circumventing technical restrictions for any reason. 
As a result, the lawful consumer cannot legally cir-
cumvent technological restrictions, even if he or she 
is simply trying to exercise a fair use or to utilize 
the work on a different digital media device. See, 
e.g., Universal City Studios, Inc. v. Reimerdes, 111 
F. Supp. 2d 294, 321–24 (S.D.N.Y. 2000) (DMCA 
failed to give consumers the technical means to 
make fair uses of encrypted copyrighted works). 
(8) The authors of the DMCA never intended 
to create such a dramatic shift in the balance. As 
the report of the Committee of the Judiciary of the 
House of Representatives accompanying the DMCA 
stated: ‘‘[A]n individual [should] not be able to cir-
cumvent in order to gain unauthorized access to a 
work, but [should] be able to do so in order to make 
fair use of a work which he or she has acquired law-
fully.’’ House Report 105–551, Part I, Section-by-
Section Analysis of section 1201(a)(1) (emphasis 
added). 
(9) It is now necessary to restore the traditional 
balance between copyright holders and society, as in-
tended by the 105th Congress. Copyright laws in the 
digital age must prevent and punish digital pirates 
without treating every consumer as one.
SEC. 3. PROTECTING FAIR USE AND CONSUMER EXPECTA-
TIONS IN THE DIGITAL WORLD. 
(a) FAIR USE.—The first sentence of section 107 of 
title 17, United States Code, is amended by inserting after 
‘‘or by any other means specified in that section,’’ the fol-
lowing: ‘‘and by analog or digital transmissions,’’. 
(b) PERMISSIBLE USES OF DIGITAL WORKS.—
(1) IN GENERAL.—Chapter 1 of title 17, United 
States Code, is amended by adding after section 122 
the following: 
‘‘§ 123. Limitations on exclusive rights; Permissible 
uses of digital works 
‘‘(a) USE
OF
LAWFULLY
OBTAINED
DIGITAL 
WORKS.—Notwithstanding the provisions of section 106, 
it is not an infringement of copyright for a person who 
lawfully obtains a copy or phonorecord of a digital work, 
or who lawfully receives a transmission of a digital work, 
to reproduce, store, adapt, or access the digital work—
‘‘(1) for archival purposes, if all such archival 
copies are destroyed or rendered permanently inac-
cessible in the event that continued possession of the 
work should cease to be rightful; and 
‘‘(2) in order to perform or display the work, or 
an adaptation of the work, on a digital media device, 
if such performance or display is not public.
‘‘(b) EFFECT OF LICENSES.—When a digital work is 
distributed to the public subject to nonnegotiable license 
terms, such terms shall not be enforceable under the com-
mon laws or statutes of any State to the extent that they 
restrict or limit any of the limitations on exclusive rights 
under this title. 
‘‘(c) DEFINITIONS.—As used in this section, the fol-
lowing terms have the following meanings: 
‘‘(1) A ‘digital work’ is any literary work (ex-
cept a computer program), sound recording or musi-
cal work, or a dramatic work, motion picture, or 
other audiovisual work, in whole or in part in a dig-
ital or other nonanalog format. 
‘‘(2) A ‘digital media device’ is any hardware or 
software that converts copyrighted works in digital 
form into a form whereby the images and sounds are 
visible or audible, or retrieves or accesses copy-
righted works in digital form and transfers or makes 
available for transfer such works to such hardware 
or software. 
‘‘(d) CONSTRUCTION.—Nothing in this section shall 
enlarge or diminish any of the other limitations on exclu-
sive rights contained in this title, including any limitations 
that relate to archival activities by a library or an archives 
under sections 107 and 108.’’.
(2) CONFORMING AMENDMENT.—The table of 
sections for chapter 1 of title 17, United States 
Code, is amended by adding at the end the following 
new item:
‘‘123. Limitations on exclusive rights; Permissible uses of digital works.’’.
SEC. 4. DIGITAL FIRST SALE. 
Section 109 of title 17, United States Code, is 
amended by adding at the end the following: 
‘‘(f) The privileges prescribed by subsections (a) and 
(c) apply where the owner of a particular copy or phono-
record of a work in a digital or other nonanalog format, 
or any person authorized by such owner, sells or otherwise 
disposes of the work by means of a transmission to a sin-
gle recipient, if the owner does not retain his or her copy 
or phonorecord in a retrievable form and the work is sold 
or otherwise disposed of in its original format.’’. 
SEC. 5. PERMISSIBLE CIRCUMVENTION TO ENABLE FAIR 
USE AND CONSUMER EXPECTATIONS. 
Section 1201 of title 17, United States Code, is 
amended—
(1) by redesignating subsections (c) through (k) 
as subsections (d) through (l), respectively; and 
(2) by inserting after subsection (b) the fol-
lowing: 
‘‘(c) CIRCUMVENTION FOR NONINFRINGING USES.—
(1) Notwithstanding any other provision in this title, a
person who lawfully obtains a copy or phonorecord of a 
work, or who lawfully receives a transmission of a work, 
may circumvent a technological measure that effectively 
controls access to the work or protects a right of the copy-
right holder under this title if—
‘‘(A) such act is necessary to make a non-
infringing use of the work under this title; and 
‘‘(B) the copyright owner fails to make publicly 
available the necessary means to make such non-
infringing use without additional cost or burden to 
such person. 
‘‘(2) Notwithstanding the provisions of subsections 
(a)(2) and (b), any person may manufacture, import, offer 
to the public, provide, or otherwise make available techno-
logical means to circumvent a technological measure that 
effectively controls access to a work protected under this 
title or protects a right of a copyright holder under this 
title, if—
‘‘(A) such means are necessary to make a non-
infringing use under paragraph (1)(A); 
‘‘(B) such means are designed, produced, and 
marketed to make a noninfringing use under para-
graph (1)(A); and
‘‘(C) the copyright owner fails to make available 
the necessary means referred to in paragraph 
(1)(B).’’.
Æ