[Congressional Record (Bound Edition), Volume 147 (2001), Part 7]
[Senate]
[Pages 10227-10235]
[From the U.S. Government Publishing Office, www.gpo.gov]



     TECHNOLOGY, EDUCATION AND COPYRIGHT HARMONIZATION ACT OF 2001

  Mr. REID. Madam President, I ask unanimous consent that the Senate 
now proceed to the consideration of Calendar No. 66, S. 487.
  The PRESIDING OFFICER. The clerk will report the bill by title.
  The legislative clerk read as follows:

       A bill (S. 487) to amend chapter 1 of title 17, United 
     States Code, relating to the exemption of certain 
     performances or displays for educational uses from copyright 
     infringement provisions, to provide that the making of a 
     single copy of such performances or displays is not an 
     infringement, and for other purposes.

  There being no objection, the Senate proceeded to consider the bill, 
which has been reported from the Committee on the Judiciary with an 
amendment to strike all after the enacting clause and insert the part 
printed in italic.

     SECTION 1. EDUCATIONAL USE COPYRIGHT EXEMPTION.

       (a) Short Title.--This Act may be cited as the 
     ``Technology, Education, and Copyright Harmonization Act of 
     2001''.
       (b) Exemption of Certain Performances and Displays for 
     Educational Uses.--Section 110 of title 17, United States 
     Code, is amended--
       (1) by striking paragraph (2) and inserting the following:
       ``(2) except with respect to a work produced or marketed 
     primarily for performance or display as part of mediated 
     instructional activities transmitted via digital networks, or 
     a performance or display that is given by means of a copy or 
     phonorecord that is not lawfully made and acquired under this 
     title, and the transmitting government body or accredited 
     nonprofit educational institution knew or had reason to 
     believe was not lawfully made and acquired, the performance 
     of a nondramatic literary or musical work or reasonable and 
     limited portions of any other work, or display of a work in 
     an amount comparable to that which is typically displayed in 
     the course of a live classroom session, by or in the course 
     of a transmission, if--
       ``(A) the performance or display is made by, at the 
     direction of, or under the actual supervision of an 
     instructor as an integral part of a class session offered as 
     a regular part of the systematic mediated instructional 
     activities of a governmental body or an accredited nonprofit 
     educational institution;
       ``(B) the performance or display is directly related and of 
     material assistance to the teaching content of the 
     transmission;
       ``(C) the transmission is made solely for, and, to the 
     extent technologically feasible, the reception of such 
     transmission is limited to--
       ``(i) students officially enrolled in the course for which 
     the transmission is made; or
       ``(ii) officers or employees of governmental bodies as a 
     part of their official duties or employment; and
       ``(D) the transmitting body or institution--
       ``(i) institutes policies regarding copyright, provides 
     informational materials to faculty, students, and relevant 
     staff members that accurately describe, and promote 
     compliance with, the laws of the United States relating to 
     copyright, and provides notice to students that materials 
     used in connection with the course may be subject to 
     copyright protection; and
       ``(ii) in the case of digital transmissions--

       ``(I) applies technological measures that, in the ordinary 
     course of their operations, prevent--

       ``(aa) retention of the work in accessible form by 
     recipients of the transmission from the transmitting body or 
     institution for longer than the class session; and
       ``(bb) unauthorized further dissemination of the work in 
     accessible form by such recipients to others; and

       ``(II) does not engage in conduct that could reasonably be 
     expected to interfere with technological measures used by 
     copyright owners to prevent such retention or unauthorized 
     further dissemination;''; and

       (2) by adding at the end the following:
       ``In paragraph (2), the term `mediated instructional 
     activities' with respect to the performance or display of a 
     work by digital transmission under this section refers to 
     activities that use such work as an integral part of the 
     class experience, controlled by or under the actual 
     supervision of the instructor and analogous to the type of 
     performance or display that would take place in a live 
     classroom setting. The term does not refer to activities that 
     use, in 1 or more class sessions of a single course, such 
     works as textbooks, course packs, or other material in any 
     media, copies or phonorecords of which are typically 
     purchased or acquired by the students in higher education for 
     their independent use and retention or are typically 
     purchased or acquired for elementary and secondary students 
     for their possession and independent use.
       ``For purposes of paragraph (2), accreditation--
       ``(A) with respect to an institution providing post-
     secondary education, shall be as determined by a regional or 
     national accrediting agency recognized by the Council on 
     Higher Education Accreditation or the United States 
     Department of Education; and
       ``(B) with respect to an institution providing elementary 
     or secondary education, shall be as recognized by the 
     applicable state certification or licensing procedures.
       ``For purposes of paragraph (2), no governmental body or 
     accredited nonprofit educational institution shall be liable 
     for infringement by reason of the transient or temporary 
     storage of material carried out through the automatic 
     technical process of a digital transmission of the 
     performance or display of that material as authorized under 
     paragraph (2). No such material stored on the system or 
     network controlled or operated by the transmitting body or 
     institution under this paragraph shall be maintained on such 
     system or network in a manner ordinarily accessible to anyone 
     other than anticipated recipients. No such copy shall be 
     maintained on the system or network in a manner ordinarily 
     accessible to such anticipated recipients for a longer period 
     than is reasonably necessary to facilitate the transmissions 
     for which it was made.''.
       (c) Ephemeral Recordings.--
       (1) In general.--Section 112 of title 17, United States 
     Code, is amended--
       (A) by redesignating subsection (f) as subsection (g); and
       (B) by inserting after subsection (e) the following:
       ``(f)(1) Notwithstanding the provisions of section 106, and 
     without limiting the application of subsection (b), it is not 
     an infringement of copyright for a governmental body or other 
     nonprofit educational institution entitled under section 
     110(2) to transmit a performance or display to make copies or 
     phonorecords of a work that is in digital form and, solely to 
     the extent permitted in paragraph (2), of a work that is in 
     analog form, embodying the performance or display to be used 
     for making transmissions authorized under section 110(2), 
     if--
       ``(A) such copies or phonorecords are retained and used 
     solely by the body or institution that made them, and no 
     further copies or phonorecords are reproduced from them, 
     except as authorized under section 110(2); and
       ``(B) such copies or phonorecords are used solely for 
     transmissions authorized under section 110(2).
       ``(2) This subsection does not authorize the conversion of 
     print or other analog versions of works into digital formats, 
     except that such conversion is permitted hereunder, only with 
     respect to the amount of such works authorized to be 
     performed or displayed under section 110(2), if--
       ``(A) no digital version of the work is available to the 
     institution; or
       ``(B) the digital version of the work that is available to 
     the institution is subject to technological protection 
     measures that prevent its use for section 110(2).''.

