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[House Report 107-687]
[From the U.S. Government Publishing Office]

107th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     107-687
======================================================================
 
     TECHNOLOGY, EDUCATION, AND COPYRIGHT HARMONIZATION ACT OF 2001

                                _______
                                

 September 25, 2002.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

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

                              R E P O R T

                         [To accompany S. 487]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to whom was referred the 
bill (S. 487) to amend chapter 1 of title 17, United States 
Code, relating to the exemption of certain performances or 
displays for educational uses from copyright infringement 
provisions, to provide that the making of copies or 
phonorecords of such performances or displays is not an 
infringement under certain circumstances, and for other 
purposes, having considered the same, reports favorably thereon 
without amendment and recommends that the bill do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     2
Background and Need for the Legislation..........................     3
Hearings.........................................................     4
Committee Consideration..........................................     4
Vote of the Committee............................................     5
Committee Oversight Findings.....................................     5
Performance Goals and Objectives.................................     5
New Budget Authority and Tax Expenditures........................     5
Congressional Budget Office Cost Estimate........................     5
Constitutional Authority Statement...............................     6
Section-by-Section Analysis and Discussion.......................     7
Changes in Existing Law Made by the Bill, as Reported............    16
Markup Transcript................................................    20

                          Purpose and Summary

    S. 487, the ``Technology, Education And Copyright 
Harmonization Act of 2001,'' or the ``TEACH Act,'' updates the 
distance education provisions of the Copyright Act for the 21st 
Century. The act allows students and teachers to benefit from 
deployment in education of advanced digital transmission 
technologies like the Internet, while introducing safeguards to 
limit the additional risks to copyright owners that are 
inherent in exploiting works in a digital format. This 
legislation has been crafted in a process that has ensured 
broad consensus of affected parties.
    Education is the means by which we develop our nation's 
human resources. In this information age, marked by both 
cooperation and competition on a global scale, the ability of 
the United States to meet its domestic and international 
challenges and responsibilities is directly dependent on its 
educational capacity. That capacity in turn will be determined 
by the quality of our educational programs and their reach to 
all sectors of the public. For our nation to maintain its 
competitive edge, it will need to extend education beyond 
children and young adults to lifelong learning for working 
adults, and to reach all students of all income levels, in 
cities and rural settings, in schools and on campuses, in the 
workplace, at home, and at times selected by students to meet 
their needs.
    Digital distance education helps make this possible, 
whether in the traditional sense, when instructor and student 
are separated in place and perhaps time, or in new hybrids of 
traditional classroom education combined with online 
components. Increasingly, college students can submit class 
assignments by email and participate in discussions that 
connect students in a classroom with students beyond the 
classroom. Similarly, K-12 students can learn about the customs 
and cultures of other countries through real-time audiovisual 
conversations with pen pals from those countries; they can 
learn science in new ways by having scientific demonstrations 
and actual experiments conducted at distant locations brought 
to them in real time via the Internet. The National Science 
Foundation, the National Academy of Sciences, and other 
scientific societies and educational organizations are working 
hard to improve our nation's science and mathematics education; 
other groups are developing new ways to bring humanities and 
the arts to students and the broader public. Many of these new 
educational efforts draw on advances in information technology 
and digital networks.
    The TEACH Act amends sections 110(2) and 112 of the 
Copyright Act to facilitate the growth and development of 
digital distance education. The act expands the exempted 
copyright rights, the types of transmissions, and the 
categories of works that the exemption covers beyond those that 
are covered by the existing exemption for performances and 
displays of certain copyrighted works in the course of 
instructional transmissions. Thus, for example, it allows 
transmissions to locations other than a physical classroom, and 
allows for performances of reasonable and limited portions of 
audiovisual works, sound recordings, and other works within the 
scope of the exemption. At the same time, it maintains and 
clarifies the concept of ``mediated instructional activities'' 
to which the exemption applies, and includes safeguards such as 
obligations to implement technological protection measures and 
limitations on the amounts of certain types of works that may 
be performed or displayed. The act also amends section 112 of 
the Copyright Act to permit storage of copyrighted material on 
servers in order to permit the performances and displays 
authorized by section 110(2) to be made asynchronously in 
distance education courses.

                Background and Need for the Legislation

    Section 110(2) of the Copyright Act was enacted in 1976 \1\ 
on the basis of a policy determination that certain 
performances and displays of copyrighted works in connection 
with systematic instruction using then-known forms of distance 
education should be permitted without a need to obtain a 
license or rely on fair use. The technological characteristics 
of digital transmissions have rendered the language of section 
110(2) inapplicable to the most advanced delivery methods for 
instruction. Without an amendment to accommodate these new 
technologies, the policy behind the 1976 act would be 
increasingly diminished.
---------------------------------------------------------------------------
    \1\ Pub. L. No. 94-553, 90 Stat. 2549 (1976).
---------------------------------------------------------------------------
    At the same time, two factors recommend some recalibrating 
of the policy balance struck in 1976. The characteristics of 
digital transmission technologies present new educational 
opportunities, such as the ability to provide a media-rich, 
interactive educational experience to students unable to attend 
classes at the physical location of the institution. On the 
other hand, the ability of digital transmission technologies to 
disseminate rapidly and without control virtually infinite 
numbers of high quality copies, create new risks for the owners 
of copyrighted works used in distance education.
    In the 5 years leading up to the passage of the Digital 
Millennium Copyright Act (DMCA) in 1998,\2\ the application of 
copyright law to distance education using digital technologies 
was the subject of public debate and attention in the United 
States. Extensive discussions concerning the issue were 
conducted during Congress' consideration of the DMCA, but no 
conclusion was reached. Therefore, in section 403 of the DMCA, 
Congress directed the Copyright Office to consult with 
representatives of copyright owners, non-profit educational 
institutions, and non-profit libraries and archives, and 
thereafter to submit to Congress ``recommendations on how to 
promote distance education through digital technologies, 
including interactive digital networks, while maintaining an 
appropriate balance between the rights of copyright owners and 
the needs of users of copyrighted works.'' \3\ The 
recommendations were to include any legislation the Register of 
Copyrights considered appropriate to achieve that objective. 
The Copyright Office was specifically directed to consider the 
following issues: the need for a new exemption, the categories 
of works to be included in any exemption, the appropriate 
quantitative limitations on the portions of works that may be 
used under any exemption, which parties should be eligible for 
any exemption, which parties should be eligible recipients of 
distance education material under any exemption, the extent to 
which technological protection measures should be mandated as a 
condition of eligibility for any exemption, the extent to which 
the availability of licenses should be considered in assessing 
the eligibility for any exemption, and other issues the Office 
considered appropriate.
---------------------------------------------------------------------------
    \2\ Pub. L. No. 105-304, 112 Stat. 2877 (1998).
    \3\ Id.
---------------------------------------------------------------------------
    The Copyright Office conducted an extensive and intensive 
process of identifying stakeholders, holding public hearings, 
soliciting comments, conducting research, and consulting with 
experts in various fields. On June 24, 1999, the Register of 
Copyrights formally presented the findings and recommendations 
of the Copyright Office to the Subcommittee on Courts and 
Intellectual Property.\4\ Among other things, the Copyright 
Office recommended the following changes: elimination of the 
requirement of a physical classroom, clarification that the 
term ``transmission'' covers digital transmissions, expanding 
the rights covered by the exemption to include those needed to 
accomplish network transmissions, expanding the categories of 
works exempted from the performance rights beyond the current 
coverage of non-dramatic literary and musical works, and 
creating new safeguards to counteract the risks imposed by 
digital transmissions.\5\
---------------------------------------------------------------------------
    \4\ Register of Copyrights, Report on Copyright and Digital 
Distance Education (1999).
    \5\ Id.
---------------------------------------------------------------------------
    On March 7, 2001, Senator Hatch, joined by Senator Leahy, 
introduced S. 487, the ``Technology, Education and Copyright 
Harmonization Act of 2001,'' or the ``TEACH Act,'' \6\ to 
implement many of the Copyright Office recommendations. On 
March 17, 2001, the Senate Judiciary Committee met in executive 
session to consider S. 487. An amendment in the nature of a 
substitute was offered by the Chairman Hatch, together with the 
Ranking Member Leahy, which had been developed to implement the 
purposes of the TEACH Act, following extensive discussions with 
the education and copyright owner communities, and with further 
assistance from the Copyright Office. The substitute amendment 
was adopted by unanimous consent and the bill, as amended, was 
then ordered to be favorably reported to the full Senate by 
unanimous consent. On June 7, 2001, S. 487, as amended, passed 
the Senate by unanimous consent.
---------------------------------------------------------------------------
    \6\ S. 487, 107th Cong., 1st Sess. (2001). See 2000 Cong. Rec. S 
2008-2009 (daily ed. Mar. 7, 2001).
---------------------------------------------------------------------------

