108TH CONGRESS

2D SESSION S. 1932

AN ACT

To provide criminal penalties for unauthorized recording of

motion pictures in a motion picture exhibition facility,

to provide criminal and civil penalties for unauthorized

distribution of commercial prerelease copyrighted works,

and for other purposes.

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 ‘‘Artists’ Rights and

5 Theft Prevention Act of 2004’’ or the ‘‘ART Act’’.
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1 SEC. 2. CONGRESSIONAL FINDINGS.

2 Congress finds the following:

3 (1) Intellectual property—

4 (A) represents the ideas, imagination and

5 creativity needed to innovate long before a

6 product is brought to market;

7 (B) is fundamental to the continued eco8 nomic, social, and cultural development of soci9 ety; and

10 (C) deserves the protection of our laws.

11 (2) Music, film, software, and all other forms of

12 intellectual property represent one of the strongest

13 and most significant sectors of the United States

14 economy, as demonstrated by the fact that these

15 industries—

16 (A) accounted for more than 5 percent of

17 the United States Gross Domestic Product, or

18 $535,100,000,000 in 2001;

19 (B) represent almost 6 percent of all

20 United States employment; and

21 (C) led all major industry sectors in for22 eign sales and exports in 2001.

23 (3) In an attempt to combat the growing use of

24 the Internet and technology for the illegal reproduc25 tion and distribution of copyrighted materials, Con26 gress unanimously passed and President Clinton
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1 signed the ‘‘No Electronic Theft (NET) Act’’ in

2 1997. The NET Act is designed to strengthen copy3 right and trademark laws and to permit the prosecu4 tion of individuals in cases involving large-scale ille5 gal reproduction or distribution of copyrighted works

6 where the infringers act willfully.

7 (4) Under the No Electronic Theft (NET) Act’s

8 economic harm requirement, investigations by law

9 enforcement of copyright infringements are particu10 larly resource intensive and pose significant chal11 lenges. In the interest of broader deterrence and in

12 order to facilitate the prosecution of particularly

13 egregious copyright violations, it is important to rec14 ognize that a significant level of economic harm can

15 be reached by the distribution of prerelease commer16 cial works.

17 (5) The use of camcorders and other audio18 visual recording devices in movie theaters to make il19 legal copies of films is posing a serious threat to the

20 motion picture industry. According to a recent in21 dustry study, 92.4 percent of the first copies of mov22 ies available for download on the Internet originate

23 from camcorders.

24 (6) Given the difficulty of enforcement, online

25 theft of music, film, software, and all forms of intel-
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1 lectual property continues to rise. The negative ef2 fects on this large segment of the United States

3 economy are significant, as exemplified by almost a

4 31 percent drop in sales for the music industry from

5 the middle of 2000 to the middle of 2003.

6 (7) Federal legislation is necessary and war7 ranted to combat the most egregious forms of online

8 theft of intellectual property and its significant, neg9 ative economic impact on the United States economy

10 because—

11 (A) Article 1, section 8 of the United

12 States Constitution gives Congress the power

13 ‘‘[t]o promote the Progress of Science and use14 ful Arts, by securing for limited Times to Au15 thors and Inventors the exclusive Right to their

16 respective Writings and Discoveries,’’ as well as

17 the power ‘‘[t]o regulate Commerce with foreign

18 nations, and among the several States.’’;

19 (B) the importance of the music, film, soft20 ware and other intellectual property-based in21 dustries to the overall health of the United

22 States economy is well documented and signifi23 cant; and
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1 (C) theft and unauthorized distribution of

2 intellectual property across State and inter3 national lines occurs on a regular basis.

4 SEC. 3. CRIMINAL PENALTIES FOR UNAUTHORIZED RE5 CORDING OF MOTION PICTURES IN A MO6 TION PICTURE EXHIBITION FACILITY.

7 (a) IN GENERAL.—Chapter 113 of title 18, United

8 States Code, is amended by adding after section 2319A

9 the following new section:

10 ‘‘§ 2319B. Unauthorized recording of motion pictures

11 in a motion picture exhibition facility

12 ‘‘(a) OFFENSE.—Any person who, without the au13 thorization of the copyright owner, knowingly uses or at14 tempts to use an audiovisual recording device to transmit

15 or make a copy of a motion picture or other audiovisual

16 work protected under title 17, or any part thereof, from

17 a performance of such work in a motion picture exhibition

18 facility, shall—

19 ‘‘(1) be imprisoned for not more than 3 years,

20 fined under this title, or both; or

21 ‘‘(2) if the offense is a second or subsequent of22 fense, be imprisoned for no more than 6 years, fined

23 under this title, or both.