[[Page 10228]]

       (2) Technical and conforming amendment.--Section 802(c) of 
     title 17, United States Code, is amended in the third 
     sentence by striking ``section 112(f)'' and inserting 
     ``section 112(g)''.
       (d) Patent and Trademark Office Report.--
       (1) In general.--Not later than 180 days after the date of 
     enactment of this Act and after a period for public comment, 
     the Undersecretary of Commerce for Intellectual Property, 
     after consultation with the Register of Copyrights, shall 
     submit to the Committees on the Judiciary of the Senate and 
     the House of Representatives a report describing 
     technological protection systems that have been implemented, 
     are available for implementation, or are proposed to be 
     developed to protect digitized copyrighted works and prevent 
     infringement, including upgradeable and self-repairing 
     systems, and systems that have been developed, are being 
     developed, or are proposed to be developed in private 
     voluntary industry-led entities through an open broad based 
     consensus process. The report submitted to the Committees 
     shall not include any recommendations, comparisons, or 
     comparative assessments of any commercially available 
     products that may be mentioned in the report.
       (2) Limitations.--The report under this subsection--
       (A) is intended solely to provide information to Congress; 
     and
       (B) shall not be construed to affect in any way, either 
     directly or by implication, any provision of title 17, United 
     States Code, including the requirements of clause (ii) of 
     section 110(2)(D) of that title (as added by this Act), or 
     the interpretation or application of such provisions, 
     including evaluation of the compliance with that clause by 
     any governmental body or nonprofit educational institution.

  Mr. LEAHY. Madam President. I am pleased that the Senate is 
considering the TEACH Act, S. 487, today. This legislation will help 
clarify the law and allow educators to use the same rich material in 
distance learning over the Internet that they are able to use in face-
to-face classroom instruction. The Senate has been focused on education 
reform for the past two months. The legislation we report today 
reflects our understanding that we must be able to use new technologies 
to advance our education goals in a manner that recognizes and protects 
copyrighted works.
  The genesis of this bill was in the Digital Millennium Copyright Act 
(DMCA), where we asked the Copyright Office to study the complex 
copyright issues involved in distance education and to make 
recommendations to us for any legislative changes. The Copyright Office 
released its report in May, 1999, and made valuable suggestions on how 
modest changes in our copyright law could go a long way to foster the 
appropriate use of copyrighted works in valid distance learning 
activities. Senator Hatch and I then introduced the TEACH Act, S. 487, 
relying heavily on the legislative recommendations of that report.
  Marybeth Peters, the Registrar of Copyrights, and her staff deserve 
our heartfelt thanks for that comprehensive study and their work on 
this legislation.
  At the March 13, 2001, hearing on this legislation, we heard from 
people who both supported the legislation and had concerns about it. I 
appreciate that some copyright owners disagreed with the Copyright 
Office's conclusions and believed instead that current copyright laws 
are adequate to enable and foster legitimate distance learning 
activities. We have made efforts in refining the original legislation 
to address the valid concerns of both the copyright owners and the 
educational community. This has not been an easy process and I want to 
extend my thanks to all of those who worked hard and with us to craft 
the legislation reported by the Judiciary Committee and considered by 
the Senate today.
  The growth of distance learning is exploding, largely because it is 
responsive to the needs of older, non-traditional students. The 
Copyright Office, ``CO,'' report noted two years ago that, by 2002, the 
number of students taking distance education courses will represent 15 
percent of all higher education students. Moreover, the typical average 
distance learning student is 34 years old, employed full-time and has 
previous college credit. More than half are women. In increasing 
numbers, students in other countries are benefitting from educational 
opportunities here through U.S. distance education programs. (CO 
Report, at pp. 19-20).
  In high schools, distance education makes advanced college placement 
and college equivalency courses available--a great opportunity for 
residents in our more-rural states. In colleges, distance education 
makes lifelong learning a practical reality.
  Not only does distance education make it more convenient for many 
students to pursue an education, for students who have full- time work 
commitments, who live in rural areas or in foreign countries, who have 
difficulty obtaining child or elder care, or who have physical 
disabilities, distance education may be the only means for them to 
pursue an education. These are the people with busy schedules who need 
the flexibility that on-line programs offer: virtual classrooms 
accessible when the student is ready to log-on.
  In rural areas, distance education provides an opportunity for 
schools to offer courses that their students might otherwise not be 
able enjoy. It is therefore no surprise that in Vermont, and many other 
rural states, distance learning is a critical component of any quality 
educational and economic development system. The most recent Vermont 
Telecommunications Plan, which was published in 1999, identifies 
distance learning as being critical to Vermont's development. It also 
recommends that Vermont consider ``using its purchasing power to 
accelerate the introduction of new [distance learning] services in 
Vermont.'' Technology has empowered individuals in the most remote 
communities to have access to the knowledge and skills necessary to 
improve their education and ensure they are competitive for jobs in the 
21st Century.
  Several years ago, I was proud to work with the state in establishing 
the Vermont Interactive Television network. This constant two-way 
video-conferencing system can reach communities, schools and businesses 
in every corner of the state. Since we first successfully secured funds 
to build the backbone of the system, Vermont has constructed fourteen 
sites. The VIT system is currently running at full capacity and has 
demonstrated that in Vermont, technology highways are just as important 
as our transportation highways.
  No one single technology should be the platform for distance 
learning. In Vermont, creative uses of available resources have put in 
place a distance learning system that employs T-1 lines in some areas 
and traditional internet modem hook-ups in others. Several years ago, 
the Grand Isle Supervisory Union received a grant from the U.S. 
Department of Agriculture to link all the schools within the district 
with fiber optic cable. There are not a lot of students in this 
Supervisory Union but there is a lot of land separating one school from 
another. The bandwidth created by the fiber optic cables has not only 
improved the educational opportunities in the four Grand Isle towns, 
but it has also provided a vital economic boost to the area's 
businesses.
  While there are wonderful examples of the use of distance learning 
inside Vermont, the opportunities provided by these technologies are 
not limited to the borders of one state, or even one country. Champlain 
College, a small school in Burlington, Vermont has shown this is true 
when it adopted a strategic plan to provide distance learning for 
students throughout the world.. Under the leadership of President Roger 
Perry, Champlain College now has more students enrolled than any other 
college in Vermont. The campus in Vermont has not been overwhelmed with 
the increase. Instead, Champlain now teaches a large number of students 
overseas through its on-line curriculum. Similarly, Marlboro College in 
Marlboro, Vermont, offers innovative graduate programs designed for 
working professionals with classes that meet not only in person but 
also online.
  The Internet, with its interactive, multi-media capabilities, has 
been a significant development for distance learning. By contrast to 
the traditional, passive approach of distance learning where a student 
located remotely from a classroom was able to watch a lecture being 
broadcast at a fixed time over the air, distance learners today can 
participate in real-time

[[Page 10229]]

class discussions, or in simultaneous multimedia projects. The 
Copyright Office report confirmed what I have assumed for some time--
that ``the computer is the most versatile of distance education 
instruments,'' not just in terms of flexible schedules, but also in 
terms of the material available.
  More than 20 years ago, the Congress recognized the potential of 
broadcast and cable technology to supplement classroom teaching, and to 
bring the classroom to those who, because of their disabilities or 
other special circumstances, are unable to attend classes. We included 
in the present Copyright Act certain exemptions for distance learning, 
in addition to the general fair use exemption. The time has come to do 
more. The recent report of the Web-Based Education Commission, headed 
by former Senator Bob Kerrey, says:

       Current copyright law governing distance education . . . 
     was based on broadcast models of telecourses for distance 
     education. That law was not established with the virtual 
     classroom in mind, nor does it resolve emerging issues of 
     multimedia online, or provide a framework for permitting 
     digital transmissions.