                                Hearings

    The Committee's Subcommittee on Courts, the Internet, and 
Intellectual Property held a hearing on S. 487 on June 27, 
2001. Testimony was received from the Honorable Marybeth 
Peters, Register of Copyrights, Copyright Office of the United 
States, Library of Congress; Allan Robert Adler, Vice 
President, Legal & Government Affairs, Association of American 
Publishers, Inc.; and John C. Vaughn, Executive Vice President, 
Association of American Universities.

                        Committee Consideration

    On July 11, 2001, the Subcommittee on Courts, the Internet, 
and Intellectual Property met in open session and ordered 
favorably reported the bill S. 487, by voice vote, a quorum 
being present. On July 17, 2002, the Committee met in open 
session and ordered favorably reported the bill S. 487, by 
voice vote, a quorum being present.

                         Vote of the Committee

    There were no recorded votes on S. 487.

                      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.

                    Performance Goals and Objectives

    S. 487 does not authorize funding. Therefore, clause 3(c) 
of rule XIII of the Rules of the House of Representatives is 
inapplicable.

               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 S. 487, 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, July 26, 2002.
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 S. 487, the Technology, 
Education, and Copyright Harmonization Act of 2001.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Ken Johnson 
(for Federal costs), who can be reached at 226-2860, and Paige 
Piper/Bach (for the private-sector impact), who can be reached 
at 226-2940.
            Sincerely,
                                  Dan L. Crippen, Director.

Enclosure

cc:
        Honorable John Conyers, Jr.
        Ranking Member
S. 487--Technology, Education, and Copyright Harmonization Act of 2001.
    S. 487 would modify the exemption under copyright law for 
schools and governments that display and copy literature, 
music, and other material for educational purposes. Copyright 
laws are administered by the Copyright Office. The act also 
would require the Patent and Trademark Office (PTO) to report 
to the Congress within 6 months of enactment on the range of 
technologies that are available to protect copyrighted material 
that is available in digital form.
    Based on information from the Copyright Office and the PTO, 
CBO estimates that implementing S. 487 would have a negligible 
impact on the operating budgets of those agencies. The act 
would not affect direct spending or receipts; therefore, pay-
as-you-go procedures would not apply.
    S. 487 contains no intergovernmental mandates as defined in 
the Unfunded Mandates Reform Act (UMRA) and would impose no 
costs on State, local, or tribal governments.
    S. 487 would impose a private-sector mandate, as defined by 
UMRA. CBO estimates that the direct cost of the mandates would 
fall well below the annual threshold established by UMRA for 
private-sector mandates ($115 million in 2002, adjusted 
annually for inflation).
    S. 487 would impose a private-sector mandate as defined by 
UMRA on copyright owners. The act would limit the right of 
copyright owners to collect compensation under copyright law 
for use of certain secondary materials by educators in classes 
offered over the Internet. It would clarify existing law to 
exempt the digital transmission of such materials used in 
distance learning from copyright control. According to 
information from the U.S. Copyright Office and industry 
sources, compensation currently received by copyright owners 
from the use of those materials is minimal. CBO estimates, 
therefore, that the direct cost of the mandate, measured as net 
income forgone, would fall well below the annual threshold 
established by UMRA for private-sector mandates ($115 million 
in 2002, adjusted annually for inflation).
    On May 29, 2001, CBO transmitted a cost estimate for S. 487 
as ordered reported by the Senate Committee on the Judiciary on 
May 17, 2001. The two versions of the act are nearly identical, 
and the estimated costs are the same. Both versions of the bill 
contain the same private-sector mandate.
    The CBO staff contacts for this estimate are Ken Johnson 
(for Federal costs), who can be reached at 226-2860, and Paige 
Piper/Bach (for the private-sector impact), who can be reached 
at 226-2940. This estimate was approved by Peter H. Fontaine, 
Deputy Assistant Director for Budget Analysis.

                   Constitutional Authority Statement

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

               Section-by-Section Analysis and Discussion

               SEC. 1. EDUCATION USE COPYRIGHT EXEMPTION.

