Union Calendar No. 362

105th CONGRESS

2d Session

H. R. 2281

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

A BILL

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

July 22, 1998

Reported from the Committee on Commerce with an amendment

July 22, 1998

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

HR 2281 RH

Union Calendar No. 362

105th CONGRESS

2d Session

H. R. 2281

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

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

IN THE HOUSE OF REPRESENTATIVES

July 29, 1997

Mr. COBLE (for himself, Mr. HYDE, Mr. CONYERS, and Mr. FRANK of Massachusetts) introduced the following bill; which was referred to the Committee on the Judiciary

May 22, 1998

Reported with an amendment, referred to the Committees on Commerce and Ways and Means for a period ending not later than June 19, 1998, for consideration of such provisions of the bill and amendment as fall within the jurisdictions of those committees pursuant to clause 1(e) and (s), rule X, respectively

[Strike out all after the enacting clause and insert the part printed in italic]

June 19, 1998

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

June 25, 1998

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

July 21, 1998

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

July 22, 1998

Reported from the Committee on Commerce with an amendment

[Strike out all after the enacting clause and insert the part printed in boldface roman]

July 22, 1998

Additional sponsors: Mr. BONO, Mr. MCCOLLUM, Mr. BERMAN, Mrs. BONO, Mr. PAXON, and Mr. PICKERING

July 22, 1998

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

[For text of introduced bill, see copy of bill as introduced on July 29, 1997]

A BILL

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

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

TITLE I--WIPO COPYRIGHT TREATIES IMPLEMENTATION

SEC. 101. SHORT TITLE.

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

SEC. 102. TECHNICAL AMENDMENTS.

(a) DEFINITIONS- Section 101 of title 17, United States Code, is amended--

(1) by striking the definition of `Berne Convention work';

(2) in the definition of `The `country of origin' of a Berne Convention work'--

(A) by striking `The `country of origin' of a Berne Convention work, for purposes of section 411, is the United States if' and inserting `For purposes of section 411, a work is a `United States work' only if';

(B) in paragraph (1)--

(i) in subparagraph (B) by striking `nation or nations adhering to the Berne Convention' and inserting `treaty party or parties';

(ii) in subparagraph (C) by striking `does not adhere to the Berne Convention' and inserting `is not a treaty party'; and

(iii) in subparagraph (D) by striking `does not adhere to the Berne Convention' and inserting `is not a treaty party'; and

(C) in the matter following paragraph (3) by striking `For the purposes of section 411, the `country of origin' of any other Berne Convention work is not the United States.';

(3) by inserting after the definition of `fixed' the following:

`The `Geneva Phonograms Convention' is the Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of Their Phonograms, concluded at Geneva, Switzerland, on October 29, 1971.';

(4) by inserting after the definition of `including' the following:

`An `international agreement' is--

`(1) the Universal Copyright Convention;

`(2) the Geneva Phonograms Convention;

`(3) the Berne Convention;

`(4) the WTO Agreement;

`(5) the WIPO Copyright Treaty;

`(6) the WIPO Performances and Phonograms Treaty; and

`(7) any other copyright treaty to which the United States is a party.';

(5) by inserting after the definition of `transmit' the following:

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

(6) by inserting after the definition of `widow' the following:

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

(7) by inserting after the definition of `The `WIPO Copyright Treaty' the following:

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

(8) by inserting after the definition of `work made for hire' the following:

`The terms `WTO Agreement' and `WTO member country' have the meanings given those terms in paragraphs (9) and (10), respectively, of section 2 of the Uruguay Round Agreements Act.'.

(b) SUBJECT MATTER OF COPYRIGHT; NATIONAL ORIGIN- Section 104 of title 17, United States Code, is amended--

(1) in subsection (b)--

(A) in paragraph (1) by striking `foreign nation that is a party to a copyright treaty to which the United States is also a party' and inserting `treaty party';

(B) in paragraph (2) by striking `party to the Universal Copyright Convention' and inserting `treaty party';

(C) by redesignating paragraph (5) as paragraph (6);

(D) by redesignating paragraph (3) as paragraph (5) and inserting it after paragraph (4);

(E) by inserting after paragraph (2) the following:

`(3) the work is a sound recording that was first fixed in a treaty party; or';

(F) in paragraph (4) by striking `Berne Convention work' and inserting `pictorial, graphic, or sculptural work that is incorporated in a building or other structure, or an architectural work that is embodied in a building and the building or structure is located in the United States or a treaty party'; and

(G) by inserting after paragraph (6), as so redesignated, the following:

`For purposes of paragraph (2), a work that is published in the United States or a treaty party within 30 days after publication in a foreign nation that is not a treaty party shall be considered to be first published in the United States or such treaty party, as the case may be.'; and

(2) by adding at the end the following new subsection:

`(d) EFFECT OF PHONOGRAMS TREATIES- Notwithstanding the provisions of subsection (b), no works other than sound recordings shall be eligible for protection under this title solely by virtue of the adherence of the United States to the Geneva Phonograms Convention or the WIPO Performances and Phonograms Treaty.'.

(c) COPYRIGHT IN RESTORED WORKS- Section 104A(h) of title 17, United States Code, is amended--

(1) in paragraph (1), by striking subparagraphs (A) and (B) and inserting the following:

`(A) a nation adhering to the Berne Convention;

`(B) a WTO member country;

`(C) a nation adhering to the WIPO Copyright Treaty;

`(D) a nation adhering to the WIPO Performances and Phonograms Treaty; or

`(E) subject to a Presidential proclamation under subsection (g).';

(2) by amending paragraph (3) to read as follows:

`(3) The term `eligible country' means a nation, other than the United States, that--

`(A) becomes a WTO member country after the date of the enactment of the Uruguay Round Agreements Act;

`(B) on such date of enactment is, or after such date of enactment becomes, a nation adhering to the Berne Convention;

`(C) adheres to the WIPO Copyright Treaty;

`(D) adheres to the WIPO Performances and Phonograms Treaty; or

`(E) after such date of enactment becomes subject to a proclamation under subsection (g).';

(3) in paragraph (6)--

(A) in subparagraph (C)(iii) by striking `and' after the semicolon;

(B) at the end of subparagraph (D) by striking the period and inserting `; and'; and

(C) by adding after subparagraph (D) the following:

`(E) if the source country for the work is an eligible country solely by virtue of its adherence to the WIPO Performances and Phonograms Treaty, is a sound recording.';

(4) in paragraph (8)(B)(i)--

(A) by inserting `of which' before `the majority'; and

(B) by striking `of eligible countries'; and

(5) by striking paragraph (9).

(d) REGISTRATION AND INFRINGEMENT ACTIONS- Section 411(a) of title 17, United States Code, is amended in the first sentence--

(1) by striking `actions for infringement of copyright in Berne Convention works whose country of origin is not the United States and'; and

(2) by inserting `United States' after `no action for infringement of the copyright in any'.

(e) STATUTE OF LIMITATIONS- Section 507(a) of title 17, United State Code, is amended by striking `No' and inserting `Except as expressly provided otherwise in this title, no'.

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

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

`CHAPTER 12--COPYRIGHT PROTECTION AND MANAGEMENT SYSTEMS

`Sec.

`1201. Circumvention of copyright protection systems.

`1202. Integrity of copyright management information.

`1203. Civil remedies.

`1204. Criminal offenses and penalties.

`Sec. 1201. Circumvention of copyright protection systems

`(a) VIOLATIONS REGARDING CIRCUMVENTION OF TECHNOLOGICAL PROTECTION MEASURES- (1) No person shall circumvent a technological protection measure that effectively controls access to a work protected under this title.

`(2) No person shall manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof, that--

`(A) is primarily designed or produced for the purpose of circumventing a technological protection measure that effectively controls access to a work protected under this title;

`(B) has only limited commercially significant purpose or use other than to circumvent a technological protection measure that effectively controls access to a work protected under this title; or

`(C) is marketed by that person or another acting in concert with that person with that person's knowledge for use in circumventing a technological protection measure that effectively controls access to a work protected under this title.

`(3) As used in this subsection--

`(A) to `circumvent a technological protection measure' means to descramble a scrambled work, to decrypt an encrypted work, or otherwise to avoid, bypass, remove, deactivate, or impair a technological protection measure, without the authority of the copyright owner; and

`(B) a technological protection measure `effectively controls access to a work' if the measure, in the ordinary course of its operation, requires the application of information, or a process or a treatment, with the authority of the copyright owner, to gain access to the work.

`(b) ADDITIONAL VIOLATIONS- (1) No person shall manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof, that--

`(A) is primarily designed or produced for the purpose of circumventing protection afforded by a technological protection measure that effectively protects a right of a copyright owner under this title in a work or a portion thereof;

`(B) has only limited commercially significant purpose or use other than to circumvent protection afforded by a technological protection measure that effectively protects a right of a copyright owner under this title in a work or a portion thereof; or

`(C) is marketed by that person or another acting in concert with that person with that person's knowledge for use in circumventing protection afforded by a technological protection measure that effectively protects a right of a copyright owner under this title in a work or a portion thereof.

`(2) As used in this subsection--

`(A) the term `circumvent protection afforded by a technological protection measure' means avoiding, bypassing, removing, deactivating, or otherwise impairing a technological protection measure; and

`(B) a technological protection measure `effectively protects a right of a copyright owner' under this title if the measure, in the ordinary course of its operation, prevents, restricts, or otherwise limits the exercise of a right of a copyright owner under this title.

`(c) IMPORTATION- The importation into the United States, the sale for importation, or the sale within the United States after importation by the owner, importer, or consignee of any technology, product, service, device, component, or part thereof as described in subsection (a) or (b) shall be actionable under section 337 of the Tariff Act of 1930 (19 U.S.C. 1337).

