I
107TH CONGRESS
2D SESSION
H. R. 5544
To amend the Federal Trade Commission Act to provide that the advertising
or sale of a mislabeled copy-protected music disc is an unfair method
of competition and an unfair and deceptive act or practice, and for
other purposes.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 3, 2002
Mr. BOUCHER (for himself and Mr. DOOLITTLE) introduced the following bill;
which was referred to the Committee on Energy and Commerce, and in
addition to the Committee on the Judiciary, for a period to be subse-
quently determined by the Speaker, in each case for consideration of such
provisions as fall within the jurisdiction of the committee concerned
A BILL
To amend the Federal Trade Commission Act to provide
that the advertising or sale of a mislabeled copy-pro-
tected music disc is an unfair method of competition
and an unfair and deceptive act or practice, and for
other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Digital Media Con-
sumers’ Rights Act of 2002’’.
SEC. 2. FINDINGS.
Congress finds the following:
(1) The limited introduction into commerce of
‘‘copy-protected compact discs’’ has caused con-
sumer confusion and placed increased, unwarranted
burdens on retailers, consumer electronics manufac-
turers, and personal computer manufacturers re-
sponding to consumer complaints, conditions which
will worsen as larger numbers of such discs are in-
troduced into commerce.
(2) Recording companies introducing new forms
of copy protection should have the freedom to inno-
vate, but should also be responsible for providing
adequate notice to consumers about restrictions on
the playability and recordability of ‘‘copy-protected
compact discs’’.
(3) The Federal Trade Commission should be
empowered and directed to ensure the adequate la-
beling of prerecorded digital music disc products.
SEC. 3. INADEQUATELY LABELED COPY-PROTECTED COM-
PACT DISCS.
The Federal Trade Commission Act (15 U.S.C. 41
et seq.) is amended by inserting after section 24 the fol-
lowing new section:
‘‘INADEQUATELY LABELED COPY-PROTECTED COMPACT
DISCS
‘‘SEC. 24A. (a) DEFINITIONS.—In this section:
‘‘(1) The term ‘Commission’ means the Federal
Trade Commission.
‘‘(2) The term ‘audio compact disc’ means a
substrate packaged as a commercial prerecorded
audio product, containing a sound recording or re-
cordings, that conforms to all specifications and re-
quirements for Red Book Audio and bears a duly li-
censed and authorized ‘Compact disc Digital Audio’
logo.
‘‘(3) The term ‘prerecorded digital music disc
product’ means a commercial audio product com-
prised of a substrate in the form of a disc in which
is recorded a sound recording or sound recordings
generally in accordance with Red Book Audio speci-
fications but that does not conform to all licensed
requirements for Red Book Audio: Provided, That a
substrate containing a prerecorded sound recording
that conforms to the licensing requirements applica-
ble to a DVD-Audio disc or a Super Audio Compact
Disc is not a prerecorded digital music disc product.
‘‘(4) The term ‘Red Book Audio’ means audio
data digitized at 44,100 samples per second (44.1
kHz) with a range of 65,536 possible values as de-
fined in the ‘Compact Disc-Digital Audio System
Description’ (first published in 1980 by Philips N.V.
and Sony Corporation, as updated from time to
time).
‘‘(b) PROHIBITED ACTS.—(1) The introduction into
commerce, sale, offering for sale, or advertising for sale
of a prerecorded digital music disc product which is mis-
labeled or falsely or deceptively advertised or invoiced,
within the meaning of this section or any rules or regula-
tions prescribed by the Commission pursuant to subsection
(d), is unlawful and shall be deemed an unfair method of
competition and an unfair and deceptive act or practice
in commerce under section 5(a)(1).
‘‘(2) Prior to the time a prerecorded digital music
disc product is sold and delivered to the ultimate con-
sumer, it shall be unlawful to remove or mutilate, or cause
or participate in the removal or mutilation of, any label
required by this section or any rules or regulations pre-
scribed by the Commission pursuant to subsection (d) to
be affixed to such prerecorded digital music disc product.
Any person violating this subsection shall be deemed to
have engaged in an unfair method of competition and an
unfair and deceptive act or practice in commerce under
this Act.
