HR 2281 PCS
the Federal Rules of Civil Procedure governing the
issuance, service, and enforcement of a subpoena
duces tecum.
‘‘(h) CONDITIONS FOR ELIGIBILITY.—
‘‘(1) ACCOMMODATION OF TECHNOLOGY.—The
limitations on liability established by this section
shall apply to a service provider only if the service
provider—
‘‘(A) has adopted and reasonably imple-
mented, and informs subscribers and account
holders of the service provider’s system or net-
work of, a policy that provides for the termi-
nation in appropriate circumstances of subscrib-
ers and account holders of the service provider’s
system or network who are repeat infringers;
and
‘‘(B) accommodates and does not interfere
with standard technical measures.
‘‘(2) DEFINITION.—As used in this subsection,
the term ‘standard technical measures’ means tech-
nical measures that are used by copyright owners to
identify or protect copyrighted works and—
‘‘(A) have been developed pursuant to a
broad consensus of copyright owners and serv-
HR 2281 PCS
ice providers in an open, fair, voluntary, multi-
industry standards process;
‘‘(B) are available to any person on rea-
sonable and nondiscriminatory terms; and
‘‘(C) do not impose substantial costs on
service providers or substantial burdens on their
systems or networks.
‘‘(i) INJUNCTIONS.—The following rules shall apply
in the case of any application for an injunction under sec-
tion 502 against a service provider that is not subject to
monetary remedies under this section:
‘‘(1) SCOPE OF RELIEF.—(A) With respect to
conduct other than that which qualifies for the limi-
tation on remedies set forth in subsection (a), the
court may grant injunctive relief with respect to a
service provider only in one or more of the following
forms:
‘‘(i) An order restraining the service pro-
vider from providing access to infringing mate-
rial or activity residing at a particular online
site on the provider’s system or network.
‘‘(ii) An order restraining the service pro-
vider from providing access to a subscriber or
account holder of the service provider’s system
or network who is engaging in infringing activ-
HR 2281 PCS
ity and is identified in the order, by terminating
the accounts of the subscriber or account holder
that are specified in the order.
‘‘(iii) Such other injunctive relief as the
court may consider necessary to prevent or re-
strain infringement of copyrighted material
specified in the order of the court at a particu-
lar online location, if such relief is the least
burdensome to the service provider among the
forms of relief comparably effective for that
purpose.
‘‘(B) If the service provider qualifies for the
limitation on remedies described in subsection (a),
the court may only grant injunctive relief in one or
both of the following forms:
‘‘(i) An order restraining the service pro-
vider from providing access to a subscriber or
account holder of the service provider’s system
or network who is using the provider’s service
to engage in infringing activity and is identified
in the order, by terminating the accounts of the
subscriber or account holder that are specified
in the order.
‘‘(ii) An order restraining the service pro-
vider from providing access, by taking reason-
HR 2281 PCS
able steps specified in the order to block access,
to a specific, identified, online location outside
the United States.
‘‘(2) CONSIDERATIONS.—The court, in consid-
ering the relevant criteria for injunctive relief under
applicable law, shall consider—
‘‘(A) whether such an injunction, either
alone or in combination with other such injunc-
tions issued against the same service provider
under this subsection, would significantly bur-
den either the provider or the operation of the
provider’s system or network;
‘‘(B) the magnitude of the harm likely to
be suffered by the copyright owner in the digi-
tal network environment if steps are not taken
to prevent or restrain the infringement;
‘‘(C) whether implementation of such an
injunction would be technically feasible and ef-
fective, and would not interfere with access to
noninfringing material at other online locations;
and
‘‘(D) whether other less burdensome and
comparably effective means of preventing or re-
straining access to the infringing material are
available.
HR 2281 PCS
‘‘(3) NOTICE
AND EX PARTE ORDERS.—In-
junctive relief under this subsection shall be avail-
able only after notice to the service provider and an
opportunity for the service provider to appear are
provided, except for orders ensuring the preservation
of evidence or other orders having no material ad-
verse effect on the operation of the service provider’s
communications network.
