[House Report 105-551]
[From the U.S. Government Publishing Office]



105th Congress                                            Rept. 105-551
                        HOUSE OF REPRESENTATIVES

 2d Session                                                      Part 1
_______________________________________________________________________


 
     WIPO COPYRIGHT TREATIES IMPLEMENTATION AND ON-LINE COPYRIGHT 
                   INFRINGEMENT LIABILITY LIMITATION

_______________________________________________________________________


  May 22, 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. 2281]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to whom was referred the 
bill (H.R. 2281) to amend title 17, United States Code, to 
implement the World Intellectual Property Organization 
Copyright Treaty and Performances and Phonograms Treaty, 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........................................           9
Background and Need for the Legislation....................           9
Hearings...................................................          12
Committee Consideration....................................          13
Committee Oversight Findings...............................          13
Committee on Government Reform and Oversight Findings......          13
New Budget Authority and Tax Expenditures..................          13
Congressional Budget Office Cost Estimate..................          13
Constitutional Authority Statement.........................          15
Section-by-Section Analysis and Discussion.................          15
Changes in Existing Law Made by the Bill, as Reported......          29

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

            TITLE I--WIPO COPYRIGHT TREATIES IMPLEMENTATION

SEC. 101. SHORT TITLE.

    This title may be cited as the ``WIPO Copyright Treaties 
Implementation Act''.

SEC. 102. TECHNICAL AMENDMENTS.

    (a) Definitions.--Section 101 of title 17, United States Code, is 
amended--
            (1) by striking the definition of ``Berne Convention 
        work'';
            (2) in the definition of ``The `country of origin' of a 
        Berne Convention work''--
                    (A) by striking ``The `country of origin' of a 
                Berne Convention work, for purposes of section 411, is 
                the United States if'' and inserting ``For purposes of 
                section 411, a work is a `United States work' only 
                if'';
                    (B) in paragraph (1)--
                            (i) in subparagraph (B) by striking 
                        ``nation or nations adhering to the Berne 
                        Convention'' and inserting ``treaty party or 
                        parties'';
                            (ii) in subparagraph (C) by striking ``does 
                        not adhere to the Berne Convention'' and 
                        inserting ``is not a treaty party''; and
                            (iii) in subparagraph (D) by striking 
                        ``does not adhere to the Berne Convention'' and 
                        inserting ``is not a treaty party''; and
                    (C) in the matter following paragraph (3) by 
                striking ``For the purposes of section 411, the 
                `country of origin' of any other Berne Convention work 
                is not the United States.'';
            (3) by inserting after the definition of ``fixed'' the 
        following:
            ``The `Geneva Phonograms Convention' is the Convention for 
        the Protection of Producers of Phonograms Against Unauthorized 
        Duplication of Their Phonograms, concluded at Geneva, 
        Switzerland, on October 29, 1971.'';
            (4) by inserting after the definition of ``including'' the 
        following:
            ``An `international agreement' is--
                    ``(1) the Universal Copyright Convention;
                    ``(2) the Geneva Phonograms Convention;
                    ``(3) the Berne Convention;
                    ``(4) the WTO Agreement;
                    ``(5) the WIPO Copyright Treaty;
                    ``(6) the WIPO Performances and Phonograms Treaty; 
                and
                    ``(7) any other copyright treaty to which the 
                United States is a party.'';
            (5) by inserting after the definition of ``transmit'' the 
        following:
            ``A `treaty party' is a country or intergovernmental 
        organization other than the United States that is a party to an 
        international agreement.'';
            (6) by inserting after the definition of ``widow'' the 
        following:
            ``The `WIPO Copyright Treaty' is the WIPO Copyright Treaty 
        concluded at Geneva, Switzerland, on December 20, 1996.'';
            (7) by inserting after the definition of ``The `WIPO 
        Copyright Treaty' '' the following:
            ``The `WIPO Performances and Phonograms Treaty' is the WIPO 
        Performances and Phonograms Treaty concluded at Geneva, 
        Switzerland, on December 20, 1996.''; and
            (8) by inserting after the definition of ``work made for 
        hire'' the following:
            ``The terms `WTO Agreement' and `WTO member country' have 
        the meanings given those terms in paragraphs (9) and (10), 
        respectively, of section 2 of the Uruguay Round Agreements 
        Act.''.
    (b) Subject Matter of Copyright; National Origin.--Section 104 of 
title 17, United States Code, is amended--
            (1) in subsection (b)--
                    (A) in paragraph (1) by striking ``foreign nation 
                that is a party to a copyright treaty to which the 
                United States is also a party'' and inserting ``treaty 
                party'';
                    (B) in paragraph (2) by striking ``party to the 
                Universal Copyright Convention'' and inserting ``treaty 
                party'';
                    (C) by redesignating paragraph (5) as paragraph 
                (6);
                    (D) by redesignating paragraph (3) as paragraph (5) 
                and inserting it after paragraph (4);
                    (E) by inserting after paragraph (2) the following:
            ``(3) the work is a sound recording that was first fixed in 
        a treaty party; or'';
                    (F) in paragraph (4) by striking ``Berne Convention 
                work'' and inserting ``pictorial, graphic, or 
                sculptural work that is incorporated in a building or 
                other structure, or an architectural work that is 
                embodied in a building and the building or structure is 
                located in the United States or a treaty party''; and
                    (G) by inserting after paragraph (6), as so 
                redesignated, the following:
``For purposes of paragraph (2), a work that is published in the United 
States or a treaty party within 30 days after publication in a foreign 
nation that is not a treaty party shall be considered to be first 
published in the United States or such treaty party, as the case may 
be.''; and
            (2) by adding at the end the following new subsection:
    ``(d) Effect of Phonograms Treaties.--Notwithstanding the 
provisions of subsection (b), no works other than sound recordings 
shall be eligible for protection under this title solely by virtue of 
the adherence of the United States to the Geneva Phonograms Convention 
or the WIPO Performances and Phonograms Treaty.''.
    (c) Copyright in Restored Works.--Section 104A(h) of title 17, 
United States Code, is amended--
            (1) in paragraph (1), by striking subparagraphs (A) and (B) 
        and inserting the following:
                    ``(A) a nation adhering to the Berne Convention;
                    ``(B) a WTO member country;
                    ``(C) a nation adhering to the WIPO Copyright 
                Treaty;
                    ``(D) a nation adhering to the WIPO Performances 
                and Phonograms Treaty; or
                    ``(E) subject to a Presidential proclamation under 
                subsection (g).'';
            (2) by amending paragraph (3) to read as follows:
            ``(3) The term `eligible country' means a nation, other 
        than the United States, that--
                    ``(A) becomes a WTO member country after the date 
                of the enactment of the Uruguay Round Agreements Act;
                    ``(B) on such date of enactment is, or after such 
                date of enactment becomes, a nation adhering to the 
                Berne Convention;
                    ``(C) adheres to the WIPO Copyright Treaty;
                    ``(D) adheres to the WIPO Performances and 
                Phonograms Treaty; or
                    ``(E) after such date of enactment becomes subject 
                to a proclamation under subsection (g).'';
            (3) in paragraph (6)--
                    (A) in subparagraph (C)(iii) by striking ``and'' 
                after the semicolon;
                    (B) at the end of subparagraph (D) by striking the 
                period and inserting ``; and''; and
                    (C) by adding after subparagraph (D) the following:
                    ``(E) if the source country for the work is an 
                eligible country solely by virtue of its adherence to 
                the WIPO Performances and Phonograms Treaty, is a sound 
                recording.'';
            (4) in paragraph (8)(B)(i)--
                    (A) by inserting ``of which'' before ``the 
                majority''; and
                    (B) by striking ``of eligible countries''; and
            (5) by striking paragraph (9).
    (d) Registration and Infringement Actions.--Section 411(a) of title 
17, United States Code, is amended in the first sentence--
            (1) by striking ``actions for infringement of copyright in 
        Berne Convention works whose country of origin is not the 
        United States and''; and
            (2) by inserting ``United States'' after ``no action for 
        infringement of the copyright in any''.
    (e) Statute of Limitations.--Section 507(a) of title 17, United 
State Code, is amended by striking ``No'' and inserting ``Except as 
expressly provided otherwise in this title, no''.

SEC. 103. COPYRIGHT PROTECTIONS SYSTEMS AND COPYRIGHT MANAGEMENT 
                    INFORMATION.

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

       ``CHAPTER 12--COPYRIGHT PROTECTION AND MANAGEMENT SYSTEMS

``Sec.
``1201. Circumvention of copyright protection systems.
``1202. Integrity of copyright management information.
``1203. Civil remedies.
``1204. Criminal offenses and penalties.

``Sec. 1201. Circumvention of copyright protection systems

    ``(a) Violations Regarding Circumvention of Technological 
Protection Measures.--(1) No person shall circumvent a technological 
protection measure that effectively controls access to a work protected 
under this title.
    ``(2) No person shall manufacture, import, offer to the public, 
provide, or otherwise traffic in any technology, product, service, 
device, component, or part thereof, that--
            ``(A) is primarily designed or produced for the purpose of 
        circumventing a technological protection measure that 
        effectively controls access to a work protected under this 
        title;
            ``(B) has only limited commercially significant purpose or 
        use other than to circumvent a technological protection measure 
        that effectively controls access to a work protected under this 
        title; or
            ``(C) is marketed by that person or another acting in 
        concert with that person with that person's knowledge for use 
        in circumventing a technological protection measure that 
        effectively controls access to a work protected under this 
        title.
    ``(3) As used in this subsection--
            ``(A) to `circumvent a technological protection measure' 
        means to descramble a scrambled work, to decrypt an encrypted 
        work, or otherwise to avoid, bypass, remove, deactivate, or 
        impair a technological protection measure, without the 
        authority of the copyright owner; and
            ``(B) a technological protection measure `effectively 
        controls access to a work' if the measure, in the ordinary 
        course of its operation, requires the application of 
        information, or a process or a treatment, with the authority of 
        the copyright owner, to gain access to the work.
    ``(b) Additional Violations.--(1) No person shall manufacture, 
import, offer to the public, provide, or otherwise traffic in any 
technology, product, service, device, component, or part thereof, 
that--
            ``(A) is primarily designed or produced for the purpose of 
        circumventing protection afforded by a technological protection 
        measure that effectively protects a right of a copyright owner 
        under this title in a work or a portion thereof;
            ``(B) has only limited commercially significant purpose or 
        use other than to circumvent protection afforded by a 
        technological protection measure that effectively protects a 
        right of a copyright owner under this title in a work or a 
        portion thereof; or
            ``(C) is marketed by that person or another acting in 
        concert with that person with that person's knowledge for use 
        in circumventing protection afforded by a technological 
        protection measure that effectively protects a right of a 
        copyright owner under this title in a work or a portion 
        thereof.
    ``(2) As used in this subsection--
            ``(A) the term `circumvent protection afforded by a 
        technological protection measure' means avoiding, bypassing, 
        removing, deactivating, or otherwise impairing a technological 
        protection measure; and
            ``(B) a technological protection measure `effectively 
        protects a right of a copyright owner' under this title if the 
        measure, in the ordinary course of its operation, prevents, 
        restricts, or otherwise limits the exercise of a right of a 
        copyright owner under this title.
    ``(c) Importation.--The importation into the United States, the 
sale for importation, or the sale within the United States after 
importation by the owner, importer, or consignee of any technology, 
product, service, device, component, or part thereof as described in 
subsection (a) or (b) shall be actionable under section 337 of the 
Tariff Act of 1930 (19 U.S.C. 1337).
    ``(d) Other Rights, Etc., Not Affected.--Nothing in this section 
shall affect rights, remedies, limitations, or defenses to copyright 
infringement, including fair use, under this title.
    ``(e) Exemption for Nonprofit Libraries, Archives, and Educational 
Institutions.--(1) A nonprofit library, archives, or educational 
institution which gains access to a commercially exploited copyrighted 
work solely in order to make a good faith determination of whether to 
acquire a copy of that work for the sole purpose of engaging in conduct 
permitted under this title shall not be in violation of subsection 
(a)(1). A copy of a work to which access has been gained under this 
paragraph--
            ``(A) may not be retained longer than necessary to make 
        such good faith determination; and
            ``(B) may not be used for any other purpose.
    ``(2) The exemption available under paragraph (1) shall only apply 
with respect to a work when an identical copy of that work is not 
reasonably available in another form.
    ``(3) A nonprofit library, archives, or educational institution 
that willfully for the purpose of commercial advantage or financial 
gain violates paragraph (1)--
            ``(A) shall, for the first offense, be subject to the civil 
        remedies under section 1203; and
            ``(B) shall, for repeated or subsequent offenses, in 
        addition to the civil remedies under section 1203, forfeit the 
        exemption provided under paragraph (1).
    ``(4) This subsection may not be used as a defense to a claim under 
subsection (a)(2) or (b), nor may this subsection permit a nonprofit 
library, archives, or educational institution to manufacture, import, 
offer to the public, provide, or otherwise traffic in any technology 
which circumvents a technological protection measure.
    ``(5) In order for a library or archives to qualify for the 
exemption under this subsection, the collections of that library or 
archives shall be--
            ``(A) open to the public; or
            ``(B) available not only to researchers affiliated with the 
        library or archives or with the institution of which it is a 
        part, but also to other persons doing research in a specialized 
        field.
    ``(f) Law Enforcement and Intelligence Activities.--This section 
does not prohibit any lawfully authorized investigative, protective, or 
intelligence activity of a law enforcement agency of the United States, 
a State, or a political subdivision of a State, or of an intelligence 
agency of the United States.

