[House Report 108-421]
[From the U.S. Government Publishing Office]



108th Congress                                            Rept. 108-421
                        HOUSE OF REPRESENTATIVES
 2d Session                                                      Part 1

======================================================================



 
      DATABASE AND COLLECTIONS OF INFORMATION MISAPPROPRIATION ACT

                                _______
                                

               February 11, 2004.--Ordered to be printed

                                _______
                                

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

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 3261]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on the Judiciary, to whom was referred the bill 
(H.R. 3261) to prohibit the misappropriation of certain 
databases, having considered the same, report favorably thereon 
with an amendment and recommend that the bill as amended do 
pass.

                                CONTENTS

                                                                   Page
The Amendment....................................................     2
Purpose and Summary..............................................     7
Background and Need for the Legislation..........................     7
Hearings.........................................................    10
Committee Consideration..........................................    10
Vote of the Committee............................................    10
Committee Oversight Findings.....................................    13
New Budget Authority and Tax Expenditures........................    13
Congressional Budget Office Cost Estimate........................    13
Performance Goals and Objectives.................................    15
Constitutional Authority Statement...............................    15
Section-by-Section Analysis and Discussion.......................    15
Changes in Existing Law Made by the Bill, as Reported............    17
Markup Transcript................................................    18
Dissenting Views.................................................    77
Dissenting Views.................................................    81

                             The Amendment

  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Database and Collections of 
Information Misappropriation Act''.

SEC. 2. DEFINITIONS.

  In this Act:
          (1) Collective work.--The term ``collective work'' means a 
        work, such as a periodical issue, anthology, or encyclopedia, 
        in which a number of contributions, constituting separate and 
        independent works in themselves, are assembled into a 
        collective whole.
          (2) Commerce.--The term ``commerce'' means all commerce which 
        may be lawfully regulated by the Congress.
          (3) Compilation.--The term ``compilation'' means a work 
        formed by the collection and assembling of preexisting 
        materials or of data that are selected, coordinated, or 
        arranged in such a way that the resulting work as a whole 
        constitutes an original work of authorship. The term 
        ``compilation'' includes collective works.
          (4) Database.--
                  (A) In general.--Subject to subparagraph (B), the 
                term ``database'' means a collection of a large number 
                of discrete items of information produced for the 
                purpose of bringing such discrete items of information 
                together in one place or through one source so that 
                persons may access them.
                  (B) Exclusions.--The term database does not include 
                any of the following:
                          (i) A work of authorship, other than a 
                        compilation or a collective work.
                          (ii) A collection of information that 
                        principally performs the function of 
                        addressing, routing, forwarding, transmitting, 
                        or storing digital online communications or 
                        receiving access to connections for digital 
                        communications, except that the fact that a 
                        collection of information includes or consists 
                        of online location designations shall not by 
                        itself be the basis for applying this clause.
                          (iii) A collection of information gathered, 
                        organized, or maintained to perform the 
                        function of providing schedule and program 
                        information for multichannel audio or video 
                        programming.
                          (iv) A collection of information gathered, 
                        organized, or maintained to register domain 
                        name registrant contact data maintained by a 
                        domain name registration authority, unless such 
                        registration authority takes appropriate steps 
                        to ensure the integrity and accuracy of such 
                        information and provides real-time, 
                        unrestricted, and fully searchable public 
                        access to the information contained in such 
                        collection of information.
                  (C) Discrete sections.--The fact that a database is a 
                subset of a database shall not preclude such subset 
                from treatment as a database under this Act.
          (5) Domain name.--The term ``domain name'' means any 
        alphanumeric designation which is registered with or assigned 
        by any domain name registrar, domain name registry, or other 
        domain name registration authority as part of an electronic 
        address on the Internet.
          (6) In concert.--A person acts ``in concert'' with another 
        person who makes a database available in commerce if the act of 
        making available in commerce is planned, arranged, coordinated, 
        adjusted, agreed upon, or settled between the two persons 
        acting together, in pursuance of some design or in accordance 
        with some scheme.
          (7) Information.--The term ``information'' means facts, data, 
        works of authorship, or any other intangible material capable 
        of being generated or gathered.
          (8) Internet.--The term ``Internet'' means the combination of 
        computer facilities and electromagnetic transmission media, and 
        related equipment and software, comprising the interconnected 
        worldwide network of computer networks that employ the 
        Transmission Control Protocol/Internet Protocol or any 
        successor protocol to transmit information.
          (9) Legal entity.--The term ``legal entity'' means a person, 
        other than an individual, including a firm, corporation, union, 
        or other organization, which is organized under the laws of the 
        United States, a State, the District of Columbia, or any 
        commonwealth, territory, or possession of the United States, or 
        the laws of a foreign country.
          (10) Maintain.--To ``maintain'' a database means to update, 
        validate, or supplement the information contained in the 
        database.
          (11) Making available in commerce to others.--The term 
        ``making available in commerce to others'' means making 
        available in commerce to--
                  (A) a substantial number of members of the public; or
                  (B) a number of persons that extends beyond--
                          (i) a family and its social acquaintances; or
                          (ii) those who could reasonably anticipate to 
                        have a database made available in commerce to 
                        them without a customary commercial 
                        relationship.
        A court may take into account repeated acts directed to 
        different persons by the same or concerted parties in 
        determining whether the limits imposed by subparagraph (B)(ii) 
        have been exceeded.

SEC. 3. PROHIBITION AGAINST MISAPPROPRIATION OF DATABASES.

  (a) Liability.--Any person who makes available in commerce to others 
a quantitatively substantial part of the information in a database 
generated, gathered, or maintained by another person, knowing that such 
making available in commerce is without the authorization of that other 
person (including a successor in interest) or that other person's 
licensee, when acting within the scope of its license, shall be liable 
for the remedies set forth in section 7 if--
          (1) the database was generated, gathered, or maintained 
        through a substantial expenditure of financial resources or 
        time;
          (2) the unauthorized making available in commerce occurs in a 
        time sensitive manner and inflicts injury on the database or a 
        product or service offering access to multiple databases; and
          (3) the ability of other parties to free ride on the efforts 
        of the plaintiff would so reduce the incentive to produce or 
        make available the database or the product or service that its 
        existence or quality would be substantially threatened.
  (b) Injury.--For purposes of subsection (a), the term ``inflicts an 
injury'' means serving as a functional equivalent in the same market as 
the database in a manner that causes the displacement, or the 
disruption of the sources, of sales, licenses, advertising, or other 
revenue.
  (c) Time sensitive.--In determining whether an unauthorized making 
available in commerce occurs in a time sensitive manner, the court 
shall consider the temporal value of the information in the database, 
within the context of the industry sector involved.

SEC. 4. PERMITTED ACTS.

  (a) Independently Generated or Gathered Information.--This Act shall 
not restrict any person from--
          (1) independently generating or gathering information 
        obtained by means other than extracting it from a database 
        generated, gathered, or maintained by another person; and
          (2) making that information available in commerce.
  (b) Acts of Making Available in Commerce by Nonprofit Scientific or 
Research Institutions.--Subject to section 9, the making available in 
commerce of a substantial part of a database by a nonprofit scientific 
or research institution, including an employee or agent of such 
institution acting within the scope of such employment or agency, for 
nonprofit scientific or research purposes shall not be prohibited by 
section 3 if the court determines that the making available in commerce 
of the information in the database is reasonable under the 
circumstances, taking into consideration the customary practices 
associated with such uses of such database by nonprofit scientific or 
research institutions and other factors that the court determines 
relevant.
  (c) Hyperlinking.--Nothing in this Act shall restrict the act of 
hyperlinking of one online location to another or the providing of a 
reference or pointer (including such reference or pointer in a 
directory or index) to a database.
  (d) News Reporting.--Nothing in this Act shall restrict any person 
from making available in commerce information for the primary purpose 
of news reporting, including news and sports gathering, dissemination, 
and comment, unless the information is time sensitive and has been 
gathered by a news reporting entity, and making available in commerce 
the information is part of a consistent pattern engaged in for the 
purpose of direct competition.

SEC. 5. EXCLUSIONS.

  (a) Government Information.--
          (1) In general.--Except as provided in paragraph (2), 
        protection under this Act shall not extend to--
                  (A) a database generated, gathered, organized, or 
                maintained by a Federal, State, or local governmental 
                entity, or by an employee or agent of such an entity, 
                acting within the scope of such employment or agency; 
                or
                  (B) a database generated, gathered, or maintained by 
                an entity pursuant to and to the extent required by a 
                Federal statute or regulation requiring such a 
                database.
          (2) Exception.--Nothing in this subsection shall preclude 
        protection under this Act for a database gathered, organized, 
        or maintained by an employee or agent of an entity described in 
        paragraph (1) that is acting outside the scope of such 
        employment or agency, or by a Federal, State, or local 
        educational institution, or its employees or agents, in the 
        course of engaging in education, research, or scholarship.
  (b) Computer Programs.--
          (1) Protection not extended.--Subject to paragraph (2), 
        protection under section 3 shall not extend to computer 
        programs, including any computer program used in the 
        manufacture, production, operation, or maintenance of a 
        database, or to any element of a computer program necessary to 
        its operation.
          (2) Incorporated databases.--A database that is otherwise 
        subject to protection under section 3 is not disqualified from 
        such protection solely because it resides in a computer 
        program, so long as the collection of information functions as 
        a database within the meaning of this Act.

SEC. 6. RELATION TO OTHER LAWS.

  (a) Other Rights Not Affected.--
          (1) In general.--Subject to subsection (b), nothing in this 
        Act shall affect rights, limitations, or remedies concerning 
        copyright, patent, trademark, design rights, antitrust, trade 
        secrets, privacy, access to public documents, and misuse.
          (2) Right of contract.--Notwithstanding subsection (b), 
        nothing in this Act shall affect rights, limitations, or 
        remedies concerning the common law right of contract.
  (b) Preemption of State Law.--
          (1) Laws regulating conduct that is subject of the act.--On 
        and after the effective date of this Act, no State statute, 
        rule, regulation, or common law doctrine that prohibits or 
        otherwise regulates conduct that is prohibited or regulated 
        under this Act shall be effective.
          (2) Clarification of inapplicability to cases not involving 
        commercial competition.--Paragraph (1) shall not apply to 
        preempt actions under State law against a person for taking 
        actions that--
                  (A)(i) disrupt the sources of data supply to a 
                database; or
                  (ii) substantially impair the perceived accuracy, 
                currency, or completeness of data in a database by 
                inaccurate, untimely, or incomplete replication and 
                distribution of such data; and
                  (B) do not involve the person making available in 
                commerce the data from such database in competition 
                with such database.
  (c) Communications Act of 1934.--Nothing in this Act shall affect the 
operation of section 222(e) or any other provision of the 
Communications Act of 1934 (47 U.S.C. 151 et seq.), or shall restrict 
any person from making available in commerce or extracting subscriber 
list information, as such term is defined in section 222(h)(3) of the 
Communications Act of 1934 (47 U.S.C. 222(h)(3)).
  (d) Securities.--Nothing in this Act shall--
          (1) affect the operation of the Securities Act of 1933 (15 
        U.S.C. 78a et seq.), the Securities Exchange Act of 1934 (15 
        U.S.C. 78a et seq.), the Public Utility Holding Company Act of 
        1935 (15 U.S.C. 79a et seq.), the Trust Indenture Act of 1939 
        (15 U.S.C. 77aaa et seq.), the Investment Company Act of 1940 
        (15 U.S.C. 80a-1 et seq.), the Investment Advisers Act of 1940 
        (15 U.S.C. 80b et seq.), or the Securities Investor Protection 
        Act of 1970 (15 U.S.C. 78aaa et seq.), or the rules or 
        regulations thereunder;
          (2) affect the authority of the Securities and Exchange 
        Commission; or
          (3) apply to information with respect to quotations for, or 
        indications, orders, or transactions in, securities.
  (e) Misuse.--Judicial doctrines of misuse shall apply under this Act.

SEC. 7. CIVIL REMEDIES.