Subsection (a): Short Title
    This section provides that this act may be cited as the 
``Technology, Education and Copyright Harmonization Act of 
2001.''
Subsection (b): Exemption of Certain Performances and Displays for 
        Educational Uses
            Summary
    Section 1(b) of the TEACH Act amends section 110(2) of the 
Copyright Act to encompass performances and displays of 
copyrighted works in digital distance education under 
appropriate circumstances. The section expands the scope of 
works to which the amended section 110(2) exemption applies to 
include performances of reasonable and limited portions of 
works other than nondramatic literary and musical works (which 
are currently covered by the exemption), while also limiting 
the amount of any work that may be displayed under the 
exemption to what is typically displayed in the course of a 
live classroom session. At the same time, section 1(b) removes 
the concept of the physical classroom, while maintaining and 
clarifying the requirement of mediated instructional activity 
and limiting the availability of the exemption to mediated 
instructional activities of governmental bodies and 
``accredited'' non-profit educational institutions. This 
section of the act also limits the amended exemption to exclude 
performances and displays given by means of a copy or 
phonorecord that is not lawfully made and acquired, which the 
transmitting body or institution knew or had reason to believe 
was not lawfully made and acquired. In addition, section 1(b) 
requires the transmitting institution to apply certain 
technological protection measures to protect against retention 
of the work and further downstream dissemination. The section 
also clarifies that participants in authorized digital distance 
education transmissions will not be liable for any infringement 
by reason of transient or temporary reproductions that may 
occur through the automatic technical process of a digital 
transmission for the purpose of a performance or display 
permitted under the section. Obviously, with respect to such 
reproductions, the distribution right would not be infringed. 
Throughout the act, the term ``transmission'' is intended to 
include transmissions by digital, as well as analog means.
            Works Subject to the Exemption and Applicable Portions
    The TEACH Act expands the scope of the section 110(2) 
exemption to apply to performances and displays of all 
categories of copyrighted works, subject to specific exclusions 
for works ``produced or marketed primarily for performance or 
display as part of mediated instructional activities 
transmitted via digital networks'' and performance or displays 
``given by means of a copy or phonorecord that is not lawfully 
made and acquired,'' which the transmitting body or institution 
``knew or had reason to believe was not lawfully made and 
acquired.''
    Unlike the current section 110(2), which applies only to 
public performances of non-dramatic literary or musical works, 
the amendment would apply to public performances of any type of 
work, subject to certain exclusions set forth in section 
110(2), as amended. The performance of works other than non-
dramatic literary or musical works is limited, however, to 
``reasonable and limited portions'' of less than the entire 
work. What constitutes a ``reasonable and limited'' portion 
should take into account both the nature of the market for that 
type of work and the pedagogical purposes of the performance.
    In addition, because ``display'' of certain types of works, 
such as literary works using an ``e-book'' reader, could 
substitute for traditional purchases of the work (e.g., a text 
book), the display exemption is limited to ``an amount 
comparable to that which is typically displayed in the course 
of a live classroom setting.'' This limitation is a further 
implementation of the ``mediated instructional activity'' 
concept described below, and recognizes that a ``display'' may 
have a different meaning and impact in the digital environment 
than in the analog environment to which section 110(2) has 
previously applied. The ``limited portion'' formulation used in 
conjunction with the performance right exemption is not used in 
connection with the display right exemption, because, for 
certain works, display of the entire work could be appropriate 
and consistent with displays typically made in a live classroom 
setting (e.g., short poems or essays, or images of pictorial, 
graphic, or sculptural works, etc.).
    The exclusion for works ``produced or marketed primarily 
for performance or display as part of mediated instructional 
activities transmitted via digital networks'' is intended to 
prevent the exemption from undermining the primary market for 
(and, therefore, impairing the incentive to create, modify or 
distribute) those materials whose primary market would 
otherwise fall within the scope of the exemption. The concept 
of ``performance or display as part of mediated instructional 
activities'' is discussed in greater detail below, in 
connection with the scope of the exemption. It is intended to 
have the same meaning and application here, so that works 
produced or marketed primarily for activities covered by the 
exemption would be excluded from the exemption. The exclusion 
is not intended to apply generally to all educational materials 
or to all materials having educational value. The exclusion is 
limited to materials whose primary market is ``mediated 
instructional activities,'' i.e., materials performed or 
displayed as an integral part of the class experience, 
analogous to the type of performance or display that would take 
place in a live classroom setting. At the same time, the 
reference to ``digital networks'' is intended to limit the 
exclusion to materials whose primary market is the digital 
network environment, not instructional materials developed and 
marketed for use in the physical classroom.
    The exclusion of performances or displays ``given by means 
of a copy or phonorecord that is not lawfully made and 
acquired'' under title 17 is based on a similar exclusion in 
the current language of section 110(1) for the performance or 
display of an audiovisual work in the classroom. Unlike the 
provision in section 110(1), the exclusion here applies to the 
performance or display of any work. But, as in section 110(1), 
the exclusion applies only where the transmitting body or 
institution ``knew or had reason to believe'' that the copy or 
phonorecord was not lawfully made and acquired. As noted in the 
Register's Report, the purpose of the exclusion is to reduce 
the likelihood that an exemption intended to cover only the 
equivalent of traditional concepts of performance and display 
would result in the proliferation or exploitation of 
unauthorized copies.\7\An educator would typically purchase, 
license, rent, make a fair-use copy, or otherwise lawfully 
acquire the copy to be used, and works not yet made available 
in the market (whether by distribution, performance or display) 
would, as a practical matter, be rendered ineligible for use 
under the exemption.
---------------------------------------------------------------------------
    \7\ REGISTER OF COPYRIGHTS, REPORT ON COPYRIGHT AND DIGITAL 
DISTANCE EDUCATION (1999) at 159.
---------------------------------------------------------------------------
            Eligible Transmitting Entities
    As under the current section 110(2), the exemption, as 
amended, is limited to government bodies and non-profit 
educational institutions. However, due to the fact that, as the 
Register's Report points out, ``nonprofit educational 
institutions'' are no longer a closed and familiar group, and 
the ease with which anyone can transmit educational material 
over the Internet, the amendment would require non-profit 
educational institutions to be ``accredited'' in order to 
provide further assurances that the institution is a bona fide 
educational institution. It is not otherwise intended to alter 
the eligibility criteria. Nor is it intended to limit or affect 
any other provision of the Copyright Act that relates to non-
profit educational institutions or to imply that non-accredited 
educational institutions are necessarily not bona fide.
    ``Accreditation'' is defined in section 1(b)(2) of the 
TEACH Act in terms of the qualification of the educational 
institution. It is not defined in terms of particular courses 
or programs. Thus, an accredited nonprofit educational 
institution qualifies for the exemption with respect to its 
courses whether or not the courses are part of a degree or 
certificate-granting program.
            Qualifying Performances and Displays; Mediated 
                    Instructional Activities
    Subparagraph (2)(A) of the amended exemption provides that 
the exemption applies to a performance or display made ``by, at 
the direction of, or under the actual supervision of an 
instructor as an integral part of a class session offered as a 
regular part of . . . systematic mediated instructional 
activity.'' The subparagraph includes several requirements, all 
of which are intended to make clear that the transmission must 
be part of mediated instructional activity. First, the 
performance or display must be made by, under the direction of, 
or under the actual supervision of an instructor. The 
performance or display may be initiated by the instructor. It 
may also be initiated by a person enrolled in the class as long 
as it is done either at the direction, or under the actual 
supervision, of the instructor. ``Actual'' supervision is 
intended to require that the instructor is, in fact, 
supervising the class activities, and that supervision is not 
in name or theory only. It is not intended to require either 
constant, real-time supervision by the instructor or pre-
approval by the instructor for the performance or display. 
Asynchronous learning, at the pace of the student, is a 
significant and beneficial characteristic of digital distance 
education, and the concept of control and supervision is not 
