Union Calendar No. 213

106TH CONGRESS

1ST SESSION H. R. 1858

[Report No. 106–350, Part I]

A BILL

To promote electronic commerce through improved

access for consumers to electronic databases, including securities market information databases.

OCTOBER 8, 1999

The Committee on the Judiciary discharged; committed

to the Committee of the Whole House on the State ofthe Union and ordered to be printed
IB

Union Calendar No. 213

106TH CONGRESS

1ST SESSION H. R. 1858

[Report No. 106–350, Part I]

To promote electronic commerce through improved access for consumers to

electronic databases, including securities market information databases.

IN THE HOUSE OF REPRESENTATIVES

MAY 19, 1999

Mr. BLILEY (for himself, Mr. DINGELL, Mr. TAUZIN, Mr. MARKEY, Mr.

OXLEY, and Mr. TOWNS) introduced the following bill; which was referred

to the Committee on Commerce

SEPTEMBER 30, 1999

Reported with an amendment and referred to the Committee on the Judiciary

for a period ending not later than October 8, 1999, for consideration of

such provisions of the bill and amendment as fall within the jurisdiction

of that committee pursuant to clause 1(k), rule X

[Strike out all after the enacting clause and insert the part printed in italic]

OCTOBER 8, 1999

Additional sponsors: Mr. BARTON of Texas, Mr. KASICH, Mr. CLAY, Ms.

ESHOO, Mr. DEAL of Georgia, Mr. THOMPSON of Mississippi, Mr.

BLUNT, Mr. STEARNS, Mr. ETHERIDGE, Mr. MCINTOSH, Mr. NEY, Mr.

BARRETT of Wisconsin, and Mr. BOUCHER

OCTOBER 8, 1999

The Committee on the Judiciary discharged; committed to the Committee of

the Whole House on the State of the Union and ordered to be printed
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[For text of introduced bill, see copy of bill as introduced on May 19, 1999]

A BILL

To promote electronic commerce through improved access

for consumers to electronic databases, including securities market information databases.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Consumer and Investor

5 Access to Information Act of 1999’’.

6 TITLE I—COMMERCE IN DUPLI7 CATED DATABASES PROHIB8 ITED

9 SEC. 101. DEFINITIONS.

10 As used in this title:

11 (1) DATABASE.—(A) The term ‘‘database’’ means

12 a collection of a large number of discrete items of in13 formation that have been collected and organized in

14 a single place, or in such a way as to be accessible

15 through a single source, through the investment of

16 substantial monetary or other resources, for the pur17 pose of providing access to those discrete items of in18 formation by users of the database. Such term does

19 not include works that are combined and ordered in
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1 a logical progression or other meaningful way in

2 order to tell a story, communicate a message, rep3 resent an idea, or achieve a result.

4 (B) If a database is organized into discrete sec5 tions containing a large number of discrete items of

6 information, each section may be treated as a data7 base if each such section meets the requirements of

8 subparagraph (A).

9 (2) DUPLICATE OF A DATABASE.—A database is

10 ‘‘a duplicate’’ of any other database if the database

11 is substantially the same as such other database, as

12 a result of the extraction of information from such

13 other database.

14 (3) INFORMATION.—The term ‘‘information’’

15 means facts, data, or any other intangible material

16 capable of being collected and organized in a system17 atic way, with the exception of works of authorship

18 within the meaning of section 102 of title 17, United

19 States Code.

20 (4) COMMERCE.—The term ‘‘commerce’’ means

21 all commerce which may be lawfully regulated by the

22 Congress.

23 (5) IN COMPETITION.—The term ‘‘in competition

24 with’’ when used with respect to the sale or distribu-
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1 tion of a database to the public means that the

2 database—

3 (A) displaces substantial sales or licenses of

4 the database of which it is a duplicate; and

5 (B) significantly threatens the opportunity

6 to recover a reasonable return on the investment

7 in the collecting or organizing of the duplicated

8 database.

