)(1) that is 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, or in the case of a
    subscription service, by all subscribers of the service, 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 noninteractive subscription digital
    audio transmissions and that is not a preexisting subscription
    service or a preexisting satellite digital audio radio service.'';
            (E) by inserting after paragraph (9), as so redesignated,
        the following:
        ``(10) A `preexisting satellite digital audio radio service' is
    a subscription satellite digital audio radio service provided
    pursuant to a satellite digital audio radio service license issued
    by the Federal Communications Commission on or before July 31,
    1998, and any renewal of such license to the extent of the scope of
    the original license, and may include a limited number of sample
    channels representative of the subscription service that are made
    available on a nonsubscription basis in order to promote the
    subscription service.
        ``(11) 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 transmissions to the public for a fee on or
    before July 31, 1998, and may include a limited number of sample
    channels representative of the subscription service that are made
    available on a nonsubscription basis in order to promote the
    subscription service.''; and
            (F) by adding at the end the following:
        ``(15) A `transmission' is either an initial transmission or a
    retransmission.''.
        (5) The amendment made by paragraph (2)(B)(i)(III) of this
    subsection shall be deemed to have been enacted as part of the
    Digital Performance Right in Sound Recordings Act of 1995, and the
    publication of notice of proceedings under section 114(f)(1) of
    title 17, United States Code, as in effect upon the effective date
    of that Act, for the determination of royalty payments shall be
    deemed to have been made for the period beginning on the effective
    date of that Act and ending on December 1, 2001.
        (6) The amendments made by this subsection do not annul, limit,
    or otherwise impair the rights that are preserved by section 114 of
    title 17, United States Code, including the rights preserved by
    subsections (c), (d)(4), and (i) of such section.
    (b) Ephemeral Recordings.--Section 112 of title 17, United States
Code, is amended--
        (1) by redesignating subsection (e) as subsection (f); and
        (2) by inserting after subsection (d) the following:
    ``(e) Statutory License.--(1) A transmitting organization entitled
to transmit to the public a performance of a sound recording under the
limitation on exclusive rights specified by section 114(d)(1)(C)(iv) or
under a statutory license in accordance with section 114(f) is entitled
to a statutory license, under the conditions specified by this
subsection, to make no more than 1 phonorecord of the sound recording
(unless the terms and conditions of the statutory license allow for
more), if the following conditions are satisfied:
        ``(A) The phonorecord is retained and used solely by the
    transmitting organization that made it, and no further phonorecords
    are reproduced from it.
        ``(B) The phonorecord is used solely for the transmitting
    organization's own transmissions originating in the United States
    under a statutory license in accordance with section 114(f) or the
    limitation on exclusive rights specified by section
    114(d)(1)(C)(iv).
        ``(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.
        ``(D) Phonorecords of the sound recording have been distributed
    to the public 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 phonorecord
    under this subsection from a phonorecord lawfully made and acquired
    under the authority of the copyright owner.
    ``(3) Notwithstanding any provision of the antitrust laws, any
copyright owners of sound recordings and any transmitting organizations
entitled to a statutory license under this subsection may negotiate and
agree upon royalty rates and license terms and conditions for making
phonorecords of such sound recordings under this section 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 offered by
transmitting organizations. Any copyright owners of sound recordings or
any transmitting organizations entitled to 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 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 offered by
transmitting organizations. 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; and
        ``(B) the relative roles of the copyright owner and the
    transmitting organization 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 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 a phonorecord 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 as
permitted under 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.
    ``(10) Nothing in this subsection annuls, limits, impairs, or
otherwise affects in any way the existence or value of any of the
exclusive rights of the copyright owners in a sound recording, except
as otherwise provided in this subsection, or in a musical work,
including the exclusive rights to reproduce and distribute a sound
recording or musical work, including by means of a digital phonorecord
delivery, under sections 106(1), 106(3), and 115, and the right to
perform publicly a sound recording or musical work, including by means
of a digital audio transmission, under sections 106(4) and 106(6).''.
    (c) Scope of Section 112(a) of Title 17 Not Affected.--Nothing in
this section or the amendments made by this section shall affect the
scope of section 112(a) of title 17, United States Code, or the
entitlement of any person to an exemption thereunder.
    (d) Procedural Amendments to Chapter 8.--Section 802 of title 17,
United States Code, is amended--
        (1) in subsection (f)--
            (A) in the first sentence by striking ``60'' and inserting
        ``90''; and
            (B) in the third sentence by striking ``that 60-day
        period'' and inserting ``an additional 30-day period''; and
        (2) in subsection (g) by inserting after the second sentence
    the following: ``When this title provides that the royalty rates or
    terms that were previously in effect are to expire on a specified
    date, any adjustment by the Librarian of those rates or terms shall
    be effective as of the day following the date of expiration of the
    rates or terms that were previously in effect, even if the
    Librarian's decision is rendered on a later date.''.
    (e) Conforming Amendments.--(1) Section 801(b)(1) of title 17,
United States Code, is amended in the second sentence by striking
``sections 114, 115, and 116'' and inserting ``sections 114(f)(1)(B),
115, and 116''.
    (2) Section 802(c) of title 17, United States Code, is amended by
striking ``section 111, 114, 116, or 119, any person entitled to a
compulsory license'' and inserting ``section 111, 112, 114, 116, or
119, any transmitting organization entitled to a statutory license
under section 112(f), any person entitled to a statutory license''.
    (3) Section 802(g) of title 17, United States Code, is amended by
striking ``sections 111, 114'' and inserting ``sections 111, 112,
114''.
    (4) Section 802(h)(2) of title 17, United States Code, is amended
by striking ``section 111, 114'' and inserting ``section 111, 112,
114''.
    (5) Section 803(a)(1) of title 17, United States Code, is amended
by striking ``sections 114, 115'' and inserting ``sections 112, 114,
115''.
    (6) Section 803(a)(5) of title 17, United States Code, is amended--
        (A) by striking ``section 114'' and inserting ``section 112 or
    114''; and
        (B) by striking ``that section'' and inserting ``those
    sections''.