  The Kerrey report concluded that our copyright laws were 
``inappropriately restrictive.'' (p. 97).
  Under current law, the performance or display of any work in the 
course of face-to-face instruction in a classroom is exempt from the 
exclusive rights of a copyright owner. In addition, the copyright law 
allows transmissions of certain performances or displays of copyrighted 
works but restricts such transmissions subject to the exemption to 
those sent to a classroom or a similar place which is normally devoted 
to instruction, to persons whose disabilities or other special 
circumstances prevent classroom attendance, or to government employees. 
While this exemption is technology neutral and does not limit exempt 
``transmissions'' to distance learning broadcasts, the exemption does 
not authorize the reproduction or distribution of copyrighted works a 
limitation that has enormous implications for transmissions over 
computer networks. Digital transmissions over computer networks involve 
multiple acts of reproduction as a data packet is moved from one 
computer to another.
  The TEACH Act makes three significant expansions in the distance 
learning exemption in the Copyright Act, while minimizing the 
additional risks to copyright owners that are inherent in exploiting 
works in a digital format. First, the bill eliminates the current 
eligibility requirements for the distance learning exemption that the 
instruction occur in a physical classroom or that special circumstances 
prevent the attendance of students in the classroom. At the same time, 
the bill would maintain and clarify the requirement that the exemption 
is limited to use in mediated instructional activities of governmental 
bodies and accredited non-profit educational institutions.
  Second, the bill clarifies that the distance learning exemption 
covers the transient or temporary copies that may occur through the 
automatic technical process of transmitting material over the Internet.
  Third, the current distance learning exemption only permits the 
transmission of the performance of ``non-dramatic literary or musical 
works,'' but does not allow the transmission of movies or videotapes, 
or the performance of plays. The Kerrey Commission report cited this 
limitation as an obstacle to distance learning in current copyright law 
and noted the following examples: A music instructor may play songs and 
other pieces of music in a classroom, but must seek permission from 
copyright holders in order to incorporate these works into an online 
version of the same class. A children's literature instructor may 
routinely display illustrations from childrens' books in the classroom, 
but must get licenses for each one for on online version of the course.
  To alleviate this disparity, the TEACH Act would amend current law to 
allow educators to show reasonable and limited portions of dramatic 
literary and musical works, audiovisual works, and sound recordings, in 
addition to the complete versions of nondramatic literary and musical 
works which are currently exempted.
  This legislation is a balanced proposal that expands the educational 
use exemption in the copyright law for distance learning, but also 
contains a number of safeguards for copyright owners. In particular, 
the bill excludes from the exemption those works that are produced 
primarily for instructional use, because for such works, unlike 
entertainment products or materials of a general educational nature, 
the exemption could significantly cut into primary markets, impairing 
incentives to create. Indeed, the Web-Based Education Commission urged 
the development of ``high quality online educational content that meets 
the highest standards of educational excellence.'' Copyright protection 
can help provide the incentive for the development of such content.
  In addition, the bill requires that the government or educational 
institution using the exemption transmit copyrighted works that are 
lawfully made or acquired and use technological protection safeguards 
to protect against retention of the work and ensure that the 
dissemination of material covered under the exemption is limited only 
to the students who are intended to receive it.
  Finally, the bill directs the Patent and Trademark Office to report 
to the Congress with a description of the various technological 
protection systems in use, available, or being developed to protect 
digitized copyrighted works and prevent infringement, including those 
being developed in private, voluntary, industry-led entities through an 
open broad based consensus process. The original version of this study 
proposed by Senator Hatch in an amendment filed to the Elementary and 
Secondary Education bill, S. 1, proved highly controversial.
  I appreciate that copyright owners are frustrated at the pace at 
which technological measures are being developed and implemented to 
protect digital copyrighted works, particularly as high-speed Internet 
connections and broadband service becomes more readily available. At 
the same time, computer and software manufacturers and providers of 
Internet services are appropriately opposed to the government mandating 
use of a particular technological protection measure or setting the 
specification standards for such measures. Indeed, copyright owners are 
a diverse group, and some owners may want more flexibility and variety 
in the technical protection measures available for their works than 
would result if the government intervened too soon and mandated a 
particular standard or system. I am glad that with the constructive 
assistance of Senator Cantwell and other members of the Judiciary 
Committee, we were able to include a version of the PTO study in the 
bill that is limited to providing information to the Congress.
  Distance education is an important issue to both Senator Hatch and to 
me, and to the people of all of our States. This is a good bill and I 
urge the Congress to act promptly to see this legislation enacted.
  Mr. HATCH. Madam President, I am pleased that we will pass out of the 
Senate today S. 487, the ``Technology Education and Copyright 
Harmonization Act'' or fittingly abbreviated as the ``TEACH Act,'' 
which updates the educational use provisions of the copyright law to 
account for advancements in digital transmission technologies that 
support distance learning.
  But first I want to thank the Ranking Member for his work and 
partnership on this legislation. We have done it in a bipartisan, 
consensus-building manner. I would also like to thank the various 
representatives of the copyright owner and education communities who 
have worked so hard with us to achieve this consensus and move this 
legislation forward.
  They have worked in the spirit of cooperation toward the shared goal 
of helping our students learn better through technology and the media. 
I would also like to thank the Register of Copyrights, and her staff at 
the Copyright Office, for their help and technical assistance. They 
have done an admirable job in helping us move forward the deployment of 
the Internet

[[Page 10230]]

