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104TH CONGRESS

2D SESSION H. R. 3531

To amend title 15, United States Code, to promote investment and prevent

intellectual property piracy with respect to databases.

IN THE HOUSE OF REPRESENTATIVES

MAY 23, 1996

Mr. MOORHEAD introduced the following bill; which was referred to the

Committee on the Judiciary

A BILL

To amend title 15, United States Code, to promote investment and prevent intellectual property piracy with respect to databases.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Database Investment

5 and Intellectual Property Antipiracy Act of 1996’’.

6 SEC. 2. DEFINITIONS.

7 ‘‘Change of commercial significance’’ means a change

8 that a reasonable user of a database would regard as af9 fecting the quality, quantity or value of contents of that

10 database as a whole.
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1 ‘‘Commerce’’ means all commerce that may lawfully

2 be regulated by Congress.

3 ‘‘Database’’ means a collection, assembly or compila4 tion, in any form or medium now or later known or devel5 oped, of works, data or other materials, arranged in a sys6 tematic or methodical way.

7 ‘‘Database maker’’ means the natural or juristic per8 son making a substantial investment, qualitatively or

9 quantitatively, in the collection, assembly, verification, or10 ganization and/or presentation of the contents of the

11 database. Unless provided otherwise by contract—

12 (1) where two or more persons qualify as the

13 makers of a database, they are jointly the database

14 maker;

15 (2) where a database is made by employees

16 within the scope of their employment, the employer

17 is the database maker; and

18 (3) where a database is made pursuant to spe19 cial order or commission, the person who ordered or

20 commissioned the database is the database maker.

21 ‘‘Database management information’’ means the

22 name and other identifying information of the database

23 maker, the name and other identifying information of the

24 database owner, and terms and conditions for extraction

25 and use or reuse of the contents of the database.
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1 ‘‘Database owner’’ means the database maker or the

2 natural or juristic person who is the database maker’s suc3 cessor in interest.

4 ‘‘Extraction’’ means the permanent or temporary

5 transfer of all or a substantial part of the contents of a

6 database or of a copy or copies thereof. Such transfer may

7 be to an identical or different medium, and by any means

8 or in any form, now or later known or developed.

9 ‘‘Governmental entity’’ means the United States Gov10 ernment, any State, any agency or instrumentality of ei11 ther, and any officer or employee of any of the foregoing

12 acting in his or her official capacity.

13 ‘‘Insubstantial part’’ of a database means any portion

14 of the contents of a database whose extraction, use or

15 reuse does not diminish the value of the database, conflict

16 with a normal exploitation of the database or adversely

17 affect the actual or potential market for the database.

18 ‘‘Juristic person’’ means any firm, corporation,

19 union, association, non-profit institution, or other organi20 zation capable of suing and being sued in a court of law,

21 but does not include a governmental entity.

22 ‘‘Place in commercial use’’ means to use or reuse, or

23 to authorize use or reuse, for direct or indirect commercial

24 advantage or for financial gain.
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1 ‘‘Person’’ means any natural person, any juristic per2 son, and any governmental entity.

3 ‘‘Use’’ and ‘‘reuse’’ means making available all or a

4 substantial part, qualitatively or quantitatively, of the con5 tents of a database, or access to all or such substantial

6 part, whether or not for direct or indirect commercial ad7 vantage or financial gain, by any means now known or

8 later developed, including any of the following: (i) market9 ing, selling, or renting; (ii) in the form of permanent or

10 temporary copies; or (iii) by distribution, any online or

11 other form of transmission.

12 SEC. 3. DATABASES SUBJECT TO THE ACT.

13 (a) A database is subject to the Act if it is the result

14 of a qualitatively or quantitatively substantial investment

15 of human, technical, financial or other resources in the

16 collection, assembly, verification, organization or presen17 tation of the database contents, and (i) the database is

18 used or reused in commerce; or (ii) the database owner

19 intends to use or reuse the database in commerce.

20 (b) A database otherwise subject to this Act shall re21 main subject, regardless of whether it is made available

22 to the public or in commercial use; the form or medium

23 in which it is embodied; or whether the database or any

24 contents of the database are intellectual creations.
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1 (c) Except for a database made by a governmental

2 entity, any database otherwise subject to this Act, is not

3 excluded herefrom because its contents have been obtained

4 from a governmental entity.