  (a) Civil Actions.--
          (1) Commencement of actions.--Any person who is injured by a 
        violation of section 3 may bring a civil action for such a 
        violation in an appropriate United States district court. Any 
        action against a State governmental entity may be brought in 
        any court that has jurisdiction over claims against such 
        entity.
          (2) Notice of commencement of actions and appeals.--Any 
        person who brings an action for such a violation, or who files 
        an appeal from any final decision on such an action, shall 
        transmit notice of such action or appeal to the Federal Trade 
        Commission, the United States Patent and Trademark Office, and 
        the Register of Copyrights, in accordance with subsection 
        (i)(1).
  (b) Temporary and Permanent Injunctions.--Any court having 
jurisdiction of a civil action under this section shall have the power 
to grant temporary and permanent injunctions, according to the 
principles of equity and upon such terms as the court may deem 
reasonable, to prevent or restrain a violation or attempted violation 
of section 3. Any such injunction may be served anywhere in the United 
States on the person enjoined, and may be enforced by proceedings in 
contempt or otherwise by any United States district court having 
jurisdiction over that person.
  (c) Monetary Relief.--
          (1) Actual damages and attributable profits.--When a 
        violation of section 3 has been established in any civil action 
        arising under this section, the plaintiff shall be entitled to 
        recover the actual damages sustained by the plaintiff as a 
        result of the violation and any profits of the defendant that 
        are attributable to the violation and are not taken into 
        account in computing the actual damages sustained by the 
        plaintiff. The court shall assess such profits or damages or 
        cause the same to be assessed under its direction. In assessing 
        profits the plaintiff shall be required to prove defendant's 
        gross revenue only and the defendant shall be required to prove 
        all elements of cost or deduction claims.
          (2) Additional damages.--In addition to actual damages, the 
        court may enter judgment for an additional amount not exceeding 
        2 times such actual damages after considering the following 
        factors:
                  (A) Whether the plaintiff notified the defendant of 
                the alleged violation and the defendant continued to 
                violate section 3.
                  (B) The willfulness of the defendant's conduct.
                  (C) Whether the defendant has a history of database 
                misappropriation.
                  (D) The defendant's ability to pay.
                  (E) Whether the alleged violation had a serious 
                negative financial impact on the plaintiff.
                  (F) Any good faith effort by the defendant to rectify 
                the misappropriation.
                  (G) Whether the assessment of additional damages is 
                necessary in order to deter future violations.
  (d) Impoundment.--At any time while an action under this section is 
pending, including an action seeking to enjoin a violation, the court 
may order the impounding, on such terms as it deems reasonable, of all 
copies of contents of a database made available in commerce or 
attempted to be made available in commerce potentially in violation of 
section 3, and of all masters, tapes, disks, diskettes, or other 
articles by means of which such copies may be reproduced. The court 
may, as part of a final judgment or decree finding a violation or 
attempted violation of section 3, order the remedial modification or 
destruction of all copies of contents of a database made available in 
commerce or attempted to be made available in commerce in violation of 
section 3, and of all masters, tapes, disks, diskettes, or other 
articles by means of which such copies may be reproduced.
  (e) Costs and Attorney's Fees.--The court in its discretion may award 
reasonable costs and attorney's fees to the prevailing party. The court 
shall award costs and fees if it determines that an action was brought 
or a defense was raised under this Act in bad faith.
  (f) Actions Against United States Government.--Subsections (b) and 
(d) shall not apply to any action against the United States Government.
  (g) Relief Against State Entities.--The relief provided under this 
section shall be available against a State governmental entity to the 
extent permitted by applicable law.
  (h) Limitation on Liability of Certain Entities.--
          (1) Limitation on liability.--No provider of an interactive 
        computer service shall be liable under section 3 for making 
        available information that is provided by another information 
        content provider.
          (2) Definitions.--In this subsection, the terms ``interactive 
        computer service'' and ``information content provider'' have 
        the meanings given those terms in section 230(f) of the 
        Communications Act of 1934 (47 U.S.C. 230(f)).
          (3) Construction.--For purposes of section 230 of the 
        Communications Act of 1934 and any other provision of law, the 
        provisions of this Act shall not be construed to be a law 
        pertaining to intellectual property.
  (i) Oversight of Civil Remedies by FTC and PTO.--
          (1) Notice.--The Federal Trade Commission, the Director of 
        the United States Patent and Trademark Office, and the Register 
        of Copyrights shall, by regulation, prescribe the form and 
        procedures by which persons shall transmit the notices required 
        by subsection (a)(2).
          (2) Oversight.--The Federal Trade Commission, the Director of 
        the United States Patent and Trademark Office, and the Register 
        of Copyrights shall review the actions conducted under this 
        section for the purposes of identifying instances in which 
        judicial interpretation of this Act adversely or otherwise 
        materially affects the administration of laws and policies 
        within their respective jurisdictions.
          (3) Amicus curiae briefs.--The Federal Trade Commission, the 
        Director of the United States Patent and Trademark Office, and 
        the Register of Copyrights may, in appropriate instances, file 
        briefs as friends of the court in appeals from final decisions 
        of actions under this section.
          (4) Reports.--The Federal Trade Commission, the Director of 
        the United States Patent and Trademark Office, and the Register 
        of Copyrights shall, within 18 months after the date of the 
        enactment of this Act, each transmit a report to the Committee 
        on the Judiciary and the Committee on Energy and Commerce of 
        the House of Representatives and the Committee on the Judiciary 
        and the Committee on Commerce, Science, and Transportation of 
        the Senate on their operations under this subsection. Such 
        reports shall include--
                  (A) a summary of any briefs filed under paragraph 
                (3);
                  (B) an explanation of the impact, if any, of the 
                judicial decisions reviewed on existing laws and 
                policies within the jurisdiction of the Commission, the 
                Director of the Patent and Trademark Office, or the 
                Register of Copyrights, as the case may be; and
                  (C) any recommendations for legislative or other 
                changes that the Commission, the Director of the Patent 
                and Trademark Office, or the Register of Copyrights, as 
                the case may be, considers appropriate.

SEC. 8. LIMITATION ON ACTIONS.

  No civil action shall be maintained under this Act unless it is 
commenced within 2 years after the cause of action arises or claim 
accrues.

SEC. 9. EXCLUSION FROM LIABILITY FOR EDUCATIONAL INSTITUTIONS AND 
                    RESEARCH LABORATORIES.

  (a) Exclusion.--Except as provided in subsection (d), no liability 
shall be imposed under this Act on--
          (1) any accredited nonprofit postsecondary educational 
        institution or any nonprofit research laboratory,
          (2) any employee of such educational institution or 
        laboratory acting within the scope of his or her employment, or
          (3) any student enrolled in such educational institution 
        acting in furtherance of the supervised activities or programs 
        of the institution,
by reason of activities undertaken for nonprofit education, scientific, 
or research purposes.
  (b) Accreditation.--For purposes of this section, accreditation shall 
be as determined by a regional or national accrediting agency 
recognized by the Council on Higher Accreditation or the United States 
Department of Education.
  (c) Nonprofit Research Laboratory.--For purposes of this section, a 
nonprofit research laboratory is a nonprofit research organization that 
is primarily engaged in basic or applied scientific research, or both, 
and that is a qualified organization as defined in section 41(b)(6)(B) 
of the Internal Revenue Code of 1986 for purposes of the research 
credit determined under section 41 of such Code.
  (d) Exception.--Subsection (a) does not apply to an institution, 
laboratory, employee of such institution or laboratory, or student of 
such institution to the extent that the institution, laboratory, 
employee, or student makes available substantially all of a database in 
direct commercial competition with a person who made the substantial 
expenditure described in section 3(a)(1).

SEC. 10. EFFECTIVE DATE.

  (a) In General.--This Act shall take effect on the date of the 
enactment of this Act, and shall apply to acts of making available in 
commerce on or after that date with respect to databases existing 
before, on, or after that date.
  (b) Prior Acts Not Affected.--No person shall be liable under section 
3 for making available in commerce on or after the date of the 
enactment of this Act a quantitatively substantial part of the 
information in a database in violation of that section, when the 
information was lawfully extracted from the database before the date of 
the enactment of this Act, by that person or by that person's 
predecessor in interest.

SEC. 11. NONSEVERABILITY.

  (a) In General.--If the Supreme Court of the United States holds that 
the provisions of section 3, relating to prohibition against 
misappropriation of databases, are invalid under Article I of, or the 
First Amendment to, the Constitution of the United States, then this 
Act is repealed, effective as of the date of the Supreme Court 
decision.
  (b) Termination.--Subsection (a) shall cease to be effective at the 
end of the 10-year period beginning on the date of the enactment of 
this Act.

                          Purpose and Summary

    H.R. 3261, the ``Database and Collections of Information 
Misappropriation Act,'' creates a comprehensive Federal 
protection system for databases. This redress will supplement a 
patchwork of existing state and Federal remedies that do not, 
individually nor collectively, offer adequate protection.
    Accurate databases are critical to our information economy. 
Databases affect the flow of information in a number of 
important fields and endeavors, including law, medicine, public 
health, and consumer matters. ``Free-riders''--those who steal 
databases--do not invest the time, money, and other resources 
necessary to produce databases. The protections offered under 
H.R. 3261 will ensure that lawful database owners retain an 
incentive to produce and maintain their compilations, while 
American consumers and businesses will benefit from the 
availability and accuracy of these publications.

                Background and Need for the Legislation

                               IN GENERAL

    Electronic collections, and other collections of factual 
material, are indispensable to the United States in the new 
information economy. These information products put a wealth of 
data in a convenient and organized form at the fingertips of 
businesses, scientists, scholars, and consumers, enabling them 
to retrieve specific factual information needed to solve a 
particular economic, research, or educational problem. Whether 
the focus is on financial, scientific, legal, medical, 
bibliographic, or other information, databases improve 
productivity.
    Developing, compiling, distributing and maintaining 
commercially significant collections requires substantial 
investments of time, personnel, effort, and money. Information 
companies, small and large, must dedicate substantial resources 
to gathering and verifying factual material, presenting it in a 
user-friendly way, and keeping it current and useful to 
customers. American firms have been the global leaders in this 
field. They have brought to market a wide range of valuable 
collections that meet the information needs of businesses, 
professionals, researchers, and consumers worldwide. But 
several recent legal and technological developments threaten to 
derail this progress by eroding the incentives for continued 
investment needed to maintain and build upon the U.S. lead in 
world markets for electronic information resources.
    Historically, protection of collections of information has 
always been recognized as a branch of copyright law. Databases 
or compilations have been protected by copyright in some form 
since 1790, when the first U.S. Copyright Act was enacted. As 
courts applied copyright law to compilations, two distinct 
rationales for protection emerged. One, known as ``sweat of the 
brow doctrine,'' viewed the compiler's effort and investment 
(much as in trademark law) as the basis for copyright 
protection. In 1976, the Copyright Act was amended to require 
that compilations contain an element of creativity or 
originality in addition to effort and investment. Despite this 
amendment, many courts have continued to apply the ``sweat of 
the brow'' doctrine in determining copyright protection.
    In Feist Publications, Inc., v. Rural Telephone Service 
Co.,\1\ the Supreme Court affirmed that originality and 
creativity (in addition to investment and effort) are required 
for protection under the Copyright Act, and that a related form 
of protection would have to be created to more fairly protect 
compilations or portions of compilations in which there is 
effort and investment, but not a threshold level of originality 
or creativity. While Feist reaffirmed that most--although not 
all--commercially significant databases satisfy the 
``originality'' requirement for protection under copyright, the 
Court emphasized that this protection is necessarily ``thin.'' 
\2\ Several subsequent lower court decisions have underscored 
that copyright cannot stop a competitor from lifting massive 
amounts of factual material from a copyrighted database to use 
as the basis for its own competing product. This casts doubt on 
the ability of a database proprietor to use contractual 
provisions to protect itself against unfair competition from 
``free riders.''
---------------------------------------------------------------------------
    \1\ 499 U.S. 340 (1991).
    \2\ Id. at 349.
---------------------------------------------------------------------------
    Similar to other legislative initiatives since in the 104th 
Congress, H.R. 3261 responds to Feist. Although not based on a 
copyright or other property right model, the bill offers 
database owners protection for their compilations that is more 
comprehensive and uniform than the inadequate patchwork system 
of state and Federal laws currently available.
    Beyond these legal and commercial developments in the 
United States, there is reason to protect American-generated 
databases in the world market. To illustrate, a 6-year 
legislative process culminated in the issuance of a European 
Union Directive on Legal Protection of Databases in 1996. Among 
other things, the directive creates a new sui generis form of 
property right for the legal protection of databases to 
supplement copyright. However, it denies this new protection to 
collections of information originating in the United States or 
other countries unless the other country offers `comparable'' 
protection to collections originating in the European Union. 
When fully implemented, the European Directive could place U.S. 
firms at an enormous competitive disadvantage throughout the 
entire European market.
    In cyberspace, technological developments represent a 
threat as well as an opportunity for collections of 
information, just as for other works. Copying factual material 
from a third party's collection and rearranging it to form a 
competing information product--behavior that copyright 
protection alone may not effectively prevent--is cheaper and 
easier than ever through digital technology that is now in 
widespread use. Furthermore, piracy and personal theft of 
collections developed through the resources of a third party is 
easy to achieve and will be rampant without better protection 
for database owners.
    Taken together, these factors strongly suggest that the 
Congress should implement a new Federal system to protect 
developers against piracy and unfair competition, and thereby 
encourage continued investment in the production and 
distribution of valuable commercial collections of information. 
Such legislation will improve the market climate for 
collections of information in the United States; ensure 
protection for U.S. collections abroad on an equitable basis; 
place the United States on the leading edge of an emerging 
international consensus; and provide a balanced and measured 
response to the new challenges of digital technology. This bill 
seeks to advance those goals.
    H.R. 3261 fosters legitimate commercial incentives that the 
Committee believes will ensure the continued growth, vitality, 
and success of the market for important information products, 
while securing the continued legitimate use of collections of 
information for scientific, research, educational, and other 
purposes. The Committee further believes that preventing 
producers from having to rely on a hodgepodge of individual 
state laws is essential to advancing this goal.
    As noted, the bill does not adopt a structure like 
copyright, rather, it embraces a misappropriation model. H.R. 
3261 prohibits a third party from selling a ``quantitatively 
substantial'' portion of a database, provided the owner made a 
substantial investment of time or money in developing the 
database. The owner must also establish that the 
misappropriation occurred in a time-sensitive manner that 
caused injury and that the free use of the database will reduce 
the incentive to maintain it. There are other exclusions and 
qualifications to this basic prohibition to protect 
universities and research institutions, developers of 
electronic program guides, and those who use government 
databases, among others.
    In sum, H.R. 3261 represents a narrow and balanced response 
to the growing problem of database piracy. The high threshold 
that an owner must satisfy to establish liability--a total of 
10 criteria must be met--in addition to the exclusions or 
exemptions set forth in the bill ensure that it will only be 
used to dissuade genuinely bad actors from indulging in piracy.

          DATABASE INITIATIVES: 104TH CONGRESS-107TH CONGRESS

    104th Congress. Former Representative Carlos Moorhead, then 
Chairman of the Committee on the Judiciary's Subcommittee on 
Courts and Intellectual Property, introduced H.R. 3531, the 
``Database Investment and Intellectual Property Antipiracy 
Act.'' No action was taken on the bill.
    105th Congress. Representative Howard Coble, then Chairman 
of the Subcommittee on Courts and Intellectual Property, 
introduced H.R. 2652, the ``Collections of Information 
Antipiracy Act.'' H.R. 2652 passed the House twice, once as a 
stand-alone bill and once as part of the Digital Millennium 
Copyright Act (DMCA).\3\ The final version of the DMCA that 
became law did not include the database provision.
---------------------------------------------------------------------------
    \3\ Pub. L. 105-304.
---------------------------------------------------------------------------
    106th Congress. Representative Coble introduced H.R. 354, 
the ``Collections of Information Antipiracy Act.'' H.R. 354 was 
approved by the Committee on the Judiciary and was sequentially 
referred to the Committee on Commerce. Representative Tom 
Bliley, Chairman of the Commerce Committee, introduced H.R. 
1858, the ``Consumer and Investor Access to Information Act.'' 
H.R. 1858 was approved by the Committee on Commerce and was 
sequentially referred to the Committee on the Judiciary. No 
further action was taken on either bill.
    107th Congress. In an effort to avoid the stalemate of the 
106th Congress, Representative F. James Sensenbrenner, Jr., 
Chairman of the Judiciary Committee, and Representative W.J. 
(Billy) Tauzin, Chairman of the Commerce Committee, agreed to 
participate in deliberations that would produce a consensus 
bill. The process included stakeholder discussions and 
negotiations followed by closed-door negotiations between the 
staffs of the two Committees. At the conclusion of the 107th 
Congress, the staffs made progress but did not reach an 
agreement on the final text of a bill. As a result, Chairman 
Sensenbrenner and Chairman Tauzin sent a letter to the Speaker, 
requesting that negotiations continue apace until April 15, 
2003.
    As introduced by Representative Coble on October 8, 2003, 
H.R. 3261 constitutes the final negotiation product as 
contemplated by Chairman Sensenbrenner and Chairman Tauzin in 
advance of Subcommittee and Committee markup.