SEC. 406. 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.--(1) In the case of a transfer of
copyright ownership under United States law in a motion picture (as the
terms `transfer of copyright ownership' and `motion picture' are
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--
        ``(A) 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
        ``(B) 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.
    ``(2) For purposes of paragraph (1)(A), `knows or has reason to
know' means any of the following:
        ``(A) Actual knowledge that the collective bargaining agreement
    was or will be applicable to the motion picture.
        ``(B)(i) Constructive knowledge that the collective bargaining
    agreement was or will be applicable to the motion picture, arising
    from recordation of a document pertaining to copyright in the
    motion picture under section 205 of title 17 or from publication,
    at a site available to the public on-line that is operated by the
    relevant union, of information that identifies the motion picture
    as subject to a collective bargaining agreement with that union, if
    the site permits commercially reasonable verification of the date
    on which the information was available for access.
        ``(ii) Clause (i) applies only if the transfer referred to in
    subsection (a)(1) occurs--
            ``(I) after the motion picture is completed, or
            ``(II) before the motion picture is completed and--
                ``(aa) within 18 months before the filing of an
            application for copyright registration for the motion
            picture under section 408 of title 17, or
                ``(bb) if no such application is filed, within 18
            months before the first publication of the motion picture
            in the United States.
        ``(C) Awareness of other facts and circumstances pertaining to
    a particular transfer from which it is apparent that the collective
    bargaining agreement was or will be applicable to the motion
    picture.
    ``(b) Scope of Exclusion of Transfers of Public Performance
Rights.--For purposes of this section, the exclusion under subsection
(a) of transfers of copyright ownership in a motion picture that are
limited to public performance rights includes transfers to a
terrestrial broadcast station, cable system, or programmer to the
extent that the station, system, or programmer is functioning as an
exhibitor of the motion picture, either by exhibiting the motion
picture on its own network, system, service, or station, or by
initiating the transmission of an exhibition that is carried on another
network, system, service, or station. When a terrestrial broadcast
station, cable system, or programmer, or other transferee, is also
functioning otherwise as a distributor or as a producer of the motion
picture, the public performance exclusion does not affect any
obligations imposed on the transferee to the extent that it is engaging
in such functions.
    ``(c) Exclusion for Grants of Security Interests.--Subsection (a)
shall not apply to--
        ``(1) a transfer of copyright ownership consisting solely of a
    mortgage, hypothecation, or other security interest; or
        ``(2) a subsequent transfer of the copyright ownership secured
    by the security interest described in paragraph (1) by or under the
    authority of the secured party, including a transfer through the
    exercise of the secured party's rights or remedies as a secured
    party, or by a subsequent transferee.
The exclusion under this subsection shall not affect any rights or
remedies under law or contract.
    ``(d) Deferral Pending Resolution of Bona Fide Dispute.--A
transferee on which obligations are imposed under subsection (a) by
virtue of paragraph (1) of that subsection may elect to defer
performance of such obligations that are subject to a bona fide dispute
between a union and a prior transferor until that dispute is resolved,
except that such deferral shall not stay accrual of any union claims
due under an applicable collective bargaining agreement.
    ``(e) Scope of Obligations Determined by Private Agreement.--
Nothing in this section shall expand or diminish the rights,
obligations, or remedies of any person under the collective bargaining
agreements or assumption agreements referred to in this section.
    ``(f) 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)(1)(B), the transferor shall be
liable to the transferee for any damages suffered by the transferee as
a result of the failure to notify.
    ``(g) Determination of Disputes and Claims.--Any dispute concerning
the application of subsections (a) through (f) 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.
    ``(h) Study.--The Comptroller General, in consultation with the
Register of Copyrights, shall conduct a study of the conditions in the
motion picture industry that gave rise to this section, and the impact
of this section on the motion picture industry. The Comptroller General
shall report the findings of the study to the Congress within 2 years
after the effective date of this chapter.''.
    (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. 407. EFFECTIVE DATE.

    Except as otherwise provided in this title, this title and the
amendments made by this title shall take effect on the date of the
enactment of this Act.

            TITLE V--PROTECTION OF CERTAIN ORIGINAL DESIGNS

SEC. 501. SHORT TITLE.

