[Congressional Record (Bound Edition), Volume 153 (2007), Part 4]
[Extensions of Remarks]
[Pages 4785-4787]
[From the U.S. Government Publishing Office, www.gpo.gov]




                INTRODUCTION OF THE FAIR USE ACT OF 2007

                                 ______
                                 

                           HON. RICK BOUCHER

                              of virginia

                    in the house of representatives

                       Tuesday, February 27, 2007

  Mr. BOUCHER. Madam Speaker, I am pleased to be introducing the 
Freedom And Innovation Revitalizing U.S. Entrepreneurship Act of 2007. 
Like other bills I have introduced in earlier years, the FAIR USE Act 
of 2007 is intended to promote innovation, encourage the introduction 
of new technology, enhance library preservation efforts and protect the 
fair use rights of consumers.
  As more fully described in the attached section-by-section analysis, 
this bill differs fundamentally from H.R. 107 and H.R. 1201, as 
proposed in the 108th and 109th Congresses, respectively. For example, 
the revised bill does not contain the provision which would have 
established a fair use defense to the act of circumvention. I continue 
to believe that there should be such an exemption in the law, but 
content owners have expressed concern that enactment of such a 
provision could lead to widespread redistribution of audiovisual and 
other works.
  In an effort to address their concerns, I have instead crafted 
specific exemptions to section 1201 of the Digital Millennium Copyright 
Act which do not pose a comparable potential threat to their business 
models. For example, the proposed legislation would codify the decision 
by the Register of Copyrights, as affirmed in a determination made by 
the Librarian of Congress under section 1201(a)(1) of the DMCA, to 
allow consumers to ``circumvent'' digital locks in six discrete areas. 
The bill also contains six narrowly crafted additional exemptions that 
are a natural extension of these

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exemptions. For example, given the central role that libraries and 
archives play in our society in ensuring free speech and continuing 
access to creative works, the bill includes a provision to ensure that 
they can circumvent a digital lock to preserve or secure a copy of a 
work or replace a copy that is damaged, deteriorating, lost, or stolen.
  The bill contains other new elements. For example, it would limit the 
availability of statutory damages against individuals and firms who may 
be found to have engaged in contributory infringement, inducement of 
infringement, vicarious liability or other indirect infringement. Given 
the increasing extent to which content companies are on the receiving 
end of lawsuits, I would hope they would see the value of this element 
of the bill.
  I have more narrowly crafted the provision codifying the Supreme 
Court's Betamax decision to eliminate any uncertainty about a potential 
negative impact on the Supreme Court's holding in the Grokster case.
  I look forward to working with my colleagues and all interested 
parties in an effort to properly balance the rights of content owners, 
consumers and other constructive users of content.
  I will welcome their suggestions about how the measure might be 
further improved as it moves forward in the legislative process.


