SEC. 107. AUTHORIZED APPROPRIATIONS.
There are authorized to be appropriated to the De-
partment of Justice for fiscal year 2005 not less than
$15,000,000 for the investigation and prosecution of viola-
tions of title 17, United States Code.
SEC. 108. CRIMINAL PENALTIES FOR UNAUTHORIZED RE-
CORDING OF MOTION PICTURES IN A MO-
TION PICTURE EXHIBITION FACILITY.
(a) IN GENERAL.—Chapter 113 of title 18, United
States Code, is amended by adding after section 2319A
the following new section:
‘‘§ 2319B. Unauthorized recording of motion pictures
in a motion picture exhibition facility
‘‘(a) OFFENSE.—Any person who, without the au-
thorization of the copyright owner, knowingly uses or at-
tempts to use an audiovisual recording device to transmit
or make a copy of a motion picture or other audiovisual
work protected under title 17, or any part thereof, from
a performance of such work in a motion picture exhibition
facility, shall—
‘‘(1) be imprisoned for not more than 3 years,
fined under this title, or both; or
‘‘(2) if the offense is a second or subsequent of-
fense, be imprisoned for no more than 6 years, fined
under this title, or both.
The possession by a person of an audiovisual recording
device in a motion picture exhibition facility may be con-
sidered as evidence in any proceeding to determine wheth-
er that person committed an offense under this subsection,
but shall not, by itself, be sufficient to support a conviction
of that person for such offense.
‘‘(b) FORFEITURE AND DESTRUCTION.—When a per-
son is convicted of an offense under subsection (a), the
court in its judgment of conviction shall, in addition to
any penalty provided, order the forfeiture and destruction
or other disposition of all unauthorized copies of motion
pictures or other audiovisual works protected under title
17, or parts thereof, and any audiovisual recording devices
or other equipment used in connection with the offense.
‘‘(c) AUTHORIZED ACTIVITIES.—This section does
not prevent any lawfully authorized investigative, protec-
tive, or intelligence activity by an officer, agent, or em-
ployee of the United States, a State, or a political subdivi-
sion of a State, or by a person acting under a contract
with the United States, a State, or a political subdivision
of a State.
‘‘(d) IMMUNITY FOR THEATERS AND AUTHORIZED
PERSONS.—With reasonable cause, the owner or lessee of
a motion picture facility where a motion picture is being
exhibited, the authorized agent or employee of such owner
or lessee, the licensor of the motion picture being exhib-
ited, or the agent or employee of such licensor—
‘‘(1) may detain, in a reasonable manner and
for a reasonable time, any person suspected of com-
mitting an offense under this section for the purpose
of questioning that person or summoning a law en-
forcement officer; and
‘‘(2) shall not be held liable in any civil or
criminal action by reason of a detention under para-
graph (1).
‘‘(e) VICTIM IMPACT STATEMENT.—
‘‘(1) IN GENERAL.—During the preparation of
the presentence report under rule 32(c) of the Fed-
eral Rules of Criminal Procedure, victims of an of-
fense under this section shall be permitted to submit
to the probation officer a victim impact statement
that identifies the victim of the offense and the ex-
tent and scope of the injury and loss suffered by the
victim, including the estimated economic impact of
the offense on that victim.
‘‘(2) CONTENTS.—A victim impact statement
submitted under this subsection shall include—
‘‘(A) producers and sellers of legitimate
works affected by conduct involved in the of-
fense;
‘‘(B) holders of intellectual property rights
in the works described in subparagraph (A);
and
‘‘(C) the legal representatives of such pro-
ducers, sellers, and holders.
‘‘(f) DEFINITIONS.—In this section:
‘‘(1) AUDIOVISUAL
WORK, COPY, ETC.—The
terms ‘audiovisual work’, ‘copy’, ‘copyright owner’,
‘motion picture’, and ‘transmit’ have, respectively,
the meanings given those terms in section 101 of
title 17.