                                Hearings

    The Committee's Subcommittee on Courts, the Internet, and 
Intellectual Property, along with the Committee on Commerce's 
Subcommittee on Commerce, Trade, and Consumer Protection, held 
a joint hearing on the Discussion Draft of what would become 
H.R. 3261 on September 23, 2003. Testimony was received from 
four individuals representing four organizations, with 
additional materials submitted by other individuals and 
organizations.

                        Committee Consideration

    On October 16, 2003, the Subcommittee on Courts, the 
Internet, and Intellectual Property met in open session and 
ordered favorably reported the bill H.R. 3261, with an 
amendment, by a recorded vote of 10 to 3, a quorum being 
present. On January 21, 2004, the Committee met in open session 
and ordered reported favorably the bill H.R. 3261, with an 
amendment, by a recorded vote of 16 to 7, a quorum being 
present.

                         Vote of the Committee

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee notes that the 
following rollcall votes occurred during the Committee's 
consideration of H.R. 3261.
    1. Boucher amendment regarding Internet service provider 
(ISP) liability to the Coble amendment regarding the same 
matter to the amendment in the nature of a substitute to H.R. 
3261. By a rollcall vote of 17 yeas to 7 nays and one pass, the 
amendment passed.

                                                   ROLLCALL NO. 1
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Hyde........................................................
Mr. Coble.......................................................                              X
Mr. Smith.......................................................                              X
Mr. Gallegly....................................................
Mr. Goodlatte...................................................              X
Mr. Chabot......................................................              X
Mr. Jenkins.....................................................              X
Mr. Cannon......................................................              X
Mr. Bachus......................................................
Mr. Hostettler..................................................              X
Mr. Green.......................................................                              X
Mr. Keller......................................................                              X
Ms. Hart........................................................              X
Mr. Flake.......................................................
Mr. Pence.......................................................
Mr. Forbes......................................................              X
Mr. King........................................................                              X
Mr. Carter......................................................
Mr. Feeney......................................................              X
Mrs. Blackburn..................................................                              X
Mr. Conyers.....................................................                              X
Mr. Berman......................................................
Mr. Boucher.....................................................              X
Mr. Nadler......................................................
Mr. Scott.......................................................              X
Mr. Watt........................................................              X
Ms. Lofgren.....................................................              X
Ms. Jackson Lee.................................................              X
Ms. Waters......................................................
Mr. Meehan......................................................              X
Mr. Delahunt....................................................
Mr. Wexler......................................................
Ms. Baldwin.....................................................              X
Mr. Weiner......................................................
Mr. Schiff......................................................                                           Pass
Ms. Sanchez.....................................................              X
Mr. Sensenbrenner, Chairman.....................................              X
                                                                 -----------------------------------------------
    Total.......................................................             17               7          1 Pass
----------------------------------------------------------------------------------------------------------------

    2. Boucher amendment regarding retroactive application of 
the bill's provisions to the amendment in the nature of a 
substitute to H.R. 3261. By a rollcall vote of 8 yeas to 18 
nays, the amendment was defeated.

                                                   ROLLCALL NO. 2
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Hyde........................................................
Mr. Coble.......................................................                              X
Mr. Smith.......................................................                              X
Mr. Gallegly....................................................
Mr. Goodlatte...................................................                              X
Mr. Chabot......................................................                              X
Mr. Jenkins.....................................................                              X
Mr. Cannon......................................................                              X
Mr. Bachus......................................................                              X
Mr. Hostettler..................................................                              X
Mr. Green.......................................................                              X
Mr. Keller......................................................                              X
Ms. Hart........................................................
Mr. Flake.......................................................
Mr. Pence.......................................................
Mr. Forbes......................................................                              X
Mr. King........................................................                              X
Mr. Carter......................................................                              X
Mr. Feeney......................................................                              X
Mrs. Blackburn..................................................                              X
Mr. Conyers.....................................................                              X
Mr. Berman......................................................
Mr. Boucher.....................................................              X
Mr. Nadler......................................................
Mr. Scott.......................................................              X
Mr. Watt........................................................              X
Ms. Lofgren.....................................................              X
Ms. Jackson Lee.................................................              X
Ms. Waters......................................................
Mr. Meehan......................................................              X
Mr. Delahunt....................................................
Mr. Wexler......................................................
Ms. Baldwin.....................................................              X
Mr. Weiner......................................................
Mr. Schiff......................................................                              X
Ms. Sanchez.....................................................              X
Mr. Sensenbrenner, Chairman.....................................                              X
                                                                 -----------------------------------------------
    Total.......................................................              8              18
----------------------------------------------------------------------------------------------------------------

    3. Motion to report H.R. 3261, as amended by the amendment 
in the nature of a substitute, as amended. By a rollcall vote 
of 16 yeas to 7 nays, the motion was agreed to.

                                                   ROLLCALL NO. 3
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Hyde........................................................
Mr. Coble.......................................................              X
Mr. Smith.......................................................              X
Mr. Gallegly....................................................
Mr. Goodlatte...................................................
Mr. Chabot......................................................              X
Mr. Jenkins.....................................................              X
Mr. Cannon......................................................              X
Mr. Bachus......................................................              X
Mr. Hostettler..................................................              X
Mr. Green.......................................................              X
Mr. Keller......................................................              X
Ms. Hart........................................................
Mr. Flake.......................................................
Mr. Pence.......................................................
Mr. Forbes......................................................              X
Mr. King........................................................              X
Mr. Carter......................................................              X
Mr. Feeney......................................................
Mrs. Blackburn..................................................              X
Mr. Conyers.....................................................                              X
Mr. Berman......................................................
Mr. Boucher.....................................................                              X
Mr. Nadler......................................................
Mr. Scott.......................................................                              X
Mr. Watt........................................................                              X
Ms. Lofgren.....................................................
Ms. Jackson Lee.................................................                              X
Ms. Waters......................................................
Mr. Meehan......................................................                              X
Mr. Delahunt....................................................
Mr. Wexler......................................................
Ms. Baldwin.....................................................                              X
Mr. Weiner......................................................
Mr. Schiff......................................................              X
Ms. Sanchez.....................................................              X
Mr. Sensenbrenner, Chairman.....................................              X
                                                                 -----------------------------------------------
    Total.......................................................             16               7
----------------------------------------------------------------------------------------------------------------

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of Rule XIII 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.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of House rule XIII is inapplicable because 
this legislation does not provide new budgetary authority or 
increased tax expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 3(c)(3) of Rule XIII of the Rules 
of the House of Representatives, the Committee sets forth, with 
respect to the bill, H.R. 3261, the following estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, February 10, 2004.
Hon. F. James Sensenbrenner, Jr., 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. 3261, the 
``Database and Collections of Information Misappropriation 
Act.''
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Melissa E. 
Zimmerman (for Federal costs), who can be reached at 226-2860, 
Sarah Puro (for the State and local impact), who can be reached 
at 225-3220, and Paige Piper/Bach (for the private-sector 
impact), who can be reached at 226-2940.
            Sincerely,
                                       Douglas Holtz-Eakin.

Enclosure

cc:
        Honorable John Conyers, Jr.
        Ranking Member
H.R. 3261--Database and Collections of Information Misappropriation 
        Act.
    H.R. 3261 would allow parties who create or maintain 
information databases to file civil suits in a United States 
district court against parties who misuse those databases. The 
bill would require the United States Patent and Trademark 
Office, the Federal Trade Commission, and the Register of 
Copyrights to accept and review notices submitted by 
individuals filing such suits. Under the bill, each agency also 
would be required to write a report regarding the impact of the 
law with recommendations for change. CBO estimates that 
implementing H.R. 3261 would have no significant effect on 
spending subject to appropriation and would not affect direct 
spending or revenues.
    H.R. 3261 contains an intergovernmental mandate as defined 
in the Unfunded Mandates Reform Act (UMRA) because it would 
preempt State laws that protect the collection of information; 
however, CBO estimates that the resulting costs, if any, would 
not be significant and would not exceed the threshold 
established in UMRA ($60 million in 2004, adjusted annually for 
inflation).
    H.R. 3261 would create a new private-sector mandate as 
defined in UMRA by prohibiting any person from making a 
substantial part of information in certain databases available 
to the public in commerce without proper authorization. CBO 
cannot estimate the total cost of the mandate because we do not 
have enough information to determine the scope and impact of 
the prohibition.
    Currently, certain types of information that may be 
contained in a database are not protected by copyright law, and 
such information may not be protected under individual State 
laws. H.R. 3261 would impose a mandate by creating a Federal 
law of misappropriation that would subject to civil penalties 
any person who, without authority, makes a substantial portion 
of the information of the database publicly available. To avoid 
such penalties, a person must obtain the consent of the 
database owner through a licensing or similar agreement. The 
cost of complying with the mandate would be either the cost of 
the license or the revenue forgone by not making the 
information publicly available. The person's ability to obtain 
a license from the proper authority would depend in part on the 
potential effects on competition with the database products or 
services.
    CBO cannot estimate the total cost of the mandate because 
we do not have enough information to determine the scope and 
impact of the prohibition against misappropriation of certain 
databases. While court decisions have identified collections of 
information that failed to meet the creative expression 
standard under existing copyright law, those decisions are of 
limited use in identifying all of the types of collections to 
which H.R. 3261 could extend protection. Database providers may 
have been unaware of unauthorized use or, even if aware of such 
activity, may not have chosen to test their rights in court.
    The CBO staff contacts for this estimate are Melissa E. 
Zimmerman (for Federal costs), who can be reached at 226-2860, 
Sarah Puro (for the State and local impact), who can be reached 
at 225-3220, and Paige Piper/Bach (for the private-sector 
impact), who can be reached at 226-2940. The estimate was 
approved by Peter H. Fontaine, Deputy Assistant Director for 
Budget Analysis.

                    Performance Goals and Objectives

    H.R. 3261 does not authorize funding. Therefore, clause 
3(c)(4) of Rule XIII of the Rules of the House of 
Representatives is inapplicable.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of Rule XIII of the Rules of the 
House of Representatives, the Committee finds the authority for 
this legislation in article 1, section 8, of the Constitution.

               Section-by-Section Analysis and Discussion

    Section 1. Short Title. This Act may be cited as the 
``Database and Collections of Information Misappropriation 
Act.''
    Section 2. Definitions. Section 2 sets forth definitions of 
miscellaneous terms, including ``database,'' ``legal entity,'' 
and ``making available in commerce to others.''
    Section 3. Prohibition Against Misappropriation of 
Databases. Section 3 prohibits the making available to others 
of a quantitatively substantial part of the information in a 
database, with knowledge that the making available is without 
the database producer's authorization, if--

         Lthe database was generated, gathered, or 
        maintained through a substantial expenditure of 
        financial resources or time;

         Lthe making available occurs in a time-
        sensitive manner;

         Lthe making available inflicts injury on the 
        database by serving as a functional equivalent in the 
        same market as the database in a manner that causes 
        displacement of sources of revenue; and

         Lthe ability of parties to ``free-ride'' on 
        others threatens the existence or quality of the 
        database.

    As noted, a prospective plaintiff must satisfy a number of 
stringent criteria to be successful in a piracy suit for 
damages, impoundment, or injunctive relief . Failure to meet 
even one condition will result in a finding for the defendant. 
This high threshold will to protect legitimate third-party use 
of databases. Section 3 is aimed at combating the most 
egregious of bad actors and will therefore not generate 
unnecessary or illegitimate litigation.
    Section 4. Permitted Acts. Section 4 provides the Act shall 
not restrict acts of making available the information in a 
database--

         Lby any person who independently generates or 
        gathers information;

         Lby a nonprofit educational, scientific, or 
        research institution, if a court determines that the 
        making available in commerce of the information is 
        reasonable under the circumstances, taking into 
        consideration the customary practices of the non-profit 
        educational, scientific or research institution;

         Lby the act of hyper-linking of one online 
        location to another or providing of a reference or a 
        pointer; or

         Lfor the primary purpose of news reporting 
        (including news and sports gathering and dissemination) 
        unless the information is time-sensitive and has been 
        gathered by a news-reporting entity, and the making 
        available is part of a consistent pattern engaged in 
        for the purpose of direct competition.

    Section 5. Exclusions. Section 5 protection under the bill 
is unavailable for--

         Linformation generated, gathered, organized, 
        or maintained by a governmental entity or pursuant to a 
        Federal statute or regulation; and

         Lcomputer programs (but databases incorporated 
        into computer programs will receive protection).

    Section 6. Relation to Other Laws. Section 6--

         Lpreserves the law of copyrights, patents, 
        trademarks, design rights, antitrust, trade secrets, 
        privacy, access to public documents, misuse, and 
        contract law;

         Lpreempts state law that is the subject of the 
        Act but does not preempt for cases involving something 
        other than commercial competition;

         Laffirms the ``savings'' clause for the 
        Communications Act of 1934, along with securities laws, 
        regulations, or market data; and

         Lclarifies that judicial doctrines of misuse 
        apply.

    Section 7. Civil Remedies. Section 7 includes the following 
remedies:

         La private right of action that may be brought 
        in an appropriate U.S. district court for injunctive 
        relief or actual damages, with double damages available 
        when there is willful conduct, a history of database 
        misappropriation, or a of necessity to deter future 
        violations;

         Lan award of court costs and attorney's fees 
        to the prevailing party; and

         Loversight by the Federal Trade Commission, 
        the Copyright Office, and the Patent and Trademark 
        Office.