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

SEC. 502. PROTECTION OF CERTAIN ORIGINAL DESIGNS.

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

              ``CHAPTER 13--PROTECTION OF ORIGINAL DESIGNS

``Sec.
``1301. Designs protected.
``1302. Designs not subject to protection.
``1303. Revisions, adaptations, and rearrangements.
``1304. Commencement of protection.
``1305. Term of protection.
``1306. Design notice.
``1307. Effect of omission of notice.
``1308. Exclusive rights.
``1309. Infringement.
``1310. Application for registration.
``1311. Benefit of earlier filing date in foreign country.
``1312. Oaths and acknowledgments.
``1313. Examination of application and issue or refusal of registration.
``1314. Certification of registration.
``1315. Publication of announcements and indexes.
``1316. Fees.
``1317. Regulations.
``1318. Copies of records.
``1319. Correction of errors in certificates.
``1320. Ownership and transfer.
``1321. Remedy for infringement.
``1322. Injunctions.
``1323. Recovery for infringement.
``1324. Power of court over registration.
``1325. Liability for action on registration fraudulently obtained.
``1326. Penalty for false marking.
``1327. Penalty for false representation.
``1328. Enforcement by Treasury and Postal Service.
``1329. Relation to design patent law.
``1330. Common law and other rights unaffected.
``1331. Administrator; Office of the Administrator.
``1332. No retroactive effect.

``Sec. 1301. 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 1302(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. 1302. 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. 1303. 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 1302 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. 1304. 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 1313(a) or the date the design is first made
public as defined by section 1310(b).

``Sec. 1305. 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 1304.
    ``(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. 1306. Design notice

    ``(a) Contents of Design Notice.--(1) Whenever any design for which
protection is sought under this chapter is made public under section
1310(b), the owner of the design shall, subject to the provisions of
section 1307, mark it or have it marked legibly with a design notice
consisting of--
        ``(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. 1307. Effect of omission of notice

    ``(a) Actions With Notice.--Except as provided in subsection (b),
the omission of the notice prescribed in section 1306 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 1306 shall prevent any recovery under section
1323 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. 1308. 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. 1309. Infringement

    ``(a) Acts of Infringement.--Except as provided in subsection (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. 1310. 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 2 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 1306, 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. 1311. 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 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. 1312. 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. 1313. 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 1310, and upon payment of the fee prescribed under section
1316, 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. 1314. 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. 1315. 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. 1316. 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. 1317. Regulations

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

``Sec. 1318. 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. 1319. 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. 1320. 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 1312 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. 1321. 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 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 1313(c).

Sec. 1322. 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. 1323. 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. 1324. 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. 1325. 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. 1326. 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
1306, 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. 1327. 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. 1328. 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 1308 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 1308 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. 1329. Relation to design patent law

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

``Sec. 1330. 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. 1331. 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. 1332. No retroactive effect

    ``Protection under this chapter shall not be available for any
design that has been made public under section 1310(b) before the
effective date of this chapter.''.

SEC. 503. 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:

``13. Protection of Original Designs.............................1301''.

    (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 13 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.--(1) Section 1400(a) of
title 28, United States Code, is amended by inserting ``or designs''
after ``mask works''.
    (2) The section heading for section 1400 of title 28, United States
Code, is amended to read as follows:

``Patents and copyrights, mask works, and designs''.

    (3) The item relating to section 1400 in the table of sections at
the beginning of chapter 87 of title 28, United States Code, is amended
to read as follows:

``1400.  Patents and copyrights, mask works, and designs.''.

    (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 13 of title 17,'' after ``title 17''.

SEC. 504. JOINT STUDY OF THE EFFECT OF THIS TITLE.

    (a) In General.--Not later than 1 year after the date of the
enactment of this Act, and not later than 2 years after such date of
enactment, the Register of Copyrights and the Commissioner of Patents
and Trademarks shall submit to the Committees on the Judiciary of the
Senate and the House of Representatives a joint report evaluating the
effect of the amendments made by this title.
    (b) Elements for Consideration.--In carrying out subsection (a),
the Register of Copyrights and the Commissioner of Patents and
Trademarks shall consider--
        (1) the extent to which the amendments made by this title has
    been effective in suppressing infringement of the design of vessel
    hulls;
        (2) the extent to which the registration provided for in
    chapter 13 of title 17, United States Code, as added by this title,
    has been utilized;
        (3) the extent to which the creation of new designs of vessel
    hulls have been encouraged by the amendments made by this title;
        (4) the effect, if any, of the amendments made by this title on
    the price of vessels with hulls protected under such amendments;
    and
        (5) such other considerations as the Register and the
    Commissioner may deem relevant to accomplish the purposes of the
    evaluation conducted under subsection (a).

SEC. 505. EFFECTIVE DATE.

    The amendments made by sections 502 and 503 shall take effect on
the date of the enactment of this Act and shall remain in effect until
the end of the 2-year period beginning on such date of enactment. No
cause of action based on chapter 13 of title 17, United States Code, as
added by this title, may be filed after the end of that 2-year period.

                               Speaker of the House of Representatives.

                            Vice President of the United States and
                                               President of the Senate.
