Congressional Record, Volume 145 Issue 111 (Monday, August 2, 1999)

[Congressional Record Volume 145, Number 111 (Monday, August 2, 1999)]
[House]
[Pages H6798-H6799]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

Mr. COBLE. Mr. Speaker, I move to suspend the rules and pass the bill
(H.R. 1761) to amend provisions of title 17, United States Code,
relating to penalties, and for other purposes as amended.
The Clerk read as follows:

H.R. 1761

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 ``Copyright Damages
Improvement Act of 1999''.

SEC. 2. STATUTORY DAMAGES ENHANCEMENT.

SEC. 3. SENTENCING COMMISSION GUIDELINES.

Section 2(g) of the No Electronic Theft (NET) Act (28
U.S.C. 994 note) is amended by striking paragraph (2) and
inserting the following:
``(2) In implementing paragraph (1), the Sentencing
Commission shall amend the guideline applicable to criminal
infringement of a copyright or trademark to provide an
enhancement based upon the retail price of the legitimate
items that are infringed upon and the quantity of the
infringing items. To the extent the conduct involves a
violation of section 2319A of title 18, United States Code,
the enhancement shall be based upon the retail price of the
infringing items and the quantity of the infringing items.
``(3) Paragraph (1) shall be implemented not later than 3
months after the later of--
``(A) the first day occurring after May 20, 1999, or
``(B) the first day after the date of the enactment of this
paragraph,

on which sufficient members of the Sentencing Commission have
been confirmed to constitute a quorum.
``(4) The Commission shall promulgate the guidelines or
amendments provided for 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.''.

SEC. 4. EFFECTIVE DATE.

The amendments made by section 2 shall apply to any action
brought on or after the date of the enactment of this Act,
regardless of the date on which the alleged activity that is
the basis of the action occurred.

The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
North Carolina (Mr. Coble) and the gentleman from California (Mr.
Berman) 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 to revise and extend their remarks and insert
extraneous material into the Record 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.
Mr. Speaker, H.R. 1761 makes significant improvements in the ability
of the Copyright Act to deter copyright infringement. It will increase
the statutory damages available to copyright owners whose registered
works have been infringed in an effort to deter infringing conduct.
Copyright piracy is flourishing in the world. With the advanced
technologies available and the fact that many computer users are either
ignorant of the copyright laws or simply believe that they will not be
caught or punished, the piracy trend will continue.
One way to combat this problem is to increase the statutory penalties
for copyright infringement so that there will be an effective deterrent
to this conduct.
Another significant aspect of H.R. 1761 addresses a problem the
subcommittee learned about during an oversight hearing on the
implementation of the NET Act and enforcement against Internet piracy.
The House Judiciary Subcommittee on Courts and Intellectual Property
received testimony about the lack of prosecutions being brought under
the act by the Department of Justice and the Sentencing Commission
staff failure to address Congress' desire to impose strict penalties
for violations of the act that will deter infringement in their recent
report. H.R. 1761 clarifies Congress' intent that the United States
Sentencing Commission ensure that the sentencing guideline for the
intellectual property offenses provide for consideration of the retail
price of the legitimate infringed-upon item and the quantity of
infringing items in order to make the guidelines sufficiently stringent
to deter such crime. This language gives the Sentencing Commission the
discretion to adopt an aggravating adjustment where it may be
appropriate in cases of pre-released copyright piracy in which no
corresponding legitimate copyrighted item yet exists, but the economic
harm could be devastating. These changes will enable the Department of
Justice to better prosecute crimes against intellectual property.
It is vital that the United States recognizes intellectual property
rights and provides strong protection and enforcement against
violations of those rights. By doing that the United States will
protect its valuable intellectual property and encourage other
countries to enact and enforce strong copyright protection laws.
I would like to commend the distinguished gentleman from California
(Mr. Rogan) for his leadership in introducing this bill and his hard
work in bringing it to this point. H.R. 1761 is an important piece of
legislation, and I urge my colleagues to support it.
Mr. Speaker, I reserve the balance of my time.
Mr. BERMAN. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in support of H.R. 1761, the Copyright Damages
Improvement Act of 1999. Consistent with the responsibility conferred
on us by article 1, section 8, of the Constitution, we are required
from time to time to assess the efficacy of our intellectual property
laws in protecting the works of authors and inventors. Toward that end
earlier this year the Subcommittee on Courts and Intellectual Property
resolved to address several concerns which had been brought to our
attention regarding the deterrence of copyright infringement and
penalties for such infringement in those instances when it does
unfortunately occur.
The bill originally reported out by the Committee on the Judiciary
was broader in scope than the bill before us today, and I supported
that bill in its previous form, but we resolved to bring before this
body a bill reflecting a consensus, and that is what we have done. I
know of no opposition to the bill under consideration today.
The bill has two key features. First the bill provides an inflation
adjustment for copyright statutory damages. It has been well over a
decade since we last adjusted statutory damages for inflation. Our
purpose must be to provide meaningful disincentives for infringement,
and to accomplish this the cost of infringement must substantially
exceed the cost of compliance so that

[[Page H6799]]

those who use or distribute intellectual property have an incentive to
comply with the law. The inflation adjustments provided in H.R. 1761
accomplish that objective.
Secondly, at a hearing held this past May, the Subcommittee on Courts
and Intellectual Property heard evidence that the current sentencing
guidelines for intellectual property crimes is not sufficiently
stringent to deter such crimes.