`(d) OTHER RIGHTS, ETC., NOT AFFECTED- Nothing in this section shall affect rights, remedies, limitations, or defenses to copyright infringement, including fair use, under this title.

`(e) EXEMPTION FOR NONPROFIT LIBRARIES, ARCHIVES, AND EDUCATIONAL INSTITUTIONS- (1) A nonprofit library, archives, or educational institution which gains access to a commercially exploited copyrighted work solely in order to make a good faith determination of whether to acquire a copy of that work for the sole purpose of engaging in conduct permitted under this title shall not be in violation of subsection (a)(1). A copy of a work to which access has been gained under this paragraph--

`(A) may not be retained longer than necessary to make such good faith determination; and

`(B) may not be used for any other purpose.

`(2) The exemption available under paragraph (1) shall only apply with respect to a work when an identical copy of that work is not reasonably available in another form.

`(3) A nonprofit library, archives, or educational institution that willfully for the purpose of commercial advantage or financial gain violates paragraph (1)--

`(A) shall, for the first offense, be subject to the civil remedies under section 1203; and

`(B) shall, for repeated or subsequent offenses, in addition to the civil remedies under section 1203, forfeit the exemption provided under paragraph (1).

`(4) This subsection may not be used as a defense to a claim under subsection (a)(2) or (b), nor may this subsection permit a nonprofit library, archives, or educational institution to manufacture, import, offer to the public, provide, or otherwise traffic in any technology which circumvents a technological protection measure.

`(5) In order for a library or archives to qualify for the exemption under this subsection, the collections of that library or archives shall be--

`(A) open to the public; or

`(B) available not only to researchers affiliated with the library or archives or with the institution of which it is a part, but also to other persons doing research in a specialized field.

`(f) LAW ENFORCEMENT AND INTELLIGENCE ACTIVITIES- This section does not prohibit any lawfully authorized investigative, protective, or intelligence activity of a law enforcement agency of the United States, a State, or a political subdivision of a State, or of an intelligence agency of the United States.

`Sec. 1202. Integrity of copyright management information

`(a) FALSE COPYRIGHT MANAGEMENT INFORMATION- No person shall knowingly--

`(1) provide copyright management information that is false, or

`(2) distribute or import for public distribution copyright management information that is false,

with the intent to induce, enable, facilitate, or conceal infringement.

`(b) REMOVAL OR ALTERATION OF COPYRIGHT MANAGEMENT INFORMATION- No person shall, without the authority of the copyright owner or the law--

`(1) intentionally remove or alter any copyright management information,

`(2) distribute or import for distribution copyright management information, knowing that the copyright management information has been removed or altered without authority of the copyright owner or the law, or

`(3) distribute, import for distribution, or publicly perform works, copies of works, or phonorecords, knowing that the copyright management information has been removed or altered without authority of the copyright owner or the law,

knowing or, with respect to civil remedies under section 1203, having reasonable grounds to know, that it will induce, enable, facilitate, or conceal an infringement of any right under this title.

`(c) DEFINITION- As used in this chapter, the term `copyright management information' means the following information conveyed in connection with copies or

phonorecords of a work or performances or displays of a work, including in digital form:

`(1) The title and other information identifying the work, including the information set forth on a notice of copyright.

`(2) The name of, and other identifying information about, the author of a work.

`(3) The name of, and other identifying information about, the copyright owner of the work, including the information set forth in a notice of copyright.

`(4) With the exception of public performances of works by radio and television broadcast stations, the name of, and other identifying information about, a performer whose performance is fixed in a work other than an audiovisual work.

`(5) With the exception of public performances of works by radio and television broadcast stations, in the case of an audiovisual work, the name of, and other identifying information about, a writer, performer, or director who is credited in the audiovisual work.

`(6) Identifying numbers or symbols referring to such information or links to such information.

`(7) Such other information as the Register of Copyrights may prescribe by regulation, but not including any information concerning the user of a copyrighted work.

`(d) LAW ENFORCEMENT AND INTELLIGENCE ACTIVITIES- This section does not prohibit any lawfully authorized investigative, protective, or intelligence activity of a law enforcement agency of the United States, a State, or a political subdivision of a State, or of an intelligence agency of the United States.

`Sec. 1203. Civil remedies

`(a) CIVIL ACTIONS- Any person injured by a violation of section 1201 or 1202 may bring a civil action in an appropriate United States district court for such violation.

`(b) POWERS OF THE COURT- In an action brought under subsection (a), the court--

`(1) may grant temporary and permanent injunctions on such terms as it deems reasonable to prevent or restrain a violation;

`(2) at any time while an action is pending, may order the impounding, on such terms as it deems reasonable, of any device or product that is in the custody or control of the alleged violator and that the court has reasonable cause to believe was involved in a violation;

`(3) may award damages under subsection (c);

`(4) in its discretion may allow the recovery of costs by or against any party other than the United States or an officer thereof;

`(5) in its discretion may award reasonable attorney's fees to the prevailing party; and

`(6) may, as part of a final judgment or decree finding a violation, order the remedial modification or the destruction of any device or product involved in the violation that is in the custody or control of the violator or has been impounded under paragraph (2).

`(c) AWARD OF DAMAGES-

`(1) IN GENERAL- Except as otherwise provided in this chapter, a person committing a violation of section 1201 or 1202 is liable for either--

`(A) the actual damages and any additional profits of the violator, as provided in paragraph (2); or

`(B) statutory damages, as provided in paragraph (3).

`(2) ACTUAL DAMAGES- The court shall award to the complaining party the actual damages suffered by the party as a result of the violation, and any profits of the violator that are attributable to the violation and are not taken into account in computing the actual damages, if the complaining party elects such damages at any time before final judgment is entered.

`(3) STATUTORY DAMAGES- (A) At any time before final judgment is entered, a complaining party may elect to recover an award of statutory damages for each violation of section 1201 in the sum of not less than $200 or more than $2,500 per act of circumvention, device, product, component, offer, or performance of service, as the court considers just.

`(B) At any time before final judgment is entered, a complaining party may elect to recover an award of statutory damages for each violation of section 1202 in the sum of not less than $2,500 or more than $25,000.

`(4) REPEATED VIOLATIONS- In any case in which the injured party sustains the burden of proving, and the court finds, that a person has violated section 1201 or 1202 within 3 years after a final judgment was entered against that person for another such violation, the court may increase the award of

damages up to triple the amount that would otherwise be awarded, as the court considers just.

`(5) INNOCENT VIOLATIONS-

`(A) IN GENERAL- The court in its discretion may reduce or remit the total award of damages in any case in which the violator sustains the burden of proving, and the court finds, that the violator was not aware and had no reason to believe that its acts constituted a violation.

`(B) NONPROFIT LIBRARY, ARCHIVES, OR EDUCATIONAL INSTITUTION- In the case of a nonprofit library, archives, or educational institution, the court shall remit damages in any case in which the library, archives, or educational institution sustains the burden of proving, and the court finds, that the library, archives, or educational institution was not aware and had no reason to believe that its acts constituted a violation.

`Sec. 1204. Criminal offenses and penalties

`(a) IN GENERAL- Any person who violates section 1201 or 1202 willfully and for purposes of commercial advantage or private financial gain--

`(1) shall be fined not more than $500,000 or imprisoned for not more than 5 years, or both, for the first offense; and

`(2) shall be fined not more than $1,000,000 or imprisoned for not more than 10 years, or both, for any subsequent offense.

`(b) LIMITATION FOR NONPROFIT LIBRARY, ARCHIVES, OR EDUCATIONAL INSTITUTION- Subsection (a) shall not apply to a nonprofit library, archives, or educational institution.

`(c) STATUTE OF LIMITATIONS- Notwithstanding section 507(a) of this title, no criminal proceeding shall be maintained under subsection (a) unless such proceeding is commenced within 5 years after the cause of action arose.'.

SEC. 104. CONFORMING AMENDMENT.

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

1201'.

SEC. 105. EFFECTIVE DATE.

(a) IN GENERAL- Subject to subsection (b), the amendments made by this title shall take effect on the date of the enactment of this Act.

(b) AMENDMENTS RELATING TO CERTAIN INTERNATIONAL AGREEMENTS- (1) The following shall take effect upon the entry into force of the WIPO Copyright Treaty with respect to the United States:

(A) Paragraph (5) of the definition of `international agreement' contained in section 101 of title 17, United States Code, as amended by section 102(a)(4) of this Act.

(B) The amendment made by section 102(a)(6) of this Act.

(C) Subparagraph (C) of section 104(h)(1) of title 17, United States Code, as amended by section 102(c)(1) of this Act.

(D) Subparagraph (C) of section 104(h)(3) of title 17, United States Code, as amended by section 102(c)(2) of this Act.

(2) The following shall take effect upon the entry into force of the WIPO Performances and Phonograms Treaty with respect to the United States:

(A) Paragraph (6) of the definition of `international agreement' contained in section 101 of title 17, United States Code, as amended by section 102(a)(4) of this Act.

(B) The amendment made by section 102(a)(7) of this Act.

(C) The amendment made by section 102(b)(2) of this Act.

(D) Subparagraph (D) of section 104(h)(1) of title 17, United States Code, as amended by section 102(c)(1) of this Act.

(E) Subparagraph (D) of section 104(h)(3) of title 17, United States Code, as amended by section 102(c)(2) of this Act.

(F) The amendments made by section 102(c)(3) of this Act.

TITLE II--ON-LINE COPYRIGHT INFRINGEMENT LIABILITY LIMITATION

SEC. 201. SHORT TITLE.

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

SEC. 202. LIMITATIONS ON LIABILITY FOR COPYRIGHT INFRINGEMENT.