``Sec. 1202. Integrity of copyright management information

    ``(a) False Copyright Management Information.--No person shall 
knowingly--
            ``(1) provide copyright management information that is 
        false, or
            ``(2) distribute or import for public distribution 
        copyright management information that is false,
with the intent to induce, enable, facilitate, or conceal infringement.
    ``(b) Removal or Alteration of Copyright Management Information.--
No person shall, without the authority of the copyright owner or the 
law--
            ``(1) intentionally remove or alter any copyright 
        management information,
            ``(2) distribute or import for distribution copyright 
        management information, knowing that the copyright management 
        information has been removed or altered without authority of 
        the copyright owner or the law, or
            ``(3) distribute, import for distribution, or publicly 
        perform works, copies of works, or phonorecords, knowing that 
        the copyright management information has been removed or 
        altered without authority of the copyright owner or the law,
knowing or, with respect to civil remedies under section 1203, having 
reasonable grounds to know, that it will induce, enable, facilitate, or 
conceal an infringement of any right under this title.
    ``(c) Definition.--As used in this chapter, the term `copyright 
management information' means the following information conveyed in 
connection with copies or phonorecords of a work or performances or 
displays of a work, including in digital form:
            ``(1) The title and other information identifying the work, 
        including the information set forth on a notice of copyright.
            ``(2) The name of, and other identifying information about, 
        the author of a work.
            ``(3) The name of, and other identifying information about, 
        the copyright owner of the work, including the information set 
        forth in a notice of copyright.
            ``(4) With the exception of public performances of works by 
        radio and television broadcast stations, the name of, and other 
        identifying information about, a performer whose performance is 
        fixed in a work other than an audiovisual work.
            ``(5) With the exception of public performances of works by 
        radio and television broadcast stations, in the case of an 
        audiovisual work, the name of, and other identifying 
        information about, a writer, performer, or director who is 
        credited in the audiovisual work.
            ``(6) Identifying numbers or symbols referring to such 
        information or links to such information.
            ``(7) Such other information as the Register of Copyrights 
        may prescribe by regulation, but not including any information 
        concerning the user of a copyrighted work.
    ``(d) Law Enforcement and Intelligence Activities.--This section 
does not prohibit any lawfully authorized investigative, protective, or 
intelligence activity of a law enforcement agency of the United States, 
a State, or a political subdivision of a State, or of an intelligence 
agency of the United States.

``Sec. 1203. Civil remedies

    ``(a) Civil Actions.--Any person injured by a violation of section 
1201 or 1202 may bring a civil action in an appropriate United States 
district court for such violation.
    ``(b) Powers of the Court.--In an action brought under subsection 
(a), the court--
            ``(1) may grant temporary and permanent injunctions on such 
        terms as it deems reasonable to prevent or restrain a 
        violation;
            ``(2) at any time while an action is pending, may order the 
        impounding, on such terms as it deems reasonable, of any device 
        or product that is in the custody or control of the alleged 
        violator and that the court has reasonable cause to believe was 
        involved in a violation;
            ``(3) may award damages under subsection (c);
            ``(4) in its discretion may allow the recovery of costs by 
        or against any party other than the United States or an officer 
        thereof;
            ``(5) in its discretion may award reasonable attorney's 
        fees to the prevailing party; and
            ``(6) may, as part of a final judgment or decree finding a 
        violation, order the remedial modification or the destruction 
        of any device or product involved in the violation that is in 
        the custody or control of the violator or has been impounded 
        under paragraph (2).
    ``(c) Award of Damages.--
            ``(1) In general.--Except as otherwise provided in this 
        chapter, a person committing a violation of section 1201 or 
        1202 is liable for either--
                    ``(A) the actual damages and any additional profits 
                of the violator, as provided in paragraph (2); or
                    ``(B) statutory damages, as provided in paragraph 
                (3).
            ``(2) Actual damages.--The court shall award to the 
        complaining party the actual damages suffered by the party as a 
        result of the violation, and any profits of the violator that 
        are attributable to the violation and are not taken into 
        account in computing the actual damages, if the complaining 
        party elects such damages at any time before final judgment is 
        entered.
            ``(3) Statutory damages.--(A) At any time before final 
        judgment is entered, a complaining party may elect to recover 
        an award of statutory damages for each violation of section 
        1201 in the sum of not less than $200 or more than $2,500 per 
        act of circumvention, device, product, component, offer, or 
        performance of service, as the court considers just.
            ``(B) At any time before final judgment is entered, a 
        complaining party may elect to recover an award of statutory 
        damages for each violation of section 1202 in the sum of not 
        less than $2,500 or more than $25,000.
            ``(4) Repeated violations.--In any case in which the 
        injured party sustains the burden of proving, and the court 
        finds, that a person has violated section 1201 or 1202 within 3 
        years after a final judgment was entered against that person 
        for another such violation, the court may increase the award of 
        damages up to triple the amount that would otherwise be 
        awarded, as the court considers just.
            ``(5) Innocent violations.--
                    ``(A) In general.--The court in its discretion may 
                reduce or remit the total award of damages in any case 
                in which the violator sustains the burden of proving, 
                and the court finds, that the violator was not aware 
                and had no reason to believe that its acts constituted 
                a violation.
                    ``(B) Nonprofit library, archives, or educational 
                institution.--In the case of a nonprofit library, 
                archives, or educational institution, the court shall 
                remit damages in any case in which the library, 
                archives, or educational institution sustains the 
                burden of proving, and the court finds, that the 
                library, archives, or educational institution was not 
                aware and had no reason to believe that its acts 
                constituted a violation.

``Sec. 1204. Criminal offenses and penalties

    ``(a) In General.--Any person who violates section 1201 or 1202 
willfully and for purposes of commercial advantage or private financial 
gain--
            ``(1) shall be fined not more than $500,000 or imprisoned 
        for not more than 5 years, or both, for the first offense; and
            ``(2) shall be fined not more than $1,000,000 or imprisoned 
        for not more than 10 years, or both, for any subsequent 
        offense.
    ``(b) Limitation for Nonprofit Library, Archives, or Educational 
Institution.--Subsection (a) shall not apply to a nonprofit library, 
archives, or educational institution.
    ``(c) Statute of Limitations.--Notwithstanding section 507(a) of 
this title, no criminal proceeding shall be maintained under subsection 
(a) unless such proceeding is commenced within 5 years after the cause 
of action arose.''.

SEC. 104. CONFORMING AMENDMENT.

    The table of chapters for title 17, United States Code, is amended 
by adding at the end the following:

``12. Copyright Protection and Management Systems...........    1201''.

SEC. 105. EFFECTIVE DATE.

    (a) In General.--Subject to subsection (b), the amendments made by 
this title shall take effect on the date of the enactment of this Act.
    (b) Amendments Relating to Certain International Agreements.--(1) 
The following shall take effect upon the entry into force of the WIPO 
Copyright Treaty with respect to the United States:
            (A) Paragraph (5) of the definition of ``international 
        agreement'' contained in section 101 of title 17, United States 
        Code, as amended by section 102(a)(4) of this Act.
            (B) The amendment made by section 102(a)(6) of this Act.
            (C) Subparagraph (C) of section 104(h)(1) of title 17, 
        United States Code, as amended by section 102(c)(1) of this 
        Act.
            (D) Subparagraph (C) of section 104(h)(3) of title 17, 
        United States Code, as amended by section 102(c)(2) of this 
        Act.
    (2) The following shall take effect upon the entry into force of 
the WIPO Performances and Phonograms Treaty with respect to the United 
States:
            (A) Paragraph (6) of the definition of ``international 
        agreement'' contained in section 101 of title 17, United States 
        Code, as amended by section 102(a)(4) of this Act.
            (B) The amendment made by section 102(a)(7) of this Act.
            (C) The amendment made by section 102(b)(2) of this Act.
            (D) Subparagraph (D) of section 104(h)(1) of title 17, 
        United States Code, as amended by section 102(c)(1) of this 
        Act.
            (E) Subparagraph (D) of section 104(h)(3) of title 17, 
        United States Code, as amended by section 102(c)(2) of this 
        Act.
            (F) The amendments made by section 102(c)(3) of this Act.

     TITLE II--ON-LINE COPYRIGHT INFRINGEMENT LIABILITY LIMITATION

SEC. 201. SHORT TITLE.

    This title may be cited as the ``On-Line Copyright Infringement 
Liability Limitation Act''.

SEC. 202. LIMITATIONS ON LIABILITY FOR COPYRIGHT INFRINGEMENT.

    (a) In General.--Chapter 5 of title 17, United States Code, is 
amended by adding after section 511 the following new section:

``Sec. 512. Limitations on liability relating to material on-line

    ``(a) Limitation.--Notwithstanding the provisions of section 106, a 
provider shall not be liable for--
            ``(1) direct infringement, based solely on the intermediate 
        storage and transmission of material through a system or 
        network controlled or operated by or for that provider, if--
                    ``(A) the transmission was initiated by another 
                person;
                    ``(B) the storage and transmission is carried out 
                through an automatic technological process, without any 
                selection of that material by the provider; and
                    ``(C) no copy of the material thereby made by the 
                provider is maintained on the provider's system or 
                network in a manner ordinarily accessible to anyone 
                other than the recipients anticipated by the person who 
                initiated the transmission, and no such copy is 
                maintained on the system or network in a manner 
                ordinarily accessible to such recipients for a longer 
                period than is reasonably necessary for the 
                transmission;
            ``(2) monetary relief under section 504 or 505 for 
        contributory infringement or vicarious liability, based solely 
        on conduct described in paragraph (1); or
            ``(3) monetary relief under section 504 or 505 for 
        contributory infringement or vicarious liability, based solely 
        on transmitting or providing access to material over that 
        provider's system or network, other than conduct described in 
        paragraph (1), if the provider--
                    ``(A) does not have actual knowledge that the 
                material is infringing or, in the absence of such 
                actual knowledge, is not aware of facts or 
                circumstances from which infringing activity is 
                apparent; and
                    ``(B) does not receive a financial benefit directly 
                attributable to the infringing activity, if the 
                provider has the right and ability to control such 
                activity.
    ``(b) Protection of Privacy.--Nothing in subsection (a) shall be 
construed to condition the applicability of subsection (a) on a 
provider--
            ``(1) monitoring its service or affirmatively seeking facts 
        indicating infringing activity, or
            ``(2) accessing, removing, or disabling access to material, 
        if such conduct is prohibited by law.
    ``(c) Limitation Based Upon Removing or Disabling Access to 
Infringing Material.--A provider shall not be liable to any person for 
any claim based on that provider's good faith disabling of access to or 
removal of material claimed to be infringing or based on facts or 
circumstances from which infringing activity is apparent, regardless of 
whether the material or activity is ultimately determined to be 
infringing.
    ``(d) Other Defenses Not Affected.--Removing or disabling access to 
material which a provider transmits on-line or to which a provider 
provides on-line access, or the failure to do so, shall not adversely 
bear upon the consideration by a court of a defense to infringement 
asserted by that provider on the basis of section 107 or any other 
provision of law.
    ``(e) Misrepresentations.--Any person who knowingly materially 
misrepresents to a provider that material on-line is infringing shall 
be liable for any damages, including costs and attorneys' fees, 
incurred by the provider, by the alleged infringer, or by any copyright 
owner or copyright owner's authorized licensee, who is injured by such 
misrepresentation, as a result of the provider relying upon such 
misrepresentation in removing or disabling access to the material 
claimed to be infringing.
    ``(f) Definition.--As used in this section, the term `provider' 
means a provider of on-line services or network access.''.
    (b) Conforming Amendment.--The table of sections for chapter 5 of 
title 17, United States Code, is amended by adding at the end the 
following:

``512. Limitations on liability relating to material on-line.''.

SEC. 203. LIMITATIONS ON EXCLUSIVE RIGHTS; COMPUTER PROGRAMS.

    Section 117 of title 17, United States Code, is amended--
    (1) by striking ``Notwithstanding'' and inserting the following:
    ``(a) Making of Additional Copy or Adaptation by Owner of Copy.--
Notwithstanding'';
    (2) by striking ``Any exact'' and inserting the following:
    ``(b) Lease, Sale, or Other Transfer of Additional Copy or 
Adaptation.--Any exact''; and
    (3) by adding at the end the following:
    ``(c) Machine Maintenance or Repair.--Notwithstanding the 
provisions of section 106, it is not an infringement for the owner or 
lessee of a machine to make or authorize the making of a copy of a 
computer program if such copy is made solely by virtue of the 
activation of a machine that lawfully contains an authorized copy of 
the computer program, for purposes only of maintenance or repair of 
that machine, if--
            ``(1) such new copy is used in no other manner and is 
        destroyed immediately after the maintenance or repair is 
        completed; and
            ``(2) with respect to any computer program or part thereof 
        that is not necessary for that machine to be activated, such 
        program or part thereof is not accessed or used other than to 
        make such new copy by virtue of the activation of the machine.
    ``(d) Definitions.--For purposes of this section--
            ``(1) the `maintenance' of a machine is the servicing of 
        the machine in order to make it work in accordance with its 
        original specifications and any changes to those specifications 
        authorized for that machine; and
            ``(2) the `repair' of a machine is the restoring of the 
        machine to the state of working in accordance with its original 
        specifications and any changes to those specifications 
        authorized for that machine.''.