    Empowering an individual to prevent the misappropriation of 
his or her database through commencement of a civil action is 
eminently fair. In addition, section 7 permits the 
``prevailing'' party to petition the court for costs and 
attorney's fees. Thus, an owner's right to bring suit is 
balanced with the specter of having to pay the defendant if the 
suit is meritless. The oversight function provided by the 
Federal Trade Commission, Register of Copyrights, and Director 
of the Patent and Trademark Office will also prevent frivolous 
litigation. All three Federal entities will essentially review 
the state of database litigation and offer their insights as to 
whether the public interest is served through enforcement of 
H.R. 3261.
    Section 7 of the bill was amended at the full Committee 
markup regarding the liability of Internet service providers 
(ISPs) under the terms of the bill. Representative Coble 
offered an amendment to exempt ISPs based on a description of 
their operations. The Coble amendment was substantially 
revised, however, by a second-degree amendment offered by 
Representative Rick Boucher. The Boucher amendment states that 
no ``provider of an interactive computer service [i.e., an ISP] 
shall be liable under section 3 for making available 
information that is provided by another information content 
provider.'' In other words, the Boucher amendment essentially 
exempts an ISP from any liability based on its status as an ISP 
if it acts as a mere conduit when transferring information over 
the Internet provided by a third party source, such as a 
subscriber.
    Section 8. Limitation on Actions. Section 8 provides that 
no civil action shall be maintained under this Act unless it is 
commenced within 2 years after the cause of action arises or 
claim accrues.
    Section 9. Exclusion From Liability for Educational 
Institutions. Section 9 excludes any ``accredited nonprofit 
post-secondary educational institution or any nonprofit 
research laboratory'' from liability under the Act. An 
exception to this exclusion lies if any shielded entity ``makes 
available substantially all of a database in direct commercial 
competition'' with a database owner as described in Section 3.
    The exclusion under section 9 was further expanded at full 
Committee markup when Representative Coble offered an amendment 
clarifying that the exclusion applies to the work of a student 
``acting in furtherance of supervised activities or programs.'' 
The amendment also more accurately defines a ``nonprofit'' 
research laboratory.
    Section 10. Effective Date. Section 10 provides that the 
Act shall take effect on the date of the enactment of the Act, 
and shall apply to violations on or after that date with 
respect to databases existing before, on, or after that date.
    Section 11. Nonseverability. This section provides that if, 
within 10 years from the date of enactment, the Supreme Court 
of the United States holds that the provisions of section 3 are 
invalid under article I of the Constitution, then this Act is 
repealed, effective as of the date of the Supreme Court 
decision.
    Section 11 offers consolation to critics who assert that 
the bill violates the Copyright Clause of the U.S. Constitution 
(article I, section 8, clause 8). The Committee believes that 
the bill is constitutionally sound and is not a derivation of 
or an expansion to copyright since it is based on a 
misappropriation model. The Committee further notes that the 
Congress is fully empowered to legislate in this area based on 
its Commerce Clause power (article I, section 8, clause 3).

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of Rule XIII of the Rules of 
the House of Representatives, the Committee notes that this 
bill does not change existing law.

                           Markup Transcript



                            BUSINESS MEETING

                      WEDNESDAY, JANUARY 21, 2004

                  House of Representatives,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:05 a.m., in 
Room 2141, Rayburn House Office Building, Hon. F. James 
Sensenbrenner, Jr. [Chairman of the Committee] presiding.
    [Intervening business.]
    Chairman Sensenbrenner. The next item on the agenda is H.R. 
3261, the ``Database and Collections of Information 
Misappropriation Act.''
    The Chair recognizes the gentleman from Texas, Mr. Smith, 
the Chairman of the Subcommittee on Courts, the Internet, and 
Intellectual Property.
    Mr. Smith. Mr. Chairman, the Subcommittee on Courts, the 
Internet, and Intellectual Property reports favorably the bill 
H.R. 3261 with a single amendment in the nature of a substitute 
and moves its favorable recommendation to the full House.
    Chairman Sensenbrenner. Without objection, the bill will be 
considered as read and open for amendment at any point. And the 
Subcommittee amendment in the nature of a substitute which the 
Members have before them will be considered as read, considered 
as the original text for purposes of amendment, and open for 
amendment at any point.
    [The amendment in the nature of a substitute follows:]
      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


    Chairman Sensenbrenner. The Chair recognizes the gentleman 
from Texas, Mr. Smith, to strike the last word.
    Mr. Smith. Mr. Chairman, electronic compilations and other 
collections of factual material are indispensable to the 
American economy. These information products place a wealth of 
data at the fingertips of businesses, professionals, 
scientists, scholars, and consumers. Databases are essential 
tools for improving productivity, advancing education and 
training, and creating a more informed citizenry. But several 
recent legal and technological developments threaten to reduce 
incentives for investments needed to maintain and expand 
databases.
    Introduced by our colleague Representative Coble, H.R. 3261 
will provide protection for databases and incentives for their 
creators to continue producing these valuable tools, a product 
of much negotiation and compromise----
    Mr. Scott. Mr. Chairman we are having trouble hearing down 
on this end.
    Mr. Smith. A product of much negotiation and compromise, 
the legislation is narrowly tailored to target bad actors while 
preserving the ability of consumers to access and use 
information.
    Mr. Chairman, I will yield the balance of my time to the 
gentleman from North Carolina, the originator of the 
legislation.
    Mr. Coble. I thank the gentleman for yielding.
    Mr. Chairman, let me give the Members a little background. 
This has gone around the block several times. I think in the 
105th Congress, the bill passed the House only to languish in 
the Senate. And in the waning days of that session, I received 
commitment and promises from a Democrat Senator and a 
Republican Senator, and they assured me it would be the first 
order of business when the next session convened. Well, that 
never came to pass.
    We have many people, influential interested supporters and 
advocates for each side of this issue. And when that occurs, 
Mr. Chairman, as you know, the result usually is compromise. 
This bill before us today is not only a compromise, it is a 
very watered-down version compared to the initial bill. I can 
live with it, and I hope most of the others can. But I do 
believe databases have value, they are worth protecting. 
Individuals and businesses would not have devoted time, energy, 
and financial resources were it otherwise. And, sadly, free 
riders would not try to steal databases if their compilations 
lacked value.
    Finally, I want to assure the Members that no one has tried 
to ``bull rush'' this matter through.
    Mr. Chairman, I thank you and the Ranking Member. I thank 
the Chairman of the Commerce Committee, Mr. Tauzin. You all 
conducted several open discussions. I was in absentia most of 
those because, for other reasons, I was not assigned to the IP 
committee at that time. But I am told that those sessions were 
productive. And I think what we have here is, as I say, a 
watered-down compromised version. There are a number of 
accommodations that have been made for the benefit of those who 
were less enthusiastic about reform. The amount of additional 
damages have been lowered; the criminal penalties have been 
deleted; we have established a knowledge standard as a 
precursor to liability; and, finally, we expand current 
exemptions for universities, research entities, news reporting, 
et cetera.
    Mr. Chairman, this is a product of compromise and give and 
take. It is, in fact, a poster child of sorts for the 
legislative process. I hope that we can ultimately and finally 
put the database issue to bed, at least on the House side, by 
enacting this bill, and I urge its adoption and yield back the 
balance of my time.
    Chairman Sensenbrenner. The time belongs to the gentleman 
from Texas, Mr. Smith.
    Mr. Coble. I yield back to the gentleman from Texas.
    Mr. Smith. Mr. Chairman, and I yield back the balance of my 
time.
    Chairman Sensenbrenner. Who wishes to give the opening 
statement on the minority side? The gentleman from Virginia, 
Mr. Boucher, is recognized for 5 minutes.
    Mr. Boucher. Well, thank you very much, Mr. Chairman.
    I am rising in opposition to this measure because I frankly 
think it is not needed, and I am very concerned that if this 
bill is passed into law there will be a truly mischievous 
consequence. Genuine damage can be done to the ability of the 
public to have access to facts that are necessary for carrying 
on many commercial and noncommercial activities.
    First let me say that the remedies herein contained simply 
is not necessary. Copyright law has been interpreted by the 
courts to provide remedies in many of the instances where 
people are seeking protection for created databases. The 
realtors, for example, have been able to protect their multiple 
listing service through traditional copyright principles. The 
courts have found that there is enough originality in the 
creation of the multiple listings that copyright applies and 
protection has been accorded.
    Thompson and Thompson was able to obtain through 
traditional copyright and trademark remedies protection for 
trademark databases organized by word, organized by mark, and 
by combinations of word and mark.
    Another remedy frequently applied to provide relief has 
been common-law trespass causes of action. And eBay has 
succeeded in having its databases protected from parties that 
were intruding into the server on a frequent basis under a 
common-law theory of trespass. Misappropriation of property has 
been used very successfully by those who were claiming 
protection for databases.
    Beyond that, principles of contract can apply. And where 
there are subscription license agreements between the creator 
of the database and the subscriber, those legal theories also 
offer adequate protection.
    The Digital Millennium Copyright Act also offers protection 
because it makes it unlawful to circumvent a technical 
protection measure that guards access to a copyrighted work. 
And where the creator has created a database and then encrypts 
that, the DMCA offers a measure of protection with respect to 
those who would seek to circumvent that technical protection 
measure.
    Not only is this not needed, but its enactment into law 
truly would be mischievous. I am quite concerned that people 
involved in scientific research and other kinds of research in 
the creation of information that is shared on a daily basis in 
our society would be badly inhibited from their ability in 
order to engage in that normal discourse and in the compilation 
of reports and other documents that are very useful in our 
society.
    I think if this bill becomes law, there is going to be lots 
of litigation. The experience of the European Union which 
adopted a database protection measure several years ago is not 
encouraging in this respect. More than 100 reported cases have 
emanated from that provision so far, and many of the results in 
these reported cases are conflicting. And so a great deal of 
confusion and an enormous amount of litigation has certainly 
been the experience in the European Union. I daresay we would 
have a similar experience here in the United States.
    A very large coalition of interested parties has announced 
opposition to this bill, ranging from the chamber of commerce 
and financial services companies, Internet companies such as 
AOL, AT&T, Yahoo, Internet service providers including Verizon 
and SBC, and public interest organizations including a large 
number of associations representing libraries. Even the 
National Academy of Sciences has urged that this measure not be 
adopted because of the adverse effect that it can have on the 
conduct of legitimate scientific research.
    I think the measure is unnecessary. I think that if Members 
of the House Commerce Committee, who I know to some extent were 
involved in discussions regarding the bill that is before the 
Committee today, were consulted, very few if any Members of 
that Committee would actually say they support the passage of 
this bill, and I think the general sentiment in the House at 
large is not inconsistent with what one would expect from the 
House Commerce Committee.
    Mr. Chairman, today I am going to offer some amendments 
that hopefully would improve the measure some. I hope at the 
end of that process it would be the pleasure of this Committee 
not to report the bill.
    Thank you, Mr. Chairman. And I yield back.
    Chairman Sensenbrenner. Without objection, all Members' 
opening statements will be included in the record at this 
point.
    Chairman Sensenbrenner. Are there amendments? The gentleman 
from North Carolina, Mr. Coble.
    Mr. Coble. I have an amendment at the desk, Mr. Chairman.
    Chairman Sensenbrenner. The clerk will report the 
amendment.
    Mr. Coble. Number 572.
    The Clerk. Amendment to the amendment in the nature of a 
substitute.
    Chairman Sensenbrenner. Without objection, the amendment is 
considered as read and open for amendment at any point.
    [The amendment to the amendment in the nature of a 
substitute follows:]
      
      

  


      
      

  


    Chairman Sensenbrenner. At this time, the Chair will 
declare a recess for Members to go to lunch. Since the votes 
are going to start momentarily, I would ask the Members to 
return to the Committee meeting promptly after the last of the 
series of four votes, where we will resume consideration of 
this legislation. I would like to get this legislation, which 
is somewhat controversial, concluded in the Committee, as well 
as H.R. 3291 which is the cooperative research and technology 
bill before we adjourn today. I understand that the second bill 
is not very controversial. But if we can get both of these 
bills resolved today, it will make our work next week much 
better.
    Mr. Conyers. Mr. Chairman.
    Chairman Sensenbrenner. The gentleman from Michigan.
    Mr. Conyers. Might I just inquire, are there any 
prospective plans for the Committee for next week?
    Chairman Sensenbrenner. The Chair has announced that the 
items on the markup agenda that are not concluded today will be 
considered at a markup next Wednesday.
    Mr. Weiner. Mr. Chairman.
    Chairman Sensenbrenner. The gentleman from New York.
    Mr. Weiner. Just so I understand, because I have an 
interest in this bill, what you just said is we are going to 
come back after the last vote for the week?
    Chairman Sensenbrenner. Yes. And we will finish this bill 
up and hopefully finish up the research and--Cooperative 
Research and Technology Act.
    The Committee stands recessed until after the last vote. 
Members will return promptly.
    [Whereupon, at 12:07 p.m., the Committee recessed, to 
reconvene at 1:10 p.m., the same day.]
    AFTERNOON SESSION.
    Chairman Sensenbrenner. The Committee will be in order.
    When the Committee recessed earlier today, pending was a 
motion to report favorably the bill H.R. 3261. The bill was 
considered as read and open for amendment at any point, and the 
Subcommittee amendment in the nature of a substitute was moved 
and was considered as the original text for purposes of 
amendment. There was an amendment that was offered, an 
amendment to the substitute amendment that was offered by the 
gentleman from North Carolina, Mr. Coble, which was read. The 
gentleman from North Carolina is recognized for 5 minutes.
    Mr. Coble. I thank the Chairman.
    Mr. Chairman, the Database Coalition and representatives of 
the University and Research Entity Community developed this 
amendment to section 9 of the bill which excludes educational 
institutions and research labs from liability under H.R. 3261. 
The amendment clarifies that the exclusion applies to the work 
of a student, quote, acting in furtherance of supervised 
activities or programs, close quote. The amendment also more 
accurately defines a nonprofit research lab, and this is 
essentially a perfecting amendment that was worked out between 
the affected parties. It is noncontroversial, and I urge its 
adoption.
    Chairman Sensenbrenner. The question is on agreeing to the 
amendment to the amendment in the nature of a substitute 
offered by the gentleman from North Carolina.
    Those in favor will say aye.
    Opposed, no.
    The ayes appear to have it. The ayes have it. The amendment 
to the amendment in the nature of a substitute is agreed to.
    The gentleman from North Carolina.
    Mr. Coble. I have another amendment at the desk.
    Chairman Sensenbrenner. The clerk will report the 
amendment.
    Mr. Boucher. Mr. Chairman, I have an amendment to this 
amendment.
    Chairman Sensenbrenner. The procedure is for the clerk to 
report the amendment, the gentleman from North Carolina to be 
recognized for 5 minutes, and then the Chair will recognize the 
gentleman from Virginia and he can offer his amendment to the 
amendment.
    Mr. Boucher. Thank you, Mr. Chairman.
    Chairman Sensenbrenner. Without objection, the amendment 
offered by Mr. Coble is considered as read and open for 
amendment at any point. And the gentleman from North Carolina 
is recognized for 5 minutes.
    [The amendment to the amendment in the nature of a 
substitute follows:]
      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


