[Congressional Record Volume 144, Number 30 (Wednesday, March 18, 1998)]
[House]
[Pages H1243-H1247]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   VESSEL HULL DESIGN PROTECTION ACT

  Mr. COBLE. Mr. Speaker, I move to suspend the rules and pass the bill 
(H.R. 2696) to amend title 17, United States Code, to provide for 
protection of certain original designs, as amended.
  The Clerk read as follows:

                               H.R. 2696

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

     SEC. 2. PROTECTION OF CERTAIN ORIGINAL DESIGNS.

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

              ``CHAPTER 12--PROTECTION OF ORIGINAL DESIGNS

``Sec.
``1201. Designs protected.
``1202. Designs not subject to protection.
``1203. Revisions, adaptations, and rearrangements.
``1204. Commencement of protection.
``1205. Term of protection.
``1206. Design notice.
``1207. Effect of omission of notice.
``1208. Exclusive rights.
``1209. Infringement.
``1210. Application for registration.
``1211. Benefit of earlier filing date in foreign country.
``1212. Oaths and acknowledgments.
``1213. Examination of application and issue or refusal of 
              registration.
``1214. Certification of registration.
``1215. Publication of announcements and indexes.
``1216. Fees.
``1217. Regulations.
``1218. Copies of records.
``1219. Correction of errors in certificates.
``1220. Ownership and transfer.
``1221. Remedy for infringement.
``1222. Injunctions.
``1223. Recovery for infringement.
``1224. Power of court over registration.
``1225. Liability for action on registration fraudulently obtained.
``1226. Penalty for false marking.
``1227. Penalty for false representation.
``1228. Enforcement by Treasury and Postal Service .
``1229. Relation to design patent law.
``1230. Common law and other rights unaffected.
``1231. Administrator; Office of the Administrator.
``1232. No retroactive effect.

     ``Sec. 1201. Designs protected

       ``(a) Designs Protected.--
       ``(1) In general.--The designer or other owner of an 
     original design of a useful article which makes the article 
     attractive or distinctive in appearance to the purchasing or 
     using public may secure the protection provided by this 
     chapter upon complying with and subject to this chapter.
       ``(2) Vessel hulls.--The design of a vessel hull, including 
     a plug or mold, is subject to protection under this chapter, 
     notwithstanding section 1202(4).

[[Page H1244]]

       ``(b) Definitions.--For the purpose of this chapter, the 
     following terms have the following meanings:
       ``(1) A design is `original' if it is the result of the 
     designer's creative endeavor that provides a distinguishable 
     variation over prior work pertaining to similar articles 
     which is more than merely trivial and has not been copied 
     from another source.
       ``(2) A `useful article' is a vessel hull, including a plug 
     or mold, which in normal use has an intrinsic utilitarian 
     function that is not merely to portray the appearance of the 
     article or to convey information. An article which normally 
     is part of a useful article shall be deemed to be a useful 
     article.
       ``(3) A `vessel' is a craft, especially one larger than a 
     rowboat, designed to navigate on water, but does not include 
     any such craft that exceeds 200 feet in length.
       ``(4) A `hull' is the frame or body of a vessel, including 
     the deck of a vessel, exclusive of masts, sails, yards, and 
     rigging.
       ``(5) A `plug' means a device or model used to make a mold 
     for the purpose of exact duplication, regardless of whether 
     the device or model has an intrinsic utilitarian function 
     that is not only to portray the appearance of the product or 
     to convey information.
       ``(6) A `mold' means a matrix or form in which a substance 
     for material is used, regardless of whether the matrix or 
     form has an intrinsic utilitarian function that is not only 
     to portray the appearance of the product or to convey 
     information.

     ``Sec. 1202. Designs not subject to protection

       ``Protection under this chapter shall not be available for 
     a design that is--
       ``(1) not original;
       ``(2) staple or commonplace, such as a standard geometric 
     figure, a familiar symbol, an emblem, or a motif, or another 
     shape, pattern, or configuration which has become standard, 
     common, prevalent, or ordinary;
       ``(3) different from a design excluded by paragraph (2) 
     only in insignificant details or in elements which are 
     variants commonly used in the relevant trades;
       ``(4) dictated solely by a utilitarian function of the 
     article that embodies it; or
       ``(5) embodied in a useful article that was made public by 
     the designer or owner in the United States or a foreign 
     country more than 1 year before the date of the application 
     for registration under this chapter.

