[House Report 105-436]
[From the U.S. Government Publishing Office]



105th Congress                                                   Report
 2nd Session            HOUSE OF REPRESENTATIVES                105-436
_______________________________________________________________________


 
                   VESSEL HULL DESIGN PROTECTION ACT

                                _______
                                

 March 11, 1998.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Coble, from the Committee on the Judiciary, submitted the following

                              R E P O R T

                        [To accompany H.R. 2696]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to whom was referred the 
bill (H.R. 2696) to amend title 17, United States Code, to 
provide for protection of certain original designs, having 
considered the same, reports favorably thereon with an 
amendment and recommends that the bill as amended do pass.

                           TABLE OF CONTENTS

                                                                  

                                                                 Page
The Amendment..............................................           1
Purpose and Summary........................................          10
Background and Need for Legislation........................          10
Hearings...................................................          13
Committee Consideration....................................          13
Committee Oversight Findings...............................          14
Committee on Government Reform and Oversight Findings......          14
New Budget Authority and Tax Expenditures..................          14
Congressional Budget Office Estimate.......................          14
Constitutional Authority Statement.........................          15
Section-by-Section Analysis and Discussion.................          15
Changes in Exesting Law Made by the Bill, as Reported......          20

    The amendment is as follows:
    Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

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

SEC. 2. PROTECTION OF CERTAIN ORIGINAL DESIGNS.

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

              ``CHAPTER 12--PROTECTION OF ORIGINAL DESIGNS

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

``Sec. 1201. Designs protected

    ``(a) Designs Protected.--
            ``(1) In general.--The designer or other owner of an 
        original design of a useful article which makes the article 
        attractive or distinctive in appearance to the purchasing or 
        using public may secure the protection provided by this chapter 
        upon complying with and subject to this chapter.
            ``(2) Vessel hulls or component parts thereof.--The design 
        of a vessel hull or component part of a vessel hull, including 
        a plug or mold, is subject to protection under this chapter, 
        notwithstanding section 1202(4).
    ``(b) Definitions.--For the purpose of this chapter, the following 
terms have the following meanings:
            ``(1) A design is `original' if it is the result of the 
        designer's creative endeavor that provides a distinguishable 
        variation over prior work pertaining to similar articles which 
        is more than merely trivial and has not been copied from 
        another source.
            ``(2) A `useful article' is a vessel hull or a component 
        part thereof, including a plug or mold, which in normal use has 
        an intrinsic utilitarian function that is not merely to portray 
        the appearance of the article or to convey information. An 
        article which normally is part of a useful article shall be 
        deemed to be a useful article.
            ``(3) A `vessel' is a craft, especially one larger than a 
        rowboat, designed to navigate on water.
            ``(4) A `hull' is the frame or body of a vessel, exclusive 
        of masts, sails, yards, and rigging.
            ``(5) A `plug' means a device or model used to make a mold 
        for the purpose of exact duplication, regardless of whether the 
        device or model has an intrinsic utilitarian function that is 
        not only to portray the appearance of the product or to convey 
        information.
            ``(6) A `mold' means a matrix or form in which a substance 
        for material is used, regardless of whether the matrix or form 
        has an intrinsic utilitarian function that is not only to 
        portray the appearance of the product or to convey information.

``Sec. 1202. Designs not subject to protection

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

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

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

``Sec. 1204. Commencement of protection

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

``Sec. 1205. Term of protection

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

``Sec. 1206. Design notice

    ``(a) Contents of Design Notice.--(1) Whenever any design for which 
protection is sought under this chapter is made public under section 
1210(b), the owner of the design shall, subject to the provisions of 
section 1207, mark it or have it marked legibly with a design notice 
consisting of--
            ``(A) the words `Protected Design', the abbreviation 
        `Prot'd Des.', or the letter `D' with a circle, or the symbol 
        *D*;
            ``(B) the year of the date on which protection for the 
        design commenced; and
            ``(C) the name of the owner, an abbreviation by which the 
        name can be recognized, or a generally accepted alternative 
        designation of the owner.
Any distinctive identification of the owner may be used for purposes of 
subparagraph (C) if it has been approved and recorded by the 
Administrator before the design marked with such identification is 
registered.
    ``(2) After registration, the registration number may be used 
instead of the elements specified in subparagraphs (B) and (C) of 
paragraph (1).
    ``(b) Location of Notice.--The design notice shall be so located 
and applied as to give reasonable notice of design protection while the 
vessel hull embodying the design is passing through its normal channels 
of commerce.
    ``(c) Subsequent Removal of Notice.--When the owner of a design has 
complied with the provisions of this section, protection under this 
chapter shall not be affected by the removal, destruction, or 
obliteration by others of the design notice on an article.

``Sec. 1207. Effect of omission of notice

    ``(a) Actions With Notice.--Except as provided in subsection (b), 
the omission of the notice prescribed in section 1206 shall not cause 
loss of the protection under this chapter or prevent recovery for 
infringement under this chapter against any person who, after receiving 
written notice of the design protection, begins an undertaking leading 
to infringement under this chapter.
    ``(b) Actions Without Notice.--The omission of the notice 
prescribed in section 1406 shall prevent any recovery under section 
1223 against a person who began an undertaking leading to infringement 
under this chapter before receiving written notice of the design 
protection. No injunction shall be issued under this chapter with 
respect to such undertaking unless the owner of the design reimburses 
that person for any reasonable expenditure or contractual obligation in 
connection with such undertaking that was incurred before receiving 
written notice of the design protection, as the court in its discretion 
directs. The burden of providing written notice of design protection 
shall be on the owner of the design.

``Sec. 1208. Exclusive rights

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

``Sec. 1209. Infringement

    ``(a) Acts of Infringement.--Except as provided in subjection (b), 
it shall be infringement of the exclusive rights in a design protected 
under this chapter for any person, without the consent of the owner of 
the design, within the United States and during the term of such 
protection, to--
            ``(1) make, have made, or import, for sale or for use in 
        trade, any infringing article as defined in subsection (e); or
            ``(2) sell or distribute for sale or for use in trade any 
        such infringing article.
    ``(b) Acts of Sellers and Distributors.--A seller or distributor of 
an infringing article who did not make or import the vessel hull shall 
be deemed to have infringed on a design protected under this chapter 
only if that person--
            ``(1) induced or acted in collusion with a manufacturer to 
        make, or an importer to import such article, except that merely 
        purchasing or giving an order to purchase a vessel hull in the 
        ordinary course of business shall not of itself constitute such 
        inducement or collusion; or
            ``(2) refused or failed, upon the request of the owner of 
        the design, to make a prompt and full disclosure of that 
        person's source of such vessel hull, and that person orders or 
        reorders such article after having receiving notice by 
        registered or certified mail of the protection subsisting in 
        the design.
    ``(c) Acts Without Knowledge.--It shall not be infringement under 
this section to make, have made, import, sell, or distribute, any 
vessel hull embodying a design which was created without knowledge that 
a design was protected under this chapter and was copied from such 
protected design.
    ``(d) Acts in Ordinary Course of Business.--A person who 
incorporates into that person's product of manufacture an infringing 
article acquired from others in the ordinary course of business, or 
who, without knowledge of the protected design embodied in an 
infringing article, makes or processes the infringing article for the 
account of another person in the ordinary course of business, shall not 
be deemed to have infringed the rights in that design under this 
chapter except under a condition contained in paragraph (1) or (2) of 
subsection (b). Accepting an order or reorder from the source of the 
infringing article shall be deemed ordering or reordering within the 
meaning of subsection (b)(2).
    ``(e) Infringing Article Defined.--As used in this section, an 
`infringing article' is any article the design of which has been copied 
from a design protected under this chapter, without the consent of the 
owner of the protected design. An infringing article is not an 
illustration or picture of a protected design in an advertisement, 
book, periodical, newspaper, photograph, broadcast, motion picture, or 
similar medium or an article that embodies, in common with the 
protected design, only elements described in section 1202. A design 
shall not be deemed to have been copied from a protected design if it 
is original and not substantially similar in appearance to a protected 
design.
    ``(f) Establishing Originality.--The party to any action or 
proceeding under this chapter who alleges rights under this chapter in 
a design shall have the burden of establishing the design's originality 
whenever the opposing party introduces an earlier work which is 
identical to such design, or so similar as to make prima facie showing 
that such design was copied from such work.
    ``(g) Reproduction for Teaching or Analysis.--It is not an 
infringement of the exclusive rights of a design owner for a person to 
reproduce the design in a vessel hull or in any other form solely for 
the purpose of teaching, analyzing, or evaluating the appearance, 
concepts, or techniques embodied in the design, or the function of the 
vessel hull embodying the design.