5 (d) Computer programs are not subject to this Act,

6 including without limitation any computer programs used

7 in the manufacture, production, operation or maintenance

8 of a database. However, the contents of a database other9 wise subject to this Act remain subject, notwithstanding

10 their direct or indirect incorporation in a computer pro11 gram or other work.

12 SEC. 4. PROHIBITED ACTS.

13 (a) No person shall, without the authorization of the

14 database owner—

15 (1) extract, use or reuse all or a substantial

16 part, qualitatively or quantitatively, of the contents

17 of a database subject to this Act in a manner that

18 conflicts with the database owner’s normal exploi19 tation of the database or adversely affects the actual

20 or potential market for the database;

21 (2) engage, notwithstanding section 5(a), in the

22 repeated or systematic extraction, use or reuse of in23 substantial parts, qualitatively or quantitatively, of

24 the contents of a database subject to this Act in a

25 manner that cumulatively conflicts with the database
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1 owner’s normal exploitation of the database or ad2 versely affects the actual or potential market for the

3 database; or

4 (3) procure, direct or commission any act pro5 hibited by subsections (i) or (ii).

6 (b) Acts that conflict with a normal exploitation of

7 the database or adversely affect the actual or potential

8 market for the database include but are not limited to the

9 extraction, use or reuse of all or a substantial part of the

10 contents of a database—

11 (1) in a product or service that directly or indi12 rectly competes in any market with the database

13 from which it was extracted; or

14 (2) in a product or service that directly or indi15 rectly competes in any market in which the database

16 owner has a demonstrable interest or expectation in

17 licensing or otherwise using or reusing the database;

18 or

19 (3) in a product or service for customers who

20 might otherwise reasonably be expected to be cus21 tomers for the database; or

22 (4) by or for multiple persons within an organi23 zation or entity in lieu of the authorized additional

24 use or reuse (by license, purchase or otherwise) of

25 copies of the database by or for such persons.
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1 SEC. 5. EXCEPTIONS TO PROHIBITED ACTS.

2 (a) Subject to section 4(a)(ii), a lawful user of a

3 database made available to the public or placed in com4 mercial use is not prohibited from extracting, using or

5 reusing insubstantial parts of its contents, qualitatively or

6 quantitatively, for any purposes whatsoever.

7 (b) Nothing in this Act shall in any way restrict any

8 person from independently collecting, assembling or com9 piling works, data or materials from sources other than

10 a database subject to this Act.

11 SEC. 6. DURATION OF PROHIBITIONS.

12 (a) A database becomes subject to this Act when the

13 necessary investment has been made to qualify its maker

14 as such under section 2. The database shall remain subject

15 to this Act for a period of twenty-five years from the first

16 of January following the date when it was first made avail17 able to the public or the date when it was first placed in

18 commercial use, whichever is earlier.

19 (b) Any change of commercial significance, quali20 tatively or quantitatively, to a database, including any

21 such change through the accumulation of successive addi22 tions, deletions, reverifications, alterations, modifications

23 in organization or presentation, or other modifications,

24 shall make the resulting database subject to this Act for

25 its own term, as calculated under subsection (a).
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1 SEC. 7. CIVIL REMEDIES FOR VIOLATION OF SECTION 4.

2 (a) CIVIL ACTIONS.—A database owner injured by a

3 violation of section 4 may bring a civil action for such a

4 violation in an appropriate United States district court

5 without regard to the amount in controversy: Provided

6 however, That any action against a State governmental en7 tity may be brought in any court that has jurisdiction over

8 claims against such entity.

9 (b) TEMPORARY AND PERMANENT INJUNCTIONS.—

10 Any court having jurisdiction of a civil action arising here11 under shall have the power to grant temporary and perma12 nent injunctions, according to the principles of equity and

13 upon such terms as the court may deem reasonable, to

14 prevent the violation of section 4. Any such injunction

15 granted upon hearing, after notice to the party sought to

16 be enjoined, by any district court of the United States,

17 may be served on the party against whom such injunction

18 is granted anywhere in the United States where such per19 son may be found, and shall be operative and may be en20 forced by proceedings in contempt or otherwise by any

21 United States district court having jurisdiction over such

22 party.