9 (6) GOVERNMENT DATABASE.—The term ‘‘gov10 ernment database’’ means a database that—

11 (A) has been collected or maintained by the

12 United States of America, any foreign govern13 ment, or any agency or instrumentality thereof;

14 (B) has been collected or maintained by a

15 commercial entity pursuant to a contract with

16 the United States of America or any agency or

17 instrumentality thereof, unless the information

18 contained in such database was permanently

19 available on an interactive computer network

20 without restriction in a publicly accessible elec21 tronic form without charge, at the time a dupli22 cate of such database was sold or distributed; or

23 (C) is required by Federal statute or regula24 tion to be collected or maintained, to the extent

25 so required.
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1 SEC. 102. PROHIBITION AGAINST DISTRIBUTION OF DUPLI2 CATES.

3 It is unlawful for any person or entity, by any means

4 or instrumentality of interstate or foreign commerce or

5 communications, to sell or distribute to the public a data6 base that—

7 (1) is a duplicate of another database that was

8 collected and organized by another person or entity;

9 and

10 (2) is sold or distributed in commerce in com11 petition with that other database.

12 SEC. 103. PERMITTED ACTS.

13 (a) COLLECTING OR USE OF INFORMATION OBTAINED

14 THROUGH OTHER MEANS.—Nothing in this title shall re15 strict any person or entity from selling or distributing to

16 the public a database consisting of information obtained by

17 means other than by extracting it from a database collected

18 and organized by another person or entity.

19 (b) NEWS REPORTING.—Nothing in this title shall re20 strict any person or entity from selling or distributing to

21 the public a duplicate of a database for the sole purpose

22 of news or sports reporting, including news and sports in23 formation gathering, dissemination, and comment, unless

24 the information duplicated is time sensitive and has been

25 collected by a news or sports reporting entity, and the sale
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1 or distribution is part of a consistent pattern engaged in

2 for the purpose of direct competition.

3 (c) LAW ENFORCEMENT AND INTELLIGENCE ACTIVI4 TIES.—Nothing in this title shall prohibit an officer, agent,

5 or employee of the United States, a State, or a political

6 subdivision of a State, or a person acting under contract

7 with such officers, agents or employees, from selling or dis8 tributing to the public a duplicate of a database as part

9 of lawfully authorized law enforcement or intelligence ac10 tivities.

11 (d) SCIENTIFIC, EDUCATIONAL, OR RESEARCH

12 USES.—No person or entity who, for scientific, educational,

13 or research purposes, sells or distributes to the public a du14 plicate of a database that has been collected or organized

15 by another person or entity shall incur liability under this

16 title so long as such conduct is not part of a consistent pat17 tern engaged in for the purpose of competition with that

18 other person or entity.

19 SEC. 104. EXCLUSIONS.

20 (a) GOVERNMENT INFORMATION.—

21 (1) EXCLUSION OF GOVERNMENT DATABASES.—

22 Protection under section 102 shall not extend to a

23 government database.

24 (2) INCORPORATED NONGOVERNMENT PORTIONS

25 PROTECTED.—The incorporation of all or part of a
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1 government database into a non-government database

2 does not preclude protection for the portions of the

3 non-government database which came from a source

4 other than the government database.

5 (3) AUTHORITY TO EXCLUDE ADDITIONAL GOV6 ERNMENT-SUPPORTED DATABASES.—Nothing in this

7 title shall prevent the Federal Government or a State

8 or local government from establishing by law or con9 tract that a database, the creation or maintenance of

10 which is substantially funded by such Federal, State,

11 or local government, shall not be subject to the protec12 tion afforded under this title.

13 (b) DATABASES RELATED TO INTERNET COMMUNICA14 TIONS.—Protection under section 102 does not extend to a

15 database incorporating information collected or

16 organized—

17 (1) to perform the function of addressing, rout18 ing, forwarding, transmitting, or storing Internet

19 communications; or

20 (2) to perform the function of providing or re21 ceiving connections for Internet communications.

22 (c) COMPUTER PROGRAMS.—

23 (1) PROTECTION NOT EXTENDED.—Subject to

24 paragraph (2), protection under section 102 shall not

25 extend to computer programs, including any com-
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1 puter program used in the manufacture, production,

2 operation, or maintenance of a database, or any ele3 ment of a computer program necessary to its oper4 ation.