``Sec. 1210. Application for registration

    ``(a) Time Limit for Application for Registration.--Protection 
under this chapter shall be lost if application for registration of the 
design is not made within one year after the date on which the design 
is first made public.
    ``(b) When Design Is Made Public.--A design is made public when an 
existing vessel hull embodying the design is anywhere publicly 
exhibited, publicly distributed, or offered for sale or sold to the 
public by the owner of the design or with the owner's consent.
    ``(c) Application by Owner of Design.--Application for registration 
may be made by the owner of the design.
    ``(d) Contents of Application.--The application for registration 
shall be made to the Administrator and shall state--
            ``(1) the name and address of the designer or designers of 
        the design;
            ``(2) the name and address of the owner if different from 
        the designer;
            ``(3) the specific name of the vessel hull embodying the 
        design;
            ``(4) the date, if any, that the design was first made 
        public, if such date was earlier than the date of the 
        application;
            ``(5) affirmation that the design has been fixed in a 
        useful article; and
            ``(6) such other information as may be required by the 
        Administrator.
The application for registration may include a description setting 
forth the salient features of the design, but the absence of such a 
description shall not prevent registration under this chapter.
    ``(e) Sworn Statement.--The application for registration shall be 
accompanied by a statement under oath by the applicant or the 
applicant's duly authorized agent or representative, setting forth, to 
the best of the applicant's knowledge and belief--
            ``(1) that the design is original and was created by the 
        designer or designers named in the application;
            ``(2) that the design has not previously been registered on 
        behalf of the applicant or the applicant's predecessor in 
        title; and
            ``(3) that the applicant is the person entitled to 
        protection and to registration under this chapter.
If the design has been made public with the design notice prescribed in 
section 1406, the statement shall also described the exact form and 
position of the design notice.
    ``(f) Effect of Errors.--(1) Error in any statement or assertion as 
to the utility of the vessel hull named in the application, the design 
of which is sought to be registered, shall not affect the protection 
secured under this chapter.
    ``(2) Errors in omitting a joint designer or in naming an alleged 
joint designer shall not affect the validity of the registration, or 
the actual ownership or the protection of the design, unless it is 
shown that the error occurred with deceptive intent.
    ``(g) Design Made in Scope of Employment.--In a case in which the 
design was made within the regular scope of the designer's employment 
and individual authorship of the design is difficult or impossible to 
ascribe and the application so states, the name and address of the 
employer for whom the design was made may be stated instead of that of 
the individual designer.
    ``(h) Pictorial Representation of Design.--The application for 
registration shall be accompanied by two copies of a drawing or other 
pictorial representation of the vessel hull having one or more views, 
adequate to show the design, in a form and style suitable for 
reproduction, which shall be deemed a part of the application.
    ``(i) Design in More Than One Useful Article.--If the 
distinguishing elements of a design are in substantially the same form 
in different vessel hulls, the design shall be protected as to all such 
vessel hulls when protected as to one of them, but not more than one 
registration shall be required for the design.
    ``(j) Application for More Than One Design.--More than one design 
may be included in the same application under such conditions as may be 
prescribed by the Administrator. For each design included in an 
application the fee prescribed for a single design shall be paid.

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

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

``Sec. 1212. Oaths and acknowledgments

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

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

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

``Sec. 1214. Certification of registration

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

``Sec. 1215. Publication of announcements and indexes

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

``Sec. 1216. Fees

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

``Sec. 1217. Regulations

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

``Sec. 1218. Copies of records

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

``Sec. 1219. Correction of errors in certificates

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

``Sec. 1220. Ownership and transfer

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

``Sec. 1221. Remedy for infringement

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

Sec. 1222. Injunctions

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

``Sec. 1223. Recovery for infringement

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

``Sec. 1224. Power of court over registration

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

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

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

``Sec. 1226. Penalty for false marking

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

``Sec. 1227. Penalty for false representation

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

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

    ``(a) Regulations.--The Secretary of the Treasury and the United 
States Postal Service shall separately or jointly issue regulations for 
the enforcement of the rights set forth in section 1208 with respect to 
importation. These regulations may require, as a condition for the 
exclusion of articles from the United States, that the person seeking 
exclusion take any one or more of the following actions:
            ``(1) Obtain a court order enjoining, or an order of the 
        International Trade Commission under section 337 of the Tariff 
        Act of 1930 excluding, importation of the articles.
            ``(2) Furnish proof that the design involved is protected 
        under this chapter and that the importation of the articles 
        would infringe the rights in the design under this chapter.
            ``(3) Post a surety bond for any injury that may result if 
        the detention or exclusion of the articles proves to be 
        unjustified.
    ``(b) Seizure and Forfeiture.--Articles imported in violation of 
the rights set forth in section 1208 are subject to seizure and 
forfeiture in the same manner as property imported in violation of the 
customs laws. Any such forfeited articles shall be destroyed as 
directed by the Secretary of the Treasury or the court, as the case may 
be, except that the articles may be returned to the country of export 
whenever it is shown to the satisfaction of the Secretary of the 
Treasury that the importer had no reasonable grounds for believing that 
his or her acts constituted a violation of the law.

``Sec. 1229. Relation to design patent and copyright law

    ``The issuance of a design patent under title 35 for an original 
design for an article of manufacture, or the issuance of a copyright 
registration under title 17 for an original design, shall terminate any 
protection of the original design under this chapter.

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

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

``Sec. 1231. Administrator

    ``The Administrator and Office of the Administrator referred to in 
this chapter shall be the Register of Copyrights and the Copyrights 
Office of the Library of Congress, respectively.

``Sec. 1232. No retroactive effect

    ``Protection under this chapter shall not be available for any 
design that has been made public under section 1209(b) before the 
effective date of this chapter.''.

