New Yorkers For Fair Use

© Copyright for the Digital Millennium
H. R. 2281


                            One Hundred Fifth Congress
                                                         of the
                                United States of America
                                          AT THE SECOND SESSION

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


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

                       Be it enacted by the Senate and House of Representatives of
                  the United States of America in Congress assembled,
                  SECTION 1. SHORT TITLE.
                       This Act may be cited as the ``Digital Millennium Copyright
                  Act''.
                  SEC. 2. TABLE OF CONTENTS.
                  Sec. 1. Short title.
                  Sec. 2. Table of contents.
                                    TITLE I-WIPO TREATIES IMPLEMENTATION
                  Sec. 101. Short title.
                  Sec. 102. Technical amendments.
                  Sec. 103. Copyright protection systems and copyright management information.
                  Sec. 104. Evaluation of impact of copyright law and amendments on electronic
                              commerce and technological development.
                  Sec. 105. Effective date.
                    TITLE II-ONLINE COPYRIGHT INFRINGEMENT LIABILITY LIMITATION
                  Sec. 201. Short title.
                  Sec. 202. Limitations on liability for copyright infringement.
                  Sec. 203. Effective date.
                  TITLE III-COMPUTER MAINTENANCE OR REPAIR COPYRIGHT EXEMPTION
                  Sec. 301. Short title.
                  Sec. 302. Limitations on exclusive rights; computer programs.
                                          TITLE IV-MISCELLANEOUS PROVISIONS
                  Sec. 401. Provisions Relating to the Commissioner of Patents and Trademarks and
                              the Register of Copyrights.
                  Sec. 402. Ephemeral recordings.
                  Sec. 403. Limitations on exclusive rights; distance education.
                  Sec. 404. Exemption for libraries and archives.
                  Sec. 405. Scope of exclusive rights in sound recordings; ephemeral recordings.
                  Sec. 406. Assumption of contractual obligations related to transfers of rights in
                              motion pictures.
                  Sec. 407. Effective date.
                             TITLE V-PROTECTION OF CERTAIN ORIGINAL DESIGNS
                  Sec. 501. Short title.
                  Sec. 502. Protection of certain original designs.
                  Sec. 503. Conforming amendments.
                  Sec. 504. Joint study of the effect of this title.
                  Sec. 505. Effective date.



                                 H. R. 2281-2

             TITLE I-WIPO TREATIES
                       IMPLEMENTATION

SEC. 101. SHORT TITLE.
    This title may be cited as the ``WIPO Copyright and Perform-
ances and Phonograms Treaties Implementation Act of 1998''.
SEC. 102. TECHNICAL AMENDMENTS.
    (a) DEFINITIONS.-Section 101 of title 17, United States Code,
is amended-
        (1) by striking the definition of ``Berne Convention work'';
        (2) in the definition of ``The `country of origin' of a Berne
    Convention work''-
             (A) by striking ``The `country of origin' of a Berne
        Convention work, for purposes of section 411, is the United
        States if'' and inserting ``For purposes of section 411, a
        work is a `United States work' only if'';
             (B) in paragraph (1)-
                      (i) in subparagraph (B) by striking ``nation or
             nations adhering to the Berne Convention'' and insert-
             ing ``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:



                                H. R. 2281-3

         ``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 Copy-
    right 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 Agree-
    ments 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



                                   H. R. 2281-4

                   ``(E) subject to a Presidential proclamation under sub-
              section (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 record-
              ing.'';
              (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 infringe-
          ment of the copyright in any''.
          (e) STATUTE OF LIMITATIONS.-Section 507(a) of title 17, United
State Code, is amended by striking ``No'' and inserting ``Except
as expressly provided otherwise in this title, no''.
SEC. 103. COPYRIGHT PROTECTION SYSTEMS AND COPYRIGHT
                   MANAGEMENT INFORMATION.
          (a) IN GENERAL.-Title 17, United States Code, is amended
by adding at the end the following new chapter:
 ``CHAPTER 12-COPYRIGHT PROTECTION AND
                         MANAGEMENT SYSTEMS
``Sec.
``1201. Circumvention of copyright protection systems.
``1202. Integrity of copyright management information.
``1203. Civil remedies.
``1204. Criminal offenses and penalties.
``1205. Savings clause.
`` 1201. Circumvention of copyright protection systems
          ``(a) VIOLATIONS REGARDING CIRCUMVENTION OF TECHNO-
LOGICAL MEASURES.-(1)(A) No person shall circumvent a techno-
logical measure that effectively controls access to a work protected



                              H. R. 2281-5

under this title. The prohibition contained in the preceding sentence
shall take effect at the end of the 2-year period beginning on
the date of the enactment of this chapter.
    ``(B) The prohibition contained in subparagraph (A) shall not
apply to persons who are users of a copyrighted work which is
in a particular class of works, if such persons are, or are likely
to be in the succeeding 3-year period, adversely affected by virtue
of such prohibition in their ability to make noninfringing uses
of that particular class of works under this title, as determined
under subparagraph (C).
    ``(C) During the 2-year period described in subparagraph (A),
and during each succeeding 3-year period, the Librarian of Con-
gress, upon the recommendation of the Register of Copyrights,
who shall consult with the Assistant Secretary for Communications
and Information of the Department of Commerce and report and
comment on his or her views in making such recommendation,
shall make the determination in a rulemaking proceeding on the
record for purposes of subparagraph (B) of whether persons who
are users of a copyrighted work are, or are likely to be in the
succeeding 3-year period, adversely affected by the prohibition
under subparagraph (A) in their ability to make noninfringing
uses under this title of a particular class of copyrighted works.
In conducting such rulemaking, the Librarian shall examine-
          ``(i) the availability for use of copyrighted works;
          ``(ii) the availability for use of works for nonprofit archival,
    preservation, and educational purposes;
          ``(iii) the impact that the prohibition on the circumvention
    of technological measures applied to copyrighted works has
    on criticism, comment, news reporting, teaching, scholarship,
    or research;
          ``(iv) the effect of circumvention of technological measures
    on the market for or value of copyrighted works; and
          ``(v) such other factors as the Librarian considers appro-
    priate.
    ``(D) The Librarian shall publish any class of copyrighted works
for which the Librarian has determined, pursuant to the rulemaking
conducted under subparagraph (C), that noninfringing uses by per-
sons who are users of a copyrighted work are, or are likely to
be, adversely affected, and the prohibition contained in subpara-
graph (A) shall not apply to such users with respect to such class
of works for the ensuing 3-year period.
    ``(E) Neither the exception under subparagraph (B) from the
applicability of the prohibition contained in subparagraph (A), nor
any determination made in a rulemaking conducted under subpara-
graph (C), may be used as a defense in any action to enforce
any provision of this title other than this paragraph.
    ``(2) No person shall manufacture, import, offer to the public,
provide, or otherwise traffic in any technology, product, service,
device, component, or part thereof, that-
          ``(A) is primarily designed or produced for the purpose
    of circumventing a technological measure that effectively con-
    trols access to a work protected under this title;
          ``(B) has only limited commercially significant purpose or
    use other than to circumvent a technological measure that
    effectively controls access to a work protected under this title;
    or



                               H. R. 2281-6

            ``(C) is marketed by that person or another acting in concert
    with that person with that person's knowledge for use in cir-
    cumventing a technological measure that effectively controls
    access to a work protected under this title.
    ``(3) As used in this subsection-
            ``(A) to `circumvent a technological measure' means to
    descramble a scrambled work, to decrypt an encrypted work,
    or otherwise to avoid, bypass, remove, deactivate, or impair
    a technological measure, without the authority of the copyright
    owner; and
            ``(B) a technological measure `effectively controls access to
    a work' if the measure, in the ordinary course of its operation,
    requires the application of information, or a process or a treat-
    ment, with the authority of the copyright owner, to gain access
    to the work.
    ``(b) ADDITIONAL VIOLATIONS.-(1) No person shall manufacture,
import, offer to the public, provide, or otherwise traffic in any
technology, product, service, device, component, or part thereof,
that- ``(A) is primarily designed or produced for the purpose
    of circumventing protection afforded by a technological measure
    that effectively protects a right of a copyright owner under
    this title in a work or a portion thereof;
            ``(B) has only limited commercially significant purpose or
    use other than to circumvent protection afforded by a techno-
    logical 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 cir-
    cumventing protection afforded by a technological measure that
    effectively protects a right of a copyright owner under this
    title in a work or a portion thereof.
    ``(2) As used in this subsection-
            ``(A) to `circumvent protection afforded by a technological
    measure' means avoiding, bypassing, removing, deactivating,
    or otherwise impairing a technological measure; and
            ``(B) a technological measure `effectively protects a right
    of a copyright owner under this title' if the measure, in the
    ordinary course of its operation, prevents, restricts, or otherwise
    limits the exercise of a right of a copyright owner under this
    title.
    ``(c) OTHER RIGHTS, ETC., NOT AFFECTED.-(1) Nothing in this
section shall affect rights, remedies, limitations, or defenses to
copyright infringement, including fair use, under this title.
    ``(2) Nothing in this section shall enlarge or diminish vicarious
or contributory liability for copyright infringement in connection
with any technology, product, service, device, component, or part
thereof.
    ``(3) Nothing in this section shall require that the design of,
or design and selection of parts and components for, a consumer
electronics, telecommunications, or computing product provide for
a response to any particular technological measure, so long as
such part or component, or the product in which such part or
component is integrated, does not otherwise fall within the prohibi-
tions of subsection (a)(2) or (b)(1).



                             H. R. 2281-7

    ``(4) Nothing in this section shall enlarge or diminish any rights
of free speech or the press for activities using consumer electronics,
telecommunications, or computing products.
    ``(d) EXEMPTION FOR NONPROFIT LIBRARIES, ARCHIVES, AND EDU-
CATIONAL INSTITUTIONS.-(1) A nonprofit library, archives, or edu-
cational institution which gains access to a commercially exploited
copyrighted work solely in order to make a good faith determination
of whether to acquire a copy of that work for the sole purpose
of engaging in conduct permitted under this title shall not be
in violation of subsection (a)(1)(A). A copy of a work to which
access has been gained under this paragraph-
         ``(A) may not be retained longer than necessary to make
    such good faith determination; and
         ``(B) may not be used for any other purpose.
    ``(2) The exemption made available under paragraph (1) shall
only apply with respect to a work when an identical copy of that
work is not reasonably available in another form.
    ``(3) A nonprofit library, archives, or educational institution
that willfully for the purpose of commercial advantage or financial
gain violates paragraph (1)-
         ``(A) shall, for the first offense, be subject to the civil
    remedies under section 1203; and
         ``(B) shall, for repeated or subsequent offenses, in addition
    to the civil remedies under section 1203, forfeit the exemption
    provided under paragraph (1).
    ``(4) This subsection may not be used as a defense to a claim
under subsection (a)(2) or (b), nor may this subsection permit a
nonprofit library, archives, or educational institution to manufac-
ture, import, offer to the public, provide, or otherwise traffic in
any technology, product, service, component, or part thereof, which
circumvents a technological measure.
    ``(5) In order for a library or archives to qualify for the exemp-
tion under this subsection, the collections of that library or archives
shall be-``(A) open to the public; or
         ``(B) available not only to researchers affiliated with the
    library or archives or with the institution of which it is a
    part, but also to other persons doing research in a specialized
    field.
    ``(e) LAW ENFORCEMENT, INTELLIGENCE, AND OTHER GOVERN-
MENT ACTIVITIES.-This section does not prohibit any lawfully
authorized investigative, protective, information security, or intel-
ligence activity of an officer, agent, or employee of the United
States, a State, or a political subdivision of a State, or a person
acting pursuant to a contract with the United States, a State,
or a political subdivision of a State. For purposes of this subsection,
the term `information security' means activities carried out in order
to identify and address the vulnerabilities of a government com-
puter, computer system, or computer network.
    ``(f ) REVERSE ENGINEERING.-(1) Notwithstanding the provi-
sions of subsection (a)(1)(A), a person who has lawfully obtained
the right to use a copy of a computer program may circumvent
a technological measure that effectively controls access to a particu-
lar portion of that program for the sole purpose of identifying
and analyzing those elements of the program that are necessary
to achieve interoperability of an independently created computer
program with other programs, and that have not previously been



                               H. R. 2281-8

readily available to the person engaging in the circumvention, to
the extent any such acts of identification and analysis do not
constitute infringement under this title.
    ``(2) Notwithstanding the provisions of subsections (a)(2) and
(b), a person may develop and employ technological means to cir-
cumvent a technological measure, or to circumvent protection
afforded by a technological measure, in order to enable the identi-
fication and analysis under paragraph (1), or for the purpose of
enabling interoperability of an independently created computer pro-
gram with other programs, if such means are necessary to achieve
such interoperability, to the extent that doing so does not constitute
infringement under this title.
    ``(3) The information acquired through the acts permitted under
paragraph (1), and the means permitted under paragraph (2), may
be made available to others if the person referred to in paragraph
(1) or (2), as the case may be, provides such information or means
solely for the purpose of enabling interoperability of an independ-
ently created computer program with other programs, and to the
extent that doing so does not constitute infringement under this
title or violate applicable law other than this section.
    ``(4) For purposes of this subsection, the term `interoperability'
means the ability of computer programs to exchange information,
and of such programs mutually to use the information which has
been exchanged.
    ``(g) ENCRYPTION RESEARCH.-
         ``(1) DEFINITIONS.-For purposes of this subsection-
             ``(A) the term `encryption research' means activities
         necessary to identify and analyze flaws and vulnerabilities
         of encryption technologies applied to copyrighted works,
         if these activities are conducted to advance the state of
         knowledge in the field of encryption technology or to assist
         in the development of encryption products; and
             ``(B) the term `encryption technology' means the scram-
         bling and descrambling of information using mathematical
         formulas or algorithms.
         ``(2) PERMISSIBLE ACTS OF ENCRYPTION RESEARCH.-Not-
    withstanding the provisions of subsection (a)(1)(A), it is not
    a violation of that subsection for a person to circumvent a
    technological measure as applied to a copy, phonorecord,
    performance, or display of a published work in the course
    of an act of good faith encryption research if-
             ``(A) the person lawfully obtained the encrypted copy,
         phonorecord, performance, or display of the published work;
             ``(B) such act is necessary to conduct such encryption
         research;
             ``(C) the person made a good faith effort to obtain
         authorization before the circumvention; and
             ``(D) such act does not constitute infringement under
         this title or a violation of applicable law other than this
         section, including section 1030 of title 18 and those provi-
         sions of title 18 amended by the Computer Fraud and
         Abuse Act of 1986.
         ``(3) FACTORS IN DETERMINING EXEMPTION.-In determining
    whether a person qualifies for the exemption under paragraph
    (2), the factors to be considered shall include-
             ``(A) whether the information derived from the
         encryption research was disseminated, and if so, whether



                              H. R. 2281-9

        it was disseminated in a manner reasonably calculated
        to advance the state of knowledge or development of
        encryption technology, versus whether it was disseminated
        in a manner that facilitates infringement under this title
        or a violation of applicable law other than this section,
        including a violation of privacy or breach of security;
            ``(B) whether the person is engaged in a legitimate
        course of study, is employed, or is appropriately trained
        or experienced, in the field of encryption technology; and
            ``(C) whether the person provides the copyright owner
        of the work to which the technological measure is applied
        with notice of the findings and documentation of the
        research, and the time when such notice is provided.
        ``(4) USE OF TECHNOLOGICAL MEANS FOR RESEARCH ACTIVI-
    TIES.-Notwithstanding the provisions of subsection (a)(2), it
    is not a violation of that subsection for a person to-
            ``(A) develop and employ technological means to cir-
        cumvent a technological measure for the sole purpose of
        that person performing the acts of good faith encryption
        research described in paragraph (2); and
            ``(B) provide the technological means to another person
        with whom he or she is working collaboratively for the
        purpose of conducting the acts of good faith encryption
        research described in paragraph (2) or for the purpose
        of having that other person verify his or her acts of good
        faith encryption research described in paragraph (2).
        ``(5) REPORT TO CONGRESS.-Not later than 1 year after
    the date of the enactment of this chapter, the Register of
    Copyrights and the Assistant Secretary for Communications
    and Information of the Department of Commerce shall jointly
    report to the Congress on the effect this subsection has had
    on-     ``(A) encryption research and the development of
        encryption technology;
            ``(B) the adequacy and effectiveness of technological
        measures designed to protect copyrighted works; and
            ``(C) protection of copyright owners against the
        unauthorized access to their encrypted copyrighted works.
    The report shall include legislative recommendations, if any.
    ``(h) EXCEPTIONS REGARDING MINORS.-In applying subsection
(a) to a component or part, the court may consider the necessity
for its intended and actual incorporation in a technology, product,
service, or device, which-
        ``(1) does not itself violate the provisions of this title; and
        ``(2) has the sole purpose to prevent the access of minors
    to material on the Internet.
    ``(i) PROTECTION OF PERSONALLY IDENTIFYING INFORMATION.-
        (1) CIRCUMVENTION PERMITTED.-Notwithstanding the
    provisions of subsection (a)(1)(A), it is not a violation of that
    subsection for a person to circumvent a technological measure
    that effectively controls access to a work protected under this
    title, if-``(A) the technological measure, or the work it protects,
        contains the capability of collecting or disseminating
        personally identifying information reflecting the online
        activities of a natural person who seeks to gain access
        to the work protected;



