I

106TH CONGRESS

1ST SESSION H. R. 1858

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

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’’.
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1 TITLE I—COMMERCE IN DUPLI2 CATED DATABASES PROHIB3 ITED

4 SEC. 101. DEFINITIONS.

5 As used in this title:

6 (1) DATABASE.—The term ‘‘database’’ means a

7 collection of discrete items of information that have

8 been collected and organized in a single place, or in

9 such a way as to be accessible through a single

10 source, through the investment of substantial mone11 tary or other resources, for the purpose of providing

12 access to those discrete items of information by

13 users of the database. However, a discrete section of

14 a database that contains multiple discrete items of

15 information may also be treated as a database.

16 (2) DUPLICATE OF A DATABASE.—A database

17 is ‘‘a duplicate’’ of any other database if the data18 base is substantially the same as such other data19 base, and was made by extracting information from

20 such other database.

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

22 means facts, data, or any other intangible material

23 capable of being collected and organized in a system24 atic way, with the exception of works of authorship.
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1 (4) COMMERCE.—The term ‘‘commerce’’ means

2 all commerce which may be lawfully regulated by the

3 Congress.

4 (5) IN COMPETITION.—The term ‘‘in competi5 tion with’’ when used with respect to the sale or dis6 tribution of a database to the public means that the

7 database—

8 (A) displaces substantial sales or licenses

9 of the database of which it is a duplicate; and

10 (B) significantly threatens the opportunity

11 to recover a return on the investment in the col12 lecting or organizing of the duplicated database.

13 (6) GOVERNMENT DATABASE.—The term ‘‘gov14 ernment database’’ means a database that—

15 (A) has been collected or maintained by

16 the United States of America, or any agency or

17 instrumentality thereof; or

18 (B) is required by Federal statute or regu19 lation to be collected or maintained, to the ex20 tent so required.

21 SEC. 102. PROHIBITION AGAINST DISTRIBUTION OF DUPLI22 CATES.

23 It is unlawful for any person, by any means or instru24 mentality of interstate or foreign commerce or commu-
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1 nications, to sell or distribute to the public a database

2 that—

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

4 collected and organized by another person; and

5 (2) is sold or distributed in commerce in com6 petition with that other database.

7 SEC. 103. PERMITTED ACTS.

8 (a) COLLECTING OR USE OF INFORMATION OB9 TAINED THROUGH OTHER MEANS.—Nothing in this title

10 shall restrict any person from selling or distributing to the

11 public a database consisting of information obtained by

12 means other than by extracting it from a database col13 lected and organized by another person.

14 (b) NEWS REPORTING.—Nothing in this title shall

15 restrict any person from selling or distributing to the pub16 lic a duplicate of a database for the sole purpose of news

17 reporting, including news gathering and dissemination, or

18 comment, unless the information duplicated is time sen19 sitive and has been collected by a news reporting entity,

20 and the sale or distribution is part of a consistent pattern

21 engaged in for the purpose of direct competition.

22 (c) LAW ENFORCEMENT AND INTELLIGENCE ACTIVI23 TIES.—Nothing in this title shall prohibit an officer,

24 agent, or employee of the United States, a State, or a po25 litical subdivision of a State, or a person acting under con-
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1 tract of such officers, agents or employees, from selling

2 or distributing to the public a duplicate of a database as

3 part of lawfully authorized investigative, protective, or in4 telligence activities.

5 (d) SCIENTIFIC, EDUCATIONAL, OR RESEARCH

6 USES.—No person or entity who for scientific, edu7 cational, or research purposes duplicates the same infor8 mation that has been collected or generated by another

9 person or entity shall incur liability under this title so long

10 as such conduct is not part of a consistent pattern en11 gaged in for the purpose of direct commercial competition

12 with that other person.

13 SEC. 104. EXCLUSIONS.

14 (a) GOVERNMENT INFORMATION.—

15 (1) EXCLUSION OF GOVERNMENT DATA16 BASES.—Protection under section 102 shall not ex17 tend to government databases.

18 (2) INCORPORATED NONGOVERNMENT POR19 TIONS PROTECTED.—The incorporation of all or part

20 of a government database into a non-government

21 database does not preclude protection for the por22 tions of the non-government database which came

23 from a source other than the government database.

24 (3) AUTHORITY TO EXCLUDE ADDITIONAL GOV25 ERNMENT-SUPPORTED DATABASES.—Nothing in this
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1 title shall prevent the Federal Government or a

2 State or local government from establishing by law

3 or contract that a database, the creation or mainte4 nance of which is substantially funded by such Fed5 eral, State, or local government, shall not be subject

6 to the protection afforded under this title.