intended to limit the qualification of such asynchronous 
activities for this exemption.
    The performance or display must also be made as an 
``integral part'' of a class session, so it must be part of a 
class itself, rather than ancillary to it. Further, it must 
fall within the concept of ``mediated instructional 
activities'' as described in section 1(b)(2) of the TEACH Act. 
This latter concept is intended to require the performance or 
display to be analogous to the type of performance or display 
that would take place in a live classroom setting. Thus, 
although it is possible to display an entire textbook or 
extensive course-pack material through an e-book reader or 
similar device or computer application, this type of use of 
such materials as supplemental reading would not be analogous 
to the type of display that would take place in the classroom, 
and therefore would not be authorized under the exemption.
    The amended exemption is not intended to address other uses 
of copyrighted works in the course of digital distance 
education, including student use of supplemental or research 
materials in digital form, such as electronic course packs, e-
reserves, and digital library resources. Such activities do not 
involve uses analogous to the performances and displays 
currently addressed in section 110(2).
    The ``mediated instructional activity'' requirement is thus 
intended to prevent the exemption provided by the TEACH Act 
from displacing textbooks, course packs or other material in 
any media, copies or phonorecords of which are typically 
purchased or acquired by students for their independent use and 
retention (in most post-secondary and some elementary and 
secondary contexts). The Committee notes that in many secondary 
and elementary school contexts, such copies of such materials 
are not purchased or acquired directly by the students, but 
rather are provided for the students' independent use and 
possession (for the duration of the course) by the institution.
    The limitation of the exemption to systematic ``mediated 
instructional activities'' in subparagraph (2)(A) of the 
amended exemption operates together with the exclusion in the 
opening clause of section 110(2) for works ``produced or 
marketed primarily for performance or display as part of 
mediated instructional activities transmitted via digital 
networks'' to place boundaries on the exemption. The former 
relates to the nature of the exempt activity; the latter limits 
the relevant materials by excluding those primarily produced or 
marketed for the exempt activity.
    One example of the interaction of the two provisions is the 
application of the exemption to textbooks. Pursuant to 
subparagraph (2)(A), which limits the exemption to ``mediated 
instructional activities,'' the display of material from a 
textbook that would typically be purchased by students in the 
local classroom environment, in lieu of purchase by the 
students, would not fall within the exemption. Conversely, 
because textbooks typically are not primarily produced or 
marketed for performance or display in a manner analogous to 
performances or display in the live classroom setting, they 
would not per se be excluded from the exemption under the 
exclusion in the opening clause. Thus, an instructor would not 
be precluded from using a chart or table or other short excerpt 
from a textbook different from the one assigned for the course, 
or from emphasizing such an excerpt from the assigned textbook 
that had been purchased by the students.
    The requirement of subparagraph (2)(B), that the 
performance or display must be directly related and of material 
assistance to the teaching content of the transmission, is 
found in current law, and has been retained in its current 
form. As noted in the Register's Report \8\, this test of 
relevance and materiality connects the copyrighted work to the 
curriculum, and it means that the portion performed or 
displayed may not be performed or displayed for the mere 
entertainment of the students, or as unrelated background 
material.
---------------------------------------------------------------------------
    \8\ Id. at 80.
---------------------------------------------------------------------------
            Limitations on Receipt of Transmissions
    Unlike current section 110(2), the TEACH Act amendment 
removes the requirement that transmissions be received in 
classrooms or similar places devoted to instruction unless the 
recipient is an officer or employee of a governmental body or 
is prevented by disability or special circumstances from 
attending a classroom or similar place of instruction. One of 
the great potential benefits of digital distance education is 
its ability to reach beyond the physical classroom, to provide 
quality educational experiences to all students of all income 
levels, in cities and rural settings, in schools and on 
campuses, in the workplace, at home, and at times selected by 
students to meet their needs.
    In its place, the act substitutes the requirements in 
subparagraph (2)(C) that the transmission be made solely for 
and, to the extent technologically feasible, the reception be 
limited to students officially enrolled in the course for which 
the transmission is made or governmental employees as part of 
their official duties or employment. This requirement is not 
intended to impose a general requirement of network security. 
Rather, it is intended to require only that the students or 
employees authorized to be recipients of the transmission 
should be identified, and the transmission should be 
technologically limited to such identified authorized 
recipients through systems such as password access or other 
similar measures.
            Additional Safeguards to Counteract New Risks
    The digital transmission of works to students poses greater 
risks to copyright owners than transmissions through analog 
broadcasts. Digital technologies make possible the creation of 
multiple copies, and their rapid and widespread dissemination 
around the world. Accordingly, the TEACH Act includes several 
safeguards not currently present in section 110(2).
    First, a transmitting body or institution seeking to invoke 
the exemption is required to institute policies regarding 
copyright and to provide information to faculty, students, and 
relevant staff members that accurately describe and promote 
compliance with copyright law. Further, the transmitting 
organization must provide notice to recipients that materials 
used in connection with the course may be subject to copyright 
protection. These requirements are intended to promote an 
environment of compliance with the law, inform recipients of 
their responsibilities under copyright law, and decrease the 
likelihood of unintentional and uninformed acts of 
infringement.
    Second, in the case of a digital transmission, the 
transmitting body or institution is required to apply 
technological measures to prevent: (i) retention of the work in 
accessible form by recipients to which it sends the work for 
longer than the class session; and (ii) unauthorized further 
dissemination of the work in accessible form by such 
recipients. Measures intended to limit access to authorized 
recipients of transmissions from the transmitting body or 
institution are not addressed in this subparagraph (2)(D). 
Rather, they are the subjects of subparagraph (2)(C).
    Third, in the case of a digital transmission, the 
transmitting body or institution must not ``engage in conduct 
that could reasonably be expected to interfere with 
technological measures used by copyright owners to prevent such 
retention or unauthorized further dissemination.'' As the 
context makes clear, this requirement refers to conduct that is 
taken in connection with the particular transmissions subject 
to the exemption, rather than to the broader activities of the 
transmitting body or institution generally. Further, like the 
other provisions under paragraph (2)(D)(ii), the requirement 
has no legal effect other than as a condition of eligibility 
for the exemption. Thus, it is not otherwise enforceable to 
preclude or prohibit conduct.
    The requirement that technological measures be applied to 
limit retention for no longer than the ``class session'' refers 
back to the requirement that the performance be made as an 
``integral part of a class session.'' The duration of a ``class 
session'' in asynchronous distance education would generally be 
that period during which a student is logged on to the server 
of the institution or governmental body making the display or 
performance, but is likely to vary with the needs of the 
student and with the design of the particular course. It does 
not mean the duration of a particular course (i.e., a semester 
or term), but rather is intended to describe the equivalent of 
an actual single face-to-face mediated class session (although 
it may be asynchronous and one student may remain online or 
retain access to the performance or display for longer than 
another student as needed to complete the class session). 
Although flexibility is necessary to accomplish the pedagogical 
goals of distance education, the Committee expects that a 
common sense construction will be applied so that a copy or 
phonorecord displayed or performed in the course of a distance 
education program would not remain in the possession of the 
recipient in a way that could substitute for acquisition or for 
uses other than use in the particular class session. 
Conversely, the technological protection measure in 
subparagraph (2)(D)(ii) refers only to retention of a copy or 
phonorecord in the computer of the recipient of a transmission. 
The material to be performed or displayed may, under the 
amendments made by the act to section 112 and with certain 
limitations set forth therein, remain on the server of the 
institution or government body for the duration of its use in 
one or more courses, and may be accessed by a student each time 
the student logs on to participate in the particular class 
session of the course in which the display or performance is 