5 (2) INCORPORATED DATABASES.—A database

6 that is otherwise subject to protection under section

7 102 is not disqualified from such protection solely be8 cause it resides in a computer program, so long as

9 the database functions as a database within the

10 meaning of this title.

11 (d) NONPROTECTABLE SUBJECT MATTER.—Protection

12 under section 102 does not extend to the sale or distribution

13 to the public of a duplicate of any individual idea, fact,

14 procedure, system, method of operation, concept, principle,

15 or discovery.

16 (e) SUBSCRIBER LIST INFORMATION.—Protection

17 under section 102 does not extend to a database of sub18 scriber list information within the meaning of section

19 222(f) of the Communications Act of 1934 (47 U.S.C.

20 222(f)). Nothing in this subsection shall affect the operation

21 of section 222(e) of such Act, under which a telecommuni22 cations carrier provides, upon request, subscriber list infor23 mation for the purposes of publishing directories in any

24 format under nondiscriminatory and reasonable rates,

25 terms, and conditions.
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1 (f) LEGAL MATERIALS.—Protection under section 102

2 does not extend to a database of primary legal materials,

3 including court opinions, statutes, codes, regulations, or ad4 ministrative agency decisions, from any Federal, State, or

5 local jurisdiction, unless such materials were permanently

6 available on an interactive computer network without re7 striction, in an official publicly accessible electronic form

8 without charge, at the time a duplicate of such database

9 was sold or distributed.

10 (g) SECURITIES MARKET DATA.—Nothing in this title

11 shall apply to any database, or any discrete section of a

12 database, composed predominantly of market information

13 within the meaning of section 11A(e)(6) of the Securities

14 Exchange Act of 1934, as amended by section 201 of this

15 Act.

16 SEC. 105. RELATIONSHIP TO OTHER LAWS.

17 (a) OTHER RIGHTS NOT AFFECTED.—Subject to sub18 section (b), nothing in this title shall affect rights, limita19 tions, or remedies concerning copyright, or any other rights

20 or obligations relating to information, including laws with

21 respect to patent, trademark, design rights, antitrust, trade

22 secrets, privacy, access to public documents, misuse, and the

23 law of contract.

24 (b) PREEMPTION OF STATE LAW.—On or after the ef25 fective date of this Act, no State law that prohibits or that
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1 otherwise regulates conduct that is subject to the prohibi2 tions specified in section 102 shall be effective to the extent

3 that such State law is inconsistent with section 102.

4 (c) LICENSING.—Subject to the provisions on misuse

5 in section 106(b), nothing in this title shall restrict the

6 rights of parties freely to enter into licenses or any other

7 contracts with respect to the use of information.

8 (d) COMMUNICATIONS ACT OF 1934.—Nothing in this

9 title shall affect the operation of the Communications Act

10 of 1934 (47 U.S.C. 151 et seq.) or the authority of the Fed11 eral Communications Commission.

12 (e) SECURITIES LAWS.—Nothing in this title shall

13 affect—

14 (1) the operation of the Securities Act of 1933

15 (15 U.S.C. 78a et seq.), the Securities Exchange Act

16 of 1934 (15 U.S.C. 78a et seq.), the Public Utility

17 Holding Company Act of 1935 (15 U.S.C. 79a et

18 seq.), the Trust Indenture Act of 1939 (15 U.S.C.

19 77aaa et seq.), the Investment Company Act of 1940

20 (15 U.S.C. 80a–1 et seq.), the Investment Advisers Act

21 of 1940 (15 U.S.C. 80b et seq.), or the Securities In22 vestor Protection Act of 1970 (15 U.S.C. 78aaa et

23 seq.); or

24 (2) the authority of the Securities and Exchange

25 Commission.
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1 SEC. 106. LIMITATIONS ON LIABILITY.

2 (a) SERVICE PROVIDER LIABILITY.—A provider of

3 telecommunications services or information services (within

4 the meaning of section 3 of the Communications Act of 1934

5 (47 U.S.C. 153)), or the operator of facilities therefor, shall

6 not be liable for a violation of section 102 if such provider

7 or operator did not initially place the database that is the

8 subject of the violation on a system or network controlled

9 by such provider or operator.

