`[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 2037 Placed on Calendar Senate (PCS)]





                                                       Calendar No. 358

105th CONGRESS

  2d Session

                                S. 2037

_______________________________________________________________________

                                 A BILL

To amend title 17, United States Code, to implement the WIPO Copyright 
  Treaty and the WIPO Performances and Phonograms Treaty, to provide 
limitations on copyright liability relating to material online, and for 
                            other purposes.

_______________________________________________________________________

                              May 6, 1998

                 Read twice and placed on the calendar





                                                       Calendar No. 358
105th CONGRESS
  2d Session
                                S. 2037

To amend title 17, United States Code, to implement the WIPO Copyright 
  Treaty and the WIPO Performances and Phonograms Treaty, to provide 
limitations on copyright liability relating to material online, and for 
                            other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 6, 1998

Mr. Hatch, from the Committee on the Judiciary, reported the following 
     original bill; which was read twice and placed on the calendar

_______________________________________________________________________

                                 A BILL


 
To amend title 17, United States Code, to implement the WIPO Copyright 
  Treaty and the WIPO Performances and Phonograms Treaty, to provide 
limitations on copyright liability relating to material online, and for 
                            other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Digital Millennium Copyright Act of 
1998''.

SEC. 2. TABLE OF CONTENTS.

Sec. 1. Short title.
Sec. 2. Table of contents.
                 TITLE I--WIPO TREATIES IMPLEMENTATION

Sec. 101. Short title.
Sec. 102. Technical amendments.
Sec. 103. Copyright protection systems and copyright management 
                            information.
Sec. 104. Conforming amendment.
Sec. 105. Effective date.
          TITLE II--INTERNET COPYRIGHT INFRINGEMENT LIABILITY

Sec. 201. Short title.
Sec. 202. Limitations on liability for Internet copyright infringement.
Sec. 203. Conforming amendment.
Sec. 204. Liability of educational institutions for online infringement 
                            of copyright.
Sec. 205. Effective date.
               TITLE III--COMPUTER MAINTENANCE OR REPAIR

Sec. 301. Limitation on exclusive rights; computer programs.
   TITLE IV--DISTANCE EDUCATION; EXEMPTION FOR LIBRARIES AND ARCHIVES

Sec. 401. Ephemeral recordings.
Sec. 402. Limitations on exclusive rights; distance education.
Sec. 403. Exemption for libraries and archives.

                 TITLE I--WIPO TREATIES IMPLEMENTATION

SEC. 101. SHORT TITLE.

    This Title may be cited as the ``WIPO Copyright and Performances 
and Phonograms Treaties Implementation Act of 1998''.

SEC. 102. TECHNICAL AMENDMENTS.

    (a) Section 101 of title 17, United States Code, is amended--
            (1) by deleting the definition of ``Berne Convention 
        work'';
            (2) in the definition of ``The `country of origin' of a 
        Berne Convention work'', by deleting ``The `country of origin' 
        of a Berne Convention work,'', capitalizing the first letter of 
        the word ``for'', deleting ``is the United States'' after ``For 
purposes of section 411,'', and inserting ``a work is a `United States 
work' only'' after ``For purposes of section 411,'';
            (3) in subsection (1)(B) of the definition of ``The 
        `country of origin' of a Berne Convention work'', by inserting 
        ``treaty party or parties'' and deleting ``nation or nations 
        adhering to the Berne Convention'';
            (4) in subsection (1)(C) of the definition of ``The 
        `country of origin' of a Berne Convention work'', by inserting 
        ``is not a treaty party'' and deleting ``does not adhere to the 
        Berne Convention'';
            (5) in subsection (1)(D) of the definition of ``The 
        `country of origin' of a Berne Convention work'', by inserting 
        ``is not a treaty party'' and deleting ``does not adhere to the 
        Berne Convention'';
            (6) in section (3) of the definition of ``The `country of 
        origin' of a Berne Convention work'', by deleting ``For the 
        purposes of section 411, the `country of origin' of any other 
        Berne Convention work is not the United States.'';
            (7) after the definition for ``fixed'', by inserting ``The 
        `Geneva Phonograms Convention' is the Convention for the 
        Protection of Producers of Phonograms Against Unauthorized 
        Duplication of Their Phonograms, concluded at Geneva, 
        Switzerland on October 29, 1971.'';
            (8) after the definition for ``including'', by inserting 
        ``An `international agreement' is--
            ``(1) the Universal Copyright Convention;
            ``(2) the Geneva Phonograms Convention;
            ``(3) the Berne Convention;
            ``(4) the WTO Agreement;
            ``(5) the WIPO Copyright Treaty;
            ``(6) the WIPO Performances and Phonograms Treaty; and
            ``(7) any other copyright treaty to which the United States 
        is a party.'';
            (9) after the definition for ``transmit'', by inserting ``A 
        `treaty party' is a country or intergovernmental organization 
        other than the United States that is a party to an 
        international agreement.'';
            (10) after the definition for ``widow'', by inserting ``The 
        `WIPO Copyright Treaty' is the WIPO Copyright Treaty concluded 
        at Geneva, Switzerland, on December 20, 1996.'';
            (11) after the definition for ``The `WIPO Copyright 
        Treaty', by inserting ``The `WIPO Performances and Phonograms 
        Treaty' is the WIPO Performances and Phonograms Treaty 
        concluded at Geneva, Switzerland on December 20, 1996.''; and
            (12) by inserting, after the definition for ``work for 
        hire'', ``The `WTO Agreement' is the Agreement Establishing the 
        World Trade Organization entered into on April 15, 1994. The 
        terms `WTO Agreement' and `WTO member country' have the 
        meanings given those terms in paragraphs (9) and (10) 
        respectively of section 2 of the Uruguay Round Agreements 
        Act.''.
    (b) Section 104 of title 17, United States Code, is amended--
            (1) in section (b)(1), by deleting ``foreign nation that is 
        a party to a copyright treaty to which the United States is 
        also a party'' and inserting ``treaty party'';
            (2) in section (b)(2) by deleting ``party to the Universal 
        Copyright Convention'' and inserting ``treaty party'';
            (3) by renumbering the present section (b)(3) as (b)(5) and 
        moving it to its proper sequential location and inserting a new 
        section (b)(3) to read:
            ``(3) the work is a sound recording that was first fixed in 
        a treaty party; or'';
            (4) in section (b)(4) by deleting ``Berne Convention work'' 
        and inserting ``pictorial, graphic or sculptural work that is 
        incorporated in a building or other structure, or an 
        architectural work that is embodied in a building and the 
        building or structure is located in the United States or a 
        treaty party'';
            (5) by renumbering present section (b)(5) as (b)(6);
            (6) by inserting a new section (b)(7) to read:
            ``(7) For purposes of paragraph (2), a work that is 
        published in the United States or a treaty party within thirty 
        days of publication in a foreign nation that is not a treaty 
        party shall be considered first published in the United States 
        or such treaty party as the case may be.''; and
            (7) by inserting a new section (d) to read:
    ``(d) Effect of Phonograms Treaties.--Notwithstanding the 
provisions of subsection (b), no works other than sound recordings 
shall be eligible for protection under this title solely by virtue of 
the adherence of the United States to the Geneva Phonograms Convention 
or the WIPO Performances and Phonograms Treaty.''.
    (c) Section 104A(h) of title 17, United States Code, is amended--
            (1) in paragraph (1), by deleting ``(A) a nation adhering 
        to the Berne Convention or a WTO member country; or (B) subject 
        to a Presidential proclamation under subsection (g),'' and 
        inserting--
                    ``(A) a nation adhering to the Berne Convention;
                    ``(B) a WTO member country;
                    ``(C) a nation adhering to the WIPO Copyright 
                Treaty;
                    ``(D) a nation adhering to the WIPO Performances 
                and Phonograms Treaty; or
                    ``(E) subject to a Presidential proclamation under 
                subsection (g)'';
            (2) paragraph (3) is amended to read as follows:
            ``(3) the term `eligible country' means a nation, other 
        than the United States that--
                    ``(A) becomes a WTO member country after the date 
                of enactment of the Uruguay Round Agreements Act;
                    ``(B) on the date of enactment is, or after the 
                date of enactment becomes, a nation adhering to the 
                Berne Convention;
                    ``(C) adheres to the WIPO Copyright Treaty;
                    ``(D) adheres to the WIPO Performances and 
                Phonograms Treaty; or
                    ``(E) after such date of enactment becomes subject 
                to a proclamation under subsection (g).'';
            (3) in paragraph (6)(C)(iii), by deleting ``and'' after 
        ``eligibility'';
            (4) at the end of paragraph (6)(D), by deleting the period 
        and inserting ``; and'';
            (5) by adding the following new paragraph (6)(E):
                    ``(E) if the source country for the work is an 
                eligible country solely by virtue of its adherence to 
                the WIPO Performances and Phonograms Treaty, is a sound 
                recording.'';
            (6) in paragraph (8)(B)(i), by inserting ``of which'' 
        before ``the majority'' and striking ``of eligible countries''; 
        and
            (7) by deleting paragraph (9).
    (d) Section 411 of title 17, United States Code, is amended--
            (1) in subsection (a), by deleting ``actions for 
        infringement of copyright in Berne Convention works whose 
        country of origin is not the United States and''; and
            (2) in subsection (a), by inserting ``United States'' after 
        ``no action for infringement of the copyright in any''.
    (e) Section 507(a) of title 17, United States Code, is amended by 
adding at the beginning, ``Except as expressly provided elsewhere in 
this title,''.