                          Purpose and Summary

    H.R. 2281 contains two titles. The first, entitled the 
``WIPO Copyright Treaties Implementation Act,'' implements 
World Intellectual Property Organization sponsored copyright 
agreements signed by the United States. The second, entitled 
the ``On-Line Copyright Infringement Liability Limitation 
Act,'' limits the liability on-line and Internet service 
providers may incur as a result of transmissions containing 
copyrighted works traveling through systems and networks under 
their control.

                Background and Need For the Legislation

The ``WIPO Copyright Treaties Implementation Act''
    The digital environment now allows users of electronic 
media to send and retrieve perfect reproductions of copyrighted 
material easily and nearly instantaneously, to or from 
locations around the world. With this evolution in technology, 
the law must adapt in order to make digital networks safe 
places to disseminate and exploit copyrighted works.
    In Geneva, Switzerland, in December, 1996, a Diplomatic 
Conference was convened under the auspices of the World 
Intellectual Property Organization (``WIPO''), to negotiate new 
multilateral treaties to protect copyrighted material in the 
digital environment and to provide stronger international 
protection to performers and producers of phonograms. In 
addition to the digital issues, the latter is important to 
provide guarantees abroad of the same strong protection for 
American records, tapes, and compact discs abroad that is 
provided domestically.
    The conference produced two treaties, the ``WIPO Copyright 
Treaty'' and the ``WIPO Performances and Phonograms Treaty,'' 
which were adopted by consensus by over 150 countries. The 
treaties will ensure adequate protection for American works in 
countries around the world at a time when borderless digital 
means of dissemination are becoming increasingly popular. While 
such rapid dissemination of perfect copies will benefit both 
U.S. owners and consumers, it will unfortunately also 
facilitate pirates who aim to destroy the value of American 
intellectual property.
    The successful negotiation of the treaties brings with it 
the need for domestic implementing legislation. Title I of this 
bill contains two substantive additions to U.S. domestic law, 
in addition to some technical changes, to bring the law into 
compliance with the treaties so that they may be ratified 
appropriately.
    The treaties do not require any change in the substance of 
copyright rights or exceptions in U.S. law. They do, however, 
require two technological adjuncts to the copyright law, 
intended to ensure a thriving electronic marketplace for 
copyrighted works on the Internet. The treaties address the 
problems posed by the possible circumvention of technologies, 
such as encryption, which will be used to protect copyrighted 
works in the digital environment and to secure on-line 
licensing systems. To comply with the treaties, the U.S. must 
make it unlawful to defeat technological protections used by 
copyright owners to protect their works. This would include 
preventing unauthorized access as well as the manufacture and 
sale of devices primarily designed to decode encrypted 
copyrighted material. Further, the U.S. must, under the 
treaties, make it unlawful to intentionally provide false 
information, or to deliberately alter or delete information 
provided by a copyright owner which identifies a work, its 
owner or performer, and the terms and conditions for its use.
    When copyrighted material is adequately protected in the 
digital environment, a plethora of works will be distributed 
and performed over the Internet. In order to protect the owner, 
copyrighted works will most likely be encrypted and made 
available to consumers once payment is made for access to a 
copy of the work. There will be those who will try to profit 
from the works of others by decoding the encrypted codes 
protecting copyrighted works, or engaging in the business of 
providing devices or services to enable others to do so. A new 
``Section 1201'' to the Copyright Act is required by both WIPO 
Treaties to make it unlawful to engage in such activity. The 
changes contained in the new Section 1201 are meant to parallel 
similar types of protection afforded by Federal 
telecommunications law and state laws. Just as Congress acted 
in the areas of cable television and satellite transmissions to 
prevent unauthorized interception and descrambling of signals, 
it is now necessary to address the on-line environment.
    While there are no objections to preventing piracy on the 
Internet, it is not easy to draw the line between legitimate 
and non-legitimate uses of decoding devices, and to account for 
devices which serve legitimate purposes. The bill, as reported, 
presents a reasonable compromise by preventing only the 
manufacture or sale of devices that: (1) are ``primarily 
designed'' to grant free, unauthorized access to copyrighted 
works; (2) have only limited commercially significant purpose 
or use other than to grant such free access; or (3) are 
intentionally marketed for use in granting such free access. 
This would not include normal household devices such as 
Videocasette Recorders or personal computers, since such 
devices are not ``primarily designed'' to circumvent 
technological protections granting access to copyrighted works, 
have obvious and numerous commercially significant purposes and 
uses other than circumventing such protections, and are not 
intentionally marketed to circumvent such protections. It would 
however, prevent a manufacturer from making a device that is 
primarily designed for such a purpose and labeling it as a 
common household device.
    A new ``Section 1202'' to the Copyright Act is required by 
both WIPO Treaties to ensure the integrity of the electronic 
marketplace by preventing fraud and misinformation. The section 
prohibits intentionally providing false copyright management 
information, such as the title of a work or the name of its 
author, with the intent to induce, enable, facilitate or 
conceal infringement. It also prohibits the deliberate deleting 
or altering copyright management information. This section will 
operate to protect consumers from misinformation as well as 
authors and copyright owners from interference with the private 
licensing process.
The ``On-Line Copyright Infringement Liability Limitation Act''
    The ``On-Line Copyright Infringement Liability Limitation 
Act'' addresses concerns raised by a number of on-line service 
and Internet access providers regarding their potential 
liability when infringing material is transmitted on-line 
through their services. While several judicially created 
doctrines currently address the question of when liability is 
appropriate, providers have sought greater certainty through 
legislation as to how these doctrines will apply in the digital 
environment.
    Title II of this bill codifies the core of current case law 
dealing with the liability of on-line service providers, while 
narrowing and clarifying the law in other respects. It offers 
the advantage of incorporating and building on those judicial 
applications of existing copyright law to the digital 
environment that have been widely accepted as fair and 
reasonable.
    The bill distinguishes between direct infringement and 
secondary liability, treating each separately. This structure 
is consistent with evolving case law, and appropriate in light 
of the different legal bases for and policies behind the 
different forms of liability.
    As to direct infringement, liability is ruled out for 
passive, automatic acts engaged in through a technological 
process initiated by another. Thus, the bill essentially 
codifies the result in the leading and most thoughtful judicial 
decision to date: Religious Technology Center v. Netcom On-line 
Communications Services, Inc., 907 F. Supp. 1361 (N.D. Cal. 
1995). In doing so, it overrules those aspects of Playboy 
Enterprises, Inc. v. Frena, 839 F. Supp. 1552 (M.D. Fla. 1993), 
insofar as that case suggests that such acts by service 
providers could constitute direct infringement, and provides 
certainty that Netcom and its progeny, so far only a few 
district court cases, will be the law of the land.
    As to secondary liability, the bill changes existing law in 
two primary respects: (1) no monetary relief can be assessed 
for the passive, automatic acts identified in Religious 
Technology Center v. Netcom On-line Communications Services, 
Inc.; and (2) the current criteria for finding contributory 
infringement or vicarious liability are made clearer and 
somewhat more difficult to satisfy. Injunctive relief will, 
however, remain available, ensuring that it is possible for 
copyright owners to secure the cooperation of those with the 
capacity to prevent ongoing infringement. Failure to qualify 
for the exemption or limitation does not mean that the provider 
is necessarily an infringer or liable for monetary damages. If 
the exemption or limitation does not apply, the doctrines of 
existing law will come into play, and liability will only 
attach to the extent that the court finds that the requirements 
for direct infringement, contributory infringement or vicarious 
liability have been met, that the conduct is not excused by any 
other exception or limitation, and that monetary remedies are 
appropriate. Where monetary remedies remain available under the 
bill, the ordinary rules for courts to follow in setting the 
amounts of those remedies will still apply. This includes the 
remittal of statutory damages under paragraph 504 (c)(2) for 
non-profits and public broadcasting entities based on the 
reasonable belief that the infringing act was a fair use.
    Safeguards in the bill include language intended to guard 
against interference with privacy; a provision ensuring that 
nonprofit institutions such as universities will not be 
prejudiced when they determine that an allegedly infringing use 
is fair use; a provision protecting service providers from 
lawsuits when they act to assist copyright owners in limiting 
or preventing infringement; and a provision requiring payment 
of costs incurred when someone knowingly makes false 
accusations of on-line infringement.

                                Hearings

    The Committee's Subcommittee on Courts and Intellectual 
Property held two days of hearings on this legislation on 
September 16 and 17, 1997 (Serial #33). Testimony was received 
from The Honorable Bruce Lehman, Assistant Secretary of 
Commerce and Commissioner of Patents and Trademarks, Patent and 
Trademark Office, United States Department of Commerce; The 
Honorable Marybeth Peters, Register of Copyrights, United 
States Copyright Office, The Library of Congress; Roy Neel, 
President and Chief Executive Officer, United States Telephone 
Association; Jack Valenti, President and Chief Executive 
Officer, Motion Picture Association of America; Robert 
Holleyman, President, Business Software Alliance; M.R.C. 
Greenwood, Chancellor, University of California, Santa Cruz, on 
behalf of the Association of American Universities and the 
National Association of State Universities and Land Grant 
Colleges; Tushar Patel, Vice President and Managing Director, 
USWeb; Lawrence Kenswil, Executive Vice President, Business and 
Legal Affairs, Universal Music Group; Marc Jacobson, General 
Counsel, Prodigy Services, Inc.; Ken Wasch, President, Software 
Publishers Association; Ronald G. Dunn, President, Information 
Industry Association; John Bettis, Songwriter, on behalf of the 
American Society of Composers Authors and Publishers; Allee 
Willis, Songwriter, on behalf of Broadcast Music, Incorporated; 
Robert L. Oakley, Professor of Law, Georgetown University Law 
Center and Director, Georgetown Law Library, on behalf of a 
Coalition of Library and Educational Organizations; Johnny 
Cash, Vocal Artist, with Hilary Rosen, President and Chief 
Executive Officer, Recording Industry Association of America; 
Allan Adler, Vice President, Legal and Governmental Affairs, 
Association of American Publishers; Gail Markels, General 
Counsel and Senior Vice President, Interactive Digital Software 
Association; Mike Kirk, Executive Director, American 
Intellectual Property Law Association; Thomas Ryan, President, 
SciTech Software, Inc.; Mark Belinsky, Vice President, Copy 
Protection Group, Macrovision, Inc.; Douglas Bennett, 
President, Earlham College, Vice President, American Council of 
Learned Societies, on behalf of the Digital Future Coalition; 
Edward J. Black, President, Computer and Communications 
Industry Association; Christopher Byrne, Director of 
Intellectual Property, Silicon Graphics, Inc., on behalf of the 
Information Technology Industry Council; and Gary Shapiro, 
President, Consumer Electronics Manufacturer's Association (a 
sector of the Electronic Industries Association), and Chairman, 
Home Recording Rights Coalition.

                        Committee Consideration

    On February 26, 1998, the Subcommittee conducted a markup 
of H.R. 2281, the ``WIPO Copyright Treaties Implementation 
Act,'' and on H.R. 3209, the ``On-Line Copyright Infringement 
Liability Limitation Act.''
    H.R. 2281 was reported favorably by voice vote, a quorum 
being present, to the full Committee in the form of a single 
amendment in the nature of a substitute incorporating 
amendments adopted by the Subcommittee.
    H.R. 3209 was reported favorably by voice vote, a quorum 
being present, to the full Committee, without amendment.
    On April 1, 1998, the full Committee conducted a markup of 
H.R. 2281, as reported by the Subcommittee. The Committee 
adopted, by voice vote, an amendment in the nature of a 
substitute offered by Mr. Coble, which made the provisions of 
H.R. 2281, as reported, title I of the bill, and certain 
provisions of H.R. 3209 title II of the bill.
    The Committee favorably reported, by voice vote, a quorum 
being present, H.R. 2281, as amended, to the House.

                      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)(1) 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(l)(3)(D) of rule XI of the Rules of the House of 
Representatives.

