[DOCID: f:hr551p1.105]
From the House Reports Online via GPO Access
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105th Congress                                            Rept. 105-551
                        HOUSE OF REPRESENTATIVES

 2d Session                                                      Part 1
_______________________________________________________________________


     WIPO COPYRIGHT TREATIES IMPLEMENTATION AND ON-LINE COPYRIGHT
                   INFRINGEMENT LIABILITY LIMITATION

_______________________________________________________________________

  May 22, 1998.--Committed to the Committee of the Whole House on the
              State of the Union and ordered to be printed

                                _______


Mr. Coble, from the Committee on the Judiciary, submitted the following

                              R E P O R T

                        [To accompany H.R. 2281]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to whom was referred the
bill (H.R. 2281) to amend title 17, United States Code, to
implement the World Intellectual Property Organization
Copyright Treaty and Performances and Phonograms Treaty, having
considered the same, reports favorably thereon with an
amendment and recommends that the bill as amended do pass.

                           TABLE OF CONTENTS
                                                                   Page
The Amendment..............................................           1
Purpose and Summary........................................           9
Background and Need for the Legislation....................           9
Hearings...................................................          12
Committee Consideration....................................          13
Committee Oversight Findings...............................          13
Committee on Government Reform and Oversight Findings......          13
New Budget Authority and Tax Expenditures..................          13
Congressional Budget Office Cost Estimate..................          13
Constitutional Authority Statement.........................          15
Section-by-Section Analysis and Discussion.................          15
Changes in Existing Law Made by the Bill, as Reported......          29

    The amendment is as follows:
    Strike out all after the enacting clause and insert in lieu
thereof the following:

            TITLE I--WIPO COPYRIGHT TREATIES IMPLEMENTATION

SEC. 101. SHORT TITLE.

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

SEC. 102. TECHNICAL AMENDMENTS.

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

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

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

       ``CHAPTER 12--COPYRIGHT PROTECTION AND MANAGEMENT SYSTEMS

``Sec.
``1201. Circumvention of copyright protection systems.
``1202. Integrity of copyright management information.
``1203. Civil remedies.
``1204. Criminal offenses and penalties.

``Sec. 1201. Circumvention of copyright protection systems

    ``(a) Violations Regarding Circumvention of Technological
Protection Measures.--(1) No person shall circumvent a technological
protection measure that effectively controls access to a work protected
under this title.
    ``(2) No person shall manufacture, import, offer to the public,
provide, or otherwise traffic in any technology, product, service,
device, component, or part thereof, that--
            ``(A) is primarily designed or produced for the purpose of
        circumventing a technological protection measure that
        effectively controls access to a work protected under this
        title;
            ``(B) has only limited commercially significant purpose or
        use other than to circumvent a technological protection measure
        that effectively controls access to a work protected under this
        title; or
            ``(C) is marketed by that person or another acting in
        concert with that person with that person's knowledge for use
        in circumventing a technological protection measure that
        effectively controls access to a work protected under this
        title.
    ``(3) As used in this subsection--
            ``(A) to `circumvent a technological protection measure'
        means to descramble a scrambled work, to decrypt an encrypted
        work, or otherwise to avoid, bypass, remove, deactivate, or
        impair a technological protection measure, without the
        authority of the copyright owner; and
            ``(B) a technological protection measure `effectively
        controls access to a work' if the measure, in the ordinary
        course of its operation, requires the application of
        information, or a process or a treatment, with the authority of
        the copyright owner, to gain access to the work.
    ``(b) Additional Violations.--(1) No person shall manufacture,
import, offer to the public, provide, or otherwise traffic in any
technology, product, service, device, component, or part thereof,
that--
            ``(A) is primarily designed or produced for the purpose of
        circumventing protection afforded by a technological protection
        measure that effectively protects a right of a copyright owner
        under this title in a work or a portion thereof;
            ``(B) has only limited commercially significant purpose or
        use other than to circumvent protection afforded by a
        technological protection measure that effectively protects a
        right of a copyright owner under this title in a work or a
        portion thereof; or
            ``(C) is marketed by that person or another acting in
        concert with that person with that person's knowledge for use
        in circumventing protection afforded by a technological
        protection measure that effectively protects a right of a
        copyright owner under this title in a work or a portion
        thereof.
    ``(2) As used in this subsection--
            ``(A) the term `circumvent protection afforded by a
        technological protection measure' means avoiding, bypassing,
        removing, deactivating, or otherwise impairing a technological
        protection measure; and
            ``(B) a technological protection measure `effectively
        protects a right of a copyright owner' under this title if the
        measure, in the ordinary course of its operation, prevents,
        restricts, or otherwise limits the exercise of a right of a
        copyright owner under this title.
    ``(c) Importation.--The importation into the United States, the
sale for importation, or the sale within the United States after
importation by the owner, importer, or consignee of any technology,
product, service, device, component, or part thereof as described in
subsection (a) or (b) shall be actionable under section 337 of the
Tariff Act of 1930 (19 U.S.C. 1337).
    ``(d) Other Rights, Etc., Not Affected.--Nothing in this section
shall affect rights, remedies, limitations, or defenses to copyright
infringement, including fair use, under this title.
    ``(e) Exemption for Nonprofit Libraries, Archives, and Educational
Institutions.--(1) A nonprofit library, archives, or educational
institution which gains access to a commercially exploited copyrighted
work solely in order to make a good faith determination of whether to
acquire a copy of that work for the sole purpose of engaging in conduct
permitted under this title shall not be in violation of subsection
(a)(1). A copy of a work to which access has been gained under this
paragraph--
            ``(A) may not be retained longer than necessary to make
        such good faith determination; and
            ``(B) may not be used for any other purpose.
    ``(2) The exemption available under paragraph (1) shall only apply
with respect to a work when an identical copy of that work is not
reasonably available in another form.
    ``(3) A nonprofit library, archives, or educational institution
that willfully for the purpose of commercial advantage or financial
gain violates paragraph (1)--
            ``(A) shall, for the first offense, be subject to the civil
        remedies under section 1203; and
            ``(B) shall, for repeated or subsequent offenses, in
        addition to the civil remedies under section 1203, forfeit the
        exemption provided under paragraph (1).
    ``(4) This subsection may not be used as a defense to a claim under
subsection (a)(2) or (b), nor may this subsection permit a nonprofit
library, archives, or educational institution to manufacture, import,
offer to the public, provide, or otherwise traffic in any technology
which circumvents a technological protection measure.
    ``(5) In order for a library or archives to qualify for the
exemption under this subsection, the collections of that library or
archives shall be--
            ``(A) open to the public; or
            ``(B) available not only to researchers affiliated with the
        library or archives or with the institution of which it is a
        part, but also to other persons doing research in a specialized
        field.
    ``(f) Law Enforcement and Intelligence Activities.--This section
does not prohibit any lawfully authorized investigative, protective, or
intelligence activity of a law enforcement agency of the United States,
a State, or a political subdivision of a State, or of an intelligence
agency of the United States.

``Sec. 1202. Integrity of copyright management information

    ``(a) False Copyright Management Information.--No person shall
knowingly--
            ``(1) provide copyright management information that is
        false, or
            ``(2) distribute or import for public distribution
        copyright management information that is false,
with the intent to induce, enable, facilitate, or conceal infringement.
    ``(b) Removal or Alteration of Copyright Management Information.--
No person shall, without the authority of the copyright owner or the
law--
            ``(1) intentionally remove or alter any copyright
        management information,
            ``(2) distribute or import for distribution copyright
        management information, knowing that the copyright management
        information has been removed or altered without authority of
        the copyright owner or the law, or
            ``(3) distribute, import for distribution, or publicly
        perform works, copies of works, or phonorecords, knowing that
        the copyright management information has been removed or
        altered without authority of the copyright owner or the law,
knowing or, with respect to civil remedies under section 1203, having
reasonable grounds to know, that it will induce, enable, facilitate, or
conceal an infringement of any right under this title.
    ``(c) Definition.--As used in this chapter, the term `copyright
management information' means the following information conveyed in
connection with copies or phonorecords of a work or performances or
displays of a work, including in digital form:
            ``(1) The title and other information identifying the work,
        including the information set forth on a notice of copyright.
            ``(2) The name of, and other identifying information about,
        the author of a work.
            ``(3) The name of, and other identifying information about,
        the copyright owner of the work, including the information set
        forth in a notice of copyright.
            ``(4) With the exception of public performances of works by
        radio and television broadcast stations, the name of, and other
        identifying information about, a performer whose performance is
        fixed in a work other than an audiovisual work.
            ``(5) With the exception of public performances of works by
        radio and television broadcast stations, in the case of an
        audiovisual work, the name of, and other identifying
        information about, a writer, performer, or director who is
        credited in the audiovisual work.
            ``(6) Identifying numbers or symbols referring to such
        information or links to such information.
            ``(7) Such other information as the Register of Copyrights
        may prescribe by regulation, but not including any information
        concerning the user of a copyrighted work.
    ``(d) Law Enforcement and Intelligence Activities.--This section
does not prohibit any lawfully authorized investigative, protective, or
intelligence activity of a law enforcement agency of the United States,
a State, or a political subdivision of a State, or of an intelligence
agency of the United States.