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

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

       ``CHAPTER 12--COPYRIGHT PROTECTION AND MANAGEMENT SYSTEMS

``Sec.
``1201. Circumvention of copyright protection systems.
``1202. Integrity of copyright management information.
``1203. Civil remedies.
``1204. Criminal offenses and penalties.
``1205. Savings Clause.
``Sec. 1201. Circumvention of copyright protection systems
    ``(a) Violations Regarding Circumvention of Technological 
Protection Measures.--(1) No person shall circumvent a technological 
protection measure that effectively controls access to a work protected 
under this title.
    ``(2) No person shall manufacture, import, offer to the public, 
provide or otherwise traffic in any technology, product, service, 
device, component, or part thereof that--
            ``(A) is primarily designed or produced for the purpose of 
        circumventing a technological protection measure that 
        effectively controls access to a work protected under this 
        title;
            ``(B) has only limited commercially significant purpose or 
        use other than to circumvent a technological protection measure 
that effectively controls access to a work protected under this title; 
or
            ``(C) is marketed by that person or another acting in 
        concert with that person with that person's knowledge for use 
        in circumventing a technological protection measure that 
        effectively controls access to a work protected under this 
        title.
    ``(3) As used in this subsection--
            ``(A) to `circumvent a technological protection measure' 
        means to descramble a scrambled work, to decrypt an encrypted 
        work, or otherwise to avoid, bypass, remove, deactivate, or 
        impair a technological protection measure, without the 
        authority of the copyright owner; and
            ``(B) a technological protection measure `effectively 
        controls access to a work' if the measure, in the ordinary 
        course of its operation, requires the application of 
        information, or a process or a treatment, with the authority of 
        the copyright owner, to gain access to the work.
    ``(b) Additional Violations.--(1) No person shall manufacture, 
import, offer to the public, provide, or otherwise traffic in any 
technology, product, service, device, component, or part thereof that--
            ``(A) is primarily designed or produced for the purpose of 
        circumventing protection afforded by a technological protection 
        measure that effectively protects a right of a copyright owner 
        under this title in a work or a portion thereof;
            ``(B) has only limited commercially significant purpose or 
        use other than to circumvent protection afforded by a 
        technological protection measure that effectively protects a 
        right of a copyright owner under this title in a work or a 
        portion thereof; or
            ``(C) is marketed by that person or another acting in 
        concert with that person with that person's knowledge for use 
        in circumventing protection afforded by a technological 
        protection measure that effectively protects a right of a 
        copyright owner under this title in a work or a portion 
        thereof.
    ``(2) As used in this subsection--
            ``(A) to `circumvent protection afforded by a technological 
        protection measure' means avoiding, bypassing, removing, 
        deactivating, or otherwise impairing a technological protection 
        measure; and
            ``(B) a technological protection measure `effectively 
        protects a right of a copyright owner under this title' if the 
        measure, in the ordinary course of its operation, prevents, 
        restricts, or otherwise limits the exercise of a right of a 
        copyright owner under this title.
    ``(c) Importation.--The importation into the United States, the 
sale for importation, or the sale within the United States after 
importation by the owner, importer, or consignee of any technology, 
product, service, device, component, or part thereof as described in 
subsection (a) or (b) shall be actionable under section 337 of the 
Tariff Act of 1930 (19 U.S.C. 1337).
    ``(d) Other Rights, Etc., Not Affected.--(1) Nothing in this 
section shall affect rights, remedies, limitations, or defenses to 
copyright infringement, including fair use, under this title.
    ``(2) Nothing in this section shall enlarge or diminish vicarious 
or contributory liability for copyright infringement in connection with 
any technology, product, service, device, component or part thereof.
    ``(3) Nothing in this section shall require that the design of, or 
design and selection of parts and components for, a consumer 
electronics, telecommunications, or computing product provide for a 
response to any particular technological protection measure, so long as 
such part or component or the product, in which such part or component 
is integrated, does not otherwise fall within the prohibitions of 
subsections (a)(2) or (b)(1).
    ``(e) Exemption for Nonprofit Libraries, Archives, and Educational 
Institutions.--(1) A nonprofit library, archives, or educational 
institution which gains access to a commercially exploited copyrighted 
work solely in order to make a good faith determination of whether to 
acquire a copy of that work for the sole purpose of engaging in conduct 
permitted under this title shall not be in violation of subsection 
(a)(1). A copy of a work to which access has been gained under this 
paragraph--
            ``(A) may not be retained longer than necessary to make 
        such good faith determination; and
            ``(B) may not be used for any other purpose.
    ``(2) The exemption made available under paragraph (1) shall only 
apply with respect to a work when an identical copy of that work is not 
reasonably available in another form.
    ``(3) A nonprofit library, archives, or educational institution 
that willfully for the purpose of commercial advantage or financial 
gain violates paragraph (1)--
            ``(A) shall, for the first offense, be subject to the civil 
        remedies under section 1203; and
            ``(B) shall, for repeated or subsequent offenses, in 
        addition to the civil remedies under section 1203, forfeit the 
        exemption provided under paragraph (1).
    ``(4) This subsection may not be used as a defense to a claim under 
subsection (a)(2) or (b), nor may this subsection permit a nonprofit 
library, archives, or educational institution to manufacture, import, 
offer to the public, provide, or otherwise traffic in any technology 
which circumvents a technological protection measure.
    ``(5) In order for a library or archives to qualify for the 
exemption under this subsection, the collections of that library or 
archives shall be--
            ``(A) open to the public; or
            ``(B) available not only to researchers affiliated with the 
        library or archives or with the institution of which it is a 
        part, but also to other persons doing research in a specialized 
        field.
    ``(f) Law Enforcement and Intelligence Activities.--This section 
does not prohibit any lawfully authorized investigative, protective, or 
intelligence activity of an officer, agent or employee of the United 
States, a State, or a political subdivision of a State, or a person 
acting pursuant to a contract with such entities.
    ``(g) Notwithstanding the provisions of subsection 1201(a)(1), a 
person who has lawfully obtained the right to use a copy of a computer 
program may circumvent a technological protection measure that 
effectively controls access to a particular portion of that program for 
the sole purpose of identifying and analyzing those elements of the 
program that are necessary to achieve interoperability of an 
independently created computer program with other programs, and that 
have not previously been readily available to the person engaging in 
the circumvention, to the extent any such acts of identification and 
analysis do not constitute infringement under this title.
    ``(h) Notwithstanding the provisions of subsections 1201(a)(2) and 
(b), a person may develop and employ technological means to circumvent 
for the identification and analysis described in subsection (g), or for 
the limited purpose of achieving interoperability of an independently 
created computer program with other programs, where such means are 
necessary to achieve such interoperability, to the extent that doing so 
does not constitute infringement under this title.
    ``(i) The information acquired through the acts permitted under 
subsection (g), and the means permitted under subsection (h), may be 
made available to others if the person referred to in subsections (g) 
or (h) provides such information or means solely for the purpose of 
achieving interoperability of an independently created computer program 
with other programs, and to the extent that doing so does not 
constitute infringement under this title, or violate applicable law 
other than this title.
    ``(j) For purposes of subsections (g), (h) and (i), the term 
``interoperability'' means the ability of computer programs to exchange 
information, and for such programs mutually to use the information 
which has been exchanged.
    ``(k) In applying subsection (a) to a component or part, the court 
may consider the necessity for its intended and actual incorporation in 
a technology, product, service or device, which (i) does not itself 
violate the provisions of this chapter and (ii) has the sole purpose to 
prevent the access of minors to material on the Internet.''
``Sec. 1202. Integrity of copyright management information
    ``(a) False Copyright Management Information.--No person shall 
knowingly--
            ``(1) provide copyright management information that is 
        false, or
            ``(2) distribute or import for distribution copyright 
        management information that is false, with the intent to 
        induce, enable, facilitate or conceal infringement.
    ``(b) Removal or Alteration of Copyright Management Information.--
No person shall, without the authority of the copyright owner or the 
law--
            ``(1) intentionally remove or alter any copyright 
        management information,
            ``(2) distribute or import for distribution copyright 
        management information knowing that the copyright management 
        information has been removed or altered without authority of 
        the copyright owner or the law, or
            ``(3) distribute, import for distribution, or publicly 
        perform works, copies of works, or phonorecords, knowing that 
        copyright management information has been removed or altered 
        without authority of the copyright owner or the law, knowing, 
        or, with respect to civil remedies under section 1203, having 
        reasonable grounds to know, that it will induce, enable, 
        facilitate or conceal an infringement of any right under this 
        title.
    ``(c) Definition.--As used in this chapter, `copyright management 
information' means the following information conveyed in connection 
with copies or phonorecords of a work or performances or displays of a 
work, including in digital form--
            ``(1) the title and other information identifying the work, 
        including the information set forth on a notice of copyright;