24 ‘‘(b) FORFEITURE AND DESTRUCTION.—When a per25 son is convicted of a violation of subsection (a), the court
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1 in its judgment of conviction shall, in addition to any pen2 alty provided, order the forfeiture and destruction or other

3 disposition of all unauthorized copies of motion pictures

4 or other audiovisual works protected under title 17, or

5 parts thereof, and any audiovisual recording devices or

6 other equipment used in connection with the offense.

7 ‘‘(c) AUTHORIZED ACTIVITIES.—This section does

8 not prevent any lawfully authorized investigative, protec9 tive, or intelligence activity by an officer, agent, or em10 ployee of the United States, a State, or a political subdivi11 sion of a State, or a person acting under a contract with

12 the United States, a State, or a political subdivision of

13 a State.

14 ‘‘(d) IMMUNITY FOR THEATERS.—With reasonable

15 cause, the owner or lessee of a facility where a motion

16 picture is being exhibited, the authorized agent or em17 ployee of such owner or lessee, the licensor of the motion

18 picture being exhibited, or the agent or employee of such

19 licensor—

20 ‘‘(1) may detain, in a reasonable manner and

21 for a reasonable time, any person suspected of a vio22 lation of this section for the purpose of questioning

23 or summoning a law enforcement officer; and
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1 ‘‘(2) shall not be held liable in any civil or

2 criminal action arising out of a detention under

3 paragraph (1).

4 ‘‘(e) VICTIM IMPACT STATEMENT.—

5 ‘‘(1) IN GENERAL.—During the preparation of

6 the presentence report under rule 32(c) of the Fed7 eral Rules of Criminal Procedure, victims of an of8 fense under this section shall be permitted to submit

9 to the probation officer a victim impact statement

10 that identifies the victim of the offense and the ex11 tent and scope of the injury and loss suffered by the

12 victim, including the estimated economic impact of

13 the offense on that victim.

14 ‘‘(2) CONTENTS.—A victim impact statement

15 submitted under this subsection shall include—

16 ‘‘(A) producers and sellers of legitimate

17 works affected by conduct involved in the of18 fense;

19 ‘‘(B) holders of intellectual property rights

20 in the works described in subparagraph (A);

21 and

22 ‘‘(C) the legal representatives of such pro23 ducers, sellers, and holders.

24 ‘‘(f) DEFINITIONS.—In this section, the following

25 definitions shall apply:
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1 ‘‘(1) TITLE 17 DEFINITIONS.—The terms

2 ‘audiovisual work’, ‘copy’, ‘copyright owner’, ‘motion

3 picture’, ‘motion picture exhibition facility’, and

4 ‘transmit’ have, respectively, the meanings given

5 those terms in section 101 of title 17.

6 ‘‘(2) AUDIOVISUAL RECORDING DEVICE.—The

7 term ‘audiovisual recording device’ means a digital

8 or analog photographic or video camera, or any

9 other technology or device capable of enabling the

10 recording or transmission of a copyrighted motion

11 picture or other audiovisual work, or any part there12 of, regardless of whether audiovisual recording is the

13 sole or primary purpose of the device.’’.

14 (b) CLERICAL AMENDMENT.—The table of sections

15 at the beginning of chapter 113 of title 18, United States

16 Code, is amended by inserting after the item relating to

17 section 2319A the following:

‘‘2319B. Unauthorized recording of motion pictures in a motion picture exhibition facility.’’.

18 (c) DEFINITION.—Section 101 of title 17, United

19 States Code, is amended by inserting after the definition

20 of ‘‘Motion pictures’’ the following:

21 ‘‘The term ‘motion picture exhibition facility’ means

22 a movie theater, screening room, or other venue that is

23 being used primarily for the exhibition of a copyrighted

24 motion picture, if such exhibition is open to the public or
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1 is made to an assembled group of viewers outside of a nor2 mal circle of a family and its social acquaintances.’’.