               New Budget Authority and Tax Expenditures

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

               Congressional Budget Office Cost Estimate

    In compliance with clause 2(l)(C)(3) of rule XI of the 
Rules of the House of Representatives, the Committee sets 
forth, with respect to the bill, H.R. 2281, the following 
estimate and comparison prepared by the Director of the 
Congressional Budget Office under section 403 of the 
Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, April 16, 1998.
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. 2281, the WIPO 
Copyright Treaties Implementation Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Kim Cawley, 
who can be reached at 226-2860.
            Sincerely,

                                           June E. O'Neill, Director.  
    Enclosure.

    cc: Honorable John Conyers, Jr.,
         Ranking Minority Member.
H.R. 2281--WIPO Copyright Treaties Implementation Act
    CBO estimates that enacting H.R. 2281 would have no 
significant impact on the federal budget. Enacting the bill 
would establish new criminal penalties and thus could affect 
both receipts and direct spending. Hence, pay-as-you-go 
procedures would apply, but we expect that any changes in 
receipts and direct spending would be insignificant.
    Title I of H.R. 2281 would amend U.S. copyright law to 
comply with two treaties produced by the December 1996 
conference of the World Intellectual Property Organization one 
regarding the use of copyrighted material in digital 
environments, and the other dealing with international 
copyright protection of performers and producers of phonograms. 
Section 1204 would establish criminal fines of up to $1 million 
for anyone attempting to circumvent copyright protection 
systems, or falsifying or altering copyright management 
information. Enacting this provision could increase 
governmental receipts from the collection of fines, but we 
estimate that any such increase would be less than $500,000 
annually. Criminal fines are deposited in the Crime Victims 
Fund and are spent in the following year. Thus any change in 
direct spending from the fund would also amount to less than 
$500,000 annually.
    Title II would limit the liability for copyright 
infringement of persons who are providers of on-line services 
or network access. Based on information from the Copyright 
Office, CBO estimates this provision would have no budgetary 
impact.
    Section 4 of the Unfunded Mandates Reform Act of 1995 
excludes from the application of that act any legislative 
provisions that are necessary for the ratification or 
implementation of international treaty obligations. CBO has 
determined that Title I of the bill fits within that exclusion 
because it is necessary for the implementation of the WIPO 
Copyright Treaty and the WIPO Performances and Phonograms 
Treaty. Title II of the bill does not contain any 
intergovernmental or private-sector mandates.
    The CBO staff contact for this estimate is Kim Cawley, who 
can be reached at 226-2860. This estimate was approved by 
Robert A. Sunshine, Deputy Assistant Director for Budget 
Analysis.