                         H. R. 2281-10

         ``(B) in the normal course of its operation, the techno-
    logical measure, or the work it protects, collects or dissemi-
    nates personally identifying information about the person
    who seeks to gain access to the work protected, without
    providing conspicuous notice of such collection or dissemi-
    nation to such person, and without providing such person
    with the capability to prevent or restrict such collection
    or dissemination;
         ``(C) the act of circumvention has the sole effect of
    identifying and disabling the capability described in
    subparagraph (A), and has no other effect on the ability
    of any person to gain access to any work; and
         ``(D) the act of circumvention is carried out solely for
    the purpose of preventing the collection or dissemination
    of personally identifying information about a natural per-
    son who seeks to gain access to the work protected, and
    is not in violation of any other law.
    ``(2) INAPPLICABILITY       TO    CERTAIN        TECHNOLOGICAL
MEASURES.-This subsection does not apply to a technological
measure, or a work it protects, that does not collect or dissemi-
nate personally identifying information and that is disclosed
to a user as not having or using such capability.
``( j) SECURITY TESTING.-
    ``(1) DEFINITION.-For purposes of this subsection, the term
`security testing' means accessing a computer, computer system,
or computer network, solely for the purpose of good faith test-
ing, investigating, or correcting, a security flaw or vulnerability,
with the authorization of the owner or operator of such com-
puter, computer system, or computer network.
    ``(2) PERMISSIBLE ACTS OF SECURITY TESTING.-Notwith-
standing the provisions of subsection (a)(1)(A), it is not a viola-
tion of that subsection for a person to engage in an act of
security testing, if such act does not constitute infringement
under this title or a violation of applicable law other than
this section, including section 1030 of title 18 and those provi-
sions of title 18 amended by the Computer Fraud and Abuse
Act of 1986.
    ``(3) FACTORS IN DETERMINING EXEMPTION.-In determining
whether a person qualifies for the exemption under paragraph
(2), the factors to be considered shall include-
         ``(A) whether the information derived from the security
    testing was used solely to promote the security of the
    owner or operator of such computer, computer system or
    computer network, or shared directly with the developer
    of such computer, computer system, or computer network;
    and ``(B) whether the information derived from the security
    testing was used or maintained in a manner that does
    not facilitate infringement under this title or a violation
    of applicable law other than this section, including a viola-
    tion of privacy or breach of security.
    ``(4) USE OF TECHNOLOGICAL MEANS FOR SECURITY TEST-
ING.-Notwithstanding the provisions of subsection (a)(2), it
is not a violation of that subsection for a person to develop,
produce, distribute or employ technological means for the sole
purpose of performing the acts of security testing described



                           H. R. 2281-11

   in subsection (2), provided such technological means does not
   otherwise violate section (a)(2).
   ``(k) CERTAIN ANALOG DEVICES AND CERTAIN TECHNOLOGICAL
MEASURES.-
       ``(1) CERTAIN ANALOG DEVICES.-
            ``(A) Effective 18 months after the date of the enact-
       ment of this chapter, no person shall manufacture, import,
       offer to the public, provide or otherwise traffic in any-
                ``(i) VHS format analog video cassette recorder
            unless such recorder conforms to the automatic gain
            control copy control technology;
                ``(ii) 8mm format analog video cassette camcorder
            unless such camcorder conforms to the automatic gain
            control technology;
                ``(iii) Beta format analog video cassette recorder,
            unless such recorder conforms to the automatic gain
            control copy control technology, except that this
            requirement shall not apply until there are 1,000 Beta
            format analog video cassette recorders sold in the
            United States in any one calendar year after the date
            of the enactment of this chapter;
                ``(iv) 8mm format analog video cassette recorder
            that is not an analog video cassette camcorder, unless
            such recorder conforms to the automatic gain control
            copy control technology, except that this requirement
            shall not apply until there are 20,000 such recorders
            sold in the United States in any one calendar year
            after the date of the enactment of this chapter; or
                ``(v) analog video cassette recorder that records
            using an NTSC format video input and that is not
            otherwise covered under clauses (i) through (iv), unless
            such device conforms to the automatic gain control
            copy control technology.
            ``(B) Effective on the date of the enactment of this
       chapter, no person shall manufacture, import, offer to the
       public, provide or otherwise traffic in-
                ``(i) any VHS format analog video cassette recorder
            or any 8mm format analog video cassette recorder if
            the design of the model of such recorder has been
            modified after such date of enactment so that a model
            of recorder that previously conformed to the automatic
            gain control copy control technology no longer conforms
            to such technology; or
                ``(ii) any VHS format analog video cassette
            recorder, or any 8mm format analog video cassette
            recorder that is not an 8mm analog video cassette
            camcorder, if the design of the model of such recorder
            has been modified after such date of enactment so
            that a model of recorder that previously conformed
            to the four-line colorstripe copy control technology no
            longer conforms to such technology.
       Manufacturers that have not previously manufactured or
       sold a VHS format analog video cassette recorder, or an
       8mm format analog cassette recorder, shall be required
       to conform to the four-line colorstripe copy control tech-
       nology in the initial model of any such recorder manufac-
       tured after the date of the enactment of this chapter,



                      H. R. 2281-12

    and thereafter to continue conforming to the four-line
    colorstripe copy control technology. For purposes of this
    subparagraph, an analog video cassette recorder `conforms
    to' the four-line colorstripe copy control technology if it
    records a signal that, when played back by the playback
    function of that recorder in the normal viewing mode,
    exhibits, on a reference display device, a display containing
    distracting visible lines through portions of the viewable
    picture.
    ``(2) CERTAIN ENCODING RESTRICTIONS.-No person shall
apply the automatic gain control copy control technology or
colorstripe copy control technology to prevent or limit consumer
copying except such copying-
        ``(A) of a single transmission, or specified group of
    transmissions, of live events or of audiovisual works for
    which a member of the public has exercised choice in
    selecting the transmissions, including the content of the
    transmissions or the time of receipt of such transmissions,
    or both, and as to which such member is charged a separate
    fee for each such transmission or specified group of trans-
    missions;
        ``(B) from a copy of a transmission of a live event
    or an audiovisual work if such transmission is provided
    by a channel or service where payment is made by a
    member of the public for such channel or service in the
    form of a subscription fee that entitles the member of
    the public to receive all of the programming contained
    in such channel or service;
        ``(C) from a physical medium containing one or more
    prerecorded audiovisual works; or
        ``(D) from a copy of a transmission described in
    subparagraph (A) or from a copy made from a physical
    medium described in subparagraph (C).
In the event that a transmission meets both the conditions
set forth in subparagraph (A) and those set forth in subpara-
graph (B), the transmission shall be treated as a transmission
described in subparagraph (A).
    ``(3) INAPPLICABILITY.-This subsection shall not-
        ``(A) require any analog video cassette camcorder to
    conform to the automatic gain control copy control tech-
    nology with respect to any video signal received through
    a camera lens;
        ``(B) apply to the manufacture, importation, offer for
    sale, provision of, or other trafficking in, any professional
    analog video cassette recorder; or
        ``(C) apply to the offer for sale or provision of, or
    other trafficking in, any previously owned analog video
    cassette recorder, if such recorder was legally manufactured
    and sold when new and not subsequently modified in viola-
    tion of paragraph (1)(B).
    ``(4) DEFINITIONS.-For purposes of this subsection:
        ``(A) An `analog video cassette recorder' means a device
    that records, or a device that includes a function that
    records, on electromagnetic tape in an analog format the
    electronic impulses produced by the video and audio por-
    tions of a television program, motion picture, or other form
    of audiovisual work.



                               H. R. 2281-13

                 ``(B) An `analog video cassette camcorder' means an
        analog video cassette recorder that contains a recording
        function that operates through a camera lens and through
        a video input that may be connected with a television
        or other video playback device.
                 ``(C) An analog video cassette recorder `conforms' to
        the automatic gain control copy control technology if it-
                     ``(i) detects one or more of the elements of such
                 technology and does not record the motion picture or
                 transmission protected by such technology; or
                     ``(ii) records a signal that, when played back, exhib-
                 its a meaningfully distorted or degraded display.
                 ``(D) The term `professional analog video cassette
        recorder' means an analog video cassette recorder that
        is designed, manufactured, marketed, and intended for use
        by a person who regularly employs such a device for a
        lawful business or industrial use, including making,
        performing, displaying, distributing, or transmitting copies
        of motion pictures on a commercial scale.
                 ``(E) The terms `VHS format', `8mm format', `Beta for-
        mat', `automatic gain control copy control technology',
        `colorstripe copy control technology', `four-line version of
        the colorstripe copy control technology', and `NTSC' have
        the meanings that are commonly understood in the con-
        sumer electronics and motion picture industries as of the
        date of the enactment of this chapter.
        ``(5) VIOLATIONS.-Any violation of paragraph (1) of this
    subsection shall be treated as a violation of subsection (b)(1)
    of this section. Any violation of paragraph (2) of this subsection
    shall be deemed an `act of circumvention' for the purposes
    of section 1203(c)(3)(A) of this chapter.
`` 1202. Integrity of copyright management information
    ``(a) FALSE COPYRIGHT MANAGEMENT INFORMATION.-No person
shall knowingly and with the intent to induce, enable, facilitate,
or conceal infringement-
        ``(1) provide copyright management information that is
    false, or
        ``(2) distribute or import for distribution copyright manage-
    ment information that is false.
    ``(b) REMOVAL OR ALTERATION OF COPYRIGHT MANAGEMENT
INFORMATION.-No person shall, without the authority of the copy-
right owner or the law-
        ``(1) intentionally remove or alter any copyright manage-
    ment information,
        ``(2) distribute or import for distribution copyright manage-
    ment information knowing that the copyright management
    information has been removed or altered without authority
    of the copyright owner or the law, or
        ``(3) distribute, import for distribution, or publicly perform
    works, copies of works, or phonorecords, knowing that copyright
    management information has been removed or altered without
    authority of the copyright owner or the law,
knowing, or, with respect to civil remedies under section 1203,
having reasonable grounds to know, that it will induce, enable,
facilitate, or conceal an infringement of any right under this title.



                             H. R. 2281-14

    ``(c) DEFINITION.-As used in this section, the term `copyright
management information' means any of the following information
conveyed in connection with copies or phonorecords of a work or
performances or displays of a work, including in digital form, except
that such term does not include any personally identifying informa-
tion about a user of a work or of a copy, phonorecord, performance,
or display of a work:
        ``(1) The title and other information identifying the work,
    including the information set forth on a notice of copyright.
        ``(2) The name of, and other identifying information about,
    the author of a work.
        ``(3) The name of, and other identifying information about,
    the copyright owner of the work, including the information
    set forth in a notice of copyright.
        ``(4) With the exception of public performances of works
    by radio and television broadcast stations, the name of, and
    other identifying information about, a performer whose
    performance is fixed in a work other than an audiovisual work.
        ``(5) With the exception of public performances of works
    by radio and television broadcast stations, in the case of an
    audiovisual work, the name of, and other identifying informa-
    tion about, a writer, performer, or director who is credited
    in the audiovisual work.
        ``(6) Terms and conditions for use of the work.
        ``(7) Identifying numbers or symbols referring to such
    information or links to such information.
        ``(8) Such other information as the Register of Copyrights
    may prescribe by regulation, except that the Register of Copy-
    rights may not require the provision of any information concern-
    ing the user of a copyrighted work.
    ``(d) LAW ENFORCEMENT, INTELLIGENCE, AND OTHER GOVERN-
MENT ACTIVITIES.-This section does not prohibit any lawfully
authorized investigative, protective, information security, or intel-
ligence activity of an officer, agent, or employee of the United
States, a State, or a political subdivision of a State, or a person
acting pursuant to a contract with the United States, a State,
or a political subdivision of a State. For purposes of this subsection,
the term `information security' means activities carried out in order
to identify and address the vulnerabilities of a government com-
puter, computer system, or computer network.
    ``(e) LIMITATIONS ON LIABILITY.-
        ``(1) ANALOG TRANSMISSIONS.-In the case of an analog
    transmission, a person who is making transmissions in its
    capacity as a broadcast station, or as a cable system, or someone
    who provides programming to such station or system, shall
    not be liable for a violation of subsection (b) if-
             ``(A) avoiding the activity that constitutes such viola-
        tion is not technically feasible or would create an undue
        financial hardship on such person; and
             ``(B) such person did not intend, by engaging in such
        activity, to induce, enable, facilitate, or conceal infringe-
        ment of a right under this title.
        ``(2) DIGITAL TRANSMISSIONS.-
             ``(A) If a digital transmission standard for the place-
        ment of copyright management information for a category
        of works is set in a voluntary, consensus standard-setting
        process involving a representative cross-section of broadcast



                                H. R. 2281-15

         stations or cable systems and copyright owners of a cat-
         egory of works that are intended for public performance
         by such stations or systems, a person identified in para-
         graph (1) shall not be liable for a violation of subsection
         (b) with respect to the particular copyright management
         information addressed by such standard if-
                  ``(i) the placement of such information by someone
             other than such person is not in accordance with such
             standard; and
                  ``(ii) the activity that constitutes such violation
             is not intended to induce, enable, facilitate, or conceal
             infringement of a right under this title.
             ``(B) Until a digital transmission standard has been
         set pursuant to subparagraph (A) with respect to the place-
         ment of copyright management information for a category
         or works, a person identified in paragraph (1) shall not
         be liable for a violation of subsection (b) with respect to
         such copyright management information, if the activity
         that constitutes such violation is not intended to induce,
         enable, facilitate, or conceal infringement of a right under
         this title, and if-
                  ``(i) the transmission of such information by such
             person would result in a perceptible visual or aural
             degradation of the digital signal; or
                  ``(ii) the transmission of such information by such
             person would conflict with-
                      ``(I) an applicable government regulation
                  relating to transmission of information in a digital
                  signal;
                      ``(II) an applicable industry-wide standard
                  relating to the transmission of information in a
                  digital signal that was adopted by a voluntary
                  consensus standards body prior to the effective
                  date of this chapter; or
                      ``(III) an applicable industry-wide standard
                  relating to the transmission of information in a
                  digital signal that was adopted in a voluntary,
                  consensus standards-setting process open to
                  participation by a representative cross-section of
                  broadcast stations or cable systems and copyright
                  owners of a category of works that are intended
                  for public performance by such stations or systems.
         ``(3) DEFINITIONS.-As used in this subsection-
             ``(A) the term `broadcast station' has the meaning given
         that term in section 3 of the Communications Act of 1934
         (47 U.S.C. 153); and
             ``(B) the term `cable system' has the meaning given
         that term in section 602 of the Communications Act of
         1934 (47 U.S.C. 522).
`` 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-



                         H. R. 2281-16

    ``(1) may grant temporary and permanent injunctions on
such terms as it deems reasonable to prevent or restrain a
violation, but in no event shall impose a prior restraint on
free speech or the press protected under the 1st amendment
to the Constitution;
    ``(2) at any time while an action is pending, may order
the impounding, on such terms as it deems reasonable, of
any device or product that is in the custody or control of
the alleged violator and that the court has reasonable cause
to believe was involved in a violation;
    ``(3) may award damages under subsection (c);
    ``(4) in its discretion may allow the recovery of costs by
or against any party other than the United States or an officer
thereof;
    ``(5) in its discretion may award reasonable attorney's fees
to the prevailing party; and
    ``(6) may, as part of a final judgment or decree finding
a violation, order the remedial modification or the destruction
of any device or product involved in the violation that is in
the custody or control of the violator or has been impounded
under paragraph (2).
``(c) AWARD OF DAMAGES.-
    ``(1) IN GENERAL.-Except as otherwise provided in this
title, a person committing a violation of section 1201 or 1202
is liable for either-
            ``(A) the actual damages and any additional profits
    of the violator, as provided in paragraph (2), or
            ``(B) statutory damages, as provided in paragraph (3).
    ``(2) ACTUAL DAMAGES.-The court shall award to the
complaining party the actual damages suffered by the party
as a result of the violation, and any profits of the violator
that are attributable to the violation and are not taken into
account in computing the actual damages, if the complaining
party elects such damages at any time before final judgment
is entered.
    ``(3) STATUTORY DAMAGES.-(A) At any time before final
judgment is entered, a complaining party may elect to recover
an award of statutory damages for each violation of section
1201 in the sum of not less than $200 or more than $2,500
per act of circumvention, device, product, component, offer,
or performance of service, as the court considers just.
    ``(B) At any time before final judgment is entered, a
complaining party may elect to recover an award of statutory
damages for each violation of section 1202 in the sum of not
less than $2,500 or more than $25,000.
    ``(4) REPEATED VIOLATIONS.-In any case in which the
injured party sustains the burden of proving, and the court
finds, that a person has violated section 1201 or 1202 within
3 years after a final judgment was entered against the person
for another such violation, the court may increase the award
of damages up to triple the amount that would otherwise be
awarded, as the court considers just.
    ``(5) INNOCENT VIOLATIONS.-
            ``(A) IN GENERAL.-The court in its discretion may
    reduce or remit the total award of damages in any case
    in which the violator sustains the burden of proving, and