‘‘(j) DEFINITIONS.—
‘‘(1) SERVICE PROVIDER.—(A) As used in sub-
section (a), the term ‘service provider’ means an en-
tity offering the transmission, routing, or providing
of connections for digital online communications, be-
tween or among points specified by a user, of mate-
rial of the user’s choosing, without modification to
the content of the material as sent or received.
‘‘(B) As used in this section, other than sub-
section (a), the term ‘service provider’ means a pro-
vider of online services or network access, or the op-
erator of facilities therefor, and includes an entity
described in subparagraph (A).
‘‘(2) MONETARY RELIEF.—As used in this sec-
tion, the term ‘monetary relief’ means damages,
costs, attorneys’ fees, and any other form of mone-
tary payment.
HR 2281 PCS
‘‘(k) OTHER DEFENSES NOT AFFECTED.—The fail-
ure of a service provider’s conduct to qualify for limitation
of liability under this section shall not bear adversely upon
the consideration of a defense by the service provider that
the service provider’s conduct is not infringing under this
title or any other defense.
‘‘(l) PROTECTION OF PRIVACY.—Nothing in this sec-
tion shall be construed to condition the applicability of
subsections (a) through (d) on—
‘‘(1) a service provider monitoring its service or
affirmatively seeking facts indicating infringing ac-
tivity, except to the extent consistent with a stand-
ard technical measure complying with the provisions
of subsection (h); or
‘‘(2) a service provider gaining access to, re-
moving, or disabling access to material in cases in
which such conduct is prohibited by law.
‘‘(m) CONSTRUCTION.—Subsections (a), (b), (c), and
(d) describe separate and distinct functions for purposes
of applying this section. Whether a service provider quali-
fies for the limitation on liability in any one of those sub-
sections shall be based solely on the criteria in that sub-
section, and shall not affect a determination of whether
that service provider qualifies for the limitations on liabil-
ity under any other such subsection.’’.
HR 2281 PCS
‘‘(2) the ‘repair’ of a machine is the restoring
of the machine to the state of working in accordance
with its original specifications and any changes to
those specifications authorized for that machine.’’.
TITLE IV—MISCELLANEOUS
PROVISIONS
Subtitle A—Establishment of the
Under Secretary of Commerce
for Intellectual Property Policy
SEC. 401. UNDER SECRETARY OF COMMERCE FOR INTEL-
LECTUAL PROPERTY POLICY.
(a) APPOINTMENT.—There shall be within the De-
partment of Commerce an Under Secretary of Commerce
for Intellectual Property Policy, who shall be appointed
by the President, by and with the advice and consent of
the Senate, at level II of the Executive Schedule. On or
after the effective date of this subtitle, the President may
designate an individual to serve as the Acting Under Sec-
retary until the date on which an Under Secretary quali-
fies under this subsection.
(b) DUTIES.—The Under Secretary of Commerce for
Intellectual Property Policy, under the direction of the
Secretary of Commerce, shall perform the following func-
tions with respect to intellectual property policy:
HR 2281 PCS
(1) In coordination with the Under Secretary of
Commerce for International Trade, promote exports
of goods and services of the United States industries
that rely on intellectual property.
(2) Advise the President, through the Secretary
of Commerce, on national and certain international
issues relating to intellectual property policy, includ-
ing issues in the areas of patents, trademarks, and
copyrights.
(3) Advise Federal departments and agencies
on matters of intellectual property protection in
other countries.
(4) Provide guidance, as appropriate, with re-
spect to proposals by agencies to assist foreign gov-
ernments and international intergovernmental orga-
nizations on matters of intellectual property protec-
tion.
(5) Conduct programs and studies related to
the effectiveness of intellectual property protection
throughout the world.
(6) Advise the Secretary of Commerce on pro-
grams and studies relating to intellectual property
policy that are conducted, or authorized to be con-
ducted, cooperatively with foreign patent and trade-
HR 2281 PCS
mark offices and international intergovernmental or-
ganizations.
(7) In coordination with the Department of
State, conduct programs and studies cooperatively
with foreign intellectual property offices and inter-
national intergovernmental organizations.