3 SEC. 4. CRIMINAL INFRINGEMENT OF A WORK BEING PRE4 PARED FOR COMMERCIAL DISTRIBUTION.

5 (a) PROHIBITED ACTS.—Section 506(a) of title 17,

6 United States Code, is amended to read as follows:

7 ‘‘(a) CRIMINAL INFRINGEMENT.—

8 ‘‘(1) IN GENERAL.—Any person who willfully

9 infringes a copyright shall be punished as provided

10 under section 2319 of title 18, if the infringement

11 was committed—

12 ‘‘(A) for purposes of commercial advantage

13 or private financial gain;

14 ‘‘(B) by the reproduction or distribution,

15 including by electronic means, during any 180–

16 day period, of 1 or more copies or phonorecords

17 of 1 or more copyrighted works, which have a

18 total retail value of more than $1,000; or

19 ‘‘(C) by the distribution of a work being

20 prepared for commercial distribution, by mak21 ing it available on a computer network acces22 sible to members of the public, if such person

23 knew or should have known that the work was

24 intended for commercial distribution.
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1 ‘‘(2) EVIDENCE.—For purposes of this sub2 section, evidence of reproduction or distribution of a

3 copyrighted work, by itself, shall not be sufficient to

4 establish willful infringement of a copyright.

5 ‘‘(3) DEFINITION.—In this subsection, the term

6 ‘work being prepared for commercial distribution’

7 means—

8 ‘‘(A) a computer program, a musical work,

9 a motion picture or other audiovisual work, or

10 a sound recording, if at the time of unauthor11 ized distribution—

12 ‘‘(i) the copyright owner has a reason13 able expectation of commercial distribu14 tion; and

15 ‘‘(ii) the copies or phonorecords of the

16 work have not been commercially distrib17 uted; or

18 ‘‘(B) a motion picture, if at the time of un19 authorized distribution, the motion picture—

20 ‘‘(i) has been made available for view21 ing in a motion picture exhibition facility;

22 and

23 ‘‘(ii) has not been made available in

24 copies for sale to the general public in the

25 United States in a format intended to per-
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1 mit viewing outside a motion picture exhi2 bition facility.’’.

3 (b) CRIMINAL PENALTIES.—Section 2319 of title 18,

4 United States Code, is amended—

5 (1) in subsection (a)—

6 (A) by striking ‘‘Whoever’’ and inserting

7 ‘‘Any person who’’; and

8 (B) by striking ‘‘and (c) of this section’’

9 and inserting ‘‘, (c), and (d)’’;

10 (2) in subsection (b), by striking ‘‘section

11 506(a)(1)’’ and inserting ‘‘section 506(a)(1)(A)’’;

12 (3) in subsection (c), by striking ‘‘section

13 506(a)(2) of title 17, United States Code’’ and in14 serting ‘‘section 506(a)(1)(B) of title 17’’;

15 (4) by redesignating subsections (d) and (e) as

16 subsections (e) and (f), respectively;

17 (5) by adding after subsection (c) the following:

18 ‘‘(d) Any person who commits an offense under sec19 tion 506(a)(1)(C) of title 17—

20 ‘‘(1) shall be imprisoned not more than 3 years,

21 fined under this title, or both;

22 ‘‘(2) shall be imprisoned not more than 5 years,

23 fined under this title, or both, if the offense was

24 committed for purposes of commercial advantage or

25 private financial gain;
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1 ‘‘(3) shall be imprisoned not more than 6 years,

2 fined under this title, or both, if the offense is a sec3 ond or subsequent offense; and

4 ‘‘(4) shall be imprisoned not more than 10

5 years, fined under this title, or both, if the offense

6 is a second or subsequent offense under paragraph

7 (2).’’; and

8 (6) in subsection (f), as redesignated—

9 (A) in paragraph (1), by striking ‘‘and’’ at

10 the end;

11 (B) in paragraph (2), by striking the pe12 riod at the end and inserting a semicolon; and

13 (C) by adding at the end the following:

14 ‘‘(3) the term ‘financial gain’ has the meaning

15 given the term in section 101 of title 17; and

16 ‘‘(4) the term ‘work being prepared for com17 mercial distribution’ has the meaning given the term

18 in section 506(a) of title 17.’’.

19 SEC. 5. CIVIL REMEDIES FOR INFRINGEMENT OF A WORK

20 BEING PREPARED FOR COMMERCIAL DIS21 TRIBUTION.

22 (a) PREREGISTRATION.—Section 408 of title 17,

23 United States Code, is amended by adding at the end the

24 following:
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1 ‘‘(f) PREREGISTRATION OF WORKS BEING PRE2 PARED FOR COMMERCIAL DISTRIBUTION.—

3 ‘‘(1) RULEMAKING.—Not later than 180 days

4 after the date of enactment of this Act, the Register

5 of Copyrights shall issue regulations to establish

6 procedures for preregistration of a work that is

7 being prepared for commercial distribution and has

8 not been published.