                                   H. R. 2281-17

           the court finds, that the violator was not aware and had
           no reason to believe that its acts constituted a violation.
                ``(B) NONPROFIT LIBRARY, ARCHIVES, OR EDUCATIONAL
           INSTITUTIONS.-In the case of a nonprofit library, archives,
           or educational institution, the court shall remit damages
           in any case in which the library, archives, or educational
           institution sustains the burden of proving, and the court
           finds, that the library, archives, or educational institution
           was not aware and had no reason to believe that its acts
           constituted a violation.
`` 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 EDU-
CATIONAL INSTITUTION.-Subsection (a) shall not apply to a non-
profit library, archives, or educational institution.
     ``(c) STATUTE OF LIMITATIONS.-No criminal proceeding shall
be brought under this section unless such proceeding is commenced
within 5 years after the cause of action arose.
`` 1205. Savings clause
     ``Nothing in this chapter abrogates, diminishes, or weakens
the provisions of, nor provides any defense or element of mitigation
in a criminal prosecution or civil action under, any Federal or
State law that prevents the violation of the privacy of an individual
in connection with the individual's use of the Internet.''.
     (b) CONFORMING AMENDMENT.-The table of chapters for title
17, United States Code, is amended by adding after the item relat-
ing to chapter 11 the following:
``12. Copyright Protection and Management Systems ............................... 1201''.
SEC. 104. EVALUATION OF IMPACT OF COPYRIGHT LAW AND AMEND-
                MENTS ON ELECTRONIC COMMERCE AND TECHNO-
                LOGICAL DEVELOPMENT.
     (a) EVALUATION BY THE REGISTER OF COPYRIGHTS AND THE
ASSISTANT SECRETARY FOR COMMUNICATIONS AND INFORMATION.-
The Register of Copyrights and the Assistant Secretary for Commu-
nications and Information of the Department of Commerce shall
jointly evaluate-
           (1) the effects of the amendments made by this title and
     the development of electronic commerce and associated tech-
     nology on the operation of sections 109 and 117 of title 17,
     United States Code; and
           (2) the relationship between existing and emergent tech-
     nology and the operation of sections 109 and 117 of title 17,
     United States Code.
     (b) REPORT TO CONGRESS.-The Register of Copyrights and
the Assistant Secretary for Communications and Information of
the Department of Commerce shall, not later than 24 months after
the date of the enactment of this Act, submit to the Congress
a joint report on the evaluation conducted under subsection (a),



                               H. R. 2281-18

including any legislative recommendations the Register and the
Assistant Secretary may have.
SEC. 105. EFFECTIVE DATE.
    (a) IN GENERAL.-Except as otherwise provided in this title,
this title and the amendments made by this title shall take effect
on the date of the enactment of this Act.
    (b) AMENDMENTS RELATING TO CERTAIN INTERNATIONAL AGREE-
MENTS.-(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 agree-
    ment'' contained in section 101 of title 17, United States Code,
    as amended by section 102(a)(4) of this Act.
            (B) The amendment made by section 102(a)(6) of this Act.
            (C) Subparagraph (C) of section 104A(h)(1) of title 17,
    United States Code, as amended by section 102(c)(1) of this
    Act. (D) Subparagraph (C) of section 104A(h)(3) of title 17,
    United States Code, as amended by section 102(c)(2) of this
    Act.
    (2) The following shall take effect upon the entry into force
of the WIPO Performances and Phonograms Treaty with respect
to the United States:
            (A) Paragraph (6) of the definition of ``international agree-
    ment'' contained in section 101 of title 17, United States Code,
    as amended by section 102(a)(4) of this Act.
            (B) The amendment made by section 102(a)(7) of this Act.
            (C) The amendment made by section 102(b)(2) of this Act.
            (D) Subparagraph (D) of section 104A(h)(1) of title 17,
    United States Code, as amended by section 102(c)(1) of this
    Act. (E) Subparagraph (D) of section 104A(h)(3) of title 17,
    United States Code, as amended by section 102(c)(2) of this
    Act. (F) The amendments made by section 102(c)(3) of this
    Act.

            TITLE II-ONLINE COPYRIGHT
INFRINGEMENT LIABILITY LIMITATION

SEC. 201. SHORT TITLE.
    This title may be cited as the ``Online Copyright Infringement
Liability Limitation Act''.
SEC. 202. LIMITATIONS ON LIABILITY FOR COPYRIGHT INFRINGE-
                MENT.
    (a) IN GENERAL.-Chapter 5 of title 17, United States Code,
is amended by adding after section 511 the following new section:
`` 512. Limitations on liability relating to material online
    ``(a) TRANSITORY DIGITAL NETWORK COMMUNICATIONS.-A serv-
ice provider shall not be liable for monetary relief, or, except as
provided in subsection ( j), for injunctive or other equitable relief,



                           H. R. 2281-19

for infringement of copyright by reason of the provider's transmit-
ting, routing, or providing connections for, material through a sys-
tem or network controlled or operated by or for the service provider,
or by reason of the intermediate and transient storage of that
material in the course of such transmitting, routing, or providing
connections, if-
        ``(1) the transmission of the material was initiated by or
    at the direction of a person other than the service provider;
        ``(2) the transmission, routing, provision of connections,
    or storage is carried out through an automatic technical process
    without selection of the material by the service provider;
        ``(3) the service provider does not select the recipients of
    the material except as an automatic response to the request
    of another person;
        ``(4) no copy of the material made by the service provider
    in the course of such intermediate or transient storage is main-
    tained on the system or network in a manner ordinarily acces-
    sible to anyone other than anticipated recipients, and no such
    copy is maintained on the system or network in a manner
    ordinarily accessible to such anticipated recipients for a longer
    period than is reasonably necessary for the transmission, rout-
    ing, or provision of connections; and
        ``(5) the material is transmitted through the system or
    network without modification of its content.
    ``(b) SYSTEM CACHING.-
        ``(1) LIMITATION ON LIABILITY.-A service provider shall
    not be liable for monetary relief, or, except as provided in
    subsection ( j), for injunctive or other equitable relief, for
    infringement of copyright by reason of the intermediate and
    temporary storage of material on a system or network controlled
    or operated by or for the service provider in a case in which-
             ``(A) the material is made available online by a person
        other than the service provider;
             ``(B) the material is transmitted from the person
        described in subparagraph (A) through the system or net-
        work to a person other than the person described in
        subparagraph (A) at the direction of that other person;
        and ``(C) the storage is carried out through an automatic
        technical process for the purpose of making the material
        available to users of the system or network who, after
        the material is transmitted as described in subparagraph
        (B), request access to the material from the person
        described in subparagraph (A),
    if the conditions set forth in paragraph (2) are met.
        (2) CONDITIONS.-The conditions referred to in paragraph
    (1) are that-
             ``(A) the material described in paragraph (1) is
        transmitted to the subsequent users described in paragraph
        (1)(C) without modification to its content from the manner
        in which the material was transmitted from the person
        described in paragraph (1)(A);
             ``(B) the service provider described in paragraph (1)
        complies with rules concerning the refreshing, reloading,
        or other updating of the material when specified by the
        person making the material available online in accordance



                       H. R. 2281-20

    with a generally accepted industry standard data commu-
    nications protocol for the system or network through which
    that person makes the material available, except that this
    subparagraph applies only if those rules are not used by
    the person described in paragraph (1)(A) to prevent or
    unreasonably impair the intermediate storage to which
    this subsection applies;
        ``(C) the service provider does not interfere with the
    ability of technology associated with the material to return
    to the person described in paragraph (1)(A) the information
    that would have been available to that person if the mate-
    rial had been obtained by the subsequent users described
    in paragraph (1)(C) directly from that person, except that
    this subparagraph applies only if that technology-
             ``(i) does not significantly interfere with the
        performance of the provider's system or network or
        with the intermediate storage of the material;
             ``(ii) is consistent with generally accepted industry
        standard communications protocols; and
             ``(iii) does not extract information from the provid-
        er's system or network other than the information
        that would have been available to the person described
        in paragraph (1)(A) if the subsequent users had gained
        access to the material directly from that person;
        ``(D) if the person described in paragraph (1)(A) has
    in effect a condition that a person must meet prior to
    having access to the material, such as a condition based
    on payment of a fee or provision of a password or other
    information, the service provider permits access to the
    stored material in significant part only to users of its
    system or network that have met those conditions and
    only in accordance with those conditions; and
        ``(E) if the person described in paragraph (1)(A) makes
    that material available online without the authorization
    of the copyright owner of the material, the service provider
    responds expeditiously to remove, or disable access to, the
    material that is claimed to be infringing upon notification
    of claimed infringement as described in subsection (c)(3),
    except that this subparagraph applies only if-
             ``(i) the material has previously been removed from
        the originating site or access to it has been disabled,
        or a court has ordered that the material be removed
        from the originating site or that access to the material
        on the originating site be disabled; and
             ``(ii) the party giving the notification includes in
        the notification a statement confirming that the
        material has been removed from the originating site
        or access to it has been disabled or that a court has
        ordered that the material be removed from the origi-
        nating site or that access to the material on the origi-
        nating site be disabled.
    ``(c) INFORMATION RESIDING ON SYSTEMS OR NETWORKS AT
DIRECTION OF USERS.-
    ``(1) IN GENERAL.-A service provider shall not be liable
for monetary relief, or, except as provided in subsection ( j),
for injunctive or other equitable relief, for infringement of copy-
right by reason of the storage at the direction of a user of



                           H. R. 2281-21

material that resides on a system or network controlled or
operated by or for the service provider, if the service provider-
        ``(A)(i) does not have actual knowledge that the mate-
    rial or an activity using the material on the system or
    network is infringing;
        ``(ii) in the absence of such actual knowledge, is not
    aware of facts or circumstances from which infringing activ-
    ity is apparent; or
        ``(iii) upon obtaining such knowledge or awareness, acts
    expeditiously to remove, or disable access to, the material;
        ``(B) does not receive a financial benefit directly attrib-
    utable to the infringing activity, in a case in which the
    service provider has the right and ability to control such
    activity; and
        ``(C) upon notification of claimed infringement as
    described in paragraph (3), responds expeditiously to
    remove, or disable access to, the material that is claimed
    to be infringing or to be the subject of infringing activity.
    ``(2) DESIGNATED AGENT.-The limitations on liability estab-
lished in this subsection apply to a service provider only if
the service provider has designated an agent to receive notifica-
tions of claimed infringement described in paragraph (3), by
making available through its service, including on its website
in a location accessible to the public, and by providing to
the Copyright Office, substantially the following information:
        ``(A) the name, address, phone number, and electronic
    mail address of the agent.
        ``(B) other contact information which the Register of
    Copyrights may deem appropriate.
The Register of Copyrights shall maintain a current directory
of agents available to the public for inspection, including
through the Internet, in both electronic and hard copy formats,
and may require payment of a fee by service providers to
cover the costs of maintaining the directory.
    ``(3) ELEMENTS OF NOTIFICATION.-
        ``(A) To be effective under this subsection, a notification
    of claimed infringement must be a written communication
    provided to the designated agent of a service provider that
    includes substantially the following:
             ``(i) A physical or electronic signature of a person
        authorized to act on behalf of the owner of an exclusive
        right that is allegedly infringed.
             ``(ii) Identification of the copyrighted work claimed
        to have been infringed, or, if multiple copyrighted
        works at a single online site are covered by a single
        notification, a representative list of such works at that
        site.``(iii) Identification of the material that is claimed
        to be infringing or to be the subject of infringing activ-
        ity and that is to be removed or access to which is
        to be disabled, and information reasonably sufficient
        to permit the service provider to locate the material.
             ``(iv) Information reasonably sufficient to permit
        the service provider to contact the complaining party,
        such as an address, telephone number, and, if avail-
        able, an electronic mail address at which the complain-
        ing party may be contacted.



                               H. R. 2281-22

                    ``(v) A statement that the complaining party has
             a good faith belief that use of the material in the
             manner complained of is not authorized by the copy-
             right owner, its agent, or the law.
                    ``(vi) A statement that the information in the
             notification is accurate, and under penalty of perjury,
             that the complaining party is authorized to act on
             behalf of the owner of an exclusive right that is alleg-
             edly infringed.
             ``(B)(i) Subject to clause (ii), a notification from a copy-
         right owner or from a person authorized to act on behalf
         of the copyright owner that fails to comply substantially
         with the provisions of subparagraph (A) shall not be consid-
         ered under paragraph (1)(A) in determining whether a
         service provider has actual knowledge or is aware of facts
         or circumstances from which infringing activity is apparent.
             ``(ii) In a case in which the notification that is provided
         to the service provider's designated agent fails to comply
         substantially with all the provisions of subparagraph (A)
         but substantially complies with clauses (ii), (iii), and (iv)
         of subparagraph (A), clause (i) of this subparagraph applies
         only if the service provider promptly attempts to contact
         the person making the notification or takes other reason-
         able steps to assist in the receipt of notification that
         substantially complies with all the provisions of subpara-
         graph (A).
    ``(d) INFORMATION LOCATION TOOLS.-A service provider shall
not be liable for monetary relief, or, except as provided in subsection
( j), for injunctive or other equitable relief, for infringement of copy-
right by reason of the provider referring or linking users to an
online location containing infringing material or infringing activity,
by using information location tools, including a directory, index,
reference, pointer, or hypertext link, if the service provider-
         ``(1)(A) does not have actual knowledge that the material
    or activity is infringing;
         ``(B) in the absence of such actual knowledge, is not aware
    of facts or circumstances from which infringing activity is
    apparent; or
         ``(C) upon obtaining such knowledge or awareness, acts
    expeditiously to remove, or disable access to, the material;
         ``(2) does not receive a financial benefit directly attributable
    to the infringing activity, in a case in which the service provider
    has the right and ability to control such activity; and
         ``(3) upon notification of claimed infringement as described
    in subsection (c)(3), responds expeditiously to remove, or disable
    access to, the material that is claimed to be infringing or
    to be the subject of infringing activity, except that, for purposes
    of this paragraph, the information described in subsection
    (c)(3)(A)(iii) shall be identification of the reference or link, to
    material or activity claimed to be infringing, that is to be
    removed or access to which is to be disabled, and information
    reasonably sufficient to permit the service provider to locate
    that reference or link.
    ``(e) LIMITATION ON LIABILITY OF NONPROFIT EDUCATIONAL
INSTITUTIONS.-(1) When a public or other nonprofit institution
of higher education is a service provider, and when a faculty mem-
ber or graduate student who is an employee of such institution



                               H. R. 2281-23

is performing a teaching or research function, for the purposes
of subsections (a) and (b) such faculty member or graduate student
shall be considered to be a person other than the institution, and
for the purposes of subsections (c) and (d) such faculty member's
or graduate student's knowledge or awareness of his or her infring-
ing activities shall not be attributed to the institution, if-
          ``(A) such faculty member's or graduate student's infringing
     activities do not involve the provision of online access to instruc-
     tional materials that are or were required or recommended,
     within the preceding 3-year period, for a course taught at
     the institution by such faculty member or graduate student;
          ``(B) the institution has not, within the preceding 3-year
     period, received more than two notifications described in sub-
     section (c)(3) of claimed infringement by such faculty member
     or graduate student, and such notifications of claimed infringe-
     ment were not actionable under subsection (f ); and
          ``(C) the institution provides to all users of its system
     or network informational materials that accurately describe,
     and promote compliance with, the laws of the United States
     relating to copyright.
     ``(2) INJUNCTIONS.-For the purposes of this subsection, the
limitations on injunctive relief contained in subsections ( j)(2) and
( j)(3), but not those in ( j)(1), shall apply.
     ``(f ) MISREPRESENTATIONS.-Any person who knowingly materi-
ally misrepresents under this section-
          ``(1) that material or activity is infringing, or
          ``(2) that material or activity was removed or disabled by
     mistake or misidentification,
shall be liable for any damages, including costs and attorneys'
fees, incurred by the alleged infringer, by any copyright owner
or copyright owner's authorized licensee, or by a service provider,
who is injured by such misrepresentation, as the result of the
service provider relying upon such misrepresentation in removing
or disabling access to the material or activity claimed to be infring-
ing, or in replacing the removed material or ceasing to disable
access to it.
     ``(g) REPLACEMENT OF REMOVED OR DISABLED MATERIAL AND
LIMITATION ON OTHER LIABILITY.-
          ``(1) NO LIABILITY FOR TAKING DOWN GENERALLY.-Subject
     to paragraph (2), a service provider shall not be liable to any
     person for any claim based on the service provider's good faith
     disabling of access to, or removal of, material or activity claimed
     to be infringing or based on facts or circumstances from which
     infringing activity is apparent, regardless of whether the mate-
     rial or activity is ultimately determined to be infringing.
          ``(2) EXCEPTION.-Paragraph (1) shall not apply with
     respect to material residing at the direction of a subscriber
     of the service provider on a system or network controlled or
     operated by or for the service provider that is removed, or
     to which access is disabled by the service provider, pursuant
     to a notice provided under subsection (c)(1)(C), unless the serv-
     ice provider-
                 ``(A) takes reasonable steps promptly to notify the
          subscriber that it has removed or disabled access to the
          material;