                        Constitutional Authority

    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 101: Short Title
    This section provides that this Act may be cited as the 
``WIPO Copyright Treaties Implementation Act.''
Section 102: Technical Changes
            Summary
    To comply with the obligations of the WIPO Treaties, 
several technical amendments to the U.S. Copyright Act are 
necessary. These amendments are needed to ensure that works 
from countries that join the two new WIPO Treaties, including 
works in existence on the date each treaty becomes effective 
for the United States, will be protected in the United States 
on a formality-free basis, as required by the provisions of 
each treaty. Three sections of the Copyright Act require 
amendment: (1) section 104, which specifies the conditions on 
which works from other countries are protected in the United 
States; (2) section 104A, which restores protection to certain 
preexisting works from other countries that have fallen into 
the public domain in the United States; and (3) section 411(a), 
which makes copyright registration a precondition to bringing 
suit for infringement for some works. In addition, the 
amendments made to these sections require some additions to, 
and changes in, the definition section of the Copyright Act, 
section 101.
            Changes to Section 101: Definitions.
    The bill amends section 101 to define ``treaty party'' as 
``any country or intergovernmental organization that is a party 
to an international agreement'' and to define ``international 
agreement'' to include, inter alia, the two new WIPO Treaties. 
Definitions of the two new WIPO Treaties are also provided. In 
addition, a definition of ``United States work'' was added for 
purposes of amended section 411.
            Changes to Section 104: Subject Matter of Copyright: 
                    National Origin.
    Existing section 104 identifies the criteria that must be 
met for a work to qualify for protection under the U.S. 
copyright law (i.e., ``points of attachment''). Among those 
protected under section 104 are nationals or domiciliaries of 
those countries with which we have an appropriate Treaty 
relationship. Section 104, as it is presently written, 
explicitly identifies those Treaty relationships, but does not 
refer to the two new WIPO Treaties. Therefore, section 104 
needs to be amended to provide for points of attachment for the 
two new WIPO Treaties.
    This bill amends section 104 so that all countries that 
have copyright relations with the United States would be 
referred to collectively by the term ``treaty parties.'' This 
change, in conjunction with the amendments to section 101, 
which define ``treaty party'' and ``international agreement,'' 
serves to ensure that the two new WIPO Treaties are covered by 
section 104. The bill also amends section 104 to extend 
protection to foreign works from any treaty party based on four 
points of attachment: nationality of the author, place of first 
publication of the work, place of fixation of the sounds 
embodied in a sound recording, and the situs of a constructed 
architectural work.
    The way section 104 is presently written requires that it 
be amended each time U.S. treaty membership changes. By 
defining ``treaty party'' in section 101 and amending section 
104 to refer to ``treaty party,'' future changes in the 
treaties to which the U.S. is a party would not require changes 
to section 104. It is much clearer and less unwieldy to have a 
single set of criteria for eligibility in section 104 as 
proposed by this bill, rather than multiple, overlapping 
criteria in a long list of complex definitions in section 101. 
If we join any future treaties, they can simply be added to the 
list of ``international agreements'' without any detailed 
amendments repeating the criteria for eligibility. The 
amendment to section 104 also makes clear that membership in 
the Geneva Phonograms Convention and the WIPO Performances and 
Phonograms Treaty provides national eligibility for sound 
recordings only, not other types of works.
            Changes to Section 104A: Copyright in Restored Works
    The bill amends section 104A(h) by adding the two new WIPO 
Treaties to the definitions of ``date of adherence or 
proclamation'' and ``eligible country.'' It would also add a 
paragraph to the definition of ``restored work'' to ensure that 
copyrighted works other than sound recordings do not qualify as 
restored works where the sole basis for protection in the 
United States is adherence to the WIPO Performances and 
Phonograms Treaty.
            Changes to Section 411(a): Registration and Infringement 
                    Actions
    In its current form, section 411(a) requires works to be 
registered with the Copyright Office before suit can be brought 
for their infringement, but exempts Berne Convention works 
whose country of origin is not the United States. The section 
must be amended to exempt works from members of the two new 
WIPO Treaties.
    Amendments to section 411(a) reframe the registration 
requirement in the affirmative--essentially the converse of the 
current section. In other words, the provision would state 
affirmatively that ``United States works'' must be registered 
before suit, with ``United States works'' defined as the 
converse of the current definition of works whose country of 
origin is not the United States. Similar to the changes in 
section 104, this section could be easily updated each time the 
United States joins another treaty, without the need to change 
several interrelated provisions of the Act.
            Change to Section 507(a)
    Currently, section 507(a) provides for a three-year statute 
of limitations period for all criminal copyright actions. 
Section 507(a) is amended to recognize exceptions to the three-
year limitations period if expressly provided elsewhere in 
Title 17. New chapter 12 of Title 17 provides for a five-year 
criminal limitation period.
Section 103: Copyright Protection Systems and Copyright Management 
        Information
            Summary
    The two new WIPO Treaties include substantively identical 
provisions on technological measures of protection (also 
commonly referred to as the ``black box'' or 
``anticircumvention'' provisions). These provisions require 
contracting parties to provide ``adequate legal protection and 
effective legal remedies against the circumvention of effective 
technological measures that are used by authors in connection 
with the exercise of their rights under this Treaty or the 
Berne Convention and that restrict acts, in respect of their 
works, which are not authorized by the authors concerned or 
permitted by law.''
    Both of the new WIPO treaties also include substantively 
identical provisions on copyright management information. These 
provisions require contracting parties to protect the integrity 
of copyright management information. The treaties define 
copyright management information as ``information which 
identifies the work, the author of the work, the owner of any 
right in the work, or information about the terms and 
conditions of use of the work, and any numbers or codes that 
represent such information, when any of these items of 
information is attached to a copy of a work or appears in 
connection with the communication of a work to the public.''
    Legislation is required to comply with both of these 
provisions. To accomplish this, the bill adds a new chapter 
(chapter twelve) to Title 17 of the United States Code. This 
new chapter twelve includes four sections--(1) section 1201, 
which prohibits the circumvention of technological copyright 
protection measures; (2) section 1202, which protects the 
integrity of copyright management information; (3) section 
1203, which provides for civil remedies for violations of 
sections 1201 and 1202; and (4) section 1204, which provides 
for criminal penalties for violations of sections 1201 and 
1202.
            Section 1201: Circumvention of Copyright Protection Systems
    Subsection (a) applies when a person has not obtained 
authorized access to a copy or a phonorecord of a work for 
which the copyright owner has put in place a technological 
measure that effectively controls access to his or her work. 
The relevant terminology is defined in paragraph (a)(3), as 
described below.
    Paragraph (a)(1). The act of circumventing a technological 
protection measure put in place by a copyright owner to control 
access to a copyrighted work is the electronic equivalent of 
breaking into a locked room in order to obtain a copy of a 
book. Paragraph (a)(1) establishes a general prohibition 
against gaining unauthorized access to a work by circumventing 
a technological protection measure put in place by the 
copyright owner where such protection measure otherwise 
effectively controls access to a work protected under Title 17 
of the U.S. Code.
    Paragraph (a)(1) does not apply to the subsequent actions 
of a person once he or she has obtained authorized access to a 
copy of a work protected under Title 17, even if such actions 
involve circumvention of additional forms of technological 
protection measures. In a fact situation where the access is 
authorized, the traditional defenses to copyright infringement, 
including fair use, would be fully applicable. So, an 
individual would not be able to circumvent in order to gain 
unauthorized access to a work, but would be able to do so in 
order to make fair use of a work which he or she has acquired 
lawfully.
    Paragraph (a)(2). In order to provide meaningful protection 
and enforcement of the copyright owner's right to control 
access to his or her copyrighted work, this paragraph 
supplements the prohibition against the act of circumvention in 
paragraph (a)(1) with prohibitions on creating and making 
available certain technologies, products and services used, 
developed or advertised to defeat technological protections 
against unauthorized access to a work. Similar laws have been 
enacted in related contexts. See, e.g., 17 U.S.C. Sec. 1002(a) 
(prohibiting the import, manufacture, or distribution of 
digital audio recording equipment lacking specified 
characteristics and prohibiting the import, manufacture, or 
distribution of any device, or the offer to perform any 
service, the primary purpose or effect of which is to 
circumvent the serial copy management system required for 
digital audio equipment); 47 U.S.C. Sec. 553(a)(2) (prohibiting 
the manufacture or distribution of equipment intended for the 
unauthorized reception of cable television service); 47 U.S.C. 
Sec. 605(e)(4) (prohibiting the manufacture, assembly, import, 
and sale of equipment used in the unauthorized decryption of 
satellite cable programming.)
    Specifically, paragraph (a)(2) prohibits manufacturing, 
importing, offering to the public, providing, or otherwise 
trafficking in certain technologies, products, services, 
devices, components, or parts that can be used to circumvent a 
technological protection measure that otherwise effectively 
controls access to a work protected under Title 17. It is 
drafted carefully to target ``black boxes,'' and to ensure that 
legitimate multipurpose devices can continue to be made and 
sold. For a technology, product, service, device, component, or 
part thereof to be prohibited under this subsection, one of 
three conditions must be met. It must:
          (1) be primarily designed or produced for the purpose 
        of circumventing;
          (2) have only a limited commercially significant 
        purpose or use other than to circumvent; or
          (3) be marketed by the person who manufactures it, 
        imports it, offers it to the public, provides it or 
        otherwise traffics in it, or by another person acting 
        in concert with that person, for use in circumventing a 
        technological protection measure that effectively 
        controls access to a work protected under Title 17.
    This provision is designed to protect copyright owners, and 
simultaneously allow the development of technology.
    Paragraph (a)(3) defines certain terms used throughout 
paragraph (a):
          (1) ``circumvent a technological protection 
        measure''--for purposes of paragraph (a) only, which 
        covers protections against unauthorized initial access 
        to a work, this term means ``to descramble a scrambled 
        work, to decrypt an encrypted work, or otherwise to 
        avoid, bypass, remove, deactivate, or impair a 
        technological protection measure, without the authority 
        of the copyright owner.''
          (2) ``effectively controls access to a work''--a 
        technological protection measure ``effectively controls 
        access to a work'' if the measure, in the ordinary 
        course of its operation, requires the application of 
        information, or a process or a treatment, with the 
        authority of the copyright owner, to gain access to the 
        work.
    Subsection (b) applies when a person has obtained 
authorized access to a copy or a phonorecord of a work, but the 
copyright owner has put in place technological measures that 
effectively protect his or her right under Title 17 to control 
or limit further use of the copyrighted work.
    Paragraph(b)(1). Paralleling paragraph (a)(2), above, 
paragraph (b)(1) seeks to provide meaningful protection and 
enforcement of copyright owners' use of technological 
protection measures to protect their rights under Title 17 by 
prohibiting the act of making or selling the technological 
means to overcome these protections and facilitate copyright 
infringement. Paragraph (b)(1) prohibits manufacturing, 
importing, offering to the public, providing, or otherwise 
trafficking in certain technologies, products, services, 
devices, components, or parts thereof that can be used to 
circumvent a technological protection measure that effectively 
protects a right of a copyright owner under Title 17 in a work 
or portion thereof. Again, for a technology, product, service, 
device, component, or part thereof to be prohibited under this 
subsection, one of three conditions must be met. It must:
          (1) be primarily designed or produced for the purpose 
        of circumventing;
          (2) have only limited commercially significant 
        purpose or use other than to circumvent; or
          (3) be marketed by the person who manufactures it, 
        imports it, offers it to the public, provides it, or 
        otherwise traffics in it, or by another person acting 
        in concert with that person, for use in circumventing a 
        technological protection measure that effectively 
        protects the right of a copyright owner under Title 17 
        in a work or a portion thereof.
    Like paragraph (a)(2), this provision is designed to 
protect copyright owners, and simultaneously allow the 
development of technology.
    Paragraph (b)(2) defines certain terms used in subsection 
(b):
          (1) ``circumvent protection afforded by a 
        technological protection measure'' is defined as 
        ``avoiding, bypassing, removing, deactivating, or 
        otherwise impairing a technological protection 
        measure.''
          (2) ``effectively protects a right of a copyright 
        owner under Title 17''--a technological protection 
        measure effectively protects a right of a copyright 
        owner under Title 17 ``if the measure, in the ordinary 
        course of its operation, prevents, restricts, or 
        otherwise limits the exercise of a right under Title 17 
        of a copyright owner.''
    Subsection (c) prohibits the importation, sale for 
importation, or sale within the United States after importation 
by the owner, importer or consignee of any technology, product, 
service, device, component, or part thereof covered by 
subsections (a) or (b). This paragraph further provides that 
violations of this provision are actionable under section 1337 
of Title 19 of the U.S. Code, which authorizes actions by the 
International Trade Commission against unfair import practices.
    Subsection (d) provides that section 1201 shall not have 
any effect on rights, remedies, limitations, or defenses to 
copyright infringement, including fair use, under Title 17. 
This provision is intended to ensure that none of the 
provisions in section 1201 affect the existing legal regime 
established in the Copyright Act and case law interpreting that 
statute.
    Subsection (e) allows a nonprofit library, nonprofit 
archives or nonprofit educational institution to obtain access 
to a copyrighted work for the sole purpose of making a good 
faith determination as to whether it wishes to acquire a copy, 
or portion of a copy, of that work in order to engage in 
conduct permitted under the Copyright Act, such as a fair use 
under section 107. A qualifying institution may not gain access 
for a period of time longer than necessary to determine whether 
it wishes to obtain a copy, or portion of a copy, for such 
purposes and the right to gain access shall not apply for any 
other purpose.
    The right to obtain access under this paragraph only 
applies when the nonprofit library, nonprofit archives, or 
nonprofit educational institution cannot obtain a copy of an 
identical work by other means, and such an entity may not use 
the exemption in this paragraph for commercial advantage or 
financial gain without penalty.
    This paragraph shall not be used as a defense to the 
prohibitions on manufacturing or selling devices contained in 
paragraph (a)(2) or subsection (b).
    Subsection (f) makes clear that the prohibitions in section 
1201 do not prohibit any lawfully authorized investigative, 
protective, or intelligence activity by or at the direction of 
a federal, state, or local law enforcement agency, or of an 
intelligence agency of the United States.
            Section 1202: Integrity of Copyright Management Information
    Subsection (a) establishes a general prohibition against 
intentionally providing false copyright management information 
(``CMI''), as defined in subsection (c), and against 
distributing or importing for distribution false CMI. There are 
two prerequisites that must be met for these prohibitions to be 
violated: (1) the person providing, distributing or importing 
the false CMI must know the CMI is false, and (2) the person 
providing, distributing, or importing the false CMI must do so 
with the intent to induce, enable, facilitate or conceal an 
infringement of any right under Title 17. The prohibition in 
this subsection does not include ordinary and customary 
practices of broadcasters or inadvertent omission of credits 
from broadcasts of audiovisual works since, inter alia, such 
omissions do not entail knowing provision of false CMI with 
intent to induce, enable, facilitate or conceal a copyright 
infringement.
    Subsection (b) establishes a general prohibition against 
removing or altering CMI and against distributing or importing 
for distribution altered CMI or distributing, importing for 
distribution or publicly performing works in which CMI has been 
removed. There are three specific acts prohibited if they are 
committed without the authority of the copyright owner or the 
law, and if they are done knowing, or with respect to civil 
remedies under section 1203, having reasonable grounds to know, 
that they will induce, enable, facilitate or conceal a 
copyright infringement: (1) intentionally removing or altering 
CMI; (2) distributing or importing for distribution CMI knowing 
that it has been altered without the authority of the copyright 
owner or the law; or (3) distributing, importing for 
distribution, or publicly performing works, copies of works, or 
phonorecords knowing that CMI has been removed or altered 
without the authority of the copyright owner or the law. The 
prohibition in this subsection does not include ordinary and 
customary practices of broadcasters or inadvertent omission of 
credits from broadcasts of audiovisual works since, inter alia, 
such omissions are not made with knowledge that they will 
induce, enable, facilitate or conceal a copyright infringement.
    Subsection (c) defines CMI. To fall within the definition, 
there is a threshold requirement that the information be 
conveyed in connection with copies or phonorecords, 
performances or displays of the copyrighted work. The term 
``conveyed'' is used in its broadest sense and is not meant to 
require any type of transfer, physical or otherwise, of the 
information. It merely requires that the information be 
accessible in conjunction with, or appear with, the work being 
accessed.
    Subsection (c) defines CMI as (1) the title of a work or 
other information that identifies the work; (2) the author's 
name or other information that identifies the author; (3) the 
copyright owner's name or other information that identifies the 
copyright owner; and (4) terms and conditions for use of a 
work. Numbers and symbols which refer to or represent the above 
information are also included within the definition of CMI. As 
noted above, both treaties require that numbers and symbols be 
included within the definition of CMI. Links, such as embedded 
pointers and hyperlinks, to the above information are also 
included. The phrase ``links to such information'' was included 
because removing or altering a link to the information will 
have the same adverse effect as removing or altering the 
information itself. Finally, paragraph (c)(6) of the definition 
permits the Register of Copyrights to prescribe by regulation 
other information that, if conveyed in connection with a work, 
is to be protected as CMI. To protect the privacy of users of 
copyrighted works, however, the Register of Copyrights may not 
include within the definition of CMI any information concerning 
users of copyrighted works.
    Subsection (d) makes clear that the prohibitions in section 
1202 do not prohibit any lawfully authorized investigative, 
protective or intelligence activity by or at the direction of a 
federal, state or local law enforcement agency, or of an 
intelligence agency of the United States.
    Section 1202 does not mandate the use of any type of CMI. 
It merely protects the integrity of CMI if a party chooses to 
use it in connection with a copyrighted work, prohibiting its 
deliberate deletion or alteration. It also should be noted that 
the definition of ``copyright management information'' does not 
encompass, nor is it intended to encompass, tracking or usage 
information relating to the identity of users of the works. The 
definition of CMI encompasses only the types of information 
listed, such as the author's name, the copyright owner's name, 
copyright notice information, and title of the work. It would 
be inconsistent with the purpose and construction of this bill 
and contrary to the protection of privacy to include tracking 
and usage information within the definition of CMI.
    Section 1202 imposes liability for specified acts. It does 
not address the question of liability for persons who 
manufacture devices or provide services.
            Section 1203. Civil Remedies
    Section 1203 is divided into three paragraphs. Subsection 
(a) sets forth the general proposition that civil remedies are 
available for violations of sections 1201 and 1202. This 
paragraph establishes the jurisdiction for such civil actions 
as the ``appropriate U.S. district court'' and limits standing 
to bring a civil action to those persons injured by a violation 
of section 1201 or 1202.
    Subsection (b) sets out the powers of the court that hears 
the case. Subsection (b) permits the court to (1) grant 
temporary and permanent injunctions; (2) order the impounding 
of any device or product that is in the custody or control of 
the alleged violator and that the court has reasonable cause to 
believe was involved in a violation; (3) award damages; (4) 
allow the recovery of costs by or against any party; (5) award 
reasonable attorney's fees to the prevailing party; and (6) 
order the remedial modification or the destruction of any 
device or product involved in the violation that is in the 
custody or control of the violator or has been impounded.
    Subsection (c) is divided into five sections, each of which 
addresses the awarding of damages to the prevailing party. 
Paragraph (c)(1) establishes the general proposition that a 
person who violates section 1201 or 1202 is liable for either 
actual damages and any additional profits of the violator or 
statutory damages. Paragraphs (c)(2) and (c)(3) specify that 
the complaining party may finalize a choice between the two 
types of damage awards at any time until the final judgment is 
entered.
    Paragraph (c)(2) provides that, when the prevailing party 
opts for actual damages, the court shall award to that party 
the actual damages suffered by the party as a result of the 
violations, as well as any profits of the violator that are 
attributable to the violation and are not taken into account in 
computing the actual damages.
    Paragraph (c)(3) provides different statutory award amounts 
depending upon whether the civil action involves a section 1201 
or 1202 violation. When the violation is a section 1201 
violation and the prevailing party opts to recover an award of 
statutory damages, the prevailing party will be awarded 
statutory damages of not less than $200 or more than $2,500 per 
act of circumvention, device, product, component, offer, or 
performance of service. When the violation is a section 1202 
violation and the prevailing party opts to recover an award of 
statutory damages, the prevailing party will be awarded 
statutory damages of not less than $2,500 or more than $25,000 
for each violation.
    Paragraphs (c)(4) and (c)(5) set forth circumstances in 
which it would be appropriate to increase or decrease a damage 
award. Paragraph (c)(4) provides for an increased damage award 
when the violator is a repeat offender. Specifically, when the 
prevailing party establishes that a person violated section 
1201 or 1202 within three years after a final judgment was 
entered against that person for another such violation, the 
award of damages may be increased to a sum of up to triple the 
amount that would otherwise be awarded. Paragraph (c)(5)(A) 
provides that, when a violator of section 1201 or 1202 was not 
aware and had no reason to believe that its acts constituted a 
violation, the damage award may be reduced or remitted. 
Paragraph (c)(5)(B) provides that, when a nonprofit library, 
nonprofit archives, or nonprofit educational institution 
violator of section 1201 or 1202 was not aware and had no 
reason to believe that its acts constituted a violation, the 
damage award shall be remitted entirely.
            Section 1204: Criminal Penalties
    Subsection (a) provides for the availability of criminal 
penalties for violations of sections 1201 and 1202. The 
standard applicable under this section is identical to the 
standard used in section 506 of the Copyright Act to establish 
criminal violations. Subsection (a) also sets forth the 
penalties available for a criminal violations of sections 1201 
and 1202 as ``not more than $500,000 or imprisonment for not 
more than five years, or both.'' If the person who is found 
guilty of criminal violation of sections 1201 or 1202 is a 
repeat offender, section 1204 provides that penalties may be 
increased to ``not more than $1,000,000 or imprisonment for not 
more than ten years, or both.''.
    Subsection (b) exempts completely any nonprofit library, 
nonprofit archives or nonprofit educational institution from 
the criminal penalties contained in subsection (a).
    Subsection (c) provides for a five-year statute of 
limitations for criminal offenses under chapter 12.
Section 104: Conforming Amendments
    This section amends the table of chapters for Title 17 to 
reflect the addition of new chapter twelve.
Section 105: Effective Date
    This section establishes the effective date of the proposed 
amendments in this bill as the date the bill is enacted into 
law. There are several exceptions to this effective date. These 
exceptions only apply to the technical amendments that are 
proposed in section 102 of the bill. Section 105 of the bill 
changes the effective date of any provision in section 102 of 
the bill that specifically refers to the WIPO Copyright Treaty 
or the WIPO Performances and Phonograms Treaty from the date 
the bill is enacted into law to the date the Treaty enters into 
force.
    These exceptions were necessary because, as of the drafting 
of this bill, the two treaties have not entered into force and 
will not do so until three months after 30 States deposit their 
instruments of ratification or accession with the Director 
General of WIPO. The exceptions ensure that the amendments that 
refer specifically to the two treaties do not become effective 
until the treaties themselves become effective. In addition, it 
was necessary to refer to the each treaty separately in this 
section, because it is possible that the two treaties may enter 
into force at different times and the amendments particular to 
each treaty had to be grouped together to ensure that the 
provisions relating specifically to one treaty do not become 
effective once the other treaty enters into force. Finally, it 
was necessary to add the phrase ``with respect to the United 
States'' to ensure that, if the Treaties enter into force 
before the United States deposits its instrument of accession, 
the United States does not extend benefits to Member States of 
these Treaties until the United States becomes party to the 
Treaties.
Section 201: Short Title
    This section establishes the short title of the bill as the 
``On-Line Copyright Infringement Liability Limitation Act.''
Section 202: Limitations
    Paragraph 512(a)(1) exempts a provider from liability on 
the basis of direct infringement for transmitting material over 
its system or network at the request of a third party, and for 
the intermediate storage of such material, in certain 
circumstances. The exempted storage and transmissions are those 
carried out through an automatic technological process that is 
indiscriminate--i.e., the provider takes no part in the 
selection of the particular material transmitted--where the 
copies are retained no longer than necessary for the purpose of 
carrying out the transmission. This conduct would ordinarily 
include forwarding of customers' Usenet postings to other 
Internet sites in accordance with configuration settings that 
apply to all such postings. It would also include routing of 
packets from one point to another on the Internet.
    This exemption codifies the result of Religious Technology 
Center v. Netcom On-line Communications Services, Inc., 907 F. 
Supp. 1361 (N.D. Cal. 1995) (``Netcom''), with respect to 
liability of providers for direct infringement. See id. at 
1368-70. In Netcom the court held that a provider is not liable 
for direct infringement where it takes no ``affirmative action 
that [directly results] in copying . . . works other than by 
installing and maintaining a system whereby software 
automatically forwards messages received from subscribers . . . 
and temporarily stores copies on its system.'' By referring to 
temporary storage of copies, Netcom recognizes implicitly that 
intermediate copies may be retained without liability for only 
a limited period of time. The requirement in paragraph 
512(a)(1) that ``no copy [be] maintained on the system or 
network . . . for a longer period than reasonably necessary for 
the transmission'' is drawn from the facts of the Netcom case, 
and is intended to codify this implicit limitation in the 
Netcom holding.
    Paragraph 512(a)(2) exempts a provider from any type of 
monetary relief under theories of contributory infringement or 
vicarious liability for the same activities for which providers 
are exempt from liability for direct infringement under 
paragraph 512(a)(1). This provision extends the Netcom holding 
with respect to direct infringement to remove monetary exposure 
for such limited activities for claims arising under doctrines 
of secondary liability. Taken together, paragraphs (1) and (2) 
mean that providers will never be liable for any monetary 
damages for this type of transmission of material at the 
request of third parties or for intermediate storage of such 
material in the course of the transmission. Copyright owners 
may still seek an injunction against such activities under 
theories of secondary liability, if they can establish the 
necessary elements of a claim.
    Paragraph 512(a)(3) similarly exempts a provider from 
monetary relief under theories of contributory infringement or 
vicarious liability for conduct going beyond the scope of 
paragraph (1), where a provider's level of participation in and 
knowledge of the infringement are low. Such conduct could 
include providing storage on a server and transmitting material 
from such storage in response to requests from users of the 
Internet. In addition, the provision modifies and clarifies the 
knowledge element of contributory infringement and the 
financial benefit element of vicarious liability. Even if a 
provider satisfies the common-law elements of contributory 
infringement or vicarious liability, it will be exempt from 
monetary liability if it satisfies the criteria in 
subparagraphs (A) and (B). As under paragraph (2), copyright 
owners may still seek an injunction even if the provider 
qualifies for the exemption from monetary relief.
    The knowledge standard in subparagraph (A), in addition to 
actual knowledge, includes ``facts or circumstances from which 
infringing activity is apparent.'' This would include a notice 
or any other ``red flag''--information of any kind that a 
reasonable person would rely upon. It may, in appropriate 
circumstances include the absence of customary indicia of 
ownership or authorization, such as a standard and accepted 
digital watermark or other copyright management information. As 
subsection (b) makes clear, the bill imposes no obligation on a 
provider to seek out such red flags. Once a provider becomes 
aware of a red flag, however, it ceases to qualify for the 
exemption.
    This standard differs from existing law, under which a 
defendant may be liable for contributory infringement if it 
knows or should have known that material was infringing.
    The financial benefit standard in subparagraph (B) is 
intended to codify and clarify the direct financial benefit 
element of vicarious liability as it has been interpreted in 
cases such as Marobie-FL, Inc. v. National Association of Fire 
Equipment Distributors,--F. Supp.--(N.D. Ill. 1997). As in 
Marobie, receiving a one-time set-up fee and flat periodic 
payments for service from a person engaging in infringing 
activities would not constitute receiving ``a financial benefit 
directly attributable to the infringing activity.'' Nor is 
subparagraph (B) intended to cover fees based on the length of 
the message (per number of bytes, for example) or by connect 
time. It would, however, include any such fees where the value 
of the service lies in providing access to infringing material.
    The ``right and ability to control'' language in 
Subparagraph (B) codifies the second element of vicarious 
liability. It is not intended to limit this element purely to 
formal indicia of control such as the presence or absence of a 
contractual provision. Rather, Subparagraph (B) is intended to 
preserve existing case law that examines all relevant aspects 
of the relationship between the primary and secondary 
infringer.
    Paragraph (b)(1) states specifically that the knowledge 
standard in subsection (a) shall not be construed to condition 
the limitation contained in that subsection on monitoring a 
network for infringement or searching out suspicious 
information. Once one becomes aware of such information, 
however, one may have an obligation to check further. Paragraph 
(b)(2) states specifically that nothing in subsection (a) shall 
condition the limitation contained in that subsection on 
accessing, removing or disabling access to material, if such 
accessing, removing or disabling is prohibited by law. This is 
intended to prevent the accessing, removing or disabling of 
information contained in transmissions protected under other 
laws, such as electronic mail protected under the Electronic 
Communications Privacy Act.
    The exemption and limitations provided in this subsection 
are affirmative defenses, like the exceptions and limitations 
established elsewhere in title 17. While the burden of proving 
the elements of direct or contributory infringement, or 
vicarious liability, rests with the copyright owner in a suit 
brought for copyright infringement, a defendant asserting this 
exemption or limitation as an affirmative defense in such a 
suit bears the burden of establishing its entitlement.
    Subsections (c) through (e) are intended to protect 
providers when they remove, disable or block access to material 
and remove possible disincentives to cooperate with copyright 
owners by taking steps to prevent infringement. These 
paragraphs ensure that a person who responds to information 
indicating infringement by removing, disabling or blocking 
access to material will not be penalized for having done so.
    Subsection (c) is essentially a ``Good Samaritan'' defense. 
It ensures that a person who acts responsibly upon obtaining 
information indicating an infringement, whether by receiving a 
notice or otherwise, and removes, disables or blocks access to 
the relevant material, cannot be held liable for having done 
so. This section would block claims by anyone based on the 
take-down itself (e.g., interference with contract claims).
    Subsection (d) preserves potential legal defenses. It 
ensures that whatever decision is made by a person who has 
obtained information indicating infringement, whether to 
remove, disable or block access to the material, or not to do 
so because of a potential defense, cannot be used against that 
person in an infringement suit. For example, an educational 
institution which receives notice of infringement and 
determines that the material may be subject to a fair use 
defense would still be able to assert such a defense whether or 
not it chose to block access to the material.
    Subsection (e) protects against losses caused by reliance 
on false information. It provides penalties for knowing 
material misrepresentations that material on-line is 
infringing, allowing the recovery of any damages incurred by a 
person who relies on such misrepresentations in removing, 
disabling or blocking access to such material.
    Subsection (f) defines a ``provider'' as a provider of on-
line services or network access.
Section 203: Limitations on Exclusive Rights; Computer Programs
    This legislation amends Section 117 to ensure that 
independent service organizations do not inadvertently become 
liable for copyright infringement merely because they have 
turned on a machine in order to service its hardware 
components.
    When a computer is activated, that is when it is turned on, 
certain software or parts thereof (generally the machine's 
operating system software) is automatically copied into the 
machine's random access memory, or ``RAM''. During the course 
of activating the computer, different parts of the operating 
system may reside in the RAM at different times because the 
operating system is sometimes larger than the capacity of the 
RAM. Because such copying has been held to constitute a 
``reproduction'' under Sec. 106 of the Copyright Act (see MAI 
Sys. Corp. v. Peak Computer, 991 F.2d 511 (9th Cir. 1993), 
cert. dismissed, 114 S.Ct. 671 (1994)), a person who activated 
the machine without the authorization of the copyright owner of 
that software could be liable for copyright infringement. This 
legislation has the narrow and specific intent of relieving 
independent service providers, persons unaffiliated with either 
the owner or lessee of the machine, from liability under the 
Copyright Act when, solely by virtue of activating the machine 
in which a computer program resides, they inadvertently cause 
an unauthorized copy of that program to be made.
    The legislation is narrowly crafted to achieve the 
foregoing objective without prejudicing the rights of copyright 
owners of computer software. Thus, for example, the amendment 
does not relieve from liability persons who make unauthorized 
adaptations, modifications or other changes to the software. 
The amendment also does not relieve from liability persons who 
make any unauthorized copies of software other than those 
caused solely by activation of the machine.
    The operative provisions, and limitations, are in two new 
subsections to Section 117: subsections (c) and (d).
    Subsection (c) delineates the specific circumstances under 
which a reproduction of a computer program would not constitute 
infringement of copyright. The goal is to maintain undiminished 
copyright protection afforded under the Copyright Act to 
authors of computer programs, while making it possible for 
third parties to perform servicing of the hardware. It states 
that it is not an infringement of copyright for the owner or 
lessee of a machine to make or authorize the making of a copy 
of a computer program provided that the following conditions 
are met:
    First, subsection (c) itself makes clear that the copy of 
the computer program must have been made solely and 
automatically by virtue of turning on the machine in order to 
perform repairs or maintenance on the hardware components of 
the machine. Moreover, the copy of the computer program which 
is reproduced as a direct and sole consequence of activation 
must be an authorized copy that has lawfully been installed in 
the machine. Authorized copies of computer programs are only 
those copies that have been made available with the consent of 
the copyright owner. Also, the acts performed by the service 
provider must be authorized by the owner or lessee of the 
machine.
    Second, in accordance with paragraph (c)(1), the resulting 
copy may not be used by the person performing repairs or 
maintenance of the hardware components of the machine in any 
manner other than to effectuate the repair or maintenance of 
the machine. Once these tasks are completed, the copy of the 
program must be destroyed, which generally will happen 
automatically once the machine is turned off.
    Third, as is made clear in paragraph (c)(2), the amendment 
is not intended to diminish the rights of copyright owners of 
those computer programs, or parts thereof, that also may be 
loaded into RAM when the computer is turned on, but which did 
not need to be so loaded in order for the machine to be turned 
on. A hardware manufacturer or software developer might, for 
example, provide diagnostic and utility programs that load into 
RAM along with or as part of the operating system, even though 
they market those programs as separate products--either as 
freestanding programs, or pursuant to separate licensing 
agreements. Indeed, a password or other technical access device 
is sometimes required for the owner of the machine to be able 
to gain access to such programs. In other cases, it is not the 
hardware or software developer that has arranged for certain 
programs automatically to be reproduced when the machine is 
turned on; rather, the owner of the machine may have configured 
its computer to load certain applications programs into RAM as 
part of the boot-up process (such as a word processing program 
on a personal computer). This amendment is not intended to 
derogate from the rights of the copyright owners of such 
programs. In order to avoid inadvertent copyright infringement, 
these programs need to be covered by subsection (c), but only 
to the extent that they are automatically reproduced when the 
machine is turned on. This legislation is not intended to 
legitimize unauthorized access to and use of such programs just 
because they happen to be resident in the machine itself and 
are reproduced with or as part of the operating system when the 
machine is turned on. According to paragraph (c)(2), if such a 
program is accessed or used without the authorization of the 
copyright owner, the initial reproduction of the program shall 
not be deemed exempt from infringement under subsection (c).
    Subsection (d) defines two terms not previously defined by 
the Copyright Act. Paragraph (1) defines the term 
``maintenance.'' These acts can include, but are not limited 
to, cleaning the machine, tightening connections, installing 
new components such as memory chips, circuit boards and hard 
disks, checking the proper functioning of these components, and 
other similar acts.
    Paragraph (2) of subsection (d) defines the term 
``repair.'' Acts of repairing the hardware include, but are not 
limited to, replacing worn or defective components such as 
memory chips, circuit boards and hard disks, correcting the 
improper installation of new components, and other similar 
acts.
    Both paragraphs (1) and (2) of subsection (d) are subject 
to the same limitations, which are intended to clarify that 
activating a machine in order to perform maintenance or repair 
does not constitute infringement under subsection (c) if the 
maintenance or repair is undertaken to make the machine work in 
accordance with the parameters specified for such a machine and 
its component parts. Because technological improvements may 
lead customers to upgrade their machines, the language of both 
definitions authorizes service providers to maintain those 
components of the hardware that have been installed since the 
time the machine was originally acquired, or to install new 
components. But their acts shall be deemed non-infringing under 
subsection (c) only if the components being serviced have been 
lawfully acquired and installed. Finally, the terms 
``maintenance'' and ``repair'' do not include unauthorized 
adaptations, modifications, error corrections or any other 
changes to any software which may be in the machine being 
serviced.