9 ‘‘(2) CLASS OF WORKS.—The regulations estab10 lished under paragraph (1) shall permit

11 preregistration for any work that is in a class of

12 works that the Register determines has had a his13 tory of infringement prior to authorized commercial

14 distribution.

15 ‘‘(3) APPLICATION FOR REGISTRATION.—Not

16 later than 3 months after the first publication of the

17 work, the applicant shall submit to the Copyright

18 Office—

19 ‘‘(A) an application for registration of the

20 work;

21 ‘‘(B) a deposit; and

22 ‘‘(C) the applicable fee.

23 ‘‘(4) EFFECT OF UNTIMELY APPLICATION.—An

24 action for infringement under this chapter shall be

25 dismissed, and no award of statutory damages or at-
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1 torney fees shall be made for a preregistered work,

2 if the items described in paragraph 3 are not sub3 mitted to the Copyright Office in proper form within

4 the earlier of—

5 ‘‘(A) 3 months after the first publication of

6 the work; or

7 ‘‘(B) 1 month after the copyright owner

8 has learned of the infringement.’’.

9 (b) INFRINGEMENT ACTIONS.—Section 411(a) of

10 title 17, United States Code, is amended by inserting

11 ‘‘preregistration or’’ after ‘‘shall be instituted until’’.

12 (c) EXCLUSION.—Section 412 of title 17, United

13 States Code, is amended by inserting ‘‘, an action for in14 fringement of the copyright of a work that has been

15 preregistered under section 408(f) before the commence16 ment of the infringement,’’ after ‘‘section 106A(a)’’.

17 SEC. 6. FEDERAL SENTENCING GUIDELINES.

18 (a) REVIEW AND AMENDMENT.—Not later than 180

19 days after the date of enactment of this Act, the United

20 States Sentencing Commission, pursuant to its authority

21 under section 994 of title 28, United States Code, and

22 in accordance with this section, shall review and, if appro23 priate, amend the Federal sentencing guidelines and policy

24 statements applicable to persons convicted of intellectual

25 property rights crimes, including any offense under—
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1 (1) section 506, 1201, or 1202 of title 17,

2 United States Code; or

3 (2) section 2318, 2319, 2319A, 2319B, or 2320

4 of title 18, United States Code.

5 (b) AUTHORIZATION.—The United States Sentencing

6 Commission may amend the Federal sentencing guidelines

7 in accordance with the procedures set forth in section

8 21(a) of the Sentencing Act of 1987 (28 U.S.C. 994 note)

9 as though the authority under that section had not ex10 pired.

11 (c) RESPONSIBILITIES OF UNITED STATES SEN12 TENCING COMMISSION.—In carrying out this subsection,

13 the United States Sentencing Commission shall—

14 (1) take all appropriate measures to ensure that

15 the Federal sentencing guidelines and policy state16 ments described in subsection (a) are sufficiently

17 stringent to deter, and adequately reflect the nature

18 of, intellectual property rights crimes;

19 (2) determine whether to provide a sentencing

20 enhancement for those convicted of the offenses de21 scribed in subsection (a), if the conduct involves the

22 display, performance, publication, reproduction, or

23 distribution of a copyrighted work before it has been

24 authorized by the copyright owner, whether in the
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1 media format used by the infringing party or in any

2 other media format;

3 (3) determine whether the scope of ‘‘uploading’’

4 set forth in application note 3 of section 2B5.3 of

5 the Federal sentencing guidelines is adequate to ad6 dress the loss attributable to people who broadly dis7 tribute copyrighted works without authorization over

8 the Internet; and

9 (4) determine whether the sentencing guidelines

10 and policy statements applicable to the offenses de11 scribed in subsection (a) adequately reflect any harm

12 to victims from copyright infringement if law en13 forcement authorities cannot determine how many

14 times copyright material has been reproduced or dis15 tributed.

16 SEC. 7. AUTHORIZATION OF APPROPRIATIONS.

17 There are authorized to be appropriated to the De18 partment of Justice $5,000,000 for each of the fiscal years

19 2005, 2006, 2007, 2008, and 2009 to prosecute violations

20 of intellectual property rights as set forth under sections
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1 2318, 2319, 2319A, 2319B, and 2320 of title 18, United

2 States Code.

Passed the Senate June 25, 2004.

Attest:

Secretary.
108TH CONGRESS

2D SESSION S. 1932

AN ACT

To provide criminal penalties for unauthorized reother purposes. mercial prerelease copyrighted works, and for penalties for unauthorized distribution of com- exhibition facility, to provide criminal and civil cording of motion pictures in a motion picture