``Sec. 1203. Civil remedies

    ``(a) Civil Actions.--Any person injured by a violation of section
1201 or 1202 may bring a civil action in an appropriate United States
district court for such violation.
    ``(b) Powers of the Court.--In an action brought under subsection
(a), the court--
            ``(1) may grant temporary and permanent injunctions on such
        terms as it deems reasonable to prevent or restrain a
        violation;
            ``(2) at any time while an action is pending, may order the
        impounding, on such terms as it deems reasonable, of any device
        or product that is in the custody or control of the alleged
        violator and that the court has reasonable cause to believe was
        involved in a violation;
            ``(3) may award damages under subsection (c);
            ``(4) in its discretion may allow the recovery of costs by
        or against any party other than the United States or an officer
        thereof;
            ``(5) in its discretion may award reasonable attorney's
        fees to the prevailing party; and
            ``(6) may, as part of a final judgment or decree finding a
        violation, order the remedial modification or the destruction
        of any device or product involved in the violation that is in
        the custody or control of the violator or has been impounded
        under paragraph (2).
    ``(c) Award of Damages.--
            ``(1) In general.--Except as otherwise provided in this
        chapter, a person committing a violation of section 1201 or
        1202 is liable for either--
                    ``(A) the actual damages and any additional profits
                of the violator, as provided in paragraph (2); or
                    ``(B) statutory damages, as provided in paragraph
                (3).
            ``(2) Actual damages.--The court shall award to the
        complaining party the actual damages suffered by the party as a
        result of the violation, and any profits of the violator that
        are attributable to the violation and are not taken into
        account in computing the actual damages, if the complaining
        party elects such damages at any time before final judgment is
        entered.
            ``(3) Statutory damages.--(A) At any time before final
        judgment is entered, a complaining party may elect to recover
        an award of statutory damages for each violation of section
        1201 in the sum of not less than $200 or more than $2,500 per
        act of circumvention, device, product, component, offer, or
        performance of service, as the court considers just.
            ``(B) At any time before final judgment is entered, a
        complaining party may elect to recover an award of statutory
        damages for each violation of section 1202 in the sum of not
        less than $2,500 or more than $25,000.
            ``(4) Repeated violations.--In any case in which the
        injured party sustains the burden of proving, and the court
        finds, that a person has violated section 1201 or 1202 within 3
        years after a final judgment was entered against that person
        for another such violation, the court may increase the award of
        damages up to triple the amount that would otherwise be
        awarded, as the court considers just.
            ``(5) Innocent violations.--
                    ``(A) In general.--The court in its discretion may
                reduce or remit the total award of damages in any case
                in which the violator sustains the burden of proving,
                and the court finds, that the violator was not aware
                and had no reason to believe that its acts constituted
                a violation.
                    ``(B) Nonprofit library, archives, or educational
                institution.--In the case of a nonprofit library,
                archives, or educational institution, the court shall
                remit damages in any case in which the library,
                archives, or educational institution sustains the
                burden of proving, and the court finds, that the
                library, archives, or educational institution was not
                aware and had no reason to believe that its acts
                constituted a violation.

``Sec. 1204. Criminal offenses and penalties

    ``(a) In General.--Any person who violates section 1201 or 1202
willfully and for purposes of commercial advantage or private financial
gain--
            ``(1) shall be fined not more than $500,000 or imprisoned
        for not more than 5 years, or both, for the first offense; and
            ``(2) shall be fined not more than $1,000,000 or imprisoned
        for not more than 10 years, or both, for any subsequent
        offense.
    ``(b) Limitation for Nonprofit Library, Archives, or Educational
Institution.--Subsection (a) shall not apply to a nonprofit library,
archives, or educational institution.
    ``(c) Statute of Limitations.--Notwithstanding section 507(a) of
this title, no criminal proceeding shall be maintained under subsection
(a) unless such proceeding is commenced within 5 years after the cause
of action arose.''.

SEC. 104. CONFORMING AMENDMENT.

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

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

SEC. 105. EFFECTIVE DATE.

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

     TITLE II--ON-LINE COPYRIGHT INFRINGEMENT LIABILITY LIMITATION

SEC. 201. SHORT TITLE.

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

SEC. 202. LIMITATIONS ON LIABILITY FOR COPYRIGHT INFRINGEMENT.

    (a) In General.--Chapter 5 of title 17, United States Code, is
amended by adding after section 511 the following new section:

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

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

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

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

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

                          Purpose and Summary

    H.R. 2281 contains two titles. The first, entitled the
``WIPO Copyright Treaties Implementation Act,'' implements
World Intellectual Property Organization sponsored copyright
agreements signed by the United States. The second, entitled
the ``On-Line Copyright Infringement Liability Limitation
Act,'' limits the liability on-line and Internet service
providers may incur as a result of transmissions containing
copyrighted works traveling through systems and networks under
their control.

                Background and Need For the Legislation

The ``WIPO Copyright Treaties Implementation Act''
    The digital environment now allows users of electronic
media to send and retrieve perfect reproductions of copyrighted
material easily and nearly instantaneously, to or from
locations around the world. With this evolution in technology,
the law must adapt in order to make digital networks safe
places to disseminate and exploit copyrighted works.
    In Geneva, Switzerland, in December, 1996, a Diplomatic
Conference was convened under the auspices of the World
Intellectual Property Organization (``WIPO''), to negotiate new
multilateral treaties to protect copyrighted material in the
digital environment and to provide stronger international
protection to performers and producers of phonograms. In
addition to the digital issues, the latter is important to
provide guarantees abroad of the same strong protection for
American records, tapes, and compact discs abroad that is
provided domestically.
    The conference produced two treaties, the ``WIPO Copyright
Treaty'' and the ``WIPO Performances and Phonograms Treaty,''
which were adopted by consensus by over 150 countries. The
treaties will ensure adequate protection for American works in
countries around the world at a time when borderless digital
means of dissemination are becoming increasingly popular. While
such rapid dissemination of perfect copies will benefit both
U.S. owners and consumers, it will unfortunately also
facilitate pirates who aim to destroy the value of American
intellectual property.
    The successful negotiation of the treaties brings with it
the need for domestic implementing legislation. Title I of this
bill contains two substantive additions to U.S. domestic law,
in addition to some technical changes, to bring the law into
compliance with the treaties so that they may be ratified
appropriately.
    The treaties do not require any change in the substance of
copyright rights or exceptions in U.S. law. They do, however,
require two technological adjuncts to the copyright law,
intended to ensure a thriving electronic marketplace for
copyrighted works on the Internet. The treaties address the
problems posed by the possible circumvention of technologies,
such as encryption, which will be used to protect copyrighted
works in the digital environment and to secure on-line
licensing systems. To comply with the treaties, the U.S. must
make it unlawful to defeat technological protections used by
copyright owners to protect their works. This would include
preventing unauthorized access as well as the manufacture and
sale of devices primarily designed to decode encrypted
copyrighted material. Further, the U.S. must, under the
treaties, make it unlawful to intentionally provide false
information, or to deliberately alter or delete information
provided by a copyright owner which identifies a work, its
owner or performer, and the terms and conditions for its use.
    When copyrighted material is adequately protected in the
digital environment, a plethora of works will be distributed
and performed over the Internet. In order to protect the owner,
copyrighted works will most likely be encrypted and made
available to consumers once payment is made for access to a
copy of the work. There will be those who will try to profit
from the works of others by decoding the encrypted codes
protecting copyrighted works, or engaging in the business of
providing devices or services to enable others to do so. A new
``Section 1201'' to the Copyright Act is required by both WIPO
Treaties to make it unlawful to engage in such activity. The
changes contained in the new Section 1201 are meant to parallel
similar types of protection afforded by Federal
telecommunications law and state laws. Just as Congress acted
in the areas of cable television and satellite transmissions to
prevent unauthorized interception and descrambling of signals,
it is now necessary to address the on-line environment.
    While there are no objections to preventing piracy on the
Internet, it is not easy to draw the line between legitimate
and non-legitimate uses of decoding devices, and to account for
devices which serve legitimate purposes. The bill, as reported,
presents a reasonable compromise by preventing only the
manufacture or sale of devices that: (1) are ``primarily
designed'' to grant free, unauthorized access to copyrighted
works; (2) have only limited commercially significant purpose
or use other than to grant such free access; or (3) are
intentionally marketed for use in granting such free access.
This would not include normal household devices such as
Videocasette Recorders or personal computers, since such
devices are not ``primarily designed'' to circumvent
technological protections granting access to copyrighted works,
have obvious and numerous commercially significant purposes and
uses other than circumventing such protections, and are not
intentionally marketed to circumvent such protections. It would
however, prevent a manufacturer from making a device that is
primarily designed for such a purpose and labeling it as a
common household device.
    A new ``Section 1202'' to the Copyright Act is required by
both WIPO Treaties to ensure the integrity of the electronic
marketplace by preventing fraud and misinformation. The section
prohibits intentionally providing false copyright management
information, such as the title of a work or the name of its
author, with the intent to induce, enable, facilitate or
conceal infringement. It also prohibits the deliberate deleting
or altering copyright management information. This section will
operate to protect consumers from misinformation as well as
authors and copyright owners from interference with the private
licensing process.
The ``On-Line Copyright Infringement Liability Limitation Act''
    The ``On-Line Copyright Infringement Liability Limitation
Act'' addresses concerns raised by a number of on-line service
and Internet access providers regarding their potential
liability when infringing material is transmitted on-line
through their services. While several judicially created
doctrines currently address the question of when liability is
appropriate, providers have sought greater certainty through
legislation as to how these doctrines will apply in the digital
environment.
    Title II of this bill codifies the core of current case law
dealing with the liability of on-line service providers, while
narrowing and clarifying the law in other respects. It offers
the advantage of incorporating and building on those judicial
applications of existing copyright law to the digital
environment that have been widely accepted as fair and
reasonable.
    The bill distinguishes between direct infringement and
secondary liability, treating each separately. This structure
is consistent with evolving case law, and appropriate in light
of the different legal bases for and policies behind the
different forms of liability.
    As to direct infringement, liability is ruled out for
passive, automatic acts engaged in through a technological
process initiated by another. Thus, the bill essentially
codifies the result in the leading and most thoughtful judicial
decision to date: Religious Technology Center v. Netcom On-line
Communications Services, Inc., 907 F. Supp. 1361 (N.D. Cal.
1995). In doing so, it overrules those aspects of Playboy
Enterprises, Inc. v. Frena, 839 F. Supp. 1552 (M.D. Fla. 1993),
insofar as that case suggests that such acts by service
providers could constitute direct infringement, and provides
certainty that Netcom and its progeny, so far only a few
district court cases, will be the law of the land.
    As to secondary liability, the bill changes existing law in
two primary respects: (1) no monetary relief can be assessed
for the passive, automatic acts identified in Religious
Technology Center v. Netcom On-line Communications Services,
Inc.; and (2) the current criteria for finding contributory
infringement or vicarious liability are made clearer and
somewhat more difficult to satisfy. Injunctive relief will,
however, remain available, ensuring that it is possible for
copyright owners to secure the cooperation of those with the
capacity to prevent ongoing infringement. Failure to qualify
for the exemption or limitation does not mean that the provider
is necessarily an infringer or liable for monetary damages. If
the exemption or limitation does not apply, the doctrines of
existing law will come into play, and liability will only
attach to the extent that the court finds that the requirements
for direct infringement, contributory infringement or vicarious
liability have been met, that the conduct is not excused by any
other exception or limitation, and that monetary remedies are
appropriate. Where monetary remedies remain available under the
bill, the ordinary rules for courts to follow in setting the
amounts of those remedies will still apply. This includes the
remittal of statutory damages under paragraph 504 (c)(2) for
non-profits and public broadcasting entities based on the
reasonable belief that the infringing act was a fair use.
    Safeguards in the bill include language intended to guard
against interference with privacy; a provision ensuring that
nonprofit institutions such as universities will not be
prejudiced when they determine that an allegedly infringing use
is fair use; a provision protecting service providers from
lawsuits when they act to assist copyright owners in limiting
or preventing infringement; and a provision requiring payment
of costs incurred when someone knowingly makes false
accusations of on-line infringement.