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

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

`(a) LIMITATION- Notwithstanding the provisions of section 106, a provider shall not be liable for--

`(1) direct infringement, based solely on the intermediate storage and transmission of material

through a system or network controlled or operated by or for that provider, if--

`(A) the transmission was initiated by another person;

`(B) the storage and transmission is carried out through an automatic technological process, without any selection of that material by the provider; and

`(C) no copy of the material thereby made by the provider is maintained on the provider's system or network in a manner ordinarily accessible to anyone other than the recipients anticipated by the person who initiated the transmission, and no such copy is maintained on the system or network in a manner ordinarily accessible to such recipients for a longer period than is reasonably necessary for the transmission;

`(2) monetary relief under section 504 or 505 for contributory infringement or vicarious liability, based solely on conduct described in paragraph (1); or

`(3) monetary relief under section 504 or 505 for contributory infringement or vicarious liability, based solely on transmitting or providing access to material over that provider's system or network, other than conduct described in paragraph (1), if the provider--

`(A) does not have actual knowledge that the material is infringing or, in the absence of such actual knowledge, is not aware of facts or circumstances from which infringing activity is apparent; and

`(B) does not receive a financial benefit directly attributable to the infringing activity, if the provider has the right and ability to control such activity.

`(b) PROTECTION OF PRIVACY- Nothing in subsection (a) shall be construed to condition the applicability of subsection (a) on a provider--

`(1) monitoring its service or affirmatively seeking facts indicating infringing activity, or

`(2) accessing, removing, or disabling access to material, if such conduct is prohibited by law.

`(c) LIMITATION BASED UPON REMOVING OR DISABLING ACCESS TO INFRINGING MATERIAL- A provider shall not be liable to any person for any claim based on that provider's good faith disabling of access to or removal of material claimed to be infringing or based on facts or circumstances from which infringing activity is apparent, regardless of whether the material or activity is ultimately determined to be infringing.

`(d) OTHER DEFENSES NOT AFFECTED- Removing or disabling access to material which a provider transmits on-line or to which a provider provides on-line access, or the failure to do so, shall not adversely bear upon the consideration by a court of a defense to infringement asserted by that provider on the basis of section 107 or any other provision of law.

`(e) MISREPRESENTATIONS- Any person who knowingly materially misrepresents to a provider that material on-line is infringing shall be liable for any damages, including costs and attorneys' fees, incurred by the provider, by the alleged infringer, or by any copyright owner or copyright owner's authorized licensee, who is injured by such misrepresentation, as a result of the provider relying upon such misrepresentation in removing or disabling access to the material claimed to be infringing.

`(f) DEFINITION- As used in this section, the term `provider' means a provider of on-line services or network access.'.

(b) CONFORMING AMENDMENT- The table of sections for chapter 5 of title 17, United States Code, is amended by adding at the end the following:

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

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

Section 117 of title 17, United States Code, is amended--

(1) by striking `Notwithstanding' and inserting the following:

`(a) MAKING OF ADDITIONAL COPY OR ADAPTATION BY OWNER OF COPY- Notwithstanding';

(2) by striking `Any exact' and inserting the following:

`(b) LEASE, SALE, OR OTHER TRANSFER OF ADDITIONAL COPY OR ADAPTATION- Any exact'; and

(3) by adding at the end the following:

`(c) MACHINE MAINTENANCE OR REPAIR- Notwithstanding the provisions of section 106, it is not an infringement for the owner or lessee of a machine to make or authorize the making of a copy of a computer program if such copy is made solely by virtue of the activation of a machine that lawfully contains an authorized copy of the computer program, for purposes only of maintenance or repair of that machine, if--

`(1) such new copy is used in no other manner and is destroyed immediately after the maintenance or repair is completed; and

`(2) with respect to any computer program or part thereof that is not necessary for that machine to be activated, such program or part thereof is not accessed or used other than to make such new copy by virtue of the activation of the machine.

`(d) DEFINITIONS- For purposes of this section--

`(1) the `maintenance' of a machine is the servicing of the machine in order to make it work in accordance with its original specifications and any changes to those specifications authorized for that machine; and

`(2) the `repair' of a machine is the restoring of the machine to the state of working in accordance with its original specifications and any changes to those specifications authorized for that machine.'.

SECTION 1. SHORT TITLE.

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

SEC. 2. TABLE OF CONTENTS.

Sec. 1. Short title.

Sec. 2. Table of contents.

TITLE I--WIPO TREATIES IMPLEMENTATION

Sec. 101. Short title.

Sec. 102. Circumvention of copyright protection systems.

Sec. 103. Integrity of copyright management information.

Sec. 104. Civil remedies.

Sec. 105. Criminal offenses and penalties.

Sec. 106. Savings clause.

Sec. 107. Development and implementation of technological protection measures.

Sec. 108. Technical amendments.

Sec. 109. Effective date.

TITLE II--INTERNET COPYRIGHT INFRINGEMENT LIABILITY

Sec. 201. Short title.

Sec. 202. Limitations on liability for Internet copyright infringement.

Sec. 203. Limitations on exclusive rights; computer programs.

Sec. 204. Liability of educational institutions for online infringement of copyright.

Sec. 205. Evaluation of impact of copyright law and amendments on electronic commerce and technological development.

Sec. 206. Effective date.

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

Sec. 301. Ephemeral recordings.

Sec. 302. Limitations on exclusive rights; distance education.

Sec. 303. Exemption for libraries and archives.

TITLE IV--RELATED PROVISIONS

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

TITLE I--WIPO TREATIES IMPLEMENTATION

SEC. 101. SHORT TITLE.

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

SEC. 102. CIRCUMVENTION OF COPYRIGHT PROTECTION SYSTEMS.

(a) VIOLATIONS REGARDING CIRCUMVENTION OF TECHNOLOGICAL PROTECTION MEASURES- (1)(A) The Secretary of Commerce shall issue regulations prohibiting any person from circumventing a technological protection measure that effectively controls access to a work protected under title 17, United States Code, to the extent provided in this subsection, effective at the end of the 2-year period beginning on the date of the enactment of this Act.

(B) During the 2-year period described in subparagraph (A), and in each succeeding 2-year period, the Secretary of Commerce, in consultation with the Assistant Secretary of Commerce for Communications and Information, the Commissioner of Patents and Trademarks, and the Register of Copyrights, shall conduct a rulemaking on the record to determine whether users of copyrighted works have been, or are likely to be in the succeeding 2-year period, adversely affected by the implementation of technological protection measures that effectively control access to works protected under title 17, United States Code, in their ability to make lawful uses under title 17, United States Code, of copyrighted works. In conducting such rulemaking, the Secretary shall examine--

(i) the availability for use of copyrighted works;

(ii) the availability for use of works for archival, preservation, and educational purposes;

(iii) the impact of the application of technological protection measures to copyrighted works on criticism, comment, news reporting, teaching, scholarship, or research;

(iv) the effect of circumvention of technological protection measures on the market for or value of copyrighted works; and

(v) such other factors as the Secretary, in consultation with the Assistant Secretary of Commerce for Communications and Information, the Commissioner of Patents and Trademarks, and the Register of Copyrights, considers appropriate.

(C) The Secretary, with respect to each particular class of copyrighted works for which the Secretary has determined, pursuant to the rulemaking conducted under subparagraph (B), that lawful uses have been, or are likely to be, adversely affected, shall waive the applicability of the regulations issued under subparagraph (A) for the ensuing 2-year period. The determinations made in the rulemaking shall not be admissible in any action to enforce any provision of this Act other than this paragraph.

(2) No person shall manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof, that--

(A) is primarily designed or produced for the purpose of circumventing a technological protection measure that effectively controls access to a work protected under title 17, United States Code;

(B) has only limited commercially significant purpose or use other than to circumvent a technological protection measure that effectively controls access to a work protected under title 17, United States Code; or

(C) is marketed by that person or another acting in concert with that person with that person's knowledge for use in circumventing a technological protection measure that effectively controls access to a work protected under title 17, United States Code.

(3) As used in this subsection--

(A) to `circumvent a technological protection measure' means to descramble a scrambled work, to decrypt an encrypted work, or otherwise to avoid, bypass, remove, deactivate, or impair a technological protection measure, without the authority of the copyright owner; and

(B) a technological protection measure `effectively controls access to a work' if the measure, in the ordinary course of its operation, requires the application of information, or a process or a treatment, with the authority of the copyright owner, to gain access to the work.

(b) ADDITIONAL VIOLATIONS- (1) No person shall manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof, that--

(A) is primarily designed or produced for the purpose of circumventing protection afforded by a technological protection measure that effectively protects a right of a copyright owner under title 17, United States Code, in a work or a portion thereof;

(B) has only limited commercially significant purpose or use other than to circumvent protection afforded by a technological protection measure that effectively protects a right of a copyright owner under title 17, United States Code, in a work or a portion thereof; or

(C) is marketed by that person or another acting in concert with that person with that person's knowledge for use in circumventing protection afforded by a technological protection measure that effectively protects a right of a copyright owner under title 17, United States Code, in a work or a portion thereof.

(2) As used in this subsection--

(A) to `circumvent protection afforded by a technological protection measure' means avoiding, bypassing, removing, deactivating, or otherwise impairing a technological protection measure; and

(B) a technological protection measure `effectively protects a right of a copyright owner under title 17, United States Code' if the measure, in the ordinary course of its operation, prevents, restricts, or otherwise limits the exercise of a right of a copyright owner under title 17, United States Code.

(c) OTHER RIGHTS, ETC., NOT AFFECTED- (1) Nothing in this section shall affect rights, remedies, limitations, or defenses to copyright infringement, including fair use, under title 17, United States Code.

(2) Nothing in this section shall enlarge or diminish vicarious or contributory liability for copyright infringement in connection with any technology, product, service, device, component, or part thereof.