            ``(2) the name of, and other identifying information about, 
        the author of a work;
            ``(3) the name of, and other identifying information about, 
        the copyright owner of the work, including the information set 
        forth in a notice of copyright;
            ``(4) with the exception of public performances of works by 
        radio and television broadcast stations the name of, and other 
        identifying information about, a performer whose performance is 
        fixed in a work other than an audiovisual work;
            ``(5) with the exception of public performances of works by 
        radio and television broadcast stations, in the case of an 
        audiovisual work, the name of, and other identifying 
        information about, a writer, performer, or director who is 
        credited in the audiovisual work;
            ``(6) identifying numbers of symbols referring to such 
        information or links to such information; or
            ``(7) such other information as the Register of Copyrights 
        may prescribe by regulation, except that the Register of 
        Copyrights may not require the provision of any information 
        concerning the user of a copyrighted work.
    ``(d) Law Enforcement and Intelligence Activities.--This section 
does not prohibit any lawfully authorized investigative, protective, or 
intelligence activity of an officer, agent, or employee of the United 
States, a State, or a political subdivision of a State, or a person 
acting pursuant to a contract with such entities.
    ``(e) Limitations on Liability.--
            ``(1) Analog transmissions.--In the case of an analog 
        transmission, a person who is making transmissions in its 
        capacity as a radio or television broadcast station, or as a 
        cable system, or someone who provides programming to such 
        station or system, shall not be liable for a violation of 
        subsection (b) if--
                    ``(A) avoiding the activity that constitutes such 
                violation is not technically feasible or would create 
                an undue financial hardship on such person; and
                    ``(B) such person did not intend, by engaging in 
                such activity, to induce, enable, facilitate or conceal 
                infringement.
            ``(2) Digital transmissions.--
                    ``(A) If a digital transmission standard for the 
                placement of copyright management information for a 
                category of works is set in a voluntary, consensus 
                standard-setting process involving a representative 
                cross-section of radio or television broadcast stations 
                or cable systems and copyright owners of a category of 
                works that are intended for public performance by such 
                stations or systems, a person identified in subsection 
                (e)(1) shall not be liable for a violation of 
                subsection (b) with respect to the particular copyright 
                management information addressed by such standard if--
                            ``(i) the placement of such information by 
                        someone other than such person is not in 
                        accordance with such standard; and
                            ``(ii) the activity that constitutes such 
                        violation is not intended to induce, enable, 
                        facilitate or conceal infringement.
                    ``(B) Until a digital transmission standard has 
                been set pursuant to subparagraph (A) with respect to 
                the placement of copyright management information for a 
                category or works, a person identified in subsection 
                (e)(1) shall not be liable for a violation of 
                subsection (b) with respect to such copyright 
                management information, where the activity that 
                constitutes such violation is not intended to induce, 
                enable, facilitate or conceal infringement, if--
                            ``(i) the transmission of such information 
                        by such person would result in a perceptible 
                        visual or aural degradation of the digital 
                        signal; or
                            ``(ii) the transmission of such information 
                        by such person would conflict with--
                                    ``(I) an applicable government 
                                regulation relating to transmission of 
                                information in a digital signal;
                                    ``(II) an applicable industry-wide 
                                standard relating to the transmission 
                                of information in a digital signal that 
                                was adopted by a voluntary consensus 
                                standards body prior to the effective 
                                date of this section; or
                                    ``(III) an applicable industry-wide 
                                standard relating to the transmission 
                                of information in a digital signal that 
                                was adopted in a voluntary, consensus 
                                standards-setting process open to 
                                participation by a representative 
                                cross-section of radio or television 
                                broadcast stations or cable systems and 
                                copyright owners of a category of works 
                                that are intended for public 
                                performance by such stations or 
                                systems.
``Sec. 1203. Civil remedies
    ``(a) Civil Actions.--Any person injured by a violation of section 
1201 or 1202 may bring a civil action in an appropriate United States 
district court for such violation.
    ``(b) Powers of the Court.--In an action brought under subsection 
(a), the court--
            ``(1) may grant temporary and permanent injunctions on such 
        terms as it deems reasonable to prevent or restrain a 
        violation;
            ``(2) at any time while an action is pending, may order the 
        impounding, on such terms as it deems reasonable, of any device 
        or product that is in the custody or control of the alleged 
        violator and that the court has reasonable cause to believe was 
        involved in a violation;
            ``(3) may award damages under subsection (c);
            ``(4) in its discretion may allow the recovery of costs by 
        or against any party other than the United States or an officer 
        thereof;
            ``(5) in its discretion may award reasonable attorney's 
        fees to the prevailing party; and
            ``(6) may, as part of a final judgment or decree finding a 
        violation, order the remedial modification or the destruction 
        of any device or product involved in the violation that is in 
        the custody or control of the violator or has been impounded 
        under paragraph (2).
    ``(c) Award of Damages.--
            ``(1) In general.--Except as otherwise provided in this 
        chapter, a person committing a violation of section 1201 or 
        1202 is liable for either--
                    ``(A) the actual damages and any additional profits 
                of the violator, as provided in paragraph (2), or
                    ``(B) statutory damages, as provided in paragraph 
                (3).
            ``(2) Actual damages.--The court shall award to the 
        complaining party the actual damages suffered by the party as a 
        result of the violation, and any profits of the violator that 
        are attributable to the violation and are not taken into 
        account in computing the actual damages, if the complaining 
        party elects such damages at any time before final judgment is 
        entered.
            ``(3) Statutory damages.--
                    ``(A) At any time before final judgment is entered, 
                a complaining party may elect to recover an award of 
                statutory damages for each violation of section 1201 in 
                the sum of not less than $200 or more than $2,500 per 
                act of circumvention, device, product, component, 
                offer, or performance of service, as the court 
                considers just.
                    ``(B) At any time before final judgment is entered, 
                a complaining party may elect to recover an award of 
                statutory damages for each violation of section 1202 in 
                the sum of not less than $2,500 or more than $25,000.
            ``(4) Repeated violations.--In any case in which the 
        injured party sustains the burden of proving, and the 
court finds, that a person has violated section 1201 or 1202 within 
three years after a final judgment was entered against the person for 
another such violation, the court may increase the award of damages up 
to triple the amount that would otherwise be awarded, as the court 
considers just.
            ``(5) Innocent violations.--
                    ``(A) In general.--The court in its discretion may 
                reduce or remit the total award of damages in any case 
                in which the violator sustains the burden of proving, 
                and the court finds, that the violator was not aware 
                and had no reason to believe that its acts constituted 
                a violation.
                    ``(B) Nonprofit library, archives, or educational 
                institutions.--In the case of a nonprofit library, 
                archives, or educational institution, the court shall 
                remit damages in any case in which the library, 
                archives, or educational institution sustains the 
                burden of proving, and the court finds, that the 
                library, archives, or educational institution was not 
                aware and had no reason to believe that its acts 
                constituted a violation.
``Sec. 1204. Criminal offenses and penalties
    ``(a) In General.--Any person who violates section 1201 or 1202 
willfully and for purposes of commercial advantage or private financial 
gain--
            ``(1) shall be fined not more than $500,000 or imprisoned 
        for not more than 5 years, or both for the first offense; and
            ``(2) shall be fined not more than $1,000,000 or imprisoned 
        for not more than 10 years, or both for any subsequent offense.
    ``(b) Limitation for Nonprofit Library, Archives, or Educational 
Institution.--Subsection (a) shall not apply to a nonprofit library, 
archives, or educational institution.
    ``(c) Statute of Limitations.--Notwithstanding section 507(a) of 
this title, no criminal proceeding shall be brought under this section 
unless such proceeding is commenced within five years after the cause 
of action arose.''.
``Sec. 1205. Savings Clause
    ``Nothing in this chapter abrogates, diminishes or weakens the 
provisions of, nor provides any defense or element of mitigation in a 
criminal prosecution or civil action under, any federal or state law 
that prevents the violation of the privacy of an individual in 
connection with the individual's use of the Internet.''.