{time} 1700

The subcommittee's conclusion ratified by the committee was that the
current guideline with its reliance on the value of the infringing item
should be replaced with a guideline based on the retail price of the
infringed upon item. At the same time, as a result of quite productive
discussions with the staff of the sentencing commission, we
acknowledged the commission's ability to make reasonable adjustments,
aggravating or mitigating, as appropriate.
Mr. Speaker, I want to thank the chairman of the subcommittee for
bringing this bill to the floor and for his consistent work in bringing
bills to strengthen our intellectual property laws to the floor.
Mr. Speaker, I yield back the balance of my time.
Mr. COBLE. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I thank my friend from California, and I was about to do
the same to him. We have worked very closely on this. This has taken a
good amount of time, both on the part of gentleman from California (Mr.
Berman) and me as well as other members of the subcommittee and staff.
All have done a good job. This is an important piece of legislation.
Mr. ROGAN. Mr. Speaker, copyright violations, particularly those via
the Internet, are a growing problem. H.R. 1761 the Copyright Damages
Improvement Act of 1999 ensures that changes in federal law keep up
with changes in technology. This bill provides an effective deterrent
against copyright infringers and Internet privacy. I am pleased to join
the chairman of the Courts and Intellectual Property Subcommittee, Mr.
Coble, and the gentleman from Virginia Mr. Goodlatte, along with the
ranking member of the subcommittee, the gentleman from California Mr.
Berman, to make these significant improvements to the Copyright Act and
the No Electronic Theft Act.
H.R. 1761 will increase the amount of statutory damages available for
copyright infringement. Specifically, this bill, as amended, increases
existing penalties for infringement by 50%. Further, the bill clarifies
Congress' intent that the United States Sentencing Commission consider
the retail price of a legitimate infringed-upon work and the quantity
of the infringed upon works when determining sentencing guidelines for
intellectual property offenses.
During the subcommittee's hearing on the ``Implementation of the NET
Act and Enforcement Against Internet Privacy,'' the concern raised
about the lack of prosecutions being brought by the Justice Department
and the Sentencing Commission's failure to address Congress' desire to
impose strict penalties for violators. The committee heard how the
price that pirated material is sold for on the black market is often
the value used for prosecution, not the actual value of the copyrighted
item. This is wrong. My bill clarifies that the Sentencing Commission
shall use the retail price and quantity of the infringed-upon goods as
bases for determining their value.
Finally, I want to recognize and thank all of the interested parties
who came together to work out the compromise language that is contained
in the manager's amendment today. These needed changes will give added
protections to copyright owners by strengthening the deterrents for
intellectual property theft, and enable the Department of Justice to
better prosecute crimes against copyright owners.
Mr. Speaker, it is crucial that our country remain the leader in the
protection and enforcement of intellectual property rights, H.R. 1761
increases the damages for copyright infringement, and serves as a
strict deterrent for those who try to skirt the law. I urge my
colleagues to support the passage of this bill in its amended form.
Mr. COBLE. Mr. Speaker, I have no further requests for time, and I
yield back the balance of my time.
The SPEAKER pro tempore (Mr. Miller of Florida). 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. 1761, 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.
Mr. COBLE. Mr. Speaker, I ask unanimous consent to take from the
Speaker's table the Senate bill (S. 1257) to amend statutory damages
provisions of title 17, United States Code, and ask for its immediate
consideration in the House.
The Clerk read the title of the Senate bill.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from North Carolina?
Mr. BERMAN. Mr. Speaker, reserving the right to object, I do so
simply to yield to my friend from North Carolina to indicate his
intentions with respect to bringing up the Senate bill at this time.
Mr. COBLE. Mr. Speaker, will the gentleman yield?
Mr. BERMAN. I yield to the gentleman from North Carolina.
Mr. COBLE. Mr. Speaker, the purpose of this request is to amend the
companion Senate bill and send it back to the Senate with the amendment
that the House just passed.
Mr. BERMAN. Mr. Speaker, reclaiming my time, I withdraw my
reservation of objection.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from North Carolina?
There was no objection.
The Clerk read the Senate bill, as follows:

S. 1257

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Digital Theft Deterrence and
Copyright Damages Improvement Act of 1999''.

SEC. 2. STATUTORY DAMAGES ENHANCEMENT.

Section 504(c) of title 17, United States Code, is
amended--
(1) in paragraph (1)--
(A) by striking ``$500'' and inserting ``$750''; and
(B) by striking ``$20,000'' and inserting ``$30,000''; and
(2) in paragraph (2)--
(A) by inserting ``(A)'' after ``(2)'';
(B) by striking ``$100,000'' and inserting ``$150,000'';
(C) by inserting after the second sentence the following:
``(B) In a case where the copyright owner demonstrates that
the infringement was part of a repeated pattern or practice
of willful infringement, the court may increase the award of
statutory damages to a sum of not more than $250,000 per
work.''; and
(D) by striking ``The court shall remit statutory damages''
and inserting the following:
``(C) The court shall remit statutory damages''.
Passed the Senate July 1, 1999.

Motion Offered by Mr. Coble

Mr. COBLE. Mr. Speaker, I offer a motion.
The Clerk read as follows:

Mr. Coble moves to strike all after the enacting clause of
the Senate bill, S. 1257, and to insert in lieu thereof the
text of H.R. 1761 as it passed the House.

The motion was agreed to.
The Senate bill was ordered to be read a third time, was read the
third time, and passed.
The title of the Senate bill was amended so as to read: ``to amend
provisions of title 17, United States Code, relating to penalties, and
for other purposes.''.
A motion to reconsider was laid on the table.
A similar House bill (H.R. 1761) was laid on the table.

____________________