                         H. R. 2281-24

         ``(B) upon receipt of a counter notification described
    in paragraph (3), promptly provides the person who pro-
    vided the notification under subsection (c)(1)(C) with a
    copy of the counter notification, and informs that person
    that it will replace the removed material or cease disabling
    access to it in 10 business days; and
         ``(C) replaces the removed material and ceases dis-
    abling access to it not less than 10, nor more than 14,
    business days following receipt of the counter notice, unless
    its designated agent first receives notice from the person
    who submitted the notification under subsection (c)(1)(C)
    that such person has filed an action seeking a court order
    to restrain the subscriber from engaging in infringing activ-
    ity relating to the material on the service provider's system
    or network.
    ``(3) CONTENTS OF COUNTER NOTIFICATION.-To be effective
under this subsection, a counter notification must be a written
communication provided to the service provider's designated
agent that includes substantially the following:
         ``(A) A physical or electronic signature of the subscriber.
         ``(B) Identification of the material that has been
    removed or to which access has been disabled and the
    location at which the material appeared before it was
    removed or access to it was disabled.
         ``(C) A statement under penalty of perjury that the
    subscriber has a good faith belief that the material was
    removed or disabled as a result of mistake or
    misidentification of the material to be removed or disabled.
         ``(D) The subscriber's name, address, and telephone
    number, and a statement that the subscriber consents to
    the jurisdiction of Federal District Court for the judicial
    district in which the address is located, or if the subscriber's
    address is outside of the United States, for any judicial
    district in which the service provider may be found, and
    that the subscriber will accept service of process from the
    person who provided notification under subsection (c)(1)(C)
    or an agent of such person.
    ``(4) LIMITATION ON OTHER LIABILITY.-A service provider's
compliance with paragraph (2) shall not subject the service
provider to liability for copyright infringement with respect
to the material identified in the notice provided under sub-
section (c)(1)(C).
``(h) SUBPOENA TO IDENTIFY INFRINGER.-
    ``(1) REQUEST.-A copyright owner or a person authorized
to act on the owner's behalf may request the clerk of any
United States district court to issue a subpoena to a service
provider for identification of an alleged infringer in accordance
with this subsection.
    ``(2) CONTENTS OF REQUEST.-The request may be made
by filing with the clerk-
         ``(A) a copy of a notification described in subsection
    (c)(3)(A);
         ``(B) a proposed subpoena; and
         ``(C) a sworn declaration to the effect that the purpose
    for which the subpoena is sought is to obtain the identity
    of an alleged infringer and that such information will only



                               H. R. 2281-25

         be used for the purpose of protecting rights under this
         title.
         ``(3) CONTENTS OF SUBPOENA.-The subpoena shall author-
    ize and order the service provider receiving the notification
    and the subpoena to expeditiously disclose to the copyright
    owner or person authorized by the copyright owner information
    sufficient to identify the alleged infringer of the material
    described in the notification to the extent such information
    is available to the service provider.
         ``(4) BASIS FOR GRANTING SUBPOENA.-If the notification
    filed satisfies the provisions of subsection (c)(3)(A), the proposed
    subpoena is in proper form, and the accompanying declaration
    is properly executed, the clerk shall expeditiously issue and
    sign the proposed subpoena and return it to the requester
    for delivery to the service provider.
         ``(5) ACTIONS OF SERVICE PROVIDER RECEIVING SUBPOENA.-
    Upon receipt of the issued subpoena, either accompanying or
    subsequent to the receipt of a notification described in sub-
    section (c)(3)(A), the service provider shall expeditiously disclose
    to the copyright owner or person authorized by the copyright
    owner the information required by the subpoena, notwithstand-
    ing any other provision of law and regardless of whether the
    service provider responds to the notification.
         ``(6) RULES APPLICABLE TO SUBPOENA.-Unless otherwise
    provided by this section or by applicable rules of the court,
    the procedure for issuance and delivery of the subpoena, and
    the remedies for noncompliance with the subpoena, shall be
    governed to the greatest extent practicable by those provisions
    of the Federal Rules of Civil Procedure governing the issuance,
    service, and enforcement of a subpoena duces tecum.
    ``(i) CONDITIONS FOR ELIGIBILITY.-
         ``(1) ACCOMMODATION OF TECHNOLOGY.-The limitations on
    liability established by this section shall apply to a service
    provider only if the service provider-
                 ``(A) has adopted and reasonably implemented, and
         informs subscribers and account holders of the service
         provider's system or network of, a policy that provides
         for the termination in appropriate circumstances of
         subscribers and account holders of the service provider's
         system or network who are repeat infringers; and
                 ``(B) accommodates and does not interfere with stand-
         ard technical measures.
         ``(2) DEFINITION.-As used in this subsection, the term
    `standard technical measures' means technical measures that
    are used by copyright owners to identify or protect copyrighted
    works and-
                 ``(A) have been developed pursuant to a broad consen-
         sus of copyright owners and service providers in an open,
         fair, voluntary, multi-industry standards process;
                 ``(B) are available to any person on reasonable and
         nondiscriminatory terms; and
                 ``(C) do not impose substantial costs on service provid-
         ers or substantial burdens on their systems or networks.
    ``( j) INJUNCTIONS.-The following rules shall apply in the case
of any application for an injunction under section 502 against
a service provider that is not subject to monetary remedies under
this section:



                        H. R. 2281-26

    ``(1) SCOPE OF RELIEF.-(A) With respect to conduct other
than that which qualifies for the limitation on remedies set
forth in subsection (a), the court may grant injunctive relief
with respect to a service provider only in one or more of
the following forms:
         ``(i) An order restraining the service provider from
    providing access to infringing material or activity residing
    at a particular online site on the provider's system or
    network.
         ``(ii) An order restraining the service provider from
    providing access to a subscriber or account holder of the
    service provider's system or network who is engaging in
    infringing activity and is identified in the order, by termi-
    nating the accounts of the subscriber or account holder
    that are specified in the order.
         ``(iii) Such other injunctive relief as the court may
    consider necessary to prevent or restrain infringement of
    copyrighted material specified in the order of the court
    at a particular online location, if such relief is the least
    burdensome to the service provider among the forms of
    relief comparably effective for that purpose.
    ``(B) If the service provider qualifies for the limitation on
remedies described in subsection (a), the court may only grant
injunctive relief in one or both of the following forms:
         ``(i) An order restraining the service provider from
    providing access to a subscriber or account holder of the
    service provider's system or network who is using the
    provider's service to engage in infringing activity and is
    identified in the order, by terminating the accounts of
    the subscriber or account holder that are specified in the
    order.
         ``(ii) An order restraining the service provider from
    providing access, by taking reasonable steps specified in
    the order to block access, to a specific, identified, online
    location outside the United States.
    ``(2) CONSIDERATIONS.-The court, in considering the rel-
evant criteria for injunctive relief under applicable law, shall
consider-
         ``(A) whether such an injunction, either alone or in
    combination with other such injunctions issued against
    the same service provider under this subsection, would
    significantly burden either the provider or the operation
    of the provider's system or network;
         ``(B) the magnitude of the harm likely to be suffered
    by the copyright owner in the digital network environment
    if steps are not taken to prevent or restrain the infringe-
    ment;
         ``(C) whether implementation of such an injunction
    would be technically feasible and effective, and would not
    interfere with access to noninfringing material at other
    online locations; and
         ``(D) whether other less burdensome and comparably
    effective means of preventing or restraining access to the
    infringing material are available.
    ``(3) NOTICE AND EX PARTE ORDERS.-Injunctive relief
under this subsection shall be available only after notice to
the service provider and an opportunity for the service provider



                                    H. R. 2281-27

     to appear are provided, except for orders ensuring the preserva-
     tion of evidence or other orders having no material adverse
     effect on the operation of the service provider's communications
     network.
     ``(k) DEFINITIONS.-
           ``(1) SERVICE PROVIDER.-(A) As used in subsection (a), the
     term `service provider' means an entity offering the trans-
     mission, routing, or providing of connections for digital online
     communications, between or among points specified by a user,
     of material of the user's choosing, without modification to the
     content of the material as sent or received.
           ``(B) As used in this section, other than subsection (a),
     the term `service provider' means a provider of online services
     or network access, or the operator of facilities therefor, and
     includes an entity described in subparagraph (A).
           ``(2) MONETARY RELIEF.-As used in this section, the term
     `monetary relief' means damages, costs, attorneys' fees, and
     any other form of monetary payment.
     ``(l) OTHER DEFENSES NOT AFFECTED.-The failure of a service
provider's conduct to qualify for limitation of liability under this
section shall not bear adversely upon the consideration of a defense
by the service provider that the service provider's conduct is not
infringing under this title or any other defense.
     ``(m) PROTECTION OF PRIVACY.-Nothing in this section shall
be construed to condition the applicability of subsections (a) through
(d) on- ``(1) a service provider monitoring its service or affirma-
     tively seeking facts indicating infringing activity, except to
     the extent consistent with a standard technical measure
     complying with the provisions of subsection (i); or
           ``(2) a service provider gaining access to, removing, or dis-
     abling access to material in cases in which such conduct is
     prohibited by law.
     ``(n) CONSTRUCTION.-Subsections (a), (b), (c), and (d) describe
separate and distinct functions for purposes of applying this section.
Whether a service provider qualifies for the limitation on liability
in any one of those subsections shall be based solely on the criteria
in that subsection, and shall not affect a determination of whether
that service provider qualifies for the limitations on liability under
any other such subsection.''.
     (b) CONFORMING AMENDMENT.-The table of sections for chapter
5 of title 17, United States Code, is amended by adding at the
end the following:
``512. Limitations on liability relating to material online.''.

SEC. 203. EFFECTIVE DATE.
     This title and the amendments made by this title shall take
effect on the date of the enactment of this Act.

  TITLE III-COMPUTER MAINTENANCE
    OR REPAIR COPYRIGHT EXEMPTION

SEC. 301. SHORT TITLE.
     This title may be cited as the ``Computer Maintenance Competi-
tion Assurance Act''.



                               H. R. 2281-28

SEC. 302. LIMITATIONS ON EXCLUSIVE RIGHTS; COMPUTER PRO-
               GRAMS.
    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 com-
    pleted; 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 specifica-
    tions 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 specifica-
    tions and any changes to those specifications authorized for
    that machine.''.

             TITLE IV-MISCELLANEOUS
                            PROVISIONS

SEC. 401. PROVISIONS RELATING TO THE COMMISSIONER OF PATENTS
               AND TRADEMARKS AND THE REGISTER OF COPYRIGHTS
    (a) COMPENSATION.-(1) Section 3(d) of title 35, United States
Code, is amended by striking ``prescribed by law for Assistant
Secretaries of Commerce'' and inserting ``in effect for level III of
the Executive Schedule under section 5314 of title 5, United States
Code''.
    (2) Section 701(e) of title 17, United States Code, is amended-
           (A) by striking ``IV'' and inserting ``III''; and
           (B) by striking ``5315'' and inserting ``5314''.
    (3) Section 5314 of title 5, United States Code, is amended
by adding at the end the following:
           ``Assistant Secretary of Commerce and Commissioner of
    Patents and Trademarks.
           ``Register of Copyrights.''.
    (b) CLARIFICATION OF AUTHORITY OF THE COPYRIGHT OFFICE.-
Section 701 of title 17, United States Code, is amended-



                              H. R. 2281-29

        (1) by redesignating subsections (b) through (e) as sub-
    sections (c) through (f ), respectively; and
        (2) by inserting after subsection (a) the following:
    ``(b) In addition to the functions and duties set out elsewhere
in this chapter, the Register of Copyrights shall perform the follow-
ing functions:
        ``(1) Advise Congress on national and international issues
    relating to copyright, other matters arising under this title,
    and related matters.
        ``(2) Provide information and assistance to Federal depart-
    ments and agencies and the Judiciary on national and inter-
    national issues relating to copyright, other matters arising
    under this title, and related matters.
        ``(3) Participate in meetings of international intergovern-
    mental organizations and meetings with foreign government
    officials relating to copyright, other matters arising under this
    title, and related matters, including as a member of United
    States delegations as authorized by the appropriate Executive
    branch authority.
        ``(4) Conduct studies and programs regarding copyright,
    other matters arising under this title, and related matters,
    the administration of the Copyright Office, or any function
    vested in the Copyright Office by law, including educational
    programs conducted cooperatively with foreign intellectual
    property offices and international intergovernmental organiza-
    tions.``(5) Perform such other functions as Congress may direct,
    or as may be appropriate in furtherance of the functions and
    duties specifically set forth in this title.''.
SEC. 402. EPHEMERAL RECORDINGS.
    Section 112(a) of title 17, United States Code, is amended-
        (1) by redesignating paragraphs (1), (2), and (3) as subpara-
    graphs (A), (B), and (C), respectively;
        (2) by inserting ``(1)'' after ``(a)'';
        (3) by inserting after ``under a license'' the following:
    ``, including a statutory license under section 114(f ),'';
        (4) by inserting after ``114(a),'' the following: ``or for a
    transmitting organization that is a broadcast radio or television
    station licensed as such by the Federal Communications
    Commission and that makes a broadcast transmission of a
    performance of a sound recording in a digital format on a
    nonsubscription basis,''; and
        (5) by adding at the end the following:
    ``(2) In a case in which a transmitting organization entitled
to make a copy or phonorecord under paragraph (1) in connection
with the transmission to the public of a performance or display
of a work is prevented from making such copy or phonorecord
by reason of the application by the copyright owner of technical
measures that prevent the reproduction of the work, the copyright
owner shall make available to the transmitting organization the
necessary means for permitting the making of such copy or phono-
record as permitted under that paragraph, if it is technologically
feasible and economically reasonable for the copyright owner to
do so. If the copyright owner fails to do so in a timely manner
in light of the transmitting organization's reasonable business
requirements, the transmitting organization shall not be liable for



                             H. R. 2281-30

a violation of section 1201(a)(1) of this title for engaging in such
activities as are necessary to make such copies or phonorecords
as permitted under paragraph (1) of this subsection.''.
SEC. 403. LIMITATIONS ON EXCLUSIVE RIGHTS; DISTANCE EDUCATION.
    (a) RECOMMENDATIONS BY REGISTER OF COPYRIGHTS.-Not later
than 6 months after the date of the enactment of this Act, the
Register of Copyrights, after consultation with representatives of
copyright owners, nonprofit educational institutions, and nonprofit
libraries and archives, shall submit to the Congress recommenda-
tions on how to promote distance education through digital tech-
nologies, including interactive digital networks, while maintaining
an appropriate balance between the rights of copyright owners
and the needs of users of copyrighted works. Such recommendations
shall include any legislation the Register of Copyrights considers
appropriate to achieve the objective described in the preceding
sentence.
    (b) FACTORS.-In formulating recommendations under sub-
section (a), the Register of Copyrights shall consider-
        (1) the need for an exemption from exclusive rights of
    copyright owners for distance education through digital net-
    works;
        (2) the categories of works to be included under any
    distance education exemption;
        (3) the extent of appropriate quantitative limitations on
    the portions of works that may be used under any distance
    education exemption;
        (4) the parties who should be entitled to the benefits of
    any distance education exemption;
        (5) the parties who should be designated as eligible
    recipients of distance education materials under any distance
    education exemption;
        (6) whether and what types of technological measures can
    or should be employed to safeguard against unauthorized access
    to, and use or retention of, copyrighted materials as a condition
    of eligibility for any distance education exemption, including,
    in light of developing technological capabilities, the exemption
    set out in section 110(2) of title 17, United States Code;
        (7) the extent to which the availability of licenses for the
    use of copyrighted works in distance education through inter-
    active digital networks should be considered in assessing eligi-
    bility for any distance education exemption; and
        (8) such other issues relating to distance education through
    interactive digital networks that the Register considers appro-
    priate.
SEC. 404. EXEMPTION FOR LIBRARIES AND ARCHIVES.
    Section 108 of title 17, United States Code, is amended-
        (1) in subsection (a)-
               (A) by striking ``Notwithstanding'' and inserting
        ``Except as otherwise provided in this title and notwith-
        standing'';
               (B) by inserting after ``no more than one copy or phono-
        record of a work'' the following: ``, except as provided in
        subsections (b) and (c)''; and
               (C) in paragraph (3) by inserting after ``copyright'' the
        following: ``that appears on the copy or phonorecord that
        is reproduced under the provisions of this section, or



                               H. R. 2281-31

         includes a legend stating that the work may be protected
         by copyright if no such notice can be found on the copy
         or phonorecord that is reproduced under the provisions
         of this section'';
         (2) in subsection (b)-
                (A) by striking ``a copy or phonorecord'' and inserting
         ``three copies or phonorecords'';
                (B) by striking ``in facsimile form''; and
                (C) by striking ``if the copy or phonorecord reproduced
         is currently in the collections of the library or archives.''
         and inserting ``if-
         ``(1) the copy or phonorecord reproduced is currently in
    the collections of the library or archives; and
         ``(2) any such copy or phonorecord that is reproduced in
    digital format is not otherwise distributed in that format and
    is not made available to the public in that format outside
    the premises of the library or archives.''; and
         (3) in subsection (c)-
                (A) by striking ``a copy or phonorecord'' and inserting
         ``three copies or phonorecords'';
                (B) by striking ``in facsimile form'';
                (C) by inserting ``or if the existing format in which
         the work is stored has become obsolete,'' after ``stolen,'';
                (D) by striking ``if the library or archives has, after
         a reasonable effort, determined that an unused replacement
         cannot be obtained at a fair price.'' and inserting ``if-
         ``(1) the library or archives has, after a reasonable effort,
    determined that an unused replacement cannot be obtained
    at a fair price; and
         ``(2) any such copy or phonorecord that is reproduced in
    digital format is not made available to the public in that format
    outside the premises of the library or archives in lawful posses-
    sion of such copy.''; and
                (E) by adding at the end the following:
``For purposes of this subsection, a format shall be considered obso-
lete if the machine or device necessary to render perceptible a
work stored in that format is no longer manufactured or is no
longer reasonably available in the commercial marketplace.''.
SEC. 405. SCOPE OF EXCLUSIVE RIGHTS IN SOUND RECORDINGS;
                EPHEMERAL RECORDINGS.
    (a) SCOPE OF EXCLUSIVE RIGHTS IN SOUND RECORDINGS.-Sec-
tion 114 of title 17, United States Code, is amended as follows:
         (1) Subsection (d) is amended-
                (A) in paragraph (1) by striking subparagraph (A) and
         inserting the following:
                ``(A) a nonsubscription broadcast transmission;''; and
                (B) by amending paragraph (2) to read as follows:
         ``(2) STATUTORY LICENSING OF CERTAIN TRANSMISSIONS.-
    The performance of a sound recording publicly by means of
    a subscription digital audio transmission not exempt under
    paragraph (1), an eligible nonsubscription transmission, or a
    transmission not exempt under paragraph (1) that is made
    by a preexisting satellite digital audio radio service shall be
    subject to statutory licensing, in accordance with subsection
    (f ) if-