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 (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, 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
     * * * * * * *
      Copyright Protection and Management Systems...................1201
     * * * * * * *

CHAPTER 1--SUBJECT MATTER AND SCOPE OF COPYRIGHT

           *       *       *       *       *       *       *


Sec. 101. Definitions

    Except as otherwise provided in this title, as used in this 
title, the following terms and their variant forms mean the 
following:

           *       *       *       *       *       *       *

            The ``Berne Convention'' is the Convention for the 
        Protection of Literary and Artistic Works, signed at 
        Berne, Switzerland, on September 9, 1886, and all acts, 
        protocols, and revisions thereto.
            [A work is a ``Berne Convention work'' if--
                    [(1) in the case of an unpublished work, 
                one or more of the authors is a national of a 
                nation adhering to the Berne Convention, or in 
                the case of a published work, one or more of 
                the authors is a national of a nation adhering 
                to the Berne Convention on the date of first 
                publication;
                    [(2) the work was first published in a 
                nation adhering to the Berne Convention, or was 
                simultaneously first published in a nation 
                adhering to the Berne Convention and in a 
                foreign nation that does not adhere to the 
                Berne Convention;
                    [(3) in the case of an audiovisual work--
                            [(A) if one or more of the authors 
                        is a legal entity, that author has its 
                        headquarters in a nation adhering to 
                        the Berne Convention; or
                            [(B) if one or more of the authors 
                        is an individual, that author is 
                        domiciled, or has his or her habitual 
                        residence in, a nation adhering to the 
                        Berne Convention;
                    [(4) in the case of a pictorial, graphic, 
                or sculptural work that is incorporated in a 
                building or other structure, the building or 
                structure is located in a nation adhering to 
                the Berne Convention; or
                    [(5) in the case of an architectural work 
                embodied in a building, such building is 
                erected in a country adhering to the Berne 
                Convention.
        For purposes of paragraph (1), an author who is 
        domiciled in or has his or her habitual residence in, a 
        nation adhering to the Berne Convention is considered 
        to be a national of that nation. For purposes of 
        paragraph (2), a work is considered to have been 
        simultaneously published in two or more nations if its 
        dates of publication are within 30 days of one 
        another.]