SEC. 3. CONFORMING AMENDMENTS.

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

``12. Protection of Original Designs........................    1201''.
    (b) Jurisdiction of District Courts Over Design Actions.--(1) 
Section 1338(c) of title 28, United States Code, is amended by 
inserting ``, and to exclusive rights in designs under chapter 12 of 
title 17,'' after ``title 17''.
    (2)(A) The section heading for section 1338 of title 28, United 
States Code, is amended by inserting ``designs,'' after ``mask 
works,''.
    (B) The item relating to section 1338 in the table of sections at 
the beginning of chapter 85 of title 28, United States Code, is amended 
by inserting ``designs,'' after ``mask works,''.
    (c) Place of Design Actions.--Section 1400(a) of title 28, United 
States Code, is amended by inserting ``or designs'' after ``mask 
works,''.
    (d) Actions Against the United States.--Section 1498(e) of title 
28, United States Code, is amended by inserting ``, and to exclusive 
rights in designs under chapter 12 of title 17,'' after ``title 17''.

SEC. 4. EFFECTIVE DATE.

    The amendments made by sections 2 and 3 shall take effect one year 
after the date of the enactment of this Act.

                          Purpose and Summary

    The purpose of H.R. 1252, the ``Vessel Hull Design 
Protection Act,'' is to offer limited protection for original 
designs of vessel hulls which are subject to misappropriation 
by persons who indulge in a marine industry practice known as 
``hull splashing.''

                  Background and Need For Legislation

                  General Inadequacies of Present Law

    Since 1789, American intellectual property law and unfair 
trade statutes have evolved to afford substantial protection 
for individuals and business entities wishing to prevent the 
misappropriation of their works of authorship, inventions, and 
reputations. Nonetheless, in recent years it has become more 
apparent that this presently-constituted body of law is 
inadequate to serve the needs of certain designers, including 
those affiliated with the marine manufacturing industry. As 
discussed below, designs of useful articles are frequently left 
unprotected in the United States because safeguards available 
under patent, copyright, and trademark law are too time-
consuming or expensive to acquire, or both.

                             Design Patents

    The Design Patent Act of 1954 is codified at Section 171 of 
Title 35 of the U.S. Code. This statute allows a person to 
obtain a design patent for ``. . . any new, original, and 
ornamental design for an article of manufacture . . .,'' and 
provides that all provisions relating to patents for inventions 
(utility patents) also apply.
    More specifically, anyone wishing to obtain a design patent 
for an article of manufacture must show that the design is:
          1. Novel. Would an ``ordinary observer,'' viewing the 
        new design as a whole, consider it to be different 
        from, rather than a modification of, an already 
        existing design?
          2. Nonobvious. Section 103 of the Patent Act requires 
        utility patents to be ``nonobvious;'' that is, ``the 
        differences between the subject matter . . . to be 
        patented and the prior art must be such that the 
        subject matter as a whole would not have been obvious 
        when the invention was made to a person having ordinary 
        skill in the relevant art . . .'' (italics added). 
        Erratically developed and applied through the years, 
        case law on this point suggests that nonobviousness 
        should be measured in terms of a ``designer of ordinary 
        capability who designs articles of the type presented 
        in the application.'' In re Nalbandian, 661 F.2d 1214, 
        1216 (C.C.P.A. 1981).
          3. Ornamental. A design patent must create a pleasing 
        appearance.
          4. Not Functional. If a design is ``primarily 
        functional rather than ornamental,'' or if it is 
        ``dictated by functional considerations,'' it is not 
        patentable. Power Control Corp. v. Hybrinetics, Inc., 
        806 F. 2d 234, 238 (Fed. Cir. 1986).
    As a practical matter, anyone who secures a design patent 
enjoys a monopoly over the use of the design for 14 years. But 
the difficulty in meeting these extraordinarily high standards, 
combined with the costs and delay associated with researching 
prior art, dissuade many designers from pursuing this option.

           Copyright and Design Protection of Useful Articles

    Section 102 of Title 17 of the U.S. Code states that ``. . 
. copyright protection subsists in original works of authorship 
fixed in any tangible medium of expression . . . from which 
they can be perceived, reproduced, or otherwise communicated, 
either directly or with the aid of a machine or device.''
    In addition, Section 101 of the Copyright Act of 1976 
affords protection to ``useful'' articles. Pursuant to this 
development, a useful article may be copyrightable if it has an 
intrinsic utilitarian function that is not merely to portray 
the appearance of the article or to convey information. The 
relevant design must incorporate pictorial, graphic, or 
sculptural features that can be identified separately from, and 
are capable of existing independently of, the utilitarian 
aspects of the article. For the most part, ``conceptual'' 
separability is enough to merit protection; that is, an 
observer must see the article in part as a work of art, not 
just an elegant functional item.
    The benefits of applying for design protection under the 
Copyright Act are manifest: instant protection upon creation, 
relatively quick and inexpensive registration, and the 
preserved option of applying later for design patent 
protection. Nonetheless, courts have inconsistently applied 
different standards when reviewing the merits of design claims; 
in fact, many designs are rejected as ``unoriginal'' or 
``functional.'' Design protection under present copyright law 
is therefore spotty.

               Trademark Protection of Industrial Design

    While some states have their own trademark law, federal law 
as prescribed by the Lanham Act (15 U.S.C. Sec. 1051, et. seq.) 
is much preferred as it offers nationwide protection. In brief, 
when an owner of a mark registers it with the Patent and 
Trademark Office under the Lanham Act, he or she enjoys the 
exclusive right to use that mark in connection with goods in 
commerce. No person or business entity may use the same mark or 
one of ``near resemblance'' in connection with other goods in 
commerce so as to confuse or mislead consumers.
    Trademark law acknowledges that the consuming public makes 
a connection between a symbol that represents the attributes of 
a given product and that product. This explains why industrial 
designs usually cannot acquire protection under the Lanham Act; 
that is, product design features are generally not distinctive 
in a trademark sense. Unlike protected marks, they are not 
recognized by the public as identifying a product source.
    The time needed to acquire trademark status combined with 
the absence of enforceable rights up to that point also 
discourage designers from seeking protection under the Lanham 
Act.

                   Abridged History of Design Reform

    The initial attempt to enact a federal design protection 
statute with broad, industry-wide application occurred in 1914, 
and was followed by sporadic efforts to resurrect the issue in 
other Congresses thereafter. These bills took one of two forms: 
changes to copyright law or a ``relaxation'' of the 
restrictions placed on design patents. Although the Senate 
included a design provision in its version of the Copyright Act 
amendments of 1976, it was deleted in conference. No other 
bill, before or since, has come close to enactment.
    What accounts for this legislative track record? Critics 
from the academy as well as private industry have expressed 
their concerns that design protection possibly upsets a 
critical balance struck in intellectual property law, 
especially the law of patents: namely, that the promotion of 
innovation must, at some point, give way to imitation and 
refinement through imitation, both of which are ``. . . 
necessary to invention itself and the very lifeblood of a 
competitive economy.'' Bonito Boats, Inc. v. Thunder Craft 
Boats, Inc., 489 U.S. 141, 146 (1989) [hereinafter Bonito 
Boats]. These critics fear that comprehensive design 
legislation, practically applied, might diminish rather than 
stimulate net commercial activity throughout the economy. Their 
reasoning is that threshold requirements for protection under 
most design schemes are less demanding than those under 
traditional intellectual property law. This would result in 
increased litigation and a general unwillingness to manufacture 
competing products.
    Advocates of design protection insist that these concerns 
are overstated. They argue that, in the absence of creative 
development, there can be no imitation. In addition, if the 
threshold requirements for design protection are more easily 
met than those applying to copyright, trademark, and patent 
law, the solution is to offer less protection (usually measured 
by duration).