                      H. R. 2281-32

    ``(A)(i) the transmission is not part of an interactive
service;
    ``(ii) except in the case of a transmission to a business
establishment, the transmitting entity does not automati-
cally and intentionally cause any device receiving the trans-
mission to switch from one program channel to another;
and ``(iii) except as provided in section 1002(e), the trans-
mission of the sound recording is accompanied, if tech-
nically feasible, by the information encoded in that sound
recording, if any, by or under the authority of the copyright
owner of that sound recording, that identifies the title
of the sound recording, the featured recording artist who
performs on the sound recording, and related information,
including information concerning the underlying musical
work and its writer;
    ``(B) in the case of a subscription transmission not
exempt under paragraph (1) that is made by a preexisting
subscription service in the same transmission medium used
by such service on July 31, 1998, or in the case of a
transmission not exempt under paragraph (1) that is made
by a preexisting satellite digital audio radio service-
            ``(i) the transmission does not exceed the sound
    recording performance complement; and
            ``(ii) the transmitting entity does not cause to be
    published by means of an advance program schedule
    or prior announcement the titles of the specific sound
    recordings or phonorecords embodying such sound
    recordings to be transmitted; and
    ``(C) in the case of an eligible nonsubscription trans-
mission or a subscription transmission not exempt under
paragraph (1) that is made by a new subscription service
or by a preexisting subscription service other than in the
same transmission medium used by such service on July
31, 1998-
            ``(i) the transmission does not exceed the sound
    recording performance complement, except that this
    requirement shall not apply in the case of a retrans-
    mission of a broadcast transmission if the retrans-
    mission is made by a transmitting entity that does
    not have the right or ability to control the programming
    of the broadcast station making the broadcast trans-
    mission, unless-
                ``(I) the broadcast station makes broadcast
            transmissions-
                     ``(aa) in digital format that regularly
                exceed the sound recording performance com-
                plement; or
                     ``(bb) in analog format, a substantial por-
                tion of which, on a weekly basis, exceed the
                sound recording performance complement; and
                ``(II) the sound recording copyright owner or
            its representative has notified the transmitting
            entity in writing that broadcast transmissions of
            the copyright owner's sound recordings exceed the
            sound recording performance complement as pro-
            vided in this clause;



              H. R. 2281-33

    ``(ii) the transmitting entity does not cause to be
published, or induce or facilitate the publication, by
means of an advance program schedule or prior
announcement, the titles of the specific sound record-
ings to be transmitted, the phonorecords embodying
such sound recordings, or, other than for illustrative
purposes, the names of the featured recording artists,
except that this clause does not disqualify a transmit-
ting entity that makes a prior announcement that a
particular artist will be featured within an unspecified
future time period, and in the case of a retransmission
of a broadcast transmission by a transmitting entity
that does not have the right or ability to control the
programming of the broadcast transmission, the
requirement of this clause shall not apply to a prior
oral announcement by the broadcast station, or to an
advance program schedule published, induced, or facili-
tated by the broadcast station, if the transmitting
entity does not have actual knowledge and has not
received written notice from the copyright owner or
its representative that the broadcast station publishes
or induces or facilitates the publication of such advance
program schedule, or if such advance program schedule
is a schedule of classical music programming published
by the broadcast station in the same manner as pub-
lished by that broadcast station on or before September
30, 1998;
    ``(iii) the transmission-
        ``(I) is not part of an archived program of less
    than 5 hours duration;
        ``(II) is not part of an archived program of
    5 hours or greater in duration that is made avail-
    able for a period exceeding 2 weeks;
        ``(III) is not part of a continuous program
    which is of less than 3 hours duration; or
        ``(IV) is not part of an identifiable program
    in which performances of sound recordings are
    rendered in a predetermined order, other than an
    archived or continuous program, that is transmit-
    ted at- ``(aa) more than 3 times in any 2-week
        period that have been publicly announced in
        advance, in the case of a program of less than
        1 hour in duration, or
             ``(bb) more than 4 times in any 2-week
        period that have been publicly announced in
        advance, in the case of a program of 1 hour
        or more in duration,
    except that the requirement of this subclause shall
    not apply in the case of a retransmission of a
    broadcast transmission by a transmitting entity
    that does not have the right or ability to control
    the programming of the broadcast transmission,
    unless the transmitting entity is given notice in
    writing by the copyright owner of the sound record-
    ing that the broadcast station makes broadcast



              H. R. 2281-34

    transmissions that regularly violate such require-
    ment;
    ``(iv) the transmitting entity does not knowingly
perform the sound recording, as part of a service that
offers transmissions of visual images contempora-
neously with transmissions of sound recordings, in a
manner that is likely to cause confusion, to cause mis-
take, or to deceive, as to the affiliation, connection,
or association of the copyright owner or featured
recording artist with the transmitting entity or a
particular product or service advertised by the
transmitting entity, or as to the origin, sponsorship,
or approval by the copyright owner or featured record-
ing artist of the activities of the transmitting entity
other than the performance of the sound recording
itself;``(v) the transmitting entity cooperates to prevent,
to the extent feasible without imposing substantial
costs or burdens, a transmission recipient or any other
person or entity from automatically scanning the
transmitting entity's transmissions alone or together
with transmissions by other transmitting entities in
order to select a particular sound recording to be
transmitted to the transmission recipient, except that
the requirement of this clause shall not apply to a
satellite digital audio service that is in operation, or
that is licensed by the Federal Communications
Commission, on or before July 31, 1998;
    ``(vi) the transmitting entity takes no affirmative
steps to cause or induce the making of a phonorecord
by the transmission recipient, and if the technology
used by the transmitting entity enables the transmit-
ting entity to limit the making by the transmission
recipient of phonorecords of the transmission directly
in a digital format, the transmitting entity sets such
technology to limit such making of phonorecords to
the extent permitted by such technology;
    ``(vii) phonorecords of the sound recording have
been distributed to the public under the authority of
the copyright owner or the copyright owner authorizes
the transmitting entity to transmit the sound record-
ing, and the transmitting entity makes the trans-
mission from a phonorecord lawfully made under the
authority of the copyright owner, except that the
requirement of this clause shall not apply to a retrans-
mission of a broadcast transmission by a transmitting
entity that does not have the right or ability to control
the programming of the broadcast transmission, unless
the transmitting entity is given notice in writing by
the copyright owner of the sound recording that the
broadcast station makes broadcast transmissions that
regularly violate such requirement;
    ``(viii) the transmitting entity accommodates and
does not interfere with the transmission of technical
measures that are widely used by sound recording
copyright owners to identify or protect copyrighted
works, and that are technically feasible of being



                       H. R. 2281-35

       transmitted by the transmitting entity without impos-
       ing substantial costs on the transmitting entity or
       resulting in perceptible aural or visual degradation
       of the digital signal, except that the requirement of
       this clause shall not apply to a satellite digital audio
       service that is in operation, or that is licensed under
       the authority of the Federal Communications Commis-
       sion, on or before July 31, 1998, to the extent that
       such service has designed, developed, or made commit-
       ments to procure equipment or technology that is not
       compatible with such technical measures before such
       technical measures are widely adopted by sound record-
       ing copyright owners; and
           ``(ix) the transmitting entity identifies in textual
       data the sound recording during, but not before, the
       time it is performed, including the title of the sound
       recording, the title of the phonorecord embodying such
       sound recording, if any, and the featured recording
       artist, in a manner to permit it to be displayed to
       the transmission recipient by the device or technology
       intended for receiving the service provided by the
       transmitting entity, except that the obligation in this
       clause shall not take effect until 1 year after the date
       of the enactment of the Digital Millennium Copyright
       Act and shall not apply in the case of a retransmission
       of a broadcast transmission by a transmitting entity
       that does not have the right or ability to control the
       programming of the broadcast transmission, or in the
       case in which devices or technology intended for receiv-
       ing the service provided by the transmitting entity
       that have the capability to display such textual data
       are not common in the marketplace.''.
   (2) Subsection (f ) is amended-
       (A) in the subsection heading by striking ``NONEXEMPT
   SUBSCRIPTION'' and inserting ``CERTAIN NONEXEMPT'';
       (B) in paragraph (1)-
           (i) in the first sentence-
                  (I) by striking ``(1) No'' and inserting ``(1)(A)
           No'';(II) by striking ``the activities'' and inserting
           ``subscription transmissions by preexisting
           subscription services and transmissions by
           preexisting satellite digital audio radio services'';
           and (III) by striking ``2000'' and inserting ``2001'';
           and
           (ii) by amending the third sentence to read as
       follows: ``Any copyright owners of sound recordings,
       preexisting subscription services, or preexisting sat-
       ellite digital audio radio services may submit to the
       Librarian of Congress licenses covering such subscrip-
       tion transmissions with respect to such sound record-
       ings.''; and
       (C) by striking paragraphs (2), (3), (4), and (5) and
   inserting the following:
   ``(B) In the absence of license agreements negotiated under
subparagraph (A), during the 60-day period commencing 6



                       H. R. 2281-36

months after publication of the notice specified in subparagraph
(A), and upon the filing of a petition in accordance with section
803(a)(1), the Librarian of Congress shall, pursuant to chapter
8, convene a copyright arbitration royalty panel to determine
and publish in the Federal Register a schedule of rates and
terms which, subject to paragraph (3), shall be binding on
all copyright owners of sound recordings and entities perform-
ing sound recordings affected by this paragraph. In establishing
rates and terms for preexisting subscription services and
preexisting satellite digital audio radio services, in addition
to the objectives set forth in section 801(b)(1), the copyright
arbitration royalty panel may consider the rates and terms
for comparable types of subscription digital audio transmission
services and comparable circumstances under voluntary license
agreements negotiated as provided in subparagraph (A).
    ``(C)(i) Publication of a notice of the initiation of voluntary
negotiation proceedings as specified in subparagraph (A) shall
be repeated, in accordance with regulations that the Librarian
of Congress shall prescribe-
        ``(I) no later than 30 days after a petition is filed
    by any copyright owners of sound recordings, any preexist-
    ing subscription services, or any preexisting satellite digital
    audio radio services indicating that a new type of subscrip-
    tion digital audio transmission service on which sound
    recordings are performed is or is about to become oper-
    ational; and
        ``(II) in the first week of January 2001, and at 5-
    year intervals thereafter.
    ``(ii) The procedures specified in subparagraph (B) shall
be repeated, in accordance with regulations that the Librarian
of Congress shall prescribe, upon filing of a petition in accord-
ance with section 803(a)(1) during a 60-day period commenc-
ing-    ``(I) 6 months after publication of a notice of the initi-
    ation of voluntary negotiation proceedings under subpara-
    graph (A) pursuant to a petition under clause (i)(I) of
    this subparagraph; or
        ``(II) on July 1, 2001, and at 5-year intervals thereafter.
    ``(iii) The procedures specified in subparagraph (B) shall
be concluded in accordance with section 802.
    ``(2)(A) No later than 30 days after the date of the enact-
ment of the Digital Millennium Copyright Act, the Librarian
of Congress shall cause notice to be published in the Federal
Register of the initiation of voluntary negotiation proceedings
for the purpose of determining reasonable terms and rates
of royalty payments for public performances of sound recordings
by means of eligible nonsubscription transmissions and trans-
missions by new subscription services specified by subsection
(d)(2) during the period beginning on the date of the enactment
of such Act and ending on December 31, 2000, or such other
date as the parties may agree. Such rates and terms shall
distinguish among the different types of eligible nonsubscription
transmission services and new subscription services then in
operation and shall include a minimum fee for each such type
of service. Any copyright owners of sound recordings or any
entities performing sound recordings affected by this paragraph
may submit to the Librarian of Congress licenses covering



                       H. R. 2281-37

such eligible nonsubscription transmissions and new subscrip-
tion services with respect to such sound recordings. The parties
to each negotiation proceeding shall bear their own costs.
    ``(B) In the absence of license agreements negotiated under
subparagraph (A), during the 60-day period commencing 6
months after publication of the notice specified in subparagraph
(A), and upon the filing of a petition in accordance with section
803(a)(1), the Librarian of Congress shall, pursuant to chapter
8, convene a copyright arbitration royalty panel to determine
and publish in the Federal Register a schedule of rates and
terms which, subject to paragraph (3), shall be binding on
all copyright owners of sound recordings and entities perform-
ing sound recordings affected by this paragraph during the
period beginning on the date of the enactment of the Digital
Millennium Copyright Act and ending on December 31, 2000,
or such other date as the parties may agree. Such rates and
terms shall distinguish among the different types of eligible
nonsubscription transmission services then in operation and
shall include a minimum fee for each such type of service,
such differences to be based on criteria including, but not
limited to, the quantity and nature of the use of sound record-
ings and the degree to which use of the service may substitute
for or may promote the purchase of phonorecords by consumers.
In establishing rates and terms for transmissions by eligible
nonsubscription services and new subscription services, the
copyright arbitration royalty panel shall establish rates and
terms that most clearly represent the rates and terms that
would have been negotiated in the marketplace between a
willing buyer and a willing seller. In determining such rates
and terms, the copyright arbitration royalty panel shall base
its decision on economic, competitive and programming informa-
tion presented by the parties, including-
        ``(i) whether use of the service may substitute for or
    may promote the sales of phonorecords or otherwise may
    interfere with or may enhance the sound recording copy-
    right owner's other streams of revenue from its sound
    recordings; and
        ``(ii) the relative roles of the copyright owner and the
    transmitting entity in the copyrighted work and the service
    made available to the public with respect to relative cre-
    ative contribution, technological contribution, capital
    investment, cost, and risk.
In establishing such rates and terms, the copyright arbitration
royalty panel may consider the rates and terms for comparable
types of digital audio transmission services and comparable
circumstances under voluntary license agreements negotiated
under subparagraph (A).
    ``(C)(i) Publication of a notice of the initiation of voluntary
negotiation proceedings as specified in subparagraph (A) shall
be repeated in accordance with regulations that the Librarian
of Congress shall prescribe-
        ``(I) no later than 30 days after a petition is filed
    by any copyright owners of sound recordings or any eligible
    nonsubscription service or new subscription service indicat-
    ing that a new type of eligible nonsubscription service
    or new subscription service on which sound recordings are
    performed is or is about to become operational; and



                         H. R. 2281-38

         ``(II) in the first week of January 2000, and at 2-
    year intervals thereafter, except to the extent that different
    years for the repeating of such proceedings may be deter-
    mined in accordance with subparagraph (A).
    ``(ii) The procedures specified in subparagraph (B) shall
be repeated, in accordance with regulations that the Librarian
of Congress shall prescribe, upon filing of a petition in
accordance with section 803(a)(1) during a 60-day period
commencing-
         ``(I) 6 months after publication of a notice of the
    initiation of voluntary negotiation proceedings under
    subparagraph (A) pursuant to a petition under clause (i)(I);
    or ``(II) on July 1, 2000, and at 2-year intervals thereafter,
    except to the extent that different years for the repeating
    of such proceedings may be determined in accordance with
    subparagraph (A).
    ``(iii) The procedures specified in subparagraph (B) shall
be concluded in accordance with section 802.
    ``(3) License agreements voluntarily negotiated at any time
between 1 or more copyright owners of sound recordings and
1 or more entities performing sound recordings shall be given
effect in lieu of any determination by a copyright arbitration
royalty panel or decision by the Librarian of Congress.
    ``(4)(A) The Librarian of Congress shall also establish
requirements by which copyright owners may receive reason-
able notice of the use of their sound recordings under this
section, and under which records of such use shall be kept
and made available by entities performing sound recordings.
    ``(B) Any person who wishes to perform a sound recording
publicly by means of a transmission eligible for statutory licens-
ing under this subsection may do so without infringing the
exclusive right of the copyright owner of the sound recording-
         ``(i) by complying with such notice requirements as
    the Librarian of Congress shall prescribe by regulation
    and by paying royalty fees in accordance with this sub-
    section; or
         ``(ii) if such royalty fees have not been set, by agreeing
    to pay such royalty fees as shall be determined in accord-
    ance with this subsection.
    ``(C) Any royalty payments in arrears shall be made on
or before the twentieth day of the month next succeeding the
month in which the royalty fees are set.''.
    (3) Subsection (g) is amended-
         (A) in the subsection heading by striking ``SUB-
    SCRIPTION'';
         (B) in paragraph (1) in the matter preceding subpara-
    graph (A), by striking ``subscription transmission licensed''
    and inserting ``transmission licensed under a statutory
    license'';
         (C) in subparagraphs (A) and (B) by striking ``subscrip-
    tion''; and
         (D) in paragraph (2) by striking ``subscription''.
    (4) Subsection ( j) is amended-
         (A) by striking paragraphs (4) and (9) and redesignat-
    ing paragraphs (2), (3), (5), (6), (7), and (8) as paragraphs
    (3), (5), (9), (12), (13), and (14), respectively;