(c) DEPUTY UNDER SECRETARIES.—To assist the
Under Secretary of Commerce for Intellectual Property
Policy, the Under Secretary shall appoint a Deputy Under
Secretary for Patent Policy and a Deputy Under Secretary
for Trademark Policy, as members of the Senior Executive
Service in accordance with the provisions of title 5, United
States Code. The Deputy Under Secretaries shall perform
such duties and functions as the Under Secretary shall
prescribe.
(d) COMPENSATION.—Section 5313 of title 5, United
States Code, is amended by adding at the end the follow-
ing: ‘‘Under Secretary of Commerce for Intellectual Prop-
erty Policy.’’
(e) FUNDING.—Funds available to the Patent and
Trademark Office shall be made available for all expenses
of the Office of the Under Secretary of Commerce for In-
tellectual Property Policy, subject to prior approval in ap-
propriations Acts. Amounts made available under this sub-
section shall not exceed 2 percent of the projected annual
HR 2281 PCS
revenues of the Patent and Trademark Office from fees
for services and goods of that Office. The Secretary of
Commerce shall determine the budget requirements of the
Office of the Under Secretary for Intellectual Property
Policy.
(f) CONSULTATION.—In connection with the perform-
ance of his or her duties under this section, the Under
Secretary shall, on appropriate matters, consult with the
Register of Copyrights.
SEC. 402. RELATIONSHIP WITH EXISTING AUTHORITIES.
(a) NO DEROGATION.—Nothing in section 401 shall
derogate from the duties of the United States Trade Rep-
resentative or from the duties of the Secretary of State.
In addition, nothing in this subtitle shall derogate from
the duties and functions of the Register of Copyrights or
otherwise alter current authorities relating to copyright
matters.
(b) CLARIFICATION OF AUTHORITY OF THE COPY-
RIGHT OFFICE.—Section 701 of title 17, United States
Code, is amended—
(1) by redesignating subsections (b) through (e)
as subsections (c) through (f), respectively; and
(2) by inserting after subsection (a) the follow-
ing:
HR 2281 PCS
‘‘(b) In addition to the functions and duties set out
elsewhere in this chapter, the Register of Copyrights shall
perform the following functions:
‘‘(1) Advise Congress on national and inter-
national issues relating to copyright, other matters
arising under chapters 9, 12, 13, and 14 of this
title, and related matters.
‘‘(2) Provide information and assistance to Fed-
eral departments and agencies and the Judiciary on
national and international issues relating to copy-
right, other matters arising under chapters 9, 12,
13, and 14 of this title, and related matters.
‘‘(3) Participate in meetings of international
intergovernmental organizations and meetings with
foreign government officials relating to copyright,
other matters arising under chapters 9, 12, 13, and
14 of this title, and related matters, including as a
member of United States delegations as authorized
by the appropriate Executive Branch authority.
‘‘(4) Conduct studies and programs regarding
copyright, other matters arising under chapters 9,
12, 13, and 14 of this title, and related matters, the
administration of the Copyright Office, or any func-
tion vested in the Copyright Office by law, including
educational programs conducted cooperatively with
HR 2281 PCS
foreign intellectual property offices and international
intergovernmental organizations.
‘‘(5) Perform such other functions as Congress
may direct, or as may be appropriate in furtherance
of the functions and duties specifically set forth in
this title.’’
Subtitle B—Related Provisions
SEC. 411. EPHEMERAL RECORDINGS.
Section 112(a) of title 17, United States Code, is
amended—
(1) by redesignating paragraphs (1), (2), and
(3) as subparagraphs (A), (B), and (C), respectively;
(2) by inserting ‘‘(1)’’ after ‘‘(a)’’; and
(3) by inserting after ‘‘114(a),’’ the following:
‘‘or for a transmitting organization that is a broad-
cast radio or television station licensed as such by
the Federal Communications Commission that
broadcasts a performance of a sound recording in a
digital format on a nonsubscription basis,’’; and
(4) by adding at the end the following:
‘‘(2) In a case in which a transmitting organization
entitled to make a copy or phonorecord under paragraph
(1) in connection with the transmission to the public of
a performance or display of a work is prevented from mak-
ing such copy or phonorecord by reason of the application
HR 2281 PCS
by the copyright owner of technical measures that prevent
the reproduction of the work, the copyright owner shall
make available to the transmitting organization the nec-
essary means for permitting the making of such copy or
phonorecord as permitted under that paragraph, if it is
technologically feasible and economically reasonable for
the copyright owner to do so. If the copyright owner fails
to do so in a timely manner in light of the transmitting
organization’s reasonable business requirements, the
transmitting organization shall not be liable for a violation
of section 1201(a)(1) of this title for engaging in such ac-
tivities as are necessary to make such copies or
phonorecords as permitted under paragraph (1) of this
subsection.’’.