                                Hearings

    The Committee's Subcommittee on Courts and Intellectual
Property held two days of hearings on this legislation on
September 16 and 17, 1997 (Serial #33). Testimony was received
from The Honorable Bruce Lehman, Assistant Secretary of
Commerce and Commissioner of Patents and Trademarks, Patent and
Trademark Office, United States Department of Commerce; The
Honorable Marybeth Peters, Register of Copyrights, United
States Copyright Office, The Library of Congress; Roy Neel,
President and Chief Executive Officer, United States Telephone
Association; Jack Valenti, President and Chief Executive
Officer, Motion Picture Association of America; Robert
Holleyman, President, Business Software Alliance; M.R.C.
Greenwood, Chancellor, University of California, Santa Cruz, on
behalf of the Association of American Universities and the
National Association of State Universities and Land Grant
Colleges; Tushar Patel, Vice President and Managing Director,
USWeb; Lawrence Kenswil, Executive Vice President, Business and
Legal Affairs, Universal Music Group; Marc Jacobson, General
Counsel, Prodigy Services, Inc.; Ken Wasch, President, Software
Publishers Association; Ronald G. Dunn, President, Information
Industry Association; John Bettis, Songwriter, on behalf of the
American Society of Composers Authors and Publishers; Allee
Willis, Songwriter, on behalf of Broadcast Music, Incorporated;
Robert L. Oakley, Professor of Law, Georgetown University Law
Center and Director, Georgetown Law Library, on behalf of a
Coalition of Library and Educational Organizations; Johnny
Cash, Vocal Artist, with Hilary Rosen, President and Chief
Executive Officer, Recording Industry Association of America;
Allan Adler, Vice President, Legal and Governmental Affairs,
Association of American Publishers; Gail Markels, General
Counsel and Senior Vice President, Interactive Digital Software
Association; Mike Kirk, Executive Director, American
Intellectual Property Law Association; Thomas Ryan, President,
SciTech Software, Inc.; Mark Belinsky, Vice President, Copy
Protection Group, Macrovision, Inc.; Douglas Bennett,
President, Earlham College, Vice President, American Council of
Learned Societies, on behalf of the Digital Future Coalition;
Edward J. Black, President, Computer and Communications
Industry Association; Christopher Byrne, Director of
Intellectual Property, Silicon Graphics, Inc., on behalf of the
Information Technology Industry Council; and Gary Shapiro,
President, Consumer Electronics Manufacturer's Association (a
sector of the Electronic Industries Association), and Chairman,
Home Recording Rights Coalition.

                        Committee Consideration

    On February 26, 1998, the Subcommittee conducted a markup
of H.R. 2281, the ``WIPO Copyright Treaties Implementation
Act,'' and on H.R. 3209, the ``On-Line Copyright Infringement
Liability Limitation Act.''
    H.R. 2281 was reported favorably by voice vote, a quorum
being present, to the full Committee in the form of a single
amendment in the nature of a substitute incorporating
amendments adopted by the Subcommittee.
    H.R. 3209 was reported favorably by voice vote, a quorum
being present, to the full Committee, without amendment.
    On April 1, 1998, the full Committee conducted a markup of
H.R. 2281, as reported by the Subcommittee. The Committee
adopted, by voice vote, an amendment in the nature of a
substitute offered by Mr. Coble, which made the provisions of
H.R. 2281, as reported, title I of the bill, and certain
provisions of H.R. 3209 title II of the bill.
    The Committee favorably reported, by voice vote, a quorum
being present, H.R. 2281, as amended, to the House.

                      Committee Oversight Findings

    In compliance with clause 2(l)(3)(A) of rule XI of the
Rules of the House of Representatives, the Committee reports
that the findings and recommendations of the Committee, based
on oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.

         Committee on Government Reform and Oversight Findings

    No findings or recommendations of the Committee on
Government Reform and Oversight were received as referred to in
clause 2(l)(3)(D) of rule XI of the Rules of the House of
Representatives.

               New Budget Authority and Tax Expenditures

    Clause 2(l)(3)(B) of House Rule XI is inapplicable because
this legislation does not provide new budgetary authority or
increased tax expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 2(l)(C)(3) of rule XI of the
Rules of the House of Representatives, the Committee sets
forth, with respect to the bill, H.R. 2281, the following
estimate and comparison prepared by the Director of the
Congressional Budget Office under section 403 of the
Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, April 16, 1998.
Hon. Henry J. Hyde,
Chairman, Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 2281, the WIPO
Copyright Treaties Implementation Act.
    If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Kim Cawley,
who can be reached at 226-2860.
            Sincerely,

                                           June E. O'Neill, Director.
    Enclosure.

    cc: Honorable John Conyers, Jr.,
         Ranking Minority Member.
H.R. 2281--WIPO Copyright Treaties Implementation Act
    CBO estimates that enacting H.R. 2281 would have no
significant impact on the federal budget. Enacting the bill
would establish new criminal penalties and thus could affect
both receipts and direct spending. Hence, pay-as-you-go
procedures would apply, but we expect that any changes in
receipts and direct spending would be insignificant.
    Title I of H.R. 2281 would amend U.S. copyright law to
comply with two treaties produced by the December 1996
conference of the World Intellectual Property Organization one
regarding the use of copyrighted material in digital
environments, and the other dealing with international
copyright protection of performers and producers of phonograms.
Section 1204 would establish criminal fines of up to $1 million
for anyone attempting to circumvent copyright protection
systems, or falsifying or altering copyright management
information. Enacting this provision could increase
governmental receipts from the collection of fines, but we
estimate that any such increase would be less than $500,000
annually. Criminal fines are deposited in the Crime Victims
Fund and are spent in the following year. Thus any change in
direct spending from the fund would also amount to less than
$500,000 annually.
    Title II would limit the liability for copyright
infringement of persons who are providers of on-line services
or network access. Based on information from the Copyright
Office, CBO estimates this provision would have no budgetary
impact.
    Section 4 of the Unfunded Mandates Reform Act of 1995
excludes from the application of that act any legislative
provisions that are necessary for the ratification or
implementation of international treaty obligations. CBO has
determined that Title I of the bill fits within that exclusion
because it is necessary for the implementation of the WIPO
Copyright Treaty and the WIPO Performances and Phonograms
Treaty. Title II of the bill does not contain any
intergovernmental or private-sector mandates.
    The CBO staff contact for this estimate is Kim Cawley, who
can be reached at 226-2860. This estimate was approved by
Robert A. Sunshine, Deputy Assistant Director for Budget
Analysis.

                        Constitutional Authority

    Pursuant to Rule XI, clause 2(1)(4) of the Rules of the
House of Representatives, the Committee finds the authority for
this legislation in Article I, clause 8, section 8 of the
Constitution.