                         H. R. 2281-39

           (B) by inserting after paragraph (1) the following:
     ``(2) An `archived program' is a predetermined program
that is available repeatedly on the demand of the transmission
recipient and that is performed in the same order from the
beginning, except that an archived program shall not include
a recorded event or broadcast transmission that makes no
more than an incidental use of sound recordings, as long as
such recorded event or broadcast transmission does not contain
an entire sound recording or feature a particular sound record-
ing.'';    (C) by inserting after paragraph (3), as so redesignated,
     the following:
     ``(4) A `continuous program' is a predetermined program
that is continuously performed in the same order and that
is accessed at a point in the program that is beyond the control
of the transmission recipient.'';
           (D) by inserting after paragraph (5), as so redesignated,
     the following:
     ``(6) An `eligible nonsubscription transmission' is a noninter-
active nonsubscription digital audio transmission not exempt
under subsection (d)(1) that is made as part of a service that
provides audio programming consisting, in whole or in part,
of performances of sound recordings, including retransmissions
of broadcast transmissions, if the primary purpose of the service
is to provide to the public such audio or other entertainment
programming, and the primary purpose of the service is not
to sell, advertise, or promote particular products or services
other than sound recordings, live concerts, or other music-
related events.
     ``(7) An `interactive service' is one that enables a member
of the public to receive a transmission of a program specially
created for the recipient, or on request, a transmission of a
particular sound recording, whether or not as part of a program,
which is selected by or on behalf of the recipient. The ability
of individuals to request that particular sound recordings be
performed for reception by the public at large, or in the case
of a subscription service, by all subscribers of the service,
does not make a service interactive, if the programming on
each channel of the service does not substantially consist of
sound recordings that are performed within 1 hour of the
request or at a time designated by either the transmitting
entity or the individual making such request. If an entity
offers both interactive and noninteractive services (either
concurrently or at different times), the noninteractive compo-
nent shall not be treated as part of an interactive service.
     ``(8) A `new subscription service' is a service that performs
sound recordings by means of noninteractive subscription
digital audio transmissions and that is not a preexisting
subscription service or a preexisting satellite digital audio radio
service.'';(E) by inserting after paragraph (9), as so redesignated,
     the following:
     ``(10) A `preexisting satellite digital audio radio service'
is a subscription satellite digital audio radio service provided
pursuant to a satellite digital audio radio service license issued
by the Federal Communications Commission on or before July
31, 1998, and any renewal of such license to the extent of



                            H. R. 2281-40

    the scope of the original license, and may include a limited
    number of sample channels representative of the subscription
    service that are made available on a nonsubscription basis
    in order to promote the subscription service.
         ``(11) A `preexisting subscription service' is a service that
    performs sound recordings by means of noninteractive audio-
    only subscription digital audio transmissions, which was in
    existence and was making such transmissions to the public
    for a fee on or before July 31, 1998, and may include a limited
    number of sample channels representative of the subscription
    service that are made available on a nonsubscription basis
    in order to promote the subscription service.''; and
             (F) by adding at the end the following:
         ``(15) A `transmission' is either an initial transmission or
    a retransmission.''.
         (5) The amendment made by paragraph (2)(B)(i)(III) of
    this subsection shall be deemed to have been enacted as part
    of the Digital Performance Right in Sound Recordings Act of
    1995, and the publication of notice of proceedings under section
    114(f )(1) of title 17, United States Code, as in effect upon
    the effective date of that Act, for the determination of royalty
    payments shall be deemed to have been made for the period
    beginning on the effective date of that Act and ending on
    December 1, 2001.
         (6) The amendments made by this subsection do not annul,
    limit, or otherwise impair the rights that are preserved by
    section 114 of title 17, United States Code, including the rights
    preserved by subsections (c), (d)(4), and (i) of such section.
    (b) EPHEMERAL RECORDINGS.-Section 112 of title 17, United
States Code, is amended-
         (1) by redesignating subsection (e) as subsection (f ); and
         (2) by inserting after subsection (d) the following:
    ``(e) STATUTORY LICENSE.-(1) A transmitting organization enti-
tled to transmit to the public a performance of a sound recording
under the limitation on exclusive rights specified by section
114(d)(1)(C)(iv) or under a statutory license in accordance with
section 114(f ) is entitled to a statutory license, under the conditions
specified by this subsection, to make no more than 1 phonorecord
of the sound recording (unless the terms and conditions of the
statutory license allow for more), if the following conditions are
satisfied:``(A) The phonorecord is retained and used solely by the
    transmitting organization that made it, and no further
    phonorecords are reproduced from it.
         ``(B) The phonorecord is used solely for the transmitting
    organization's own transmissions originating in the United
    States under a statutory license in accordance with section
    114(f ) or the limitation on exclusive rights specified by section
    114(d)(1)(C)(iv).
         ``(C) Unless preserved exclusively for purposes of archival
    preservation, the phonorecord is destroyed within 6 months
    from the date the sound recording was first transmitted to
    the public using the phonorecord.
         ``(D) Phonorecords of the sound recording have been distrib-
    uted to the public under the authority of the copyright owner
    or the copyright owner authorizes the transmitting entity to
    transmit the sound recording, and the transmitting entity



                           H. R. 2281-41

    makes the phonorecord under this subsection from a phono-
    record lawfully made and acquired under the authority of the
    copyright owner.
    ``(3) Notwithstanding any provision of the antitrust laws, any
copyright owners of sound recordings and any transmitting
organizations entitled to a statutory license under this subsection
may negotiate and agree upon royalty rates and license terms
and conditions for making phonorecords of such sound recordings
under this section and the proportionate division of fees paid among
copyright owners, and may designate common agents to negotiate,
agree to, pay, or receive such royalty payments.
    ``(4) No later than 30 days after the date of the enactment
of the Digital Millennium Copyright Act, the Librarian of Congress
shall cause notice to be published in the Federal Register of the
initiation of voluntary negotiation proceedings for the purpose of
determining reasonable terms and rates of royalty payments for
the activities specified by paragraph (2) of this subsection during
the period beginning on the date of the enactment of such Act
and ending on December 31, 2000, or such other date as the
parties may agree. Such rates shall include a minimum fee for
each type of service offered by transmitting organizations. Any
copyright owners of sound recordings or any transmitting organiza-
tions entitled to a statutory license under this subsection may
submit to the Librarian of Congress licenses covering such activities
with respect to such sound recordings. The parties to each negotia-
tion proceeding shall bear their own costs.
    ``(5) In the absence of license agreements negotiated under
paragraph (3), during the 60-day period commencing 6 months
after publication of the notice specified in paragraph (4), and upon
the filing of a petition in accordance with section 803(a)(1), the
Librarian of Congress shall, pursuant to chapter 8, convene a copy-
right arbitration royalty panel to determine and publish in the
Federal Register a schedule of reasonable rates and terms which,
subject to paragraph (6), shall be binding on all copyright owners
of sound recordings and transmitting organizations entitled to a
statutory license under this subsection during the period beginning
on the date of the enactment of the Digital Millennium Copyright
Act and ending on December 31, 2000, or such other date as
the parties may agree. Such rates shall include a minimum fee
for each type of service offered by transmitting organizations. The
copyright arbitration royalty panel shall establish rates that most
clearly represent the fees that would have been negotiated in the
marketplace between a willing buyer and a willing seller. In deter-
mining such rates and terms, the copyright arbitration royalty
panel shall base its decision on economic, competitive, and program-
ming information presented by the parties, including-
        ``(A) whether use of the service may substitute for or may
    promote the sales of phonorecords or otherwise interferes with
    or enhances the copyright owner's traditional streams of reve-
    nue; and
        ``(B) the relative roles of the copyright owner and the
    transmitting organization in the copyrighted work and the serv-
    ice made available to the public with respect to relative creative
    contribution, technological contribution, capital investment,
    cost, and risk.
In establishing such rates and terms, the copyright arbitration
royalty panel may consider the rates and terms under voluntary



                             H. R. 2281-42

license agreements negotiated as provided in paragraphs (3) and
(4). The Librarian of Congress shall also establish requirements
by which copyright owners may receive reasonable notice of the
use of their sound recordings under this section, and under which
records of such use shall be kept and made available by transmitting
organizations entitled to obtain a statutory license under this sub-
section.
    ``(6) License agreements voluntarily negotiated at any time
between 1 or more copyright owners of sound recordings and 1
or more transmitting organizations entitled to obtain a statutory
license under this subsection shall be given effect in lieu of any
determination by a copyright arbitration royalty panel or decision
by the Librarian of Congress.
    ``(7) Publication of a notice of the initiation of voluntary negotia-
tion proceedings as specified in paragraph (4) shall be repeated,
in accordance with regulations that the Librarian of Congress shall
prescribe, in the first week of January 2000, and at 2-year intervals
thereafter, except to the extent that different years for the repeating
of such proceedings may be determined in accordance with para-
graph (4). The procedures specified in paragraph (5) shall be
repeated, in accordance with regulations that the Librarian of Con-
gress shall prescribe, upon filing of a petition in accordance with
section 803(a)(1), during a 60-day period commencing on July 1,
2000, and at 2-year intervals thereafter, except to the extent that
different years for the repeating of such proceedings may be deter-
mined in accordance with paragraph (4). The procedures specified
in paragraph (5) shall be concluded in accordance with section
802.``(8)(A) Any person who wishes to make a phonorecord of a
sound recording under a statutory license in accordance with this
subsection may do so without infringing the exclusive right of
the copyright owner of the sound recording under section 106(1)-
            ``(i) by complying with such notice requirements as the
    Librarian of Congress shall prescribe by regulation and by
    paying royalty fees in accordance with this subsection; or
            ``(ii) if such royalty fees have not been set, by agreeing
    to pay such royalty fees as shall be determined in accordance
    with this subsection.
    ``(B) Any royalty payments in arrears shall be made on or
before the 20th day of the month next succeeding the month in
which the royalty fees are set.
    ``(9) If a transmitting organization entitled to make a phono-
record under this subsection is prevented from making such phono-
record by reason of the application by the copyright owner of tech-
nical measures that prevent the reproduction of the sound recording,
the copyright owner shall make available to the transmitting
organization the necessary means for permitting the making of
such phonorecord as permitted under this subsection, if it is techno-
logically feasible and economically reasonable for the copyright
owner to do so. If the copyright owner fails to do so in a timely
manner in light of the transmitting organization's reasonable busi-
ness requirements, the transmitting organization shall not be liable
for a violation of section 1201(a)(1) of this title for engaging in
such activities as are necessary to make such phonorecords as
permitted under this subsection.
    ``(10) Nothing in this subsection annuls, limits, impairs, or
otherwise affects in any way the existence or value of any of



                              H. R. 2281-43

the exclusive rights of the copyright owners in a sound recording,
except as otherwise provided in this subsection, or in a musical
work, including the exclusive rights to reproduce and distribute
a sound recording or musical work, including by means of a digital
phonorecord delivery, under sections 106(1), 106(3), and 115, and
the right to perform publicly a sound recording or musical work,
including by means of a digital audio transmission, under sections
106(4) and 106(6).''.
    (c) SCOPE OF SECTION 112(a)OFT
                                             ITLE 17 NOT AFFECTED.-
Nothing in this section or the amendments made by this section
shall affect the scope of section 112(a) of title 17, United States
Code, or the entitlement of any person to an exemption thereunder.
    (d) PROCEDURAL AMENDMENTS TO CHAPTER 8.-Section 802 of
title 17, United States Code, is amended-
         (1) in subsection (f )-
                (A) in the first sentence by striking ``60'' and inserting
         ``90''; and
                (B) in the third sentence by striking ``that 60-day
         period'' and inserting ``an additional 30-day period''; and
         (2) in subsection (g) by inserting after the second sentence
    the following: ``When this title provides that the royalty rates
    or terms that were previously in effect are to expire on a
    specified date, any adjustment by the Librarian of those rates
    or terms shall be effective as of the day following the date
    of expiration of the rates or terms that were previously in
    effect, even if the Librarian's decision is rendered on a later
    date.''.
    (e) CONFORMING AMENDMENTS.-(1) Section 801(b)(1) of title
17, United States Code, is amended in the second sentence by
striking ``sections 114, 115, and 116'' and inserting ``sections
114(f )(1)(B), 115, and 116''.
    (2) Section 802(c) of title 17, United States Code, is amended
by striking ``section 111, 114, 116, or 119, any person entitled
to a compulsory license'' and inserting ``section 111, 112, 114, 116,
or 119, any transmitting organization entitled to a statutory license
under section 112(f ), any person entitled to a statutory license''.
    (3) Section 802(g) of title 17, United States Code, is amended
by striking ``sections 111, 114'' and inserting ``sections 111, 112,
114''.(4) Section 802(h)(2) of title 17, United States Code, is amended
by striking ``section 111, 114'' and inserting ``section 111, 112, 114''.
    (5) Section 803(a)(1) of title 17, United States Code, is amended
by striking ``sections 114, 115'' and inserting ``sections 112, 114,
115''.(6) Section 803(a)(5) of title 17, United States Code, is
amended-
         (A) by striking ``section 114'' and inserting ``section 112
    or 114''; and
         (B) by striking ``that section'' and inserting ``those sections''.
SEC. 406. ASSUMPTION OF CONTRACTUAL OBLIGATIONS RELATED TO
                TRANSFERS OF RIGHTS IN MOTION PICTURES.
    (a) IN GENERAL.-Part VI of title 28, United States Code, is
amended by adding at the end the following new chapter:



                                 H. R. 2281-44

    ``CHAPTER 180-ASSUMPTION OF CERTAIN
               CONTRACTUAL OBLIGATIONS
``Sec. 4001. Assumption of contractual obligations related to transfers of rights in
           motion pictures.
`` 4001. Assumption of contractual obligations related to
               transfers of rights in motion pictures
     ``(a) ASSUMPTION OF OBLIGATIONS.-(1) In the case of a transfer
of copyright ownership under United States law in a motion picture
(as the terms `transfer of copyright ownership' and `motion picture'
are defined in section 101 of title 17) that is produced subject
to 1 or more collective bargaining agreements negotiated under
the laws of the United States, if the transfer is executed on or
after the effective date of this chapter and is not limited to public
performance rights, the transfer instrument shall be deemed to
incorporate the assumption agreements applicable to the copyright
ownership being transferred that are required by the applicable
collective bargaining agreement, and the transferee shall be subject
to the obligations under each such assumption agreement to make
residual payments and provide related notices, accruing after the
effective date of the transfer and applicable to the exploitation
of the rights transferred, and any remedies under each such
assumption agreement for breach of those obligations, as those
obligations and remedies are set forth in the applicable collective
bargaining agreement, if-
          ``(A) the transferee knows or has reason to know at the
     time of the transfer that such collective bargaining agreement
     was or will be applicable to the motion picture; or
          ``(B) in the event of a court order confirming an arbitration
     award against the transferor under the collective bargaining
     agreement, the transferor does not have the financial ability
     to satisfy the award within 90 days after the order is issued.
     ``(2) For purposes of paragraph (1)(A), `knows or has reason
to know' means any of the following:
          ``(A) Actual knowledge that the collective bargaining agree-
     ment was or will be applicable to the motion picture.
          ``(B)(i) Constructive knowledge that the collective bargain-
     ing agreement was or will be applicable to the motion picture,
     arising from recordation of a document pertaining to copyright
     in the motion picture under section 205 of title 17 or from
     publication, at a site available to the public on-line that is
     operated by the relevant union, of information that identifies
     the motion picture as subject to a collective bargaining agree-
     ment with that union, if the site permits commercially reason-
     able verification of the date on which the information was
     available for access.
          ``(ii) Clause (i) applies only if the transfer referred to in
     subsection (a)(1) occurs-
               ``(I) after the motion picture is completed, or
               ``(II) before the motion picture is completed and-
                     ``(aa) within 18 months before the filing of an
               application for copyright registration for the motion
               picture under section 408 of title 17, or
                     ``(bb) if no such application is filed, within 18
               months before the first publication of the motion pic-
               ture in the United States.