                  Vessel Hull Designs and Bonito Boats

    The experience of the marine manufacturing industry in the 
wake of Bonito Boats, supra, illustrates the reformist view. 
Bonito Boats was a Florida-based corporation that developed a 
hull design for fiberglass recreational boats. The 
manufacturing process entailed creating a hardwood model that 
was then sprayed with fiberglass to create a mold which served 
to produce the finished fiberglass boats for sale. The company 
did not acquire utility or design patents for the hull or the 
process. Six years later, the Florida General Assembly enacted 
a so-called ``plug mold'' statute that prohibited the use of a 
direct molding process to duplicate ``unpatented'' boat hulls, 
and forbid the knowing sale of hulls so duplicated. When a 
Tennessee corporation, Thunder Craft Boats, began duplicating 
the hull designs and selling what amounted to knock-offs, 
Bonito Boats sued under the Florida statute. The U.S. Supreme 
Court affirmed the action of the Florida trial court, Court of 
Appeals, and Supreme Court by dismissing the case, ruling that 
the Supremacy Clause of the U.S. Constitution preempted state 
action on the matter. The Court concluded by noting that ``[i]t 
is for Congress to determine if the present system of design 
and utility patents is ineffectual in promoting the useful arts 
in the context of industrial design.'' Bonito Boats at 168.
    Boat manufacturers invest significant resources in the 
design and development of safe, structurally sound, and often 
high-performance boat hull designs. Including research and 
development costs, a boat manufacturer may invest as much as 
$500,000 to produce a design from which one line of vessels can 
be manufactured. When a boat hull is designed and the design 
engineering and tooling process is complete, the engineers then 
develop a boat ``plug'' from which they construct a boat 
``mold.'' The manufacturer constructs a particular line of 
boats from this mold.
    In contrast, those intent on stealing the original boat 
design, such as Thunder Craft, can simply use a finished boat 
hull in place of the manufacturer's plug to develop a mold. 
This practice is referred to in the trade as ``splashing a 
mold.'' The copied mold can then be used to create a line of 
vessels with a hull seemingly identical to that appropriated 
from the design manufacturer.
    ``Hull splashing'' is a problem for consumers, as well as 
manufacturers and boat design firms. Consumers who purchase 
copied boats are defrauded in the sense that they are not 
benefitting from the many attributes of hull design, other than 
shape, that are structurally relevant, including those related 
to quality and safety. It is also highly unlikely that consumer 
know that a boat has been copied from an existing design. Most 
importantly for the purposes of promoting intellectual property 
rights, if manufacturers are not permitted to recoup at least 
some of their research and development costs, they may no 
longer invest in new, innovative boat designs that boaters 
eagerly await.

                                Hearings

    The Committee's Subcommittee on Courts and Intellectual 
Property held one day of hearings on H.R. 2696 on October 23, 
1997. Testimony was received from five witnesses representing 
five organizations.

                        Committee Consideration

    On February 26, 1998, the Subcommittee on Courts and 
Intellectual Property met in open session and ordered reported 
an amendment in the nature of a substitute to H.R. 2696 by 
voice vote, a quorum being present. On March 3, 1998, the 
Committee met in open session and ordered reported favorably 
the amendment in the nature of a substitute to H.R. 2696, 
without amendment by voice vote, a quorum being present.

                      Committee Oversight Findings

    In compliance with clause 2(l)(3)(A) of rule XI of the 
Rules of the House of Representatives, the Committee reports 
that the findings and recommendations of the Committee, based 
on oversight activities under clause 2(b)(l) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

         Committee on Government Reform and Oversight Findings

    No findings or recommendations of the Committee on 
Government Reform and Oversight were received as referred to in 
clause 2(1)(3)(D) of rule XI of the Rules of the House of 
Representatives.

               New Budget Authority and Tax Expenditures

    Clause 2(1)(3)(B) of House Rule XI is inapplicable because 
this legislation does not provide new budgetary authority or 
increased tax expenditures.

                  Congressional Budget Office Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, March 11, 1997.
Hon. Henry J. Hyde,
Chairman, Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2696, the Vessel 
Hull Design Protection Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Kathleen 
Gramp (for federal costs), who can be reached at 226-2860, and 
Matthew Eyles (for the private-sector impact), who can be 
reached at 226-2649.
            Sincerely,

                                           June E. O'Neill, Director.  
    Enclosure.

    cc: Hon. John Conyers, Jr.
         Ranking Minority Member
H.R. 2696--Vessel Hull Design Protection Act
    H.R. 2696 would provide copyright protection to certain 
vessel hull designs beginning one year after the enactment of 
the bill. The bill would direct the Administrator of the U.S. 
Copyright Office to establish a process for registering 
copyrights of vessel designs and for hearing and arbitrating 
disputes. The office also would be required to publish lists of 
registered designs and make drawings or other representations 
available to the public. Prospective applicants would be 
required to pay fees set to cover most, if not all, of the 
costs incurred by the agency to administer the program. The 
bill provides remedies for infringements of registered designs 
and specifies civil penalties for false representations or 
labeling.
    CBO estimates that enacting H.R. 2696 would have no 
significant budgetary impact. Based on information from agency 
and industry sources, CBO estimates that the Copyright Office 
would spend about $200,000 in 1999 to establish the program and 
another $200,000 each year thereafter to process registrations, 
subject to appropriation of the necessary amounts. Offsetting 
collections would increase by similar amounts beginning in 
2000, the first year we would expect applicants for such 
copyrights. CBO assumes that those collections would be 
credited as an offset to annual appropriations.
    Revenues from possible civil penalties are not expected to 
be significant. Because this legislation would affect receipts, 
pay-as-you-go procedures would apply. CBO estimates, however, 
that the pay-as-you-go impact would be negligible.
    H.R. 2696 would impose a new private-sector mandate, as 
defined in the Unfunded Mandates Reform Act of 1995 (UMRA), by 
creating new fees for firms and individuals who apply for 
copyright protection of an original vessel hull design. 
Copyright law and copyright fees are the exclusive domain of 
the federal government. Therefore, an increase in existing 
copyright fees or the imposition of new fees constitutes a new 
enforceable duty and meets the definition of a private-sector 
mandate in UMRA. Based on information from the Copyright 
Office, CBO estimates that the direct costs of the new private-
sector mandate in the bill would be negligible and would fall 
well below the $100 million statutory threshold in UMRA. The 
bill contains no intergovernmental mandates as defined in UMRA, 
and would not affect the budgets of state, local, or tribal 
governments.
    The CBO staff contacts for this estimate are Kathleen Gramp 
(for federal costs), who can be reached at 226-2860, and 
Matthew Eyles (for the private-sector impact), who can be 
reached at 226-2649. This estimate was approved by Robert A. 
Sunshine, Assistant Deputy Director for budget Analysis.