10 (b) MISUSE.—A person or entity shall not be liable

11 for a violation of section 102 if the person or entity bene12 fiting from the protection afforded a database under section

13 102 misuses the protection. In determining whether a per14 son or entity has misused the protection afforded under this

15 title, the following factors, among others, shall be consid16 ered:

17 (1) the extent to which the ability of persons or

18 entities to engage in the permitted acts under this

19 title has been frustrated by contractual arrangements

20 or technological measures;

21 (2) the extent to which information contained in

22 a database that is the sole source of the information

23 contained therein is made available through licensing

24 or sale on reasonable terms and conditions;

25 (3) the extent to which the license or sale of in26 formation contained in a database protected under
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1 this title has been conditioned on the acquisition or

2 license of any other product or service, or on the per3 formance of any action, not directly related to the li4 cense or sale;

5 (4) the extent to which access to information nec6 essary for research, competition, or innovation pur7 poses has been prevented;

8 (5) the extent to which the manner of asserting

9 rights granted under this title constitutes a barrier to

10 entry into the relevant database market; and

11 (6) the extent to which the judicially developed

12 doctrines of misuse in other areas of the law may ap13 propriately be extended to the case or controversy.

14 SEC. 107. ENFORCEMENT.

15 (a) USE OF FEDERAL TRADE COMMISSION ACT AU16 THORITY.—The Federal Trade Commission shall have juris17 diction, under section 5 of the Federal Trade Commission

18 Act (15 U.S.C. 45), to prevent violations of section 102 of

19 this title.

20 (b) RULEMAKING AUTHORITY.—The Federal Trade

21 Commission may, pursuant to subparagraph (A) or (B) of

22 section 18(a) of the Federal Trade Commission Act (15

23 U.S.C. 57a(a)), but without regard to the limitations con24 tained in section 18(b)(3) of such Act, prescribe rules to

25 implement this title.
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1 (c) ENFORCEMENT.—Any violation of any rule pre2 scribed under subsection (b) shall be treated as a violation

3 of a rule respecting unfair or deceptive acts or practices

4 under section 5 of the Federal Trade Commission Act (15

5 U.S.C. 45). Notwithstanding section 5(a)(2) of such Act (15

6 U.S.C. 45(a)(2)), communications common carriers shall be

7 subject to the jurisdiction of the Federal Trade Commission

8 for purposes of this title.

9 (d) ACTIONS BY THE COMMISSION.—The Federal

10 Trade Commission shall prevent any person or entity from

11 violating section 102 or a rule of the Commission under

12 subsection (b) of this section in the same manner, by the

13 same means, and with the same jurisdiction, powers, and

14 duties as though all applicable terms and provisions of the

15 Federal Trade Commission Act (15 U.S.C. 41 et seq.) were

16 incorporated into and made a part of this title. Any person

17 or entity who violates section 102 or such rule shall be sub18 ject to the penalties and entitled to the privileges and im19 munities provided in the Federal Trade Commission Act

20 in the same manner, by the same means, and with the same

21 jurisdiction, power, and duties as though all applicable

22 terms and provisions of the Federal Trade Commission Act

23 were incorporated into and made a part of this title.
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1 SEC. 108. REPORT TO CONGRESS.

2 Not later than 36 months after the date of enactment

3 of this title, the Federal Trade Commission shall report to

4 the Congress on the effect this title has had on electronic

5 commerce and on the United States database industry and

6 related parties, including—

7 (1) the availability of databases, search engines,

8 and other tools for locating information necessary for

9 electronic commerce;

10 (2) the extent of competition between database

11 producers, including the concentration of market

12 power within the database industry;

13 (3) the investment in the development and main14 tenance of databases, including changes in the num15 ber and size of databases;

16 (4) the availability of information to industries

17 and researchers which rely upon such availability;

18 (5) whether in the period after enactment of this

19 title database producers have faced unfair competi20 tion, particularly from publishers in the European

21 Union; and

22 (6) the extent to which extraction of information

23 from databases, to a degree insufficient to result in li24 ability under section 102, is harming database pro25 ducers’ incentive to collect and organize databases.
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1 SEC. 109. EFFECTIVE DATE.