made. The reference to ``accessible form'' recognizes that 
certain technological protection measures that could be used to 
comply with subparagraph (2)(D)(ii) do not cause the 
destruction or prevent the making of a digital file; rather 
they work by encrypting the work and limiting access to the 
keys and the period in which such file may be accessed. On the 
other hand, an encrypted file would still be considered to be 
in ``accessible form'' if the body or institution provides the 
recipient with a key for use beyond the class session.
    Paragraph (2)(D)(ii) provides, as a condition of 
eligibility for the exemption, that a transmitting body or 
institution apply technological measures that reasonably 
prevent both retention of the work in accessible form for 
longer than the class session and further dissemination of the 
work. This requirement does not impose a duty to guarantee that 
retention and further dissemination will never occur. Nor does 
it imply that there is an obligation to monitor recipient 
conduct. Moreover, the ``reasonably prevent'' standard should 
not be construed to imply perfect efficacy in stopping 
retention or further dissemination. The obligation to 
``reasonably prevent'' contemplates an objectively reasonable 
standard regarding the ability of a technological protection 
measure to achieve its purpose. Examples of technological 
protection measures that exist today and would reasonably 
prevent retention and further dissemination, include measures 
used in connection with streaming to prevent the copying of 
streamed material, such as the Real Player ``Secret Handshake/
Copy Switch'' technology discussed in Real Networks v. 
Streambox, 2000 WL 127311 (Jan. 18, 2000) or digital rights 
management systems that limit access to or use of encrypted 
material downloaded onto a computer. It is not the Committee's 
intent, by noting the existence of the foregoing, to specify 
the use of any particular technology to comply with 
subparagraph (2)(D)(ii). Other technologies will certainly 
evolve. Further, it is possible that, as time passes, a 
technological protection measure may cease to reasonably 
prevent retention of the work in accessible form for longer 
than the class session and further dissemination of the work, 
either due to the evolution of technology or to the widespread 
availability of a hack that can be readily used by the public. 
In those cases, a transmitting organization would be required 
to apply a different measure.
    Nothing in section 110(2) should be construed to affect the 
application or interpretation of section 1201. Conversely, 
nothing in section 1201 should be construed to affect the 
application or interpretation of section 110(2).
            Transient and Temporary Copies
    Section 1(b)(2) of the TEACH Act implements the Register's 
recommendation that liability not be imposed upon those who 
participate in digitally transmitted performances and displays 
authorized under this subsection by reason of copies or 
phonorecords made through the automatic technical process of 
such transmission, or any distribution resulting therefrom. 
Certain modifications have been made to the Register's 
recommendations to accommodate instances where the 
recommendation was either too broad or not sufficiently broad 
to cover the appropriate activities.
    The third paragraph added to the amended exemption under 
section 1(b)(2) of the TEACH Act recognizes that transmitting 
organizations should not be responsible for copies or 
phonorecords made by third parties, beyond the control of the 
transmitting organization. However, consistent with the 
Register's concern that the exemption should not be transformed 
into a mechanism for obtaining copies \9\, the paragraph also 
requires that such transient or temporary copies stored on the 
system or network controlled or operated by the transmitting 
body or institution shall not be maintained on such system or 
network ``in a manner ordinarily accessible to anyone other 
than anticipated recipients'' or ``in a manner ordinarily 
accessible to such anticipated recipients for a longer period 
than is reasonably necessary to facilitate the transmissions'' 
for which they are made.
---------------------------------------------------------------------------
    \9\ Id. at 151.
---------------------------------------------------------------------------
    The liability of intermediary service providers remains 
governed by section 512, but, subject to section 512(d) and 
section 512(e), section 512 will not affect the legal 
obligations of a transmitting body or institution when it 
selects material to be used in teaching a course, and 
determines how it will be used and to whom it will be 
transmitted as a provider of content.
    The paragraph refers to ``transient'' and ``temporary'' 
copies consistent with the terminology used in section 512, 
including transient copies made in the transmission path by 
conduits and temporary copies, such as caches, made by the 
originating institution, by service providers or by recipients. 
Organizations providing digital distance education will, in 
many cases, provide material from source servers that create 
additional temporary or transient copies or phonorecords of the 
material in storage known as ``caches'' in other servers in 
order to facilitate the transmission. In addition, transient or 
temporary copies or phonorecords may occur in the transmission 
stream, or in the computer of the recipient of the 
transmission. Thus, by way of example, where content is 
protected by a digital rights management system, the 
recipient's browser may create a cache copy of an encrypted 
file on the recipient's hard disk, and another copy may be 
created in the recipient's random access memory at the time the 
content is perceived. The third paragraph added to the amended 
exemption by section 1(b)(2) of the TEACH Act is intended to 
make clear that those authorized to participate in digitally 
transmitted performances and displays as authorized under 
section 110(2) are not liable for infringement as a result of 
such copies created as part of the automatic technical process 
of the transmission if the requirements of that language are 
met. The paragraph is not intended to create any implication 
that such participants would be liable for copyright 
infringement in the absence of the paragraph.
Subsection (c): Ephemeral Recordings
    One way in which digitally transmitted distance education 
will expand America's educational capacity and effectiveness is 
through the use of asynchronous education, where students can 
take a class when it is convenient for them, not at a specific 
hour designated by the body or institution. This benefit is 
likely to be particularly valuable for working adults. 
Asynchronous education also has the benefit of proceeding at 
the student's own pace, and freeing the instructor from the 
obligation to be in the classroom or on call at all hours of 
the day or night.
    In order for asynchronous distance education to proceed, 
organizations providing distance education transmissions must 
be able to load material that will be displayed or performed on 
their servers, for transmission at the request of students. The 
TEACH Act's amendment to section 112 makes that possible.
    Under new subsection 112(f)(1), transmitting organizations 
authorized to transmit performances or displays under section 
110(2) may load on their servers copies or phonorecords of the 
performance or display authorized to be transmitted under 
section 110(2) to be used for making such transmissions. The 
subsection recognizes that it often is necessary to make more 
than one ephemeral recording in order to efficiently carry out 
digital transmissions, and authorizes the making of such copies 
or phonorecords.
    Subsection 112(f) imposes several limitations on the 
authorized ephemeral recordings. First, they may be retained 
and used solely by the government body or educational 
institution that made them. No further copies or phonorecords 
may be made from them, except for copies or phonorecords that 
are authorized by subsection 110(2), such as the copies that 
fall within the scope of the third paragraph added to the 
amended exemption under section 1(b)(2) of the TEACH Act. The 
authorized ephemeral recordings must be used solely for 
transmissions authorized under section 110(2).
    The Register's Report notes the sensitivity of copyright 
owners to the digitization of works that have not been 
digitized by the copyright owner. As a general matter, 
subsection 112(f) requires the use of works that are already in 
digital form. However, the Committee recognizes that some works 
may not be available for use in distance education, either 
because no digital version of the work is available to the 
institution, or because available digital versions are subject 
to technological protection measures that prevent their use for 
the performances and displays authorized by section 110(2). In 
those circumstances where no digital version is available to 
the institution or the digital version that is available is 
subject to technological measures that prevent its use for 
distance education under the exemption, section 112(f)(2) 
authorizes the conversion from an analog version, but only 
conversion of the portion or amount of such works that are 
authorized to be performed or displayed under section 110(2). 
It should be emphasized that subsection 112(f)(2) does not 
provide any authorization to convert print or other analog 
versions of works into digital format except as permitted in 
section 112(f)(2).
            Relationship to Fair Use and Contractual Obligations
    As the Register's Report makes clear ``critical to [its 
conclusion and recommendations] is the continued availability 
of the fair use doctrine.'' \10\ Nothing in this act is 
intended to limit or otherwise to alter the scope of the fair 
use doctrine. As the Register's Report explains:
---------------------------------------------------------------------------
    \10\ Id. at xvi.