                   Constitutional Authority Statement

    Pursuant to Rule XI, clause 2(1)(4) of the Rules of the 
House of Representatives, the Committee finds the authority for 
this legislation in Article I, clause 8, section 8 of the 
Constitution.

                      Section-by-Section Analysis

Section 1. Title.
    Section 1 creates the short title of the bill, the ``Vessel 
Hull Design Protection Act of 1997.''
Section 2. Addition of Chapter 12 to Title 17 of the U.S. Code.
    Designs Protected; Definitions (New Section 1201). 
Subsection (a)(1) states that the ``. . . designer or other 
owner of an original design of a `useful article' which makes 
the article more attractive or distinctive in appearance to the 
purchasing or using public may [receive protection under the 
bill].'' A ``useful article'' is defined as a ``. . . vessel 
hull . . ., including a plug or mold. . . .''
    Subsection (a)(2) specifies that ``. . . the design of a 
vessel hull . . ., including a plug or mold, is subject to 
protection notwithstanding [the general utility exclusion set 
forth in Section 1202(4)]. In other words, it is the intent of 
the Committee that original designs of vessel hulls will be 
subject to protection whether those designs are a function of 
creative endeavor or utility.
    Subsection (b)(1) specifies that a design is ``. . . 
`original' if it is the result of the designer's creative 
endeavor that provides a distinguishable variation over prior 
work pertaining to similar articles which is more than merely 
trivial and has not been copied from another source.''
    Finally, since the problems of the marine manufacturing 
industry giving rise to the legislation are directly related to 
hull splashing, it is the intent of the Committee that this 
activity is proscribed by the bill.
    Designs not Subject to Protection (New Section 1202). 
Section 1202 enumerates five descriptive elements, any one of 
which will disqualify a design from protection under (new) 
Chapter 12. This includes any design which is:
          1. not original;
          2. staple or commonplace, such as a standard 
        geometric figure, familiar symbol, emblem, or motif, or 
        other shape, pattern, or configuration which has become 
        standard, common, prevalent, or ordinary;
          3. different from a design excluded by the second 
        listed element only in insignificant details or in 
        attributes which are variants commonly used in the 
        relevant trades;
          4. dictated solely by a utilitarian function of the 
        article that embodies it; or
          5. embodied in a useful article that was made public 
        by the designer or owner in the United States or a 
        foreign country more than one year before the date of 
        application for registration under Chapter 12.
    Revisions, Adaptions, and Rearrangements (New Section 
1203). This section protects a design that is a ``. . . 
substantial revision, adaptation, or rearrangement of . . . 
subject matter [that is excluded from protection under Section 
1202].'' Even so, the excluded subject matter itself does not 
receive any additional protection under the Chapter.
    Commencement of Protection (New Section 1204). Design 
protection under Chapter 12 begins the earlier of the date or 
publication [Section 1213(a)] or the date the design is first 
made public [Section 1210(b)].
    Term of Protection (New Section 1205). Term for an 
appropriate vessel hull design is 10 years, with a term running 
to the end of the calendar year in which it would otherwise 
expire.
    Design Notice (New Section 1206). This section requires the 
owner of a protected design to mark it with a design notice 
consisting of the words ``Protected Design'' (or a prescribed 
abbreviation thereof), the year on which protection commenced, 
and the name of the owner (or a prescribed abbreviation 
thereof). The registration number (see Section 1214), once 
acquired, is an appropriate substitute for the last two 
requirements.
    Effect of Omission of Notice (New Section 1207). In 
general, failure to supply notice pursuant to Section 1206 will 
not cause loss of protection or prevent recovery for 
infringement against any person who, ``. . . after receiving 
written notice of the design protection, begins an undertaking 
leading to infringement. . . .''
    Moreover, the owner of a protected design who has not 
complied with the notice requirements of Section 1206 may still 
bring an action against an infringer even if the latter has not 
received written notice prior to his or her undertaking. Under 
these circumstances, the owner may not obtain an injunction 
with respect to the infringing activity until he or she has 
reimbursed the infringer for reasonable expenses incurred 
before receiving written notice of protection. The burden of 
providing written notice is on the owner.
    Exclusive Rights (New Section 1208). The owner of a 
protected design for a vessel hull has the exclusive right to 
make, have made, or import, for sale or for use in trade, any 
vessel hull embodying the design. The owner may also sell or 
distribute for sale or for use in trade any vessel hull 
embodying the design.
    Infringement (New Section 1209). In general, infringement 
occurs when a third party other than the owner of the protected 
design performs any of the activities set forth in Section 
1208.
    Pursuant to Subsections (b) (1) and (2), a seller or 
distributor will only be held liable if he or she colluded with 
a manufacturer or an importer to infringe; or if he or she 
refused or failed, upon the owner's request, to disclose 
promptly and fully the source of the infringing product, and 
then proceeded to order or reorder infringing product after 
receiving written notice of protection.
    It is not an act of infringement for a person to make, have 
made, import, sell, or distribute any article embodying a 
design that was created without knowledge that it was copied 
from a protected design.
    Similarly, a person who incorporates into his or her 
product of manufacture an infringing article acquired from a 
third party in the ordinary course of business; or who, without 
knowledge of protection, makes or processes an infringing 
article for the use of another shall not be deemed to have 
infringed except under a condition set forth in Subsections (b) 
(1) or (2), id.
    Paragraph (e) defines an ``infringing article'' as ``. . . 
any article, the design of which has been copied from a design 
protected under . . . [C]hapter 12], without the consent of the 
owner. . . . Illustrations or pictures of a protected design in 
a book, newspaper, magazine, broadcast, motion picture, or 
``similar medium'' do not constitute infringing articles. 
Further, a design that ``. . . is original and not 
substantially similar in appearance to a protected design'' 
will be deemed not to have been copied from a protected design.
    Paragraph (f) places the burden on that party asserting a 
right of protection in an infringement action to establish the 
originality of his or her design whenever the other party 
introduces an earlier work that is identical or highly similar 
to the design, thereby suggesting that the design was copied 
from the work.
    Paragraph (g) permits a third party ``. . . to reproduce 
the design in a vessel hull or other form for the purpose of 
teaching, analyzing, or evaluating the appearance, concepts, or 
techniques embodied in the design. . . .''
    Finally, it is the intent of the Committee that the 
knowledge requirements set forth in Section 1209 may be 
satisfied by actual or constructive knowledge. Registration of 
a design should suffice to establish this level of knowledge. A 
design notice that conforms to the requirements of Section 1206 
should also suffice to establish this level of knowledge, or at 
least raise a presumption of actual knowledge.
    Application for Registration (New Section 1210). Section 
1210 states that protection is lost if the application for 
design registration is not made within one year after the date 
the design is first made ``public'' (meaning, when a vessel 
hull embodying the design is publicly exhibited, displayed, or 
offered by sale with the owner's consent).
    Paragraph (d) of this Section prescribes relevant 
information that must appear on the application form, and notes 