23 (c) IMPOUNDMENT.—At any time while an action

24 hereunder is pending, the court may order the impound25 ing, on such terms as it deems reasonable, of all copies

26 of contents of databases extracted and or used or reused
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1 in violation of section 4, and of all masters, tapes, disks,

2 diskettes, or other articles by means of which such copies

3 may be reproduced. The court may, as part of a final judg4 ment or decree finding a violation of section 4, order the

5 remedial modification or destruction of all copies of con6 tents of databases extracted, used or reused in violation

7 of section 4, and of all masters, tapes, disks, diskettes,

8 or other articles by means of which such copies may be

9 reproduced.

10 (d) MONETARY RELIEF.—When a violation of section

11 4 has been established in any civil action arising here12 under, the plaintiff shall be entitled, subject to principles

13 of equity, to recover (i) defendant’s profit, (ii) any dam14 ages sustained by the plaintiff, and (iii) the costs of the

15 action. The court shall assess such profits or damages or

16 cause the same to be assessed under its direction. In as17 sessing profits the plaintiff shall be required to prove de18 fendant’s sales only; defendant must prove all elements of

19 cost or deduction claimed. In assessing damages the court

20 may enter judgment, according to the circumstances of the

21 case, for any sum above the amount found as actual dam22 ages, not exceeding three times such amount. If the court

23 shall find that the amount of the recovery based on profits

24 is either inadequate or excessive, the court may in its dis25 cretion enter judgment for such sum as it finds just. The
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1 court in its discretion may award reasonable attorney fees

2 to the prevailing party.

3 (e) Subsections (b) and (c) shall not apply to any ac4 tion against the United States Government.

5 (f) The relief provided under this section shall be

6 available against a State governmental entity to the extent

7 allowed by applicable law.

8 SEC. 8. CRIMINAL OFFENSES AND PENALTIES FOR VIOLA9 TION OF SECTION 4.

10 (a) Any person who violates section 4 willfully, and—

11 (1) does so for direct or indirect commercial ad12 vantage or financial gain; or

13 (2) thereby causes loss or damage to a database

14 owner aggregating $10,000 or more in any one-year

15 calendar period, shall be punished as provided in

16 subsection (b).

17 (b) An offense under subsection (a) shall be punish18 able by a fine of not more than $250,000 or imprisonment

19 for not more than five years, or both. A second or subse20 quent offense under subsection (a) shall be punishable by

21 a fine of not more than $500,000, imprisonment for not

22 more than ten years, or both.

23 SEC. 9. RELATIONSHIP TO OTHER LAWS.

24 (a) The remedies against violations hereunder shall

25 be without prejudice to any remedies under any copyright
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1 that may subsist in the database, any contents of the

2 database, or the selection, coordination or arrangement of

3 such contents. Such remedies shall not limit, impair, or

4 otherwise affect the existence, scope or duration of protec5 tion under any such copyright.

6 (b) Nothing in this Act shall restrict the rights of

7 parties freely to enter into licenses or any other contracts

8 with respect to databases or their contents.

9 (c) Nothing in this Act shall prejudice provisions con10 cerning copyright, rights related to copyright or any other

11 rights or obligations in the database or its contents, in12 cluding laws in respect of patent, trademark, design

13 rights, antitrust or competition, trade secrets, data protec14 tion and privacy, access to public documents, and the law

15 of contract.

16 SEC. 10. CIRCUMVENTION OF DATABASE PROTECTION SYS17 TEMS.

18 No person shall import, manufacture or distribute

19 any device, product, or component incorporated into a de20 vice or product, or offer or perform any service, the pri21 mary purpose or effect of which is to avoid, bypass, re22 move, deactivate, or otherwise circumvent, without the au23 thority of the database owner or the law, any process,

24 treatment, mechanism or system which prevents or inhib-
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1 its the extraction, use or reuse of the contents of the

2 database in violation of section 4 hereof.

3 SEC. 11. INTEGRITY OF DATABASE MANAGEMENT INFOR4 MATION.

5 (a) FALSE DATABASE MANAGEMENT INFORMA6 TION.—No person shall knowingly provide database man7 agement information that is false, or knowingly publicly

8 distribute or import for public distribution database man9 agement information that is false.

10 (b) REMOVAL OR ALTERATION OF DATABASE MAN11 AGEMENT INFORMATION.—No person shall, without au12 thority of the database owner or the law, (i) knowingly

13 remove or alter any database management information,

14 (ii) knowingly distribute or import for distribution

15 database management information that has been altered

16 without authority of the database owner or the law; or

17 (iii) knowingly distribute or import for distribution copies

18 of a database from which database management informa19 tion has been removed without the authority of the

20 database owner or the law.