(3) Nothing in this section shall require that the design of, or design and selection of parts and components for, a consumer electronics, telecommunications, or computing product provide for a response to any particular technological protection measure.

(4) Nothing in this section shall enlarge or diminish any rights of free speech or the press for activities using consumer electronics, telecommunications, or computing products.

(d) EXEMPTION FOR NONPROFIT LIBRARIES, ARCHIVES, AND EDUCATIONAL INSTITUTIONS- (1) A nonprofit library, archives, or educational institution which gains access to a commercially exploited copyrighted work solely in order to make a good faith determination of whether to acquire a copy of that work for the sole purpose of engaging in conduct permitted under title 17, United States Code, shall not be in violation of the regulations issued under subsection (a)(1)(A). A copy of a work to which access has been gained under this paragraph--

(A) may not be retained longer than necessary to make such good faith determination; and

(B) may not be used for any other purpose.

(2) The exemption made available under paragraph (1) shall only apply with respect to a work when an identical copy of that work is not reasonably available in another form.

(3) A nonprofit library, archives, or educational institution that willfully for the purpose of commercial advantage or financial gain violates paragraph (1)--

(A) shall, for the first offense, be subject to the civil remedies under section 104; and

(B) shall, for repeated or subsequent offenses, in addition to the civil remedies under section 104, forfeit the exemption provided under paragraph (1).

(4) This subsection may not be used as a defense to a claim under subsection (a)(2) or (b), nor may this subsection permit a nonprofit library, archives, or educational institution to manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, component, or part thereof, which circumvents a technological protection measure.

(5) In order for a library or archives to qualify for the exemption under this subsection, the collections of that library or archives shall be--

(A) open to the public; or

(B) available not only to researchers affiliated with the library or archives or with the institution of which it is a part, but also to other persons doing research in a specialized field.

(e) LAW ENFORCEMENT AND INTELLIGENCE ACTIVITIES- This section does not prohibit any lawfully authorized investigative, protective, or intelligence activity of an officer, agent, or employee of the United States, a State, or a political subdivision of a State, or a person acting pursuant to a contract with the United States, a State, or a political subdivision of a State.

(f) REVERSE ENGINEERING- (1) Notwithstanding the regulations issued under subsection (a)(1)(A), a person who has lawfully obtained the right to use a copy of a computer program may circumvent a technological protection measure that effectively controls access to a particular portion of that program for the sole purpose of identifying and analyzing those elements of the program that are necessary to achieve interoperability of an independently created computer program with other programs, and that have not previously been readily available to the person engaging in the circumvention, to the extent any such acts of identification and analysis do not constitute infringement under title 17, United States Code.

(2) Notwithstanding the provisions of subsections (a)(2) and (b), a person may develop and employ technological means to circumvent a technological protection measure, or to circumvent protection afforded by a technological protection measure, in order to make the identification and analysis permitted under paragraph (1), or for the limited purpose of achieving interoperability of an independently created computer program with other programs, if such means are necessary to achieve such interoperability, to the extent that doing so does not constitute infringement under title 17, United States Code.

(3) The information acquired through the acts permitted under paragraph (1), and the means permitted under paragraph (2), may be made available to others if the person referred to in paragraph (1) or (2), as the case may be, provides such information or means solely for the purpose of achieving interoperability of an independently created computer program with other programs, and to the extent that doing so does not constitute infringement under title 17, United States Code, or violate other applicable law.

(4) For purposes of this subsection, the term `interoperability' means the ability of computer programs to exchange information, and of such programs mutually to use the information which has been exchanged.

(g) ENCRYPTION RESEARCH-

(1) DEFINITIONS- For purposes of this subsection--

(A) the term `encryption research' means activities necessary to identify and analyze flaws and vulnerabilities of encryption technologies applied to copyrighted works, if these activities are conducted to advance the state of knowledge in the field of encryption technology or to assist in the development of encryption products; and

(B) the term `encryption technology' means the scrambling and descrambling of information using mathematical formulas or algorithms.

(2) PERMISSIBLE ACTS OF ENCRYPTION RESEARCH- Notwithstanding the provisions of subsection (a)(1)(A), it is not a violation of the regulations issued under that subsection for a person to circumvent a technological protection measure as applied to a copy, phonorecord, performance, or display of a published work in the course of an act of good faith encryption research if--

(A) the person lawfully obtained the encrypted copy, phonorecord, performance, or display of the published work;

(B) such act is necessary to conduct such encryption research;

(D) such act does not constitute infringement under title 17, United States Code, or a violation of applicable law other than this section, including section 1030 of title 18, United States Code, and those provisions of title 18, United States Code, amended by the Computer Fraud and Abuse Act of 1986.

(3) FACTORS IN DETERMINING EXEMPTION- In determining whether a person qualifies for the exemption under paragraph (2), the factors to be considered shall include--

(A) whether the information derived from the encryption research was disseminated, and if so, whether it was disseminated in a manner reasonably calculated to advance the state of knowledge or development of encryption technology, versus whether it was disseminated in a manner that facilitates infringement under title 17, United States Code, or a violation of applicable law other than this section, including a violation of privacy or breach of security;

(B) whether the person is engaged in a legitimate course of study, is employed, or is appropriately trained or experienced, in the field of encryption technology; and

(C) whether the person provides the copyright owner of the work to which the technological protection measure is applied with notice of the findings and documentation of the research, and the time when such notice is provided.

(4) USE OF TECHNOLOGICAL MEANS FOR RESEARCH ACTIVITIES- Notwithstanding the provisions of subsection (a)(2), it is not a violation of that subsection for a person to--

(A) develop and employ technological means to circumvent a technological protection measure for the sole purpose of performing the acts of good faith encryption research described in paragraph (2); and

(B) provide the technological means to another person with whom he or she is working collaboratively for the purpose of conducting the acts of good faith encryption research described in paragraph (2) or for the purpose of having that other person verify his or her acts of good faith encryption research described in paragraph (2).

(5) REPORT TO CONGRESS- Not later than 1 year after the date of the enactment of this Act, the Assistant Secretary of Commerce for Communications and Information shall report to the Congress on the effect this subsection has had on--

(A) encryption research and the development of encryption technology;

(B) the adequacy and effectiveness of technological protection for copyrighted works; and

The Assistant Secretary shall include in such report recommendations, if any, on proposed amendments to this Act.

(h) COMPONENTS OR PARTS TO PREVENT ACCESS OF MINORS TO THE INTERNET- In applying subsection (a) and the regulations issued under subsection (a)(1)(A) to a component or part, the court may consider the necessity for its intended and actual incorporation in a technology, product, service, or device, which--

(1) does not itself violate the provisions of title 17, United States Code; and

(2) has the sole purpose to prevent the access of minors to material on the Internet.

(i) PROTECTION OF PERSONALLY IDENTIFYING INFORMATION-

(1) CIRCUMVENTION PERMITTED- Notwithstanding the provisions of subsection (a)(1)(A), it is not a violation of the regulations issued under that subsection for a person to circumvent a technological protection measure that effectively controls access to a work protected under title 17, United States Code, if--

(A) the technological protection measure, or the work it protects, contains the capability of collecting or disseminating personally identifying information reflecting the online activities of a natural person who seeks to gain access to the work protected;

(B) in the normal course of its operation, the technological protection measure, or the work it protects, collects or disseminates personally identifying information about the person who seeks to gain access to the work protected, without providing conspicuous notice of such collection or dissemination to such person, and without providing such person with the capability to

prevent or restrict such collection or dissemination;

(C) the act of circumvention has the sole effect of identifying and disabling the capability described in subparagraph (A), and has no other effect on the ability of any person to gain access to any work; and

(D) the act of circumvention is carried out solely for the purpose of preventing the collection or dissemination of personally identifying information about a natural person who seeks to gain access to the work protected, and is not in violation of any other law.

(2) INAPPLICABILITY TO CERTAIN TECHNOLOGICAL PROTECTION MEASURES- This subsection does not apply to a technological protection measure, or a work it protects, that does not collect or disseminate personally identifying information and that is disclosed to a user as not having or using such capability.

SEC. 103. INTEGRITY OF COPYRIGHT MANAGEMENT INFORMATION.

(a) FALSE COPYRIGHT MANAGEMENT INFORMATION- No person shall knowingly and with the intent to induce, enable, facilitate, or conceal infringement--

(1) provide copyright management information that is false, or

(2) distribute or import for distribution copyright management information that is false.

(b) REMOVAL OR ALTERATION OF COPYRIGHT MANAGEMENT INFORMATION- No person shall, without the authority of the copyright owner or the law--

(1) intentionally remove or alter any copyright management information,

(2) distribute or import for distribution copyright management information knowing that the copyright management information has been removed or altered without authority of the copyright owner or the law, or

(3) distribute, import for distribution, or publicly perform works, copies of works, or phonorecords, knowing that copyright management information has been removed or altered without authority of the copyright owner or the law,

knowing, or, with respect to civil remedies under section 104, having reasonable grounds to know, that it will induce, enable, facilitate, or conceal an infringement of any right under title 17, United States Code.

(1) the terms `distribute', `publicly perform', `copies', and `phonorecords' have the meanings given those terms in title 17, United States Code; and

(2) the term `copyright management information' means any of the following information conveyed in connection with copies or phonorecords of a work or performances or displays of a work, including in digital form, except that such term does not include any personally identifying information about a user of a work or of a copy, phonorecord, performance, or display of a work:

(A) The title and other information identifying the work, including the information set forth on a notice of copyright.

(B) The name of, and other identifying information about, the author of a work.

(C) The name of, and other identifying information about, the copyright owner of the work, including the information set forth in a notice of copyright.