and digital transmissions systems in education.
  Because of their hard work, I am confident we have an important 
education reform that can be sent to, and signed by, the President with 
broad, bipartisan support in the coming month.
  Distance education, and the use of high technology tools such as the 
Internet in education, hold great promise for students in States like 
Utah, where distances can be great between students and learning 
opportunities. I think it is similarly important for any State that has 
students who seek broader learning opportunities than they can reach in 
their local area. Any education reforms moved in the Congress this year 
should include provisions that help deploy high technology tools, 
including the Internet, to give our students the very best educational 
experience we can offer. I believe this legislation is an important 
part of truly effective education reform that can open up new vistas to 
all our students, while potentially costing less in the long run to 
provide a full education experience.
  By using these tools, students in remote areas of my home State of 
Utah are becoming able to link up to resources previously available 
only to those in cities or at prestigious educational institutions. 
Limited access to language instructors in remote areas or particle 
accelerators in most high schools limit access to educational 
opportunity. These limits can be overcome to a revolutionary degree by 
online offerings, which can combine sound, video, and interactivity in 
exciting new ways. And new experiences that transcend what is possible 
in the classroom, such as hypertexts linked directly to secondary 
sources, are possible only in the online world.
  With the advent of the Internet and other communication technologies, 
classrooms need no longer be tied to a specific location or time. As 
exciting as distance education is, online education will only thrive if 
teachers and students have affordable and convenient access to the 
highest quality educational materials. The goal of the TEACH Act is to 
update the educational provisions of the copyright law for the 21st 
century, allowing students and teachers to benefit from deployment of 
advanced digital technologies.
  Specifically, the TEACH Act amends sections 110(2) and 112 of the 
Copyright Act to facilitate the growth and development of digital 
distance learning. First, the legislation expands the scope of the 
section 110(2) exemption to apply to performances and displays of all 
categories of copyrighted works subject to reasonable limitations on 
the portion or amount of the work that can be digitally transmitted. 
Thus, for example, the Act allows transmissions to locations other than 
the physical classroom, and includes audiovisual works, sound 
recordings and other works within the exemption. At the same time, the 
bill maintains and clarifies the concept of ``mediated instructional 
activities,'' which requires that the performance or display be 
analogous to the type of performance or display that would take place 
in a live classroom setting.
  Moreover, of utmost significance to the copyright owners, the 
legislation adds new safeguards to counteract the risks posed by 
digital transmissions in an educational setting. For example, the bill 
imposes obligations to implement technological protection measures as 
well as certain limitations relating to accessibility and duration of 
transient copies. The Act also amends section 112 of the Copyright Act 
to permit storage of copyrighted material on servers in order to permit 
asynchronous use of material in distance education.
  This legislation was reported unanimously by the Judiciary Committee, 
and we expect it will pass the full Senate unanimously, too. Today we 
will make two non-controversial changes to the legislation as passed by 
the Committee. First, Senator Leahy and I have a technical amendment to 
the title of the bill, which corrects a non-substantive scrivener's 
error. Second, we are making a change in the legislative language 
regarding technological protection measures which makes our intention 
clearer by bringing the statutory language into closer conformity with 
our understanding of the provision. These changes are non-controversial 
and have the same support among the affected parties as the rest of the 
bill. For the information of my colleagues and those who may use the 
legislation, I am including a section by section analysis of the bill 
as amended following my comments, and asked that a copy of that section 
by section analysis and copies of the two amendments be published 
immediately following my remarks in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See Exhibit 1).
  Mr. HATCH. A few comments about the study we request from the Patent 
and Trademark Office included in this legislation. There was some 
controversy generated in some quarters over an earlier draft of the 
TEACH Act that directed the Undersecretary for Intellectual Property to 
provide the Judiciary Committee with information about technological 
protection measures for copyrighted works online. I must confess, I 
still do not entirely understand the precise objections to that 
formulation. One lobbyist, I believe from the Digital Media 
Association, was arguing that the study would lead to a rash of class 
action lawsuits. I have been trying to parse the language to see if 
this informational report might have also provided for attorneys fees. 
But, fortunately, such imaginative readings of the language are no 
longer necessary because we were able to come to some agreement late 
last night on language that will allow the Committee to receive useful 
information for our own use and for the information of our constituents 
without causing interest rates to increase or the Potomac to run 
backwards. In all seriousness, I thank those who worked with us late 
into the night to forge an agreement that allows us to move forward on 
this last issue as part of this consensus legislation. I believe we 
have a bill that will be good for students, teachers, copyright owners, 
and information technologists.
  But I would like to explain some of the thinking that went into 
requesting that report. First of all, the report is not designed to be 
a first step toward the government regulating, mandating, or favoring 
types of technologies or products produced to protect copyrighted works 
online. Second, the legislative language makes clear that we do not 
seek a government comparison of various products that are commercially 
available. We do not seek such comparisons, and we do not want the 
government picking winners and losers among commercial products, nor in 
setting the standards that would govern the development of such 
products.
  Instead, this request is made because technological protection will 
be increasingly important in preventing widespread, unlawful copying of 
copyrighted works generally, and the Committee wishes to know as much 
about its capabilities as possible, for ourselves and for our 
constitents. This information would be extremely valuable, for example, 
if the Committee determines in the future that it is appropriate to 
facilitate the standard-setting process or to encourage the 
implementation of such standards in devices so that creative works can 
be offered to the public in a secure environment. Encryption, 
watermarking, and digital rights management systems have been and 
continue to be developed to protect copyrighted works, but these are 
just a portion of the possibilities that exist in making the digital 
environment safe for the delivery of valuable copyrighted works. If, 
for instance, computers and other digital devices recognized and 
responded to technological protection measures, a significant portion 
of the infringing activity that harms copyright owners could be 
prevented, and the Internet could be a much safer environment for the 
valuable and quality works that consumers want to enjoy and copyright 
owners want to deliver online. Therefore, the Undersecretary should 
include in its study so-called ``bilateral'' systems that have been or 
could be developed that would allow technology embedded in copyrighted 
works to communicate

[[Page 10231]]

with computers and other devices with regard to the level of protection 
required for that work, as well as unilateral protection systems. The 
Undersecretary should also provide us information on robust and 
reliable protection systems that could be renewed or upgraded after 
subjected to cyberhacking, as opposed to becoming useless or obsolete. 
Some have raised concerns that such a study would only provide a 
snapshot in time, or would be out of date by the time it is finished 
due to continual advances in technology. This may be correct. However, 
despite these possible limitations, the study will be extremely useful 
in establishing a baseline of knowledge for the Committee and our 
constituents with regard to what technology is or could be made 
available and how it is or could be implemented. Perhaps the 
information contained in this report could be updated by the 
Undersecretary to address evolving technologies in this area.
  Overall, this legislation will make it easier for the teacher who 
connects with her students online to enhance the learning process by 
illustrating music appreciation principles with appropriately limited 
sound recordings or illustrate visual design or story-telling 
principles with appropriate movie clips. These wholly new interactive 
educational experiences, or more traditional ones now made available 
around the students' schedule, will be made more easily and more 
inexpensively by this legislation. Beyond the legislative safe harbor 
provided by this legislation, opportunities for students and lifetime 
learners of all kinds, in all kinds of locations, are limited only by 
the human imagination and the cooperative creativity of the creators 
and users of copyrighted works. The possibilities for everyone in the 
wired world are thrilling to contemplate.
  I strongly believe that this legislation is necessary to foster and 
promote distance education while at the same time maintains a careful 
balance between copyright owners and users. Through the increasing 
influence of educational technologies, virtual classrooms are popping 
up all over the country and what we do not want to do is stand in the 
way of the development and advancement of innovative technologies that 
offer new and exciting educational opportunities. I think we all agree 
that digital distance should be fostered and utilized to the greatest 
extent possible to deliver instruction to students in ways that could 
have been possible a few years ago. We live at a point in time when we 
truly have an opportunity to help shape the future by influencing how 
technology is used in education so I hope my colleagues will join us in 
supporting this modest update of the copyright law that offers to make 
more readily available distance education in a digital environment to 
all of our students.

  Exhibit 1.--Section-by-Section Analysis of S. 487, the Technology, 
               Education, and Copyright Harmonization Act


                      Subsection (a): Short Title

       This section provides that this Act may be cited as the 
     ``Technology, Education and Copyright Harmonization Act of 
     2001.''


  Subsection (b): Exemption of Certain Performances and Displays for 
                            Educational Uses

                                Summary

       Section 1(b) of the TEACH Act amends section 110(2) of the 
     Copyright Act to encompass performances and displays of 
     copyrighted works in digital distance education under 
     appropriate circumstances. The section expands the scope of 
     works to which the amended section 110(2) exemption applies 
     to include performances of reasonable and limited portions of 
     works other than nondramatic literary and musical works 
     (which are currently covered by the exemption), while also 
     limiting the amount of any work that may be displayed under 
     the exemption to what is typically displayed in the course of 
     a live classroom session. At the same time, section 1(b) 
     removes the concept of the physical classroom, while 
     maintaining and clarifying the requirement of mediated 
     instructional activity and limiting the availability of the 
     exemption to mediated instructional activities of 
     governmental bodies and ``accredited'' non-profit educational 
     institutions. This section of the Act also limits the amended 
     exemption to exclude performances and displays given by means 
     of a copy or phonorecord that is not lawfully made and 
     acquired, which the transmitting body or institution knew or 
     had reason to believe was not lawfully made and acquired. In 
     addition, section 1(b) requires the transmitting institution 
     to apply certain technological protection measures to protect 
     against retention of the work and further downstream 
     dissemination. The section also clarifies that participants 
     in authorized digital distance education transmissions will 
     not be liable for any infringement by reason of transient or 
     temporary reproductions that may occur through the automatic 
     technical process of a digital transmission for the purpose 
     of a performance or display permitted under the section. 
     Obviously, with respect to such reproductions, the 
     distribution right would not be infringed. Throughout the 
     Act, the term ``transmission'' is intended to include 
     transmissions by digital, as well as analog means.