     ``Sec. 1203. Revisions, adaptations, and rearrangements

       ``Protection for a design under this chapter shall be 
     available notwithstanding the employment in the design of 
     subject matter excluded from protection under section 1202 if 
     the design is a substantial revision, adaptation, or 
     rearrangement of such subject matter. Such protection shall 
     be independent of any subsisting protection in subject matter 
     employed in the design, and shall not be construed as 
     securing any right to subject matter excluded from protection 
     under this chapter or as extending any subsisting protection 
     under this chapter.

     ``Sec. 1204. Commencement of protection

       ``The protection provided for a design under this chapter 
     shall commence upon the earlier of the date of publication of 
     the registration under section 1213(a) or the date the design 
     is first made public as defined by section 1210(b).

     ``Sec. 1205. Term of protection

       ``(a) In General.--Subject to subsection (b), the 
     protection provided under this chapter for a design shall 
     continue for a term of 10 years beginning on the date of the 
     commencement of protection under section 1204.
       ``(b) Expiration.--All terms of protection provided in this 
     section shall run to the end of the calendar year in which 
     they would otherwise expire.
       ``(c) Termination of Rights.--Upon expiration or 
     termination of protection in a particular design under this 
     chapter, all rights under this chapter in the design shall 
     terminate, regardless of the number of different articles in 
     which the design may have been used during the term of its 
     protection.

     ``Sec. 1206. Design notice

       ``(a) Contents of Design Notice.--(1) Whenever any design 
     for which protection is sought under this chapter is made 
     public under section 1210(b), the owner of the design shall, 
     subject to the provisions of section 1207, mark it or have it 
     marked legibly with a design notice consisting of--
       ``(A) the words `Protected Design', the abbreviation 
     `Prot'd Des.', or the letter `D' with a circle, or the symbol 
     *D*;
       ``(B) the year of the date on which protection for the 
     design commenced; and
       ``(C) the name of the owner, an abbreviation by which the 
     name can be recognized, or a generally accepted alternative 
     designation of the owner.

     Any distinctive identification of the owner may be used for 
     purposes of subparagraph (C) if it has been recorded by the 
     Administrator before the design marked with such 
     identification is registered.
       ``(2) After registration, the registration number may be 
     used instead of the elements specified in subparagraphs (B) 
     and (C) of paragraph (1).
       ``(b) Location of Notice.--The design notice shall be so 
     located and applied as to give reasonable notice of design 
     protection while the useful article embodying the design is 
     passing through its normal channels of commerce.
       ``(c) Subsequent Removal of Notice.--When the owner of a 
     design has complied with the provisions of this section, 
     protection under this chapter shall not be affected by the 
     removal, destruction, or obliteration by others of the design 
     notice on an article.

     ``Sec. 1207. Effect of omission of notice

       ``(a) Actions With Notice.--Except as provided in 
     subsection (b), the omission of the notice prescribed in 
     section 1206 shall not cause loss of the protection under 
     this chapter or prevent recovery for infringement under this 
     chapter against any person who, after receiving written 
     notice of the design protection, begins an undertaking 
     leading to infringement under this chapter.
       ``(b) Actions Without Notice.--The omission of the notice 
     prescribed in section 1206 shall prevent any recovery under 
     section 1223 against a person who began an undertaking 
     leading to infringement under this chapter before receiving 
     written notice of the design protection. No injunction shall 
     be issued under this chapter with respect to such undertaking 
     unless the owner of the design reimburses that person for any 
     reasonable expenditure or contractual obligation in 
     connection with such undertaking that was incurred before 
     receiving written notice of the design protection, as the 
     court in its discretion directs. The burden of providing 
     written notice of design protection shall be on the owner of 
     the design.

     ``Sec. 1208. Exclusive rights

       ``The owner of a design protected under this chapter has 
     the exclusive right to--
       ``(1) make, have made, or import, for sale or for use in 
     trade, any useful article embodying that design; and
       ``(2) sell or distribute for sale or for use in trade any 
     useful article embodying that design.