           *       *       *       *       *       *       *

            [The ``country of origin'' of a Berne Convention 
        work, for purposes of section 411, is the United States 
        if] For purposes of section 411, a work is a ``United 
        States work'' only if--
                    (1) in the case of a published work, the 
                work is first published--
                            (A) in the United States;
                            (B) simultaneously in the United 
                        States and another [nation or nations 
                        adhering to the Berne Convention] 
                        treaty party or parties, whose law 
                        grants a term of copyright protection 
                        that is the same as or longer than the 
                        term provided in the United States;
                            (C) simultaneously in the United 
                        States and a foreign nation that [does 
                        not adhere to the Berne Convention] is 
                        not a treaty party; or
                            (D) in a foreign nation that [does 
                        not adhere to the Berne Convention] is 
                        not a treaty party, and all of the 
                        authors of the work are nationals, 
                        domiciliaries, or habitual residents 
                        of, or in the case of an audiovisual 
                        work legal entities with headquarters 
                        in, the United States;

           *       *       *       *       *       *       *

                    (3) in the case of a pictorial, graphic, or 
                sculptural work incorporated in a building or 
                structure, the building or structure is located 
                in the United States.
        [For the purposes of section 411, the ``country of 
        origin'' of any other Berne Convention work is not the 
        United States.]

           *       *       *       *       *       *       *

            The ``Geneva Phonograms Convention'' is the 
        Convention for the Protection of Producers of 
        Phonograms Against Unauthorized Duplication of Their 
        Phonograms, concluded at Geneva, Switzerland, on 
        October 29, 1971.

           *       *       *       *       *       *       *

            An ``international agreement'' is--
                    (1) the Universal Copyright Convention;
                    (2) the Geneva Phonograms Convention;
                    (3) the Berne Convention;
                    (4) the WTO Agreement;
                    (5) the WIPO Copyright Treaty;
                    (6) the WIPO Performances and Phonograms 
                Treaty; and
                    (7) any other copyright treaty to which the 
                United States is a party.

           *       *       *       *       *       *       *

            A ``treaty party'' is a country or 
        intergovernmental organization other than the United 
        States that is a party to an international agreement.

           *       *       *       *       *       *       *

            The ``WIPO Copyright Treaty'' is the WIPO Copyright 
        Treaty concluded at Geneva, Switzerland, on December 
        20, 1996.
            The ``WIPO Performances and Phonograms Treaty'' is 
        the WIPO Performances and Phonograms Treaty concluded 
        at Geneva, Switzerland, on December 20, 1996.

           *       *       *       *       *       *       *

            The terms ``WTO Agreement'' and ``WTO member 
        country'' have the meanings given those terms in 
        paragraphs (9) and (10), respectively, of section 2 of 
        the Uruguay Round Agreements Act.

           *       *       *       *       *       *       *


Sec. 104. Subject matter of copyright: National origin

    (a) Unpublished Works.--The works specified by sections 102 
and 103, while unpublished, are subject to protection under 
this title without regard to the nationality or domicile of the 
author.
    (b) Published Works.--The works specified by sections 102 
and 103, when published, are subject to protection under this 
title if--
            (1) on the date of first publication, one or more 
        of the authors is a national or domiciliary of the 
        United States, or is a national, domiciliary, or 
        sovereign authority of a [foreign nation that is a 
        party to a copyright treaty to which the United States 
        is also a party] treaty party, or is a stateless 
        person, wherever that person may be domiciled; or
            (2) the work is first published in the United 
        States or in a foreign nation that, on the date of 
        first publication, is a [party to the Universal 
        Copyright Convention] treaty party; or
            (3) the work is a sound recording that was first 
        fixed in a treaty party; or
            (4) the work is a [Berne Convention work] 
        pictorial, graphic, or sculptural work that is 
        incorporated in a building or other structure, or an 
        architectural work that is embodied in a building and 
        the building or structure is located in the United 
        States or a treaty party; or
            [(3)] (5) the work is first published by the United 
        Nations or any of its specialized agencies, or by the 
        Organization of American States; or
            [(5)] (6) the work comes within the scope of a 
        Presidential proclamation. Whenever the President finds 
        that a particular foreign nation extends, to works by 
        authors who are nationals or domiciliaries of the 
        United States or to works that are first published in 
        the United States, copyright protection on 
        substantially the same basis as that on which the 
        foreign nation extends protection to works of its own 
        nationals and domiciliaries and works first published 
        in that nation, the President may by proclamation 
        extend protection under this title to works of which 
        one or more of the authors is, on the date of first 
        publication, a national, domiciliary, or sovereign 
        authority of that nation, or which was first published 
        in that nation. The President may revise, suspend, or 
        revoke any such proclamation or impose any conditions 
        or limitations on protection under a proclamation.
For purposes of paragraph (2), a work that is published in the 
United States or a treaty party within 30 days after 
publication in a foreign nation that is not a treaty party 
shall be considered to be first published in the United States 
or such treaty party, as the case may be.

           *       *       *       *       *       *       *

    (d) Effect of Phonograms Treaties.--Notwithstanding the 
provisions of subsection (b), no works other than sound 
recordings shall be eligible for protection under this title 
solely by virtue of the adherence of the United States to the 
Geneva Phonograms Convention or the WIPO Performances and 
Phonograms Treaty.

Sec. 104A. Copyright in restored works

    (a) * * *

           *       *       *       *       *       *       *

    (h) Definitions.--For purposes of this section and section 
109(a):
            (1) The term ``date of adherence or proclamation'' 
        means the earlier of the date on which a foreign nation 
        which, as of the date the WTO Agreement enters into 
        force with respect to the United States, is not a 
        nation adhering to the Berne Convention or a WTO member 
        country, becomes--
                    [(A) a nation adhering to the Berne 
                Convention or a WTO member country; or
                    [(B) subject to a Presidential proclamation 
                under subsection (g).]
                    (A) a nation adhering to the Berne 
                Convention;
                    (B) a WTO member country;
                    (C) a nation adhering to the WIPO Copyright 
                Treaty;
                    (D) a nation adhering to the WIPO 
                Performances and Phonograms Treaty; or
                    (E) subject to a Presidential proclamation 
                under subsection (g).

           *       *       *       *       *       *       *

            [(3) The term ``eligible country'' means a nation, 
        other than the United States, that--
                    [(A) becomes a WTO member country after the 
                date of the enactment of the Uruguay Round 
                Agreements Act;
                    [(B) on such date of enactment is, or after 
                such date of enactment becomes, a member of the 
                Berne Convention; or
                    [(C) after such date of enactment becomes 
                subject to a proclamation under subsection (g).
        For purposes of this section, a nation that is a member 
        of the Berne Convention on the date of the enactment of 
        the Uruguay Round Agreements Act shall be construed to 
        become an eligible country on such date of enactment.]
            (3) The term ``eligible country'' means a nation, 
        other than the United States, that--
                    (A) becomes a WTO member country after the 
                date of the enactment of the Uruguay Round 
                Agreements Act;
                    (B) on such date of enactment is, or after 
                such date of enactment becomes, a nation 
                adhering to the Berne Convention;
                    (C) adheres to the WIPO Copyright Treaty;
                    (D) adheres to the WIPO Performances and 
                Phonograms Treaty; or
                    (E) after such date of enactment becomes 
                subject to a proclamation under subsection (g).

           *       *       *       *       *       *       *

            (6) The term ``restored work'' means an original 
        work of authorship that--
                    (A) * * *

           *       *       *       *       *       *       *

                    (C) is in the public domain in the United 
                States due to--
                            (i) * * *

           *       *       *       *       *       *       *

                            (iii) lack of national eligibility; 
                        [and]
                    (D) has at least one author or rightholder 
                who was, at the time the work was created, a 
                national or domiciliary of an eligible country, 
                and if published, was first published in an 
                eligible country and not published in the 
                United States during the 30-day period 
                following publication in such eligible 
                country[.]; and
                    (E) if the source country for the work is 
                an eligible country solely by virtue of its 
                adherence to the WIPO Performances and 
                Phonograms Treaty, is a sound recording.

           *       *       *       *       *       *       *

            (8) The ``source country'' of a restored work is--
                    (A) a nation other than the United States;
                    (B) in the case of an unpublished work--
                            (i) the eligible country in which 
                        the author or rightholder is a national 
                        or domiciliary, or, if a restored work 
                        has more than 1 author or rightholder, 
                        of which the majority of foreign 
                        authors or rightholders are nationals 
                        or domiciliaries [of eligible 
                        countries]; or

           *       *       *       *       *       *       *

            [(9) The terms ``WTO Agreement'' and ``WTO member 
        country'' have the meanings given those terms in 
        paragraphs (9) and (10), respectively, of section 2 of 
        the Uruguay Round Agreements Act.]

           *       *       *       *       *       *       *


Sec. 117. Limitations on exclusive rights: Computer programs

    [Notwithstanding] (a) Making of Additional Copy or 
Adaptation by Owner of Copy.--Notwithstanding the provisions of 
section 106, it is not an infringement for the owner of a copy 
of a computer program to make or authorize the making of 
another copy or adaptation of that computer program provided:
            (1) * * *

           *       *       *       *       *       *       *

    [Any exact] (b) Lease, Sale, or Other Transfer of 
Additional Copy or Adaptation.--Any exact copies prepared in 
accordance with the provisions of this section may be leased, 
sold, or otherwise transferred, along with the copy from which 
such copies were prepared, only as part of the lease, sale, or 
other transfer of all rights in the program. Adaptations so 
prepared may be transferred only with the authorization of the 
copyright owner.
    (c) Machine Maintenance or Repair.--Notwithstanding the 
provisions of section 106, it is not an infringement for the 
owner or lessee of a machine to make or authorize the making of 
a copy of a computer program if such copy is made solely by 
virtue of the activation of a machine that lawfully contains an 
authorized copy of the computer program, for purposes only of 
maintenance or repair of that machine, if--
            (1) such new copy is used in no other manner and is 
        destroyed immediately after the maintenance or repair 
        is completed; and
            (2) with respect to any computer program or part 
        thereof that is not necessary for that machine to be 
        activated, such program or part thereof is not accessed 
        or used other than to make such new copy by virtue of 
        the activation of the machine.
    (d) Definitions.--For purposes of this section--
            (1) the ``maintenance'' of a machine is the 
        servicing of the machine in order to make it work in 
        accordance with its original specifications and any 
        changes to those specifications authorized for that 
        machine; and
            (2) the ``repair'' of a machine is the restoring of 
        the machine to the state of working in accordance with 
        its original specifications and any changes to those 
        specifications authorized for that machine.

           *       *       *       *       *       *       *


CHAPTER 4--COPYRIGHT NOTICE, DEPOSIT, AND REGISTRATION

           *       *       *       *       *       *       *


Sec. 411. Registration and infringement actions

    (a) Except for [actions for infringement of copyright in 
Berne Convention works whose country of origin is not the 
United States and] an action brought for a violation of the 
rights of the author under section 106A(a), and subject to the 
provisions of subsection (b), no action for infringement of the 
copyright in any United States work shall be instituted until 
registration of the copyright claim has been made in accordance 
with this title. In any case, however, where the deposit, 
application, and fee required for registration have been 
delivered to the Copyright Office in proper form and 
registration has been refused, the applicant is entitled to 
institute an action for infringement if notice thereof, with a 
copy of the complaint, is served on the Register of Copyrights. 
The Register may, at his or her option, become a party to the 
action with respect to the issue of registrability of the 
copyright claim by entering an appearance within sixty days 
after such service, but the Register's failure to become a 
party shall not deprive the court of jurisdiction to determine 
that issue.

           *       *       *       *       *       *       *


             CHAPTER 5--COPYRIGHT INFRINGEMENT AND REMEDIES

Sec.
501.  Infringement of copyright.
     * * * * * * *
512.  Limitations on liability relating to material on-line.

           *       *       *       *       *       *       *


Sec. 507. Limitations on actions

    (a) Criminal Proceedings.--[No] Except as expressly 
provided otherwise in this title, no criminal proceeding shall 
be maintained under the provisions of this title unless it is 
commenced within 5 years after the cause of action arose.

