[Congressional Record Volume 145, Number 89 (Tuesday, June 22, 1999)]
[Senate]
[Pages S7452-S7456]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. HATCH (for himself and Mr. Leahy):
  S. 1260. A bill to make technical corrections in title 17, United 
States Code, and other laws; to the Committee on the Judiciary.


                  copyright act technical corrections

  Mr. HATCH. Mr. President, today I am pleased to rise, along with the 
ranking minority Member on the Judiciary Committee, Senator Leahy, to 
introduce a series of intellectual property related ``high-tech'' 
measures designed to promote the continued growth of these vital 
sectors of the American economy and to protect the interests and 
investment of the entrepreneurs, authors, and innovators who fuel their 
growth.
  It is no secret that high technology is the driving force in the 
American economy today. American technology is setting new standards 
for the global economy, from computer chip technology and computer 
hardware, to personal and business software applications, to Internet, 
multimedia and telecommunications technology, and even cutting-edge 
pharmaceuticals and genetic research. In my own state of Utah, these 
information technology industries contribute in excess of $7 billion 
each year to the State's economy and pay wages that average 66 percent 
higher than the state average. Their performance has placed Utah among 
the world's top ten technology centers according to Newsweek Magazine. 
Where Wired is a Way of Life, Newsweek, November 9, 1998, at 44. 
Similar success is seen across the country, with seven of the world's 
top ten technology centers located in the United States, and with 
American creative industries now surpassing all other export sectors in 
foreign sales and exports.
  Underlying all of these technologies are the intangible property 
rights--

[[Page S7453]]

copyrights, trademarks, patents, and trade secrets--that serve to 
promote creativity and innovation by safeguarding the investment, 
effort, and goodwill of those who venture into these fast-paced and 
volatile fields. Providing adequate protections for these intellectual 
property rights in the global high-tech environment is critical, 
particularly in the digital environment where electronic piracy is so 
easy, so cheap, and yet so potentially devastating to intellectual 
property owners--many of which are small entrepreneurial enterprises. 
In Utah, 65 percent of the information technology companies have fewer 
than 25 employees, and a majority have annual revenues of less than $1 
million. Over half of Utah's information technology companies have been 
in business for less than 10 years, with nearly a quarter having opened 
their doors since 1995. Intellectual property is the lifeblood of these 
companies and others similarly situated throughout the country, and 
even a single instance of piracy may be enough to drive them out of 
business. What's more, without adequate international protection, these 
companies would simply be unable to compete in the global marketplace.
  That is why in the last Congress we enacted a number of measures to 
provide enhanced protection for intellectual property in the new 
global, high-tech environment. For example, last year Congress ratified 
two new landmark World Intellectual Property Organization (WIPO) 
treaties to update international copyright standards to respond to the 
challenges of the global economy and the digital, networked 
environment. In enacting the Digital Millennium Copyright Act (DMCA), 
Congress implemented these treaties in the United States by bringing 
our own copyright laws into the digital age and set the standard 
internationally for other nations to follow in amending their own laws 
to meet the requirements of the new WIPO treaties. In addition, as a 
part of that bill, we paved the way for new growth in online commerce 
by creating greater security for copyright owners and for the Internet 
service providers who transmit and store copyrighted works online. We 
also addressed new technologies, such as webcasting and satellite 
radio, to provide a copyright framework in which these new platforms 
can flourish.

  This year, Senator Leahy and I are continuing to focus our attention, 
and that of the Judiciary Committee, on important high-tech and 
intellectual property legislation. Already this year the Judiciary 
Committee has reported, and the Senate has enacted, legislation to 
extend the Satellite Home Viewer Act, which will enable the satellite 
industry to use new and emerging technology to provide competition in 
the multichannel video marketplace and allow satellite subscribers to 
receive local network stations by way of their satellite dishes for the 
first time.
  Today we are introducing a number of additional measures relating to 
technology and intellectual property to strengthen our laws further in 
order to provide both incentives to creativity and deterrents against 
infringement. Included among these are legislation that builds upon 
existing protections, including last year's measures to deter digital 
piracy, by raising the Copyright Act's limit on statutory damages, 
thereby making it more costly to engage in cyber-piracy and copyright 
theft. Also included is a measure to make technical ``clean-up'' 
amendments to the Digital Millennium Copyright Act in order to make its 
provisions clearer and more user-friendly. On the trademark side, 
Senator Leahy and I are introducing a bill to make the protection of 
famous marks easier and more efficient and to provide recourse for 
trademark owners against the federal government for trademark 
infringement. Finally, we are introducing Patent and Trademark Office 
reauthorization legislation to allow the PTO to better serve its 
customers--America's innovators and trademark owners--through the 
collection and retention of patent and trademark fees.
  It is our intention to turn to these bills in the Judiciary Committee 
prior to the July 4th recess at a Committee markup session dedicated 
solely to the consideration of intellectual property legislation. I 
expect these measures to be noncontroversial, and I look forward to 
working with my colleagues in the Senate as we bring these bills to the 
floor.