                      Section-by-Section Analysis

Section 101: Short Title
    This section provides that this Act may be cited as the
``WIPO Copyright Treaties Implementation Act.''
Section 102: Technical Changes
            Summary
    To comply with the obligations of the WIPO Treaties,
several technical amendments to the U.S. Copyright Act are
necessary. These amendments are needed to ensure that works
from countries that join the two new WIPO Treaties, including
works in existence on the date each treaty becomes effective
for the United States, will be protected in the United States
on a formality-free basis, as required by the provisions of
each treaty. Three sections of the Copyright Act require
amendment: (1) section 104, which specifies the conditions on
which works from other countries are protected in the United
States; (2) section 104A, which restores protection to certain
preexisting works from other countries that have fallen into
the public domain in the United States; and (3) section 411(a),
which makes copyright registration a precondition to bringing
suit for infringement for some works. In addition, the
amendments made to these sections require some additions to,
and changes in, the definition section of the Copyright Act,
section 101.
            Changes to Section 101: Definitions.
    The bill amends section 101 to define ``treaty party'' as
``any country or intergovernmental organization that is a party
to an international agreement'' and to define ``international
agreement'' to include, inter alia, the two new WIPO Treaties.
Definitions of the two new WIPO Treaties are also provided. In
addition, a definition of ``United States work'' was added for
purposes of amended section 411.
            Changes to Section 104: Subject Matter of Copyright:
                    National Origin.
    Existing section 104 identifies the criteria that must be
met for a work to qualify for protection under the U.S.
copyright law (i.e., ``points of attachment''). Among those
protected under section 104 are nationals or domiciliaries of
those countries with which we have an appropriate Treaty
relationship. Section 104, as it is presently written,
explicitly identifies those Treaty relationships, but does not
refer to the two new WIPO Treaties. Therefore, section 104
needs to be amended to provide for points of attachment for the
two new WIPO Treaties.
    This bill amends section 104 so that all countries that
have copyright relations with the United States would be
referred to collectively by the term ``treaty parties.'' This
change, in conjunction with the amendments to section 101,
which define ``treaty party'' and ``international agreement,''
serves to ensure that the two new WIPO Treaties are covered by
section 104. The bill also amends section 104 to extend
protection to foreign works from any treaty party based on four
points of attachment: nationality of the author, place of first
publication of the work, place of fixation of the sounds
embodied in a sound recording, and the situs of a constructed
architectural work.
    The way section 104 is presently written requires that it
be amended each time U.S. treaty membership changes. By
defining ``treaty party'' in section 101 and amending section
104 to refer to ``treaty party,'' future changes in the
treaties to which the U.S. is a party would not require changes
to section 104. It is much clearer and less unwieldy to have a
single set of criteria for eligibility in section 104 as
proposed by this bill, rather than multiple, overlapping
criteria in a long list of complex definitions in section 101.
If we join any future treaties, they can simply be added to the
list of ``international agreements'' without any detailed
amendments repeating the criteria for eligibility. The
amendment to section 104 also makes clear that membership in
the Geneva Phonograms Convention and the WIPO Performances and
Phonograms Treaty provides national eligibility for sound
recordings only, not other types of works.
            Changes to Section 104A: Copyright in Restored Works
    The bill amends section 104A(h) by adding the two new WIPO
Treaties to the definitions of ``date of adherence or
proclamation'' and ``eligible country.'' It would also add a
paragraph to the definition of ``restored work'' to ensure that
copyrighted works other than sound recordings do not qualify as
restored works where the sole basis for protection in the
United States is adherence to the WIPO Performances and
Phonograms Treaty.
            Changes to Section 411(a): Registration and Infringement
                    Actions
    In its current form, section 411(a) requires works to be
registered with the Copyright Office before suit can be brought
for their infringement, but exempts Berne Convention works
whose country of origin is not the United States. The section
must be amended to exempt works from members of the two new
WIPO Treaties.
    Amendments to section 411(a) reframe the registration
requirement in the affirmative--essentially the converse of the
current section. In other words, the provision would state
affirmatively that ``United States works'' must be registered
before suit, with ``United States works'' defined as the
converse of the current definition of works whose country of
origin is not the United States. Similar to the changes in
section 104, this section could be easily updated each time the
United States joins another treaty, without the need to change
several interrelated provisions of the Act.
            Change to Section 507(a)
    Currently, section 507(a) provides for a three-year statute
of limitations period for all criminal copyright actions.
Section 507(a) is amended to recognize exceptions to the three-
year limitations period if expressly provided elsewhere in
Title 17. New chapter 12 of Title 17 provides for a five-year
criminal limitation period.
Section 103: Copyright Protection Systems and Copyright Management
        Information
            Summary
    The two new WIPO Treaties include substantively identical
provisions on technological measures of protection (also
commonly referred to as the ``black box'' or
``anticircumvention'' provisions). These provisions require
contracting parties to provide ``adequate legal protection and
effective legal remedies against the circumvention of effective
technological measures that are used by authors in connection
with the exercise of their rights under this Treaty or the
Berne Convention and that restrict acts, in respect of their
works, which are not authorized by the authors concerned or
permitted by law.''
    Both of the new WIPO treaties also include substantively
identical provisions on copyright management information. These
provisions require contracting parties to protect the integrity
of copyright management information. The treaties define
copyright management information as ``information which
identifies the work, the author of the work, the owner of any
right in the work, or information about the terms and
conditions of use of the work, and any numbers or codes that
represent such information, when any of these items of
information is attached to a copy of a work or appears in
connection with the communication of a work to the public.''
    Legislation is required to comply with both of these
provisions. To accomplish this, the bill adds a new chapter
(chapter twelve) to Title 17 of the United States Code. This
new chapter twelve includes four sections--(1) section 1201,
which prohibits the circumvention of technological copyright
protection measures; (2) section 1202, which protects the
integrity of copyright management information; (3) section
1203, which provides for civil remedies for violations of
sections 1201 and 1202; and (4) section 1204, which provides
for criminal penalties for violations of sections 1201 and
1202.
            Section 1201: Circumvention of Copyright Protection Systems
    Subsection (a) applies when a person has not obtained
authorized access to a copy or a phonorecord of a work for
which the copyright owner has put in place a technological
measure that effectively controls access to his or her work.
The relevant terminology is defined in paragraph (a)(3), as
described below.
    Paragraph (a)(1). The act of circumventing a technological
protection measure put in place by a copyright owner to control
access to a copyrighted work is the electronic equivalent of
breaking into a locked room in order to obtain a copy of a
book. Paragraph (a)(1) establishes a general prohibition
against gaining unauthorized access to a work by circumventing
a technological protection measure put in place by the
copyright owner where such protection measure otherwise
effectively controls access to a work protected under Title 17
of the U.S. Code.
    Paragraph (a)(1) does not apply to the subsequent actions
of a person once he or she has obtained authorized access to a
copy of a work protected under Title 17, even if such actions
involve circumvention of additional forms of technological
protection measures. In a fact situation where the access is
authorized, the traditional defenses to copyright infringement,
including fair use, would be fully applicable. So, an
individual would not be able to circumvent in order to gain
unauthorized access to a work, but would be able to do so in
order to make fair use of a work which he or she has acquired
lawfully.
    Paragraph (a)(2). In order to provide meaningful protection
and enforcement of the copyright owner's right to control
access to his or her copyrighted work, this paragraph
supplements the prohibition against the act of circumvention in
paragraph (a)(1) with prohibitions on creating and making
available certain technologies, products and services used,
developed or advertised to defeat technological protections
against unauthorized access to a work. Similar laws have been
enacted in related contexts. See, e.g., 17 U.S.C. Sec. 1002(a)
(prohibiting the import, manufacture, or distribution of
digital audio recording equipment lacking specified
characteristics and prohibiting the import, manufacture, or
distribution of any device, or the offer to perform any
service, the primary purpose or effect of which is to
circumvent the serial copy management system required for
digital audio equipment); 47 U.S.C. Sec. 553(a)(2) (prohibiting
the manufacture or distribution of equipment intended for the
unauthorized reception of cable television service); 47 U.S.C.
Sec. 605(e)(4) (prohibiting the manufacture, assembly, import,
and sale of equipment used in the unauthorized decryption of
satellite cable programming.)
    Specifically, paragraph (a)(2) prohibits manufacturing,
importing, offering to the public, providing, or otherwise
trafficking in certain technologies, products, services,
devices, components, or parts that can be used to circumvent a
technological protection measure that otherwise effectively
controls access to a work protected under Title 17. It is
drafted carefully to target ``black boxes,'' and to ensure that
legitimate multipurpose devices can continue to be made and
sold. For a technology, product, service, device, component, or
part thereof to be prohibited under this subsection, one of
three conditions must be met. It must:
          (1) be primarily designed or produced for the purpose
        of circumventing;
          (2) have only a limited commercially significant
        purpose or use other than to circumvent; or
          (3) be marketed by the person who manufactures it,
        imports it, offers it to the public, provides it or
        otherwise traffics in it, or by another person acting
        in concert with that person, for use in circumventing a
        technological protection measure that effectively
        controls access to a work protected under Title 17.
    This provision is designed to protect copyright owners, and
simultaneously allow the development of technology.
    Paragraph (a)(3) defines certain terms used throughout
paragraph (a):
          (1) ``circumvent a technological protection
        measure''--for purposes of paragraph (a) only, which
        covers protections against unauthorized initial access
        to a work, this term means ``to descramble a scrambled
        work, to decrypt an encrypted work, or otherwise to
        avoid, bypass, remove, deactivate, or impair a
        technological protection measure, without the authority
        of the copyright owner.''
          (2) ``effectively controls access to a work''--a
        technological protection measure ``effectively controls
        access to a work'' if the measure, in the ordinary
        course of its operation, requires the application of
        information, or a process or a treatment, with the
        authority of the copyright owner, to gain access to the
        work.
    Subsection (b) applies when a person has obtained
authorized access to a copy or a phonorecord of a work, but the
copyright owner has put in place technological measures that
effectively protect his or her right under Title 17 to control
or limit further use of the copyrighted work.
    Paragraph(b)(1). Paralleling paragraph (a)(2), above,
paragraph (b)(1) seeks to provide meaningful protection and
enforcement of copyright owners' use of technological
protection measures to protect their rights under Title 17 by
prohibiting the act of making or selling the technological
means to overcome these protections and facilitate copyright
infringement. Paragraph (b)(1) prohibits manufacturing,
importing, offering to the public, providing, or otherwise
trafficking in certain technologies, products, services,
devices, components, or parts thereof that can be used to
circumvent a technological protection measure that effectively
protects a right of a copyright owner under Title 17 in a work
or portion thereof. Again, for a technology, product, service,
device, component, or part thereof to be prohibited under this
subsection, one of three conditions must be met. It must:
          (1) be primarily designed or produced for the purpose
        of circumventing;
          (2) have only limited commercially significant
        purpose or use other than to circumvent; or
          (3) be marketed by the person who manufactures it,
        imports it, offers it to the public, provides it, or
        otherwise traffics in it, or by another person acting
        in concert with that person, for use in circumventing a
        technological protection measure that effectively
        protects the right of a copyright owner under Title 17
        in a work or a portion thereof.
    Like paragraph (a)(2), this provision is designed to
protect copyright owners, and simultaneously allow the
development of technology.
    Paragraph (b)(2) defines certain terms used in subsection
(b):
          (1) ``circumvent protection afforded by a
        technological protection measure'' is defined as
        ``avoiding, bypassing, removing, deactivating, or
        otherwise impairing a technological protection
        measure.''
          (2) ``effectively protects a right of a copyright
        owner under Title 17''--a technological protection