         Works subject to the exemption and applicable portions

       The TEACH Act expands the scope of the section 110(2) 
     exemption to apply to performances and displays of all 
     categories of copyrighted works, subject to specific 
     exclusions for works ``produced or marketed primarily for 
     performance or display as part of mediated instructional 
     activities transmitted via digital networks'' and performance 
     or displays ``given by means of a copy or phonorecord that is 
     not lawfully made and acquired,'' which the transmitting body 
     or institution ``knew or had reason to believe was not 
     lawfully made and acquired.''
       Unlike the current section 110(2), which applies only to 
     public performances of non-dramatic literary or musical 
     works, the amendment would apply to public performances of 
     any type of work, subject to certain exclusions set forth in 
     section 110(2), as amended. The performance of works other 
     than non-dramatic literary or musical works is limited, 
     however, to ``reasonable and limited portions'' of less than 
     the entire work. What constitutes a ``reasonable and 
     limited'' portion should take into account both the nature of 
     the market for that type of work and the pedagogical purposes 
     of the performance.
       In addition, because ``display'' of certain types of works, 
     such as literary works using an ``e-book'' reader, could 
     substitute for traditional purchases of the work (e.g., a 
     text book), the display exemption is limited to ``an amount 
     comparable to that which is typically displayed in the course 
     of a live classroom setting.'' This limitation is a further 
     implementation of the ``mediated instructional activity'' 
     concept described below, and recognizes that a ``display'' 
     may have a different meaning and impact in the digital 
     environment than in the analog environment to which section 
     110(2) has previously applied. The ``limited portion'' 
     formulation used in conjunction with the performance right 
     exemption is not used in connection with the display right 
     exemption, because, for certain works, display of the entire 
     work could be appropriate and consistent with displays 
     typically made in a live classroom setting (e.g., short poems 
     or essays, or images of pictorial, graphic, or sculptural 
     works, etc.).
       The exclusion for works ``produced or marketed primarily 
     for performance or display as part of mediated instructional 
     activities transmitted via digital networks'' is intended to 
     prevent the exemption from undermining the primary market for 
     (and, therefore, impairing the incentive to create, modify or 
     distribute) those materials whose primary market would 
     otherwise fall within the scope of the exemption. The concept 
     of ``performance or display as part of mediated instructional 
     activities'' is discussed in greater detail below, in 
     connection with the scope of the exemption. It is intended to 
     have the same meaning and application here, so that works 
     produced or marketed primarily for activities covered by the 
     exemption would be excluded from the exemption. The exclusion 
     is not intended to apply generally to all educational 
     materials or to all materials having educational value. The 
     exclusion is limited to materials whose primary market is 
     ``mediated instructional activities,'' i.e., materials 
     performed or displayed as an integral part of the class 
     experience, analogous to the type of performance or display 
     that would take place in a live classroom setting. At the 
     same time, the reference to ``digital networks'' is intended 
     to limit the exclusion to materials whose primary market is 
     the digital network environment, not instructional materials 
     developed and marketed for use in the physical classroom.
       The exclusion of performances or displays ``given by means 
     of a copy or phonorecord that is not lawfully made and 
     acquired'' under Title 17 is based on a similar exclusion in 
     the current language of section 110(1) for the performance or 
     display of an audiovisual work in the classroom. Unlike the 
     provision in section 110(1), the exclusion here applies to 
     the performance or display of any work. But, as in section 
     110(1), the exclusion applies only where the transmitting 
     body or institution ``knew or had reason to believe'' that 
     the copy or phonorecord was not lawfully made and acquired. 
     As noted in the Register's Report, the purpose of the 
     exclusion is to reduce the likelihood that an exemption 
     intended to cover only the equivalent of traditional concepts 
     of performance and display would result in the proliferation 
     or exploitation of unauthorized copies. An educator would 
     typically purchase, license, rent, make a fair use copy, or 
     otherwise lawfully acquire the copy to be used, and works not 
     yet made available in the market

[[Page 10232]]

     (whether by distribution, performance or display) would, as a 
     practical matter, be rendered ineligible for use under the 
     exemption.

                     Eligible transmitting entities

       As under the current section 110(2), the exemption, as 
     amended, is limited to government bodies and non-profit 
     educational institutions. However, due to the fact that, as 
     the Register's Report points out, ``nonprofit educational 
     institutions'' are no longer a closed and familiar group, and 
     the ease with which anyone can transmit educational material 
     over the Internet, the amendment would require non-profit 
     educational institutions to be ``accredited'' in order to 
     provide further assurances that the institution is a bona 
     fide educational institution. It is not otherwise intended to 
     alter the eligibility criteria. Nor is it intended to limit 
     or affect any other provision of the Copyright Act that 
     relates to non-profit educational institutions or to imply 
     that non-accredited educational institutions are necessarily 
     not bona fide.
       ``Accreditation'' is defined in section 1(b)(2) of the 
     TEACH Act in terms of the qualification of the educational 
     institution. It is not defined in terms of particular courses 
     or programs. Thus, an accredited nonprofit educational 
     institution qualifies for the exemption with respect to its 
     courses whether or not the courses are part of a degree or 
     certificate-granting program.