21 SEC. 12. CIVIL REMEDIES FOR VIOLATION OF SECTIONS 10

22 OR 11.

23 (a) CIVIL ACTIONS.—Any person injured by a viola24 tion of section 10 or section 11 may bring a civil action

25 for such violation in an appropriate United States district
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1 court, without regard to the amount in controversy: Pro2 vided, however, That any action against a State govern3 mental entity may be brought in any court that has juris4 diction over claims against such entity.

5 (b) POWERS OF THE COURT.—In an action brought

6 under subsection (a), the court—

7 (1) may grant temporary and permanent in8 junctions on such terms as it deems reasonable to

9 prevent or restrain a violation;

10 (2) at any time while an action is pending, may

11 order the impounding, on such terms as it deems

12 reasonable, of any device or product that is in the

13 custody or the control of the alleged violator and

14 that the court has reasonable cause to believe was

15 involved in a violation;

16 (3) may award damages under subsection (c);

17 (4) in its discretion may allow the recovery of

18 costs by or against any party other than the United

19 States or an officer thereof;

20 (5) in its discretion may award reasonable at21 torney’s fees to the prevailing party; and

22 (6) may, as part of a final judgment or decree

23 finding a violation, order the remedial modification

24 or the destruction of any device or product involved

25 in the violation that is in the custody or control of
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1 the violator or has been impounded under subsection

2 (ii).

3 (c) AWARDS OF DAMAGES.—

4 (1) IN GENERAL.—Except as otherwise pro5 vided in this Act, a violator is liable for either (A)

6 the actual damages and any additional profits of the

7 violator, as provided by subsection (ii), or (B) statu8 tory damages, as provided by subsection (iii).

9 (2) ACTUAL DAMAGES.—The court shall award

10 to the complaining party the actual damages suf11 fered by him or her as a result of the violation, and

12 any profits of the violator that are attributable to

13 the violation and are not taken into account in com14 puting the actual damages, if the complaining party

15 elects such damages at any time before final judg16 ment is entered.

17 (3) STATUTORY DAMAGES.—

18 (A) At any time before final judgment is

19 entered, a complaining party may elect to re20 cover an award of statutory damages for each

21 violation of section 10 in the sum of not less

22 than $200 or more than $2,500 per device,

23 product, offer or performance of service, as the

24 court considers just.
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1 (B) At any time before final judgment is

2 entered, a complaining party may elect to re3 cover an award of statutory damages for each

4 violation of section 11 in the sum of not less

5 than $2,500 or more than $25,000.

6 (4) REPEATED VIOLATIONS.—In any case in

7 which the injured party sustains the burden of prov8 ing, and the court finds, that a person has violated

9 section 10 or 11 within three years after a final

10 judgment was entered against that person for an11 other such violation, the court may increase the

12 award of damages up to triple the amount that

13 would otherwise be awarded, as the court considers

14 just.

15 (5) INNOCENT VIOLATIONS.—The court in its

16 discretion may reduce or remit altogether the total

17 award of damages in any case in which the violator

18 sustains the burden of proving, and the court finds,

19 that the violator was not aware and had no reason

20 to believe that its acts constituted a violation.

21 (d) Subsections (b) (i) and (ii) shall not apply to any

22 action against the United States Government.

23 (e) The relief provided under subsection (b) shall be

24 available against a State governmental entity to the extent

25 allowed by applicable law.
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1 SEC. 13. CRIMINAL OFFENSES AND PENALTIES FOR VIOLA2 TION OF SECTION 11.

3 Any person who violates section 11 with intent to de4 fraud shall be fined not more than $500,000 or impris5 oned for not more than five years, or both.

6 SEC. 14. LIMITATIONS ON ACTIONS.

7 No action shall be maintained under this Act unless

8 it is commenced within three years after the database

9 owner knew or should have known of the claim.

10 SEC. 15. EFFECTIVE DATE.

11 (a) This Act shall take effect immediately upon enact12 ment, and shall be applicable to acts committed on or after

13 that date.

14 (b) No person shall be liable under this Act for use

15 or reuse of database contents lawfully extracted from a

16 database, prior to the effective date of this Act, by that

17 person or by that person’s predecessor in interest.

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