                             H. R. 2281-45

         ``(C) Awareness of other facts and circumstances pertaining
    to a particular transfer from which it is apparent that the
    collective bargaining agreement was or will be applicable to
    the motion picture.
    ``(b) SCOPE OF EXCLUSION OF TRANSFERS OF PUBLIC PERFORM-
ANCE RIGHTS.-For purposes of this section, the exclusion under
subsection (a) of transfers of copyright ownership in a motion picture
that are limited to public performance rights includes transfers
to a terrestrial broadcast station, cable system, or programmer
to the extent that the station, system, or programmer is functioning
as an exhibitor of the motion picture, either by exhibiting the
motion picture on its own network, system, service, or station,
or by initiating the transmission of an exhibition that is carried
on another network, system, service, or station. When a terrestrial
broadcast station, cable system, or programmer, or other transferee,
is also functioning otherwise as a distributor or as a producer
of the motion picture, the public performance exclusion does not
affect any obligations imposed on the transferee to the extent that
it is engaging in such functions.
    ``(c) EXCLUSION FOR GRANTS OF SECURITY INTERESTS.-Sub-
section (a) shall not apply to-
         ``(1) a transfer of copyright ownership consisting solely
    of a mortgage, hypothecation, or other security interest; or
         ``(2) a subsequent transfer of the copyright ownership
    secured by the security interest described in paragraph (1)
    by or under the authority of the secured party, including a
    transfer through the exercise of the secured party's rights or
    remedies as a secured party, or by a subsequent transferee.
The exclusion under this subsection shall not affect any rights
or remedies under law or contract.
    ``(d) DEFERRAL PENDING RESOLUTION OF BONA FIDE DISPUTE.-
A transferee on which obligations are imposed under subsection
(a) by virtue of paragraph (1) of that subsection may elect to
defer performance of such obligations that are subject to a bona
fide dispute between a union and a prior transferor until that
dispute is resolved, except that such deferral shall not stay accrual
of any union claims due under an applicable collective bargaining
agreement.
    ``(e) SCOPE OF OBLIGATIONS DETERMINED BY PRIVATE AGREE-
MENT.-Nothing in this section shall expand or diminish the rights,
obligations, or remedies of any person under the collective bargain-
ing agreements or assumption agreements referred to in this sec-
tion.``(f) FAILURE TO NOTIFY.-If the transferor under subsection
(a) fails to notify the transferee under subsection (a) of applicable
collective bargaining obligations before the execution of the transfer
instrument, and subsection (a) is made applicable to the transferee
solely by virtue of subsection (a)(1)(B), the transferor shall be liable
to the transferee for any damages suffered by the transferee as
a result of the failure to notify.
    ``(g) DETERMINATION OF DISPUTES AND CLAIMS.-Any dispute
concerning the application of subsections (a) through (f ) shall be
determined by an action in United States district court, and the
court in its discretion may allow the recovery of full costs by
or against any party and may also award a reasonable attorney's
fee to the prevailing party as part of the costs.



                                    H. R. 2281-46

          ``(h) STUDY.-The Comptroller General, in consultation with
the Register of Copyrights, shall conduct a study of the conditions
in the motion picture industry that gave rise to this section, and
the impact of this section on the motion picture industry. The
Comptroller General shall report the findings of the study to the
Congress within 2 years after the effective date of this chapter.''.
          (b) CONFORMING AMENDMENT.-The table of chapters for part
VI of title 28, United States Code, is amended by adding at the
end the following:
``180. Assumption of Certain Contractual Obligations .............................. 4001''.
SEC. 407. EFFECTIVE DATE.
          Except as otherwise provided in this title, this title and the
amendments made by this title shall take effect on the date of
the enactment of this Act.

     TITLE V-PROTECTION OF CERTAIN
                          ORIGINAL DESIGNS
SEC. 501. SHORT TITLE.
          This Act may be referred to as the ``Vessel Hull Design Protec-
tion Act''.
SEC. 502. PROTECTION OF CERTAIN ORIGINAL DESIGNS.
          Title 17, United States Code, is amended by adding at the
end the following new chapter:
              ``CHAPTER 13-PROTECTION OF ORIGINAL DESIGNS
``Sec.
``1301. Designs protected.
``1302. Designs not subject to protection.
``1303. Revisions, adaptations, and rearrangements.
``1304. Commencement of protection.
``1305. Term of protection.
``1306. Design notice.
``1307. Effect of omission of notice.
``1308. Exclusive rights.
``1309. Infringement.
``1310. Application for registration.
``1311. Benefit of earlier filing date in foreign country.
``1312. Oaths and acknowledgments.
``1313. Examination of application and issue or refusal of registration.
``1314. Certification of registration.
``1315. Publication of announcements and indexes.
``1316. Fees.
``1317. Regulations.
``1318. Copies of records.
``1319. Correction of errors in certificates.
``1320. Ownership and transfer.
``1321. Remedy for infringement.
``1322. Injunctions.
``1323. Recovery for infringement.
``1324. Power of court over registration.
``1325. Liability for action on registration fraudulently obtained.
``1326. Penalty for false marking.
``1327. Penalty for false representation.
``1328. Enforcement by Treasury and Postal Service.
``1329. Relation to design patent law.
``1330. Common law and other rights unaffected.
``1331. Administrator; Office of the Administrator.
``1332. No retroactive effect.
`` 1301. Designs protected
          ``(a) DESIGNS PROTECTED.-



                               H. R. 2281-47

        ``(1) IN GENERAL.-The designer or other owner of an origi-
    nal design of a useful article which makes the article attractive
    or distinctive in appearance to the purchasing or using public
    may secure the protection provided by this chapter upon
    complying with and subject to this chapter.
        ``(2) VESSEL HULLS.-The design of a vessel hull, including
    a plug or mold, is subject to protection under this chapter,
    notwithstanding section 1302(4).
    ``(b) DEFINITIONS.-For the purpose of this chapter, the
following terms have the following meanings:
        ``(1) A design is `original' if it is the result of the designer's
    creative endeavor that provides a distinguishable variation over
    prior work pertaining to similar articles which is more than
    merely trivial and has not been copied from another source.
        ``(2) A `useful article' is a vessel hull, including a plug
    or mold, which in normal use has an intrinsic utilitarian func-
    tion that is not merely to portray the appearance of the article
    or to convey information. An article which normally is part
    of a useful article shall be deemed to be a useful article.
        ``(3) A `vessel' is a craft, especially one larger than a row-
    boat, designed to navigate on water, but does not include any
    such craft that exceeds 200 feet in length.
        ``(4) A `hull' is the frame or body of a vessel, including
    the deck of a vessel, exclusive of masts, sails, yards, and rigging.
        ``(5) A `plug' means a device or model used to make a
    mold for the purpose of exact duplication, regardless of whether
    the device or model has an intrinsic utilitarian function that
    is not only to portray the appearance of the product or to
    convey information.
        ``(6) A `mold' means a matrix or form in which a substance
    for material is used, regardless of whether the matrix or form
    has an intrinsic utilitarian function that is not only to portray
    the appearance of the product or to convey information.
`` 1302. Designs not subject to protection
    ``Protection under this chapter shall not be available for a
design that is-
        ``(1) not original;
        ``(2) staple or commonplace, such as a standard geometric
    figure, a familiar symbol, an emblem, or a motif, or another
    shape, pattern, or configuration which has become standard,
    common, prevalent, or ordinary;
        ``(3) different from a design excluded by paragraph (2)
    only in insignificant details or in elements which are variants
    commonly used in the relevant trades;
        ``(4) dictated solely by a utilitarian function of the article
    that embodies it; or
        ``(5) embodied in a useful article that was made public
    by the designer or owner in the United States or a foreign
    country more than 1 year before the date of the application
    for registration under this chapter.
`` 1303. Revisions, adaptations, and rearrangements
    ``Protection for a design under this chapter shall be available
notwithstanding the employment in the design of subject matter
excluded from protection under section 1302 if the design is a
substantial revision, adaptation, or rearrangement of such subject



                            H. R. 2281-48

matter. Such protection shall be independent of any subsisting
protection in subject matter employed in the design, and shall
not be construed as securing any right to subject matter excluded
from protection under this chapter or as extending any subsisting
protection under this chapter.
`` 1304. Commencement of protection
    ``The protection provided for a design under this chapter shall
commence upon the earlier of the date of publication of the registra-
tion under section 1313(a) or the date the design is first made
public as defined by section 1310(b).
`` 1305. Term of protection
    ``(a) IN GENERAL.-Subject to subsection (b), the protection
provided under this chapter for a design shall continue for a term
of 10 years beginning on the date of the commencement of protection
under section 1304.
    ``(b) EXPIRATION.-All terms of protection provided in this
section shall run to the end of the calendar year in which they
would otherwise expire.
    ``(c) TERMINATION OF RIGHTS.-Upon expiration or termination
of protection in a particular design under this chapter, all rights
under this chapter in the design shall terminate, regardless of
the number of different articles in which the design may have
been used during the term of its protection.
`` 1306. Design notice
    ``(a) CONTENTS OF DESIGN NOTICE.-(1) Whenever any design
for which protection is sought under this chapter is made public
under section 1310(b), the owner of the design shall, subject to
the provisions of section 1307, mark it or have it marked legibly
with a design notice consisting of-
         ``(A) the words `Protected Design', the abbreviation `Prot'd
    Des.', or the letter `D' with a circle, or the symbol `*D*';
         ``(B) the year of the date on which protection for the design
    commenced; and
         ``(C) the name of the owner, an abbreviation by which
    the name can be recognized, or a generally accepted alternative
    designation of the owner.
Any distinctive identification of the owner may be used for purposes
of subparagraph (C) if it has been recorded by the Administrator
before the design marked with such identification is registered.
    ``(2) After registration, the registration number may be used
instead of the elements specified in subparagraphs (B) and (C)
of paragraph (1).
    ``(b) LOCATION OF NOTICE.-The design notice shall be so located
and applied as to give reasonable notice of design protection while
the useful article embodying the design is passing through its
normal channels of commerce.
    ``(c) SUBSEQUENT REMOVAL OF NOTICE.-When the owner of
a design has complied with the provisions of this section, protection
under this chapter shall not be affected by the removal, destruction,
or obliteration by others of the design notice on an article.
`` 1307. Effect of omission of notice
    ``(a) ACTIONS WITH NOTICE.-Except as provided in subsection
(b), the omission of the notice prescribed in section 1306 shall



                              H. R. 2281-49

not cause loss of the protection under this chapter or prevent
recovery for infringement under this chapter against any person
who, after receiving written notice of the design protection, begins
an undertaking leading to infringement under this chapter.
    ``(b) ACTIONS WITHOUT NOTICE.-The omission of the notice
prescribed in section 1306 shall prevent any recovery under section
1323 against a person who began an undertaking leading to
infringement under this chapter before receiving written notice
of the design protection. No injunction shall be issued under this
chapter with respect to such undertaking unless the owner of the
design reimburses that person for any reasonable expenditure or
contractual obligation in connection with such undertaking that
was incurred before receiving written notice of the design protection,
as the court in its discretion directs. The burden of providing
written notice of design protection shall be on the owner of the
design.
`` 1308. Exclusive rights
    ``The owner of a design protected under this chapter has the
exclusive right to-
           ``(1) make, have made, or import, for sale or for use in
    trade, any useful article embodying that design; and
           ``(2) sell or distribute for sale or for use in trade any
    useful article embodying that design.
`` 1309. Infringement
    ``(a) ACTS OF INFRINGEMENT.-Except as provided in subsection
(b), it shall be infringement of the exclusive rights in a design
protected under this chapter for any person, without the consent
of the owner of the design, within the United States and during
the term of such protection, to-
           ``(1) make, have made, or import, for sale or for use in
    trade, any infringing article as defined in subsection (e); or
           ``(2) sell or distribute for sale or for use in trade any
    such infringing article.
    ``(b) ACTS OF SELLERS AND DISTRIBUTORS.-A seller or distribu-
tor of an infringing article who did not make or import the article
shall be deemed to have infringed on a design protected under
this chapter only if that person-
           ``(1) induced or acted in collusion with a manufacturer
    to make, or an importer to import such article, except that
    merely purchasing or giving an order to purchase such article
    in the ordinary course of business shall not of itself constitute
    such inducement or collusion; or
           ``(2) refused or failed, upon the request of the owner of
    the design, to make a prompt and full disclosure of that person's
    source of such article, and that person orders or reorders such
    article after receiving notice by registered or certified mail
    of the protection subsisting in the design.
    ``(c) ACTS WITHOUT KNOWLEDGE.-It shall not be infringement
under this section to make, have made, import, sell, or distribute,
any article embodying a design which was created without knowl-
edge that a design was protected under this chapter and was
copied from such protected design.
    ``(d) ACTS IN ORDINARY COURSE OF BUSINESS.-A person who
incorporates into that person's product of manufacture an infringing
article acquired from others in the ordinary course of business,



                              H. R. 2281-50

or who, without knowledge of the protected design embodied in
an infringing article, makes or processes the infringing article for
the account of another person in the ordinary course of business,
shall not be deemed to have infringed the rights in that design
under this chapter except under a condition contained in paragraph
(1) or (2) of subsection (b). Accepting an order or reorder from
the source of the infringing article shall be deemed ordering or
reordering within the meaning of subsection (b)(2).
    ``(e) INFRINGING ARTICLE DEFINED.-As used in this section,
an `infringing article' is any article the design of which has been
copied from a design protected under this chapter, without the
consent of the owner of the protected design. An infringing article
is not an illustration or picture of a protected design in an advertise-
ment, book, periodical, newspaper, photograph, broadcast, motion
picture, or similar medium. A design shall not be deemed to have
been copied from a protected design if it is original and not substan-
tially similar in appearance to a protected design.
    ``(f ) ESTABLISHING ORIGINALITY.-The party to any action or
proceeding under this chapter who alleges rights under this chapter
in a design shall have the burden of establishing the design's
originality whenever the opposing party introduces an earlier work
which is identical to such design, or so similar as to make prima
facie showing that such design was copied from such work.
    ``(g) REPRODUCTION FOR TEACHING OR ANALYSIS.-It is not an
infringement of the exclusive rights of a design owner for a person
to reproduce the design in a useful article or in any other form
solely for the purpose of teaching, analyzing, or evaluating the
appearance, concepts, or techniques embodied in the design, or
the function of the useful article embodying the design.
`` 1310. Application for registration
    ``(a) TIME LIMIT FOR APPLICATION FOR REGISTRATION.-Protec-
tion under this chapter shall be lost if application for registration
of the design is not made within 2 years after the date on which
the design is first made public.
    ``(b) WHEN DESIGN IS MADE PUBLIC.-A design is made public
when an existing useful article embodying the design is anywhere
publicly exhibited, publicly distributed, or offered for sale or sold
to the public by the owner of the design or with the owner's
consent.
    ``(c) APPLICATION BY OWNER OF DESIGN.-Application for reg-
istration may be made by the owner of the design.
    ``(d) CONTENTS OF APPLICATION.-The application for registra-
tion shall be made to the Administrator and shall state-
            ``(1) the name and address of the designer or designers
    of the design;
            ``(2) the name and address of the owner if different from
    the designer;
            ``(3) the specific name of the useful article embodying the
    design;
            ``(4) the date, if any, that the design was first made public,
    if such date was earlier than the date of the application;
            ``(5) affirmation that the design has been fixed in a useful
    article; and
            ``(6) such other information as may be required by the
    Administrator.



                              H. R. 2281-51

The application for registration may include a description setting
forth the salient features of the design, but the absence of such
a description shall not prevent registration under this chapter.
    ``(e) SWORN STATEMENT.-The application for registration shall
be accompanied by a statement under oath by the applicant or
the applicant's duly authorized agent or representative, setting
forth, to the best of the applicant's knowledge and belief-
         ``(1) that the design is original and was created by the
    designer or designers named in the application;
         ``(2) that the design has not previously been registered
    on behalf of the applicant or the applicant's predecessor in
    title; and
         ``(3) that the applicant is the person entitled to protection
    and to registration under this chapter.
If the design has been made public with the design notice prescribed
in section 1306, the statement shall also describe the exact form
and position of the design notice.
    ``(f ) EFFECT OF ERRORS.-(1) Error in any statement or asser-
tion as to the utility of the useful article named in the application
under this section, the design of which is sought to be registered,
shall not affect the protection secured under this chapter.
    ``(2) Errors in omitting a joint designer or in naming an alleged
joint designer shall not affect the validity of the registration, or
the actual ownership or the protection of the design, unless it
is shown that the error occurred with deceptive intent.
    ``(g) DESIGN MADE IN SCOPE OF EMPLOYMENT.-In a case in
which the design was made within the regular scope of the design-
er's employment and individual authorship of the design is difficult
or impossible to ascribe and the application so states, the name
and address of the employer for whom the design was made may
be stated instead of that of the individual designer.
    ``(h) PICTORIAL REPRESENTATION OF DESIGN.-The application
for registration shall be accompanied by two copies of a drawing
or other pictorial representation of the useful article embodying
the design, having one or more views, adequate to show the design,
in a form and style suitable for reproduction, which shall be deemed
a part of the application.
    ``(i) DESIGN IN MORE THAN ONE USEFUL ARTICLE.-If the distin-
guishing elements of a design are in substantially the same form
in different useful articles, the design shall be protected as to
all such useful articles when protected as to one of them, but
not more than one registration shall be required for the design.
    ``( j) APPLICATION FOR MORE THAN ONE DESIGN.-More than
one design may be included in the same application under such
conditions as may be prescribed by the Administrator. For each
design included in an application the fee prescribed for a single
design shall be paid.
`` 1311. Benefit of earlier filing date in foreign country
    ``An application for registration of a design filed in the United
States by any person who has, or whose legal representative or
predecessor or successor in title has, previously filed an application
for registration of the same design in a foreign country which
extends to designs of owners who are citizens of the United States,
or to applications filed under this chapter, similar protection to
that provided under this chapter shall have that same effect as
if filed in the United States on the date on which the application