        measure effectively protects a right of a copyright
        owner under Title 17 ``if the measure, in the ordinary
        course of its operation, prevents, restricts, or
        otherwise limits the exercise of a right under Title 17
        of a copyright owner.''
    Subsection (c) prohibits the importation, sale for
importation, or sale within the United States after importation
by the owner, importer or consignee of any technology, product,
service, device, component, or part thereof covered by
subsections (a) or (b). This paragraph further provides that
violations of this provision are actionable under section 1337
of Title 19 of the U.S. Code, which authorizes actions by the
International Trade Commission against unfair import practices.
    Subsection (d) provides that section 1201 shall not have
any effect on rights, remedies, limitations, or defenses to
copyright infringement, including fair use, under Title 17.
This provision is intended to ensure that none of the
provisions in section 1201 affect the existing legal regime
established in the Copyright Act and case law interpreting that
statute.
    Subsection (e) allows a nonprofit library, nonprofit
archives or nonprofit educational institution to obtain access
to a copyrighted work for the sole purpose of making a good
faith determination as to whether it wishes to acquire a copy,
or portion of a copy, of that work in order to engage in
conduct permitted under the Copyright Act, such as a fair use
under section 107. A qualifying institution may not gain access
for a period of time longer than necessary to determine whether
it wishes to obtain a copy, or portion of a copy, for such
purposes and the right to gain access shall not apply for any
other purpose.
    The right to obtain access under this paragraph only
applies when the nonprofit library, nonprofit archives, or
nonprofit educational institution cannot obtain a copy of an
identical work by other means, and such an entity may not use
the exemption in this paragraph for commercial advantage or
financial gain without penalty.
    This paragraph shall not be used as a defense to the
prohibitions on manufacturing or selling devices contained in
paragraph (a)(2) or subsection (b).
    Subsection (f) makes clear that the prohibitions in section
1201 do not prohibit any lawfully authorized investigative,
protective, or intelligence activity by or at the direction of
a federal, state, or local law enforcement agency, or of an
intelligence agency of the United States.
            Section 1202: Integrity of Copyright Management Information
    Subsection (a) establishes a general prohibition against
intentionally providing false copyright management information
(``CMI''), as defined in subsection (c), and against
distributing or importing for distribution false CMI. There are
two prerequisites that must be met for these prohibitions to be
violated: (1) the person providing, distributing or importing
the false CMI must know the CMI is false, and (2) the person
providing, distributing, or importing the false CMI must do so
with the intent to induce, enable, facilitate or conceal an
infringement of any right under Title 17. The prohibition in
this subsection does not include ordinary and customary
practices of broadcasters or inadvertent omission of credits
from broadcasts of audiovisual works since, inter alia, such
omissions do not entail knowing provision of false CMI with
intent to induce, enable, facilitate or conceal a copyright
infringement.
    Subsection (b) establishes a general prohibition against
removing or altering CMI and against distributing or importing
for distribution altered CMI or distributing, importing for
distribution or publicly performing works in which CMI has been
removed. There are three specific acts prohibited if they are
committed without the authority of the copyright owner or the
law, and if they are done knowing, or with respect to civil
remedies under section 1203, having reasonable grounds to know,
that they will induce, enable, facilitate or conceal a
copyright infringement: (1) intentionally removing or altering
CMI; (2) distributing or importing for distribution CMI knowing
that it has been altered without the authority of the copyright
owner or the law; or (3) distributing, importing for
distribution, or publicly performing works, copies of works, or
phonorecords knowing that CMI has been removed or altered
without the authority of the copyright owner or the law. The
prohibition in this subsection does not include ordinary and
customary practices of broadcasters or inadvertent omission of
credits from broadcasts of audiovisual works since, inter alia,
such omissions are not made with knowledge that they will
induce, enable, facilitate or conceal a copyright infringement.
    Subsection (c) defines CMI. To fall within the definition,
there is a threshold requirement that the information be
conveyed in connection with copies or phonorecords,
performances or displays of the copyrighted work. The term
``conveyed'' is used in its broadest sense and is not meant to
require any type of transfer, physical or otherwise, of the
information. It merely requires that the information be
accessible in conjunction with, or appear with, the work being
accessed.
    Subsection (c) defines CMI as (1) the title of a work or
other information that identifies the work; (2) the author's
name or other information that identifies the author; (3) the
copyright owner's name or other information that identifies the
copyright owner; and (4) terms and conditions for use of a
work. Numbers and symbols which refer to or represent the above
information are also included within the definition of CMI. As
noted above, both treaties require that numbers and symbols be
included within the definition of CMI. Links, such as embedded
pointers and hyperlinks, to the above information are also
included. The phrase ``links to such information'' was included
because removing or altering a link to the information will
have the same adverse effect as removing or altering the
information itself. Finally, paragraph (c)(6) of the definition
permits the Register of Copyrights to prescribe by regulation
other information that, if conveyed in connection with a work,
is to be protected as CMI. To protect the privacy of users of
copyrighted works, however, the Register of Copyrights may not
include within the definition of CMI any information concerning
users of copyrighted works.
    Subsection (d) makes clear that the prohibitions in section
1202 do not prohibit any lawfully authorized investigative,
protective or intelligence activity by or at the direction of a
federal, state or local law enforcement agency, or of an
intelligence agency of the United States.
    Section 1202 does not mandate the use of any type of CMI.
It merely protects the integrity of CMI if a party chooses to
use it in connection with a copyrighted work, prohibiting its
deliberate deletion or alteration. It also should be noted that
the definition of ``copyright management information'' does not
encompass, nor is it intended to encompass, tracking or usage
information relating to the identity of users of the works. The
definition of CMI encompasses only the types of information
listed, such as the author's name, the copyright owner's name,
copyright notice information, and title of the work. It would
be inconsistent with the purpose and construction of this bill
and contrary to the protection of privacy to include tracking
and usage information within the definition of CMI.
    Section 1202 imposes liability for specified acts. It does
not address the question of liability for persons who
manufacture devices or provide services.
            Section 1203. Civil Remedies
    Section 1203 is divided into three paragraphs. Subsection
(a) sets forth the general proposition that civil remedies are
available for violations of sections 1201 and 1202. This
paragraph establishes the jurisdiction for such civil actions
as the ``appropriate U.S. district court'' and limits standing
to bring a civil action to those persons injured by a violation
of section 1201 or 1202.
    Subsection (b) sets out the powers of the court that hears
the case. Subsection (b) permits the court to (1) grant
temporary and permanent injunctions; (2) order the impounding
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) award damages; (4)
allow the recovery of costs by or against any party; (5) award
reasonable attorney's fees to the prevailing party; and (6)
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.
    Subsection (c) is divided into five sections, each of which
addresses the awarding of damages to the prevailing party.
Paragraph (c)(1) establishes the general proposition that a
person who violates section 1201 or 1202 is liable for either
actual damages and any additional profits of the violator or
statutory damages. Paragraphs (c)(2) and (c)(3) specify that
the complaining party may finalize a choice between the two
types of damage awards at any time until the final judgment is
entered.
    Paragraph (c)(2) provides that, when the prevailing party
opts for actual damages, the court shall award to that party
the actual damages suffered by the party as a result of the
violations, as well as any profits of the violator that are
attributable to the violation and are not taken into account in
computing the actual damages.
    Paragraph (c)(3) provides different statutory award amounts
depending upon whether the civil action involves a section 1201
or 1202 violation. When the violation is a section 1201
violation and the prevailing party opts to recover an award of
statutory damages, the prevailing party will be awarded
statutory damages of not less than $200 or more than $2,500 per
act of circumvention, device, product, component, offer, or
performance of service. When the violation is a section 1202
violation and the prevailing party opts to recover an award of
statutory damages, the prevailing party will be awarded
statutory damages of not less than $2,500 or more than $25,000
for each violation.
    Paragraphs (c)(4) and (c)(5) set forth circumstances in
which it would be appropriate to increase or decrease a damage
award. Paragraph (c)(4) provides for an increased damage award
when the violator is a repeat offender. Specifically, when the
prevailing party establishes that a person violated section
1201 or 1202 within three years after a final judgment was
entered against that person for another such violation, the
award of damages may be increased to a sum of up to triple the
amount that would otherwise be awarded. Paragraph (c)(5)(A)
provides that, when a violator of section 1201 or 1202 was not
aware and had no reason to believe that its acts constituted a
violation, the damage award may be reduced or remitted.
Paragraph (c)(5)(B) provides that, when a nonprofit library,
nonprofit archives, or nonprofit educational institution
violator of section 1201 or 1202 was not aware and had no
reason to believe that its acts constituted a violation, the
damage award shall be remitted entirely.
            Section 1204: Criminal Penalties
    Subsection (a) provides for the availability of criminal
penalties for violations of sections 1201 and 1202. The
standard applicable under this section is identical to the
standard used in section 506 of the Copyright Act to establish
criminal violations. Subsection (a) also sets forth the
penalties available for a criminal violations of sections 1201
and 1202 as ``not more than $500,000 or imprisonment for not
more than five years, or both.'' If the person who is found
guilty of criminal violation of sections 1201 or 1202 is a
repeat offender, section 1204 provides that penalties may be
increased to ``not more than $1,000,000 or imprisonment for not
more than ten years, or both.''.
    Subsection (b) exempts completely any nonprofit library,
nonprofit archives or nonprofit educational institution from
the criminal penalties contained in subsection (a).
    Subsection (c) provides for a five-year statute of
limitations for criminal offenses under chapter 12.
Section 104: Conforming Amendments
    This section amends the table of chapters for Title 17 to
reflect the addition of new chapter twelve.
Section 105: Effective Date
    This section establishes the effective date of the proposed
amendments in this bill as the date the bill is enacted into
law. There are several exceptions to this effective date. These
exceptions only apply to the technical amendments that are
proposed in section 102 of the bill. Section 105 of the bill
changes the effective date of any provision in section 102 of
the bill that specifically refers to the WIPO Copyright Treaty
or the WIPO Performances and Phonograms Treaty from the date
the bill is enacted into law to the date the Treaty enters into
force.
    These exceptions were necessary because, as of the drafting
of this bill, the two treaties have not entered into force and
will not do so until three months after 30 States deposit their
instruments of ratification or accession with the Director
General of WIPO. The exceptions ensure that the amendments that
refer specifically to the two treaties do not become effective
until the treaties themselves become effective. In addition, it
was necessary to refer to the each treaty separately in this
section, because it is possible that the two treaties may enter
into force at different times and the amendments particular to
each treaty had to be grouped together to ensure that the
provisions relating specifically to one treaty do not become
effective once the other treaty enters into force. Finally, it
was necessary to add the phrase ``with respect to the United
States'' to ensure that, if the Treaties enter into force
before the United States deposits its instrument of accession,
the United States does not extend benefits to Member States of
these Treaties until the United States becomes party to the
Treaties.
Section 201: Short Title
    This section establishes the short title of the bill as the
``On-Line Copyright Infringement Liability Limitation Act.''
Section 202: Limitations
    Paragraph 512(a)(1) exempts a provider from liability on
the basis of direct infringement for transmitting material over
its system or network at the request of a third party, and for
the intermediate storage of such material, in certain
circumstances. The exempted storage and transmissions are those
carried out through an automatic technological process that is
indiscriminate--i.e., the provider takes no part in the
selection of the particular material transmitted--where the
copies are retained no longer than necessary for the purpose of
carrying out the transmission. This conduct would ordinarily
include forwarding of customers' Usenet postings to other
Internet sites in accordance with configuration settings that
apply to all such postings. It would also include routing of
packets from one point to another on the Internet.
    This exemption codifies the result of Religious Technology
Center v. Netcom On-line Communications Services, Inc., 907 F.
Supp. 1361 (N.D. Cal. 1995) (``Netcom''), with respect to