SEC. 104. CONFORMING AMENDMENT.

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

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

SEC. 105. EFFECTIVE DATE.

    (a) In General.--Subject to subsection (b), the amendments made by 
this title shall take effect on the date of the enactment of this Act.
    (b) Amendments Relating to Certain International Agreements.--(1) 
The following shall take effect upon entry into force of the WIPO 
Copyright Treaty with respect to the United States:
            (A) paragraph (5) of the definition of ``international 
        agreement'' contained in section 101 of title 17, United States 
        Code, as amended by section 102(a)(8) of this title.
            (B) the amendment made by section 102(a)(10) of this title;
            (C) subparagraph (C) of section 104A(h)(1) of title 17, 
        United States Code, as amended by section 102(c)(1) of this 
        title; and
            (D) subparagraph (C) of section 104A(h)(3) of title 17, 
        United States Code, as amended by section 102(c)(2) of this 
        title.
    (2) The following shall take effect upon the entry into force of 
the WIPO Performances and Phonograms Treaty with respect to the United 
States:
            (A) paragraph (6) of the definition of ``international 
        agreement'' contained in section 101 of title 17, United States 
        Code, as amended by section 102(a)(8) of this title.
            (B) the amendment made by section 102(a)(11) of this title;
            (C) the amendment made by section 102(b)(7) of this title;
            (D) Subparagraph (D) of section 104A(h)(1) of title 17, 
        United States Code, as amended by section 102(c)(2) of this 
        title; and
            (E) the amendment made by section 102(c)(4) of this title; 
        and
            (F) the amendment made by section 102(c)(5) of this title.

