[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4077 Introduced in House (IH)]






108th CONGRESS
  2d Session
                                H. R. 4077

 To enhance criminal enforcement of the copyright laws, to educate the 
public about the application of copyright law to the Internet, and for 
                            other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 31, 2004

     Mr. Smith of Texas (for himself, Mr. Berman, and Mr. Conyers) 
 introduced the following bill; which was referred to the Committee on 
                             the Judiciary

_______________________________________________________________________

                                 A BILL


 
 To enhance criminal enforcement of the copyright laws, to educate the 
public about the application of copyright law to the Internet, and for 
                            other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Piracy Deterrence and Education Act 
of 2004''.

SEC. 2. FINDINGS.

    The Congress finds as follows:
            (1) The Internet, while changing the way our society 
        communicates, has also changed the nature of many crimes, 
        including the theft of intellectual property.
            (2) Trafficking in infringing copyrighted works through 
        increasingly sophisticated electronic means, including peer-to-
        peer file trading networks, Internet chat rooms, and news 
        groups, threatens lost jobs, lost income for creators, lower 
        tax revenue, and higher prices for honest purchasers.
            (3) The most popular peer-to-peer file trading software 
        programs have been downloaded by computer users over 
        200,000,000 times. At any one time there are over 3,000,000 
        users simultaneously using just one of these services. Each 
        month, on average, over 2,300,000,000 digital-media files are 
        transferred among users of peer-to-peer systems.
            (4) Many computer users simply believe that they will not 
        be caught or prosecuted for their conduct.
            (5) The security and privacy threats posed by certain peer-
        to-peer networks extend beyond users inadvertently enabling a 
        hacker to access files. Millions of copies of one of the most 
        popular peer-to-peer networks contain software that could allow 
        an independent company to take over portions of users' 
        computers and Internet connections and has the capacity to keep 
        track of users' online habits.
            (6) In light of these considerations, Federal law 
        enforcement agencies should actively pursue criminals who steal 
        the copyrighted works of others, and prevent such activity 
        through enforcement and awareness. The public should be 
        educated about the security and privacy risks associated with 
        being connected to certain peer-to-peer networks.

SEC. 3. DETERRENCE AND COORDINATION.

    (a) Program; Sharing of Information.--The Director of the Federal 
Bureau of Investigation, in consultation with the Register of 
Copyrights, shall--
            (1) develop a program based on providing of information and 
        notice to deter members of the public from committing acts of 
        copyright infringement through the Internet; and
            (2) facilitate the sharing among law enforcement agencies, 
        Internet service providers, and copyright owners of information 
        concerning acts of copyright infringement described in 
        paragraph (1).
The program under paragraph (1) shall include issuing appropriate 
warnings to individuals engaged in acts of copyright infringement 
described in paragraph (1) that they may be subject to criminal 
prosecution.
    (b) Construction.--Nothing in this section shall be construed to 
expand the investigative or enforcement powers of the Federal Bureau of 
Investigation nor to affect the duty, if any, of Internet service 
providers to monitor their service, affirmatively seek facts indicating 
infringing activity, or share private information about the users of 
their systems.
    (c) Prohibition on Use of Certain Funds.--The program created under 
subsection (a)(1) shall not use funds or resources of the Department of 
Justice allocated for criminal investigation or prosecution.

SEC. 4. DESIGNATION AND TRAINING OF AGENTS IN COMPUTER HACKING AND 
              INTELLECTUAL PROPERTY UNITS.

    (a) Designation of Agents in CHIPs Units.--The Attorney General 
shall ensure that any unit in the Department of Justice responsible for 
investigating computer hacking or responsible for investigating 
intellectual property crimes is assigned at least one agent to support 
such unit for the purpose of investigating crimes relating to the theft 
of intellectual property.
    (b) Training.--The Attorney General shall ensure that each agent 
assigned under subsection (a) has received training in the 
investigation and enforcement of intellectual property crimes.

SEC. 5. EDUCATION PROGRAM.