liability of providers for direct infringement. See id. at
1368-70. In Netcom the court held that a provider is not liable
for direct infringement where it takes no ``affirmative action
that [directly results] in copying . . . works other than by
installing and maintaining a system whereby software
automatically forwards messages received from subscribers . . .
and temporarily stores copies on its system.'' By referring to
temporary storage of copies, Netcom recognizes implicitly that
intermediate copies may be retained without liability for only
a limited period of time. The requirement in paragraph
512(a)(1) that ``no copy [be] maintained on the system or
network . . . for a longer period than reasonably necessary for
the transmission'' is drawn from the facts of the Netcom case,
and is intended to codify this implicit limitation in the
Netcom holding.
    Paragraph 512(a)(2) exempts a provider from any type of
monetary relief under theories of contributory infringement or
vicarious liability for the same activities for which providers
are exempt from liability for direct infringement under
paragraph 512(a)(1). This provision extends the Netcom holding
with respect to direct infringement to remove monetary exposure
for such limited activities for claims arising under doctrines
of secondary liability. Taken together, paragraphs (1) and (2)
mean that providers will never be liable for any monetary
damages for this type of transmission of material at the
request of third parties or for intermediate storage of such
material in the course of the transmission. Copyright owners
may still seek an injunction against such activities under
theories of secondary liability, if they can establish the
necessary elements of a claim.
    Paragraph 512(a)(3) similarly exempts a provider from
monetary relief under theories of contributory infringement or
vicarious liability for conduct going beyond the scope of
paragraph (1), where a provider's level of participation in and
knowledge of the infringement are low. Such conduct could
include providing storage on a server and transmitting material
from such storage in response to requests from users of the
Internet. In addition, the provision modifies and clarifies the
knowledge element of contributory infringement and the
financial benefit element of vicarious liability. Even if a
provider satisfies the common-law elements of contributory
infringement or vicarious liability, it will be exempt from
monetary liability if it satisfies the criteria in
subparagraphs (A) and (B). As under paragraph (2), copyright
owners may still seek an injunction even if the provider
qualifies for the exemption from monetary relief.
    The knowledge standard in subparagraph (A), in addition to
actual knowledge, includes ``facts or circumstances from which
infringing activity is apparent.'' This would include a notice
or any other ``red flag''--information of any kind that a
reasonable person would rely upon. It may, in appropriate
circumstances include the absence of customary indicia of
ownership or authorization, such as a standard and accepted
digital watermark or other copyright management information. As
subsection (b) makes clear, the bill imposes no obligation on a
provider to seek out such red flags. Once a provider becomes
aware of a red flag, however, it ceases to qualify for the
exemption.
    This standard differs from existing law, under which a
defendant may be liable for contributory infringement if it
knows or should have known that material was infringing.
    The financial benefit standard in subparagraph (B) is
intended to codify and clarify the direct financial benefit
element of vicarious liability as it has been interpreted in
cases such as Marobie-FL, Inc. v. National Association of Fire
Equipment Distributors,--F. Supp.--(N.D. Ill. 1997). As in
Marobie, receiving a one-time set-up fee and flat periodic
payments for service from a person engaging in infringing
activities would not constitute receiving ``a financial benefit
directly attributable to the infringing activity.'' Nor is
subparagraph (B) intended to cover fees based on the length of
the message (per number of bytes, for example) or by connect
time. It would, however, include any such fees where the value
of the service lies in providing access to infringing material.
    The ``right and ability to control'' language in
Subparagraph (B) codifies the second element of vicarious
liability. It is not intended to limit this element purely to
formal indicia of control such as the presence or absence of a
contractual provision. Rather, Subparagraph (B) is intended to
preserve existing case law that examines all relevant aspects
of the relationship between the primary and secondary
infringer.
    Paragraph (b)(1) states specifically that the knowledge
standard in subsection (a) shall not be construed to condition
the limitation contained in that subsection on monitoring a
network for infringement or searching out suspicious
information. Once one becomes aware of such information,
however, one may have an obligation to check further. Paragraph
(b)(2) states specifically that nothing in subsection (a) shall
condition the limitation contained in that subsection on
accessing, removing or disabling access to material, if such
accessing, removing or disabling is prohibited by law. This is
intended to prevent the accessing, removing or disabling of
information contained in transmissions protected under other
laws, such as electronic mail protected under the Electronic
Communications Privacy Act.
    The exemption and limitations provided in this subsection
are affirmative defenses, like the exceptions and limitations
established elsewhere in title 17. While the burden of proving
the elements of direct or contributory infringement, or
vicarious liability, rests with the copyright owner in a suit
brought for copyright infringement, a defendant asserting this
exemption or limitation as an affirmative defense in such a
suit bears the burden of establishing its entitlement.
    Subsections (c) through (e) are intended to protect
providers when they remove, disable or block access to material
and remove possible disincentives to cooperate with copyright
owners by taking steps to prevent infringement. These
paragraphs ensure that a person who responds to information
indicating infringement by removing, disabling or blocking
access to material will not be penalized for having done so.
    Subsection (c) is essentially a ``Good Samaritan'' defense.
It ensures that a person who acts responsibly upon obtaining
information indicating an infringement, whether by receiving a
notice or otherwise, and removes, disables or blocks access to
the relevant material, cannot be held liable for having done
so. This section would block claims by anyone based on the
take-down itself (e.g., interference with contract claims).
    Subsection (d) preserves potential legal defenses. It
ensures that whatever decision is made by a person who has
obtained information indicating infringement, whether to
remove, disable or block access to the material, or not to do
so because of a potential defense, cannot be used against that
person in an infringement suit. For example, an educational
institution which receives notice of infringement and
determines that the material may be subject to a fair use
defense would still be able to assert such a defense whether or
not it chose to block access to the material.
    Subsection (e) protects against losses caused by reliance
on false information. It provides penalties for knowing
material misrepresentations that material on-line is
infringing, allowing the recovery of any damages incurred by a
person who relies on such misrepresentations in removing,
disabling or blocking access to such material.
    Subsection (f) defines a ``provider'' as a provider of on-
line services or network access.
Section 203: Limitations on Exclusive Rights; Computer Programs
    This legislation amends Section 117 to ensure that
independent service organizations do not inadvertently become
liable for copyright infringement merely because they have
turned on a machine in order to service its hardware
components.
    When a computer is activated, that is when it is turned on,
certain software or parts thereof (generally the machine's
operating system software) is automatically copied into the
machine's random access memory, or ``RAM''. During the course
of activating the computer, different parts of the operating
system may reside in the RAM at different times because the
operating system is sometimes larger than the capacity of the
RAM. Because such copying has been held to constitute a
``reproduction'' under Sec. 106 of the Copyright Act (see MAI
Sys. Corp. v. Peak Computer, 991 F.2d 511 (9th Cir. 1993),
cert. dismissed, 114 S.Ct. 671 (1994)), a person who activated
the machine without the authorization of the copyright owner of
that software could be liable for copyright infringement. This
legislation has the narrow and specific intent of relieving
independent service providers, persons unaffiliated with either
the owner or lessee of the machine, from liability under the
Copyright Act when, solely by virtue of activating the machine
in which a computer program resides, they inadvertently cause
an unauthorized copy of that program to be made.
    The legislation is narrowly crafted to achieve the
foregoing objective without prejudicing the rights of copyright
owners of computer software. Thus, for example, the amendment
does not relieve from liability persons who make unauthorized
adaptations, modifications or other changes to the software.
The amendment also does not relieve from liability persons who
make any unauthorized copies of software other than those
caused solely by activation of the machine.
    The operative provisions, and limitations, are in two new
subsections to Section 117: subsections (c) and (d).
    Subsection (c) delineates the specific circumstances under
which a reproduction of a computer program would not constitute
infringement of copyright. The goal is to maintain undiminished
copyright protection afforded under the Copyright Act to
authors of computer programs, while making it possible for
third parties to perform servicing of the hardware. It states
that it is not an infringement of copyright for the owner or
lessee of a machine to make or authorize the making of a copy
of a computer program provided that the following conditions
are met:
    First, subsection (c) itself makes clear that the copy of
the computer program must have been made solely and
automatically by virtue of turning on the machine in order to
perform repairs or maintenance on the hardware components of
the machine. Moreover, the copy of the computer program which
is reproduced as a direct and sole consequence of activation
must be an authorized copy that has lawfully been installed in
the machine. Authorized copies of computer programs are only
those copies that have been made available with the consent of
the copyright owner. Also, the acts performed by the service
provider must be authorized by the owner or lessee of the
machine.
    Second, in accordance with paragraph (c)(1), the resulting
copy may not be used by the person performing repairs or
maintenance of the hardware components of the machine in any
manner other than to effectuate the repair or maintenance of
the machine. Once these tasks are completed, the copy of the
program must be destroyed, which generally will happen
automatically once the machine is turned off.
    Third, as is made clear in paragraph (c)(2), the amendment
is not intended to diminish the rights of copyright owners of
those computer programs, or parts thereof, that also may be
loaded into RAM when the computer is turned on, but which did
not need to be so loaded in order for the machine to be turned
on. A hardware manufacturer or software developer might, for
example, provide diagnostic and utility programs that load into
RAM along with or as part of the operating system, even though
they market those programs as separate products--either as
freestanding programs, or pursuant to separate licensing
agreements. Indeed, a password or other technical access device
is sometimes required for the owner of the machine to be able
to gain access to such programs. In other cases, it is not the
hardware or software developer that has arranged for certain
programs automatically to be reproduced when the machine is
turned on; rather, the owner of the machine may have configured
its computer to load certain applications programs into RAM as
part of the boot-up process (such as a word processing program
on a personal computer). This amendment is not intended to
derogate from the rights of the copyright owners of such
programs. In order to avoid inadvertent copyright infringement,
these programs need to be covered by subsection (c), but only
to the extent that they are automatically reproduced when the
machine is turned on. This legislation is not intended to
legitimize unauthorized access to and use of such programs just
because they happen to be resident in the machine itself and
are reproduced with or as part of the operating system when the
machine is turned on. According to paragraph (c)(2), if such a
program is accessed or used without the authorization of the
copyright owner, the initial reproduction of the program shall
not be deemed exempt from infringement under subsection (c).
    Subsection (d) defines two terms not previously defined by
the Copyright Act. Paragraph (1) defines the term
``maintenance.'' These acts can include, but are not limited
to, cleaning the machine, tightening connections, installing
new components such as memory chips, circuit boards and hard
disks, checking the proper functioning of these components, and
other similar acts.
    Paragraph (2) of subsection (d) defines the term
``repair.'' Acts of repairing the hardware include, but are not
limited to, replacing worn or defective components such as
memory chips, circuit boards and hard disks, correcting the
improper installation of new components, and other similar
acts.
    Both paragraphs (1) and (2) of subsection (d) are subject
to the same limitations, which are intended to clarify that
activating a machine in order to perform maintenance or repair
does not constitute infringement under subsection (c) if the
maintenance or repair is undertaken to make the machine work in
accordance with the parameters specified for such a machine and
its component parts. Because technological improvements may
lead customers to upgrade their machines, the language of both
definitions authorizes service providers to maintain those
components of the hardware that have been installed since the
time the machine was originally acquired, or to install new
components. But their acts shall be deemed non-infringing under
subsection (c) only if the components being serviced have been
lawfully acquired and installed. Finally, the terms
``maintenance'' and ``repair'' do not include unauthorized
adaptations, modifications, error corrections or any other
changes to any software which may be in the machine being
serviced.