(D) With the exception of public performances of works by radio and television broadcast stations, the name of, and other identifying information about, a performer whose performance is fixed in a work other than an audiovisual work.

(E) With the exception of public performances of works by radio and television broadcast stations, in the case of an audiovisual work, the name of, and other identifying information about, a writer, performer, or director who is credited in the audiovisual work.

(F) Terms and conditions for use of the work.

(G) Identifying numbers or symbols referring to such information or links to such information.

(H) Such other information as the Register of Copyrights may prescribe by regulation, except that the Register of Copyrights may not require the provision of any information concerning the user of a copyrighted work.

(d) LAW ENFORCEMENT AND INTELLIGENCE ACTIVITIES- This section does not prohibit any lawfully authorized investigative, protective, or intelligence activity of an officer, agent, or employee of the United States, a State, or a political subdivision of a State, or a person acting pursuant to a contract with the United States, a State, or a political subdivision of a State.

(e) LIMITATIONS ON LIABILITY-

(1) ANALOG TRANSMISSIONS- In the case of an analog transmission, a person who is making transmissions in its capacity as a broadcast station, or as a cable system (as defined in section 602 of the Communications Act of 1934), or someone who provides programming to such station or system, shall not be liable for a violation of subsection (b) if--

(A) avoiding the activity that constitutes such violation is not technically feasible or would create an undue financial hardship on such person; and

(B) such person did not intend, by engaging in such activity, to induce, enable, facilitate, or conceal infringement of a right under title 17, United States Code.

(2) DIGITAL TRANSMISSIONS-

(A) If a digital transmission standard for the placement of copyright management information for a category of works is set in a voluntary, consensus standard-setting process involving a representative cross-section of broadcast stations or cable systems and copyright owners of a category of works that are intended for public performance by such stations or systems, a person identified in paragraph (1) shall not be liable for a violation of subsection (b) with respect to the particular copyright management information addressed by such standard if--

(i) the placement of such information by someone other than such person is not in accordance with such standard; and

(ii) the activity that constitutes such violation is not intended to induce, enable, facilitate, or conceal infringement of a right under title 17, United States Code.

(B) Until a digital transmission standard has been set pursuant to subparagraph (A) with respect to the placement of copyright management information for a category or works, a person identified in paragraph (1) shall not be liable for a violation of subsection (b) with respect to such copyright management information, if the activity that constitutes such violation is not intended to induce, enable, facilitate, or conceal infringement of a right under title 17, United States Code, and if--

(i) the transmission of such information by such person would result in a perceptible visual or aural degradation of the digital signal; or

(ii) the transmission of such information by such person would conflict with--

(I) an applicable government regulation relating to transmission of information in a digital signal;

(II) an applicable industry-wide standard relating to the transmission of information in a digital signal that was adopted by a voluntary consensus standards body prior to the effective date of this title; or

(III) an applicable industry-wide standard relating to the transmission of information in a digital signal that was adopted in a voluntary, consensus standards-setting process open to participation by a representative cross-section of broadcast stations or cable systems and copyright owners of a category of works that are intended for public performance by such stations or systems.

(3) DEFINITIONS- As used in this subsection--

(A) the term `broadcast station' has the meaning given that term in section 3 of the Communications Act of 1934 (47 U.S.C. 153)); and

(B) the term `cable system' has the meaning given that term in section 602 of the Communications Act of 1934 (47 U.S.C. 522)).

SEC. 104. CIVIL REMEDIES.

(a) CIVIL ACTIONS- Any person injured by a violation of section 102 or 103, or of any regulation issued under section 102(a)(1), may bring a civil action in an appropriate United States district court for such violation.

(b) POWERS OF THE COURT- In an action brought under subsection (a), the court--

(1) may grant temporary and permanent injunctions on such terms as it deems reasonable to prevent or restrain a violation, but in no event shall impose a prior restraint on free speech or the press protected under the 1st amendment to the Constitution;

(2) at any time while an action is pending, may order the impounding, on such terms as it deems reasonable, of any device or product that is in the custody or control of the alleged violator and that the court has reasonable cause to believe was involved in a violation;

(3) may award damages under subsection (c);

(4) in its discretion may allow the recovery of costs by or against any party other than the United States or an officer thereof;

(5) in its discretion may award reasonable attorney's fees to the prevailing party; and

(6) may, as part of a final judgment or decree finding a violation, order the remedial modification or the destruction of any device or product involved in the violation that is in the custody or control of the violator or has been impounded under paragraph (2).

(1) IN GENERAL- Except as otherwise provided in this title, a person committing a violation of section 102 or 103, or of any regulation issued under section 102(a)(1), is liable for either--

(A) the actual damages and any additional profits of the violator, as provided in paragraph (2), or

(B) statutory damages, as provided in paragraph (3).

(2) ACTUAL DAMAGES- The court shall award to the complaining party the actual damages suffered by the party as a result of the violation, and any profits of the violator that are attributable to the violation and are not taken into account in computing the actual damages, if the complaining party elects such damages at any time before final judgment is entered.

(3) STATUTORY DAMAGES-

(A) At any time before final judgment is entered, a complaining party may elect to recover an award of statutory damages for each violation of section 102, or of a regulation issued under section 102(a)(1), in the sum of not less than $200 or more than $2,500 per act of circumvention, device, product, component, offer, or performance of service, as the court considers just.

(B) At any time before final judgment is entered, a complaining party may elect to recover an award of statutory damages for each violation of section 103 in the sum of not less than $2,500 or more than $25,000.

(4) REPEATED VIOLATIONS- In any case in which the injured party sustains the burden of proving, and the court finds, that a person has violated section 102 or 103, or any regulation issued under section 102(a)(1), within three years after a final judgment was entered against the person for another such violation, the court may increase the award of damages up to triple the amount that would otherwise be awarded, as the court considers just.

(5) Innocent violations-

(A) IN GENERAL- The court in its discretion may reduce or remit the total award of damages in any case in which the violator sustains the burden of proving, and the court finds, that the violator was not aware and had no reason to believe that its acts constituted a violation.

(B) NONPROFIT LIBRARY, ARCHIVES, OR EDUCATIONAL INSTITUTIONS- In the case of a nonprofit library, archives, or educational institution, the court shall remit damages in any case in which the library, archives, or educational institution sustains the burden of proving, and the court finds, that the library, archives, or educational institution was not aware and had no reason to believe that its acts constituted a violation.

SEC. 105. CRIMINAL OFFENSES AND PENALTIES.

(a) IN GENERAL- Any person who violates section 102 or 103, or any regulation issued under section 102(a)(1), willfully and for purposes of commercial advantage or private financial gain--

(1) shall be fined not more than $500,000 or imprisoned for not more than 5 years, or both, for the first offense; and

(2) shall be fined not more than $1,000,000 or imprisoned for not more than 10 years, or both, for any subsequent offense.

(b) LIMITATION FOR NONPROFIT LIBRARY, ARCHIVES, OR EDUCATIONAL INSTITUTION- Subsection (a) shall not apply to a nonprofit library, archives, or educational institution.

(c) STATUTE OF LIMITATIONS- No criminal proceeding shall be brought under this section unless such proceeding is commenced within five years after the cause of action arose.

SEC. 106. SAVINGS CLAUSE.

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

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

(a) STATEMENT OF CONGRESSIONAL POLICY AND OBJECTIVE- It is the sense of the Congress that technological protection measures play a crucial role in safeguarding the interests of both copyright owners and lawful users of copyrighted works in digital formats, by facilitating lawful uses of such works while protecting the private property interests of holders of rights under title 17, United States Code. Accordingly, the expeditious implementation of such measures, developed by the private sector through voluntary industry-led processes, is a key factor in realizing the full benefits of making available copyrighted works through digital networks, including the benefits set forth in this section.

(b) TECHNOLOGICAL PROTECTION MEASURES- The technological protection measures referred to in subsection (a) shall include, but not be limited to, those which--

(1) enable nonprofit libraries, for nonprofit purposes, to continue to lend to library users copies or phonorecords that such libraries have lawfully acquired, including the lending of such copies or phonorecords in digital formats in a manner that prevents infringement;

(2) effectively protect against the infringement of exclusive rights under title 17, United States Code, and facilitate the exercise of those exclusive rights; and

(3) promote the development and implementation of diverse methods, mechanisms, and arrangements in the marketplace for making available copyrighted works in digital formats which provide opportunities for individual members of the public to make lawful uses of copyrighted works in digital formats.

(c) PROCEDURES FOR DEVELOPING AND IMPLEMENTING TECHNOLOGICAL PROTECTION MEASURES- The technological protection measures whose development and implementation the Congress anticipates are those which--

(1) are developed pursuant to a broad consensus in an open, fair, voluntary, and multi-industry process;

(2) are made available on reasonable and nondiscriminatory terms; and

(3) do not impose substantial costs or burdens on copyright owners or on manufacturers of hardware or software used in conjunction with copyrighted works in digital formats.

(d) OVERSIGHT AND REPORTING- (1) The Secretary of Commerce, in consultation with the Assistant Secretary of Commerce for Communications and Information and the Register of Copyrights, shall review the impact of the enactment of section 102 of this Act on the access of individual users to copyrighted works in digital formats and shall report annually thereon to the Committees on Commerce and on the Judiciary of the House of Representatives and the Committees on Commerce, Science, and Transportation and on the Judiciary of the Senate.

(2) Each report under paragraph (1) shall address the following issues:

(A) The status of the development and implementation of technological protection measures, including measures that advance the objectives of this section, and the effectiveness of technological protection measures in protecting the private property interests of copyright owners under title 17, United States Code.