‘‘(c) MISLABELED DISCS.—For purposes of this sec-
tion, a prerecorded digital music disc product shall be con-
sidered to be mislabeled if it—
‘‘(1) bears any logo or marking which, in ac-
cordance with common practice, identifies it as an
audio compact disc;
‘‘(2) fails to bear a label on the packaging in
which it is sold at retail in words that are prominent
and plainly legible on the front of the packaging
that—
‘‘(A) it is not an audio compact disc;
‘‘(B) it might not play properly in all de-
vices capable of playing an audio compact disc;
and
‘‘(C) it might not be recordable on a per-
sonal computer or other device capable of re-
cording content from an audio compact disc; or
‘‘(3) fails to provide the following information
on the packaging in which it is sold at retail in
words that are prominent and plainly legible—
‘‘(A) any minimum recommended software
requirements for playback or recordability on a
personal computer;
‘‘(B) any restrictions on the number of
times song files may be downloaded to the hard
drive of a personal computer; and
‘‘(C) the applicable return policy for con-
sumers who find that the prerecorded digital
music disc product does not play properly in a
device capable of playing an audio compact disc.
‘‘(d) RULEMAKING.—(1) The Commission may de-
velop such rules and regulations as it deems appropriate
to prevent the prohibited acts set forth in subsection (b)
and to require the proper labeling of prerecorded digital
music disc products under subsection (c).
‘‘(2)(A) The Commission may develop such additional
rules and regulations as it deems necessary to establish
appropriate labeling requirements applicable to new audio
discs, using new playback formats (including DVD-Audio
discs and Super Audio Compact Discs), if the Commission
finds, with respect to a particular type of disc, that—
‘‘(i) the manner in which the discs are displayed
at retail, packaged, or marketed results in substan-
tial consumer confusion about the playability and re-
cordability of such discs;
‘‘(ii) the discs are not appropriately labeled with
respect to their playability on standard audio com-
pact disc playback devices; and
‘‘(iii)(I) the discs are not recordable on a per-
sonal computer; or
‘‘(II) if the discs are recordable, a recording
made from such a disc is bound to a particular de-
vice.
‘‘(B) To the maximum extent practicable, the Com-
mission shall seek to ensure that any rules and regulations
developed under this paragraph impose labeling require-
ments comparable to the requirements imposed under the
rules and regulations developed under paragraph (1).’’.
SEC. 4. REPORT TO CONGRESS.
Not later than 2 years after the date of enactment
of this Act, the Federal Trade Commission shall submit
to Congress a report detailing the following:
(1) The extent to which prerecorded digital
music disc products (as defined in section 24A of
the Federal Trade Commission Act, as added by sec-
tion 3 of this Act) have entered the market over the
preceding 2 years.
(2) The extent to which the Commission has re-
ceived complaints from consumers about the imple-
mentation of return policies for consumers who find
that a prerecorded digital music disc product does
not play properly in a device capable of playing an
audio compact disc (as defined in section 24A of
such Act).
(3) The extent to which manufacturers and re-
tailers have been burdened by consumer returns of
devices unable to play prerecorded digital music disc
products.
(4) The number of enforcement actions taken
by the Commission pursuant to section 24A of such
Act.
(5) The number of convictions or settlements
achieved as a result of enforcement actions taken by
the Commission pursuant to section 24A of such
Act.
(6) Any proposed changes to this Act, with re-
spect to prerecorded digital music disc products,
that the Commission believes would enhance enforce-
ment, eliminate consumer confusion, or otherwise
address concerns raised by consumers with the Com-
mission.
SEC. 5. FAIR USE AMENDMENTS.
(a) SCIENTIFIC RESEARCH.—Subsections (a)(2)(A)
and (b)(1)(A) of section 1201 of title 17, United States
Code, are each amended by inserting after ‘‘title’’ in sub-
section (a)(2)(A) and after ‘‘thereof’’ in subsection
(b)(1)(A) the following: ‘‘unless the person is acting solely
in furtherance of scientific research into technological pro-
tection measures’’.
(b) FAIR USE RESTORATION.—Section 1201(c) of
title 17, United States Code, is amended—
(1) in paragraph (1), by inserting before the pe-
riod at the end the following: ‘‘and it is not a viola-
tion of this section to circumvent a technological
measure in connection with access to, or the use of,
a work if such circumvention does not result in an
infringement of the copyright in the work’’; and
(2) by adding at the end the following new
paragraph:
‘‘(5) It shall not be a violation of this title to manu-
facture, distribute, or make noninfringing use of a hard-
ware or software product capable of enabling significant
noninfringing use of a copyrighted work.’’.
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