that it may include ``. . . a description setting forth the 
salient features of the design. . . .'' Failure to include a 
description, however, shall not preclude registration from 
occurring.
    Paragraph (e) requires the owner to submit a sworn 
statement along with the application attesting, inter alia, to 
the originality of the design and the identity of the 
designer(s). Good faith errors contained in the statement will 
not render it defective.
    Benefit of Earlier Filing Date in a Foreign Country (New 
Section 1211). A person who registers for design protection in 
a foreign country that extends design protection (similar to 
that contained in Chapter 12) to U.S. citizens shall receive 
the benefit of the earlier filing date when applying for 
registration in the United States.
    Oaths and Acknowledgments (New Section 1212). This section 
establishes the miscellaneous terms by which any oaths required 
under the Act may be delivered, including by a written 
declaration.
    Issue or Refusal of Application for Registration (New 
Section 1213). Section 1213 sets forth the process by which the 
``Administrator'' in charge of registration (see Section 1231) 
examines an application, registers a design, refuses to 
register one, and reconsiders a rejected application.
    Of special note is that language in Paragraph (a) which 
directs the Administrator to determine whether or not an 
application ``. . . relates to a design which on its face 
appears to be subject to protection . . .,'' and if so, to 
register the design. It is the intent of the Committee that 
this directive does not oblige the Administrator to compare the 
design with registered and other known designs.
    Certification of Registration (New Section 1214). Section 
1214 lists the duties of the Administrator when recording a 
registration certificate, as well as the contents of the 
certificate.
    Publication of Announcements and Indexes (New Section 
1215). Section 1215 confers upon the Administrator the 
authority to publish lists and indexes of registered as well as 
canceled designs, along with drawings or other pictorial 
representations of registered designs for sale or distribution. 
Such drawings and pictorial representations shall be filed and 
available for public use. Online publication is permitted under 
this Section.
    Fees (New Section 1216). The Administrator, by regulation, 
shall set reasonable fees for the filing of applications and 
other administrative services under Chapter 12.
    Regulations (New Section 1217). This Section authorizes the 
Administrator to establish regulations for the administration 
of Chapter 12.
    Copies of Records (New Section 1218). Section 1218 enables 
anyone, upon payment of a prescribed fee, to obtain certified 
copies of official records kept by the Administrator.
    Correction of Errors in Certificates (New Section 1219). 
This section empowers the Administrator to correct errors in 
registration made by the Copyright Office or by the applicant 
(if the error is clerical in nature and made in good faith).
    Ownership and Transfer (New Section 1220). Property rights 
in a design registered with the Copyright Office shall vest in 
the designer, his or her legal representative, the employer of 
the designer (if the design was created within the regular 
scope of the designer's employment), or a person to whom the 
rights of the designer or the employer have been transferred.
    The rights may be assigned, granted, conveyed, mortgaged, 
or bequeathed. With the exception of a bequest, any such 
transfer shall be void as against any subsequent purchaser or 
mortgagee for valuable consideration, unless it is recorded by 
the Administrator within three months after its date of 
execution or before the date of such subsequent purchase or 
mortgage.
    Remedy for Infringement (New Section 1221). The owner of a 
design may seek judicial review of a final refusal by the 
Administrator to register the design by bringing a civil 
action. Parties to a registration dispute may determine it by 
arbitration.
    Injunctions (New Section 1222). Any court having 
jurisdiction over actions under Chapter 12 may grant injunctive 
relief. At the same time, a seller or distributor who suffers 
damage as a result of injunctive relief wrongfully granted may 
bring a cause of action against the applicant for injunctive 
relief, and may be awarded reasonable damages.
    Recovery for Infringement (New Section 1223). A court of 
jurisdiction may award adequate compensatory damages to a 
claimant in an infringement action. In addition, the court may 
increase the damages ``. . . to such amount, not exceeding 
$50,000 or $1 per copy, whichever is greater, as the court 
determines to be just.''
    As an alternative to compensatory damages, the court may 
award the claimant the infringer's profits resulting from the 
sale of infringing copies ``. . . if the court finds that the . 
. . sales are reasonably related to the use of the claimant's 
design.''
    Attorney's fees may also be awarded, and a court may order 
any infringing articles destroyed.
    No recovery may be had for an infringement committed more 
than three years before the date on which the complaint is 
filed.
    Power of Court Over Registration (New Section 1224). This 
section empowers a court with jurisdiction to order 
registration or cancellation of a design.
    Liability for Action on Registration Fraudulently Obtained 
(New Section 1225). Any person who brings an infringement 
action knowing that registration was obtained by false or 
fraudulent representation materially affecting Chapter 12 
rights shall be liable for $10,000 or less as a court of 
jurisdiction may determine, and shall be awarded to the 
defendant as compensation, along with costs and attorney's 
fees.
    Penalty for False Marketing (New Section 1226). Any person 
who, for the purpose of deceiving the public, uses notice 
(Section 1206) for a design not registered under Chapter 12 
shall pay a civil fine of not more than $500 for each offense.
    Any person may sue for and receive one-half of the fine 
assessed; the remainder shall be awarded to the United States.
    Penalty for False Representation (New Section 1227). Any 
person who knowingly makes a false representation materially 
affecting Chapter 12 rights for the purpose of obtaining 
registration shall pay a penalty of not less than $500 but not 
more than $1,000, and shall forfeit any rights or privileges he 
or she may otherwise have in the relevant design.
    Enforcement by Treasury and Postal Service (New Section 
1228). The Secretary of the Treasury and the U.S. Postal 
Service shall separately or jointly issue regulation for the 
enforcement of Section 1208 rights with respect to importation. 
Prescribed actions leading to the exclusion of imported 
articles are established. Any article imported in violation of 
Section 1208 rights are subject to seizure and forfeiture under 
the customs laws.
    Relation to Design Patent and Copyright Law (New Section 
1229). The issuance of a design patent for an article of 
manufacture or a copyright registration for an original design 
shall terminate any protection of the original design under 
Chapter 12.
    Common Law and Other Rights Unaffected (New Section 1230). 
Nothing in Chapter 12 annuls or limits common law or other 
rights or remedies available to a person for a design not 
registered, or any rights under trademark or unfair competition 
statutes.
    Administrator (New Section 1231). The ``Administrator'' and 
``Office of the Administrator'' referred to in Chapter 12 are 
the Register of Copyrights and the U.S. Copyright Office, 
respectively.
    It is the intent of the Committee that the Administrator 
will possess wide discretion to perform his or her duties under 
by the bill in a cost-efficient manner, including the right to 
publish registrations exclusively online.
    No Retroactive Effect (New Section 1232). Protection under 
Chapter 12 is unavailable for any design not made public 
pursuant to Section 1209 before the effective date set forth in 
Section Four.
Section 3: Conforming Amendments.
    This section makes appropriate conforming amendments to the 
U.S. Code.
Section 4: Effective Date.
    The amendments set forth in Sections Two and Three of the 
bill shall take effect one year after the date of enactment.