    (a) Establishment.--There shall be established within the Office of 
the Associate Attorney General of the United States an Internet Use 
Education Program.
    (b) Purpose.--The purpose of the Internet Use Education Program 
shall be to--
            (1) educate the general public concerning the value of 
        copyrighted works and the effects of the theft of such works on 
        those who create them; and
            (2) educate the general public concerning the privacy, 
        security, and other risks of using the Internet to obtain 
        illegal copies of copyrighted works.
    (c) Sector Specific Materials.--The Internet Use Educational 
Program shall, to the extent appropriate, develop materials appropriate 
to Internet users in different sectors of the general public where 
criminal copyright infringement is a concern. The Attorney General 
shall consult with appropriate interested parties in developing such 
sector-specific materials.
    (d) Consultations.--The Attorney General shall consult with the 
Register of Copyrights and the Secretary of Commerce in developing the 
Internet Use Education Program under this section.
    (e) Prohibition on Use of Certain Funds.--The program created under 
this section shall not use funds or resources of the Department of 
Justice allocated for criminal investigation or prosecution.

SEC. 6. ACTIONS BY THE GOVERNMENT OF THE UNITED STATES.

    Section 411(a) of title 17, United States Code, is amended in the 
first sentence by striking ``Except for'' and inserting ``Except for an 
action brought by the Government of the United States or by any agency 
or instrumentality thereof, or''.

SEC. 7. AUTHORIZED APPROPRIATIONS.

    There are authorized to be appropriated to the Department of 
Justice for fiscal year 2005 not less than $15,000,000 for the 
investigation and prosecution of violations of title 17, United States 
Code.

SEC. 8. PREVENTION OF SURREPTITIOUS RECORDING IN MOTION PICTURE 
              THEATERS.

    (a) Short Title.--This section may be cited as the ``Artists' 
Rights and Theft Prevention Act of 2004'' or the ``ART Act''.
    (b) Criminal Penalties for Unauthorized Recording of Motion 
Pictures in a Motion Picture Theater.--
            (1) In general.--Chapter 113 of title 18, United States 
        Code, is amended by adding after section 2319A the following 
        new section:
``Sec. 2319B. Unauthorized recording of motion pictures in a motion 
              picture theater
    ``(a) Offense.--Whoever, without the authorization of the copyright 
owner, knowingly uses or attempts to use an audiovisual recording 
device in a motion picture theater to transmit or make a copy of a 
motion picture or other audiovisual work protected under title 17, or 
any part thereof, in a motion picture theater shall--
            ``(1) be imprisoned for not more than 3 years, fined under 
        this title, or both; or
            ``(2) if the offense is a second or subsequent offense, be 
        imprisoned for no more than 6 years, fined under this title, or 
        both.
    ``(b) Forfeiture and Destruction.--When a person is convicted of a 
violation of subsection (a), the court in its judgment of conviction 
shall, in addition to any penalty provided, order the forfeiture and 
destruction or other disposition of all unauthorized copies of motion 
pictures or other audiovisual works protected under title 17, or parts 
thereof, and any audiovisual recording devices or other equipment used 
in connection with the violation.
    ``(c) Authorized Activities.--This section does not prevent any 
lawfully authorized investigative, protective, or intelligence activity 
by an officer, agent, or employee of the United States, a State, or a 
political subdivision of a State, or by a person acting pursuant to a 
contract with the United States, a State, or a political subdivision of 
a State.
    ``(d) Victim Impact Statement.--
            ``(1) In general.--During the preparation of the 
        presentence report pursuant to rule 32(c) of the Federal Rules 
        of Criminal Procedure, victims of an offense under this section 
        shall be permitted to submit to the probation officer a victim 
        impact statement that identifies the victim of the offense and 
        the extent and scope of the injury and loss suffered by the 
        victim, including the estimated economic impact of the offense 
        on that victim.
            ``(2) Contents.--A victim impact statement submitted under 
        this subsection shall include--
                    ``(A) producers and sellers of legitimate works 
                affected by conduct involved in the offense;
                    ``(B) holders of intellectual property rights in 
                the works described in subparagraph (A); and
                    ``(C) the legal representatives of such producers, 
                sellers, and holders.
    ``(e) Definitions.--In this section:
            ``(1) Audiovisual work, copy, etc.--The terms `audiovisual 
        work', `copy', `copyright owner', `motion picture', and 
        `transmit' have, respectively, the meanings given those terms 
        in section 101 of title 17.
            ``(2) Audiovisual recording device.--The term `audiovisual 
        recording device' means a digital or analog photographic or 
        video camera, or any other technology or device capable of 
        enabling the recording or transmission of a copyrighted motion 
        picture or other audiovisual work, or any part thereof, 
        regardless of whether audiovisual recording is the sole or 
        primary purpose of the device.
            ``(3) Motion picture theater.--The term `motion picture 
        theater' means a movie theater, screening room, or other venue 
        that is being used primarily for public performance of a motion 
        picture.''.
            (2) Conforming amendment.--The table of sections for 
        chapter 113 of title 18, United States Code, is amended by 
        inserting after the item relating to section 2319A the 
        following:

``2319B. Unauthorized recording of motion pictures in a motion picture 
                            theater.''.

SEC. 9. SENSE OF THE CONGRESS ON NEED TO TAKE STEPS TO PREVENT ILLEGAL 
              ACTIVITY ON PEER-TO-PEER SERVICES.

    (a) Findings.--The Congress finds as follows:
            (1) The most popular publicly accessible peer-to-peer file 
        sharing software programs combined have been downloaded 
        worldwide over 600,000,000 times.
            (2) The vast majority of software products, including peer-
        to-peer technology, do not pose an inherent risk. Responsible 
        persons making software products should be encouraged and 
        commended for the due diligence and reasonable care they take 
        including by providing instructions, relevant information in 
        the documentation, disseminating patches, updates, and other 
        appropriate modifications to the software.
            (3) Massive volumes of illegal activity, including the 
        distribution of child pornography, viruses, and confidential 
        personal information, and copyright infringement occur on 
        publicly accessible peer-to-peer file sharing services every 
        day. Some publicly accessible peer-to-peer file sharing 
        services expose consumers, particularly children, to serious 
        risks, including legal liability, loss of privacy, threats to 
        computer security, and exposure to illegal and inappropriate 
        material.
            (4) The following studies and reports demonstrate that 
        pornography, including child pornography, is prevalent on 
        publicly available peer-to-peer file sharing services, and 
        children are regularly exposed to pornography when using 
        publicly available peer-to-peer file-sharing services:
                    (A) A February 2004 report by the General 
                Accounting Office (GAO) states that children using 
                peer-to-peer file-sharing technology can be exposed 
                inadvertently to pornographic content. When searching 
                for popular terms like ``Britney'', ``Pokemon'', and 
                ``Olsen twins'', more than half the files retrieved 
                were pornographic, including 8 percent containing child 
                pornography or child erotica.
                    (B) The GAO also found that when searching the most 
                popular peer-to-peer service for keywords known to be 
                associated with child pornography, 42 percent of the 
                returns (543 out of 1,286 files) were associated with 
                images of child pornography.
                    (C) From 2001, when the National Center for Missing 
                and Exploited Children began to track peer-to-peer 
                child pornography, until 2002, the number of reported 
                incidents increased over 400 percent--compared to an 
                increase of less than 100 percent for chat rooms, less 
                than 32 percent for websites, and no increase for news 
                groups and bulletin boards.
            (5) The full potential of peer-to-peer technology to 
        benefit consumers has yet to be realized and will not be 
        achieved until these problems are adequately addressed.
            (6) To date, the businesses that run publicly accessible 
        file-sharing services have refused or failed to voluntarily and 
        sufficiently address these problems.
            (7) Many users of publicly available peer-to-peer file-
        sharing services are drawn to these systems by the lure of 
        obtaining ``free'' music and movies.
            (8) While some users use parental controls to protect 
        children from pornography available on the Internet and search 
        engines, not all such controls work on publicly accessible 
        peer-to-peer networks.
            (9) Businesses that run publicly accessible peer-to-peer 
        file sharing services have openly acknowledged, and numerous 
        studies and reports have established, that these services 
        facilitate and profit from massive amounts of copyright 
        infringement, causing enormous damage to the economic well-
        being of the copyright industries whose works are being 
        illegally ``shared'' and downloaded.
            (10) The legitimate digital music marketplace offers 
        consumers a wide and growing array of choices for obtaining 
        music legally, without exposure to the risks posed by publicly 
        accessible peer-to-peer file sharing services.
            (11) The Federal Trade Commission issued a Consumer Alert 
        in July of 2003 warning consumers that some file-sharing 
        services contain damaging viruses and worms and, without the 
        computer user's knowledge or consent, install spyware to 
        monitor a user's browsing habits and send data to third parties 
        or automatically open network connections.
            (12) Publicly available peer-to-peer file-sharing services 
        can and should adopt reasonable business practices and use 
        technology in the marketplace to address the existing risks 
        posed to consumers by their services and facilitate the 
        legitimate use of peer-to-peer file sharing technology and 
        software.
    (b) Sense of Congress.--It is the sense of the Congress that--
            (1) responsible software developers should be commended, 
        recognized, and encouraged for their efforts to protect 
        consumers;
            (2) currently the level of ongoing and persistent illegal 
        and dangerous activity on publicly accessible peer-to-peer file 
        sharing services is harmful to consumers, minors, and the 
        economy; and
            (3) therefore, the Congress and the executive branch should 
        consider all appropriate measures to protect consumers and 
        children, and prevent such illegal activity.