7 (b) DATABASES RELATED TO INTERNET COMMU8 NICATIONS.—Protection under section 102 does not ex9 tend to a database incorporating information collected or

10 organized—

11 (1) to perform the function of addressing, rout12 ing, forwarding, transmitting, or storing Internet

13 communications; or

14 (2) to perform the function of providing or re15 ceiving connections for Internet communications.

16 (c) COMPUTER PROGRAMS.—

17 (1) PROTECTION NOT EXTENDED.—Subject to

18 paragraph (2), protection under section 102 shall

19 not extend to computer programs, including any

20 computer program used in the manufacture, produc21 tion, operation, or maintenance of a database, or

22 any element of a computer program necessary to its

23 operation.

24 (2) INCORPORATED DATABASES.—A database

25 that is otherwise subject to protection under section
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1 102 is not disqualified from such protection solely

2 because it resides in a computer program, so long as

3 the database functions as a database within the

4 meaning of this title and not as an element nec5 essary to the operation of the computer program.

6 (d) NONPROTECTABLE SUBJECT MATTER.—Protec7 tion for databases under section 102 does not extend to

8 the sale or distribution to the public of a duplicate of any

9 individual idea, fact, procedure, system, method of oper10 ation, concept, principle, or discovery.

11 (e) SUBSCRIBER LIST INFORMATION.—Protection for

12 databases under section 102 does not extend to subscriber

13 list information within the meaning of section 222(f) of

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

15 Nothing in this subsection shall affect the operation of sec16 tion 222(e) of such Act, under which a telecommunications

17 carrier provides, upon request, subscriber list information

18 for the purposes of publishing directories in any format

19 under nondiscriminatory and reasonable rates, terms, and

20 conditions.

21 SEC. 105. RELATIONSHIP TO OTHER LAWS.

22 (a) OTHER RIGHTS NOT AFFECTED.—Subject to

23 subsection (b), nothing in this title shall affect rights, limi24 tations, or remedies concerning copyright, or any other

25 rights or obligations relating to information, including
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1 laws with respect to patent, trademark, design rights,

2 antitrust, trade secrets, privacy, access to public docu3 ments, misuse, and the law of contract.

4 (b) PREEMPTION OF STATE LAW.—On or after the

5 effective date of this Act, no State law that prohibits or

6 that otherwise regulates conduct that is subject to the pro7 hibitions specified in section 102 shall be effective to the

8 extent that such State law is inconsistent with section 102.

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

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

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

12 contracts with respect to the use of information.

13 (d) COMMUNICATIONS ACT OF 1934.—Nothing in

14 this title shall affect the operation of the Communications

15 Act of 1934 (47 U.S.C. 151 et seq.) or the authority of

16 the Federal Communications Commission.

17 SEC. 106. LIMITATIONS ON LIABILITY.

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

19 telecommunications services or information services (with20 in the meaning of section 3 of the Communications Act

21 of 1934 (47 U.S.C. 153)), or the operator of facilities

22 therefor, shall not be liable for a violation of section 102

23 if such provider or operator did not initially place the data24 base that is the subject of the violation on a system or

25 network controlled by such provider or operator.
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1 (b) MISUSE.—A person shall not be liable for a viola2 tion of section 102 if the person benefiting from the pro3 tection afforded a database under section 102 misuses the

4 protection. In determining whether a person has misused

5 the protection afforded under this title, a court shall con6 sider, among other factors—

7 (1) the extent to which the ability of persons to

8 engage in the permitted acts under this title has

9 been frustrated by contractual arrangements or

10 technological measures;

11 (2) the extent to which information contained in

12 a database that is the sole source of the information

13 contained therein is made available through licensing

14 or sale on reasonable terms and conditions;

15 (3) the extent to which the license or sale of in16 formation contained in a database protected under

17 this title has been conditioned on the acquisition or

18 license of any other product or service, or on the

19 performance of any action, not directly related to the

20 license or sale;

21 (4) the extent to which access to information

22 necessary for research, competition, or innovation

23 purposes has been prevented;
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1 (5) the extent to which the manner of asserting

2 rights granted under this title constitutes a barrier

3 to entry into the relevant database market; and

4 (6) the extent to which the judicially developed

5 doctrines of misuse in other areas of the law may

6 appropriately be extended to the case or controversy.