SEC. 412. LIMITATIONS ON EXCLUSIVE RIGHTS; DISTANCE
EDUCATION.
(a) RECOMMENDATIONS
BY REGISTER
OF COPY-
RIGHTS.—Not later than 6 months after the date of the
enactment of this Act, the Register of Copyrights, after
consultation with representatives of copyright owners,
nonprofit educational institutions, and nonprofit libraries
and archives, shall submit to the Congress recommenda-
tions on how to promote distance education through digi-
tal technologies, including interactive digital networks,
while maintaining an appropriate balance between the
HR 2281 PCS
rights of copyright owners and the needs of users of copy-
righted works. Such recommendations shall include any
legislation the Register of Copyrights considers appro-
priate to achieve the objective described in the preceding
sentence.
(b) FACTORS.—In formulating recommendations
under subsection (a), the Register of Copyrights shall con-
sider—
(1) the need for an exemption from exclusive
rights of copyright owners for distance education
through digital networks;
(2) the categories of works to be included under
any distance education exemption;
(3) the extent of appropriate quantitative limi-
tations on the portions of works that may be used
under any distance education exemption;
(4) the parties who should be entitled to the
benefits of any distance education exemption;
(5) the parties who should be designated as eli-
gible recipients of distance education materials
under any distance education exemption;
(6) whether and what types of technological
measures can or should be employed to safeguard
against unauthorized access to, and use or retention
of, copyrighted materials as a condition of eligibility
HR 2281 PCS
for any distance education exemption, including, in
light of developing technological capabilities, the ex-
emption set out in section 110(2) of title 17, United
States Code;
(7) the extent to which the availability of li-
censes for the use of copyrighted works in distance
education 
through 
interactive 
digital 
networks
should be considered in assessing eligibility for any
distance education exemption; and
(8) such other issues relating to distance edu-
cation through interactive digital networks that the
Register considers appropriate.
SEC. 413. EXEMPTION FOR LIBRARIES AND ARCHIVES.
Section 108 of title 17, United States Code, is
amended—
(1) in subsection (a)—
(A) by striking ‘‘Notwithstanding’’ and in-
serting ‘‘Except as otherwise provided in this
title and notwithstanding’’;
(B) by inserting after ‘‘no more than one
copy or phonorecord of a work’’ the following:
‘‘, except as provided in subsections (b) and
(c)’’; and
(C) in paragraph (3) by inserting after
‘‘copyright’’ the following: ‘‘that appears on the
HR 2281 PCS
copy or phonorecord that is reproduced under
the provisions of this section, or includes a leg-
end stating that the work may be protected by
copyright if no such notice can be found on the
copy or phonorecord that is reproduced under
the provisions of this section’’;
(2) in subsection (b)—
(A) by striking ‘‘a copy or phonorecord’’
and inserting ‘‘three copies or phonorecords’’;
(B) by striking ‘‘in facsimile form’’; and
(C) by striking ‘‘if the copy or phonorecord
reproduced is currently in the collections of the
library or archives.’’ and inserting ‘‘if—
‘‘(1) the copy or phonorecord reproduced is cur-
rently in the collections of the library or archives;
and
‘‘(2) any such copy or phonorecord that is re-
produced in digital format is not otherwise distrib-
uted in that format and is not made available to the
public in that format outside the premises of the li-
brary or archives.’’; and
(3) in subsection (c)—
(A) by striking ‘‘a copy or phonorecord’’
and inserting ‘‘three copies or phonorecords’’;
(B) by striking ‘‘in facsimile form’’;
HR 2281 PCS
(C) by inserting ‘‘or if the existing format
in which the work is stored has become obso-
lete,’’ after ‘‘stolen,’’; and
(D) by striking ‘‘if the library or archives
has, after a reasonable effort, determined that
an unused replacement cannot be obtained at a
fair price.’’ and inserting ‘‘if—
‘‘(1) the library or archives has, after a reason-
able effort, determined that an unused replacement
cannot be obtained at a fair price; and
‘‘(2) any such copy or phonorecord that is re-
produced in digital format is not made available to
the public in that format outside the premises of the
library or archives in lawful possession of such
copy.’’; and
(E) by adding at the end the following:
‘‘For purposes of this subsection, a format shall be consid-
ered obsolete if the machine or device necessary to render
perceptible a work stored in that format is no longer man-
ufactured or is no longer reasonably available in the com-
mercial marketplace.’’.