     ``Sec. 1209. Infringement

       ``(a) Acts of Infringement.--Except as provided in 
     subjection (b), it shall be infringement of the exclusive 
     rights in a design protected under this chapter for any 
     person, without the consent of the owner of the design, 
     within the United States and during the term of such 
     protection, to--
       ``(1) make, have made, or import, for sale or for use in 
     trade, any infringing article as defined in subsection (e); 
     or
       ``(2) sell or distribute for sale or for use in trade any 
     such infringing article.
       ``(b) Acts of Sellers and Distributors.--A seller or 
     distributor of an infringing article who did not make or 
     import the article shall be deemed to have infringed on a 
     design protected under this chapter only if that person--
       ``(1) induced or acted in collusion with a manufacturer to 
     make, or an importer to import such article, except that 
     merely purchasing or giving an order to purchase such article 
     in the ordinary course of business shall not of itself 
     constitute such inducement or collusion; or
       ``(2) refused or failed, upon the request of the owner of 
     the design, to make a prompt and full disclosure of that 
     person's source of such article, and that person orders or 
     reorders such article after receiving notice by registered or 
     certified mail of the protection subsisting in the design.
       ``(c) Acts Without Knowledge.--It shall not be infringement 
     under this section to make, have made, import, sell, or 
     distribute, any article embodying a design which was created 
     without knowledge that a design was protected under this 
     chapter and was copied from such protected design.
       ``(d) Acts in Ordinary Course of Business.--A person who 
     incorporates into that person's product of manufacture an 
     infringing article acquired from others in the ordinary 
     course of business, or who, without knowledge of the 
     protected design embodied in an infringing article, makes or 
     processes the infringing article for the account of another 
     person in the ordinary course of business, shall not be 
     deemed to have infringed the rights in that design under this 
     chapter except under a condition contained in paragraph (1) 
     or (2) of subsection (b). Accepting an order or reorder from 
     the source of the infringing article shall be deemed ordering 
     or reordering within the meaning of subsection (b)(2).
       ``(e) Infringing Article Defined.--As used in this section, 
     an `infringing article' is any article the design of which 
     has been copied from a design protected under this chapter, 
     without the consent of the owner of the protected design. An 
     infringing article is not an illustration or picture of a 
     protected design in an advertisement, book, periodical, 
     newspaper, photograph, broadcast, motion picture, or similar 
     medium. A design shall not be deemed to have been copied from 
     a protected design if it is original and not substantially 
     similar in appearance to a protected design.
       ``(f) Establishing Originality.--The party to any action or 
     proceeding under this chapter who alleges rights under this 
     chapter in a design shall have the burden of establishing the 
     design's originality whenever the opposing party introduces 
     an earlier work which is identical to such design, or so 
     similar as to make prima facie showing that such design was 
     copied from such work.
       ``(g) Reproduction for Teaching or Analysis.--It is not an 
     infringement of the exclusive rights of a design owner for a 
     person to reproduce the design in a useful article or in any 
     other form solely for the purpose of teaching, analyzing, or 
     evaluating the appearance, concepts, or techniques embodied 
     in the design, or the function of the useful article 
     embodying the design.

     ``Sec. 1210. Application for registration

       ``(a) Time Limit for Application for Registration.--
     Protection under this chapter

[[Page H1245]]

     shall be lost if application for registration of the design 
     is not made within two years after the date on which the 
     design is first made public.
       ``(b) When Design Is Made Public.--A design is made public 
     when an existing useful article embodying the design is 
     anywhere publicly exhibited, publicly distributed, or offered 
     for sale or sold to the public by the owner of the design or 
     with the owner's consent.
       ``(c) Application by Owner of Design.--Application for 
     registration may be made by the owner of the design.
       ``(d) Contents of Application.--The application for 
     registration shall be made to the Administrator and shall 
     state--
       ``(1) the name and address of the designer or designers of 
     the design;
       ``(2) the name and address of the owner if different from 
     the designer;
       ``(3) the specific name of the useful article embodying the 
     design;
       ``(4) the date, if any, that the design was first made 
     public, if such date was earlier than the date of the 
     application;
       ``(5) affirmation that the design has been fixed in a 
     useful article; and
       ``(6) such other information as may be required by the 
     Administrator.

     The application for registration may include a description 
     setting forth the salient features of the design, but the 
     absence of such a description shall not prevent registration 
     under this chapter.
       ``(e) Sworn Statement.--The application for registration 
     shall be accompanied by a statement under oath by the 
     applicant or the applicant's duly authorized agent or 
     representative, setting forth, to the best of the applicant's 
     knowledge and belief--
       ``(1) that the design is original and was created by the 
     designer or designers named in the application;
       ``(2) that the design has not previously been registered on 
     behalf of the applicant or the applicant's predecessor in 
     title; and
       ``(3) that the applicant is the person entitled to 
     protection and to registration under this chapter.