7 SEC. 107. ENFORCEMENT.

8 (a) USE OF FEDERAL TRADE COMMISSION ACT AU9 THORITY.—The Federal Trade Commission shall have ju10 risdiction, under section 5 of the Federal Trade Commis11 sion Act (15 U.S.C. 45), to prevent violations of section

12 102 of this title.

13 (b) RULEMAKING AUTHORITY.—The Federal Trade

14 Commission may, pursuant to subparagraph (A) or (B)

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

16 U.S.C. 57a(a)), but without regard to the limitations con17 tained in section 18(b)(3) of such Act, prescribe rules to

18 implement this title.

19 (c) ENFORCEMENT.—Any violation of any rule pre20 scribed under subsection (b) shall be treated as a violation

21 of a rule respecting unfair or deceptive acts or practices

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

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

24 (15 U.S.C. 45(a)(2)), communications common carriers
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1 shall be subject to the jurisdiction of the Federal Trade

2 Commission for purposes of this title.

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

4 Trade Commission shall prevent any person from violating

5 section 102 or a rule of the Commission under subsection

6 (b) of this section in the same manner, by the same means,

7 and with the same jurisdiction, powers, and duties as

8 though all applicable terms and provisions of the Federal

9 Trade Commission Act (15 U.S.C. 41 et seq.) were incor10 porated into and made a part of this title. Any person

11 who violates section 102 or such rule shall be subject to

12 the penalties and entitled to the privileges and immunities

13 provided in the Federal Trade Commission Act in the

14 same manner, by the same means, and with the same ju15 risdiction, power, and duties as though all applicable terms

16 and provisions of the Federal Trade Commission Act were

17 incorporated into and made a part of this title.

18 SEC. 108. REPORT TO CONGRESS.

19 Not later than 36 months after the date of enactment

20 of this title, the Federal Trade Commission shall report

21 to the Congress on the effect this title has had on elec22 tronic commerce and on the United States database indus23 try and related parties, including—
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1 (1) the availability of databases, search engines,

2 and other tools for locating information necessary

3 for electronic commerce;

4 (2) the extent of competition between database

5 producers, including the concentration of market

6 power within the database industry;

7 (3) the investment in the development and

8 maintenance of databases, including changes in the

9 number and size of databases;

10 (4) the availability of information to industries

11 and researchers which rely upon such availability;

12 (5) whether in the period after enactment of

13 this title database producers have faced unfair com14 petition, particularly from publishers in the Euro15 pean Union; and

16 (6) the extent to which extraction of informa17 tion from databases, to a degree insufficient to re18 sult in liability under section 102, is harming data19 base producers’ incentive to collect and organize

20 databases.

21 SEC. 109. EFFECTIVE DATE.

22 This title shall take effect on the date of the enact23 ment of this Act, and shall apply to the sale or distribution

24 after that date of a database that was collected and orga25 nized after that date.
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1 TITLE II—SECURITIES MARKET

2 INFORMATION

3 SEC. 201. MISAPPROPRIATION OF REAL-TIME MARKET IN4 FORMATION.

5 Section 11A of the Securities Exchange Act of 1934

6 (15 U.S.C. 78k–1) is amended by adding at the end the

7 following new subsection:

8 ‘‘(e) MISAPPROPRIATION OF REAL-TIME MARKET IN9 FORMATION.—

10 ‘‘(1) PROHIBITION AGAINST MISAPPROPRIA11 TION.—Subject to paragraphs (3), (4), and (5), any

12 person who—

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

14 market information processor real-time market

15 information, and

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

17 or redistributes, or otherwise disseminates such

18 real-time market information, without the au19 thorization of the market information processor,

20 shall be liable to that market information processor

21 for the remedies set forth in paragraph (2).

22 ‘‘(2) CIVIL REMEDIES.—

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

24 injured by a violation of paragraph (1) may

25 bring a civil action for such a violation in an
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1 appropriate United States district court, except

2 that any action against a State governmental

3 entity may be brought in any court that has ju4 risdiction over claims against such entity.

5 ‘‘(B) TEMPORARY AND PERMANENT IN6 JUNCTIONS.—Any court having jurisdiction of a

7 civil action under this subsection shall have the

8 power to grant temporary and permanent in9 junctions, according to the principles of equity

10 and upon such terms as the court may deem

11 reasonable, to prevent a violation of paragraph

12 (1).

13 ‘‘(C) MONETARY RELIEF.—When a viola14 tion of paragraph (1) has been established in

15 any civil action arising under this subsection,

16 the plaintiff shall be entitled to recover any

17 damages sustained by the plaintiff.