(B) The degree to which individual lawful users of copyrighted works--

(i) have access to the Internet and digital networks generally;

(ii) are dependent upon such access for their use of copyrighted works;

(iii) have available to them other channels for obtaining and using copyrighted works, other than the Internet and digital networks generally;

(iv) are required to pay copyright owners or intermediaries for each lawful use of copyrighted works in digital formats to which they have access; and

(v) are able to utilize nonprofit libraries to obtain access, through borrowing without payment by the user, to copyrighted works in digital formats.

(D) Whether and the extent to which section 102, and the regulations issued under section 102(a)(1), are asserted as a basis for liability in claims brought against persons conducting research and development, including reverse engineering of copyrighted works, and the extent to which such claims constitute a serious impediment to the development and production of competitive goods and services.

(E) The degree to which individual users of copyrighted materials in digital formats are able effectively to protect themselves against the use of technological protection measures to carry out or facilitate the undisclosed collection and dissemination of personally identifying information concerning the access to and use of such materials by such users.

(F) Such other issues as the Secretary of Commerce, in consultation with the Assistant Secretary of

Commerce for Communications and Information and the Register of Copyrights, identifies as relevant to the impact of the enactment of section 102 on the access of individual users to copyrighted works in digital formats.

(3) The first report under this subsection shall be submitted not later than one year after the date of the enactment of this Act, and the last such report shall be submitted not later than three years after the date of the enactment of this Act.

(4) The reports under this subsection may include such recommendations for additional legislative action as the Secretary of Commerce and the Register of Copyrights consider advisable in order to further the objectives of this section.

SEC. 108. TECHNICAL AMENDMENTS.

(a) DEFINITIONS- Section 101 of title 17, United States Code, is amended--

(1) by striking the definition of `Berne Convention work';

(2) in the definition of `The `country of origin' of a Berne Convention work'--

(B) in paragraph (1)--

(i) in subparagraph (B) by striking `nation or nations adhering to the Berne Convention' and inserting `treaty party or parties';

(ii) in subparagraph (C) by striking `does not adhere to the Berne Convention' and inserting `is not a treaty party'; and

(iii) in subparagraph (D) by striking `does not adhere to the Berne Convention' and inserting `is not a treaty party'; and

(C) in the matter following paragraph (3) by striking `For the purposes of section 411, the `country of origin' of any other Berne Convention work is not the United States.';

(3) by inserting after the definition of `fixed' the following:

(4) by inserting after the definition of `including' the following:

`An `international agreement' is--

`(1) the Universal Copyright Convention;

`(2) the Geneva Phonograms Convention;

`(3) the Berne Convention;

`(4) the WTO Agreement;

`(5) the WIPO Copyright Treaty;

`(6) the WIPO Performances and Phonograms Treaty; and

`(7) any other copyright treaty to which the United States is a party.';

(5) by inserting after the definition of `transmit' the following:

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

(6) by inserting after the definition of `widow' the following:

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

(7) by inserting after the definition of `The `WIPO Copyright Treaty' the following:

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

(8) by inserting after the definition of `work made for hire' the following:

`The terms `WTO Agreement' and `WTO member country' have the meanings given those terms in paragraphs (9) and (10), respectively, of section 2 of the Uruguay Round Agreements Act.'.

(b) SUBJECT MATTER OF COPYRIGHT; NATIONAL ORIGIN- Section 104 of title 17, United States Code, is amended--

(1) in subsection (b)--

(A) in paragraph (1) by striking `foreign nation that is a party to a copyright treaty to which the United States is also a party' and inserting `treaty party';

(B) in paragraph (2) by striking `party to the Universal Copyright Convention' and inserting `treaty party';

(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';

(G) by inserting after paragraph (6), as so redesignated, the following:

(2) by adding at the end the following new subsection:

(1) in paragraph (1), by striking subparagraphs (A) and (B) and inserting the following:

`(A) a nation adhering to the Berne Convention;

`(B) a WTO member country;

`(C) a nation adhering to the WIPO Copyright Treaty;

`(D) a nation adhering to the WIPO Performances and Phonograms Treaty; or

`(E) subject to a Presidential proclamation under subsection (g).';

(2) by amending paragraph (3) to read as follows:

`(3) The term `eligible country' means a nation, other than the United States, that--

`(A) becomes a WTO member country after the date of the enactment of the Uruguay Round Agreements Act;

`(B) on such date of enactment is, or after such date of enactment becomes, a nation adhering to the Berne Convention;

`(C) adheres to the WIPO Copyright Treaty;

`(D) adheres to the WIPO Performances and Phonograms Treaty; or

`(E) after such date of enactment becomes subject to a proclamation under subsection (g).';

(3) in paragraph (6)--

(A) in subparagraph (C)(iii) by striking `and' after the semicolon;

(B) at the end of subparagraph (D) by striking the period and inserting `; and'; and

`(E) if the source country for the work is an eligible country solely by virtue of its adherence to the WIPO Performances and Phonograms Treaty, is a sound recording.';

(4) in paragraph (8)(B)(i)--

(A) by inserting `of which' before `the majority'; and

(B) by striking `of eligible countries'; and

(5) by striking paragraph (9).

(d) REGISTRATION AND INFRINGEMENT ACTIONS- Section 411(a) of title 17, United States Code, is amended in the first sentence--

(1) by striking `actions for infringement of copyright in Berne Convention works whose country of origin is not the United States and'; and

(2) by inserting `United States' after `no action for infringement of the copyright in any'.

(e) STATUTE OF LIMITATIONS- Section 507(a) of title 17, United State Code, is amended by striking `No' and inserting `Except as expressly provided otherwise in this title, no'.

SEC. 109. EFFECTIVE DATE.

(a) IN GENERAL- Subject to subsection (b), the amendments made by this title shall take effect on the date of the enactment of this Act.

(b) AMENDMENTS RELATING TO CERTAIN INTERNATIONAL AGREEMENTS- (1) The following shall take effect upon the entry into force of the WIPO Copyright Treaty with respect to the United States:

(A) Paragraph (5) of the definition of `international agreement' contained in section 101 of title 17, United States Code, as amended by section 108(a)(4) of this Act.

(B) The amendment made by section 108(a)(6) of this Act.

(D) Subparagraph (C) of section 104A(h)(3) of title 17, United States Code, as amended by section 108(c)(2) of this Act.

(2) The following shall take effect upon the entry into force of the WIPO Performances and Phonograms Treaty with respect to the United States:

(A) Paragraph (6) of the definition of `international agreement' contained in section 101 of title 17, United States Code, as amended by section 108(a)(4) of this Act.

(B) The amendment made by section 108(a)(7) of this Act.

(D) Subparagraph (D) of section 104A(h)(1) of title 17, United States Code, as amended by section 108(c)(1) of this Act.

(E) Subparagraph (D) of section 104A(h)(3) of title 17, United States Code, as amended by section 108(c)(2) of this Act.

(F) The amendments made by section 108(c)(3) of this Act.

TITLE II--INTERNET COPYRIGHT INFRINGEMENT LIABILITY

SEC. 201. SHORT TITLE.

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

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

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

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

`(a) DIGITAL NETWORK COMMUNICATIONS- A service provider shall not be liable for monetary relief, or except as provided in subsection (i) for injunctive or other equitable relief, for infringement for the provider's transmitting, routing, or providing connections for, material through a system or network controlled or operated by or for the service provider, or the intermediate and transient storage of such material in the course of such transmitting, routing or providing connections, if--

`(1) it was initiated by or at the direction of a person other than the service provider;

`(2) it is carried out through an automatic technical process without selection of such material by the service provider;

`(3) the service provider does not select the recipients of such material except as an automatic response to the request of another;

`(4) no such copy of such material made by the service provider is maintained on the system or network in a manner ordinarily accessible to anyone other than anticipated recipients, and no such copy is maintained on the system or network in a manner ordinarily accessible to the anticipated recipients for a longer period than is reasonably necessary for the communication; and

`(5) the material is transmitted without modification to its content.

Provided,

`(1) such material is made available online by a person other than such service provider,

`(2) such material is transmitted from the person described in paragraph (1) through such system or network to someone other than that person at the direction of such other person,

`(3) the storage is carried out through an automatic technical process for the purpose of making such material available to users of such system or network who subsequently request access to that material from the person described in paragraph (1):

Provided further,

`(4) such material is transmitted to such subsequent users without modification to its content from the manner in which the material otherwise was transmitted from the person described in paragraph (1);

Provided further,

`(A) does not significantly interfere with the performance of the provider's system or network or with the intermediate storage of the material;

`(B) is consistent with accepted industry standard communications protocols; and

`(C) does not extract information from the provider's system or network other than the information that would have been available to such person if such material had been accessed by such users directly from such person;

`(7) either--

`(A) the person described in paragraph (1) does not currently condition access to such material; or

`(B) if access to such material is so conditioned by such person, by a current individual pre-condition, such as a pre-condition based on payment of a fee, or provision of a password or other information, the service provider permits access to the stored material in significant part only to users of its system or network that have been so authorized and only in accordance with those conditions; and

Provided further,

`(c) INFORMATION STORED ON SERVICE PROVIDERS-

`(1) IN GENERAL- A service provider shall not be liable for monetary relief, or except as provided in subsection (i) for injunctive or other equitable relief, for infringement for the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider, if the service provider--

`(A)(i) does not have actual knowledge that the material or activity is infringing,

`(ii) in the absence of such actual knowledge, is not aware of facts or circumstances from which infringing activity is apparent, or

`(iii) if upon obtaining such knowledge or awareness, the service provider acts expeditiously to remove or disable access to, the material;

`(B) does not receive a financial benefit directly attributable to the infringing activity, where the service provider has the right and ability to control such activity; and

`(C) in the instance of a notification of claimed infringement as described in paragraph (3), responds expeditiously to remove, or disable access to, the material that is claimed to be infringing or to be the subject of infringing activity.