     If the design has been made public with the design notice 
     prescribed in section 1206, the statement shall also describe 
     the exact form and position of the design notice.
       ``(f) Effect of Errors.--(1) Error in any statement or 
     assertion as to the utility of the useful article named in 
     the application under this section, the design of which is 
     sought to be registered, shall not affect the protection 
     secured under this chapter.
       ``(2) Errors in omitting a joint designer or in naming an 
     alleged joint designer shall not affect the validity of the 
     registration, or the actual ownership or the protection of 
     the design, unless it is shown that the error occurred with 
     deceptive intent.
       ``(g) Design Made in Scope of Employment.--In a case in 
     which the design was made within the regular scope of the 
     designer's employment and individual authorship of the design 
     is difficult or impossible to ascribe and the application so 
     states, the name and address of the employer for whom the 
     design was made may be stated instead of that of the 
     individual designer.
       ``(h) Pictorial Representation of Design.--The application 
     for registration shall be accompanied by two copies of a 
     drawing or other pictorial representation of the useful 
     article embodying the design, having one or more views, 
     adequate to show the design, in a form and style suitable for 
     reproduction, which shall be deemed a part of the 
     application.
       ``(i) Design in More Than One Useful Article.--If the 
     distinguishing elements of a design are in substantially the 
     same form in different useful articles, the design shall be 
     protected as to all such useful articles when protected as to 
     one of them, but not more than one registration shall be 
     required for the design.
       ``(j) Application for More Than One Design.--More than one 
     design may be included in the same application under such 
     conditions as may be prescribed by the Administrator. For 
     each design included in an application the fee prescribed for 
     a single design shall be paid.

     ``Sec. 1211. Benefit of earlier filing date in foreign 
       country

       ``An application for registration of a design filed in the 
     United States by any person who has, or whose legal 
     representative or predecessor or successor in title has, 
     previously filed an application for registration of the same 
     design in a foreign country which extends to designs of 
     owners who are citizens of the United States, or to 
     applications filed under this chapter, similar protection to 
     that provided under this chapter shall have that same effect 
     as if filed in the United States on the date on which the 
     application was first filed in such foreign country, if the 
     application in the United States is filed within 6 months 
     after the earliest date on which any such foreign application 
     was filed.

     ``Sec. 1212. Oaths and acknowledgments

       ``(a) In General.--Oaths and acknowledgments required by 
     this chapter--
       ``(1) may be made--
       ``(A) before any person in the United States authorized by 
     law to administer oaths; or
       ``(B) when made in a foreign country, before any diplomatic 
     or consular officer of the United States authorized to 
     administer oaths, or before any official authorized to 
     administer oaths in the foreign country concerned, whose 
     authority shall be proved by a certificate of a diplomatic or 
     consular officer of the United States; and
       ``(2) shall be valid if they comply with the laws of the 
     State or country where made.
       ``(b) Written Declaration in Lieu of Oath.--(1) The 
     Administrator may by rule prescribe that any document which 
     is to be filed under this chapter in the Office of the 
     Administrator and which is required by any law, rule, or 
     other regulation to be under oath, may be subscribed to by a 
     written declaration in such form as the Administrator may 
     prescribe, and such declaration shall be in lieu of the oath 
     otherwise required.
       ``(2) Whenever a written declaration under paragraph (1) is 
     used, the document containing the declaration shall state 
     that willful false statements are punishable by fine or 
     imprisonment, or both, pursuant to section 1001 of title 18, 
     and may jeopardize the validity of the application or 
     document or a registration resulting therefrom.

     ``Sec. 1213. Examination of application and issue or refusal 
       of registration

       ``(a) Determination of Registrability of Design; 
     Registration.--Upon the filing of an application for 
     registration in proper form under section 1210, and upon 
     payment of the fee prescribed under section 1216, the 
     Administrator shall determine whether or not the application 
     relates to a design which on its face appears to be subject 
     to protection under this chapter, and, if so, the Register 
     shall register the design. Registration under this subsection 
     shall be announced by publication. The date of registration 
     shall be the date of publication.
       ``(b) Refusal To Register; Reconsideration.--If, in the 
     judgment of the Administrator, the application for 
     registration relates to a design which on its face is not 
     subject to protection under this chapter, the Administrator 
     shall send to the applicant a notice of refusal to register 
     and the grounds for the refusal. Within 3 months after the 
     date on which the notice of refusal is sent, the applicant 
     may, by written request, seek reconsideration of the 
     application. After consideration of such a request, the 
     Administrator shall either register the design or send to the 
     applicant a notice of final refusal to register.
       ``(c) Application To Cancel Registration.--Any person who 
     believes he or she is or will be damaged by a registration 
     under this chapter may, upon payment of the prescribed fee, 
     apply to the Administrator at any time to cancel the 
     registration on the ground that the design is not subject to 
     protection under this chapter, stating the reasons for the 
     request. Upon receipt of an application for cancellation, the 
     Administrator shall send to the owner of the design, as shown 
     in the records of the Office of the Administrator, a notice 
     of the application, and the owner shall have a period of 3 
     months after the date on which such notice is mailed in which 
     to present arguments to the Administrator for support of the 
     validity of the registration. The Administrator shall also 
     have the authority to establish, by regulation, conditions 
     under which the opposing parties may appear and be heard in 
     support of their arguments. If, after the periods provided 
     for the presentation of arguments have expired, the 
     Administrator determines that the applicant for cancellation 
     has established that the design is not subject to protection 
     under this chapter, the Administrator shall order the 
     registration stricken from the record. Cancellation under 
     this subsection shall be announced by publication, and notice 
     of the Administrator's final determination with respect to 
     any application for cancellation shall be sent to the 
     applicant and to the owner of record.