Qualifying performances and displays; mediated instructional activities

       Subparagraph (2)(A) of the amended exemption provides that 
     the exemption applies to a performance or display made ``by, 
     at the direction of, or under the actual supervision of an 
     instructor as an integral part of a class session offered as 
     a regular part of . . . systematic mediated instructional 
     activity.'' The subparagraph includes several requirements, 
     all of which are intended to make clear that the transmission 
     must be part of mediated instructional activity. First, the 
     performance or display must be made by, under the direction 
     of, or under the actual supervision of an instructor. The 
     performance or display may be initiated by the instructor. It 
     may also be initiated by a person enrolled in the class as 
     long as it is done either at the direction, or under the 
     actual supervision, of the instructor. ``Actual'' supervision 
     is intended to require that the instructor is, in fact, 
     supervising the class activities, and that supervision is not 
     in name or theory only. It is not intended to require either 
     constant, real-time supervision by the instructor or pre-
     approval by the instructor for the performance or display. 
     Asynchronous learning, at the pace of the student, is a 
     significant and beneficial characteristic of digital distance 
     education, and the concept of control and supervision is not 
     intended to limit the qualification of such asynchronous 
     activities for this exemption.
       The performance or display must also be made as an 
     ``integral part'' of a class session, so it must be part of a 
     class itself, rather than ancillary to it. Further, it must 
     fall within the concept of ``mediated instructional 
     activities'' as described in section 1(b)(2) of the TEACH 
     Act. This latter concept is intended to require the 
     performance or display to be analogous to the type of 
     performance or display that would take place in a live 
     classroom setting. Thus, although it is possible to display 
     an entire textbook or extensive course-pack material through 
     an e-book reader or similar device or computer application, 
     this type of use of such materials as supplemental reading 
     would not be analogous to the type of display that would take 
     place in the classroom, and therefore would not be authorized 
     under the exemption.
       The amended exemption is not intended to address other uses 
     of copyrighted works in the course of digital distance 
     education, including student use of supplemental or research 
     materials in digital form, such as electronic course packs, 
     e-reserves, and digital library resources. Such activities do 
     not involve uses analogous to the performances and displays 
     currently addressed in section 110(2).
       The ``mediated instructional activity'' requirement is thus 
     intended to prevent the exemption provided by the TEACH Act 
     from displacing textbooks, course packs or other material in 
     any media, copies or phonorecords of which are typically 
     purchased or acquired by students for their independent use 
     and retention (in most post-secondary and some elementary and 
     secondary contexts). The Committee notes that in many 
     secondary and elementary school contexts, such copies of such 
     materials are not purchased or acquired directly by the 
     students, but rather are provided for the students' 
     independent use and possession (for the duration of the 
     course) by the institution.
       The limitation of the exemption to systematic ``mediated 
     instructional activities'' in subparagraph (2)(A) of the 
     amended exemption operates together with the exclusion in the 
     opening clause of section 110(2) for works ``produced or 
     marketed primarily for performance or display as part of 
     mediated instructional activities transmitted via digital 
     networks'' to place boundaries on the exemption. The former 
     relates to the nature of the exempt activity; the latter 
     limits the relevant materials by excluding those primarily 
     produced or marketed for the exempt activity.
       One example of the interaction of the two provisions is the 
     application of the exemption to textbooks. Pursuant to 
     subparagraph (2)(A), which limits the exemption to ``mediated 
     instructional activities,'' the display of material from a 
     textbook that would typically be purchased by students in the 
     local classroom environment, in lieu of purchase by the 
     students, would not fall within the exemption. Conversely, 
     because textbooks typically are not primarily produced or 
     marketed for performance or display in a manner analogous to 
     performances or display in the live classroom setting, they 
     would not per se be excluded from the exemption under the 
     exclusion in the opening clause. Thus, an instructor would 
     not be precluded from using a chart or table or other short 
     excerpt from a textbook different from the one assigned for 
     the course, or from emphasizing such an excerpt from the 
     assigned textbook that had been purchased by the students.
       The requirement of subparagraph (2)(B), that the 
     performance or display must be directly related and of 
     material assistance to the teaching content of the 
     transmission, is found in current law, and has been retained 
     in its current form. As noted in the Register's Report, this 
     test of relevance and materiality connects the copyrighted 
     work to the curriculum, and it means that the portion 
     performed or displayed may not be performed or displayed for 
     the mere entertainment of the students, or as unrelated 
     background material.

                Limitations on receipt of transmissions

       Unlike current section 110(2), the TEACH Act amendment 
     removes the requirement that transmissions be received in 
     classrooms or similar places devoted to instruction unless 
     the recipient is an officer or employee of a governmental 
     body or is prevented by disability or special circumstances 
     from attending a classroom or similar place of instruction. 
     One of the great potential benefits of digital distance 
     education is its ability to reach beyond the physical 
     classroom, to provide quality educational experiences to all 
     students of all income levels, in cities and rural settings, 
     in schools and on campuses, in the workplace, at home, and at 
     times selected by students to meet their needs.
       In its place, the Act substitutes the requirement in 
     subparagraph (2)(C) that the transmission be made solely for, 
     and to the extent technologically feasible, the reception is 
     limited to students officially enrolled in the course for 
     which the transmission is made or governmental employees as 
     part of their official duties or employment. This requirement 
     is not intended to impose a general requirement of network 
     security. Rather, it is intended to require only that the 
     students or employees authorized to be recipients of the 
     transmission should be identified, and the transmission 
     should be technologically limited to such identified 
     authorized recipients through systems such as password access 
     or other similar measures.

             Additional safeguards to counteract new risks

       The digital transmission of works to students poses greater 
     risks to copyright owners than transmissions through analog 
     broadcasts. Digital technologies make possible the creation 
     of multiple copies, and their rapid and widespread 
     dissemination around the world. Accordingly, the TEACH Act 
     includes several safeguards not currently present in section 
     110(2).
       First, a transmitting body or institution seeking to invoke 
     the exemption is required to institute policies regarding 
     copyright and to provide information to faculty, students and 
     relevant staff members that accurately describe and promote 
     compliance with copyright law. Further, the transmitting 
     organization must provide notice to recipients that materials 
     used in connection with the course may be subject to 
     copyright protection. These requirements are intended to 
     promote an environment of compliance with the law, inform 
     recipients of their responsibilities under copyright law, and 
     decrease the likelihood of unintentional and uninformed acts 
     of infringement.
       Second, in the case of a digital transmission, the 
     transmitting body or institution is required to apply 
     technological measures to prevent (i) retention of the work 
     in accessible form by recipients to which it sends the work 
     for longer than the class session, and (ii) unauthorized 
     further dissemination of the work in accessible form by such 
     recipients. Measures intended to limit access to authorized 
     recipients of transmissions from the transmitting body or 
     institution are not addressed in this subparagraph (2)(D). 
     Rather, they are the subjects of subparagraph (2)(C).
       The requirement that technological measures be applied to 
     limit retention for no longer than the ``class session'' 
     refers back to the requirement that the performance be made 
     as an ``integral part of a class session.'' The duration of a 
     ``class session'' in asynchronous distance education would 
     generally be that period during which a student is logged on 
     to the server of the institution or governmental body making 
     the display or performance, but is likely to vary with the 
     needs of the student and with the design of the particular 
     course. It does not mean the duration of a particular course 
     (i.e., a semester or term), but rather is intended to 
     describe the equivalent of an actual single

[[Page 10233]]