‘‘(2) AUDIOVISUAL
RECORDING
DEVICE.—The
term ‘audiovisual recording device’ means a digital
or analog photographic or video camera, or any
other technology or device capable of enabling the
recording or transmission of a copyrighted motion
picture or other audiovisual work, or any part there-
of, regardless of whether audiovisual recording is the
sole or primary purpose of the device.
‘‘(3) MOTION PICTURE EXHIBITION FACILITY.—
The term ‘motion picture exhibition facility’ means
a movie theater, screening room, or other venue that
is being used primarily for the exhibition of a copy-
righted motion picture, if such exhibition is open to
the public or is made to an assembled group of view-
ers outside of a normal circle of a family and its so-
cial acquaintances.
‘‘(g) STATE LAW NOT PREEMPTED.—Nothing in this
section may be construed to annul or limit any rights or
remedies under the laws of any State.’’.
(b) CLERICAL AMENDMENT.—The table of sections
at the beginning of chapter 113 of title 18, United States
Code, is amended by inserting after the item relating to
section 2319A the following:
‘‘2319B. Unauthorized recording of motion pictures in a motion picture exhi-
bition facility.’’.
SEC. 109. SENSE OF THE CONGRESS ON NEED TO TAKE
STEPS TO PREVENT ILLEGAL ACTIVITY ON
PEER-TO-PEER SERVICES.
(a) FINDINGS.—The Congress finds as follows:
(1) The most popular publicly accessible peer-
to-peer file sharing software programs combined
have been downloaded worldwide over 600,000,000
times.
(2) The vast majority of software products, in-
cluding peer-to-peer technology, do not pose an in-
herent risk. Responsible persons making software
products should be encouraged and commended for
the due diligence and reasonable care they take in-
cluding by providing instructions, relevant informa-
tion in the documentation, disseminating patches,
updates, and other appropriate modifications to the
software.
(3) Massive volumes of illegal activity, including
the distribution of child pornography, viruses, and
confidential personal information, and copyright in-
fringement occur on publicly accessible peer-to-peer
file sharing services every day. Some publicly acces-
sible peer-to-peer file sharing services expose con-
sumers, particularly children, to serious risks, in-
cluding legal liability, loss of privacy, threats to com-
puter security, and exposure to illegal and inappro-
priate material.
(4) Several studies and reports demonstrate
that pornography, including child pornography, is
prevalent on publicly available peer-to-peer file shar-
ing services, and children are regularly exposed to
pornography when using such peer-to-peer file shar-
ing services.
(5) The full potential of peer-to-peer technology
to benefit consumers has yet to be realized and will
not be achieved until these problems are adequately
addressed.
(6) To date, the businesses that run publicly ac-
cessible file-sharing services have refused or failed to
voluntarily and sufficiently address these problems.
(7) Many users of publicly available peer-to-
peer file-sharing services are drawn to these systems
by the lure of obtaining ‘‘free’’ music and movies.
(8) While some users use parental controls to
protect children from pornography available on the
Internet and search engines, not all such controls
work on publicly accessible peer-to-peer networks.
(9) Businesses that run publicly accessible peer-
to-peer file sharing services have openly acknowl-
edged, and numerous studies and reports have estab-
lished, that these services facilitate and profit from
massive amounts of copyright infringement, causing
enormous damage to the economic well-being of the
copyright industries whose works are being illegally
‘‘shared’’ and downloaded.
(10) The legitimate digital music marketplace
offers consumers a wide and growing array of
choices for obtaining music legally, without exposure
to the risks posed by publicly accessible peer-to-peer
file sharing services.
(11) The Federal Trade Commission issued a
Consumer Alert in July of 2003 warning consumers
that some file-sharing services contain damaging vi-
ruses and worms and, without the computer user’s
knowledge or consent, install spyware to monitor a
user’s browsing habits and send data to third parties
or automatically open network connections.