        Fair use is a critical part of the distance education 
        landscape. Not only instructional performances and 
        displays, but also other educational uses of works, 
        such as the provision of supplementary materials or 
        student downloading of course materials, will continue 
        to be subject to the fair use doctrine. Fair use could 
        apply as well to instructional transmissions not 
        covered by the changes to section 110(2) recommended 
        above. Thus, for example, the performance of more than 
        a limited portion of a dramatic work in a distance 
        education program might qualify as fair use in 
        appropriate circumstances.\11\
---------------------------------------------------------------------------
    \11\ Id. at 161-162.

    The Register's Report also recommends that the legislative 
history of legislation implementing its distance education 
requirements make certain points about fair use. Specifically, 
---------------------------------------------------------------------------
this legislation is enacted in recognition of the following:

        a. LThe fair use doctrine is technologically neutral 
        and applies to activities in the digital environment; 
        and

        b. Lthe lack of established guidelines for any 
        particular type of use does not mean that fair use is 
        inapplicable.\12\
---------------------------------------------------------------------------
    \12\ Id.

    While the Register's Report also examined and discussed a 
variety of licensing issues with respect to educational uses 
not covered by exemptions or fair use, these issues were not 
included in the Report's legislative recommendations that 
formed the basis for the TEACH Act. It is the view of the 
Committee that nothing in this act is intended to affect in any 
way the relationship between express copyright exemptions and 
license restrictions.
            Nonapplicability to Secure Tests
    The Committee is aware and deeply concerned about the 
phenomenon of school officials who are entrusted with copies of 
secure test forms solely for use in actual test administrations 
and using those forms for a completely unauthorized purpose, 
namely helping students to study the very questions they will 
be asked on the real test. The Committee does not in any way 
intend to change current law with respect to application of the 
Copyright Act or to undermine or lessen in any way the 
protection afforded to secure tests under the Copyright Act. 
Specifically, this section would not authorize a secure test 
acquired solely for use in an actual test administration to be 
used for any other purpose.
Subsection (d): PTO Report
    The report requested in subsection (d) requests information 
about technological protection systems to protect digitized 
copyrighted works and prevent infringement. The report is 
intended for the information of Congress and shall not be 
construed to have any effect whatsoever on the meaning, 
applicability, or effect of any provision of the Copyright Act 
in general or the TEACH Act in particular.

         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, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, existing law in which no change 
is proposed is shown in roman):

                      TITLE 17, UNITED STATES CODE

           *       *       *       *       *       *       *
CHAPTER 1--SUBJECT MATTER AND SCOPE OF COPYRIGHT

           *       *       *       *       *       *       *

Sec. 110. Limitations on exclusive rights: Exemption of certain 
                    performances and displays