    Mr. Coble. I thank the Chairman.
    Mr. Chairman and Members of the Committee, my amendment 
addresses the treatment of Internet service providers or ISPs 
under the bill. First, I want to thank my friend from Virginia, 
Mr. Boucher, for his keen interest in this subject. And by the 
way, Mr. Boucher, you mentioned earlier about the realtors. The 
realtors are some of my most vocal supporters for this 
proposal. And Mr. Chairman, at this time I would like to ask 
unanimous consent to submit for the record the list of members 
of the Database Coalition.
    Chairman Sensenbrenner. Without objection.
    [The material referred to follows:]
               Sampling of Database Coalition Supporters
Thompson Publishing
Reed-Elsiveer
Software Information Industry Association
E-Bay
American Association of Publishers
McGraw Hill
Monster.com
Newspaper Association of America
American Medical Association
National Association of Realtors

    Mr. Coble. Which is impressive, if you will pardon my 
modesty.
    When it became clear that the ISP representatives were 
dissatisfied with the treatment of their industry as set forth 
in H.R. 3261, we attempted to develop an amendment that would 
satisfy their demands without compromising the core provisions 
of the bill. I want to thank the members of the Database 
Coalition and the ISP community, for that matter, for trying to 
resolve the differences in advance of the markup. Whatever the 
outcome of this debate, I renew my pledge to work with Mr. 
Boucher and others and the affected constituents with language 
acceptable to both sides that could be incorporated in a 
manager's amendment in advance of floor consideration.
    My amendment stands for the proposition that an ISP should 
not be liable for indulging in normal ISP activity under the 
bill. It excludes an ISP from any liability when it is 
transmitting, retrieving, routing a transmission, cashing or 
hosting a database on behalf of its users. It furthermore 
clarifies that an ISP cannot be held liable for hyperlinking 
and related activities. Some ISPs have taken issue with the 
enumeration of the listing of activity that should be exempted, 
arguing that the list should not cover activities that are 
unforeseen at this time and which ISPs may subsequently adopt. 
My response to that is that, given this, the ISP community, it 
appears, wants to acquire immunization based on its status 
within an industry, not based on what the members of that 
industry may do. If ISPs are exempted in this way, we will have 
unwittingly, I believe, created a major loophole that will 
allow bad actors or pirates, if you will, to steal databases 
and claim immunity under a meaningless exception.
    I supplement this point, Mr. Chairman, by adding that the 
amendment precludes any entity from claiming the ISP exemption 
when the entity benefits from a pirating of a database or acts 
in concert with a pirate. A good-faith ISP would never meet 
those conditions it seems to me.
    My amendment cannot forecast how the ISP community will 
operate in all respects, years, or even months, from this date. 
But I believe it is a good-faith attempt to accord ISPs fair 
treatment under a bill that has been greatly watered down, as I 
said before, through the years, probably 8 or 9 years this has 
been kicking around, at the expense of the affected database 
owners. I urge my Members to adopt this amendment, and yield 
back the balance of my time.
    Mr. Boucher. Mr. Chairman.
    Chairman Sensenbrenner. The gentleman from Virginia.
    Mr. Boucher. Thank you very much, Mr. Chairman. I have an 
amendment to the amendment offered by the gentleman from North 
Carolina.
    Chairman Sensenbrenner. The clerk will report the amendment 
to the amendment.
    Mr. Boucher. And it is listed as Boucher 027.
    The Clerk. Amendment to the amendment.
    Mr. Boucher. And Mr. Chairman, I ask unanimous consent that 
the amendment be considered as read.
    Chairman Sensenbrenner. Without objection, so ordered. And 
the gentleman from Virginia is recognized for 5 minutes.
    [The amendment to the amendment to the amendment in the 
nature of a substitute follows:]


    Mr. Boucher. Thank you very much, Mr. Chairman.
    This amendment also would provide an exemption to Internet 
service providers. It is very simple in its construction. It 
basically tracks the provision in the Digital Millennium 
Copyright Act that largely resulted from the efforts in 1998 of 
our colleague on this Committee, Mr. Goodlatte, which exempts 
from liability mere conduits of information, such as Internet 
service providers who merely operate the electronic facilities 
that transmit data. These electronic conduits have no role in 
the creation of the data in question; they do not monitor the 
data in question; they merely operate as the electronic service 
that enables the movement of that data into commerce. And just 
as they were exempted from liability under the provisions of 
the DMCA, an exemption, which, by the way, s worked very well 
in practice, they should be exempted by the same basic, very 
clean and straightforward approach in the bill that we have 
under consideration today. The amendment that I am offering to 
Mr. Coble's amendment would provide that exemption.
    The problem that I have with Mr. Coble's bill and his 
efforts in providing an ISP exemption is the language that 
appears on page 4 of his amendment, lines 15 through 19. And in 
that language, there first of all I think is some ambiguity as 
to its application. The language that I am offering would be 
somewhat more straightforward. The major problem is that a 
person who is working for an Internet service provider could 
well be described in the language that I have just identified 
on lines 15 through 19, someone who actively directs the 
activity of the Internet service provider, the major function 
of which is to make sure that data does flow through those 
facilities. And there is certainly room to interpret that the 
very activity of operating the ISP could fall within the 
ambient of this language. And if it were so interpreted, then 
the ISP would not be able to take advantage of the exemption 
that the gentleman from North Carolina is proposing.
    I think the one that I am offering offers an unambiguous, 
very direct approach, and as I indicated it is very consistent 
with the approach we took with respect to mere conduits under 
the DMCA, and I would hope it would be the privilege of this 
Committee to accept it.
    Ms. Lofgren. Would the gentleman yield?
    Mr. Boucher. And I would be happy to yield to the 
gentlewoman from California.
    Ms. Lofgren. I would just like to express my support of 
your amendment to the amendment, and note that in the amendment 
proposed by our friend from North Carolina, there are a whole 
series of definitions that I think inevitably will lead to 
litigation and sometimes yield results not likely intended, as 
we have discovered with the DMCA itself.
    The language proposed in the amendment to the amendment, on 
the other hand, has already been out in the marketplace, it has 
to some extent been tested. I think it is clear and unlikely to 
lead to substantial litigation and I think does achieve the 
goals that I think is the intention of Mr. Coble. And I commend 
the gentleman for his amendment and look forward to supporting 
it. And I yield back to the gentleman from Virginia.
    Mr. Boucher. I thank the gentlewoman for her comments and 
her support of this amendment. And Mr. Chairman, I yield back.
    Mr. Coble. Mr. Chairman.
    Chairman Sensenbrenner. The gentleman from North Carolina.
    Mr. Coble. Mr. Chairman, I will just respond very briefly.
    Chairman Sensenbrenner. The gentleman is recognized for 5 
minutes.
    Mr. Coble. This will surprise none of us. We all become 
subjectively involved. My friend from Virginia thinks his 
amendment is better; I think my amendment is better. 
Subjectivity. But I pretty well stated my position earlier, and 
I think ours is the better of the two and urge the defeat of 
the Boucher amendment and support of my amendment.
    Mr. Goodlatte. Mr. Chairman.
    Chairman Sensenbrenner. The other gentleman from Virginia, 
Mr. Goodlatte.
    Mr. Goodlatte. Thank you, Mr. Chairman. I wanted to commend 
both gentlemen for their efforts to address a problem that 
exists in the bill. I support the amendment to the amendment 
offered by Congressman Boucher, and I would like to tell you 
why. The Internet continues to drive innovation and provide 
efficiency for consumers and businesses. We must continue to 
create policy that provides incentives for the Internet to 
thrive so that consumers and businesses can continue to reap 
the benefits of this revolutionary technology. I support this 
amendment because it helps to ensure that the Internet will 
thrive.
    The purpose of the underlying bill is to punish those that 
misappropriate another person's database. This amendment would 
clarify that providers of interactive computer services would 
not be liable when a third party uses their services to make 
available a database in violation of this act. Providers of 
interactive computer service are some of the basic building 
blocks of the Internet, and this amendment would ensure that 
when acting as mere conduits, they would not be liable for 
violation to the act.
    In addition, the protection offered by this amendment 
applies only when a third party provides the offending content. 
So if an interactive computer service provider actually 
provides the offending information and makes it available, it 
is my understanding that they would be liable.
    The amendment will protect some of the basic building 
blocks of the Internet and help ensure that it grows and 
thrives. And I want to commend the gentleman from North 
Carolina. While I think this amendment is more comprehensive in 
addressing this problem with Internet service providers, 
nonetheless I have worked with him for years on his effort to 
produce a database bill. I think the bill is vitally important. 
In that regard I disagree with my colleague from Virginia, but 
with respect to this amendment I think it definitely perfects 
the bill and would urge my colleagues to support it.
    Chairman Sensenbrenner. The gentleman yields back the 
balance of his time. The gentleman from Texas, Mr. Smith.
    Mr. Smith. Thank you, Mr. Chairman. I move to strike the 
last word.
    Chairman Sensenbrenner. The gentleman is recognized for 5 
minutes.
    Mr. Smith. Mr. Chairman, Mr. Coble has made a good-faith 
effort to satisfy the ISP community's concerns with this 
language. The amendment will prevent an ISP from being liable 
for engaging in its normal business activities. I do not 
believe an ISP should receive a blanket exemption from 
liability just by virtue of being a service provider. It is 
unfair for an ISP to be exposed to liability for merely acting 
as a conduit for information. This language strikes an 
appropriate balance and allows ISPs to engage in their day-to-
day activities without the fear of being exposed to liability. 
I urge my colleagues to adopt the underlying amendment and 
oppose any amendments to Mr. Coble's amendment.
    I yield back the balance of my time.
    Chairman Sensenbrenner. The question is on----
    Mr. Conyers. Mr. Chairman.
    Chairman Sensenbrenner. The gentleman from Michigan.
    Mr. Conyers. Thank you, sir. Excuse my having to leave the 
Committee room.
    Could I ask both my friends from the South to explain to me 
what the differences between their approach are, just 
essentially----
    Mr. Boucher. Would the gentleman yield?
    Mr. Conyers. Of course. With pleasure.
    Mr. Boucher. I thank the gentleman for yielding.
    Both Mr. Coble and I are seeking to put forth a provision 
that would exempt ISPs from liability under the bill. The 
amendment that I have offered that accomplishes this result 
tracks very closely the approach that we took with the Digital 
Millennium Copyright Act in 1998. As the gentlewoman from 
California indicated, that approach has been well received, it 
has been very effective in application, it has been interpreted 
in the courts, and generally it is accorded a high degree of 
success. It is straightforward, it is quite simple in its 
application, and the gentleman from Virginia Mr. Goodlatte very 
articulately described the way that it would work in practice.
    The problem that I have with the amendment that has been 
offered by Mr. Coble is that the very act of operating an ISP 
would involve directing the flow of data through the ISP. And 
there is language contained within Mr. Coble's amendment that 
could be interpreted to say that that very act of operating the 
Internet service provider, even though the operator has no 
control over the data, even though he doesn't monitor the data, 
even though the data simply flows through his system, by virtue 
of the very fact that he is operating the system, his ISP for 
which he works could be subject to liability under the bill.
    That is the principal problem that I have with Mr. Coble's 
language. I think it is unnecessarily complex quite apart from 
that, but it is a construction which I think is considerably 
more complex than what I am offering.
    And let me simply add one other thing, and that is that the 
ISPs support the amendment that I have offered and do not 
support the one that Mr. Coble has. I thank the gentleman.
    Mr. Conyers. May I now turn to my friend.
    Mr. Coble. I say to my friend from the North----
    Mr. Conyers. To my friend from the South.
    Mr. Coble.--asked a very fair question. And this may be 
subject to interpretation. But it seems to me that the Boucher 
amendment pretty well extends a blanket exemption if you are an 
ISP. Mine is drawn more narrowly. And I just don't think there 
is any way that a way good-faith ISP is going to be penalized 
under my amendment.
    Mr. Conyers. I return my time.
    Chairman Sensenbrenner. The question is on the Boucher 
amendment to the Coble amendment to the amendment in the nature 
of a substitute.
    Those in favor will say aye.
    Opposed, no.
    The noes appear to have it.
    Mr. Boucher. rollcall.
    Chairman Sensenbrenner. rollcalled is ordered. The question 
is on agreeing to the Boucher amendment to the Coble amendment 
to the amendment in the nature of a substitute.
    Those in favor will, as your names are called, answer aye.
    Those opposed, no.
    And the clerk will call the roll.
    The Clerk. Mr. Hyde.
    [No response.]
    The Clerk. Mr. Coble.
    Mr. Coble. No.
    The Clerk. Mr. Coble, no.
    Mr. Smith.
    Mr. Smith. No.
    The Clerk. Mr. Smith, no.
    Mr. Gallegly.
    [No response.]
    The Clerk. Mr. Goodlatte.
    Mr. Goodlatte. Aye.
    The Clerk. Mr. Goodlatte, aye.
    Mr. Chabot.
    Mr. Chabot. Aye.
    The Clerk. Mr. Chabot, aye.
    Mr. Jenkins.
    Mr. Jenkins. Aye.
    The Clerk. Mr. Jenkins, aye.
    Mr. Cannon.
    Mr. Cannon. Aye.
    The Clerk. Mr. Cannon, aye.
    Mr. Bachus.
    [No response.]
    The Clerk. Mr. Hostettler.
    Mr. Hostettler. Aye.
    The Clerk. Mr. Hostettler, aye.
    Mr. Green.
    Mr. Green. No.
    The Clerk. Mr. Green, no.
    Mr. Keller.
    Mr. Keller. No.
    The Clerk. Mr. Keller, no.
    Ms. Hart.
    Ms. Hart. Aye.
    The Clerk. Ms. Hart, aye.
    Ms. Hart. No.
    The Clerk. Ms. Hart, no.
    Mr. Flake.
    [No response.]
    The Clerk. Mr. Pence.
    [No response.]
    The Clerk. Mr. Forbes.
    Mr. Forbes. Aye.
    The Clerk. Mr. Forbes, aye.
    Mr. King.
    Mr. King. No.
    The Clerk. Mr. King, no.
    Mr. Carter.
    [No response.]
    The Clerk. Mr. Feeney.
    Mr. Feeney. Aye.
    The Clerk. Mr. Feeney, aye.
    Mrs. Blackburn.
    Mrs. Blackburn. No.
    The Clerk. Mrs. Blackburn, no.
    Mr. Conyers.
    Mr. Conyers. No.
    The Clerk. Mr. Conyers, no.
    Mr. Berman.
    [No response.]
    The Clerk. Mr. Boucher.
    Mr. Boucher. Aye.
    The Clerk. Mr. Boucher, aye.
    Mr. Nadler.
    [No response.]
    The Clerk. Mr. Scott.
    Mr. Scott. Aye.
    The Clerk. Mr. Scott, aye.
    Mr. Watt.
    Mr. Watt. Aye.
    The Clerk. Mr. Watt, aye.
    Ms. Lofgren.
    Ms. Lofgren. Aye.
    The Clerk. Ms. Lofgren, aye.
    Ms. Jackson Lee.
    Ms. Jackson Lee. Aye.
    The Clerk. Ms. Jackson Lee, aye.
    Ms. Waters.
    [No response.]
    The Clerk. Mr. Meehan.
    Mr. Meehan. Aye.
    The Clerk. Mr. Meehan, aye.
    Mr. Delahunt.
    [No response.]
    The Clerk. Mr. Wexler.
    [No response.]
    The Clerk. Ms. Baldwin.
    Ms. Baldwin. Aye.
    The Clerk. Ms. Baldwin, aye.
    Mr. Weiner.
    [No response.]
    The Clerk. Mr. Schiff.
    Mr. Schiff. Pass.
    The Clerk. Mr. Schiff, pass.
    Ms. Sanchez.
    Ms. Sanchez. Aye.
    The Clerk. Ms. Sanchez, aye.
    Mr. Chairman.
    Chairman Sensenbrenner. Aye.
    The Clerk. Mr. Chairman, aye.
    Chairman Sensenbrenner. Are there Members who wish to cast 
or change their vote? The gentlewoman from Pennsylvania.
    Ms. Hart. Thank you. No to aye.
    The Clerk. Ms. Hart, aye.
    Chairman Sensenbrenner. Further Members who wish to cast or 
change their vote? If not, the clerk will report.
    The Clerk. Mr. Chairman, there are 17 ayes, 7 noes, and a 
pass.
    Chairman Sensenbrenner. And the amendment to the amendment 
to the amendment in the nature of a substitute is agreed to.
    The question is now on agreeing to the Coble amendment, as 
amended by the Boucher amendment.
    Those in favor will say aye.
    Opposed, no.
    The ayes appear to have it. The ayes have it and the 
amendment, as amended, is agreed to.
    Are there further amendments?
    Mr. Boucher. Mr. Chairman.
    Chairman Sensenbrenner. The gentleman from Virginia.
    Mr. Boucher. Mr. Chairman, I have an amendment, Boucher 
022.
    Chairman Sensenbrenner. The clerk will report the 
amendment.
    The Clerk. Amendment to the amendment in the nature of a 
substitute.
    Mr. Boucher. And Mr. Chairman, I ask unanimous consent that 
the amendment be considered as read.
    [The amendment to the amendment in the nature of a 
substitute follows:]
      