             the copyright damages improvement act of 1999

  The Copyright Damages Improvement Act will provide strengthened 
protections for copyright owners and added deterrence against 
infringement by making it more costly to engage in digital piracy and 
copyright theft. In an age where electronic piracy costs next to 
nothing and where the distribution of pirated goods to locations around 
the world is as easy as the click of a button, we are faced with the 
danger that the costs of engaging in piracy will pale in comparison 
with the anticipated rewards. Last year we strengthened the Copyright 
Act's substantive protections to deter digital piracy in this global 
networked environment. The bill we are introducing today will make it 
more costly to infringe these and the Copyright Act's other substantive 
protections by raising the limit on statutory damages by 50 percent.
  Section 504(c) of the Copyright Act provides for the award of 
statutory damages at the plaintiff's election in order to provide 
greater security for copyright owners, who often find it difficult to 
prove actual damages in infringement cases--particularly in the 
electronic environment--and to provide greater deterrence for would-be 
infringers. The current provision caps statutory damages at $20,000 
($100,000 in cases of willful infringement), which reflects figures set 
in statute in 1988 when the United States joined the Berne Convention. 
The combination of more than a decade of inflation and revolutionary 
changes in technology have rendered those figures largely inadequate to 
achieve their aims. The Copyright Damages Improvement Act updates the 
statutory damage provisions to account for both these factors.
  Under the bill, the cap on statutory damages is increased by 50 
percent, from $20,000 to $30,000, and the minimum is similarly 
increased from $500 to $750. For cases of willful infringement, the cap 
is raised to $150,000. In addition, the bill creates a new tier of 
statutory damages targeted at bad actors who engage in a repeated 
pattern or practice of infringement. In these cases, the court is 
authorized to award statutory damages up to $250,000.
  This will not mean that a court must impose the full amount of 
damages in any given case, or even that it will be more likely to do 
so. In most cases, courts attempt to do justice by fixing the statutory 
damages at a level that approximates actual damages and defendant's 
profits. What this bill does is give courts wider discretion to award 
damages that are commensurate with the harm caused and the gravity of 
the offense. At the same time, the bill preserves provisions of the 
current law allowing the court to reduce the award of statutory damages 
to as little as $200 in cases of innocent infringement and requiring 
the court to remit damages in certain cases involving nonprofit 
educational institutions, libraries, archives, or public broadcasting 
entities.


                  Copyright Act Technical Corrections

  Senator Leahy and I are also introducing a general clean-up measure 
as a follow-up to the Digital Millennium Copyright Act and the Sonny 
Bono Copyright Term Extension Act, which were enacted at the end of the 
last Congress. This bill improves these bills to make them more user-
friendly for copyright owners and those who make use of their works in 
accordance with the provisions of the Copyright Act.