          TITLE II--INTERNET COPYRIGHT INFRINGEMENT LIABILITY

SEC. 201. SHORT TITLE.

    This title may be cited as the ``Internet Copyright Infringement 
Liability Clarification Act of 1998''.

SEC. 202. LIMITATIONS ON LIABILITY FOR INTERNET COPYRIGHT INFRINGEMENT.

    (a) In General.--Chapter 5 of title 17, United States Code, is 
amended by adding after section 511 the following new section:
``Sec. 512. Liability of service providers for online infringement of 
              copyright
    ``(a) Digital Network Communications.--A service provider shall not 
be liable for monetary relief, or except as provided in subsection (i) 
for injunctive or other equitable relief, for infringement for the 
provider's transmitting, routing, or providing connections for, 
material through a system or network controlled or operated by or for 
the service provider, or the intermediate and transient storage of such 
material in the course of such transmitting, routing or providing 
connections, if--
            ``(1) it was initiated by or at the direction of a person 
        other than the service provider;
            ``(2) it is carried out through an automatic technical 
        process without selection of such material by the service 
        provider;
            ``(3) the service provider does not select the recipients 
        of such material except as an automatic response to the request 
        of another;
            ``(4) no such copy of such material made by the service 
        provider is maintained on the system or network in a manner 
        ordinarily accessible to anyone other than anticipated 
        recipients, and no such copy is maintained on the system or 
        network in a manner ordinarily accessible to the anticipated 
        recipients for a longer period than is reasonably necessary for 
        the communication; and
            ``(5) the material is transmitted without modification to 
        its content.
    ``(b) System Caching.--A service provider shall not be liable for 
monetary relief, or except as provided in subsection (i) for injunctive 
or other equitable relief, for infringement for the intermediate and 
temporary storage of material on the system or network controlled or 
operated by or for the service provider, where (i) such material is 
made available online by a person other than such service provider, 
(ii) such material is transmitted from the person described in clause 
(i) through such system or network to someone other than that person at 
the direction of such other person, and (iii) the storage is carried 
out through an automatic technical process for the purpose of making 
such material available to users of such system or network who 
subsequently request access to that material from the person described 
in clause (i), provided that:
            ``(1) such material is transmitted to such subsequent users 
        without modification to its content from the manner in which 
        the material otherwise was transmitted from the person 
        described in clause (i);
            ``(2) such service provider complies with rules concerning 
        the refreshing, reloading or other updating of such material 
        when specified by the person making that material available 
        online in accordance with an accepted industry standard data 
        communications protocol for the system or network through which 
        that person makes the material available; provided that the 
        rules are not used by the person described in clause (i) to 
        prevent or unreasonably impair such intermediate storage;
            ``(3) such service provider does not interfere with the 
        ability of technology associated with such material that 
        returns to the person described in clause (i) the information 
        that would have been available to such person if such material 
        had been obtained by such subsequent users directly from such 
        person, provided that such technology--
                    ``(A) does not significantly interfere with the 
                performance of the provider's system or network or with 
                the intermediate storage of the material;
                    ``(B) is consistent with accepted industry standard 
                communications protocols; and
                    ``(C) does not extract information from the 
                provider's system or network other than the information 
                that would have been available to such person if such 
                material had been accessed by such users directly from 
                such person;
            ``(4) either--
                    ``(A) the person described in clause (i) does not 
                currently condition access to such material; or
                    ``(B) if access to such material is so conditioned 
                by such person, by a current individual pre-condition, 
                such as a pre-condition based on payment of a fee, or 
                provision of a password or other information, the 
                service provider permits access to the stored material 
                in significant part only to users of its system or 
                network that have been so authorized and only in 
                accordance with those conditions; and
            ``(5) if the person described in clause (i) makes that 
        material available online without the authorization of the 
        copyright owner, then the service provider responds 
        expeditiously to remove, or disable access to, the material 
        that is claimed to be infringing upon notification of claimed 
        infringements described in subsection (c)(3); provided that the 
        material has previously been removed from the originating site, 
        and the party giving the notification includes in the 
        notification a statement confirming that such material has been 
        removed or access to it has been disabled or ordered to be 
        removed or have access disabled.
    ``(c) Information Stored on Service Providers.--
            ``(1) In general.--A service provider shall not be liable 
        for monetary relief, or except as provided in subsection (i) 
        for injunctive or other equitable relief, for infringement for 
        the storage at the direction of a user of material that resides 
        on a system or network controlled or operated by or for the 
        service provider, if the service provider--
                    ``(A)(i) does not have actual knowledge that the 
                material or activity is infringing,
                    ``(ii) in the absence of such actual knowledge, is 
                not aware of facts or circumstances from which 
                infringing activity is apparent, or
                    ``(iii) if upon obtaining such knowledge or 
                awareness, the service provider acts expeditiously to 
                remove or disable access to, the material;
                    ``(B) does not receive a financial benefit directly 
                attributable to the infringing activity, where the 
                service provider has the right and ability to control 
                such activity; and
                    ``(C) in the instance of a notification of claimed 
                infringement as described in paragraph (3), responds 
                expeditiously to remove, or disable access to, the 
                material that is claimed to be infringing or to be the 
                subject of infringing activity.
            ``(2) Designated agent.--The limitations on liability 
        established in this subsection apply only if the service 
        provider has designated an agent to receive notifications of 
claimed infringement described in paragraph (3), by substantially 
making the name, address, phone number, electronic mail address of such 
agent, and other contact information deemed appropriate by the Register 
of Copyrights, available through its service, including on its website, 
and by providing such information to the Copyright Office. The Register 
of Copyrights shall maintain a current directory of agents available to 
the public for inspection, including through the Internet, in both 
electronic and hard copy formats.
            ``(3) Elements of notification.--
                    ``(A) To be effective under this subsection, a 
                notification of claimed infringement means any written 
                communication provided to the service provider's 
                designated agent that includes substantially the 
                following:
                            ``(i) a physical or electronic signature of 
                        a person authorized to act on behalf of the 
                        owner of an exclusive right that is allegedly 
                        infringed;
                            ``(ii) identification of the copyrighted 
                        work claimed to have been infringed, or, if 
                        multiple such works at a single online site are 
                        covered by a single notification, a 
                        representative list of such works at that site;
                            ``(iii) identification of the material that 
                        is claimed to be infringing or to be the 
                        subject of infringing activity that is to be 
                        removed or access to which is to be disabled, 
                        and information reasonably sufficient to permit 
                        the service provider to locate the material;
                            ``(iv) information reasonably sufficient to 
                        permit the service provider to contact the 
                        complaining party, such as an address, 
                        telephone number, and, if available an 
                        electronic mail address at which the 
                        complaining party may be contacted;
                            ``(v) a statement that the complaining 
                        party has a good faith belief that use of the 
                        material in the manner complained of is not 
                        authorized by the copyright owner, or its 
                        agent, or the law; and
                            ``(vi) a statement that the information in 
                        the notification is accurate, and under penalty 
                        of perjury, that the complaining party has the 
                        authority to enforce the owner's rights that 
                        are claimed to be infringed.
                    ``(B) A notification from the copyright owner or 
                from a person authorized to act on behalf of the 
                copyright owner that fails substantially to conform to 
                the provisions of paragraph (3)(A) shall not be 
                considered under paragraph (1)(A) in determining 
                whether a service provider has actual knowledge or is 
                aware of facts or circumstances from which infringing 
                activity is apparent, provided that the provider 
                promptly attempts to contact the complaining party or 
                takes other reasonable steps to assist in the receipt 
                of notice under paragraph (3)(A) when the notice is 
provided to the service provider's designated agent and substantially 
satisfies the provisions of subparagraphs (3)(A)(ii), (iii), and (iv).
    ``(d) Information Location Tools.--A service provider shall not be 
liable for monetary relief, or except as provided in subsection (i) for 
injunctive or other equitable relief, for infringement for the provider 
referring or linking users to an online location containing infringing 
material or activity by using information location tools, including a 
directory, index, reference, pointer or hypertext link, if the 
provider--
            ``(1) does not have actual knowledge that the material or 
        activity is infringing or, in the absence of such actual 
        knowledge, is not aware of facts or circumstances from which 
        infringing activity is apparent;
            ``(2) does not receive a financial benefit directly 
        attributable to the infringing activity, where the service 
        provider has the right and ability to control such activity; 
        and
            ``(3) responds expeditiously to remove or disable the 
        reference or link upon notification of claimed infringement as 
        described in subsection (c)(3); provided that for the purposes 
        of this paragraph, the element in subsection (c)(3)(A)(iii) 
        shall be identification of the reference or link, to material 
        or activity claimed to be infringing, that is to be removed or 
        access to which is to be disabled, and information reasonably 
        sufficient to permit the service provider to locate such 
        reference or link.
    ``(e) Misrepresentations.--Any person who knowingly materially 
misrepresents under this section (1) that material or activity is 
infringing, or (2) that material or activity was removed or disabled by 
mistake or misidentification, shall be liable for any damages, 
including costs and attorneys' fees, incurred by the alleged infringer, 
by any copyright owner or copyright owner's authorized licensee, or by 