SEC. 10. ENHANCEMENT OF CRIMINAL COPYRIGHT INFRINGEMENT.

    (a) Criminal Infringement.--Section 506 of title 17, United States 
Code, is amended--
            (1) by amending subsection (a) to read as follows:
    ``(a) Criminal Infringement.--Any person who--
            ``(1) infringes a copyright willfully and for purposes of 
        commercial advantage or private financial gain,
            ``(2) infringes a copyright willfully by the reproduction 
        or distribution, including by the offering for distribution to 
        the public by electronic means, during any 180-day period, of 1 
        or more copies or phonorecords of 1 or more copyrighted works, 
        which have a total retail value of more than $1,000, or
            ``(3) infringes a copyright by the knowing distribution, 
        including by the offering for distribution to the public by 
        electronic means, with reckless disregard of the risk of 
        further infringement, during any 180-day period, of--
                    ``(A) 1,000 or more copies or phonorecords of 1 or 
                more copyrighted works,
                    ``(B) 1 or more copies or phonorecords of 1 or more 
                copyrighted works with a total retail value of more 
                than $10,000, or
                    ``(C) 1 or more copies or phonorecords of 1 or more 
                copyrighted pre-release works,
shall be punished as provided under section 2319 of title 18. For 
purposes of this subsection, evidence of reproduction or distribution 
of a copyrighted work, by itself, shall not be sufficient to establish 
the necessary level of intent under this subsection.''; and
            (2) by adding at the end the following:
    ``(g) Definitions.--In this section:
            ``(1) Pre-release work.--The term `pre-release work' refers 
        to a work protected under this title which has a commercial and 
        economic value and which, at the time of the infringement, the 
        defendant knew or should have known that the work had not yet 
        been made available by the copyright owner to individual 
        members of the general public in copies or phonorecords for 
        sale, license, or rental.
            ``(2) Retail value.--The `retail value' of a copyrighted 
        work is the retail price of that work in the market in which it 
        is sold. In the case of an infringement of a copyright by 
        distribution, if the retail price does not adequately reflect 
        the economic value of the infringement, then the retail value 
        may be determined using other factors, including but not 
        limited to suggested retail price, wholesale price, replacement 
        cost of the item, licensing, or distribution-related fees.''.
    (b) Penalties.--Section 2319 of title 18, United States Code, is 
amended--
            (1) by redesignating subsections (d) and (e) as subsections 
        (e) and (f), respectively;
            (2) by inserting after subsection (c) the following:
    ``(d) Any person who commits an offense under section 506(a)(3) of 
title 17--
            ``(1) shall be imprisoned not more than 3 years, or fined 
        in the amount set forth in this title, or both, or, if the 
        offense was committed for purposes of commercial advantage or 
        private financial gain, imprisoned for not more than 5 years, 
        or fined in the amount set forth in this title, or both; and
            ``(2) shall, if the offense is a second or subsequent 
        offense under paragraph (1), be imprisoned not more than 6 
        years, or fined in the amount set forth in this title, or both, 
        or, if the offense was committed for purposes of commercial 
        advantage or private financial gain, imprisoned for not more 
        than 10 years, or fined in the amount set forth in this title, 
        or both.''; and
            (3) in subsection (f), as so redesignated--
                    (A) in paragraph (1), by striking ``and'' after the 
                semicolon;
                    (B) in paragraph (2), by striking the period and 
                inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(3) the term `financial gain' has the meaning given that 
        term in section 101 (relating to definitions) of title 17.''.
    (c) Civil Remedies for Infringement of a Commercial Pre-Release 
Copyrighted Work.--Section 504(b) of title 17, United States Code, is 
amended--
            (1) by striking ``The copyright owner'' and inserting the 
        following:
            ``(1) In general.--The copyright owner''; and
            (2) by adding at the end the following:
            ``(2) Damages for pre-release infringement.--
                    ``(A) In general.--In the case of any pre-release 
                work, actual damages shall be presumed conclusively to 
                be no less than $10,000 per infringement, if a person--
                            ``(i) distributes such work by making it 
                        available on a computer network accessible to 
                        members of the public; and
                            ``(ii) knew or should have known that the 
                        work was intended for commercial distribution.
                    ``(B) Definition.--For purposes of this subsection, 
                the term `pre-release work' has the meaning given that 
                term in section 506(g).''.