                  The Trademark Amendments Act of 1999

  The Trademark Amendments Act will provide stronger and more efficient 
protection for trademark owners and consumers by making it possible to 
prevent trademark dilution before it occurs, by clarifying the remedies 
available under the federal trademark dilution statute when it does 
occur, by providing recourse against the federal government for its 
infringement of others' trademarks, and by creating greater certainty 
and uniformity in the area of trade dress protection.
  In 1995, Senator Leahy and I sponsored the Federal Trademark Dilution 
Act to provide a uniform federal cause of action for trademark 
dilution--the commercial use in commerce of a mark that dilutes, or 
``whittles away,'' the distinctive quality of a famous trademark. Under 
this legislation, now codified as section 43(c) of the Lanham Act, the 
owner of a famous mark is able to

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protect the investment and consumer goodwill associated with his mark 
by preventing others from using the same or similar marks in ways that 
tarnish or blur the distinctiveness of his mark, even where such uses 
do not directly compete with the goods or services of the trademark 
owner. This new federal cause of action has been used increasingly in 
the high-tech, online environment as a means of combating cyber-pirates 
and shady dealers who register famous marks as Internet domain names, 
seeking to sell them at a huge profit to the legitimate trademark 
owners or to reap where they have not sown, trading on the goodwill of 
others by confusing consumers about their relationships to famous 
brand-names. This problem is particularly acute in the Internet context 
where the only assurance of quality or sponsorship may be the 
information found on a web page and the IP address that leads consumers 
there.

  On the whole, the Federal Trademark Dilution Act has been effective 
in achieving better protection for trademark owners and national 
uniformity in this area of the law. There are a number of areas, 
however, in which we can improve implementation of the law and its 
ability to protect both trademark owners and consumers. The Trademark 
Amendments Act of 1999 is designed to do just that.
  First, it authorizes the Trademark Trial and Appeals Board (TTAB) to 
consider dilution as grounds for refusal to register a mark or for 
cancellation of a registered mark. In Babson Bros. Co. v. Surge Power 
Corp., 39 USPQ 2d. 1953 (TTAB 1996), the TTAB held that it was not 
authorized by the Federal Trademark Dilution Act to consider dilution 
as grounds for opposition or cancellation of a registration. Thus, 
under current law a trademark owner may seek relief under the federal 
dilution statute only after dilution of the mark has occurred. And at 
least one circuit has held that likelihood of dilution is not enough, 
the trademark owner must prove actual dilution. The result is that the 
owner of a famous mark must stand idly by throughout the registration 
process and await recourse through costly litigation in federal court 
only after he has suffered harm to his mark. By specifically allowing 
the trademark owner to oppose registration or to petition for 
cancellation of a diluting mark, the bill we are introducing today will 
prevent needless harm to the goodwill and distinctiveness of many 
trademarks and will make enforcing the federal dilution statute less 
costly and time consuming for all involved.
  Second, the bill clarifies the trademark remedies available in 
dilution cases, including injunctive relief, defendant's profits, 
damages, costs, and, in exceptional cases, reasonable attorney fees, 
and the destruction of articles containing the diluting mark.
  In addition, our bill will amend the Lanham Act to subject the 
federal government to suit for trademark infringement and dilution. The 
federal government increasingly participates in the marketplace as a 
provider of goods and services in competition with private entities. In 
fact, the federal government owns a substantial number of trademarks 
registered with the Patent and Trademark Office (PTO), and the Lanham 
Act even allows the PTO Commissioner to waive the registration fees for 
federal agencies. As a trademark owner, the federal government enjoys 
the full panoply of rights under the Lanham Act, including the right to 
sue private citizens and businesses to enforce its rights under the 
Act. In contrast, in Preferred Risk Mutual Insurance Co. v. United 
States, 39 F3d 789 (8th Cir. 1996), the Eighth Circuit held that the 
federal government is immune from suit for trademark infringement 
absent an explicit waiver of sovereign immunity.