SEC. 414. FAIR USE.
Section 107 of title 17, United States Code, is
amended in the first sentence by striking ‘‘, including such
use’’ and all that follows through ‘‘section,’’.
HR 2281 PCS
SEC. 415. SCOPE OF EXCLUSIVE RIGHTS IN SOUND RE-
CORDINGS; EPHEMERAL RECORDINGS.
(a) SCOPE OF EXCLUSIVE RIGHTS IN SOUND RE-
CORDINGS.—Section 114 of title 17, United States Code,
is amended as follows:
(1) Subsection (d) is amended—
(A) by striking subparagraph (A) and in-
serting the following:
‘‘(A) a nonsubscription broadcast trans-
mission;’’; and
(B) by amending paragraph (2) to read as
follows:
‘‘(2) STATUTORY
LICENSING
OF
CERTAIN
TRANSMISSIONS.—The performance of a sound re-
cording publicly by means of a subscription digital
audio transmission not exempt under paragraph (1)
or an eligible nonsubscription digital audio trans-
mission shall be subject to statutory licensing, in ac-
cordance with subsection (f) if—
‘‘(A) in the case of a subscription trans-
mission not exempt under paragraph (1) or an
eligible nonsubscription transmission—
‘‘(i) the transmission is not part of an
interactive service;
‘‘(ii) except in the case of a trans-
mission to a business establishment, the
HR 2281 PCS
‘‘(II) in analog format, a sub-
stantial portion of which, on a weekly
basis, exceed the sound recording per-
formance complement;
Provided, however, That the sound record-
ing copyright owner or its representative
has notified the transmitting entity in writ-
ing that broadcast transmissions of the
copyright owner’s sound recordings exceed
the sound recording complement as pro-
vided in this clause;
‘‘(ii) the transmitting entity does not
cause to be published, or induce or facili-
tate the publication, by means of an ad-
vance program schedule or prior announce-
ment, the titles of the specific sound re-
cordings 
to 
be 
transmitted, 
the
phonorecords embodying such sound re-
cordings, or, other than for illustrative
purposes, the names of the featured re-
cording artists, except that this clause does
not disqualify a transmitting entity that
makes a prior announcement that a par-
ticular artist will be featured within an un-
specified future time period and, in any 1-
HR 2281 PCS
hour period, no more than 3 such an-
nouncements are made with respect to no
more than 2 artists in each announcement;
‘‘(iii) the transmission is not part of—
‘‘(I) an archived program of less
than 5 hours duration;
‘‘(II) an archived program of
greater than 5 hours duration that is
made available for a period exceeding
2 weeks;
‘‘(III) 
a 
continuous 
program
which is of less than 3 hours duration;
or
‘‘(IV) a program, other than an
archived or continuous program, that
is transmitted at a scheduled time
more than 3 additional times in a 2-
week period following the first trans-
mission of the program and for an ad-
ditional 2-week period more than 1
month following the end of the first
such 2-week period;
‘‘(iv) the transmitting entity does not
knowingly perform the sound recording in
a manner that is likely to cause confusion,
HR 2281 PCS
to cause mistake, or to deceive, as to the
affiliation, connection, or association of the
copyright owner or featured recording art-
ist with the transmitting entity or a par-
ticular product or service advertised by the
transmitting entity, or as to the origin,
sponsorship, or approval by the copyright
owner or featured recording artist of the
activities of the transmitting entity other
than the performance of the sound record-
ing itself;
‘‘(v) the transmitting entity cooper-
ates to prevent, to the extent feasible with-
out imposing substantial costs or burdens,
a transmission recipient or any other per-
son or entity from automatically scanning
the transmitting entity’s transmissions to-
gether with transmissions by other trans-
mitting entities to select a particular sound
recording to be transmitted to the trans-
mission recipient;
‘‘(vi) the transmitting entity takes