`(2) DESIGNATED AGENT- The limitations on liability established in this subsection apply only if the service provider has designated an agent to receive notifications of claimed infringement described in paragraph (3), by substantially making the name, address, phone number, electronic mail address of such agent, and other contact information deemed appropriate by the Register of Copyrights, available through its service, including on its website, and by providing such information to the Copyright Office. The Register of Copyrights shall maintain a current directory of agents available to the public for inspection, including through the Internet, in both electronic and hard copy formats.

`(3) ELEMENTS OF NOTIFICATION-

`(A) To be effective under this subsection, a notification of claimed infringement means any written communication provided to the service provider's designated agent that includes substantially the following--

`(i) a physical or electronic signature of a person authorized to act on behalf of the owner of an exclusive right that is allegedly infringed;

`(ii) identification of the copyrighted work claimed to have been infringed, or, if multiple such works at a single online site are covered by a single notification, a representative list of such works at that site;

`(iii) identification of the material that is claimed to be infringing or to be the subject of infringing activity that is to be removed or access to which is to be disabled, and information reasonably sufficient to permit the service provider to locate the material;

`(iv) information reasonably sufficient to permit the service provider to contact the complaining party, such as an address, telephone number, and, if available an electronic mail address at which the complaining party may be contacted;

`(v) a statement that the complaining party has a good faith belief that use of the material in the manner complained of is not authorized by the copyright owner, or its agent, or the law; and

`(vi) a statement that the information in the notification is accurate, and under penalty of perjury, that the complaining party has the authority to enforce the owner's rights that are claimed to be infringed.

Provided,

`(d) INFORMATION LOCATION TOOLS- A service provider shall not be liable for monetary relief, or except as provided in subsection (i) for injunctive or other equitable relief, for infringement for the provider referring or linking users to an online location containing infringing material or activity by using information location tools, including a directory, index, reference, pointer or hypertext link, if the provider--

`(1) does not have actual knowledge that the material or activity is infringing or, in the absence of such actual knowledge, is not aware of facts or circumstances from which infringing activity is apparent;

`(2) does not receive a financial benefit directly attributable to the infringing activity, where the service provider has the right and ability to control such activity; and

Provided,

`(e) MISREPRESENTATIONS- Any person who knowingly materially misrepresents under this section--

`(1) that material or activity is infringing, or

`(2) that material or activity was removed or disabled by mistake or misidentification,

shall be liable for any damages, including costs and attorneys' fees, incurred by the alleged infringer, by any copyright owner or copyright owner's authorized licensee, or by the service provider, who is injured by such misrepresentation, as the result of the service provider relying upon such misrepresentation in removing or disabling access to the material or activity claimed to be infringing, or in replacing the removed material or ceasing to disable access to it.

`(f) REPLACEMENT OF REMOVED OR DISABLED MATERIAL AND LIMITATION ON OTHER LIABILITY-

`(1) Subject to paragraph (2) of this subsection, a service provider shall not be liable to any person for any claim based on the service provider's good faith disabling of access to, or removal of, material or activity claimed to be infringing or based on facts or circumstances from which infringing activity is apparent, regardless of whether the material or activity is ultimately determined to be infringing.

`(2) Paragraph (1) of this subsection shall not apply with respect to material residing at the direction of a subscriber of the service provider on a system or network controlled or operated by or for the service provider that is removed, or to which access is disabled by the service provider pursuant to a notice provided under subsection (c)(1)(C), unless the service provider--

`(A) takes reasonable steps promptly to notify the subscriber that it has removed or disabled access to the material;

`(B) upon receipt of a counter notice as described in paragraph (3), promptly provides the person who provided the notice under subsection (c)(1)(C) with a copy of the counter notice, and informs such person that it will replace the removed material or cease disabling access to it in ten business days; and

`(C) replaces the removed material and ceases disabling access to it not less than 10, nor more than 14, business days following receipt of the counter notice, unless its designated agent first receives notice from the person who submitted the notification under subsection (c)(1)(C) that such person has filed an action seeking a court order to restrain the subscriber from engaging in infringing activity relating to the material on the service provider's system or network.

`(3) To be effective under this subsection, a counter notification means any written communication provided to the service provider's designated agent that includes substantially the following:

`(A) A physical or electronic signature of the subscriber.

`(B) Identification of the material that has been removed or to which access has been disabled and the location at which such material appeared before it was removed or access was disabled.

`(C) A statement under penalty of perjury that the subscriber has a good faith belief that the material was removed or disabled as a result of mistake or misidentification of the material to be removed or disabled.

`(D) The subscriber's name, address and telephone number, and a statement that the subscriber consents to the jurisdiction of Federal Court for the judicial district in which the address is located, or if the subscriber's address is outside of the United States, for any judicial district in which the service provider may be found, and that the subscriber will accept service of process from the person who provided notice under subsection (c)(1)(C) or agent of such person.

`(4) A service provider's compliance with paragraph (2) shall not subject the service provider to liability for copyright infringement with respect to the material identified in the notice provided under subsection (c)(1)(C).

`(g) IDENTIFICATION OF DIRECT INFRINGER- The copyright owner or a person authorized to act on the owner's behalf may request an order for release of identification of an alleged infringer by filing--

`(1) a copy of a notification described in subsection (c)(3)(A), including a proposed order, and

`(2) a sworn declaration that the purpose of the order is to obtain the identity of an alleged infringer and that such information will only be used for the purpose of this title, with the clerk of any United States district court.

The order shall authorize and order the service provider receiving the notification to disclose expeditiously to the copyright owner or person authorized by the copyright owner information sufficient to identify the alleged direct infringer of the material described in the notification to the extent such information is available to the service provider. The order shall be expeditiously issued if the accompanying notification satisfies the provisions of subsection (c)(3)(A) and the accompanying declaration is properly executed. Upon receipt of the order, either accompanying or subsequent to the receipt of a notification described in subsection (c)(3)(A), a service provider shall expeditiously give to the copyright owner or person authorized by the copyright owner the information required by the order, notwithstanding any other provision of law and regardless of whether the service provider responds to the notification.

`(h) CONDITIONS FOR ELIGIBILITY-

`(1) ACCOMMODATION OF TECHNOLOGY- The limitations on liability established by this section shall apply only if the service provider--

`(A) has adopted and reasonably implemented, and informs subscribers of the service of, a policy for the termination of subscribers of the service who are repeat infringers; and

`(B) accommodates and does not interfere with standard technical measures as defined in this subsection.

`(2) DEFINITION- As used in this section, `standard technical measures' are technical measures, used by copyright owners to identify or protect copyrighted works, that--

`(A) have been developed pursuant to a broad consensus of copyright owners and service providers in an open, fair, voluntary, multi-industry standards process;

`(B) are available to any person on reasonable and nondiscriminatory terms; and

`(C) do not impose substantial costs on service providers or substantial burdens on their systems or networks.

`(i) INJUNCTIONS- The following rules shall apply in the case of any application for an injunction under section 502 against a service provider that is not subject to monetary remedies by operation of this section.

`(1) SCOPE OF RELIEF-

`(A) With respect to conduct other than that which qualifies for the limitation on remedies as set forth in subsection (a), the court may only grant injunctive relief with respect to a service provider in one or more of the following forms--

`(i) an order restraining it from providing access to infringing material or activity residing at a particular online site on the provider's system or network;

`(ii) an order restraining it from providing access to an identified subscriber of the service provider's system or network who is engaging in infringing activity by terminating the specified accounts of such subscriber; or

Provided,

`(B) If the service provider qualifies for the limitation on remedies described in subsection (a), the court may only grant injunctive relief in one or both of the following forms--

`(i) an order restraining it from providing access to an identified subscriber of the service provider's system or network who is using the provider's service to engage in infringing activity by terminating the specified accounts of such subscriber; or

`(ii) an order restraining it from providing access, by taking specified reasonable steps to block access, to a specific, identified, foreign online location.

`(2) CONSIDERATIONS- The court, in considering the relevant criteria for injunctive relief under applicable law, shall consider--

`(A) whether such an injunction, either alone or in combination with other such injunctions issued against the same service provider under this subsection, would significantly burden either the provider or the operation of the provider's system or network;

`(B) the magnitude of the harm likely to be suffered by the copyright owner in the digital network environment if steps are not taken to prevent or restrain the infringement;

`(C) whether implementation of such an injunction would be technically feasible and effective, and would not interfere with access to noninfringing material at other online locations; and

`(D) whether other less burdensome and comparably effective means of preventing or restraining access to the infringing material are available.

`(3) NOTICE AND EX PARTE ORDERS- Injunctive relief under this subsection shall not be available without notice to the service provider and an opportunity for such provider to appear, except for orders ensuring the preservation of evidence or other orders having no material adverse effect on the operation of the service provider's communications network.

`(j) DEFINITIONS-

`(1)(A) As used in subsection (a), the term `service provider' means an entity offering the transmission, routing or providing of connections for digital online communications, between or among points specified by a user, of material of the user's choosing, without modification to the content of the material as sent or received.

`(B) As used in any other subsection of this section, the term `service provider' means a provider of online services or network access, or the operator of facilities therefor, and includes an entity described in the preceding paragraph of this subsection.

`(2) As used in this section, the term `monetary relief' means damages, costs, attorneys' fees, and any other form of monetary payment.

`(k) OTHER DEFENSES NOT AFFECTED- The failure of a service provider's conduct to qualify for limitation of liability under this section shall not bear adversely upon the consideration of a defense by the service provider that the service provider's conduct is not infringing under this title or any other defense.

`(l) PROTECTION OF PRIVACY- Nothing in this section shall be construed to condition the applicability of subsections (a) through (d) on--

`(1) a service provider monitoring its service or affirmatively seeking facts indicating infringing activity except to the extent consistent with a standard technical measure complying with the provisions of subsection (h); or

`(2) a service provider accessing, removing, or disabling access to material where such conduct is prohibited by law.