  Limited waivers of sovereign immunity exist for patent and copyright 
cases, as well as for cases involving protected plant varieties and 
semiconductor chip mask works. Congress has also explicitly abrogated 
state immunity from suit under the 11th Amendment for cases involving 
trademark, copyright, and patent infringement. Our bill will extend 
these same policies to the federal government, making it subject to 
suit for trademark infringement and dilution on the same terms and 
conditions as states under the Lanham Act.
  The bill we are introducing will also promote greater uniformity and 
certainty in the area of trade dress protection by requiring plaintiffs 
to demonstrate that an unregistered mark is not functional. While trade 
dress may be afforded protection and registered on the Principal 
Register if it serves as a trademark or service mark, protection under 
the Lanham Act does not extend to functional trade dress features--
those that are essential to compete in a given market--which are 
properly the subject of patent law. Where the plaintiff has 
demonstrated through the examination process that the trade dress is 
eligible for registration, the federal registration serves as prima 
facie evidence of the validity of the mark and the registration, and in 
effect as prima facie evidence of nonfunctionality. For those cases 
where the plaintiff asserting trade dress protection has not 
demonstrated eligibility for registration through the trademark 
examination process, a majority of courts require the plaintiff to 
prove nonfunctionality. A minority of courts, however, have held that 
functionality is an affirmative defense which must be proved by the 
defendant.
  Our bill creates uniformity by adopting the majority view, requiring 
the plaintiff to demonstrate nonfunctionality, either in the 
examination process or as an element of his case in seeking to enforce 
trade dress rights in litigation. This is consistent with the 
principles of federal trademark law and the common law, which requires 
plaintiffs to prove the essential elements of their case. Moreover, it 
will promote both certainty and competitive fairness by encouraging 
trade dress owners to register eligible designs and to seek patent 
protection for those that are ineligible due to functionality
  Finally, this bill makes a number of technical ``clean-up'' 
amendments relating to the Trademark Law Treaty Implementation Act, 
which was enacted at the end of the last Congress.


  the United States Patent and trademark office reauthorization act, 
                            fiscal year 2000

  The fourth bill we are introducing today is designed to allow the PTO 
to better serve American innovators and trademark owners through the 
collection and retention of patent and trademark fees. Last year we 
enacted legislation to provide the PTO with the resources it needs to 
meet the demands of its workload and to limit the ability of Congress 
and the Administration to divert money from the PTO to unrelated 
federal programs--all while providing for an overall decrease in patent 
fees. The bill we are introducing today continues those policies by 
allowing the PTO to generate the revenue it needs to operate as a fully 
fee-funded agency and to retain those fees for use in its patent and 
trademark operations, without fee diversions or the creation of new 
surcharges.
  In the past, a substantial portion of patent fees revenues have been 
diverted in the budget process to pay for unrelated federal programs. 
The result has been substantial backlogs in patent pendency and a 
general inability to provide the type of service our nation's inventors 
pay for. I, along with several of my colleagues, have vigorously 
opposed this practice. The legislation we enacted last year went a long 
way to ensure that this practice would not continue. The legislation we 
are introducing today will continue this assurance by authorizing the 
PTO to raise just the revenues it needs to meet its program goals and 
retain those fees for use in its patent and trademark operations. The 
bill also makes available $116 million in fees from previous years, 
which the Administration has sought to withhold, and prohibits the 
imposition of unprecedented new surcharge fees sought by the 
Administration's budget to subsidize federal health and life insurance 
benefits for PTO employees. In the end, this legislation will promote a 
stronger, more efficient patent office and will mean, quite simply, 
that America's innovators and trademark owners will get what they pay 
for.
  Mr. President, I look forward to working with my colleagues to 
promote the progress of innovation in this country and the continued 
growth of the high-tech industrial base that has put our nation at the 
forefront of the global economy. Each of the bills we are introducing 
today will help to do

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that, and I urge my colleagues' support.
  Mr. LEAHY. Mr. President, I am pleased to join the chairman of the 
Judiciary Committee in introducing four bills to reauthorize the Patent 
and Trademark Office, update the statutory damages available under the 
Copyright Act, make technical corrections to two new copyright laws 
enacted last year, and prevent trademark dilution. As the Chairman and 
I have already indicated in our June 11 joint statement, we hope that 
the Senate Judiciary Committee reports these bills promptly and that 
the Senate considers the bills without delay.
  The introduction of these bills is a good start, but we must not lose 
sight of the other copyright and patent issues requiring our attention 
before the end of this Congress. The Senate Judiciary Committee has a 
full slate of intellectual property matters to consider and I am 
pleased to work on a bipartisan basis with the Chairman on an agenda to 
provide the creators and inventors of copyrighted and patented works 
with the protection they may need in our global economy, while at the 
same time providing libraries, educational institutions and other users 
with the clarity they need as to what constitutes a fair use of such 
works.
  Among the other important intellectual property matters for us to 
consider are the following:
  Distance Education. The Senate Judiciary Committee held a hearing 
last month on the Copyright Office's thorough and balanced report on 
copyright and digital distance education. We need to address the 
legislative recommendations outlined in that report to ensure that our 
laws permit the appropriate use of copyrighted works in valid distance 
learning activities.
  Patent Reform. A critical matter on the intellectual property agenda, 
important to the nation's economic future, is reform of our patent 
laws. I worked on a bipartisan basis in the last Congress to get the 
Omnibus Patent Act, S. 507, reported by the Judiciary Committee to the 
Senate by a vote of 177 to one, and then tried to have this bill 
considered and passed by the Senate. Unfortunately, the bill became 
stalled due to resistance by some in the majority. We should consider 
and pass this important legislation.
  Madrid Protocol Implementation Act. I introduced this legislation, S. 
671, to help American businesses, and especially small and medium-sized 
companies, protect their trademarks as they expand into international 
markets by conforming American trademark application procedures to the 
terms of the Protocol in anticipation of the U.S.'s eventual 
ratification of the treaty. Ratification by the United States of this 
treaty would help create a ``one stop'' international trademark 
registration process, which would be an enormous benefit for American 
businesses.