     ``Sec. 1214. Certification of registration

       ``Certificates of registration shall be issued in the name 
     of the United States under the seal of the Office of the 
     Administrator and shall be recorded in the official records 
     of the Office. The certificate shall state the name of the 
     useful article, the date of filing of the application, the 
     date of registration, and the date the design was made 
     public, if earlier than the date of filing of the 
     application, and shall contain a reproduction of the drawing 
     or other pictorial representation of the design. If a 
     description of the salient features of the design appears in 
     the application, the description shall also appear in the 
     certificate. A certificate of registration shall be admitted 
     in any court as prima facie evidence of the facts stated in 
     the certificate.

     ``Sec. 1215. Publication of announcements and indexes

       ``(a) Publications of the Administrator.--The Administrator 
     shall publish lists and indexes of registered designs and 
     cancellations of designs and may also publish the drawings or 
     other pictorial representations of registered designs for 
     sale or other distribution.
       ``(b) File of Representatives of Registered Designs.--The 
     Administrator shall establish and maintain a file of the 
     drawings or other pictorial representations of registered 
     designs. The file shall be available for use by the public 
     under such conditions as the Administrator may prescribe.

     ``Sec. 1216. Fees

       ``The Administrator shall by regulation set reasonable fees 
     for the filing of applications to register designs under this 
     chapter and for other services relating to the administration 
     of this chapter, taking into consideration the cost of 
     providing these services and the benefit of a public record.

     ``Sec. 1217. Regulations

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

[[Page H1246]]

     ``Sec. 1218. Copies of records

       ``Upon payment of the prescribed fee, any person may obtain 
     a certified copy of any official record of the Office of the 
     Administrator that relates to this chapter. That copy shall 
     be admissible in evidence with the same effect as the 
     original.

     ``Sec. 1219. Correction of errors in certificates

       ``The Administrator may, by a certificate of correction 
     under seal, correct any error in a registration incurred 
     through the fault of the Office, or, upon payment of the 
     required fee, any error of a clerical or typographical nature 
     occurring in good faith but not through the fault of the 
     Office. Such registration, together with the certificate, 
     shall thereafter have the same effect as if it had been 
     originally issued in such corrected form.

     ``Sec. 1220. Ownership and transfer

       ``(a) Property Right in Design.--The property right in a 
     design subject to protection under this chapter shall vest in 
     the designer, the legal representatives of a deceased 
     designer or of one under legal incapacity, the employer for 
     whom the designer created the design in the case of a design 
     made within the regular scope of the designer's employment, 
     or a person to whom the rights of the designer or of such 
     employer have been transferred. The person in whom the 
     property right is vested shall be considered the owner of the 
     design.
       ``(b) Transfer of Property Right.--The property right in a 
     registered design, or a design for which an application for 
     registration has been or may be filed, may be assigned, 
     granted, conveyed, or mortgaged by an instrument in writing, 
     signed by the owner, or may be bequeathed by will.
       ``(c) Oath or Acknowledgement of Transfer.--An oath or 
     acknowledgment under section 1212 shall be prima facie 
     evidence of the execution of an assignment, grant, 
     conveyance, or mortgage under subsection (b).
       ``(d) Recordation of Transfer.--An assignment, grant, 
     conveyance, or mortgage under subsection (b) shall be void as 
     against any subsequent purchaser or mortgagee for a valuable 
     consideration, unless it is recorded in the Office of the 
     Administrator within 3 months after its date of execution or 
     before the date of such subsequent purchase or mortgage.