`(m) RULE OF CONSTRUCTION- Subsections (a), (b), (c), and (d) are intended to describe separate and distinct functions for purposes of analysis under this section. Whether a service provider qualifies for the limitation on liability in any one such subsection shall be based solely on the criteria in each such subsection and shall not affect a determination of whether such service provider qualifies for the limitations on liability under any other such subsection.'.

(b) CONFORMING AMENDMENT- The table of sections for chapter 5 of title 17, United States Code, is amended by adding at the end the following:

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

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

Section 117 of title 17, United States Code, is amended--

(1) by striking `Notwithstanding' and inserting the following:

`(a) MAKING OF ADDITIONAL COPY OR ADAPTATION BY OWNER OF COPY- Notwithstanding';

(2) by striking `Any exact' and inserting the following:

`(b) LEASE, SALE, OR OTHER TRANSFER OF ADDITIONAL COPY OR ADAPTATION- Any exact'; and

(3) by adding at the end the following:

`(1) such new copy is used in no other manner and is destroyed immediately after the maintenance or repair is completed; and

`(d) DEFINITIONS- For purposes of this section--

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

(a) RECOMMENDATIONS BY REGISTER OF COPYRIGHTS- Not later than six months after the date of the enactment of this Act, the Register of Copyrights, after consultation with representatives of copyright owners and nonprofit educational institutions, shall submit to the Congress recommendations regarding the liability of nonprofit educational institutions for copyright infringement committed with the use of computer systems for which such an institution is a service provider, as that term is defined in section 512 of title 17, United States Code (as added by section 202 of this Act), including recommendations for legislation that the Register of Copyrights considers appropriate regarding such liability, if any.

(b) FACTORS- In formulating recommendations under subsection (a), the Register of Copyrights shall consider, where relevant--

(1) current law regarding the direct, vicarious, and contributory liability of nonprofit educational institutions for infringement by faculty, administrative employees, students, graduate students, and students who are employees of such nonprofit educational institutions;

(2) other users of their computer systems for whom nonprofit educational institutions may be responsible;

(3) the unique nature of the relationship between nonprofit educational institutions and faculty;

(4) what policies nonprofit educational institutions should adopt regarding copyright infringement by users of their computer systems;

(5) what technological measures are available to monitor infringing uses;

(6) what monitoring of their computer systems by nonprofit educational institutions is appropriate;

(7) what due process nonprofit educational institutions should afford in disabling access by users of their computer systems who are alleged to have committed copyright infringement;

(8) what distinctions, if any, should be drawn between computer systems which may be accessed from outside the nonprofit educational systems, those which may not, and combinations thereof;

(9) the tradition of academic freedom; and

(10) such other issues relating to the liability of nonprofit educational institutions for copyright infringement committed with the use of computer systems for which such an institution is a service provider that the Register considers appropriate.

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

(a) FINDINGS- In order to maintain strong protection for intellectual property and promote the development of electronic commerce and the technologies to support that commerce, the Congress must have accurate and current information on the effects of intellectual property protection on electronic commerce and technology. The emergence of digital technology and the proliferation of copyrighted works in digital media, along with the amendments to copyright law contained in this Act, make it appropriate for the Congress to review these issues to ensure that neither copyright law nor electronic commerce inhibits the development of the other.

(b) EVALUATION BY SECRETARY OF COMMERCE- The Secretary of Commerce, in consultation with the Assistant Secretary of Commerce for Communications and Information and the Register of Copyrights, shall evaluate--

(1) the effects of this Act and the amendments made by this Act on the development of electronic commerce and associated technology; and

(2) the relationship between existing and emergent technology and existing copyright law.

(c) REPORT TO CONGRESS- The Secretary of Commerce shall, not later than 1 year after the date of the enactment of this Act, submit to the Congress a report on the evaluation conducted under subsection (b), including any legislative recommendations the Secretary may have.

SEC. 206. EFFECTIVE DATE.

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

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

SEC. 301. EPHEMERAL RECORDINGS.

Section 112(a) of title 17, United States Code, is amended--

(1) by redesignating paragraphs (1), (2), and (3) as subparagraphs (A), (B), and (C), respectively;

(2) by inserting `(1)' after `(a)'; and

(3) by inserting after `114(a),' the following: `or for a transmitting organization that is a broadcast radio or television station licensed as such by the Federal Communications Commission that broadcasts a performance of a sound recording in a digital format on a nonsubscription basis,'; and

(4) by adding at the end the following:

`(2) In a case in which a transmitting organization entitled to make a copy or phonorecord under paragraph (1) in connection with the transmission to the public of a performance or display of a work described in that paragraph is prevented from making such copy or phonorecord by reason of the application by the copyright owner of technical measures that prevent the reproduction of the work, the copyright owner shall make available to the transmitting organization the necessary means for permitting the making of such copy or phonorecord within the meaning of that paragraph, if it is technologically feasible and economically reasonable for the copyright owner to do so. If the copyright owner fails to do so in a timely manner in light of the transmitting organization's reasonable business requirements, the transmitting organization shall not be liable for a violation of the regulations issued under section 102(a)(1)(A) of the WIPO Copyright Treaties Implementation Act for engaging in such activities as are necessary to make such copies or phonorecords as permitted under paragraph (1) of this subsection.'.

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

(a) RECOMMENDATIONS BY NATIONAL TELECOMMUNICATIONS AND INFORMATION ADMINISTRATION- Not later than 6 months after the date of the enactment of this Act, the Assistant Secretary of Commerce for Communications and Information, after consultation with representatives of copyright owners, nonprofit educational institutions, and nonprofit libraries and archives, shall submit to the Congress recommendations on how to promote distance education through digital technologies, including interactive digital networks, while maintaining an appropriate balance between the rights of copyright owners and the needs

of users of copyrighted works. Such recommendations shall include any legislation the Assistant Secretary considers appropriate to achieve the foregoing objective.

(b) FACTORS- In formulating recommendations under subsection (a), the Assistant Secretary of Commerce for Communications and Information shall consider--

(1) the need for an exemption from exclusive rights of copyright owners for distance education through digital networks;

(2) the categories of works to be included under any distance education exemption;

(3) the extent of appropriate quantitative limitations on the portions of works that may be used under any distance education exemption;

(4) the parties who should be entitled to the benefits of any distance education exemption;

(5) the parties who should be designated as eligible recipients of distance education materials under any distance education exemption;

(6) whether and what types of technological measures can or should be employed to safeguard against unauthorized access to, and use or retention of, copyrighted materials as a condition to eligibility for any distance education exemption, including, in light of developing technological capabilities, the exemption set out in section 110(2) of title 17, United States Code;

(7) the extent to which the availability of licenses for the use of copyrighted works in distance education through interactive digital networks should be considered in assessing eligibility for any distance education exemption; and

(8) such other issues relating to distance education through interactive digital networks that the Assistant Secretary considers appropriate.

SEC. 303. EXEMPTION FOR LIBRARIES AND ARCHIVES.

Section 108 of title 17, United States Code, is amended--

(1) in subsection (a)--

(A) by striking `Notwithstanding' and inserting `Except as otherwise provided in this title and notwithstanding';

(B) by inserting after `no more than one copy or phonorecord of a work' the following: `, except as provided in subsections (b) and (c)'; and

(C) in paragraph (3) by inserting after `copyright' the following: `that appears on the copy or phonorecord that is reproduced under the provisions of this section, or includes a legend stating that the work may be protected by copyright if no such notice can be found on the copy or phonorecord that is reproduced under the provisions of this section';

(2) in subsection (b)--

(A) by striking `a copy or phonorecord' and inserting `three copies or phonorecords';

(B) by striking `in facsimile form'; and

(C) by striking `if the copy or phonorecord reproduced is currently in the collections of the library or archives.' and inserting `if--

`(1) the copy or phonorecord reproduced is currently in the collections of the library or archives; and

`(2) any such copy or phonorecord that is reproduced in digital format is not otherwise distributed in that format and is not made available to the public in that format outside the premises of the library or archives.'; and

(3) in subsection (c)--

(A) by striking `a copy or phonorecord' and inserting `three copies or phonorecords';

(B) by striking `in facsimile form';

(D) by striking `if the library or archives has, after a reasonable effort, determined that an unused replacement cannot be obtained at a fair price.' and inserting `if--

`(1) the library or archives has, after a reasonable effort, determined that an unused replacement cannot be obtained at a fair price; and

`(2) any such copy or phonorecord that is reproduced in digital format is not made available to the public in that format except for use on the premises of the library or archives in lawful possession of such copy.'; and

(E) by adding at the end the following:

`For purposes of this subsection, a format shall be considered obsolete if the machine or device necessary to render perceptible a work stored in that format is no longer manufactured or is no longer reasonably available in the commercial marketplace.'.

TITLE IV--RELATED PROVISIONS

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

Not later than 6 months after the date of the enactment of this Act, the Assistant Secretary of Commerce for Communications and Information shall report to the Congress on appropriate mechanisms to encourage the development of access protocols, encryption testing methods, and security testing methods which would allow lawful access to, with appropriate safeguards to prevent the unlawful copying of, encrypted works. The Assistant Secretary shall include in such report recommendations on proposed amendments to this Act, if any, for achieving such result and for mechanisms to ensure that such safeguards--

(1) would be developed pursuant to a broad consensus of copyright owners and cryptographic researchers and security administrators in an open, fair, voluntary standards-setting process;

(2) to the extent feasible, would protect copyright owners against the unauthorized distribution or reproduction of their encrypted works; and

(3) would not limit encryption research, to the extent such research is permitted by law as of the enactment of this Act.

END