  Database Protection. I noted upon passage of the Digital Millennium 
Copyright Act last year that there was not enough time before the end 
of that Congress to give due consideration to the issue of database 
protection, and that I hoped the Senate Judiciary Committee would hold 
hearings and consider database protection legislation in this Congress, 
with a commitment to make more progress. I support legal protection 
against commercial misappropriation of collections of information, but 
am sensitive to the concerns raised by the Administration, the 
libraries, certain educational institutions, and the scientific 
community. This is a complex and important matter that I look forward 
to considering in this Congress.
  Tampering with Product Identification Codes. Product identification 
codes provide a means for manufacturers to track their goods, which can 
be important to protect consumers in cases of defective, tainted or 
harmful products and to implement product recalls. Defacing, removing 
or tampering with product identification codes can thwart these 
tracking efforts, with potential safety consequences for American 
consumers. We should examine the scope of, and legislative solutions to 
remedy, this problem.
  Online Trademark Protection or ``Cybersquatting.'' I have long been 
concerned with protection online of registered trademarks. Indeed, when 
the Congress passed the Federal Trademark Dilution Act of 1995, I noted 
that:

       [A]lthough no one else has yet considered this application, 
     it is my hope that this antidilution statute can help stem 
     the use of deceptive Internet addresses taken by those who 
     are choosing marks that are associated with the products and 
     reputations of others. (Congressional Record, December 29, 
     1995, page S19312).

  Last year, my amendment authorizing a study by the National Research 
Council of the National Academy of Sciences of the effects on trademark 
holders of adding new top-level domain names and requesting 
recommendations on related dispute resolution procedures, was enacted 
as part of the Next Generation Internet Research Act. We have not yet 
seen the results of that study, and I understand that the Internet 
Corporation for Assigned Names and Numbers (I-CANN) and World 
Intellectual Property Organization (WIPO) are considering mechanisms 
for resolving trademark and other disputes over assignments of domain 
names in an expeditious and inexpensive manner.
  This is an important issue both for trademark holders and for the 
future of the global Internet. While I share the concern of trademark 
holders over what WIPO has characterized as ``predatory and parasitical 
practices by a minority of domain registrants acting in bad faith'' to 
register famous or well-known marks of others--which can lead to 
consumer confusion or downright fraud--the Congress should tread 
carefully to ensure that any remedies do not impede or stifle the free 
flow of information on the Internet.