                                 H. R. 2281-52

was first filed in such foreign country, if the application in the
United States is filed within 6 months after the earliest date
on which any such foreign application was filed.
`` 1312. Oaths and acknowledgments
    ``(a) IN GENERAL.-Oaths and acknowledgments required by
this chapter-
         ``(1) may be made-
              ``(A) before any person in the United States authorized
         by law to administer oaths; or
              ``(B) when made in a foreign country, before any diplo-
         matic or consular officer of the United States authorized
         to administer oaths, or before any official authorized to
         administer oaths in the foreign country concerned, whose
         authority shall be proved by a certificate of a diplomatic
         or consular officer of the United States; and
         ``(2) shall be valid if they comply with the laws of the
    State or country where made.
    ``(b) WRITTEN DECLARATION IN LIEU OF OATH.-(1) The Adminis-
trator may by rule prescribe that any document which is to be
filed under this chapter in the Office of the Administrator and
which is required by any law, rule, or other regulation to be under
oath, may be subscribed to by a written declaration in such form
as the Administrator may prescribe, and such declaration shall
be in lieu of the oath otherwise required.
    ``(2) Whenever a written declaration under paragraph (1) is
used, the document containing the declaration shall state that
willful false statements are punishable by fine or imprisonment,
or both, pursuant to section 1001 of title 18, and may jeopardize
the validity of the application or document or a registration result-
ing therefrom.
`` 1313. Examination of application and issue or refusal of
              registration
    ``(a) DETERMINATION OF REGISTRABILITY OF DESIGN; REGISTRA-
TION.-Upon the filing of an application for registration in proper
form under section 1310, and upon payment of the fee prescribed
under section 1316, the Administrator shall determine whether
or not the application relates to a design which on its face appears
to be subject to protection under this chapter, and, if so, the Register
shall register the design. Registration under this subsection shall
be announced by publication. The date of registration shall be
the date of publication.
    ``(b) REFUSAL TO REGISTER; RECONSIDERATION.-If, in the judg-
ment of the Administrator, the application for registration relates
to a design which on its face is not subject to protection under
this chapter, the Administrator shall send to the applicant a notice
of refusal to register and the grounds for the refusal. Within 3
months after the date on which the notice of refusal is sent, the
applicant may, by written request, seek reconsideration of the
application. After consideration of such a request, the Administrator
shall either register the design or send to the applicant a notice
of final refusal to register.
    ``(c) APPLICATION TO CANCEL REGISTRATION.-Any person who
believes he or she is or will be damaged by a registration under
this chapter may, upon payment of the prescribed fee, apply to
the Administrator at any time to cancel the registration on the



                               H. R. 2281-53

ground that the design is not subject to protection under this
chapter, stating the reasons for the request. Upon receipt of an
application for cancellation, the Administrator shall send to the
owner of the design, as shown in the records of the Office of
the Administrator, a notice of the application, and the owner shall
have a period of 3 months after the date on which such notice
is mailed in which to present arguments to the Administrator
for support of the validity of the registration. The Administrator
shall also have the authority to establish, by regulation, conditions
under which the opposing parties may appear and be heard in
support of their arguments. If, after the periods provided for the
presentation of arguments have expired, the Administrator deter-
mines that the applicant for cancellation has established that the
design is not subject to protection under this chapter, the Adminis-
trator shall order the registration stricken from the record. Can-
cellation under this subsection shall be announced by publication,
and notice of the Administrator's final determination with respect
to any application for cancellation shall be sent to the applicant
and to the owner of record.
`` 1314. Certification of registration
    ``Certificates of registration shall be issued in the name of
the United States under the seal of the Office of the Administrator
and shall be recorded in the official records of the Office. The
certificate shall state the name of the useful article, the date of
filing of the application, the date of registration, and the date
the design was made public, if earlier than the date of filing
of the application, and shall contain a reproduction of the drawing
or other pictorial representation of the design. If a description
of the salient features of the design appears in the application,
the description shall also appear in the certificate. A certificate
of registration shall be admitted in any court as prima facie evidence
of the facts stated in the certificate.
`` 1315. Publication of announcements and indexes
    ``(a) PUBLICATIONS OF THE ADMINISTRATOR.-The Administrator
shall publish lists and indexes of registered designs and cancella-
tions of designs and may also publish the drawings or other pictorial
representations of registered designs for sale or other distribution.
    ``(b) FILE OF REPRESENTATIVES OF REGISTERED DESIGNS.-The
Administrator shall establish and maintain a file of the drawings
or other pictorial representations of registered designs. The file
shall be available for use by the public under such conditions
as the Administrator may prescribe.
`` 1316. Fees
    ``The Administrator shall by regulation set reasonable fees for
the filing of applications to register designs under this chapter
and for other services relating to the administration of this chapter,
taking into consideration the cost of providing these services and
the benefit of a public record.
`` 1317. Regulations
    ``The Administrator may establish regulations for the adminis-
tration of this chapter.



                            H. R. 2281-54

`` 1318. Copies of records
    ``Upon payment of the prescribed fee, any person may obtain
a certified copy of any official record of the Office of the Adminis-
trator that relates to this chapter. That copy shall be admissible
in evidence with the same effect as the original.
`` 1319. Correction of errors in certificates
    ``The Administrator may, by a certificate of correction under
seal, correct any error in a registration incurred through the fault
of the Office, or, upon payment of the required fee, any error
of a clerical or typographical nature occurring in good faith but
not through the fault of the Office. Such registration, together
with the certificate, shall thereafter have the same effect as if
it had been originally issued in such corrected form.
`` 1320. Ownership and transfer
    ``(a) PROPERTY RIGHT IN DESIGN.-The property right in a
design subject to protection under this chapter shall vest in the
designer, the legal representatives of a deceased designer or of
one under legal incapacity, the employer for whom the designer
created the design in the case of a design made within the regular
scope of the designer's employment, or a person to whom the rights
of the designer or of such employer have been transferred. The
person in whom the property right is vested shall be considered
the owner of the design.
    ``(b) TRANSFER OF PROPERTY RIGHT.-The property right in
a registered design, or a design for which an application for registra-
tion has been or may be filed, may be assigned, granted, conveyed,
or mortgaged by an instrument in writing, signed by the owner,
or may be bequeathed by will.
    ``(c) OATH OR ACKNOWLEDGEMENT OF TRANSFER.-An oath or
acknowledgment under section 1312 shall be prima facie evidence
of the execution of an assignment, grant, conveyance, or mortgage
under subsection (b).
    ``(d) RECORDATION OF TRANSFER.-An assignment, grant,
conveyance, or mortgage under subsection (b) shall be void as
against any subsequent purchaser or mortgagee for a valuable
consideration, unless it is recorded in the Office of the Administrator
within 3 months after its date of execution or before the date
of such subsequent purchase or mortgage.
`` 1321. Remedy for infringement
    ``(a) IN GENERAL.-The owner of a design is entitled, after
issuance of a certificate of registration of the design under this
chapter, to institute an action for any infringement of the design.
    ``(b) REVIEW OF REFUSAL TO REGISTER.-(1) Subject to para-
graph (2), the owner of a design may seek judicial review of a
final refusal of the Administrator to register the design under
this chapter by bringing a civil action, and may in the same action,
if the court adjudges the design subject to protection under this
chapter, enforce the rights in that design under this chapter.
    ``(2) The owner of a design may seek judicial review under
this section if-
        ``(A) the owner has previously duly filed and prosecuted
    to final refusal an application in proper form for registration
    of the design;



                               H. R. 2281-55

            ``(B) the owner causes a copy of the complaint in the action
    to be delivered to the Administrator within 10 days after the
    commencement of the action; and
            ``(C) the defendant has committed acts in respect to the
    design which would constitute infringement with respect to
    a design protected under this chapter.
    ``(c) ADMINISTRATOR AS PARTY TO ACTION.-The Administrator
may, at the Administrator's option, become a party to the action
with respect to the issue of registrability of the design claim by
entering an appearance within 60 days after being served with
the complaint, but the failure of the Administrator to become a
party shall not deprive the court of jurisdiction to determine that
issue.``(d) USE OF ARBITRATION TO RESOLVE DISPUTE.-The parties
to an infringement dispute under this chapter, within such time
as may be specified by the Administrator by regulation, may deter-
mine the dispute, or any aspect of the dispute, by arbitration.
Arbitration shall be governed by title 9. The parties shall give
notice of any arbitration award to the Administrator, and such
award shall, as between the parties to the arbitration, be dispositive
of the issues to which it relates. The arbitration award shall be
unenforceable until such notice is given. Nothing in this subsection
shall preclude the Administrator from determining whether a design
is subject to registration in a cancellation proceeding under section
1313(c).
 1322. Injunctions
    ``(a) IN GENERAL.-A court having jurisdiction over actions
under this chapter may grant injunctions in accordance with the
principles of equity to prevent infringement of a design under
this chapter, including, in its discretion, prompt relief by temporary
restraining orders and preliminary injunctions.
    ``(b) DAMAGES         FOR    INJUNCTIVE     RELIEF    WRONGFULLY
OBTAINED.-A seller or distributor who suffers damage by reason
of injunctive relief wrongfully obtained under this section has a
cause of action against the applicant for such injunctive relief
and may recover such relief as may be appropriate, including dam-
ages for lost profits, cost of materials, loss of good will, and punitive
damages in instances where the injunctive relief was sought in
bad faith, and, unless the court finds extenuating circumstances,
reasonable attorney's fees.
`` 1323. Recovery for infringement
    ``(a) DAMAGES.-Upon a finding for the claimant in an action
for infringement under this chapter, the court shall award the
claimant damages adequate to compensate for the infringement.
In addition, the court may increase the damages to such amount,
not exceeding $50,000 or $1 per copy, whichever is greater, as
the court determines to be just. The damages awarded shall con-
stitute compensation and not a penalty. The court may receive
expert testimony as an aid to the determination of damages.
    ``(b) INFRINGER'S PROFITS.-As an alternative to the remedies
provided in subsection (a), the court may award the claimant the
infringer's profits resulting from the sale of the copies if the court
finds that the infringer's sales are reasonably related to the use
of the claimant's design. In such a case, the claimant shall be
required to prove only the amount of the infringer's sales and



                            H. R. 2281-56

the infringer shall be required to prove its expenses against such
sales.``(c) STATUTE OF LIMITATIONS.-No recovery under subsection
(a) or (b) shall be had for any infringement committed more than
3 years before the date on which the complaint is filed.
    ``(d) ATTORNEY'S FEES.-In an action for infringement under
this chapter, the court may award reasonable attorney's fees to
the prevailing party.
    ``(e) DISPOSITION OF INFRINGING AND OTHER ARTICLES.-The
court may order that all infringing articles, and any plates, molds,
patterns, models, or other means specifically adapted for making
the articles, be delivered up for destruction or other disposition
as the court may direct.
`` 1324. Power of court over registration
    ``In any action involving the protection of a design under this
chapter, the court, when appropriate, may order registration of
a design under this chapter or the cancellation of such a registra-
tion. Any such order shall be certified by the court to the Adminis-
trator, who shall make an appropriate entry upon the record.
`` 1325. Liability for action on registration fraudulently
             obtained
    ``Any person who brings an action for infringement knowing
that registration of the design was obtained by a false or fraudulent
representation materially affecting the rights under this chapter,
shall be liable in the sum of $10,000, or such part of that amount
as the court may determine. That amount shall be to compensate
the defendant and shall be charged against the plaintiff and paid
to the defendant, in addition to such costs and attorney's fees
of the defendant as may be assessed by the court.
`` 1326. Penalty for false marking
    ``(a) IN GENERAL.-Whoever, for the purpose of deceiving the
public, marks upon, applies to, or uses in advertising in connection
with an article made, used, distributed, or sold, a design which
is not protected under this chapter, a design notice specified in
section 1306, or any other words or symbols importing that the
design is protected under this chapter, knowing that the design
is not so protected, shall pay a civil fine of not more than $500
for each such offense.
    ``(b) SUIT BY PRIVATE PERSONS.-Any person may sue for the
penalty established by subsection (a), in which event one-half of
the penalty shall be awarded to the person suing and the remainder
shall be awarded to the United States.
`` 1327. Penalty for false representation
    ``Whoever knowingly makes a false representation materially
affecting the rights obtainable under this chapter for the purpose
of obtaining registration of a design under this chapter shall pay
a penalty of not less than $500 and not more than $1,000, and
any rights or privileges that individual may have in the design
under this chapter shall be forfeited.



                                          H. R. 2281-57

`` 1328. Enforcement by Treasury and Postal Service
      ``(a) REGULATIONS.-The Secretary of the Treasury and the
United States Postal Service shall separately or jointly issue regula-
tions for the enforcement of the rights set forth in section 1308
with respect to importation. Such regulations may require, as a
condition for the exclusion of articles from the United States, that
the person seeking exclusion take any one or more of the following
actions: ``(1) Obtain a court order enjoining, or an order of the
      International Trade Commission under section 337 of the Tariff
      Act of 1930 excluding, importation of the articles.
             ``(2) Furnish proof that the design involved is protected
      under this chapter and that the importation of the articles
      would infringe the rights in the design under this chapter.
             ``(3) Post a surety bond for any injury that may result
      if the detention or exclusion of the articles proves to be unjusti-
      fied.
      ``(b) SEIZURE AND FORFEITURE.-Articles imported in violation
of the rights set forth in section 1308 are subject to seizure and
forfeiture in the same manner as property imported in violation
of the customs laws. Any such forfeited articles shall be destroyed
as directed by the Secretary of the Treasury or the court, as the
case may be, except that the articles may be returned to the
country of export whenever it is shown to the satisfaction of the
Secretary of the Treasury that the importer had no reasonable
grounds for believing that his or her acts constituted a violation
of the law.
`` 1329. Relation to design patent law
      ``The issuance of a design patent under title 35, United States
Code, for an original design for an article of manufacture shall
terminate any protection of the original design under this chapter.
`` 1330. Common law and other rights unaffected
      ``Nothing in this chapter shall annul or limit-
               ``(1) common law or other rights or remedies, if any, avail-
      able to or held by any person with respect to a design which
      has not been registered under this chapter; or
               ``(2) any right under the trademark laws or any right
      protected against unfair competition.
`` 1331. Administrator; Office of the Administrator
      ``In this chapter, the `Administrator' is the Register of Copy-
rights, and the `Office of the Administrator' and the `Office' refer
to the Copyright Office of the Library of Congress.
`` 1332. No retroactive effect
      ``Protection under this chapter shall not be available for any
design that has been made public under section 1310(b) before
the effective date of this chapter.''.
SEC. 503. CONFORMING AMENDMENTS.
      (a) TABLE OF CHAPTERS.-The table of chapters for title 17,
United States Code, is amended by adding at the end the following:
``13. Protection of Original Designs ................................................................ 1301''.



                                 H. R. 2281-58

     (b) JURISDICTION OF DISTRICT COURTS OVER DESIGN ACTIONS.-
(1) Section 1338(c) of title 28, United States Code, is amended
by inserting ``, and to exclusive rights in designs under chapter
13 of title 17,'' after ``title 17''.
     (2)(A) The section heading for section 1338 of title 28, United
States Code, is amended by inserting ``designs,'' after ``mask
works,''.
     (B) The item relating to section 1338 in the table of sections
at the beginning of chapter 85 of title 28, United States Code,
is amended by inserting ``designs,'' after ``mask works,''.
     (c) PLACE FOR BRINGING DESIGN ACTIONS.-(1) Section 1400(a)
of title 28, United States Code, is amended by inserting ``or designs''
after ``mask works''.
     (2) The section heading for section 1400 of title 28, United
States Code, is amended to read as follows:
``Patents and copyrights, mask works, and designs''.
     (3) The item relating to section 1400 in the table of sections
at the beginning of chapter 87 of title 28, United States Code,
is amended to read as follows:

``1400. Patents and copyrights, mask works, and designs.''.
     (d) ACTIONS AGAINST THE UNITED STATES.-Section 1498(e) of
title 28, United States Code, is amended by inserting ``, and to
exclusive rights in designs under chapter 13 of title 17,'' after
``title 17''.
SEC. 504. JOINT STUDY OF THE EFFECT OF THIS TITLE.
     (a) IN GENERAL.-Not later than 1 year after the date of the
enactment of this Act, and not later than 2 years after such date
of enactment, the Register of Copyrights and the Commissioner
of Patents and Trademarks shall submit to the Committees on
the Judiciary of the Senate and the House of Representatives a
joint report evaluating the effect of the amendments made by this
title.(b) ELEMENTS FOR CONSIDERATION.-In carrying out subsection
(a), the Register of Copyrights and the Commissioner of Patents
and Trademarks shall consider-
           (1) the extent to which the amendments made by this
     title has been effective in suppressing infringement of the
     design of vessel hulls;
           (2) the extent to which the registration provided for in
     chapter 13 of title 17, United States Code, as added by this
     title, has been utilized;
           (3) the extent to which the creation of new designs of
     vessel hulls have been encouraged by the amendments made
     by this title;
           (4) the effect, if any, of the amendments made by this
     title on the price of vessels with hulls protected under such
     amendments; and
           (5) such other considerations as the Register and the
     Commissioner may deem relevant to accomplish the purposes
     of the evaluation conducted under subsection (a).



                             H. R. 2281-59

SEC. 505. EFFECTIVE DATE.
    The amendments made by sections 502 and 503 shall take
effect on the date of the enactment of this Act and shall remain
in effect until the end of the 2-year period beginning on such
date of enactment. No cause of action based on chapter 13 of
title 17, United States Code, as added by this title, may be filed
after the end of that 2-year period.






                             Speaker of the House of Representatives.





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