2 This title shall take effect on the date of the enactment

3 of this Act, and shall apply to the sale or distribution after

4 that date of a database that was collected and organized

5 after that date.

6 TITLE II—SECURITIES MARKET

7 INFORMATION

8 SEC. 201. MISAPPROPRIATION OF REAL-TIME MARKET IN9 FORMATION.

10 Section 11A of the Securities Exchange Act of 1934

11 (15 U.S.C. 78k–1) is amended by adding at the end the

12 following new subsection:

13 ‘‘(e) MISAPPROPRIATION OF REAL-TIME MARKET IN14 FORMATION.—

15 ‘‘(1) PROHIBITION AGAINST MISAPPROPRIA16 TION.—Subject to paragraphs (3), (4), and (5), any

17 person or entity who—

18 ‘‘(A) obtains directly or indirectly from a

19 market information processor real-time market

20 information, and

21 ‘‘(B) directly or indirectly sells, distributes

22 or redistributes, or otherwise disseminates such

23 real-time market information, without the au24 thorization of such market information processor,

25 shall be liable to such market information processor

26 for the remedies set forth in paragraph (2).
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1 ‘‘(2) CIVIL REMEDIES.—

2 ‘‘(A) CIVIL ACTIONS.—Any person who is

3 injured by a violation of paragraph (1) may

4 bring a civil action for such a violation in an

5 appropriate United States district court, except

6 that any action against a State governmental

7 entity may be brought in any court that has ju8 risdiction over claims against such entity.

9 ‘‘(B) TEMPORARY AND PERMANENT INJUNC10 TIONS.—To the extent otherwise authorized by

11 section 1651 of title 28, United States Code, or

12 other law, any court having jurisdiction of a

13 civil action under this subsection shall have the

14 power to grant temporary and permanent in15 junctions, according to the principles of equity

16 and upon such terms as the court may deem rea17 sonable, to prevent a violation of paragraph (1).

18 ‘‘(C) MONETARY RELIEF.—When a violation

19 of paragraph (1) has been established in any

20 civil action arising under this subsection, the

21 plaintiff shall be entitled to recover any damages

22 sustained by the plaintiff.

23 ‘‘(D) DISGORGEMENT.—When a violation of

24 paragraph (1) has been established, if the plain25 tiff is not able to prove recoverable damages to
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1 the full extent of the defendant’s monetary gain

2 directly attributable to the violation, the court,

3 in its equitable discretion, may order the defend4 ant to disgorge the amount of such monetary

5 gain to the plaintiff.

6 ‘‘(3) PERMITTED ACTS.—

7 ‘‘(A) GATHERING OR USE OF REAL-TIME

8 MARKET INFORMATION INDEPENDENTLY OB9 TAINED.—Nothing in this subsection shall re10 strict any person or entity from independently

11 gathering real-time market information, or from

12 selling, distributing or redistributing, or other13 wise disseminating such independently gathered

14 information.

15 ‘‘(B) NEWS REPORTING.—Nothing in this

16 subsection shall restrict any news reporting enti17 ty from extracting real-time market information

18 for the sole purpose of news reporting, including

19 news gathering, dissemination, and comment,

20 unless the extraction is part of a consistent pat21 tern of competing in the distribution of real-time

22 market information with the market information

23 processor from which the information was ob24 tained.

25 ‘‘(4) RELATIONSHIP TO OTHER LAWS.—
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1 ‘‘(A) PREEMPTION.—Subject to subpara2 graphs (B) through (F), on and after the date of

3 enactment of this subsection, this section—

4 ‘‘(i) shall exclusively govern the unau5 thorized extraction, sale, distribution or re6 distribution, or other dissemination of real7 time market information; and

8 ‘‘(ii) shall supersede any other Federal

9 or State law (either statutory or common

10 law) to the extent that—

11 ‘‘(I) such other Federal or State

12 law establishes rights and remedies

13 with respect to the unauthorized ex14 traction, sale, distribution or redis15 tribution, or other dissemination of

16 real-time market information that are

17 different from or in addition to the

18 rights and remedies established by this

19 subsection; or

20 ‘‘(II) such other Federal or State

21 law is inconsistent with this section.