H.L.C.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3 of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italics and existing law in which no change is 
proposed is shown in roman):

                      TITLE 17, UNITED STATES CODE

          * * * * * * *
Chap.                                                               Sec.
      Subject Matter and Scope of Copyright..........................101
     * * * * * * *
      Protection of Original Designs................................1201
          * * * * * * *

               CHAPTER 12--PROTECTION OF ORIGINAL DESIGNS

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

Sec. 1201. Designs protected

    (a) Designs Protected.--
            (1) In general.--The designer or other owner of an 
        original design of a useful article which makes the 
        article attractive or distinctive in appearance to the 
        purchasing or using public may secure the protection 
        provided by this chapter upon complying with and 
        subject to this chapter.
            (2) Vessel hulls or component parts thereof.--The 
        design of a vessel hull or component part of a vessel 
        hull, including a plug or mold, is subject to 
        protection under this chapter, notwithstanding section 
        1202(4).
    (b) Definitions.--For the purpose of this chapter, the 
following terms have the following meanings:
            (1) A design is ``original'' if it is the result of 
        the designer's creative endeavor that provides a 
        distinguishable variation over prior work pertaining to 
        similar articles which is more than merely trivial and 
        has not been copied from another source.
            (2) A ``useful article'' is a vessel hull or a 
        component part thereof, including a plug or mold, which 
        in normal use has an intrinsic utilitarian function 
        that is not merely to portray the appearance of the 
        article or to convey information. An article which 
        normally is part of a useful article shall be deemed to 
        be a useful article.
            (3) A ``vessel'' is a craft, especially one larger 
        than a rowboat, designed to navigate on water.
            (4) A ``hull'' is the frame or body of a vessel, 
        exclusive of masts, sails, yards, and rigging.
            (5) A ``plug'' means a device or model used to make 
        a mold for the purpose of exact duplication, regardless 
        of whether the device or model has an intrinsic 
        utilitarian function that is not only to portray the 
        appearance of the product or to convey information.
            (6) A ``mold'' means a matrix or form in which a 
        substance for material is used, regardless of whether 
        the matrix or form has an intrinsic utilitarian 
        function that is not only to portray the appearance of 
        the product or to convey information.

Sec. 1202. Designs not subject to protection

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

Sec. 1203. Revisions, adaptations, and rearrangements

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

Sec. 1204. Commencement of protection

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

Sec. 1205. Term of protection

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

Sec. 1206. Design notice

    (a) Contents of Design Notice.--(1) Whenever any design for 
which protection is sought under this chapter is made public 
under section 1210(b), the owner of the design shall, subject 
to the provisions of section 1207, mark it or have it marked 
legibly with a design notice consisting of--
            (A) the words ``Protected Design'', the 
        abbreviation ``Prot'd Des.'', or the letter ``D'' with 
        a circle, or the symbol *D*;
            (B) the year of the date on which protection for 
        the design commenced; and
            (C) the name of the owner, an abbreviation by which 
        the name can be recognized, or a generally accepted 
        alternative designation of the owner.
Any distinctive identification of the owner may be used for 
purposes of subparagraph (C) if it has been approved and 
recorded by the Administrator before the design marked with 
such identification is registered.
    (2) After registration, the registration number may be used 
instead of the elements specified in subparagraphs (B) and (C) 
of paragraph (1).
    (b) Location of Notice.--The design notice shall be so 
located and applied as to give reasonable notice of design 
protection while the vessel hull embodying the design is 
passing through its normal channels of commerce.
    (c) Subsequent Removal of Notice.--When the owner of a 
design has complied with the provisions of this section, 
protection under this chapter shall not be affected by the 
removal, destruction, or obliteration by others of the design 
notice on an article.

Sec. 1207. Effect of omission of notice

    (a) Actions With Notice.--Except as provided in subsection 
(b), the omission of the notice prescribed in section 1206 
shall not cause loss of the protection under this chapter or 
prevent recovery for infringement under this chapter against 
any person who, after receiving written notice of the design 
protection, begins an undertaking leading to infringement under 
this chapter.
    (b) Actions Without Notice.--The omission of the notice 
prescribed in section 1406 shall prevent any recovery under 
section 1223 against a person who began an undertaking leading 
to infringement under this chapter before receiving written 
notice of the design protection. No injunction shall be issued 
under this chapter with respect to such undertaking unless the 
owner of the design reimburses that person for any reasonable 
expenditure or contractual obligation in connection with such 
undertaking that was incurred before receiving written notice 
of the design protection, as the court in its discretion 
directs. The burden of providing written notice of design 
protection shall be on the owner of the design.

Sec. 1208. Exclusive rights

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

Sec. 1209. Infringement

    (a) Acts of Infringement.--Except as provided in subjection 
(b), it shall be infringement of the exclusive rights in a 
design protected under this chapter for any person, without the 
consent of the owner of the design, within the United States 
and during the term of such protection, to--
            (1) make, have made, or import, for sale or for use 
        in trade, any infringing article as defined in 
        subsection (e); or
            (2) sell or distribute for sale or for use in trade 
        any such infringing article.
    (b) Acts of Sellers and Distributors.--A seller or 
distributor of an infringing article who did not make or import 
the vessel hull shall be deemed to have infringed on a design 
protected under this chapter only if that person--
            (1) induced or acted in collusion with a 
        manufacturer to make, or an importer to import such 
        article, except that merely purchasing or giving an 
        order to purchase a vessel hull in the ordinary course 
        of business shall not of itself constitute such 
        inducement or collusion; or
            (2) refused or failed, upon the request of the 
        owner of the design, to make a prompt and full 
        disclosure of that person's source of such vessel hull, 
        and that person orders or reorders such article after 
        having receiving notice by registered or certified mail 
        of the protection subsisting in the design.
    (c) Acts Without Knowledge.--It shall not be infringement 
under this section to make, have made, import, sell, or 
distribute, any vessel hull embodying a design which was 
created without knowledge that a design was protected under 
this chapter and was copied from such protected design.
    (d) Acts in Ordinary Course of Business.--A person who 
incorporates into that person's product of manufacture an 
infringing article acquired from others in the ordinary course 
of business, or who, without knowledge of the protected design 
embodied in an infringing article, makes or processes the 
infringing article for the account of another person in the 
ordinary course of business, shall not be deemed to have 
infringed the rights in that design under this chapter except 
under a condition contained in paragraph (1) or (2) of 
subsection (b). Accepting an order or reorder from the source 
of the infringing article shall be deemed ordering or 
reordering within the meaning of subsection (b)(2).
    (e) Infringing Article Defined.--As used in this section, 
an ``infringing article'' is any article the design of which 
has been copied from a design protected under this chapter, 
without the consent of the owner of the protected design. An 
infringing article is not an illustration or picture of a 
protected design in an advertisement, book, periodical, 
newspaper, photograph, broadcast, motion picture, or similar 
medium or an article that embodies, in common with the 
protected design, only elements described in section 1202. A 
design shall not be deemed to have been copied from a protected 
design if it is original and not substantially similar in 
appearance to a protected design.
    (f) Establishing Originality.--The party to any action or 
proceeding under this chapter who alleges rights under this 
chapter in a design shall have the burden of establishing the 
design's originality whenever the opposing party introduces an 
earlier work which is identical to such design, or so similar 
as to make prima facie showing that such design was copied from 
such work.
    (g) Reproduction for Teaching or Analysis.--It is not an 
infringement of the exclusive rights of a design owner for a 
person to reproduce the design in a vessel hull or in any other 
form solely for the purpose of teaching, analyzing, or 
evaluating the appearance, concepts, or techniques embodied in 
the design, or the function of the vessel hull embodying the 
design.