     the patent fee integrity and innovation protection act of 1999

  We are introducing today the Patent Fee Integrity and Innovation 
Protection Act to reauthorize the Patent and Trademark Office for 
fiscal year 2000, on terms that ensure the fees collected from users 
will be used to operate the Patent and Trademark Office and not 
diverted to other uses.
  The PTO is fully funded and operated through the payment of 
application and user fees. Indeed, taxpayer support for the operations 
of the PTO was eliminated in the Omnibus Budget Reconciliation Act of 
1990, which imposed a large fee increase (referred to as a 
``surcharge'') on those who use the PTO, namely businesses and 
inventors applying for or seeking to protect patents on trademarks.
  The fees accumulated from the surcharge were held in a surcharge 
account, for use by the PTO to support the patent and trademark 
systems. Unfortunately, however, the funds in the surcharge account 
were also diverted to fund other, unrelated government programs. By 
fiscal year 1997, almost $54 million from the surcharge account was 
diverted from PTO operations.
  Last year, Congress responded to this diversion of PTO fees by 
enacting H.R. 3723/S. 507, which the Chairman and I had introduced on 
March 20, 1997. That legislation authorized a schedule of fees to fund 
the PTO, but no other government program, and resulted in the first 
decrease in patent application fees in at least 50 years.
  This PTO reauthorization bill would make $116,000,000 available to 
the Patent and Trademark Office, a self-sustaining agency, to pay for 
salaries and necessary expenses in FY 2000. This money reflects the 
amount in carryover funds from FY99 that PTO expects to receive from 
fees collected, pursuant to the Patent Act and the Trademark Act. By 
authorizing the money to go to PTO, the bill would avoid diversion of 
these fees to other government agencies and programs. Inventors and the 
business community who rely on the patent and trademark systems do not 
want the fees they pay to be diverted but would rather see this money 
spent on PTO upgraded equipment, additional examiners and expert 
personnel or other items to make the systems more efficient. I agree.


                copyright act technical corrections act

  In the last Congress, Senator Hatch and I worked together for passage 
of the Digital Millennium Copyright Act (DMCA) and the Sonny Bono 
Copyright Term Extension Act. This significant legislation is intended 
to encourage copyright owners to make their works available online by 
updating the copyright laws with additional protections for digital 
works, and conforming copyright terms available to American authors to 
those available overseas. We are now introducing legislation that will 
make certain technical corrections to those bills.
  Specifically, this bill (1) renumbers the section number for the 
liability

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limits for online service providers; (2) renumbers paragraphs in the 
section on ``ephemeral recordings'' which are used solely for 
transmitting or archiving a performance or audiovisual display; (3) 
clarifies that the Commissioner of Patents is to be paid at level III 
of the executive schedule rather than level V, consistent with a 
provision in the DMCA; and (4) changes from one to two years the time 
for seeking design protection after a design is made public by the 
designer or, in other words, forfeits protection if an application for 
registration is not made within 2 years of the design being made 
public.
  I remain hopeful that as this bills moves forward we can also address 
another item inadvertently omitted from the DMCA. Specifically, to 
include public broadcasting entities in the liability limitation 
provisions granted under the DMCA to nonprofit libraries, archives and 
educational institutions.
  The House of Representatives passed its version of this legislation, 
H.R. 1189, on April 13, 1999, and I urge prompt Senate action on this 
Hatch-Leahy bill.


 the digital theft deterrence and copyright damages improvement act of 
                                  1999

  I have long been concerned about reducing the levels of software 
piracy in this country and around the world. The theft of digital 
copyrighted works and, in particular, of software results in lost jobs 
to American workers, lost taxes to Federal and State governments, and 
lost revenue to American companies. A report released last week by the 
Business Software Alliance estimates that worldwide theft of 
copyrighted software in 1998 amounted to nearly $11 billion. According 
to the report, if this ``pirated software has instead been legally 
purchased, the industry would have been able to employ 32,700 more 
people. In 2008, if software piracy remains at its current rate, 52,700 
jobs will be lost in the core software industry.'' This theft also 
reflects losses of $991 million in tax revenue in the United States.
  These statistics about the harm done to our economy by the theft of 
copyrighted software alone, prompted me to introduce the ``Criminal 
Copyright Improvement Act'' in both the 104th and 105th Congresses, and 
work over those two Congresses for passage of this legislation, which 
was finally enacted as the ``No Electronic Theft Act.'' The current 
rates of software piracy show that we need to do better to combat this 
theft, both with enforcement of our current copyright laws and with 
strengthened copyright laws to deter potential infringes.
  I am, therefore, pleased to join Senator Hatch in introducing the 
Digital Theft Deterrence and Copyright Damages Improvement Act. The 
bill would amend the Copyright Act, 17 U.S.C. Sec. 504(c), by 
increasing the amounts of statutory damages recoverable for copyright 
infringements. These amounts were last increased in 1988 when the 
United States acceded to the Berne Convention. Specifically, the bill 
would increase the cap on statutory damages by 50 percent, raising the 
minimum from $500 to $750 and raising the maximum from $20,000 to 
$30,000. In addition, the bill would raise from $100,000 to $150,000 
the amount of statutory damages for willful infringements.
  Courts determining the amount of statutory damages in any given case 
would have discretion to impose damages within these statutory ranges 
at just and appropriate levels, depending on the harm caused, ill-
gotten profits obtained and the gravity of the offense. The bill 
preserves provisions of the current law allowing the court to reduce 
the award of statutory damages to as little as $200 in cases of 
innocent infringement and requiring the court to remit damages in 
certain cases involving nonprofit educational institutions, libraries, 
archives, or public broadcasting entities.
  In addition, the bill would create a new tier of statutory damages 
allowing a court to award damages in the amount of $250,000 per 
infringed work where the infringement is part of a willful and repeated 
pattern of practice of infringement.
  I note that the House version of this legislation, H.R. 1761, omits 
any scienter requirement for the new proposed enhanced penalty for 
infringers who engage in a repeated pattern of infringement. I share 
the concerns raised by the Copyright Office that this provision, absent 
a willfulness scienter requirement, would permit imposition of the 
enhanced penalty even against person who negligently, albeit 
repeatedly, engaged in acts of infringement. The Hatch-Leahy bill 
avoids casting such a wide net, which could chill legitimate fair uses 
of copyrighted works.