      

  


    Chairman Sensenbrenner. If the gentleman will withhold for 
a second. Without objection, so ordered. The gentleman is 
recognized for 5 minutes.
    Mr. Boucher. Thank you, Mr. Chairman.
    This amendment very simply would make the bill prospective 
in its application. The bill says, as a part of its text, that 
the only databases that would qualify for protection under the 
bill are those that are made available to the public in a time-
sensitive manner. And yet the bill, by its terms, is also made 
retroactive, meaning that it would apply to databases that are 
presently in existence.
    It seems to me that it is impossible for the time 
sensitivity requirement to have any real meaning if in fact 
this bill would apply to databases that are in existence at the 
date that the law becomes effective. And so the amendment 
simply repeals the retroactivity provision and would make the 
bill prospective only in its application.
    Ms. Lofgren. Would the gentleman yield?
    Mr. Boucher. And I would be happy to yield to the 
gentlewoman.
    Ms. Lofgren. I think I agree with this amendment. It 
appears to me that the underlying bill is attempting to conform 
to NBA versus Motorola in the hot news exception to the Feist 
case that disrupted the sweat-of-the-brow theory back in 1991. 
However, Motorola defined hot news--among one of the four tests 
was ``highly time sensitive,'' whereas the bill itself merely 
says ``time sensitive.'' and I know that your amendment, I 
think it makes a lot of sense, that how could it be highly time 
sensitive if it were retroactive?
    But I guess the question is, wouldn't we also need to deal 
with the highly-time-sensitive versus time-sensitive issue to 
have any chance at all of meeting the objections made by the 
Court under the copyright clause in Feist?
    Mr. Boucher. I think the gentlewoman raises an excellent 
point, and I would certainly support her amendment, should she 
choose to offer it, that would change the standard within the 
bill from merely being time sensitive to actually track the 
Motorola decision and say highly time sensitive. I think she 
makes an excellent point. Either way, the bill should only be 
prospective in application, and that is what this amendment 
would achieve.
    Mr. Chairman, I yield back and urge adoption of the 
amendment.
    Chairman Sensenbrenner. The gentleman from North Carolina, 
Mr. Coble.
    Mr. Coble. Thank you, Mr. Chairman. My friend from Virginia 
prevailed on the last point; let me see if I can regroup on 
this one, Mr. Chairman.
    The whole point, Members, of database reform it seems to me 
is to protect those compilations. They have value to consumers 
and businesses. Under the protection afforded by the bill, 
persons will not only have an incentive to create new 
databases, owners will have an incentive to maintain existing 
compilations. The amendment, I fear, would deny protection to 
databases already in existence at the time of enactment.
    This just seems to me to be patently unfair. What 
incentives will compilers of healthcare publications, for 
example, legal tabulations, and a host of other worthy 
databases have to update consumers and businesses with the most 
accurate information available? What will happen to those 
consumers and businesses who unwittingly rely upon outdated 
information when making health, legal, or purchasing decisions? 
I just believe that the public at large would be better served 
to include databases that are aligned and well now rather than 
exclude them if this amendment were to pass. And I yield back.
    Mr. Goodlatte. Would the gentleman yield?
    Chairman Sensenbrenner. Time belongs to the gentleman from 
North Carolina.
    Mr. Coble. I yield to the gentleman from Virginia.
    Mr. Goodlatte. I thank the gentleman for yielding. And I 
agree with him, that there are major databases into which a 
great deal of investment has been made. And the problem that we 
confront in the digital age is the ease with which they could 
be duplicated. So somebody could take all of the previously un-
updated material and steal all of that, and then just worry 
about the small amount of updating that is done. That would be 
I think an inappropriate result.
    So I agree with the gentleman from North Carolina and 
reluctantly oppose the amendment offered by the gentleman from 
Virginia.
    Chairman Sensenbrenner. Would the gentleman yield to me?
    Mr. Coble. I yield to Mr. Chairman.
    Chairman Sensenbrenner. I agree with the arguments made 
both by the gentleman from North Carolina and the gentleman 
from Virginia. What I would say is that if this amendment is 
adopted, it effectively puts every publicly available database 
into the public domain. And in many cases, a lot of money and 
time and effort has been spent in assembling these databases. 
And to say that if there is no protection as a result of the 
enactment of this bill, I think that that would be patently 
unfair. And we would effectively, by an act of Congress, either 
be taking away the value or diminishing the value of the 
people's property.
    And I yield back to the gentleman from North Carolina.
    Mr. Coble. And I yield back the balance of my time, Mr. 
Chairman.
    Chairman Sensenbrenner. The gentleman from Michigan, Mr. 
Conyers.
    Mr. Conyers. Thank you, Mr. Chairman. I again take the 
floor to raise another North-South dialogue. This time, though, 
it is between my dear friend from Virginia on our side of the 
aisle, and I am going to add to my North Carolina friend my 
Virginia friend. So this is Virginia versus North Carolina and 
Virginia. Maybe you will do better this time, Mr. Coble.
    I am going to begin with the two gentlemen from the South 
on the Republican side. Could you explain to me, is there--
normally being opposed to retroactivity and for being 
prospective is a good thing. And apparently that is not the 
case in this instance. Could you define for the Committee why 
that is the case?
    Mr. Goodlatte. Would the gentleman yield?
    Mr. Conyers. Of course.
    Mr. Goodlatte. If you didn't have a law that prohibited 
stealing or breaking into somebody's home, it seems to me that 
if somebody had already stolen something it would make sense to 
allow the protection of things that they already own and not 
just things that--well, let me put it differently. It would 
make sense to me to allow the protection of things that you 
owned already and not things that you acquired in the future.
    That is what we are talking about here. The database 
already exists; but if it is enhanced by additional updated 
information, it seems to me the entire database should be 
protected and not just the updated material.
    Mr. Conyers. Mr. Coble.
    Mr. Coble. Thank you, Mr. Conyers. Thank you, Mr. 
Goodlatte.
    Mr. Conyers, I think you are correct when you say generally 
I think most of us probably would oppose retroactivity. But as 
my friend from the valley in Virginia, Mr. Goodlatte, pointed 
out, I think this would be one of those exceptions. And I think 
in this case retroactivity would be indeed damaging and unfair.
    Ms. Lofgren. Would the gentleman yield for an observation?
    Mr. Coble. I would indeed.
    Mr. Conyers. Yes, I would.
    Ms. Lofgren. The problem here--and I was going to move to 
strike the last word, and if I run out of time I still will. We 
are having a discussion about what we like and right and wrong 
and economics, all of which is interesting and useful. But the 
problem is that we have not yet had the constitutional law 
discussion that really is at the base of this problem.
    In 1991 the Supreme Court threw out the sweat-of-the-brow 
doctrine and said that you could not copyright facts. You can't 
have a theft unless you have property. And what the Court has 
said is you can't have property with the database because there 
is no creativity that meets the standards of the copyright 
clause. And this bill does not solve that problem.
    That is why the retroactivity issue, and why I don't have 
an amendment for the hot news exception, because there are so 
many other problems with the bill that ultimately even if we 
pass this bill, the Court is going to strike it down, it is not 
going to be found constitutional, and we will not have solved 
the problem for people who actually--I, like people and 
companies on both sides of the disagreement here, I actually 
sort of like the sweat-of-the-brow doctrine. I thought it 
served us quite well for a long time, but the Court has thrown 
that doctrine out. It is not constitutional.
    And if you take a look at the standards in this bill, the 
first, the four-prong standard, the database was generated 
through a substantial expenditure of financial resources of 
time. That is the sweat-of-the-brow doctrine that the Court 
specifically overturned in the Feist case, and that is why just 
fixing the hot news exception will not fix this bill and why, 
even though I support the amendment about retroactivity, it 
still doesn't fix the bill, because there is nothing that rises 
to the level of what the report said is necessary for 
protection of those----
    Mr. Conyers. A very good point; you support the Democratic 
south.
    I recognize Mr. Boucher at this point.
    Mr. Boucher. Well, thank you very much, Mr. Conyers. Let me 
just respond to several points. Several of the individuals who 
have spoken in opposition to this amendment have said that if 
the amendment passes, there would be no financial incentive to 
update and modernize and continue to provide new information 
for existing databases. And I take issue with that assertion. 
The creators of databases today are spending billions of 
dollars every year in order to update their databases. They are 
receiving tremendous revenues from subscription services and 
other sales of those databases, of the information therein 
contained, and they don't have the protection of this bill at 
the present time. And so if my amendment is adopted and the 
bill is made prospective only, nothing changes; the legal 
environment remains exactly the same and the incentive would be 
no less.
    Chairman Sensenbrenner. The gentleman's time has expired, 
and, without objection, will be given an additional minute.
    Mr. Boucher. Yes. Mr. Chairman, I ask for 1 additional 
minute for the gentleman from Michigan, please. And I trust the 
gentleman continues to yield.
    Mr. Conyers. Yes, of course.
    Mr. Boucher. And so the incentive would remain exactly the 
same as it is today, and we would continue to see billions of 
dollars invested by database creators in updating and 
modernizing the information in their databases.
    The other point I would simply underscore is that we render 
absolutely meaningless the time sensitivity requirement in the 
bill if we do not adopt this amendment, because we would be 
saying that databases that are already in existence as of the 
date of the effectiveness of the law would be subject to 
protection. They can't possibly be time sensitive. And so I 
think we render the text of the measure itself open to 
question; I think we render almost a nonentity that provision 
that requires time sensitivity. And surely that would not be 
the intent of the authors of the bill.
    So it seems to me, Mr. Chairman, that the measure should be 
made prospective. That is what the amendment does. I hope it 
would be adopted.
    Chairman Sensenbrenner. The gentleman's time has expired.
    The question is on agreeing to the Boucher amendment to the 
amendment in the nature of a substitute.
    Those in favor will say aye.
    Opposed, no.
    The noes appear to have it. A recorded vote is requested.
    Those in favor of the Boucher amendment to the amendment in 
the nature of a substitute will, as your names are called, 
answer aye.
    Those opposed, no.
    And the clerk will call the roll.
    The Clerk. Mr. Hyde.
    [No response.]
    The Clerk. Mr. Coble.
    Mr. Coble. No.
    The Clerk. Mr. Coble, no.
    Mr. Smith.
    Mr. Smith. No.
    The Clerk. Mr. Smith, no.
    Mr. Gallegly.
    [No response.]
    The Clerk. Mr. Goodlatte.
    Mr. Goodlatte. No.
    The Clerk. Mr. Goodlatte, no.
    Mr. Chabot.
    Mr. Chabot. No.
    The Clerk. Mr. Chabot no.
    Mr. Jenkins.
    Mr. Jenkins. No.
    The Clerk. Mr. Jenkins, no.
    Mr. Cannon.
    [No response.]
    The Clerk. Mr. Bachus.
    Mr. Bachus. No.
    The Clerk. Mr. Bachus, no.
    Mr. Hostettler.
    Mr. Hostettler. No.
    The Clerk. Mr. Hostettler, no.
    Mr. Green.
    Mr. Green. No.
    The Clerk. Mr. Green, no.
    Mr. Keller.
    Mr. Keller. No.
    The Clerk. Mr. Keller no.
    Ms. Hart.
    [No response.]
    The Clerk. Mr. Flake.
    [No response.]
    The Clerk. Mr. Pence.
    [No response.]
    The Clerk. Mr. Forbes.
    Mr. Forbes. No.
    The Clerk. Mr. Forbes, no.
    Mr. King.
    Mr. King. No.
    The Clerk. Mr. King, no.
    Mr. Carter.
    Mr. Carter. No.
    The Clerk. Mr. Carter, no.
    Mr. Feeney.
    Mr. Feeney. No.
    The Clerk. Mr. Feeney, no.
    Mrs. Blackburn.
    Mrs. Blackburn. No.
    The Clerk. Mrs. Blackburn, no.
    Mr. Conyers.
    Mr. Conyers. No.
    The Clerk. Mr. Conyers, no.
    Mr. Berman.
    [No response.]
    The Clerk. Mr. Boucher.
    Mr. Boucher. Aye.
    The Clerk. Mr. Boucher, aye.
    Mr. Nadler.
    [No response.]
    The Clerk. Mr. Scott.
    Mr. Scott. Aye.
    The Clerk. Mr. Scott, aye.
    Mr. Watt.
    Mr. Watt. Aye.
    The Clerk. Mr. Watt, aye.
    Ms. Lofgren.
    Ms. Lofgren. Aye.
    The Clerk. Ms. Lofgren, aye.
    Ms. Jackson Lee.
    Ms. Jackson Lee. Aye.
    The Clerk. Ms. Jackson Lee, aye.
    Ms. Waters.
    [No response.]
    The Clerk. Mr. Meehan.
    Mr. Meehan. Aye.
    The Clerk. Mr. Meehan, aye.
    Mr. Delahunt.
    [No response.]
    The Clerk. Mr. Wexler.
    [No response.]
    The Clerk. Ms. Baldwin.
    Ms. Baldwin. Aye.
    The Clerk. Ms. Baldwin, aye.
    Mr. Weiner.
    [No response.]
    The Clerk. Mr. Schiff.
    Mr. Schiff. No.
    The Clerk. Mr. Schiff, no.
    Ms. Sanchez.
    Ms. Sanchez. Aye.
    The Clerk. Ms. Sanchez, aye.
    Mr. Chairman.
    Chairman Sensenbrenner. No.
    The Clerk. Mr. Chairman, no.
    Chairman Sensenbrenner. Are there Members in the chamber 
who wish to cast or change their vote? The gentleman from Utah, 
Mr. Cannon.
    Mr. Cannon. No.
    The Clerk. Mr. Cannon, no.
    Chairman Sensenbrenner. Are there further Members in the 
chamber who wish to cast or change their vote? If not, the 
clerk will report.
    The Clerk. Mr. Chairman, there are 8 ayes and 18 nos.
    Chairman Sensenbrenner. And the amendment to the amendment 
in the nature of a substitute is not agreed to. Are there 
further amendments?
    Mr. Boucher. Mr. Chairman.
    Chairman Sensenbrenner. The gentleman from Virginia.
    Mr. Boucher. Mr. Chairman, I have one additional amendment. 
It is Boucher 025.
    Chairman Sensenbrenner. The clerk will report the 
amendment.
    The Clerk. Amendment to the amendment in the nature of a 
substitute.
    Mr. Boucher. And I ask unanimous consent, Mr. Chairman, 
that the amendment be considered as read.
    Chairman Sensenbrenner. Without objection, so ordered.
    [The amendment to the amendment in the nature of a 
substitute follows:]
      