     face-to-face mediated class session (although it may be 
     asynchronous and one student may remain online or retain 
     access to the performance or display for longer than another 
     student as needed to complete the class session). Although 
     flexibility is necessary to accomplish the pedagogical goals 
     of distance education, the Committee expects that a common 
     sense construction will be applied so that a copy or 
     phonorecord displayed or performed in the course of a 
     distance education program would not remain in the possession 
     of the recipient in a way that could substitute for 
     acquisition or for uses other than use in the particular 
     class session. Conversely, the technological protection 
     measure in subparagraph (2)(D)(ii) refers only to retention 
     of a copy or phonorecord in the computer of the recipient of 
     a transmission. The material to be performed or displayed 
     may, under the amendments made by the Act to section 112 and 
     with certain limitations set forth therein, remain on the 
     server of the institution or government body for the duration 
     of its use in one or more courses, and may be accessed by a 
     student each time the student logs on to participate in the 
     particular class session of the course in which the display 
     or performance is made. The reference to ``accessible form'' 
     recognizes that certain technological protection measures 
     that could be used to comply with subparagraph (2)(D)(ii) do 
     not cause the destruction or prevent the making of a digital 
     file; rather they work by encrypting the work and limiting 
     access to the keys and the period in which such file may be 
     accessed. On the other hand, an encrypted file would still be 
     considered to be in ``accessible form'' if the body or 
     institution provides the recipient with a key for use beyond 
     the class session.
       Paragraph (2)(D)(ii) provides, as a condition of 
     eligibility for the exemption, that a transmitting body or 
     institution apply technological measures that reasonably 
     prevent both retention of the work in accessible form for 
     longer than the class session and further dissemination of 
     the work. This requirement does not impose a duty to 
     guarantee that retention and further dissemination will never 
     occur. Nor does it imply that there is an obligation to 
     monitor recipient conduct. Moreover, the ``reasonably 
     prevent'' standard should not be construed to imply perfect 
     efficacy in stopping retention or further dissemination. The 
     obligation to ``reasonably prevent'' contemplates an 
     objectively reasonable standard regarding the ability of a 
     technological protection measure to achieve its purpose. 
     Examples of technological protection measures that exist 
     today and would reasonably prevent retention and further 
     dissemination, include measures used in connection with 
     streaming to prevent the copying of streamed material, such 
     as the Real Player ``Secret Handshake/Copy Switch'' 
     technology discussed Real Networks v. Streambox, 2000 WL 
     127311 (Jan. 18, 2000) or digital rights management systems 
     that limit access to or use of encrypted material downloaded 
     onto a computer. It is not the Committee's intent, by noting 
     the existence of the foregoing, to specify the use of any 
     particular technology to comply with subparagraph (2)(D)(ii). 
     Other technologies will certainly evolve. Further, it is 
     possible that, as time passes, a technological protection 
     measure may cease to reasonably prevent retention of the work 
     in accessible form for longer than the class session and 
     further dissemination of the work, either due to the 
     evolution of technology or to the widespread availability of 
     a hack that can be readily used by the public. In those 
     cases, a transmitting organization would be required to apply 
     a different measure.
       Nothing in section 110(2) should be construed to affect the 
     application or interpretation of section 1201. Conversely, 
     nothing in section 1201 should be construed to affect the 
     application or interpretation of section 110(2).

                     Transient and temporary copies

       Section 1(b)(2) of the TEACH Act implements the Register's 
     recommendation that liability not be imposed upon those who 
     participate in digitally transmitted performances and 
     displays authorized under this subsection by reason of copies 
     or phonorecords made through the automatic technical process 
     of such transmission, or any distribution resulting 
     therefrom. Certain modifications have been made to the 
     Register's recommendations to accommodate instances where the 
     recommendation was either too broad or not sufficiently broad 
     to cover the appropriate activities.
       The third paragraph added to the amended exemption under 
     section 1(b)(2) of the TEACH Act recognizes that transmitting 
     organizations should not be responsible for copies or 
     phonorecords made by third parties, beyond the control of the 
     transmitting organization. However, consistent with the 
     Register's concern that the exemption should not be 
     transformed into a mechanism for obtaining copies, the 
     paragraph also requires that such transient or temporary 
     copies stored on the system or network controlled or operated 
     by the transmitting body or institution shall not be 
     maintained on such system or network ``in a manner ordinarily 
     accessible to anyone other than anticipated recipients'' or 
     ``in a manner ordinarily accessible to such anticipated 
     recipients for a longer period than is reasonably necessary 
     to facilitate the transmissions'' for which they are made.
       The liability of intermediary service providers remains 
     governed by section 512, but, subject to section 512(d) and 
     section 512(e), section 512 will not affect the legal 
     obligations of a transmitting body or institution when it 
     selects material to be used in teaching a course, and 
     determines how it will be used and to whom it will be 
     transmitted as a provider of content.
       The paragraph refers to ``transient'' and ``temporary'' 
     copies consistent with the terminology used in section 512, 
     including transient copies made in the transmission path by 
     conduits and temporary copies, such as caches, made by the 
     originating institution, by service providers or by 
     recipients. Organizations providing digital distance 
     education will, in many cases, provide material from source 
     servers that create additional temporary or transient copies 
     or phonorecords of the material in storage known as 
     ``caches'' in other servers in order to facilitate the 
     transmission. In addition, transient or temporary copies or 
     phonorecords may occur in the transmission stream, or in the 
     computer of the recipient of the transmission. Thus, by way 
     of example, where content is protected by a digital rights 
     management system, the recipient's browser may create a cache 
     copy of an encrypted file on the recipient's hard disk, and 
     another copy may be created in the recipient's random access 
     memory at the time the content is perceived. The third 
     paragraph added to the amended exemption by section 1(b)(2) 
     of the TEACH Act is intended to make clear that those 
     authorized to participate in digitally transmitted 
     performances and displays as authorized under section 110(2) 
     are not liable for infringement as a result of such copies 
     created as part of the automatic technical process of the 
     transmission if the requirements of that language are met. 
     The paragraph is not intended to create any implication that 
     such participants would be liable for copyright infringement 
     in the absence of the paragraph.


                  subsection (c): ephemeral recordings

       One way in which digitally transmitted distance education 
     will expand America's educational capacity and effectiveness 
     is through the use of asynchronous education, where students 
     can take a class when it is convenient for them, not at a 
     specific hour designated by the body or institution. This 
     benefit is likely to be particularly valuable for working 
     adults. Asynchronous education also has the benefit of 
     proceeding at the student's own pace, and freeing the 
     instructor from the obligation to be in the classroom or on 
     call at all hours of the day or night.
       In order for asynchronous distance education to proceed, 
     organizations providing distance education transmissions must 
     be able to load material that will be displayed or performed 
     on their servers, for transmission at the request of 
     students. The TEACH Act's amendment to section 112 makes that 
     possible.
       Under new subsection 112(f)(1), transmitting organizations 
     authorized to transmit performances or displays under section 
     110(2) may load on their servers copies or phonorecords of 
     the performance or display authorized to be transmitted under 
     section 110(2) to be used for making such transmissions. The 
     subsection recognizes that it often is necessary to make more 
     than one ephemeral recording in order to efficiently carry 
     out digital transmissions, and authorizes the making of such 
     copies or phonorecords.
       Subsection 112(f) imposes several limitations on the 
     authorized ephemeral recordings. First, they may be retained 
     and used solely by the government body or educational 
     institution that made them. No further copies or phonorecords 
     may be made from them, except for copies or phonorecords that 
     are authorized by subsection 110(2), such as the copies that 
     fall within the scope of the third paragraph added to the 
     amended exemption under section 1(b)(2) of the TEACH Act. The 
     authorized ephemeral recordings must be used solely for 
     transmissions authorized under section 110(2).
       The Register's Report notes the sensitivity of copyright 
     owners to the digitization of works that have not been 
     digitized by the copyright owner. As a general matter, 
     subsection 112(f) requires the use of works that are already 
     in digital form. However, the Committee recognizes that some 
     works may not be available for use in distance education, 
     either because no digital version of the work is available to 
     the institution, or because available digital versions are 
     subject to technological protection measures that prevent 
     their use for the performances and displays authorized by 
     section 110(2). In those circumstances where no digital 
     version is available to the institution or the digital 
     version that is available is subject to technological 
     measures that prevent its use for distance education under 
     the exemption, section 112(f)(2) authorizes the conversion 
     from an analog version, but only conversion of the portion or 
     amount of such works that are authorized to be performed or 
     displayed under section 110(2). It should be emphasized that 
     subsection 112(f)(2) does not provide any authorization to 
     convert print or other analog versions of works into digital 
     format except as permitted in section 112(f)(2).