the service provider, who is injured by such misrepresentation, as the 
result of the service provider relying upon such misrepresentation in 
removing or disabling access to the material or activity claimed to be 
infringing, or in replacing the removed material or ceasing to disable 
access to it.
    ``(f) Replacement of Removed or Disabled Material and Limitation on 
Other Liability.--
            ``(1) Subject to paragraph (2) of this subsection, a 
        service provider shall not be liable to any person for any 
        claim based on the service provider's good faith disabling of 
        access to, or removal of, material or activity claimed to be 
        infringing or based on facts or circumstances from which 
        infringing activity is apparent, regardless of whether the 
        material or activity is ultimately determined to be infringing.
            ``(2) Paragraph (1) of this subsection shall not apply with 
        respect to material residing at the direction of a subscriber 
        of the service provider on a system or network controlled or 
        operated by or for the service provider that is removed, or to 
which access is disabled by the service provider pursuant to a notice 
provided under subsection (c)(1)(C), unless the service provider--
                    ``(A) takes reasonable steps promptly to notify the 
                subscriber that it has removed or disabled access to 
                the material;
                    ``(B) upon receipt of a counter notice as described 
                in paragraph (3), promptly provides the person who 
                provided the notice under subsection (c)(1)(C) with a 
                copy of the counter notice, and informs such person 
                that it will replace the removed material or cease 
                disabling access to it in ten business days; and
                    ``(C) replaces the removed material and ceases 
                disabling access to it not less than ten, nor more than 
                fourteen, business days following receipt of the 
                counter notice, unless its designated agent first 
                receives notice from the person who submitted the 
                notification under subsection (c)(1)(C) that such 
                person has filed an action seeking a court order to 
                restrain the subscriber from engaging in infringing 
                activity relating to the material on the service 
                provider's system or network.
            ``(3) To be effective under this subsection, a counter 
        notification means any written communication provided to the 
        service provider's designated agent that includes substantially 
        the following:
                    ``(A) a physical or electronic signature of the 
                subscriber;
                    ``(B) identification of the material that has been 
                removed or to which access has been disabled and the 
                location at which such material appeared before it was 
                removed or access was disabled;
                    ``(C) a statement under penalty of perjury that the 
                subscriber has a good faith belief that the material 
                was removed or disabled as a result of mistake or 
                misidentification of the material to be removed or 
                disabled;
                    ``(D) the subscriber's name, address and telephone 
                number, and a statement that the subscriber consents to 
                the jurisdiction of Federal Court for the judicial 
                district in which the address is located, or if the 
                subscriber's address is outside of the United States, 
                for any judicial district in which the service provider 
                may be found, and that the subscriber will accept 
                service of process from the person who provided notice 
                under subsection (c)(1)(C) or agent of such person.
            ``(4) A service provider's compliance with paragraph (2) 
        shall not subject the service provider to liability for 
        copyright infringement with respect to the material identified 
        in the notice provided under subsection (c)(1)(C).
    ``(g) Identification of Direct Infringer.--The copyright owner or a 
person authorized to act on the owner's behalf may request an order for 
release of identification of an alleged infringer by filing (i) a copy 
of a notification described in subsection (c)(3)(A), including a 
proposed order, and (ii) a sworn declaration that the purpose of the 
order is to obtain the identity of an alleged infringer and that such 
information will only be used for the purpose of this title, with the 
clerk of any United States district court. The order shall authorize 
and order the service provider receiving the notification to disclose 
expeditiously to the copyright owner or person authorized by the 
copyright owner information sufficient to identify the alleged direct 
infringer of the material described in the notification to the extent 
such information is available to the service provider. The order shall 
be expeditiously issued if the accompanying notification satisfies the 
provisions of subsection (c)(3)(A) and the accompanying declaration is 
properly executed. Upon receipt of the order, either accompanying or 
subsequent to the receipt of a notification described in subsection 
(c)(3)(A), a service provider shall expeditiously give to the copyright 
owner or person authorized by the copyright owner the information 
required by the order, notwithstanding any other provision of law and 
regardless of whether the service provider responds to the 
notification.
    ``(h) Conditions for Eligibility.--
            ``(1) Accommodation of technology.--The limitations on 
        liability established by this section shall apply only if the 
        service provider--
                    ``(A) has adopted and reasonably implemented, and 
                informs subscribers of the service of, a policy for the 
                termination of subscribers of the service who are 
                repeat infringers; and
                    ``(B) accommodates and does not interfere with 
                standard technical measures as defined in this 
                subsection.
            ``(2) Definition.--As used in this section, ``standard 
        technical measures'' are technical measures, used by copyright 
        owners to identify or protect copyrighted works, that--
                    ``(A) have been developed pursuant to a broad 
                consensus of copyright owners and service providers in 
                an open, fair, voluntary, multi-industry standards 
                process;
                    ``(B) are available to any person on reasonable and 
                nondiscriminatory terms; and
                    ``(C) do not impose substantial costs on service 
                providers or substantial burdens on their systems or 
                networks.
    ``(i) Injunctions.--The following rules shall apply in the case of 
any application for an injunction under section 502 against a service 
provider that is not subject to monetary remedies by operation of this 
section:
            ``(1) Scope of relief.--
                    ``(A) With respect to conduct other than that which 
                qualifies for the limitation on remedies as set forth 
                in subsection (a), the court may only grant injunctive 
                relief with respect to a service provider in one or 
                more of the following forms:
                            ``(i) an order restraining it from 
                        providing access to infringing material or 
                        activity residing at a particular online site 
                        on the provider's system or network;
                            ``(ii) an order restraining it from 
                        providing access to an identified subscriber of 
                        the service provider's system or network who is 
                        engaging in infringing activity by terminating 
                        the specified accounts of such subscriber; or
                            ``(iii) such other injunctive remedies as 
                        the court may consider necessary to prevent or 
                        restrain infringement of specified copyrighted 
                        material at a particular online location, 
                        provided that such remedies are the least 
                        burdensome to the service provider that are 
                        comparably effective for that purpose.
                    ``(B) If the service provider qualifies for the 
                limitation on remedies described in subsection (a), the 
                court may only grant injunctive relief in one or both 
                of the following forms:
                            ``(i) an order restraining it from 
                        providing access to an identified subscriber of 
                        the service provider's system or network who is 
                        using the provider's service to engage in 
                        infringing activity by terminating the 
                        specified accounts of such subscriber; or
                            ``(ii) an order restraining it from 
                        providing access, by taking specified 
                        reasonable steps to block access, to a 
                        specific, identified, foreign online location.
            ``(2) Considerations.--The court, in considering the 
        relevant criteria for injunctive relief under applicable law, 
        shall consider:
                    ``(A) whether such an injunction, either alone or 
                in combination with other such injunctions issued 
                against the same service provider under this 
                subsection, would significantly burden either the 
                provider or the operation of the provider's system or 
                network;
                    ``(B) the magnitude of the harm likely to be 
                suffered by the copyright owner in the digital network 
                environment if steps are not taken to prevent or 
                restrain the infringement;
                    ``(C) whether implementation of such an injunction 
                would be technically feasible and effective, and would 
                not interfere with access to noninfringing material at 
                other online locations; and
                    ``(D) whether other less burdensome and comparably 
                effective means of preventing or restraining access to 
                the infringing material are available.
            ``(3) Notice and ex parte orders.--Injunctive relief under 
        this subsection shall not be available without notice to the 
        service provider and an opportunity for such provider to 
        appear, except for orders ensuring the preservation of evidence 
        or other orders having no material adverse effect on the 
operation of the service provider's communications network.
    ``(j) Definitions.--
            ``(1)(A) As used in subsection (a), the term ``service 
        provider'' means an entity offering the transmission, routing 
        or providing of connections for digital online communications, 
        between or among points specified by a user, of material of the 
        user's choosing, without modification to the content of the 
        material as sent or received.
            ``(B) As used in any other subsection of this section, the 
        term ``service provider'' means a provider of online services 
        or network access, or the operator of facilities therefor, and 
        includes an entity described in the preceding paragraph of this 
        subsection.
            ``(2) As used in this section, the term ``monetary relief'' 
        means damages, costs, attorneys' fees, and any other form of 
        monetary payment.
    ``(k) Other Defenses Not Affected.--The failure of a service 
provider's conduct to qualify for limitation of liability under this 
section shall not bear adversely upon the consideration of a defense by 
the service provider that the service provider's conduct is not 
infringing under this title or any other defense.
    ``(l) Protection of Privacy.--Nothing in this section shall be 
construed to condition the applicability of subsections (a) through (d) 
on--
            ``(1) a service provider monitoring its service or 
        affirmatively seeking facts indicating infringing activity 
        except to the extent consistent with a standard technical 
        measure complying with the provisions of subsection (h); or
            ``(2) a service provider accessing, removing, or disabling 
        access to material where such conduct is prohibited by law.
    ``(m) Rule of Construction.--Subsections (a), (b), (c), and (d) are 
intended to describe separate and distinct functions for purposes of 
analysis under this section. Whether a service provider qualifies for 
the limitation on liability in any one such subsection shall be based 
solely on the criteria in each such subsection and shall not affect a 
determination of whether such service provider qualifies for the 
limitations on liability under any other such subsection.''.