Sec. 1210. Application for registration

    (a) Time Limit for Application for Registration.--
Protection under this chapter shall be lost if application for 
registration of the design is not made within one year after 
the date on which the design is first made public.
    (b) When Design Is Made Public.--A design is made public 
when an existing vessel hull embodying the design is anywhere 
publicly exhibited, publicly distributed, or offered for sale 
or sold to the public by the owner of the design or with the 
owner's consent.
    (c) Application by Owner of Design.--Application for 
registration may be made by the owner of the design.
    (d) Contents of Application.--The application for 
registration shall be made to the Administrator and shall 
state--
            (1) the name and address of the designer or 
        designers of the design;
            (2) the name and address of the owner if different 
        from the designer;
            (3) the specific name of the vessel hull embodying 
        the design;
            (4) the date, if any, that the design was first 
        made public, if such date was earlier than the date of 
        the application;
            (5) affirmation that the design has been fixed in a 
        useful article; and
            (6) such other information as may be required by 
        the Administrator.
The application for registration may include a description 
setting forth the salient features of the design, but the 
absence of such a description shall not prevent registration 
under this chapter.
    (e) Sworn Statement.--The application for registration 
shall be accompanied by a statement under oath by the applicant 
or the applicant's duly authorized agent or representative, 
setting forth, to the best of the applicant's knowledge and 
belief--
            (1) that the design is original and was created by 
        the designer or designers named in the application;
            (2) that the design has not previously been 
        registered on behalf of the applicant or the 
        applicant's predecessor in title; and
            (3) that the applicant is the person entitled to 
        protection and to registration under this chapter.
If the design has been made public with the design notice 
prescribed in section 1406, the statement shall also described 
the exact form and position of the design notice.
    (f) Effect of Errors.--(1) Error in any statement or 
assertion as to the utility of the vessel hull named in the 
application, the design of which is sought to be registered, 
shall not affect the protection secured under this chapter.
    (2) Errors in omitting a joint designer or in naming an 
alleged joint designer shall not affect the validity of the 
registration, or the actual ownership or the protection of the 
design, unless it is shown that the error occurred with 
deceptive intent.
    (g) Design Made in Scope of Employment.--In a case in which 
the design was made within the regular scope of the designer's 
employment and individual authorship of the design is difficult 
or impossible to ascribe and the application so states, the 
name and address of the employer for whom the design was made 
may be stated instead of that of the individual designer.
    (h) Pictorial Representation of Design.--The application 
for registration shall be accompanied by two copies of a 
drawing or other pictorial representation of the vessel hull 
having one or more views, adequate to show the design, in a 
form and style suitable for reproduction, which shall be deemed 
a part of the application.
    (i) Design in More Than One Useful Article.--If the 
distinguishing elements of a design are in substantially the 
same form in different vessel hulls, the design shall be 
protected as to all such vessel hulls when protected as to one 
of them, but not more than one registration shall be required 
for the design.
    (j) Application for More Than One Design.--More than one 
design may be included in the same application under such 
conditions as may be prescribed by the Administrator. For each 
design included in an application the fee prescribed for a 
single design shall be paid.

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

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

Sec. 1212. Oaths and acknowledgments

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

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

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

Sec. 1214. Certification of registration

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

Sec. 1215. Publication of announcements and indexes

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

Sec. 1216. Fees

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

Sec. 1217. Regulations

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

Sec. 1218. Copies of records

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

Sec. 1219. Correction of errors in certificates

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

Sec. 1220. Ownership and transfer

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

Sec. 1221. Remedy for infringement

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

Sec. 1222. Injunctions

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

Sec. 1223. Recovery for infringement

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

Sec. 1224. Power of court over registration

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

Sec. 1225. Liability for action on registration fraudulently obtained

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

Sec. 1226. Penalty for false marking

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

Sec. 1227. Penalty for false representation

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

Sec. 1228. Enforcement by Treasury and Postal Service

    (a) Regulations.--The Secretary of the Treasury and the 
United States Postal Service shall separately or jointly issue 
regulations for the enforcement of the rights set forth in 
section 1208 with respect to importation. These regulations may 
require, as a condition for the exclusion of articles from the 
United States, that the person seeking exclusion take any one 
or more of the following actions:
            (1) Obtain a court order enjoining, or an order of 
        the International Trade Commission under section 337 of 
        the Tariff Act of 1930 excluding, importation of the 
        articles.
            (2) Furnish proof that the design involved is 
        protected under this chapter and that the importation 
        of the articles would infringe the rights in the design 
        under this chapter.
            (3) Post a surety bond for any injury that may 
        result if the detention or exclusion of the articles 
        proves to be unjustified.
    (b) Seizure and Forfeiture.--Articles imported in violation 
of the rights set forth in section 1208 are subject to seizure 
and forfeiture in the same manner as property imported in 
violation of the customs laws. Any such forfeited articles 
shall be destroyed as directed by the Secretary of the Treasury 
or the court, as the case may be, except that the articles may 
be returned to the country of export whenever it is shown to 
the satisfaction of the Secretary of the Treasury that the 
importer had no reasonable grounds for believing that his or 
her acts constituted a violation of the law.

Sec. 1229. Relation to design patent and copyright law

    The issuance of a design patent under title 35 for an 
original design for an article of manufacture, or the issuance 
of a copyright registration under title 17 for an original 
design, shall terminate any protection of the original design 
under this chapter.

Sec. 1230. Common law and other rights unaffected

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

Sec. 1231. Administrator

    The Administrator and Office of the Administrator referred 
to in this chapter shall be the Register of Copyrights and the 
Copyrights Office of the Library of Congress, respectively.

Sec. 1232. No retroactive effect

    Protection under this chapter shall not be available for 
any design that has been made public under section 1209(b) 
before the effective date of this chapter.
                              ----------                              


                      TITLE 28, UNITED STATES CODE

          * * * * * * *

                    PART IV--JURISDICTION AND VENUE

          * * * * * * *

               CHAPTER 85--DISTRICT COURTS; JURISDICTION

Sec.
1330. Actions against foreign states.
     * * * * * * *
1338. Patents, plant variety protection, copyrights, mask works, 
          designs, trade-marks, and unfair competition.
          * * * * * * *

Sec. 1338. Patents, plant variety protection, copyrights, mask works, 
                    designs, trade-marks, and unfair competition

    (a) * * *
          * * * * * * *
    (c) Subsections (a) and (b) apply to exclusive rights in 
mask works under chapter 9 of title 17, and to exclusive rights 
in designs under chapter 12 of title 17, to the same extent as 
such subsections apply to copyrights.
          * * * * * * *

Sec. 1400. Patents and copyrights

    (a) Civil actions, suits, or proceedings arising under any 
Act of Congress relating to copyrights in mask works or designs 
may be instituted in the district in which the defendant or his 
agent resides or may be found.
          * * * * * * *

Sec. 1498. Patent and copyrights cases

    (a) * * *
          * * * * * * *
    (e) Subsections (b) and (c) of this section apply to 
exclusive rights in mask words under chapter 9 of title 17, and 
to exclusive rights in designs under chapter 12 of title 17, to 
the same extent as such subsections apply to copyrights.
          * * * * * * *

                                    
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