           *       *       *       *       *       *       *


Sec. 512. Limitations on liability relating to material on-line

    (a) Limitation.--Notwithstanding the provisions of section 
106, a provider shall not be liable for--
            (1) direct infringement, based solely on the 
        intermediate storage and transmission of material 
        through a system or network controlled or operated by 
        or for that provider, if--
                    (A) the transmission was initiated by 
                another person;
                    (B) the storage and transmission is carried 
                out through an automatic technological process, 
                without any selection of that material by the 
                provider; and
                    (C) no copy of the material thereby made by 
                the provider is maintained on the provider's 
                system or network in a manner ordinarily 
                accessible to anyone other than the recipients 
                anticipated by the person who initiated the 
                transmission, and no such copy is maintained on 
                the system or network in a manner ordinarily 
                accessible to such recipients for a longer 
                period than is reasonably necessary for the 
                transmission;
            (2) monetary relief under section 504 or 505 for 
        contributory infringement or vicarious liability, based 
        solely on conduct described in paragraph (1); or
            (3) monetary relief under section 504 or 505 for 
        contributory infringement or vicarious liability, based 
        solely on transmitting or providing access to material 
        over that provider's system or network, other than 
        conduct described in paragraph (1), if the provider--
                    (A) does not have actual knowledge that the 
                material is infringing or, in the absence of 
                such actual knowledge, is not aware of facts or 
                circumstances from which infringing activity is 
                apparent; and
                    (B) does not receive a financial benefit 
                directly attributable to the infringing 
                activity, if the provider has the right and 
                ability to control such activity.
    (b) Protection of Privacy.--Nothing in subsection (a) shall 
be construed to condition the applicability of subsection (a) 
on a provider--
            (1) monitoring its service or affirmatively seeking 
        facts indicating infringing activity, or
            (2) accessing, removing, or disabling access to 
        material, if such conduct is prohibited by law.
    (c) Limitation Based Upon Removing or Disabling Access to 
Infringing Material.--A provider shall not be liable to any 
person for any claim based on that provider's good faith 
disabling of access to or removal of material claimed to be 
infringing or based on facts or circumstances from which 
infringing activity is apparent, regardless of whether the 
material or activity is ultimately determined to be infringing.
    (d) Other Defenses Not Affected.--Removing or disabling 
access to material which a provider transmits on-line or to 
which a provider provides on-line access, or the failure to do 
so, shall not adversely bear upon the consideration by a court 
of a defense to infringement asserted by that provider on the 
basis of section 107 or any other provision of law.
    (e) Misrepresentations.--Any person who knowingly 
materially misrepresents to a provider that material on-line is 
infringing shall be liable for any damages, including costs and 
attorneys' fees, incurred by the provider, by the alleged 
infringer, or by any copyright owner or copyright owner's 
authorized licensee, who is injured by such misrepresentation, 
as a result of the provider relying upon such misrepresentation 
in removing or disabling access to the material claimed to be 
infringing.
    (f) Definition.--As used in this section, the term 
``provider'' means a provider of on-line services or network 
access.

           *       *       *       *       *       *       *


        CHAPTER 12--COPYRIGHT PROTECTION AND MANAGEMENT SYSTEMS

Sec.
1201.  Circumvention of copyright protection systems.
1202.  Integrity of copyright management information.
1203.  Civil remedies.
1204.  Criminal offenses and penalties.

Sec. 1201. Circumvention of copyright protection systems

    (a) Violations Regarding Circumvention of Technological 
Protection Measures.--(1) No person shall circumvent a 
technological protection measure that effectively controls 
access to a work protected under this title.
    (2) No person shall manufacture, import, offer to the 
public, provide, or otherwise traffic in any technology, 
product, service, device, component, or part thereof, that--
            (A) is primarily designed or produced for the 
        purpose of circumventing a technological protection 
        measure that effectively controls access to a work 
        protected under this title;
            (B) has only limited commercially significant 
        purpose or use other than to circumvent a technological 
        protection measure that effectively controls access to 
        a work protected under this title; or
            (C) is marketed by that person or another acting in 
        concert with that person with that person's knowledge 
        for use in circumventing a technological protection 
        measure that effectively controls access to a work 
        protected under this title.
    (3) As used in this subsection--
            (A) to ``circumvent a technological protection 
        measure'' means to descramble a scrambled work, to 
        decrypt an encrypted work, or otherwise to avoid, 
        bypass, remove, deactivate, or impair a technological 
        protection measure, without the authority of the 
        copyright owner; and
            (B) a technological protection measure 
        ``effectively controls access to a work'' if the 
        measure, in the ordinary course of its operation, 
        requires the application of information, or a process 
        or a treatment, with the authority of the copyright 
        owner, to gain access to the work.
    (b) Additional Violations.--(1) No person shall 
manufacture, import, offer to the public, provide, or otherwise 
traffic in any technology, product, service, device, component, 
or part thereof, that--
            (A) is primarily designed or produced for the 
        purpose of circumventing protection afforded by a 
        technological protection measure that effectively 
        protects a right of a copyright owner under this title 
        in a work or a portion thereof;
            (B) has only limited commercially significant 
        purpose or use other than to circumvent protection 
        afforded by a technological protection measure that 
        effectively protects a right of a copyright owner under 
        this title in a work or a portion thereof; or
            (C) is marketed by that person or another acting in 
        concert with that person with that person's knowledge 
        for use in circumventing protection afforded by a 
        technological protection measure that effectively 
        protects a right of a copyright owner under this title 
        in a work or a portion thereof.
    (2) As used in this subsection--
            (A) the term ``circumvent protection afforded by a 
        technological protection measure'' means avoiding, 
        bypassing, removing, deactivating, or otherwise 
        impairing a technological protection measure; and
            (B) a technological protection measure 
        ``effectively protects a right of a copyright owner'' 
        under this title if the measure, in the ordinary course 
        of its operation, prevents, restricts, or otherwise 
        limits the exercise of a right of a copyright owner 
        under this title.
    (c) Importation.--The importation into the United States, 
the sale for importation, or the sale within the United States 
after importation by the owner, importer, or consignee of any 
technology, product, service, device, component, or part 
thereof as described in subsection (a) or (b) shall be 
actionable under section 337 of the Tariff Act of 1930 (19 
U.S.C. 1337).
    (d) Other Rights, Etc., Not Affected.--Nothing in this 
section shall affect rights, remedies, limitations, or defenses 
to copyright infringement, including fair use, under this 
title.
    (e) Exemption for Nonprofit Libraries, Archives, and 
Educational Institutions.--(1) A nonprofit library, archives, 
or educational institution which gains access to a commercially 
exploited copyrighted work solely in order to make a good faith 
determination of whether to acquire a copy of that work for the 
sole purpose of engaging in conduct permitted under this title 
shall not be in violation of subsection (a)(1). A copy of a 
work to which access has been gained under this paragraph--
            (A) may not be retained longer than necessary to 
        make such good faith determination; and
            (B) may not be used for any other purpose.
    (2) The exemption available under paragraph (1) shall only 
apply with respect to a work when an identical copy of that 
work is not reasonably available in another form.
    (3) A nonprofit library, archives, or educational 
institution that willfully for the purpose of commercial 
advantage or financial gain violates paragraph (1)--
            (A) shall, for the first offense, be subject to the 
        civil remedies under section 1203; and
            (B) shall, for repeated or subsequent offenses, in 
        addition to the civil remedies under section 1203, 
        forfeit the exemption provided under paragraph (1).
    (4) This subsection may not be used as a defense to a claim 
under subsection (a)(2) or (b), nor may this subsection permit 
a nonprofit library, archives, or educational institution to 
manufacture, import, offer to the public, provide, or otherwise 
traffic in any technology which circumvents a technological 
protection measure.
    (5) In order for a library or archives to qualify for the 
exemption under this subsection, the collections of that 
library or archives shall be--
            (A) open to the public; or
            (B) available not only to researchers affiliated 
        with the library or archives or with the institution of 
        which it is a part, but also to other persons doing 
        research in a specialized field.
    (f) Law Enforcement and Intelligence Activities.--This 
section does not prohibit any lawfully authorized 
investigative, protective, or intelligence activity of a law 
enforcement agency of the United States, a State, or a 
political subdivision of a State, or of an intelligence agency 
of the United States.

Sec. 1202. Integrity of copyright management information

    (a) False Copyright Management Information.--No person 
shall knowingly--
            (1) provide copyright management information that 
        is false, or
            (2) distribute or import for public distribution 
        copyright management information that is false,
with the intent to induce, enable, facilitate, or conceal 
infringement.
    (b) Removal or Alteration of Copyright Management 
Information.--No person shall, without the authority of the 
copyright owner or the law--
            (1) intentionally remove or alter any copyright 
        management information,
            (2) distribute or import for distribution copyright 
        management information, knowing that the copyright 
        management information has been removed or altered 
        without authority of the copyright owner or the law, or
            (3) distribute, import for distribution, or 
        publicly perform works, copies of works, or 
        phonorecords, knowing that the copyright management 
        information has been removed or altered without 
        authority of the copyright owner or the law,
knowing or, with respect to civil remedies under section 1203, 
having reasonable grounds to know, that it will induce, enable, 
facilitate, or conceal an infringement of any right under this 
title.
    (c) Definition.--As used in this chapter, the term 
``copyright management information'' means the following 
information conveyed in connection with copies or phonorecords 
of a work or performances or displays of a work, including in 
digital form:
            (1) The title and other information identifying the 
        work, including the information set forth on a notice 
        of copyright.
            (2) The name of, and other identifying information 
        about, the author of a work.
            (3) The name of, and other identifying information 
        about, the copyright owner of the work, including the 
        information set forth in a notice of copyright.
            (4) With the exception of public performances of 
        works by radio and television broadcast stations, the 
        name of, and other identifying information about, a 
        performer whose performance is fixed in a work other 
        than an audiovisual work.
            (5) With the exception of public performances of 
        works by radio and television broadcast stations, in 
        the case of an audiovisual work, the name of, and other 
        identifying information about, a writer, performer, or 
        director who is credited in the audiovisual work.
            (6) Identifying numbers or symbols referring to 
        such information or links to such information.
            (7) Such other information as the Register of 
        Copyrights may prescribe by regulation, but not 
        including any information concerning the user of a 
        copyrighted work.
    (d) Law Enforcement and Intelligence Activities.--This 
section does not prohibit any lawfully authorized 
investigative, protective, or intelligence activity of a law 
enforcement agency of the United States, a State, or a 
political subdivision of a State, or of an intelligence agency 
of the United States.

Sec. 1203. Civil remedies

    (a) Civil Actions.--Any person injured by a violation of 
section 1201 or 1202 may bring a civil action in an appropriate 
United States district court for such violation.
    (b) Powers of the Court.--In an action brought under 
subsection (a), the court--
            (1) may grant temporary and permanent injunctions 
        on such terms as it deems reasonable to prevent or 
        restrain a violation;
            (2) at any time while an action is pending, may 
        order the impounding, on such terms as it deems 
        reasonable, of any device or product that is in the 
        custody or control of the alleged violator and that the 
        court has reasonable cause to believe was involved in a 
        violation;
            (3) may award damages under subsection (c);
            (4) in its discretion may allow the recovery of 
        costs by or against any party other than the United 
        States or an officer thereof;
            (5) in its discretion may award reasonable 
        attorney's fees to the prevailing party; and
            (6) may, as part of a final judgment or decree 
        finding a violation, order the remedial modification or 
        the destruction of any device or product involved in 
        the violation that is in the custody or control of the 
        violator or has been impounded under paragraph (2).
    (c) Award of Damages.--
            (1) In general.--Except as otherwise provided in 
        this chapter, a person committing a violation of 
        section 1201 or 1202 is liable for either--
                    (A) the actual damages and any additional 
                profits of the violator, as provided in 
                paragraph (2); or
                    (B) statutory damages, as provided in 
                paragraph (3).
            (2) Actual damages.--The court shall award to the 
        complaining party the actual damages suffered by the 
        party as a result of the violation, and any profits of 
        the violator that are attributable to the violation and 
        are not taken into account in computing the actual 
        damages, if the complaining party elects such damages 
        at any time before final judgment is entered.
            (3) Statutory damages.--(A) At any time before 
        final judgment is entered, a complaining party may 
        elect to recover an award of statutory damages for each 
        violation of section 1201 in the sum of not less than 
        $200 or more than $2,500 per act of circumvention, 
        device, product, component, offer, or performance of 
        service, as the court considers just.
            (B) At any time before final judgment is entered, a 
        complaining party may elect to recover an award of 
        statutory damages for each violation of section 1202 in 
        the sum of not less than $2,500 or more than $25,000.
            (4) Repeated violations.--In any case in which the 
        injured party sustains the burden of proving, and the 
        court finds, that a person has violated section 1201 or 
        1202 within 3 years after a final judgment was entered 
        against that person for another such violation, the 
        court may increase the award of damages up to triple 
        the amount that would otherwise be awarded, as the 
        court considers just.
            (5) Innocent violations.--
                    (A) In general.--The court in its 
                discretion may reduce or remit the total award 
                of damages in any case in which the violator 
                sustains the burden of proving, and the court 
                finds, that the violator was not aware and had 
                no reason to believe that its acts constituted 
                a violation.
                    (B) Nonprofit library, archives, or 
                educational institution.--In the case of a 
                nonprofit library, archives, or educational 
                institution, the court shall remit damages in 
                any case in which the library, archives, or 
                educational institution sustains the burden of 
                proving, and the court finds, that the library, 
                archives, or educational institution was not 
                aware and had no reason to believe that its 
                acts constituted a violation.

Sec. 1204. Criminal offenses and penalties

    (a) In General.--Any person who violates section 1201 or 
1202 willfully and for purposes of commercial advantage or 
private financial gain--
            (1) shall be fined not more than $500,000 or 
        imprisoned for not more than 5 years, or both, for the 
        first offense; and
            (2) shall be fined not more than $1,000,000 or 
        imprisoned for not more than 10 years, or both, for any 
        subsequent offense.
    (b) Limitation for Nonprofit Library, Archives, or 
Educational Institution.--Subsection (a) shall not apply to a 
nonprofit library, archives, or educational institution.
    (c) Statute of Limitations.--Notwithstanding section 507(a) 
of this title, no criminal proceeding shall be maintained under 
subsection (a) unless such proceeding is commenced within 5 
years after the cause of action arose.

                                
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