22 ‘‘(B) FEDERAL SECURITIES LAWS.—Nothing

23 in this subsection shall—

24 ‘‘(i) affect the operation of any other

25 provision of the securities laws (as defined
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1 in section 3(a)(47)), or the rules and regu2 lations thereunder; or

3 ‘‘(ii) impair or limit the authority of

4 the Commission.

5 ‘‘(C) ANTITRUST.—Nothing in this sub6 section shall limit in any way the constraints

7 that are imposed by Federal and State antitrust

8 laws on the manner in which products and serv9 ices may be provided to the public, including

10 those regarding single suppliers of products and

11 services.

12 ‘‘(D) LICENSING.—Nothing in this sub13 section shall restrict the rights of parties freely

14 to enter into licenses or any other contracts with

15 respect to the extraction, sale, distribution or re16 distribution, or other dissemination of real-time

17 market information, and to maintain civil ac18 tions under State law to enforce such licenses or

19 contracts.

20 ‘‘(E) FEDERAL TRADE COMMISSION.—Noth21 ing in this subsection shall affect—

22 ‘‘(i) the authority of the Federal Trade

23 Commission; or
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1 ‘‘(ii) the operation of any of the laws

2 administered by the Federal Trade Commis3 sion.

4 ‘‘(F) OTHER LAWS.—Nothing in this sub5 section shall affect rights, limitations, or rem6 edies concerning rights or obligations under laws

7 with respect to patent, trademark, or fraud.

8 ‘‘(5) LIMITATIONS ON ACTIONS.—

9 ‘‘(A) ADDITIONAL LIMITATION.—No civil ac10 tion shall be maintained under this subsection

11 for the extraction, sale, distribution or redis12 tribution, or other dissemination of market in13 formation that is not real-time market informa14 tion.

15 ‘‘(B) PERSONS OR ENTITIES SUBJECT TO

16 CONTRACTUAL REMEDIES.—No civil action shall

17 be maintained under this subsection by a market

18 information processor against any person or en19 tity to whom such processor provides real-time

20 market information pursuant to a contract or

21 agreement between such processor and such per22 son or entity with respect to any real-time mar23 ket information or any rights or remedies pro24 vided pursuant to such contract or agreement.

25 ‘‘(6) DEFINITIONS.—As used in this subsection:
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1 ‘‘(A) MARKET INFORMATION.—The term

2 ‘market information’ means information—

3 ‘‘(i) with respect to quotations and

4 transactions in any security; and

5 ‘‘(ii) the collection, processing, dis6 tribution, and publication of which is sub7 ject to this title.

8 ‘‘(B) REAL-TIME MARKET INFORMATION.—

9 Taking into account the present state of tech10 nology, different types of market data, how mar11 ket participants use market data, and other rel12 evant factors, the Commission may, consistent

13 with the protection of investors and the public

14 interest and with the objectives of this section,

15 prescribe by rule the extent to which market in16 formation shall be considered to be real-time

17 market information for purposes of this sub18 section.

19 ‘‘(C) MARKET INFORMATION PROCESSOR.—

20 The term ‘market information processor’ means

21 any exchange, self-regulatory organization, secu22 rities information processor, or national market

23 system plan administrator.’’.
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1 SEC. 202. EFFECTIVE DATE.

2 (a) IN GENERAL.—The amendment made by section

3 201 shall take effect on the date of the enactment of this

4 Act, and shall apply to acts committed on or after that date.

5 (b) PRIOR ACTS NOT AFFECTED.—No person or entity

6 shall be liable under section 11A(e) of the Securities Ex7 change Act of 1934 (15 U.S.C. 78k–1(e)), as added by sec8 tion 201 of this Act, for the extraction, sale, distribution

9 or redistribution, or other dissemination of real-time mar10 ket information prior to the date of enactment of this Act,

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