     ``Sec. 1221. Remedy for infringement

       ``(a) In General.--The owner of a design is entitled, after 
     issuance of a certificate of registration of the design under 
     this chapter, to institute an action for any infringement of 
     the design.
       ``(b) Review of Refusal To Register.--(1) Subject to 
     paragraph (2), the owner of a design may seek judicial review 
     of a final refusal of the Administrator to register the 
     design under this chapter by bringing a civil action, and may 
     in the same action, if the court adjudges the design subject 
     to protection under this chapter, enforce the rights in that 
     design under this chapter.
       ``(2) The owner of a design may seek judicial review under 
     this section if--
       ``(A) the owner has previously duly filed and prosecuted to 
     final refusal an application in proper form for registration 
     of the design;
       ``(B) the owner causes a copy of the complaint in the 
     action to be delivered to the Administrator within 10 days 
     after the commencement of the action; and
       ``(C) the defendant has committed acts in respect to the 
     design which would constitute infringement with respect to a 
     design protected under this chapter.
       ``(c) Administrator as Party to Action.--The Administrator 
     may, at the Administrator's option, become a party to the 
     action with respect to the issue of registrability of the 
     design claim by entering an appearance within 60 days after 
     being served with the complaint, but the failure of the 
     Administrator to become a party shall not deprive the court 
     of jurisdiction to determine that issue.
       ``(d) Use of Arbitration To Resolve Dispute.--The parties 
     to an infringement dispute under this chapter, within such 
     time as may be specified by the Administrator by regulation, 
     may determine the dispute, or any aspect of the dispute, by 
     arbitration. Arbitration shall be governed by title 9. The 
     parties shall give notice of any arbitration award to the 
     Administrator, and such award shall, as between the parties 
     to the arbitration, be dispositive of the issues to which it 
     relates. The arbitration award shall be unenforceable until 
     such notice is given. Nothing in this subsection shall 
     preclude the Administrator from determining whether a design 
     is subject to registration in a cancellation proceeding under 
     section 1213(c).

     Sec. 1222. Injunctions

       ``(a) In General.--A court having jurisdiction over actions 
     under this chapter may grant injunctions in accordance with 
     the principles of equity to prevent infringement of a design 
     under this chapter, including, in its discretion, prompt 
     relief by temporary restraining orders and preliminary 
     injunctions.
       ``(b) Damages for Injunctive Relief Wrongfully Obtained.--A 
     seller or distributor who suffers damage by reason of 
     injunctive relief wrongfully obtained under this section has 
     a cause of action against the applicant for such injunctive 
     relief and may recover such relief as may be appropriate, 
     including damages for lost profits, cost of materials, loss 
     of good will, and punitive damages in instances where the 
     injunctive relief was sought in bad faith, and, unless the 
     court finds extenuating circumstances, reasonable attorney's 
     fees.

     ``Sec. 1223. Recovery for infringement

       ``(a) Damages.--Upon a finding for the claimant in an 
     action for infringement under this chapter, the court shall 
     award the claimant damages adequate to compensate for the 
     infringement. In addition, the court may increase the damages 
     to such amount, not exceeding $50,000 or $1 per copy, 
     whichever is greater, as the court determines to be just. The 
     damages awarded shall constitute compensation and not a 
     penalty. The court may receive expert testimony as an aid to 
     the determination of damages.
       ``(b) Infringer's Profits.--As an alternative to the 
     remedies provided in subsection (a), the court may award the 
     claimant the infringer's profits resulting from the sale of 
     the copies if the court finds that the infringer's sales are 
     reasonably related to the use of the claimant's design. In 
     such a case, the claimant shall be required to prove only the 
     amount of the infringer's sales and the infringer shall be 
     required to prove its expenses against such sales.
       ``(c) Statute of Limitations.--No recovery under subsection 
     (a) or (b) shall be had for any infringement committed more 
     than 3 years before the date on which the complaint is filed.
       ``(d) Attorney's Fees.--In an action for infringement under 
     this chapter, the court may award reasonable attorney's fees 
     to the prevailing party.
       ``(e) Disposition of Infringing and Other Articles.--The 
     court may order that all infringing articles, and any plates, 
     molds, patterns, models, or other means specifically adapted 
     for making the articles, be delivered up for destruction or 
     other disposition as the court may direct.

     ``Sec. 1224. Power of court over registration

       ``In any action involving the protection of a design under 
     this chapter, the court, when appropriate, may order 
     registration of a design under this chapter or the 
     cancellation of such a registration. Any such order shall be 
     certified by the court to the Administrator, who shall make 
     an appropriate entry upon the record.