      

  


    Chairman Sensenbrenner. And the gentleman is recognized for 
5 minutes.
    Mr. Boucher. Thank you very much, Mr. Chairman.
    This amendment simply exempts any legal materials produced 
by a Federal court, including opinions, judgments, and rules of 
practice, and any legislative materials produced by the 
Congress, including bills and resolutions, Committee reports, 
and floor statements from the operation of the bill.
    It seems to me that we should not risk through the 
enactment of this measure these particular documents, of 
tremendous interest to the public, being locked away from 
public access, and this amendment would provide that assurance. 
I hope it will be the Committee's pleasure to adopt it, and I 
yield back.
    Chairman Sensenbrenner. The gentleman from North Carolina, 
Mr. Coble.
    Mr. Coble. I thank the Chairman. And Mr. Boucher's 
amendment excludes legal materials produced by Federal court, 
that is, opinions, rules, judgments, et cetera, and any 
legislative material produced by the Congress, bills, Committee 
reports, floor statements, from the definition of the database. 
There is a general exclusion for governmental information in 
the bill that would exempt the use of databases compiled by 
Federal, State, or local governments or by an entity carrying 
out work in response to a Government mandate.
    The Boucher amendment goes further, and would work contrary 
to the basic prohibition in the bill. The amendment would deny 
protection, it seems to me, to persons who invest time, money, 
and other resources in developing a Government documents 
database. I believe we should afford protection under the bill 
to anyone who winnows through a mountain of paper and concisely 
reduces it to a condensed version that provides necessary 
information in a consumer-friendly manner to interested 
persons, businesses, and consumers generally. It should not 
matter, it seems to me, that the subject matter relates to 
Government or legal issues as opposed to health care or sports 
matters or legalistic matters, et cetera.
    So with that in mind, Mr. Chairman, I would oppose the 
Boucher amendment.
    Chairman Sensenbrenner. Does the gentleman yield back?
    Mr. Coble. I yield back.
    Chairman Sensenbrenner. The question is on Boucher 
amendment number 025 to the amendment in the nature of a 
substitute.
    Those in favor will say aye.
    Those opposed, no.
    The noes appear to have it. The noes have it the amendment 
is not agreed to.
    Are there further amendments? If not, a reporting quorum--
--
    Mr. Watt. Mr. Chairman.
    Chairman Sensenbrenner. The gentleman from North Carolina.
    Mr. Watt. Move to strike the last word.
    Chairman Sensenbrenner. The gentleman is recognized for 5 
minutes.
    Mr. Watt. I hope it doesn't take 5 minutes. But I have 
learned, serving on this Committee with Ms. Lofgren, that when 
she or Mr. Boucher or Mr. Goodlatte say something about 
technology, they generally have a knowledge base that far 
exceeds mine, and--but I always pay attention. And nobody has 
yet responded to Ms. Lofgren's concern about the constitutional 
issue, which kind of goes to the heart of this bill and on 
which I guess I am a little concerned as we proceed to a final 
vote up or down on the bill.
    Could I ask Mr. Boucher and Mr. Coble their views--and Mr. 
Goodlatte, if he is still over there--their views on that?
    Mr. Boucher. Would the gentleman yield?
    Mr. Watt. I will yield to Mr. Boucher first.
    Mr. Boucher. Well, I thank the gentleman from North 
Carolina for posing the question. And as the gentlewoman from 
California mentioned earlier, there are severe constitutional 
questions that surround this entire subject. A point comes when 
first amendment rights begin to be invaded if facts are locked 
away in a manner that prohibits people from engaging in free 
and open speech. And to the extent that pure facts are locked 
away from public access, as this bill potentially could do, I 
think there are very serious first amendment questions that 
could be raised.
    Another major problem that I see, which also has 
constitutional dimension, is that the duration of protection 
under this bill potentially could exceed the protection that is 
accorded under the copyright statutes. The Supreme Court had a 
case in its last term in which it found that the copyright term 
extension that Congress had approved was constitutional. But in 
doing so, it made a number of statements about the value of 
fair use, for example, and the ability of people to use 
copyrighted material in everyday conversation, and to have 
access to it in a wide array of other context, for reports, 
documents, et cetera.
    I look at that language and I wonder how the Supreme Court 
could look at this law, assuming that it becomes law, and 
decide that locking away the very facts that underlie the free 
exercise of fair-use rights could be constitutional. And I 
suspect that on both of the counts that I have just mentioned, 
the Supreme Court would give serious consideration to whether 
or not this measure is constitutional. My bet would be that it 
would be declared unconstitutional, just as the gentlewoman 
from California said.
    And I thank the gentleman for yielding.
    Mr. Watt. Reclaiming my time. I yield to Mr. Coble for his 
response.
    Mr. Coble. I first of all want to associate with my friend 
from North Carolina's remarks in that I also take a back seat 
to Mr. Goodlatte, Mr. Boucher, and Ms. Lofgren when it comes to 
the complex technicalities of this issue. But I don't believe 
this diminishes free speech in any way. I think the law of 
false advertising, copyright, trademark, unfair competition, 
they regulate information or speech to a certain extent, Mr. 
Watt, in a commercial context without running afoul of the 
first amendment. And I just don't see the problem there. Again, 
I say this may be subject to interpretation, but Mr. Boucher 
and I can agree to disagree agreeably.
    Mr. Watt. Reclaiming my time, might I also yield to 
Chairman of the full Committee to get his view on this issue?
    Chairman Sensenbrenner. Well, my preparatory job was being 
the Chairman of the Science Committee. So while I don't know as 
much about technology as Ms. Lofgren, I know a little bit about 
it and how to encourage it.
    Let me say I am not concerned about the first amendment 
constitutional aspects of this. I think that the gentleman from 
Virginia may have a point on whether or not this falls within 
the copyright clause of the Constitution, in that copyrights 
are designed to protect original inventions. But practically 
every database requires some type of assembly to get all of the 
data into one convenient area, and I think that that is 
copyrightable, and I think that the courts have been friendly 
toward recognizing that this was a legal copyright.
    So you know, while none of us here are judges, I think that 
the presumption has got to be that this legislation is 
constitutional under both first amendment and copyright clause 
grounds.
    Mr. Watt. Mr. Chairman, could I ask for 30 additional 
seconds?
    Chairman Sensenbrenner. Without objection.
    Mr. Watt. And yield to Mr. Boucher for an additional 
response that he has.
    Mr. Boucher. I thank the gentleman for yielding.
    Let me simply clarify that I think the relevance of the 
discussion about the duration of copyright term as applied to 
this bill is that the material that would be protected under 
this bill could potentially be protected in perpetuity. There 
is one provision in the bill that says that if you are simply 
maintaining a database, that act alone would entitle you to 
protect. So there would appear to be no limit whatever.
    The Supreme Court came to a struggling conclusion with 
regard to whether or not the copyright term extension was 
constitutional. I daresay if the Court looks at one of these 
provisions that would extend protection for a longer time than 
is permitted under the copyright law, that the Court inevitably 
would find that that violates the right of people to have 
access to information under the first amendment and potentially 
other provisions of the Constitution, and would say that at the 
outer limit, protection could only be provided within the ambit 
of the time that the copyright law itself would accord.
    I thank the gentleman for yielding.
    Chairman Sensenbrenner. The gentleman's time has expired. 
Are there further amendments?
    If not, the question is on adoption of the amendment in the 
nature of a substitute which was laid down as the base text as 
amended.
    Those in favor will say aye.
    Opposed, no.
    The ayes appear to have it. The ayes have it, and the 
amendment in the nature of a substitute is adopted.
    A reporting quorum is present. The question occurs on the 
motion to report the bill H.R. 3261, as amended.
    All those in favor say aye.
    Opposed, no.
    The ayes appear to have it.
    Mr. Boucher. Mr. Chairman, a recorded vote, please.
    Chairman Sensenbrenner. A recorded vote is ordered.
    Those in favor of the motion to report the bill H.R. 3261, 
as amended, will, as your names are called, answer aye.
    Those opposed, no.
    And the clerk will call the roll.
    The Clerk. Mr. Hyde.
    [No response.]
    The Clerk. Mr. Coble.
    Mr. Coble. Aye.
    The Clerk. Mr. Coble, aye.
    Mr. Smith.
    Mr. Smith. Aye.
    The Clerk. Mr. Smith, aye.
    Mr. Gallegly.
    [No response.]
    The Clerk. Mr. Goodlatte.
    [No response.]
    The Clerk. Mr. Chabot.
    Mr. Chabot. Aye.
    The Clerk. Mr. Chabot, aye.
    Mr. Jenkins.
    Mr. Jenkins. Aye.
    The Clerk. Mr. Jenkins, aye.
    Mr. Cannon.
    Mr. Cannon. Aye.
    The Clerk. Mr. Cannon, aye.
    Mr. Bachus.
    Mr. Bachus. Aye.
    The Clerk. Mr. Bachus, aye.
    Mr. Hostettler.
    Mr. Hostettler. Aye.
    The Clerk. Mr. Hostettler, aye.
    Mr. Green.
    Mr. Green. Aye.
    The Clerk. Mr. Green, aye.
    Mr. Keller.
    Mr. Keller. Aye.
    The Clerk. Mr. Keller, aye.
    Ms. Hart.
    [No response.]
    The Clerk. Mr. Flake.
    Mr. Pence.
    [No response.]
    The Clerk. Mr. Forbes.
    Mr. Forbes. Aye.
    The Clerk. Mr. Forbes, aye.
    Mr. King.
    Mr. King. Aye.
    The Clerk. Mr. King, aye.
    Mr. Carter.
    Mr. Carter. Aye.
    The Clerk. Mr. Carter, aye.
    Mr. Feeney.
    [No response.]
    The Clerk. Mrs. Blackburn.
    Mrs. Blackburn. Aye.
    The Clerk. Mrs. Blackburn, aye.
    Mr. Conyers.
    Mr. Conyers. No.
    The Clerk. Mr. Conyers, no.
    Mr. Berman.
    [No response.]
    The Clerk. Mr. Boucher.
    Mr. Boucher. No.
    The Clerk. Mr. Boucher, no.
    Mr. Nadler.
    [No response.]
    The Clerk. Mr. Scott.
    Mr. Scott. No.
    The Clerk. Mr. Scott, no.
    Mr. Watt.
    Mr. Watt. No.
    The Clerk. Mr. Watt, no.
    Ms. Lofgren.
    [No response.]
    The Clerk. Ms. Jackson Lee.
    Ms. Jackson Lee. No.
    The Clerk. Ms. Jackson Lee, no.
    Ms. Waters.
    [No response.]
    The Clerk. Mr. Meehan.
    Mr. Meehan. No.
    The Clerk. Mr. Meehan, no.
    Mr. Delahunt.
    [No response.]
    The Clerk. Mr. Wexler.
    [No response.]
    The Clerk. Ms. Baldwin.
    Ms. Baldwin. No.
    The Clerk. Ms. Baldwin, no.
    Mr. Weiner.
    [No response.]
    The Clerk. Mr. Schiff.
    Mr. Schiff. Aye.
    The Clerk. Mr. Schiff, aye.
    Ms. Sanchez.
    Ms. Sanchez. Aye.
    The Clerk. Ms. Sanchez, aye.
    Mr. Chairman.
    Chairman Sensenbrenner. Aye.
    The Clerk. Mr. Chairman, aye.
    Chairman Sensenbrenner. Are there Members in the chamber 
who wish to cast or change their votes? If not, the clerk will 
report.
    The Clerk. Mr. Chairman, there are 16 ayes and 7 noes.
    Chairman Sensenbrenner. And the motion to report is agreed 
to.
    Without objection, the bill will be reported favorably to 
the House in the form of a single amendment in the nature of a 
substitute, incorporating the amendments adopted here today.
    Without objection, the Chairman is authorized to move to go 
to conference, pursuant to House rules.
    Without objection, the staff is directed to make any 
technical and conforming changes, and all Members will be given 
2 days, as provided by House rules, in which to submit 
additional dissenting supplemental or minority views.
    I would ask the indulgence of the Members of the Committee 
to sit through the reporting of one more bill which I 
anticipate to be noncontroversial.
                            Dissenting Views