                          fair use act of 2007

       Section 1 sets forth the title of the bill, the ``Freedom 
     And Innovation Revitalizing U.S. Entrepreneurship Act of 
     2007.''
       Section 2 would make two amendments to the Copyright Act.
       Subsection (2)(a) would limit the availability of statutory 
     damages against individuals and firms who may be found to 
     have engaged in contributory infringement, inducement of 
     infringement, vicarious liability, or other indirect 
     infringement. Congress developed the statutory damages award 
     process in a world of physical works, principally paper and 
     vinyl. Today, in a world in which silicon is the principal 
     medium of storage, statutory damages can be so large and 
     disproportionate that entrepreneurs and consumer electronics 
     and information technology companies are declining to bring 
     new technology to market out of fear that they could be 
     bankrupted by an adverse finding of secondary liability--even 
     in cases in which they believed on the advice of counsel that 
     their new innovative hardware or software products would be 
     found legal if they survived costly litigation with its 
     highly intrusive discovery. Under the bill, statutory damages 
     would remain available for conduct that no reasonable person 
     could have believed to be lawful. With this condition in the 
     law, entrepreneurs, venture capitalists, and consumer 
     electronics and information technology companies would feel 
     more confident in going to court, if necessary, for a fair 
     hearing on the merits, and aggrieved parties could get relief 
     from scofflaws. Moreover, actual damages would continue to 
     remain available to a person harmed by secondary 
     infringement.
       Subsection (2)(b) would effectively codify the Supreme 
     Court's holding in the Betamax decision with respect to 
     hardware devices. In Sony Corp. v. Universal Ciry Studios, 
     Inc., 464 U.S. 417 (1984), the Court held that because the 
     Betamax videocassette recorder was capable of substantial, 
     commercially significant non-infringing uses, two studios--
     which were concerned about consumers making in-home off-air 
     tapes of television broadcasts--could not hold Sony 
     contributorily liable for copyright infringement based on 
     other possible or even predominate infringing uses. To 
     provide greater legal certainty to legitimate CE companies 
     bringing new products to market in the wake of the 
     uncertainty created by the Supreme Court's decision in Metro-
     Goldwyn-Mayer Studios v. Grokster, Ltd., 545 U.S. 913 (2005), 
     subsection (b) would immunize these and other hardware 
     companies, as well as entrepreneurs, from copyright 
     infringement liability based on the design, manufacture or 
     distribution of hardware devices (or components of those 
     devices) that are capable of a substantial, commercially 
     significant non-infringing use. The enactment of this 
     clarifying provision, for avoidance of doubt with respect to 
     hardware devices, is not intended to have any negative effect 
     on the continued availability and application of the Betamax 
     standard with respect to services and software products or to 
     non-commercial activities.
       Section 3 would amend the Digital Millennium Copyright Act.
       Subsection (3)(a) would codify the decision by the Register 
     of Copyrights, as affirmed in a determination made by the 
     Librarian of Congress under section 1201(a)(1) of the DMCA, 
     to allow consumers to ``circumvent'' digital locks in six 
     discrete areas. The determination was made after a thorough 
     rule making process, in which the Register took extensive 
     testimony from rights holders, consumers, and other 
     interested parties. By codifying the Librarian's 
     determination, Congress would ensure that these practices may 
     continue, without the need for extensive review by the 
     Register and the Librarian under section 1201(a)(1) three 
     years from now. The importance of these exemptions was 
     demonstrated by the Register's extensive supporting analysis. 
     Making them permanent would create greater certainty among 
     various user communities. The need to codify the exemptions 
     is all the more compelling now that TracFone has challenged 
     the entire DMCA rulemaking process as an unlawful delegation 
     of legislative authority.
       As determined by the Librarian in the Final Rule published 
     in the Federal Register on November 27, 2006, persons making 
     non-infringing uses of the following six classes of works 
     will not be subject to the prohibition against circumventing 
     access controls of the DMCA:
       1. Audiovisual works included in the educational library of 
     a college or university's film or media studies department, 
     when circumvention is accomplished for the purpose of making 
     compilations of portions of those works for educational use 
     in the classroom by media studies or film professors.
       2. Computer programs and video games distributed in formats 
     that have become obsolete and that require the original media 
     or hardware as a condition of access.
       3. Computer programs protected by dongles that prevent 
     access due to malfunction or damage and which are obsolete.
       4. Literary works distributed in ebook format when all 
     existing ebook editions of the work contain access controls 
     that prevent the enabling either of the book's read-aloud 
     function or of screen readers that render the text into a 
     specialized format.
       5. Computer programs in the form of firmware that enable 
     wireless telephone handsets to connect to a wireless 
     telephone communication network, when circumvention is 
     accomplished for the sole purpose of lawfully connecting to a 
     wireless telephone communication network.
       6. Sound recordings distributed in compact disc format and 
     protected by technological protection measures that control 
     access to lawfully purchased works and create or exploit 
     security flaws or vulnerabilities that compromise the 
     security of personal computers when circumvention is 
     accomplished solely for the purpose of good faith testing, 
     investigating, or correcting such security flaws or 
     vulnerabilities.
       As an extension of the Librarian of Congress's 
     determination, subsection (3)(b) of the FAIR USE Act would 
     enable individuals in six narrowly defined circumstances to 
     circumvent technological protection measures:
       Paragraph (i) would extend the Librarian's determination 
     with respect to excerpts of audiovisual works for use in all 
     classrooms (instead of just in college media studies 
     classrooms). Under the provision, an instructor could 
     circumvent a digital locks on audiovisual works included in 
     the collection of a library or an archives in order to make 
     compilations of portions of those works for educational use 
     in a classroom at all grade levels.
       Paragraph (ii) would authorize consumers to circumvent a 
     lock on a DVD or other audiovisual work in order to skip past 
     commercials at the beginning of it or to bypass personally 
     objectionable content (such as pornographic scenes) contained 
     in the work. The provision does not authorize consumers to 
     make back up DVDs for archival or any other purpose.
       Paragraph (iii) would authorize consumers to transmit a 
     work over a home or personal network but not to circumvent 
     for purposes of uploading that work to the Internet.
       This provision would ensure that consumers can make fair 
     use of content they have lawfully acquired, as long as they 
     do not engage in the mass, indiscriminate redistribution of 
     that content over the Internet.
       Paragraph (iv) would allow individuals to access public 
     domain works that are in a collection of works made up 
     primarily of public domain works. It thus would preclude 
     content owners from denying the public access to public 
     domain works simply by repackaging them with one or more 
     copyrighted works and then applying a digital lock to 
     restrict or deny access to all of the works.
       Paragraph (v) would advance long-established First 
     Amendment rights by authorizing reporters, teachers, and 
     others to circumvent digital locks blocking access to works 
     of substantial public interest, when circumvention is 
     accomplished solely for purposes of criticism, comment, news 
     reporting, scholarship, or research.
       Paragraph (vi) would authorize circumvention of 
     technological measures that effectively control access to 
     copyrighted works for the purpose of enabling a library or an 
     archive to preserve or secure a copy of a work or to replace 
     a copy that is damaged, deteriorating, lost, or stolen. This 
     would ensure that libraries and archives can continue to 
     engage in activities specifically authorized by section 108 
     of the Copyright Act.
       The exceptions to the DMCA set forth in subsections (3)(a) 
     and (b) are based on extensive comments and testimony 
     received by the Copyright Office and the Congress. Their 
     enactment is not intended and should not be construed as in 
     any way limiting other rights or interpretations of either 
     the Copyright Act or the DMCA as to which consumers and other 
     users have had their rights vindicated in the courts or those 
     which have not been addressed by the courts.

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