SEC. 203. CONFORMING AMENDMENT.

    The table of sections for chapter 5 of title 17, United States 
Code, is amended by adding at the end the following:

``512. Liability of service providers for online infringement of 
                            copyright.''.

 SEC. 204. LIABILITY OF EDUCATIONAL INSTITUTIONS FOR ONLINE 
              INFRINGEMENT OF COPYRIGHT.

    (a) Not later than six months after the date of enactment of this 
Act, the Register of Copyrights, after consultation with 
representatives of copyright owners and nonprofit educational 
institutions, shall submit to the Congress recommendations regarding 
the liability of nonprofit educational institutions for copyright 
infringement committed with the use of computer systems for which such 
an institution is a service provider, as that term is defined in 17 
U.S.C. Sec. 512 (as amended by this Act), including recommendations for 
legislation the Register of Copyrights considers appropriate regarding 
such liability, if any.
    (b) In formulating recommendations, the Register of Copyrights 
shall consider, where relevant--
            (1) current law regarding the direct, vicarious, and 
        contributory liability of nonprofit educational institutions 
        for infringement by faculty, administrative employees, 
        students, graduate students, and students who are employees of 
        a nonprofit educational institution;
            (2) other users of their computer systems for whom 
        nonprofit educational institutions may be responsible;
            (3) the unique nature of the relationship between nonprofit 
        educational institutions and faculty;
            (4) what policies nonprofit educational institutions should 
        adopt regarding copyright infringement by users of their 
        computer systems;
            (5) what technological measures are available to monitor 
        infringing uses;
            (6) what monitoring of their computer systems by nonprofit 
        educational institutions is appropriate;
            (7) what due process nonprofit educational institutions 
        should afford in disabling access by users of their computer 
        systems who are alleged to have committed copyright 
        infringement;
            (8) what distinctions, if any, should be drawn between 
        computer systems which may be accessed from outside the 
        nonprofit educational systems, those which may not, and 
        combinations thereof;
            (9) the tradition of academic freedom; and
            (10) such other issues relating to the liability of 
        nonprofit educational institutions for copyright infringement 
        committed with the use of computer systems for which such an 
        institution is a service provider that the Register considers 
        appropriate.