H.L.C.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3 of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, existing law in which no change
is proposed is shown in roman):

                      TITLE 17, UNITED STATES CODE

Chap.                                                               Sec.
      Subject Matter and Scope of Copyright..........................101
     * * * * * * *
      Copyright Protection and Management Systems...................1201
     * * * * * * *

CHAPTER 1--SUBJECT MATTER AND SCOPE OF COPYRIGHT

           *       *       *       *       *       *       *

Sec. 101. Definitions

    Except as otherwise provided in this title, as used in this
title, the following terms and their variant forms mean the
following:

           *       *       *       *       *       *       *

            The ``Berne Convention'' is the Convention for the
        Protection of Literary and Artistic Works, signed at
        Berne, Switzerland, on September 9, 1886, and all acts,
        protocols, and revisions thereto.
            [A work is a ``Berne Convention work'' if--
                    [(1) in the case of an unpublished work,
                one or more of the authors is a national of a
                nation adhering to the Berne Convention, or in
                the case of a published work, one or more of
                the authors is a national of a nation adhering
                to the Berne Convention on the date of first
                publication;
                    [(2) the work was first published in a
                nation adhering to the Berne Convention, or was
                simultaneously first published in a nation
                adhering to the Berne Convention and in a
                foreign nation that does not adhere to the
                Berne Convention;
                    [(3) in the case of an audiovisual work--
                            [(A) if one or more of the authors
                        is a legal entity, that author has its
                        headquarters in a nation adhering to
                        the Berne Convention; or
                            [(B) if one or more of the authors
                        is an individual, that author is
                        domiciled, or has his or her habitual
                        residence in, a nation adhering to the
                        Berne Convention;
                    [(4) in the case of a pictorial, graphic,
                or sculptural work that is incorporated in a
                building or other structure, the building or
                structure is located in a nation adhering to
                the Berne Convention; or
                    [(5) in the case of an architectural work
                embodied in a building, such building is
                erected in a country adhering to the Berne
                Convention.
        For purposes of paragraph (1), an author who is
        domiciled in or has his or her habitual residence in, a
        nation adhering to the Berne Convention is considered
        to be a national of that nation. For purposes of
        paragraph (2), a work is considered to have been
        simultaneously published in two or more nations if its
        dates of publication are within 30 days of one
        another.]

           *       *       *       *       *       *       *

            [The ``country of origin'' of a Berne Convention
        work, for purposes of section 411, is the United States
        if] For purposes of section 411, a work is a ``United
        States work'' only if--
                    (1) in the case of a published work, the
                work is first published--
                            (A) in the United States;
                            (B) simultaneously in the United
                        States and another [nation or nations
                        adhering to the Berne Convention]
                        treaty party or parties, whose law
                        grants a term of copyright protection
                        that is the same as or longer than the
                        term provided in the United States;
                            (C) simultaneously in the United
                        States and a foreign nation that [does
                        not adhere to the Berne Convention] is
                        not a treaty party; or
                            (D) in a foreign nation that [does
                        not adhere to the Berne Convention] is
                        not a treaty party, and all of the
                        authors of the work are nationals,
                        domiciliaries, or habitual residents
                        of, or in the case of an audiovisual
                        work legal entities with headquarters
                        in, the United States;

           *       *       *       *       *       *       *

                    (3) in the case of a pictorial, graphic, or
                sculptural work incorporated in a building or
                structure, the building or structure is located
                in the United States.
        [For the purposes of section 411, the ``country of
        origin'' of any other Berne Convention work is not the
        United States.]

           *       *       *       *       *       *       *

            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.

           *       *       *       *       *       *       *

            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.

           *       *       *       *       *       *       *

            A ``treaty party'' is a country or
        intergovernmental organization other than the United
        States that is a party to an international agreement.

           *       *       *       *       *       *       *

            The ``WIPO Copyright Treaty'' is the WIPO Copyright
        Treaty concluded at Geneva, Switzerland, on December
        20, 1996.
            The ``WIPO Performances and Phonograms Treaty'' is
        the WIPO Performances and Phonograms Treaty concluded
        at Geneva, Switzerland, on December 20, 1996.

           *       *       *       *       *       *       *

            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.

           *       *       *       *       *       *       *

Sec. 104. Subject matter of copyright: National origin

    (a) Unpublished Works.--The works specified by sections 102
and 103, while unpublished, are subject to protection under
this title without regard to the nationality or domicile of the
author.
    (b) Published Works.--The works specified by sections 102
and 103, when published, are subject to protection under this
title if--
            (1) on the date of first publication, one or more
        of the authors is a national or domiciliary of the
        United States, or is a national, domiciliary, or
        sovereign authority of a [foreign nation that is a
        party to a copyright treaty to which the United States
        is also a party] treaty party, or is a stateless
        person, wherever that person may be domiciled; or
            (2) the work is first published in the United
        States or in a foreign nation that, on the date of
        first publication, is a [party to the Universal
        Copyright Convention] treaty party; or
            (3) the work is a sound recording that was first
        fixed in a treaty party; or
            (4) the work is a [Berne Convention work]
        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; or
            [(3)] (5) the work is first published by the United
        Nations or any of its specialized agencies, or by the
        Organization of American States; or
            [(5)] (6) the work comes within the scope of a
        Presidential proclamation. Whenever the President finds
        that a particular foreign nation extends, to works by
        authors who are nationals or domiciliaries of the
        United States or to works that are first published in
        the United States, copyright protection on
        substantially the same basis as that on which the
        foreign nation extends protection to works of its own
        nationals and domiciliaries and works first published
        in that nation, the President may by proclamation
        extend protection under this title to works of which
        one or more of the authors is, on the date of first
        publication, a national, domiciliary, or sovereign
        authority of that nation, or which was first published
        in that nation. The President may revise, suspend, or
        revoke any such proclamation or impose any conditions
        or limitations on protection under a proclamation.
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.

           *       *       *       *       *       *       *

    (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.

Sec. 104A. Copyright in restored works

    (a) * * *

           *       *       *       *       *       *       *

    (h) Definitions.--For purposes of this section and section
109(a):
            (1) The term ``date of adherence or proclamation''
        means the earlier of the date on which a foreign nation
        which, as of the date the WTO Agreement enters into
        force with respect to the United States, is not a
        nation adhering to the Berne Convention or a WTO member
        country, becomes--
                    [(A) a nation adhering to the Berne
                Convention or a WTO member country; or
                    [(B) subject to a Presidential proclamation
                under subsection (g).]
                    (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).

           *       *       *       *       *       *       *

            [(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 member of the
                Berne Convention; or
                    [(C) after such date of enactment becomes
                subject to a proclamation under subsection (g).
        For purposes of this section, a nation that is a member
        of the Berne Convention on the date of the enactment of
        the Uruguay Round Agreements Act shall be construed to
        become an eligible country on such date of enactment.]
            (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).

           *       *       *       *       *       *       *

            (6) The term ``restored work'' means an original
        work of authorship that--
                    (A) * * *

           *       *       *       *       *       *       *

                    (C) is in the public domain in the United
                States due to--
                            (i) * * *

           *       *       *       *       *       *       *

                            (iii) lack of national eligibility;
                        [and]
                    (D) has at least one author or rightholder
                who was, at the time the work was created, a
                national or domiciliary of an eligible country,
                and if published, was first published in an
                eligible country and not published in the
                United States during the 30-day period
                following publication in such eligible
                country[.]; and
                    (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.

           *       *       *       *       *       *       *

            (8) The ``source country'' of a restored work is--
                    (A) a nation other than the United States;
                    (B) in the case of an unpublished work--
                            (i) the eligible country in which
                        the author or rightholder is a national
                        or domiciliary, or, if a restored work
                        has more than 1 author or rightholder,
                        of which the majority of foreign
                        authors or rightholders are nationals
                        or domiciliaries [of eligible
                        countries]; or

           *       *       *       *       *       *       *

            [(9) 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.]

           *       *       *       *       *       *       *

Sec. 117. Limitations on exclusive rights: Computer programs

    [Notwithstanding] (a) Making of Additional Copy or
Adaptation by Owner of Copy.--Notwithstanding the provisions of
section 106, it is not an infringement for the owner of a copy
of a computer program to make or authorize the making of
another copy or adaptation of that computer program provided:
            (1) * * *

           *       *       *       *       *       *       *

    [Any exact] (b) Lease, Sale, or Other Transfer of
Additional Copy or Adaptation.--Any exact copies prepared in
accordance with the provisions of this section may be leased,
sold, or otherwise transferred, along with the copy from which
such copies were prepared, only as part of the lease, sale, or
other transfer of all rights in the program. Adaptations so
prepared may be transferred only with the authorization of the
copyright owner.
    (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.

           *       *       *       *       *       *       *

CHAPTER 4--COPYRIGHT NOTICE, DEPOSIT, AND REGISTRATION

           *       *       *       *       *       *       *

Sec. 411. Registration and infringement actions

    (a) Except for [actions for infringement of copyright in
Berne Convention works whose country of origin is not the
United States and] an action brought for a violation of the
rights of the author under section 106A(a), and subject to the
provisions of subsection (b), no action for infringement of the
copyright in any United States work shall be instituted until
registration of the copyright claim has been made in accordance
with this title. In any case, however, where the deposit,
application, and fee required for registration have been
delivered to the Copyright Office in proper form and
registration has been refused, the applicant is entitled to
institute an action for infringement if notice thereof, with a
copy of the complaint, is served on the Register of Copyrights.
The Register may, at his or her option, become a party to the
action with respect to the issue of registrability of the
copyright claim by entering an appearance within sixty days
after such service, but the Register's failure to become a
party shall not deprive the court of jurisdiction to determine
that issue.

           *       *       *       *       *       *       *

             CHAPTER 5--COPYRIGHT INFRINGEMENT AND REMEDIES

Sec.
501.  Infringement of copyright.
     * * * * * * *
512.  Limitations on liability relating to material on-line.

           *       *       *       *       *       *       *

Sec. 507. Limitations on actions

    (a) Criminal Proceedings.--[No] Except as expressly
provided otherwise in this title, no criminal proceeding shall
be maintained under the provisions of this title unless it is
commenced within 5 years after the cause of action arose.

           *       *       *       *       *       *       *

Sec. 512. Limitations on liability relating to material on-line

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

           *       *       *       *       *       *       *

        CHAPTER 12--COPYRIGHT PROTECTION AND MANAGEMENT SYSTEMS

Sec.
1201.  Circumvention of copyright protection systems.
1202.  Integrity of copyright management information.
1203.  Civil remedies.
1204.  Criminal offenses and penalties.