[[Page 10234]]



          Relationship to fair use and contractual obligations

       As the Register's Report makes clear ``critical to [its 
     conclusion and recommendations] is the continued availability 
     of the fair use doctrine.'' Nothing in this Act is intended 
     to limit or otherwise to alter the scope of the fair use 
     doctrine. As the Register's Report explains: ``Fair use is a 
     critical part of the distance education landscape. Not only 
     instructional performances and displays, but also other 
     educational uses of works, such as the provision of 
     supplementary materials or student downloading of course 
     materials, will continue to be subject to the fair use 
     doctrine. Fair use could apply as well to instructional 
     transmissions not covered by the changes to section 110(2) 
     recommended above. Thus, for example, the performance of more 
     than a limited portion of a dramatic work in a distance 
     education program might qualify as fair use in appropriate 
     circumstances.''
       The Register's Report also recommends that the legislative 
     history of legislation implementing its distance education 
     requirements make certain points about fair use. 
     Specifically, this legislation is enacted in recognition of 
     the following: (a) The fair use doctrine is technologically 
     neutral and applies to activities in the digital environment; 
     and (b) the lack of established guidelines for any particular 
     type of use does not mean that fair use is inapplicable.
       While the Register's Report also examined and discussed a 
     variety of licensing issues with respect to educational uses 
     not covered by exemptions or fair use, these issues were not 
     included in the Report's legislative recommendations that 
     formed the basis for the TEACH Act. It is the view of the 
     Committee that nothing in this Act is intended to affect in 
     any way the relationship between express copyright exemptions 
     and license restrictions.

                    Nonapplicability to secure tests

       The Committee is aware and deeply concerned about the 
     phenomenon of school officials who are entrusted with copies 
     of secure test forms solely for use in actual test 
     administrations and using those forms for a completely 
     unauthorized purpose, namely helping students to study the 
     very questions they will be asked on the real test. The 
     Committee does not in any way intend to change current law 
     with respect to application of the Copyright Act or to 
     undermine or lessen in any way the protection afforded to 
     secure tests under the Copyright Act. Specifically, this 
     section would not authorize a secure test acquired solely for 
     use in an actual test administration to be used for any other 
     purpose.


                       Subsection (d): PTO Report

       The report requested in subsection (d) requests information 
     about technological protection systems to protect digitized 
     copyrighted works and prevent infringement. The report is 
     intended for the information of Congress and shall not be 
     construed to have any effect whatsoever on the meaning, 
     applicability, or effect of any provision of the Copyright 
     Act in general or the TEACH Act in particular.

  Mrs. FEINSTEIN. Madam President, today I rise in strong support of S. 
487, the Technology, Education, and Copyright Harmonization, TEACH, 
Act. This Act expands the distance learning exemption in our copyright 
law, acknowledging that changes in technology sometimes require changes 
in the law. In making this change, the TEACH Act places new limits on 
the rights of copyright owners. These limits, however, are established 
in such a way that they will benefit non-profit educational 
institutions and their students, but hopefully without exposing 
copyrighted works to any further unauthorized use.
  The drafters of the Constitution acknowledged the importance of 
creative works--and recognized the property rights of the creators of 
those works--in the very text of the Constitution itself. The Copyright 
Clause of the Constitution, in protecting the rights of American 
creators everywhere, has directly translated into the most innovative 
environment for the creation of creative works we've ever seen. This 
creativity benefits consumers and our economy as a whole.
  Never in our history have we seen such a plethora of choices in 
books, movies, television, software, and music. One look at the 
statistics demonstrates the staggering importance copyrighted works 
have to the well-being of not only my home state of California, but 
also the economy of the entire Nation.
  It has been reported that the copyright industries are creating jobs 
at three times the rate of the rest of the economy. These industries 
have a surplus balance of trade with every single country in the world, 
and that last year they accounted for 5 percent of the U.S. Gross 
Domestic Product. Few other industries can boast of such a successful 
record, and the protection we grant to copyrighted works is directly 
responsible for that success.
  The message is clear. Striking the appropriate balance in copyright 
protection is vital to maintaining consumer choice, and in maintaining 
this vibrant part of the American economy. Sufficient protection means 
the continue investment in the production of creative works, which 
results in greater choices for consumers.
  Insufficient protection of copyrighted works, on the other hand, will 
negatively affect the ability and desire of creators and lawful 
distributors of such works to make the necessary investment of time, 
money and other resources to continue to create and offer quality works 
to the public.
  That is why we must carefully consider any degradation of that 
protection, even when proposed limitations would benefit other 
important segments of our society, such as the educational community.
  I believe that this legislation strikes the appropriate balance by 
allowing accredited, nonprofit educational institutions to make certain 
uses of copyrighted works, but requiring them to technologically 
protect those works to prevent unauthorized uses by others.
  The application of appropriate technological protection to 
copyrighted works is increasingly important as we move from the analog 
to the digital world Technological protection will facilitate the 
availability of copyrighted works in high-quality, digital formats and 
in global, networked environments.
  That is why the provisions of this legislation directing the 
Undersecretary of Commerce for Intellectual Property to look at what 
protective technologies are out there will be of great importance to 
this Committee in the near future as the online environment and the 
world of e-commerce develops.
  Questions such as whether unilateral protection applied to works by 
copyright owners will provide a sufficiently secure environment or 
whether bilateral technologies--which invoke a ``handshake'' of sorts 
between the work and the machine used to access the work--should be 
examined more closely have yet to be answered.
  This study should help us give us an invaluable resource with regard 
to renewable, ungradeable, and robust forms of protection that will 
allow valuable copyrighted works to move freely and securely through 
the digital environment.


                           Amendment No. 793

  Mr. REID. Madam President, Senators Hatch and Leahy have an amendment 
at the desk, and I ask for its consideration.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The legislative clerk read as follows:

       The Senator from Nevada [Mr. Reid], for Mr. Hatch, for 
     himself and Mr. Leahy, proposes an amendment numbered 793.

  Mr. REID. I ask unanimous consent reading of the amendment be 
dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

(Purpose: To clarify the application of certain technological measures)

       On page 9, lines 14 and 15 strike ``, in the ordinary 
     course of their operations,'' and insert ``reasonably''.

  Mr. REID. Madam President, I ask unanimous consent that the amendment 
be agreed to.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment (No. 793) was agreed to.
  Mr. REID. Madam President, I ask unanimous consent the committee 
substitute amendment, as amended, be agreed to, the bill be read a 
third time and passed, an amendment at the desk to the title be agreed 
to, the motion to reconsider be laid upon the table, and that any 
statements relating to the bill be printed in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The committee amendment in the nature of a substitute, as amended, 
was agreed to.

[[Page 10235]]

  The bill (S. 487), as amended, was read the third time and passed.
  The amendment (No. 794) was agreed to, as follows:

                     (Purpose: To amend the title)

       Amend the title so as to read: ``A bill to amend chapter 1 
     of title 17, United States Code, relating to the exemption of 
     certain performances or displays for educational uses from 
     copyright infringement provisions, to provide that the making 
     of copies or phonorecords of such performances or displays is 
     not an infringement under certain circumstances, and for 
     other purposes.''.

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