    Under the U.S. Constitution, facts distributed to the 
public are deemed to have entered the public domain. Consumers, 
businesses, and others are free to use those facts and 
republish them. H.R. 3261, however, would essentially allow 
database producers to lock up facts, making them available to 
the American public only for a fee or not at all if such 
restrictions would give the database owners a competitive 
advantage. Competition in the information market would be 
restricted, leading to higher prices and less innovation. 
Moreover, enactment of the legislation could undermine the 
ability of American citizens to express their First Amendment 
and other constitutionally based rights.
    We believe the bill suffers from fundamental legal defects, 
which under the Supreme Court's opinion in the Feist case rise 
to Constitutional dimension. Notwithstanding the Court's clear 
rejection of the ``sweat of the brow'' doctrine in Feist over a 
decade ago, the bill seeks to codify the doctrine. It relies on 
the Commerce Clause to achieve precisely what the Supreme Court 
found the Intellectual Property Clause prohibited: a copyright 
in facts. Moreover, notwithstanding the Second Circuit's 
articulation of a clear standard for the ``hot news'' doctrine 
in the NBA v. Motorola case, H.R. 3261 adopts a lesser standard 
as a basis for liability. Finally, notwithstanding the Supreme 
Court's recent articulation of concerns about perpetual 
copyright protection and the creation of ``a species of mutant 
copyright law,'' this bill essentially gives database owners 
the ability to lock up facts forever.
    Beyond these legal infirmities, the bill suffers from a 
weak economic rationale as well. The stated intent of H.R. 3261 
is to provide database publishers with the incentive to invest 
in the collection of information. But the proponents of H.R. 
3261 have failed to demonstrate that publishers need any 
additional incentive; the database industry in the United 
States is thriving, with publishers investing billions of 
dollars each year in the creation of new databases. Profit 
margins in the industry are higher than in most other 
industries, and the existing database companies continue to 
purchase other database companies, reflecting their confidence 
in the future of their industry.
    Additionally, proponents of H.R. 3261 have failed to show a 
gap in the legal protection of databases that needs to be 
filled. While published facts enter the public domain, database 
publishers have a wide variety of legal mechanisms that protect 
a range of business models:

         LThe publisher can employ copyright law to 
        protect the selection and arrangement of facts in a 
        database. If a person copies most of a database, he 
        probably has infringed the copyright in the database 
        because he has copied the selection and arrangement of 
        the facts.

         LThe publisher can distribute the database 
        under a license that prohibits the copying and 
        redistribution of information.

         LThe publisher can make the database available 
        only on-line, where it can receive protection under the 
        Federal Computer Fraud and Abuse Act or state trespass 
        to chattels, which have been successfully employed to 
        protect databases.

         LThe publisher can use a technological 
        protection measure to secure the database, and a person 
        who circumvents the protection violates the Digital 
        Millennium Copyright Act.

         LThe publisher of ``hot news'' can rely on 
        state common law misappropriation.

    Stripped to its essence, H.R. 3261 is not about preventing 
``piracy.'' It is about increasing publishers' revenue streams 
by allowing them to control information in an unprecedented 
way.
    H.R. 3261 contains provisions that appear at first blush to 
mitigate its harm, but their benefits disappear on closer 
examination. The bill applies only to information that is 
redistributed in ``a time sensitive manner,'' but this phrase 
is defined so indefinitely that it could include all 
information that has any commercial value. Reinforcing the 
breadth of the bill's scope is that it would apply to databases 
already in existence, including specifically encyclopedias and 
journal issues.
    H.R. 3261 contains many uncertain terms that will lead to 
litigation. Unfortunately, the potential to receive treble 
damages will provide publishers with an economic incentive to 
adopt aggressive interpretations of the bill's ambiguities. For 
example, liability is triggered when a person redistributes a 
``quantitatively substantial part of a database.'' With the 
possibility of recovering treble damages, publishers will argue 
that as little as 5% of a database is a ``quantitatively 
substantial part.'' The 1996 EU Database Directive, which 
inspired the proponents to seek database legislation in the 
U.S., has led to ruinous litigation across Europe, particularly 
with respect to specialized Internet search engines that 
provide consumers with access to news and product information. 
The litigation has centered on the Directive's ambiguous terms, 
some of which appear in H.R. 3261.
    Examples of the bill's potential harm can be given from 
every sector of the economy. An Internet company might want to 
provide consumers with the ability to compare prices at 
different websites. A biochemist might want to publish a 
comparison of his results with that of a scientist at another 
biotech firm. A market analyst might want to publish a report 
listing the performance of a wide variety of financial 
instruments. All of these activities could be unlawful under 
H.R. 3261.
    Information is the lifeblood of the Information Economy. 
Congress should not create a new regime that restricts access 
to information in the absence of any demonstrated market 
failure requiring Government regulation. Moreover, of any 
Committee in the House, this is the last Committee that should 
be favorably reporting legislation with such potentially fatal 
constitutional flaws. We trust the bill will not ultimately 
become law and give monopolists the ability to lock up facts to 
the detriment of the American public.

                                   Rick Boucher.
                                   Robert C. Scott.
                                   Melvin L. Watt.
                                   Martin T. Meehan.
                            Dissenting Views

    The stated goal of this legislation--to protect database 
owners from misappropriation of their work product--is 
appealing. The old ``sweat of the brow'' standard in existence 
before Feist Publication v. Rural Telephone Services Company, 
499 U.S. 340 (1991), seemed to serve society reasonably well by 
providing incentives for the creation of databases. But the 
Feist case was clear and decisive, and the legislation before 
us does not avoid the Constitutional defects outlined in that 
case.
    We do not believe that Congress should try to provide 
database owners with protection that is not within our power to 
grant. More precisely, we are convinced that the Intellectual 
Property Clause (article I, section 8, clause 8) of the U.S. 
Constitution does not countenance the type of protection 
granted by this bill.
    In Feist, the Supreme Court unanimously held that the 
Intellectual Property Clause protects only expressive elements 
in compilations and that effort without creativity could not 
convert facts into protected expressions. The Court thus 
expressly rejected the ``sweat of the brow'' theory, ruling 
that a compilation could only be copyrighted if the facts are 
selected, coordinated or arranged in such a way as to render 
the work an original work of authorship. Even then, the 
protection only applies to the author's original contributions 
and not the facts or information conveyed.
    This legislation is intended to resurrect the ``sweat of 
the brow'' theory rejected by the Supreme Court in Feist. In an 
attempt to conceal its true intent, the drafters have styled 
the bill as a Federal ``misappropriation'' statute, as though 
we were not creating a new property right, but establishing a 
new tort. However, the bill seeks to establish a new property 
right for databases, complete with civil remedies for 
unauthorized uses and exceptions for nonprofit scientific 
research and news reporting. Such characteristics belie the 
``misappropriation'' label, and look suspiciously analogous to 
those of copyright (infringement, fair use, etc.).
    Proponents argue that even if this proposal runs afoul of 
the Intellectual Property Clause, it is still constitutional 
because it is within Congress' power under the Commerce Clause 
(article I, section 8, clause 3). However, the Supreme Court's 
interpretation of the relationship between the Commerce Clause 
and another enumerated power (the Bankruptcy Clause) in Railway 
Labor Executives' Association v. Gibbons, 455 U.S. 457 (1982), 
seems to rule out this argument.
    In Railway Labor, the Court struck down a statute providing 
protection to the employees of a railroad in bankruptcy. The 
Court found that the proposed statute violated the 
``uniformity'' requirement of the Bankruptcy Clause, which 
Congress could not circumvent by purporting to legislate under 
the Commerce Clause. Railway Labor, 455 U.S. at 469. The 
Railway Labor opinion makes clear that Congress cannot avoid 
the particular requirements of one enumerated power by relying 
on the generality of the Commerce Clause. Likewise, H.R. 3261 
cannot avoid the originality requirement of the Intellectual 
Property Clause by relying on the general powers of the 
Commerce Clause.
    The United States Justice Department came to the same 
conclusion after analyzing an earlier database bill in 1998:

        If the Intellectual Property Clause precluded Congress 
        from providing protection against the copying of non-
        original portions of factual compilations, even 
        pursuant to a power other than conferred by that 
        Clause, then Congress would not be able to use the 
        Commerce Clause to avoid the implicit strictures of the 
        Intellectual Property Clause that the Court in Feist 
        could be said to have recognized, just as Congress may 
        not use the Commerce Clause to avoid the Bankruptcy 
        Clause's express requirement that bankruptcy laws be 
        uniform. . . .

Memorandum from William Michael Treanor, Deputy Assistant 
Attorney General, United States Department of Justice, to 
William P. Marshall, Associate White House Counsel (July 28, 
1998).
    The fact that Congress regulates trademarks under the 
Commerce Clause does not save H.R. 3261. Over 120 years ago, 
the Supreme Court ruled that the Intellectual Property Clause 
did not apply to trademarks because they were neither writings 
nor discoveries. Trade-Mark Cases, 100 U.S. 82 (1879). In 
contrast, databases are writings that clearly fall within the 
scope of the Intellectual Property Clause. Indeed, copyright 
law already extends to compilations. See, e.g., 17 U.S.C. 
Sec. 103. Thus, unlike trademarks, database legislation is 
subject to the limitations of the Intellectual Property Clause. 
See Bonito Boats v. Thundercraft Boats, 489 U.S. 141, 146 
(1989) (``[a]s we have noted in the past, the [Intellectual 
Property] Clause contains both a grant of power and certain 
limitations upon the exercise of that power'').
    We are also concerned that this legislation may run afoul 
of the First Amendment. Factual information and ideas are the 
building blocks of all forms of expression, and the Supreme 
Court has recognized that the First Amendment leaves little 
room for restrictions on the dissemination of ideas and factual 
information. In fact, the Court's ruling in Harper & Row, 
Publishers, Inc. v. Nation Enterprises, 471 U.S. 539 (1985), 
seems to indicate that our rights of expression under the First 
Amendment preclude Congress from limiting access to information 
in the manner contemplated by this legislation:

        Our ``profound national commitment to the principle 
        that debate on public issues should be uninhibited, 
        robust, and wide-open,'' New York Times Co. v. 
        Sullivan, 376 U.S. 254, 270 (1964), leaves no room for 
        a statutory monopoly over information and ideas. ``The 
        arena of public debate would be quiet, indeed, if a 
        politician could copyright his speeches or a 
        philosopher his treatises and thus obtain a monopoly on 
        the ideas they contained.'' Lee v. Runge, 404 U.S. 887, 
        893 (1971) (Douglas, J., dissenting). A broad 
        dissemination of principles, ideas, and factual 
        information is crucial to the robust public debate and 
        informed citizenry that are ``the essence of self-
        government.'' Garrison v. Louisiana, 379 U.S. 64, 74-75 
        (1964). And every citizen must be permitted freely to 
        marshal ideas and facts in the advocacy of particular 
        political choices.

Harper & Row, 471 U.S. at 582 (emphasis added).
    The Court distinguished copyright protection from the 
rights protected by the First Amendment by making clear that 
copyright protection is limited to the author's expression of 
facts or ideas, not the facts or ideas themselves. In Harper & 
Row, the Court recited with approval the Second Circuit's 
explanation that copyright's ``idea-expression'' dichotomy 
``strike[s] a definitional balance between the First Amendment 
and the Copyright Act by permitting free communication of facts 
while still protecting an author's expression.'' Harper & Row, 
471 U.S. at 556 (quoting 723 F.2d 195, 203 (2d Cir. 1983)). 
Because of this distinction, ``every . . . fact in a 
copyrighted work becomes instantly available for public 
exploitation at the moment of publication.'' Eldred v. 
Ashcroft, 537 U.S. 186, 219 (2003).
    As we stated initially, we are extremely sympathetic to the 
efforts of our Colleagues to protect the misappropriation of 
the work and efforts of database publishers. We should be 
concerned about the need to provide incentives to produce and 
maintain valuable collections of information. However, our 
efforts are worthless if we do not enact legislation that 
comports with the Constitution. We are convinced that the 
current bill will not meet the Constitutional questions raised 
by the courts that stimulated this legislation. In the end, 
enacting still another unconstitutional law serves no one's 
interests. Those who rely on the law will do so to their 
detriment. Efforts to find measures that might meet 
Constitutional muster will linger or wither. Business decisions 
may be made based on unsound law. We would also point out that 
database publishers already have a wide variety of legal 
theories available to protect their business models, as pointed 
out in the views submitted by our colleague Rep. Rick Boucher.
    While proponents of this bill have only the best 
intentions, the bill will only create additional market 
uncertainty, is unconstitutional and should be rejected.

                                   Melvin L. Watt.
                                   Zoe Lofgren.
                                   Martin T. Meehan.

                                
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