    Notwithstanding the provisions of section 106, the 
following are not infringements of copyright:
            (1) * * *
            [(2) performance of a nondramatic literary or 
        musical work or display of a work, by or in the course 
        of a transmission, if--
                    [(A) the performance or display is a 
                regular part of the systematic instructional 
                activities of a governmental body or a 
                nonprofit educational institution; and
                    [(B) the performance or display is directly 
                related and of material assistance to the 
                teaching content of the transmission; and
                    [(C) the transmission is made primarily 
                for--
                            [(i) reception in classrooms or 
                        similar places normally devoted to 
                        instruction, or
                            [(ii) reception by persons to whom 
                        the transmission is directed because 
                        their disabilities or other special 
                        circumstances prevent their attendance 
                        in classrooms or similar places 
                        normally devoted to instruction, or
                            [(iii) reception by officers or 
                        employees of governmental bodies as a 
                        part of their official duties or 
                        employment;]
            (2) except with respect to a work produced or 
        marketed primarily for performance or display as part 
        of mediated instructional activities transmitted via 
        digital networks, or a performance or display that is 
        given by means of a copy or phonorecord that is not 
        lawfully made and acquired under this title, and the 
        transmitting government body or accredited nonprofit 
        educational institution knew or had reason to believe 
        was not lawfully made and acquired, the performance of 
        a nondramatic literary or musical work or reasonable 
        and limited portions of any other work, or display of a 
        work in an amount comparable to that which is typically 
        displayed in the course of a live classroom session, by 
        or in the course of a transmission, if--
                    (A) the performance or display is made by, 
                at the direction of, or under the actual 
                supervision of an instructor as an integral 
                part of a class session offered as a regular 
                part of the systematic mediated instructional 
                activities of a governmental body or an 
                accredited nonprofit educational institution;
                    (B) the performance or display is directly 
                related and of material assistance to the 
                teaching content of the transmission;
                    (C) the transmission is made solely for, 
                and, to the extent technologically feasible, 
                the reception of such transmission is limited 
                to--
                            (i) students officially enrolled in 
                        the course for which the transmission 
                        is made; or
                            (ii) officers or employees of 
                        governmental bodies as a part of their 
                        official duties or employment; and
                    (D) the transmitting body or institution--
                            (i) institutes policies regarding 
                        copyright, provides informational 
                        materials to faculty, students, and 
                        relevant staff members that accurately 
                        describe, and promote compliance with, 
                        the laws of the United States relating 
                        to copyright, and provides notice to 
                        students that materials used in 
                        connection with the course may be 
                        subject to copyright protection; and
                            (ii) in the case of digital 
                        transmissions--
                                    (I) applies technological 
                                measures that reasonably 
                                prevent--
                                            (aa) retention of 
                                        the work in accessible 
                                        form by recipients of 
                                        the transmission from 
                                        the transmitting body 
                                        or institution for 
                                        longer than the class 
                                        session; and
                                            (bb) unauthorized 
                                        further dissemination 
                                        of the work in 
                                        accessible form by such 
                                        recipients to others; 
                                        and
                                    (II) does not engage in 
                                conduct that could reasonably 
                                be expected to interfere with 
                                technological measures used by 
                                copyright owners to prevent 
                                such retention or unauthorized 
                                further dissemination;
The exemptions provided under paragraph (5) shall not be taken 
into account in any administrative, judicial, or other 
governmental proceeding to set or adjust the royalties payable 
to copyright owners for the public performance or display of 
their works. Royalties payable to copyright owners for any 
public performance or display of their works other than such 
performances or displays as are exempted under paragraph (5) 
shall not be diminished in any respect as a result of such 
exemption.
            In paragraph (2), the term ``mediated instructional 
        activities'' with respect to the performance or display 
        of a work by digital transmission under this section 
        refers to activities that use such work as an integral 
        part of the class experience, controlled by or under 
        the actual supervision of the instructor and analogous 
        to the type of performance or display that would take 
        place in a live classroom setting. The term does not 
        refer to activities that use, in 1 or more class 
        sessions of a single course, such works as textbooks, 
        course packs, or other material in any media, copies or 
        phonorecords of which are typically purchased or 
        acquired by the students in higher education for their 
        independent use and retention or are typically 
        purchased or acquired for elementary and secondary 
        students for their possession and independent use.
            For purposes of paragraph (2), accreditation--
                    (A) with respect to an institution 
                providing post-secondary education, shall be as 
                determined by a regional or national 
                accrediting agency recognized by the Council on 
                Higher Education Accreditation or the United 
                States Department of Education; and
                    (B) with respect to an institution 
                providing elementary or secondary education, 
                shall be as recognized by the applicable state 
                certification or licensing procedures.
            For purposes of paragraph (2), no governmental body 
        or accredited nonprofit educational institution shall 
        be liable for infringement by reason of the transient 
        or temporary storage of material carried out through 
        the automatic technical process of a digital 
        transmission of the performance or display of that 
        material as authorized under paragraph (2). No such 
        material stored on the system or network controlled or 
        operated by the transmitting body or institution under 
        this paragraph shall be maintained on such system or 
        network in a manner ordinarily accessible to anyone 
        other than anticipated recipients. No such copy shall 
        be maintained on the system or network in a manner 
        ordinarily accessible to such anticipated recipients 
        for a longer period than is reasonably necessary to 
        facilitate the transmissions for which it was made.

           *       *       *       *       *       *       *

Sec. 112. Limitations on exclusive rights: Ephemeral recordings

    (a) * * *

           *       *       *       *       *       *       *

    (f)(1) Notwithstanding the provisions of section 106, and 
without limiting the application of subsection (b), it is not 
an infringement of copyright for a governmental body or other 
nonprofit educational institution entitled under section 110(2) 
to transmit a performance or display to make copies or 
phonorecords of a work that is in digital form and, solely to 
the extent permitted in paragraph (2), of a work that is in 
analog form, embodying the performance or display to be used 
for making transmissions authorized under section 110(2), if--
            (A) such copies or phonorecords are retained and 
        used solely by the body or institution that made them, 
        and no further copies or phonorecords are reproduced 
        from them, except as authorized under section 110(2); 
        and
            (B) such copies or phonorecords are used solely for 
        transmissions authorized under section 110(2).
    (2) This subsection does not authorize the conversion of 
print or other analog versions of works into digital formats, 
except that such conversion is permitted hereunder, only with 
respect to the amount of such works authorized to be performed 
or displayed under section 110(2), if--
            (A) no digital version of the work is available to 
        the institution; or
            (B) the digital version of the work that is 
        available to the institution is subject to 
        technological protection measures that prevent its use 
        for section 110(2).
    [(f)] (g) The transmission program embodied in a copy or 
phonorecord made under this section is not subject to 
protection as a derivative work under this title except with 
the express consent of the owners of copyright in the 
preexisting works employed in the program.

           *       *       *       *       *       *       *

CHAPTER 8--COPYRIGHT ARBITRATION ROYALTY PANELS

           *       *       *       *       *       *       *

Sec. 802. Membership and proceedings of copyright arbitration royalty 
                    panels

    (a) * * *

           *       *       *       *       *       *       *

    (c) Arbitration Proceedings.--Copyright arbitration royalty 
panels shall conduct arbitration proceedings, subject to 
subchapter II of chapter 5 of title 5, for the purpose of 
making their determinations in carrying out the purposes set 
forth in section 801. The arbitration panels shall act on the 
basis of a fully documented written record, prior decisions of 
the Copyright Royalty Tribunal, prior copyright arbitration 
panel determinations, and rulings by the Librarian of Congress 
under section 801(c). Any copyright owner who claims to be 
entitled to royalties under section 111, 112, 114, 116, or 119, 
any transmitting organization entitled to a statutory license 
under section [112(f)] 112(g), any person entitled to a 
statutory license under section 114(d), any person entitled to 
a compulsory license under section 115, or any interested 
copyright party who claims to be entitled to royalties under 
section 1006, may submit relevant information and proposals to 
the arbitration panels in proceedings applicable to such 
copyright owner or interested copyright party, and any other 
person participating in arbitration proceedings may submit such 
relevant information and proposals to the arbitration panel 
conducting the proceedings. In ratemaking proceedings, the 
parties to the proceedings shall bear the entire cost thereof 
in such manner and proportion as the arbitration panels shall 
direct. In distribution proceedings, the parties shall bear the 
cost in direct proportion to their share of the distribution.

           *       *       *       *       *       *       *

                           Markup Transcript

                            BUSINESS MEETING

                        WEDNESDAY, JULY 17, 2002

                  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.
    Chairman Sensenbrenner. The Committee will be in order.