(12) Publicly available peer-to-peer file-sharing
services can and should adopt reasonable business
practices and use technology in the marketplace to
address the existing risks posed to consumers by
their services and facilitate the legitimate use of
peer-to-peer file sharing technology and software.
(b) SENSE OF CONGRESS.—It is the sense of the
Congress that—
(1) responsible software developers should be
commended, recognized, and encouraged for their ef-
forts to protect consumers;
(2) currently the level of ongoing and persistent
illegal and dangerous activity on publicly accessible
peer-to-peer file sharing services is harmful to con-
sumers, minors, and the economy; and
(3) therefore, the Congress and the executive
branch should consider all appropriate measures to
protect consumers and children, and prevent such il-
legal activity.
SEC. 110. ENHANCEMENT OF CRIMINAL COPYRIGHT IN-
FRINGEMENT.
(a) CRIMINAL INFRINGEMENT.—Section 506 of title
17, United States Code, is amended—
(1) by amending subsection (a) to read as fol-
lows:
‘‘(a) CRIMINAL INFRINGEMENT.—Any person who—
‘‘(1) infringes a copyright willfully and for pur-
poses of commercial advantage or private financial
gain,
‘‘(2) infringes a copyright willfully by the repro-
duction or distribution, including by the offering for
distribution to the public by electronic means, during
any 180-day period, of 1 or more copies or
phonorecords of 1 or more copyrighted works, which
have a total retail value of more than $1,000, or
‘‘(3) infringes a copyright by the knowing dis-
tribution, including by the offering for distribution
to the public by electronic means, with reckless dis-
regard of the risk of further infringement, during
any 180-day period, of—
‘‘(A) 1,000 or more copies or phonorecords
of 1 or more copyrighted works,
‘‘(B) 1 or more copies or phonorecords of
1 or more copyrighted works with a total retail
value of more than $10,000, or
‘‘(C) 1 or more copies or phonorecords of
1 or more copyrighted pre-release works,
shall be punished as provided under section 2319 of title
18. For purposes of this subsection, evidence of reproduc-
tion or distribution of a copyrighted work, by itself, shall
not be sufficient to establish the necessary level of intent
under this subsection.’’; and
(2) by adding at the end the following:
‘‘(g) LIMITATION ON LIABILITY OF SERVICE PRO-
VIDERS.—No legal entity shall be liable for a violation of
subsection (a)(3) by reason of performing any function de-
scribed in subsection (a), (b), (c), or (d) of section 512
if such legal entity would not be liable for monetary relief
under section 512 by reason of performing such function.
Except for purposes of determining whether an entity
qualifies for the limitation on liability under subsection
(a)(3) of this section, the legal conclusion of whether an
entity qualifies for a limitation on liability under section
512 shall not be considered in a judicial determination of
whether the entity violates subsection (a) of this section.
‘‘(h) DEFINITIONS.—In this section:
‘‘(1) PRE-RELEASE WORK.—The term ‘pre-re-
lease work’ refers to a work protected under this
title which has a commercial and economic value and
which, at the time of the act of infringement that is
the basis for the offense under subsection (a)(3), the
defendant knew or should have known had not yet
been made available by the copyright owner to indi-
vidual members of the general public in copies or
phonorecords for sale, license, or rental.
‘‘(2) RETAIL VALUE.—The ‘retail value’ of a
copyrighted work is the retail price of that work in
the market in which it is sold. In the case of an in-
fringement of a copyright by distribution, if the re-
tail price does not adequately reflect the economic
value of the infringement, then the retail value may
be determined using other factors, including but not
limited to suggested retail price, wholesale price, re-
placement cost of the item, licensing, or distribution-
related fees.’’.