                  the trademark amendments act of 1999

  Finally, I am pleased to join Senator Hatch in introducing the 
Trademark Amendments Act to enhance protection for trademark owners and 
consumers by making it possible to prevent trademark dilution before it 
occurs, by clarifying the remedies available under the Federal 
trademark dilution statute when it does occur, by providing recourse 
against the Federal Government for its infringement of others' 
trademarks, and by creating greater certainty and uniformity in the 
area of trade dress protection.
  Current law provides for injunctive relief after an identical or 
similar mark has been in use and has caused actual dilution of a famous 
mark, but provides no means to oppose an application for a mark or to 
cancel a registered mark that will result in dilution of the holder's 
famous mark. In Babson Bros. Co. v. Surge Power Corp., 39 USPQ 2d. 1953 
(TTAB 1996), the Trademark Trial and Appeals Board (TTAB) held that it 
was not authorized by the ``Federal Trademark Dilution Act'' to 
consider dilution as grounds for opposition or cancellation of a 
registration. The bill remedies this situation by authorizing the TTAB 
to consider dilution as grounds for refusal to register a mark or for 
cancellation of a registered mark. This would permit the trademark 
owner to oppose registration or to petition for cancellation of a 
diluting mark, and thereby prevent needless harm to the goodwill and 
distinctiveness of many trademarks and make enforcing the Federal 
dilution statute less costly and time consuming for all involved.
  Second, the bill clarifies the trademark remedies available in 
dilution cases, including injunctive relief, defendant's profits, 
damages, costs, and, in exceptional cases, reasonable attorney fees, 
and the destruction of articles containing the diluting mark.
  Third, the bill amends the Lanham Act to allow for private citizens 
and corporate entities to sue the Federal Government for trademark 
infringement and dilution. Currently, the Federal Government may not be 
sued for trademark infringement, even though the Federal Government 
competes in some areas with private business and may sue others for 
infringement. This bill will level the playing field, and make the 
Federal Government subject to suit for trademark infringement and 
dilution on the same terms and conditions as States under the Lanham 
Act.
  Fourth, the bill provides a limited amendment to the Lanham Act to 
provide that in an action for trade dress infringement, where the 
matter sought to be protected is not registered with the PTO, the 
plaintiff has the burden of proving that the trade dress is not 
functional. This will help promote fair competition and provide an 
incentive for registration.
  Finally, this bill makes a number of technical ``clean-up'' 
amendments relating to the Trademark Law Treaty Implementation Act, 
which was enacted at the end of the last Congress.
  These bills represent a good start on the work before the Senate 
Judiciary Committee to update American intellectual property law to 
ensure that it serves to advance and protect American interests both 
here and abroad. I began this statement, however, with the list of 
copyright, patent and trademark issues that we should also address. We 
have a lot more work to do.
                                 ______