18 ‘‘(D) DISGORGEMENT.—When a violation

19 of paragraph (1) has been established, if the

20 plaintiff is not able to prove recoverable dam21 ages to the full extent of the defendant’s mone22 tary gain directly attributable to the violation,

23 the court, in its equitable discretion, may order

24 the defendant to disgorge the amount of such

25 monetary gain to the plaintiff.
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1 ‘‘(3) PERMITTED ACTS.—

2 ‘‘(A) GATHERING OR USE OF REAL-TIME

3 MARKET INFORMATION INDEPENDENTLY OB4 TAINED.—Nothing in this subsection shall re5 strict any person from independently gathering

6 real-time market information, or from redistrib7 uting or disseminating such independently gath8 ered information.

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

10 subsection shall restrict any news reporting en11 tity from extracting real-time market informa12 tion for the sole purpose of news reporting, in13 cluding news gathering, dissemination, and

14 comment, unless the extraction is part of a con15 sistent pattern of competing with a market in16 formation processor in the distribution of real17 time market information.

18 ‘‘(4) RELATIONSHIP TO OTHER LAWS.—

19 ‘‘(A) PREEMPTION.—Subject to subpara20 graphs (B), (C), and (D), on and after the date

21 of enactment of this subsection, this section—

22 ‘‘(i) shall exclusively govern the unau23 thorized extraction, sale, distribution or re24 distribution, or other dissemination of real25 time market information; and
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1 ‘‘(ii) shall supersede any other Fed2 eral or State law (either statutory or com3 mon law) to the extent that such other

4 Federal or State law is inconsistent with

5 this section.

6 ‘‘(B) FEDERAL SECURITIES LAWS.—Noth7 ing in this subsection shall be construed—

8 ‘‘(i) to limit or otherwise affect the

9 application of any provision of the securi10 ties laws (as defined in section 3(a)(47)),

11 or the rules and regulations thereunder; or

12 ‘‘(ii) to impair or limit the authority

13 of the Commission.

14 ‘‘(C) ANTITRUST.—Nothing in this sub15 section shall limit in any way the constraints

16 that are imposed by Federal and State antitrust

17 laws on the manner in which products and serv18 ices may be provided to the public, including

19 those regarding single suppliers of products and

20 services.

21 ‘‘(D) LICENSING.—Nothing in this sub22 section shall restrict the rights of parties freely

23 to enter into licenses or any other contracts

24 with respect to the extraction, sale, distribution
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1 or redistribution, or other dissemination of real2 time market information.

3 ‘‘(5) LIMITATIONS ON ACTIONS.—

4 ‘‘(A) CIVIL ACTIONS.—No civil action shall

5 be maintained under this subsection unless it is

6 commenced within one year after the cause of

7 action arises or claim accrues.

8 ‘‘(B) ADDITIONAL LIMITATION.—No civil

9 action shall be maintained under this subsection

10 for the extraction, sale, distribution or redis11 tribution, or other dissemination of market in12 formation that is not real-time market informa13 tion.

14 ‘‘(C) PERSONS SUBJECT TO CONTRACTUAL

15 REMEDIES.—No civil action shall be maintained

16 under this subsection by a market information

17 processor against any person to whom such

18 processor provides real-time market information

19 pursuant to a contract or agreement between

20 such processor and such person with respect to

21 any real-time market information or any rights

22 or remedies provided pursuant to such contract

23 or agreement.

24 ‘‘(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

11 market participants use market data, and other

12 relevant factors, the Commission may, con13 sistent with the protection of investors and the

14 public interest, prescribe by rule the extent to

15 which market information shall be considered to

16 be real-time market information for purposes of

17 this subsection.

18 ‘‘(C) MARKET INFORMATION PROC19 ESSOR.—The term ‘market information proc20 essor’ with respect to any market information

21 means the securities exchange, self-regulatory

22 organization, securities information processor,

23 or national market system plan administrator

24 that is responsible under this title or the rules

25 or regulations thereunder, for the collection,
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1 processing, distribution, and publication of, or

2 preparing for distribution or publication, such

3 market information.’’.

4 SEC. 202. EFFECTIVE DATE.

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

6 201 shall take effect on the date of the enactment of this

7 Act, and shall apply to acts committed on or after that

8 date.

9 (b) PRIOR ACTS NOT AFFECTED.—No person shall

10 be liable under section 11A(e) of the Securities Exchange

11 Act of 1934 (15 U.S.C. 78k–1(e)), as added by section

12 201 of this Act, for the extraction, sale, distribution or

13 redistribution, or other dissemination of real-time market

14 information prior to the date of enactment of this Act,

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

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