reasonable steps to ensure, to the extent
within its control, that the transmission re-
cipient cannot make a phonorecord in a
HR 2281 PCS
digital format of the transmission, and the
transmitting entity takes no affirmative
steps to cause or induce the making of a
phonorecord by the transmission recipient;
‘‘(vii) phonorecords of the sound re-
cording have been distributed to the public
in the United States under the authority of
the copyright owner or the copyright owner
authorizes the transmitting entity to trans-
mit the sound recording, and the transmit-
ting entity makes the transmission from a
phonorecord lawfully made under this title;
‘‘(viii) the transmitting entity accom-
modates and does not interfere with the
transmission of technical measures that
are widely used by sound recording copy-
right owners to identify or protect copy-
righted works, and that are technically fea-
sible of being transmitted by the transmit-
ting entity without imposing substantial
costs on the transmitting entity or result-
ing in perceptible aural or visual degrada-
tion of the digital signal; and
‘‘(ix) in the case of an eligible non-
subscription transmission, the transmitting
HR 2281 PCS
entity identifies the sound recording dur-
ing, but not before, the time it is per-
formed, including the title of the sound re-
cording, the title of the phonorecord em-
bodying such sound recording, if any, and
the featured recording artist in a manner
to permit it to be perceived by the trans-
mission recipient, except that the obliga-
tion in this clause shall not take effect
until 1 year after the date of the enact-
ment of the Digital Millennium Copyright
Act.’’.
(2) Subsection (f) is amended to read as fol-
lows:
(A) in paragraph (1)—
(i) in the first sentence—
(I) by striking ‘‘(1) No’’ and in-
serting ‘‘(1)(A) No’’;
(II) by striking ‘‘the activities’’
and inserting ‘‘subscription trans-
missions by preexisting subscription
services’’; and
(III) by striking ‘‘2000’’ and in-
serting ‘‘2001’’; and
HR 2281 PCS
(ii) by amending the third sentence to
read as follows: ‘‘Any copyright owners of
sound recordings or any preexisting sub-
scription services may submit to the Li-
brarian of Congress licenses covering such
subscriptions transmissions with respect to
such sound recordings.’’; and
(B) by striking paragraphs (2), (3), (4),
and (5) and inserting the following:
‘‘(B) In the absence of license agreements nego-
tiated under subparagraph (A), during the 60-day
period commencing 6 months after publication of the
notice specified in subparagraph (A), and upon the
filing of a petition in accordance with section
803(a)(1), the Librarian of Congress shall, pursuant
to chapter 8, convene a copyright arbitration royalty
panel to determine and publish in the Federal Reg-
ister a schedule of rates and terms which, subject to
paragraph (3), shall be binding on all copyright own-
ers of sound recordings and preexisting subscription
services. In establishing rates and terms for pre-
existing subscription services, in addition to the ob-
jectives set forth in section 801(b)(1), the copyright
arbitration royalty panel may consider the rates and
terms for comparable types of subscription digital
HR 2281 PCS
audio transmission services and comparable cir-
cumstances under voluntary license agreements ne-
gotiated as provided in subparagraph (A).
‘‘(C)(i) Publication of a notice of the initiation
of voluntary negotiation proceedings as specified in
subparagraph (A) shall be repeated, in accordance
with regulations that the Librarian of Congress shall
prescribe—
‘‘(I) no later than 30 days after a petition
is filed by any copyright owners of sound re-
cordings or any preexisting subscription services
indicating that a new type of subscription digi-
tal audio transmission service on which sound
recordings are performed is or is about to be-
come operational; and
‘‘(II) in the first week of January, 2001,
and at 5-year intervals thereafter.