(b) PENALTIES.—Section 2319 of title 18, United
States Code, is amended—
(1) by redesignating subsections (d) and (e) as
subsections (e) and (f), respectively;
(2) by inserting after subsection (c) the fol-
lowing:
‘‘(d) Any person who commits an offense under sec-
tion 506(a)(3) of title 17—
‘‘(1) shall be imprisoned not more than 3 years,
or fined in the amount set forth in this title, or both,
or, if the offense was committed for purposes of
commercial advantage or private financial gain, im-
prisoned for not more than 5 years, or fined in the
amount set forth in this title, or both; and
‘‘(2) shall, if the offense is a second or subse-
quent offense under paragraph (1), be imprisoned
not more than 6 years, or fined in the amount set
forth in this title, or both, or, if the offense was
committed for purposes of commercial advantage or
private financial gain, imprisoned for not more than
10 years, or fined in the amount set forth in this
title, or both.’’; and
(3) in subsection (f), as so redesignated—
(A) in paragraph (1), by striking ‘‘and’’
after the semicolon;
(B) in paragraph (2), by striking the pe-
riod and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(3) the term ‘financial gain’ has the meaning
given that term in section 101 (relating to defini-
tions) of title 17.’’.
(c) CIVIL REMEDIES FOR INFRINGEMENT OF A COM-
MERCIAL PRE-RELEASE COPYRIGHTED WORK.—Section
504(b) of title 17, United States Code, is amended—
(1) by striking ‘‘The copyright owner’’ and in-
serting the following:
‘‘(1) IN GENERAL.—The copyright owner’’; and
(2) by adding at the end the following:
‘‘(2) DAMAGES
FOR
PRE-RELEASE
INFRINGE-
MENT.—
‘‘(A) IN
GENERAL.—In the case of any
pre-release work, actual damages shall be pre-
sumed conclusively to be no less than $10,000
per infringement, if a person—
‘‘(i) distributes such work by making
it available on a computer network acces-
sible to members of the public; and
‘‘(ii) knew or should have known that
the work was intended for commercial dis-
tribution.
‘‘(B) DEFINITION.—For purposes of this
subsection, the term ‘pre-release work’ has the
meaning given that term in section 506(h).’’.
SEC. 111. AMENDMENT OF FEDERAL SENTENCING GUIDE-
LINES REGARDING THE INFRINGEMENT OF
COPYRIGHTED 
WORKS 
AND 
RELATED
CRIMES.
(a) AMENDMENT
TO
THE
SENTENCING
GUIDE-
LINES.—Pursuant to its authority under section 994 of
title 28, United States Code, and in accordance with this
section, the United States Sentencing Commission shall
review and, if appropriate, amend the sentencing guide-
lines and policy statements applicable to persons convicted
of intellectual property rights crimes, including sections
2318, 2319, 2319A, 2319B, 2320 of title 18, United
States Code, and sections 506, 1201, and 1202 of title
17, United States Code.
(b) FACTORS.—In carrying out this section, the Sen-
tencing Commission shall—
(1) take all appropriate measures to ensure that
the sentencing guidelines and policy statements ap-
plicable to the offenses described in subsection (a)
are sufficiently stringent to deter and adequately re-
flect the nature of such offenses;
(2) consider whether to provide a sentencing en-
hancement for those convicted of the offenses de-
scribed in subsection (a) when the conduct involves
the display, performance, publication, reproduction,
or distribution of a copyrighted work before the time
when the copyright owner has authorized the dis-
play, performance, publication, reproduction, or dis-
tribution of the original work, whether in the media
format used by the infringing good or in any other
media format;
(3) 
consider 
whether 
the 
definition 
of
‘‘uploading’’ contained in Application Note 3 to
Guideline 2B5.3 is adequate to address the loss at-
tributable to people broadly distributing copyrighted
works over the Internet without authorization; and
(4) consider whether the sentencing guidelines
and policy statements applicable to the offenses de-
scribed in subsection (a) adequately reflect any harm
to victims from infringement in circumstances where
law enforcement cannot determine how many times
copyrighted material is reproduced or distributed.