Sec. 1201. Circumvention of copyright protection systems

    (a) Violations Regarding Circumvention of Technological
Protection Measures.--(1) No person shall circumvent a
technological protection measure that effectively controls
access to a work protected under this title.
    (2) No person shall manufacture, import, offer to the
public, provide, or otherwise traffic in any technology,
product, service, device, component, or part thereof, that--
            (A) is primarily designed or produced for the
        purpose of circumventing a technological protection
        measure that effectively controls access to a work
        protected under this title;
            (B) has only limited commercially significant
        purpose or use other than to circumvent a technological
        protection measure that effectively controls access to
        a work protected under this title; or
            (C) is marketed by that person or another acting in
        concert with that person with that person's knowledge
        for use in circumventing a technological protection
        measure that effectively controls access to a work
        protected under this title.
    (3) As used in this subsection--
            (A) to ``circumvent a technological protection
        measure'' means to descramble a scrambled work, to
        decrypt an encrypted work, or otherwise to avoid,
        bypass, remove, deactivate, or impair a technological
        protection measure, without the authority of the
        copyright owner; and
            (B) a technological protection measure
        ``effectively controls access to a work'' if the
        measure, in the ordinary course of its operation,
        requires the application of information, or a process
        or a treatment, with the authority of the copyright
        owner, to gain access to the work.
    (b) Additional Violations.--(1) No person shall
manufacture, import, offer to the public, provide, or otherwise
traffic in any technology, product, service, device, component,
or part thereof, that--
            (A) is primarily designed or produced for the
        purpose of circumventing protection afforded by a
        technological protection measure that effectively
        protects a right of a copyright owner under this title
        in a work or a portion thereof;
            (B) has only limited commercially significant
        purpose or use other than to circumvent protection
        afforded by a technological protection measure that
        effectively protects a right of a copyright owner under
        this title in a work or a portion thereof; or
            (C) is marketed by that person or another acting in
        concert with that person with that person's knowledge
        for use in circumventing protection afforded by a
        technological protection measure that effectively
        protects a right of a copyright owner under this title
        in a work or a portion thereof.
    (2) As used in this subsection--
            (A) the term ``circumvent protection afforded by a
        technological protection measure'' means avoiding,
        bypassing, removing, deactivating, or otherwise
        impairing a technological protection measure; and
            (B) a technological protection measure
        ``effectively protects a right of a copyright owner''
        under this title if the measure, in the ordinary course
        of its operation, prevents, restricts, or otherwise
        limits the exercise of a right of a copyright owner
        under this title.
    (c) Importation.--The importation into the United States,
the sale for importation, or the sale within the United States
after importation by the owner, importer, or consignee of any
technology, product, service, device, component, or part
thereof as described in subsection (a) or (b) shall be
actionable under section 337 of the Tariff Act of 1930 (19
U.S.C. 1337).
    (d) Other Rights, Etc., Not Affected.--Nothing in this
section shall affect rights, remedies, limitations, or defenses
to copyright infringement, including fair use, under this
title.
    (e) Exemption for Nonprofit Libraries, Archives, and
Educational Institutions.--(1) A nonprofit library, archives,
or educational institution which gains access to a commercially
exploited copyrighted work solely in order to make a good faith
determination of whether to acquire a copy of that work for the
sole purpose of engaging in conduct permitted under this title
shall not be in violation of subsection (a)(1). A copy of a
work to which access has been gained under this paragraph--
            (A) may not be retained longer than necessary to
        make such good faith determination; and
            (B) may not be used for any other purpose.
    (2) The exemption available under paragraph (1) shall only
apply with respect to a work when an identical copy of that
work is not reasonably available in another form.
    (3) A nonprofit library, archives, or educational
institution that willfully for the purpose of commercial
advantage or financial gain violates paragraph (1)--
            (A) shall, for the first offense, be subject to the
        civil remedies under section 1203; and
            (B) shall, for repeated or subsequent offenses, in
        addition to the civil remedies under section 1203,
        forfeit the exemption provided under paragraph (1).
    (4) This subsection may not be used as a defense to a claim
under subsection (a)(2) or (b), nor may this subsection permit
a nonprofit library, archives, or educational institution to
manufacture, import, offer to the public, provide, or otherwise
traffic in any technology which circumvents a technological
protection measure.
    (5) In order for a library or archives to qualify for the
exemption under this subsection, the collections of that
library or archives shall be--
            (A) open to the public; or
            (B) available not only to researchers affiliated
        with the library or archives or with the institution of
        which it is a part, but also to other persons doing
        research in a specialized field.
    (f) Law Enforcement and Intelligence Activities.--This
section does not prohibit any lawfully authorized
investigative, protective, or intelligence activity of a law
enforcement agency of the United States, a State, or a
political subdivision of a State, or of an intelligence agency
of the United States.

Sec. 1202. Integrity of copyright management information

    (a) False Copyright Management Information.--No person
shall knowingly--
            (1) provide copyright management information that
        is false, or
            (2) distribute or import for public distribution
        copyright management information that is false,
with the intent to induce, enable, facilitate, or conceal
infringement.
    (b) Removal or Alteration of Copyright Management
Information.--No person shall, without the authority of the
copyright owner or the law--
            (1) intentionally remove or alter any copyright
        management information,
            (2) distribute or import for distribution copyright
        management information, knowing that the copyright
        management information has been removed or altered
        without authority of the copyright owner or the law, or
            (3) distribute, import for distribution, or
        publicly perform works, copies of works, or
        phonorecords, knowing that the copyright management
        information has been removed or altered without
        authority of the copyright owner or the law,
knowing or, with respect to civil remedies under section 1203,
having reasonable grounds to know, that it will induce, enable,
facilitate, or conceal an infringement of any right under this
title.
    (c) Definition.--As used in this chapter, the term
``copyright management information'' means the following
information conveyed in connection with copies or phonorecords
of a work or performances or displays of a work, including in
digital form:
            (1) The title and other information identifying the
        work, including the information set forth on a notice
        of copyright.
            (2) The name of, and other identifying information
        about, the author of a work.
            (3) The name of, and other identifying information
        about, the copyright owner of the work, including the
        information set forth in a notice of copyright.
            (4) With the exception of public performances of
        works by radio and television broadcast stations, the
        name of, and other identifying information about, a
        performer whose performance is fixed in a work other
        than an audiovisual work.
            (5) With the exception of public performances of
        works by radio and television broadcast stations, in
        the case of an audiovisual work, the name of, and other
        identifying information about, a writer, performer, or
        director who is credited in the audiovisual work.
            (6) Identifying numbers or symbols referring to
        such information or links to such information.
            (7) Such other information as the Register of
        Copyrights may prescribe by regulation, but not
        including any information concerning the user of a
        copyrighted work.
    (d) Law Enforcement and Intelligence Activities.--This
section does not prohibit any lawfully authorized
investigative, protective, or intelligence activity of a law
enforcement agency of the United States, a State, or a
political subdivision of a State, or of an intelligence agency
of the United States.

Sec. 1203. Civil remedies

    (a) Civil Actions.--Any person injured by a violation of
section 1201 or 1202 may bring a civil action in an appropriate
United States district court for such violation.
    (b) Powers of the Court.--In an action brought under
subsection (a), the court--
            (1) may grant temporary and permanent injunctions
        on such terms as it deems reasonable to prevent or
        restrain a violation;
            (2) at any time while an action is pending, may
        order the impounding, on such terms as it deems
        reasonable, of any device or product that is in the
        custody or control of the alleged violator and that the
        court has reasonable cause to believe was involved in a
        violation;
            (3) may award damages under subsection (c);
            (4) in its discretion may allow the recovery of
        costs by or against any party other than the United
        States or an officer thereof;
            (5) in its discretion may award reasonable
        attorney's fees to the prevailing party; and
            (6) may, as part of a final judgment or decree
        finding a violation, order the remedial modification or
        the destruction of any device or product involved in
        the violation that is in the custody or control of the
        violator or has been impounded under paragraph (2).
    (c) Award of Damages.--
            (1) In general.--Except as otherwise provided in
        this chapter, a person committing a violation of
        section 1201 or 1202 is liable for either--
                    (A) the actual damages and any additional
                profits of the violator, as provided in
                paragraph (2); or
                    (B) statutory damages, as provided in
                paragraph (3).
            (2) Actual damages.--The court shall award to the
        complaining party the actual damages suffered by the
        party as a result of the violation, and any profits of
        the violator that are attributable to the violation and
        are not taken into account in computing the actual
        damages, if the complaining party elects such damages
        at any time before final judgment is entered.
            (3) Statutory damages.--(A) At any time before
        final judgment is entered, a complaining party may
        elect to recover an award of statutory damages for each
        violation of section 1201 in the sum of not less than
        $200 or more than $2,500 per act of circumvention,
        device, product, component, offer, or performance of
        service, as the court considers just.
            (B) At any time before final judgment is entered, a
        complaining party may elect to recover an award of
        statutory damages for each violation of section 1202 in
        the sum of not less than $2,500 or more than $25,000.
            (4) Repeated violations.--In any case in which the
        injured party sustains the burden of proving, and the
        court finds, that a person has violated section 1201 or
        1202 within 3 years after a final judgment was entered
        against that person for another such violation, the
        court may increase the award of damages up to triple
        the amount that would otherwise be awarded, as the
        court considers just.
            (5) Innocent violations.--
                    (A) In general.--The court in its
                discretion may reduce or remit the total award
                of damages in any case in which the violator
                sustains the burden of proving, and the court
                finds, that the violator was not aware and had
                no reason to believe that its acts constituted
                a violation.
                    (B) Nonprofit library, archives, or
                educational institution.--In the case of a
                nonprofit library, archives, or educational
                institution, the court shall remit damages in
                any case in which the library, archives, or
                educational institution sustains the burden of
                proving, and the court finds, that the library,
                archives, or educational institution was not
                aware and had no reason to believe that its
                acts constituted a violation.

Sec. 1204. Criminal offenses and penalties

    (a) In General.--Any person who violates section 1201 or
1202 willfully and for purposes of commercial advantage or
private financial gain--
            (1) shall be fined not more than $500,000 or
        imprisoned for not more than 5 years, or both, for the
        first offense; and
            (2) shall be fined not more than $1,000,000 or
        imprisoned for not more than 10 years, or both, for any
        subsequent offense.
    (b) Limitation for Nonprofit Library, Archives, or
Educational Institution.--Subsection (a) shall not apply to a
nonprofit library, archives, or educational institution.
    (c) Statute of Limitations.--Notwithstanding section 507(a)
of this title, no criminal proceeding shall be maintained under
subsection (a) unless such proceeding is commenced within 5
years after the cause of action arose.

                                <greek-d>