‘‘(ii) The procedures specified in subparagraph
(B) shall be repeated, in accordance with regulations
that the Librarian of Congress shall prescribe, upon
filing of a petition in accordance with section
803(a)(1) during a 60-day period commencing—
‘‘(I) 6 months after publication of a notice
of the initiation of voluntary negotiation pro-
ceedings under subparagraph (A) pursuant to a
HR 2281 PCS
petition under clause (i)(I) of this subpara-
graph; or
‘‘(II) on July 1, 2001, and at 5-year inter-
vals thereafter.
‘‘(iii) The procedures specified in subparagraph
(B) shall be concluded in accordance with section
802.
‘‘(2)(A) No later than 30 days after the date of
the enactment of the Digital Millennium Copyright
Act, the Librarian of Congress shall cause notice to
be published in the Federal Register of the initiation
of voluntary negotiation proceedings for the purpose
of determining reasonable terms and rates of royalty
payments for eligible nonsubscription transmissions
and transmissions by new subscription services spec-
ified by subsection (d)(2) during the period begin-
ning on the date of the enactment of such Act and
ending on December 31, 2000, or such other date as
the parties may agree. Such rates and terms shall
distinguish among the different types of eligible non-
subscription transmission services then in operation
and shall include a minimum fee for each such type
of service. Any copyright owners of sound recordings
or any entities performing sound recordings affected
by this section may submit to the Librarian of Con-
HR 2281 PCS
gress licenses covering such eligible nonsubscription
transmissions with respect to such sound recordings.
The parties to each negotiation proceeding shall bear
their own costs.
‘‘(B) In the absence of license agreements nego-
tiated under subparagraph (A), during the 60-day
period commencing 6 months after publication of the
notice specified in subparagraph (A), and upon the
filing of a petition in accordance with section
803(a)(1), the Librarian of Congress shall, pursuant
to chapter 8, convene a copyright arbitration royalty
panel to determine and publish in the Federal Reg-
ister a schedule of rates and terms which, subject to
paragraph (3), shall be binding on all copyright own-
ers of sound recordings and entities performing
sound recordings during the period beginning on the
date of the enactment of the Digital Millennium
Copyright Act and ending on December 31, 2000, or
such other date as the parties may agree. Such rates
and terms shall distinguish among the different
types of eligible nonsubscription, transmission serv-
ices then in operation and shall include a minimum
fee for each such type of service, such differences to
be based on criteria, including, but not limited to,
the quantity and nature of the use of sound record-
HR 2281 PCS
ings and the degree to which use of the service may
substitute for or may promote the purchase of
phonorecords by consumers. In establishing rates
and terms for transmissions by eligible nonsubscrip-
tion services and new subscription services, the copy-
right arbitration royalty panel shall establish rates
and terms that most clearly represent the rates and
terms that would have been negotiated in the mar-
ketplace between a willing buyer and a willing seller.
In determining such rates and terms, the copyright
arbitration royalty panel shall base its decision on
economic, competitive and programming information
presented by the parties, including—
‘‘(i) whether use of the service may sub-
stitute for or may promote the sales of
phonorecords or otherwise may interfere with or
may enhance the sound recording copyright
owner’s other streams of revenue from its
sound recordings; and
‘‘(ii) the relative roles of the copyright
owner and the copyright user in the copyrighted
work and the service made available to the pub-
lic with respect to relative creative contribution,
technological contribution, capital investment,
cost, and risk.
HR 2281 PCS
‘‘(C)(i) Publication of a notice of the initiation
of voluntary negotiation proceedings as specified in
subparagraph (A) shall be repeated in accordance
with regulations that the Librarian of Congress shall
prescribe—
‘‘(I) no later than 30 days after a petition
if filed by any copyright owners of sound re-
cordings or any eligible nonsubscription service
or new subscription service indicating that a
new type of eligible nonsubscription service or
new subscription service on which sound record-
ings are performed is or is about to become
operational; and
‘‘(II) in the first week of January 2000,
and at 2-year intervals thereafter, except to the
extent that different years for the repeating of
such proceedings may be determined in accord-
ance with subparagraph (A).