SEC. 205. EFFECTIVE DATE.

    This title and the amendments made by this title shall take effect 
on the date of the enactment of this Act.

               TITLE III--COMPUTER MAINTENANCE OR REPAIR

SEC. 301. LIMITATION ON EXCLUSIVE RIGHTS; COMPUTER PROGRAMS.

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

   TITLE IV--EPHEMERAL RECORDINGS; DISTANCE EDUCATION; EXEMPTION FOR 
                         LIBRARIES AND ARCHIVES

SEC. 401. EPHEMERAL RECORDINGS.

    Section 112 of title 17, United States Code is amended by--
            (1) redesignating section 112(a) as 112(a)(1), and 
        renumbering sections 112(a)(1), (2) and (3) as sections 
        112(a)(1)(A), (B) and (C), respectively;
            (2) in section 112(a)(1), after the reference to section 
        114(a), add the words ``or for a transmitting organization that 
        is a broadcast radio or television station licensed as such by 
        the Federal Communications Commission that broadcasts a 
        performance of a sound recording in a digital format on a 
        nonsubscription basis,'';
            (3) adding new section 112(a)(2) as follows:
    ``Where a transmitting organization entitled to make a copy or 
phonorecord under section 112(a)(1) in connection with the transmission 
to the public of a performance or display of a work pursuant to that 
section is prevented from making such copy or phonorecord by reason of 
the application by the copyright owner of technical measures that 
prevent the reproduction of the work, such copyright owner shall make 
available to the transmitting organization the necessary means for 
permitting the making of such copy or phonorecord within the meaning of 
that section, provided that it is technologically feasible and 
economically reasonable for the copyright owner to do so, and provided 
further that, if such copyright owner fails to do so in a timely manner 
in light of the transmitting organization's reasonable business 
requirements, the transmitting organization shall not be liable for a 
violation of section 1201(a)(1) of this title for engaging in such 
activities as are necessary to make such copies or phonorecords as 
permitted under section 112(a)(1).''.

SEC. 402. LIMITATIONS ON EXCLUSIVE RIGHTS; DISTANCE EDUCATION.

    (a) Not later than six months after the date of enactment of this 
Act, the Register of Copyrights, after consultation with 
representatives of copyright owners, nonprofit educational institutions 
and nonprofit libraries and archives, shall submit to the 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. Such recommendations shall include any legislation the 
Register of Copyrights considers appropriate to achieve the foregoing 
objective.
    (b) In formulating recommendations, the Register of Copyrights 
shall consider--
            (1) the need for an exemption from exclusive rights for 
        distance education through digital networks;
            (2) the categories of works to be included under any 
        distance education exemption;
            (3) the extent of appropriate quantitative limitations on 
        the portions of works that may be used under any distance 
        education exemption;
            (4) the parties who should be entitled to the benefits of 
        any distance education exemption;
            (5) the parties who should be designated as eligible 
        recipients of distance education materials under any distance 
        education exemption;
            (6) whether and what types of technological measures can 
        and/or should be employed to safeguard against unauthorized 
        access to, and use or retention of, copyrighted materials as a 
        condition to eligibility for any distance education exemption, 
        including, in light of developing technological capabilities, 
        the exemption set out in section 110(2);
            (7) the extent to which the availability of licenses for 
        the use of copyrighted works in distance education through 
        interactive digital networks should be considered in assessing 
        eligibility for any distance education exemption; and
            (8) such other issues relating to distance education 
        through interactive digital networks that the Register 
        considers appropriate.''

SEC. 403. EXEMPTION FOR LIBRARIES AND ARCHIVES.

    Section 108 of title 17, United States Code, is amended--
            (1) in subsection (a) by--
                    (A) striking ``Notwithstanding'' and inserting 
                ``Except as otherwise provided and notwithstanding'';
                    (B) inserting after ``no more than one copy of 
                phonorecord of a work'' the following: ``except as 
                provided in subsections (b) and (c),''; and
                    (C) by inserting after ``copyright'' in clause (3) 
                the following: ``if such notice appears on the copy or 
                phonorecord that is reproduced under the provisions of 
                this section, or a legend stating that the work may be 
                protected by copyright if no such notice can be found 
                on the copy or phonorecord that is reproduced under the 
                provisions of this section'';
            (2) in subsection (b) by--
                    (A) striking ``a copy or phonorecord'' and 
                inserting in lieu thereof ``three copies or 
                phonorecords'';
                    (B) striking ``in facsimile form''; and
                    (C) striking ``if the copy or phonorecord 
                reproduced is currently in the collections of the 
                library or archives.'' and inserting in lieu thereof 
                ``if--
            ``(1) the copy or phonorecord reproduced is currently in 
        the collections of the library or archives; and
            ``(2) any such copy or phonorecord that is reproduced in 
        digital format is not otherwise distributed in that format and 
        is not made available to the public outside the premises of the 
        library or archives in that format.''; and
            (3) in subsection (c) by--
                    (A) striking ``a copy or phonorecord'' and 
                inserting in lieu thereof ``three copies or 
                phonorecords'';
                    (B) striking ``in facsimile form'';
                    (C) inserting ``or if the existing format in which 
                the work is stored has become obsolete,'' after 
                ``stolen,''; and
                    (D) striking ``if the library or archives has, 
                after a reasonable effort, determined that an unused 
                replacement cannot be obtained at a fair price.'' and 
                inserting in lieu thereof ``if--
            ``(1) the library or archives has, after a reasonable 
        effort, determined that an unused replacement cannot be 
        obtained at a fair price; and
            ``(2) any such copy or phonorecord that is reproduced in 
        digital format is not made available to the public in that 
        format except for use on the premises of the library or 
        archives in lawful possession of such copy.'';
                    (E) adding at the end the following: ``For purposes 
                of this subsection, a format shall be considered 
                obsolete if the machine or device necessary to render 
                perceptible a work stored in that format is no longer 
                manufactured or is no longer reasonably available in 
                the commercial marketplace.''.`