SEC. 11. AMENDMENT OF FEDERAL SENTENCING GUIDELINES REGARDING THE 
              INFRINGEMENT OF COPYRIGHTED WORKS AND RELATED CRIMES.

    (a) Amendment to the Sentencing Guidelines.--Pursuant to its 
authority under section 994 of title 28, United States Code, and in 
accordance with this section, the United States Sentencing Commission 
shall review and, if appropriate, amend the sentencing guidelines and 
policy statements applicable to persons convicted of intellectual 
property rights crimes, including sections 2318, 2319, 2319A, 2319B, 
2320 of title 18, United States Code, and sections 506, 1201, and 1202 
of title 17, United States Code.
    (b) Factors.--In carrying out this section, the Sentencing 
Commission shall--
            (1) take all appropriate measures to ensure that the 
        sentencing guidelines and policy statements applicable to the 
        offenses described in subsection (a) are sufficiently stringent 
        to deter and adequately reflect the nature of such offenses;
            (2) consider whether to provide a sentencing enhancement 
        for those convicted of the offenses described in subsection (a) 
        when the conduct involves the display, performance, 
        publication, reproduction, or distribution of a copyrighted 
        work before the time when the copyright owner has authorized 
        the display, performance, publication, reproduction, or 
        distribution of the original work, whether in the media format 
        used by the infringing good or in any other media format;
            (3) consider whether the definition of ``uploading'' 
        contained in Application Note 3 to Guideline 2B5.3 is adequate 
        to address the loss attributable to people broadly distributing 
        copyrighted works over the Internet without authorization; and
            (4) consider whether the sentencing guidelines and policy 
        statements applicable to the offenses described in subsection 
        (a) adequately reflect any harm to victims from infringement in 
        circumstances where law enforcement cannot determine how many 
        times copyrighted material is reproduced or distributed.
    (c) Promulgation.--The Commission may promulgate the guidelines or 
amendments under this section in accordance with the procedures set 
forth in section 21(a) of the Sentencing Act of 1987, as though the 
authority under that Act had not expired.
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