           *       *       *       *       *       *       *

    The next item on the agenda is the adoption of Senate 487, 
the Technology Education, and Copyright Harmonization Act of 
2001. The Chair recognizes the gentleman from North Carolina, 
Mr. Coble, for a motion.
    Mr. Coble. Mr. Chairman, the Subcommittee on Courts, the 
Internet, and Intellectual Property reports favorably the bill 
S. 487 and moves its favorable recommendation to the full 
House.
    Chairman Sensenbrenner. Without objection, S. 487 will be 
considered as read and open for amendment at any point.
    [The bill, S. 487, follows:]
    
    
    Chairman Sensenbrenner. The Chair recognizes the gentleman 
from North Carolina to strike the last word.
    Mr. Coble. Mr. Chairman, the Copyright Act contains 
provisions outlining permissible uses of copyrighted material 
for educational purposes, such as fair use and other 
educational exemptions from copyright infringement. These 
provisions were written more than two decades ago, however, 
prior to the advent of digital technologies. Accordingly, the 
purpose of S. 487 is to update the Copyright Act by 
appropriately striking a balance between the rights of 
copyright owners and the ability of users to access copyrighted 
material via the Internet and other media for educational 
purposes.
    Mr. Chairman and colleagues, this bill is popularly known 
as the Distance Education or the Teach Act. The legislation 
makes three basic changes to current law.
    First, the bill eliminates the current eligibility 
requirements for distance learning exemption that the 
instruction occur in a physical classroom or that special 
circumstances prevent the attendance of students in the 
classroom.
    Second, the bill clarifies that the distance learning 
exemption covers the transient or temporary copies that may 
occur through the automatic technical process of transmitting 
material over the Internet.
    Third, and finally, S. 487 amends the Copyright Act to 
allow educators to show reasonable and limited portions of 
dramatic literary and musical works, audiovisual works, and 
sound recordings, in addition to the complete versions of non-
dramatic literary and musical works which are currently 
exempted.
    Mr. Chairman, S. 487 is a product of bipartisan negotiation 
and in my opinion will greatly assist the education community 
without compromising the rights of copyright holders. I urge 
its adoption and yield back the balance of my time.
    Chairman Sensenbrenner. The gentleman from Michigan, Mr. 
Conyers, moves to strike the last word.
    Mr. Conyers. Thank you. On this side, we completely agree 
with the gentleman from North Carolina, Mr. Coble, and I have a 
statement I'd like to enter into the record.
    Chairman Sensenbrenner. Without objection, all Members may 
enter opening statements in the record at this point.
    [The prepared statement of Mr. Conyers follows:]
Prepared Statement of the Honorable John Conyers, Jr., a Representative 
                 in Congress From the State of Michigan
    There are many divides when it comes to who should have access to 
copyrighted content and how, but we all can agree that teachers and 
students should have access to books, music, and other works that are 
used to enhance the learning process and spur academic debate. This is 
important because more and more people are using computer for 
educational reasons, from doing research to communicating with teachers 
over the Internet.
    Unfortunately, the distance learning exemption of the Copyright 
Act, which is designed to let teachers distribute copyrighted content 
to students without paying royalties, has not kept up with the times. 
The law does not let educators use copyrighted content in online 
classrooms, where teachers and students meet on a virtual campus 
instead of an actual one.
    Fortunately, the content owners and educators were able to arrive 
at this compromise legislation to update the exemption. S. 487 makes 
several important changes to current law. First, it eliminates the 
requirement for the distance learning exemption that the instruction 
occur in a physical classroom. This is important because, in today's 
learning environment, many students attend class in cyberspace.
    Second, to make sure no one takes advantage of the exemption and 
distributes the content to make money, schools claiming the exemption 
must not only institute policies regarding the use copyrighted content 
but also ensure they are not used illegally.
    Third, to protect those whose livelihood depends on royalties from 
distance learning materials themselves, the bill excludes from the 
exemption any works produced or marketed for that purpose.
    Finally, the bill tells the PTO to report to Congress on the 
availability and development of technological measures to protect 
copyrighted content from infringement. This report will tell us what 
technologies are available to facilitate distance learning while 
deterring infringement.
    This legislation is an important step in modernizing our 
educational systems and is a remarkable signal of how creators and 
users of intellectual property can work together to resolve their 
differences.
    I urge my colleagues to vote ``Yes'' on this legislation.

    [The prepared statement of Mr. Berman follows:]
Prepared Statement of the Honorable Howard L. Berman, a Representative 
                in Congress From the State of California
    Mr. Chairman,
    Thank you for calling this markup on S. 487, the ``Technology, 
Education and Copyright Harmonization Act.'' I think it is important 
that we enact this legislation before the 107th Congress adjourns, and 
I commend you for moving forward today.
    This bill represents an excellent compromise reached after much 
deliberation in the Senate. It is my understanding the compromise is so 
delicate that any amendments could end up scuttling the entire bill. 
Therefore, I encourage my fellow Committee members to resist the urge 
to offer even well-meaning amendments. For my own part, I will resist 
the urge to offer an amendment even though there is a strong argument 
to be made that the TEACH Act should be coupled with legislation 
addressing state sovereign immunity for copyright infringement.
    This bill represents a significant revision of copyright law. Under 
certain circumstances, it would exempt a variety of entities from 
copyright infringement liability if they digitize and place online the 
copyrighted works of others.
    This significant, additional restriction on copyrights is justified 
by the critical importance and unbounded promise of distance education. 
With distance education, we can help level the playing field by 
bringing the tools of success to those students who have the least 
access to resources.
    Widespread use of distance education does bring with it many 
concerns about down-stream distribution of copyrighted materials, and 
it is important to continue to incentivize development of new education 
products. For these reasons, the bill includes requirements for the 
distance educators to use technology to protect copyrighted materials.
    Legislation works best when the interested parties can find a 
workable compromise. I appreciate that this bill is the result of much 
blood, sweat and tears, and I fully support the compromise. I urge my 
colleagues to move this bill without amendment.
    I yield back the balance of my time.

    [The prepared statement of Mr. Issa follows:]
 Prepared Statement of the Honorable Darrell E. Issa, a Representative 
                in Congress From the State of California
    I am a very strong proponent of Distance Education. I believe this 
type of learning will continue to grow as new technology becomes 
available and more affordable to all of us.
    Last year, Representative Boucher and I worked together to craft 
H.R. 2000, which is the exact text of this Senate Bill 487, but with an 
added exception for public libraries.
    While I would like to see public libraries become more involved in 
distance education, especially those serving rural areas, I realize 
this bill has passed the Senate and is on the fast track for passage by 
the full House. I have received some assurances that public libraries 
will have protection under S. 487. I will not offer an amendment today, 
but I will make certain that if public libraries are left out of 
distance education, I will do all I can to remedy the situation in the 
future.

    Chairman Sensenbrenner. Are there amendments? If there are 
not amendments, in the absence of a reporting quorum the 
previous question is ordered.
    [Intervening business.]
    The Committee now returns to the pending unfinished 
business upon which the previous question was ordered on Senate 
487. The Chair notes the presence of a reporting quorum. Those 
in favor of reporting the bill favorably will say aye. Opposed, 
no?
    The ayes appear to have it. The ayes have it and the motion 
to report favorably is agreed to. 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 the House rules, in which to 
submit additional dissenting, supplemental, or minority views.

                                
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