     ``Sec. 1225. Liability for action on registration 
       fraudulently obtained

       ``Any person who brings an action for infringement knowing 
     that registration of the design was obtained by a false or 
     fraudulent representation materially affecting the rights 
     under this chapter, shall be liable in the sum of $10,000, or 
     such part of that amount as the court may determine. That 
     amount shall be to compensate the defendant and shall be 
     charged against the plaintiff and paid to the defendant, in 
     addition to such costs and attorney's fees of the defendant 
     as may be assessed by the court.

     ``Sec. 1226. Penalty for false marking

       ``(a) In General.--Whoever, for the purpose of deceiving 
     the public, marks upon, applies to, or uses in advertising in 
     connection with an article made, used, distributed, or sold, 
     a design which is not protected under this chapter, a design 
     notice specified in section 1206, or any other words or 
     symbols importing that the design is protected under this 
     chapter, knowing that the design is not so protected, shall 
     pay a civil fine of not more than $500 for each such offense.
       ``(b) Suit by Private Persons.--Any person may sue for the 
     penalty established by subsection (a), in which event one-
     half of the penalty shall be awarded to the person suing and 
     the remainder shall be awarded to the United States.

     ``Sec. 1227. Penalty for false representation

       ``Whoever knowingly makes a false representation materially 
     affecting the rights obtainable under this chapter for the 
     purpose of obtaining registration of a design under this 
     chapter shall pay a penalty of not less than $500 and not 
     more than $1,000, and any rights or privileges that 
     individual may have in the design under this chapter shall be 
     forfeited.

     ``Sec. 1228. Enforcement by Treasury and Postal Service

       ``(a) Regulations.--The Secretary of the Treasury and the 
     United States Postal Service shall separately or jointly 
     issue regulations for the enforcement of the rights set forth 
     in section 1208 with respect to importation. Such regulations 
     may require, as a condition for the exclusion of articles 
     from the United States, that the person seeking exclusion 
     take any one or more of the following actions:
       ``(1) Obtain a court order enjoining, or an order of the 
     International Trade Commission under section 337 of the 
     Tariff Act of 1930 excluding, importation of the articles.
       ``(2) Furnish proof that the design involved is protected 
     under this chapter and that the importation of the articles 
     would infringe the rights in the design under this chapter.
       ``(3) Post a surety bond for any injury that may result if 
     the detention or exclusion of the articles proves to be 
     unjustified.
       ``(b) Seizure and Forfeiture.--Articles imported in 
     violation of the rights set forth in section 1208 are subject 
     to seizure and forfeiture in the same manner as property 
     imported in violation of the customs laws. Any such forfeited 
     articles shall be destroyed as directed by the Secretary of 
     the Treasury or the court, as the case may be, except that 
     the articles may be returned to the country of export 
     whenever it is shown to the satisfaction of the Secretary of 
     the Treasury that

[[Page H1247]]

     the importer had no reasonable grounds for believing that his 
     or her acts constituted a violation of the law.

     ``Sec. 1229. Relation to design patent law

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

     ``Sec. 1230. Common law and other rights unaffected

       ``Nothing in this chapter shall annul or limit--
       ``(1) common law or other rights or remedies, if any, 
     available to or held by any person with respect to a design 
     which has not been registered under this chapter; or
       ``(2) any right under the trademark laws or any right 
     protected against unfair competition.

     ``Sec. 1231. Administrator; Office of the Administrator

       ``In this chapter, the `Administrator' is the Register of 
     Copyrights, and the `Office of the Administrator' and the 
     `Office' refer to the Copyright Office of the Library of 
     Congress.

     ``Sec. 1232. No retroactive effect

       ``Protection under this chapter shall not be available for 
     any design that has been made public under section 1210(b) 
     before the effective date of this chapter.''.

     SEC. 3. CONFORMING AMENDMENTS.

       (a) Table of Chapters.--The table of chapters for title 17, 
     United States Code, is amended by adding at the end the 
     following:

``12. Protection of Original Designs........................1201''.....

       (b) Jurisdiction of District Courts Over Design Actions.--
     (1) Section 1338(c) of title 28, United States Code, is 
     amended by inserting ``, and to exclusive rights in designs 
     under chapter 12 of title 17,'' after ``title 17''.
       (2)(A) The section heading for section 1338 of title 28, 
     United States Code, is amended by inserting ``designs,'' 
     after ``mask works,''.
       (B) The item relating to section 1338 in the table of 
     sections at the beginning of chapter 85 of title 28, United 
     States Code, is amended by inserting ``designs,'' after 
     ``mask works,''.
       (c) Place for Bringing Design Actions.--Section 1400(a) of 
     title 28, United States Code, is amended by inserting ``or 
     designs'' after ``mask works''.
       (d) Actions Against the United States.--Section 1498(e) of 
     title 28, United States Code, is amended by inserting ``, and 
     to exclusive rights in designs under chapter 12 of title 
     17,'' after ``title 17''.