(c) PROMULGATION.—The Commission may promul-
gate the guidelines or amendments under this section in
accordance with the procedures set forth in section 21(a)
of the Sentencing Act of 1987, as though the authority
under that Act had not expired.
SEC. 112. EXEMPTION FROM INFRINGEMENT FOR SKIPPING
AUDIO AND VIDEO CONTENT IN MOTION PIC-
TURES.
(a) SHORT TITLE.—This section may be cited as the
‘‘Family Movie Act of 2004’’.
(b) EXEMPTION FROM COPYRIGHT AND TRADEMARK
INFRINGEMENT FOR SKIPPING OF AUDIO OR VIDEO CON-
TENT OF MOTION PICTURES.—Section 110 of title 17,
United States Code, is amended—
(1) in paragraph (9), by striking ‘‘and’’ after
the semicolon at the end;
(2) in paragraph (10), by striking the period at
the end and inserting ‘‘; and’’;
(3) by inserting after paragraph (10) the fol-
lowing:
‘‘(11) the making imperceptible, by or at the di-
rection of a member of a private household, of lim-
ited portions of audio or video content of a motion
picture during a performance in or transmitted to
that household for private home viewing, from an
authorized copy of the motion picture, or the cre-
ation or provision of a computer program or other
technology that enables such making imperceptible
and that is designed and marketed for such use at
the direction of a member of a private household,
if—
‘‘(A) no fixed copy of the altered version of
the motion picture is created by such computer
program or other technology; and
‘‘(B) no changes, deletions or additions are
made by such computer program or other tech-
nology to commercial advertisements, or to net-
work or station promotional announcements,
that would otherwise be performed or displayed
before, during or after the performance of the
motion picture.’’; and
(4) by adding at the end the following:
‘‘For purposes of paragraph (11), the term ‘making
imperceptible’ does not include the addition of audio or
video content that is performed or displayed over or in
place of existing content in a motion picture.’’.
(c) EXEMPTION
FROM
TRADEMARK
INFRINGE-
MENT.—Section 32 of the Trademark Act of 1946 (15
U.S.C. 1114) is amended by adding at the end the fol-
lowing:
(c) EXEMPTION
FROM
TRADEMARK
INFRINGE-
MENT.—Section 32 of the Trademark Act of 1946 (15
U.S.C. 1114) is amended by adding at the end the fol-
lowing:
‘‘(3)(A) Any person who engages in the conduct de-
scribed in paragraph (11) of section 110 of title 17,
United States Code, and who complies with the require-
ments set forth in that paragraph is not liable on account
of such conduct for a violation of any right under this Act.
This subparagraph does not preclude liability of a person
for conduct not described in paragraph (11) of section 110
of title 17, United States Code, even if that person also
engages in conduct described in paragraph (11) of section
110 of such title.
‘‘(B) A manufacturer, licensee, or licensor of tech-
nology that enables the making of limited portions of
audio or video content of a motion picture imperceptible
that is authorized under subparagraph (A) is not liable
on account of such manufacture or license for a violation
of any right under this Act, if such manufacturer, licensee,
or licensor ensures that the technology provides a clear
and conspicuous notice at the beginning of each perform-
ance that the performance of the motion picture is altered
from the performance intended by the director or copy-
right holder of the motion picture. Subparagraph (A) shall
not apply to a manufacturer, licensee, or licensor of tech-
nology that fails to comply with this subparagraph.
‘‘(C) The requirement under subparagraph (B) to
provide notice shall apply only with respect to technology
manufactured after the end of the 180-day period begin-
ning on the date of the enactment of the Family Movie
Act of 2004.’’.
(d) DEFINITION.—In this section, the term ‘‘Trade-
mark Act of 1946’’ means the Act entitled ‘‘An Act to
provide for the registration and protection of trademarks
used in commerce, to carry out the provisions of certain
international conventions, and for other purposes’’, ap-
proved July 5, 1946 (15 U.S.C. 1051 et seq.).