     SEC. 4. EFFECTIVE DATE.

       The amendments made by sections 2 and 3 shall take effect 
     one year after the date of the enactment of this Act.
  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
North Carolina (Mr. Coble) and the gentleman from Virginia (Mr. Scott) 
each will control 20 minutes.
  The Chair recognizes the gentleman from North Carolina (Mr. Coble).


                             General Leave

  Mr. COBLE. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days within which to revise and extend their remarks 
on the bill under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from North Carolina?
  There was no objection.
  Mr. COBLE. Mr. Speaker, I yield myself such time as I may consume.
  During our subcommittee hearing on H.R. 2696, the marine 
manufacturers effectively demonstrated that ``hull splashing,'' an 
industry term for applying a direct molding process to a boat hull in 
an effort to create a knock-off design, is harmful and pervasive enough 
to warrant legislative redress.
  Consumers who purchase boats with knock-off hulls are defrauded in 
the sense that they are not benefiting from the many attributes of hull 
design, other than shape, that are structurally relevant, including 
those related to quality and safety. It is also highly unlikely that 
consumers know that a boat has been copied from an existing design. 
Most importantly, for the purposes of promoting intellectual property 
rights, if manufacturers are not permitted to recoup at least some of 
their research and development costs, they may no longer invest in new, 
innovative boat designs.
  Accordingly and consistent with the history of design legislation, 
H.R. 2696 protects the original designs of vessel hulls. Owners of 
protected designs must register their work with the Copyright Office, 
and the term of protection allows for 10 years. The owner will enjoy 
the exclusive right to make, import and sell any legislative hull 
embodying a protected design. Infringers will be liable for 
compensatory damages or lost sales, and a court may increase damages by 
as much as $50,000 in egregious cases.
  Finally, Mr. Speaker, during the full committee markup of the bill, 
the gentleman from Virginia (Mr. Scott) expressed his desire that H.R. 
2696 not cover large ships manufactured for military use. It was never 
our intention to protect designs for large vessels used by the Merchant 
Marine or the Armed Services, and I am pleased that we were able to 
develop some compromise language on the subject that is acceptable to 
all parties involved.
  This language and a few technical changes to the bill are 
incorporated in the manager's amendment which I offer as a substitute 
to the bill as reported by the committee.
  In sum, Mr. Speaker, this is a good bill that will offer limited 
protection to an industry in which effort, investment and creativity 
are presently unrewarded. I urge my colleagues to pass H.R. 2696, as 
amended.
  Mr. Speaker, I reserve the balance of my time.
  Mr. SCOTT. Mr. Speaker, I yield myself such time as I may consume.
  I rise in support of H.R. 2696, the Vessel Hull Design Protection 
Act. This legislation creates a new design patent for vessel hulls. 
Confusion between copyright patent and trademark protection for hull 
models over the years has apparently produced a proliferation of 
unattributed and bad copies of expensive designs, and this legislation 
articulates clearer standards for the grant of a design patent.
  This industrial design problem is illustrated in the Supreme Court's 
1989 decision in Bonito Boats, effectively denying intellectual 
property protection for a Florida boat designer because of the contrary 
Florida State law. Here, I agree with the subcommittee Chairman, Mr. 
Coble, in that it is important that we send a message that when it 
comes to theft of patents and trademarks, it is necessary for Congress 
to set a predictable and uniform Federal rule.
  The Patent and Trademark Office does not have a formal view on this 
bill; but, as a general policy, they prefer not to enumerate subgroups 
of patents. Nevertheless, they do not oppose this legislation.
  Finally, I would like to thank the Chairman for his cooperation and 
kind assistance by adding clarifying language that exempts vessels more 
than 200 feet. This language, while maintaining copyright protection of 
smaller vessels, will not interfere with the commercial practices of 
the industry for larger vessels, and that is a very significant concern 
in my congressional district.
  Mr. Speaker, I urge my colleagues to support the bill.
  Mr. Speaker, I yield back the balance of my time.
  Mr. COBLE. Mr. Speaker, I yield myself such time as I may consume to 
express my thanks to the gentleman from Virginia (Mr. Scott) and the 
other members of the subcommittee for having worked very cooperatively 
with us in this matter.
  Mr. Speaker, I have no further requests for time; and I yield back 
the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from North Carolina (Mr. Coble) that the House suspend the 
rules and pass the bill, H.R. 2696, as amended.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

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