‘‘(ii) The procedures specified in subparagraph
(B) shall be repeated, in accordance with regulations
that the Librarian of Congress shall prescribe, upon
filing of a petition in accordance with section
803(a)(1) during a 60-day period commencing—
‘‘(I) 6 months after publication of a notice
of the initiation of voluntary negotiation pro-
HR 2281 PCS
ceedings under subparagraph (A) pursuant to a
petition under clause (i)(I); or
‘‘(II) on July 1, 2000, and at 2-year inter-
vals thereafter, except to the extent that dif-
ferent years for the repeating of such proceed-
ings may be determined in accordance with sub-
paragraph (A).
‘‘(iii) The procedures specified in subparagraph
(B) shall be concluded in accordance with section
802.
‘‘(3) License agreements voluntarily negotiated
at any time between 1 or more copyright owners of
sound recordings and 1 or more entities performing
sound recordings shall be given effect in lieu of any
determination by a copyright arbitration royalty
panel or decision by the Librarian of Congress.
‘‘(4)(A) The Librarian of Congress shall also
establish requirements by which copyright owners
may receive reasonable notice of the use of their
sound recordings under this section, and under
which records of such use shall be kept and made
available by entities performing sound recordings.
‘‘(B) Any person who wishes to perform a
sound recording publicly by means of a transmission
eligible for statutory licensing under this subsection
HR 2281 PCS
may do so without infringing the exclusive right of
the copyright owner of the sound recording—
‘‘(i) by complying with such notice require-
ments as the Librarian of Congress shall pre-
scribe by regulation and by paying royalty fees
in accordance with this subsection; or
‘‘(ii) if such royalty fees have not been set,
by agreeing to pay such royalty fees as shall be
determined in accordance with this subsection.
‘‘(C) Any royalty payments in arrears shall be
made on or before the twentieth day of the month
next succeeding the month in which the royalty fees
are set.’’.
(3) Subsection (g) is amended—
(A) in the subsection heading by striking
‘‘SUBSCRIPTION’’;
(B) in paragraph (1) in the matter preced-
ing subparagraph (A), by striking ‘‘subscription
transmission licensed’’ and inserting ‘‘trans-
mission licensed under a statutory license’’;
(C) in subparagraphs (A) and (B) by strik-
ing ‘‘subscription’’; and
(D) in paragraph (2) by striking ‘‘sub-
scription’’.
(4) Subsection (j) is amended—
HR 2281 PCS
(A) by redesignating paragraphs (2), (3),
(5), (6), (7), and (8) as paragraphs (3), (5),
(9), (11), (12), and (13), respectively;
(B) by inserting after paragraph (1) the
following:
‘‘(2) An ‘archived program’ is a prerecorded
program that is available repeatedly on demand and
that is performed in the same predetermined order
from the beginning.’’;
(C) by inserting after paragraph (3), as so
redesignated, the following:
‘‘(4) A ‘continuous program’ is a prerecorded
program that is continuously performed in the same
predetermined order and the point in the program at
which it is accessed is beyond the control of the
transmission recipient.’’;
(D) by inserting after paragraph (5), as so
redesignated, the following:
‘‘(6) An ‘eligible nonsubscription transmission’
is a noninteractive, nonsubscription transmission
made as part of a service that provides audio pro-
gramming consisting, in whole or in part, of per-
formances of sound recordings, including retrans-
missions of broadcast transmissions, if the primary
purpose of the service is to provide to the public
101
HR 2281 PCS
‘‘(2) A statutory license under this subsection grants
a transmitting organization entitled to transmit to the
public a performance of a sound recording by means of
a digital audio transmission under a statutory license in
accordance with section 114(f) or an exemption provided
in section 114(d)(1)(B) or (C) the privilege of making no
more than 1 phonorecord of the sound recording (unless
the terms and conditions of the statutory license allow for
more), if—
‘‘(A) the phonorecord is retained and used sole-
ly by the transmitting organization that made it,
and no further phonorecords are reproduced from it;
and
‘‘(B) the phonorecord is used solely for the
transmitting organization’s own transmissions in the
United States under a statutory license in accord-
ance with section 114(f) or an exemption provided in
section 114(d)(1)(B) or (C);
‘‘(C) unless preserved exclusively for purposes
of archival preservation, the phonorecord is de-
stroyed within 6 months from the date the sound re-
cording was first transmitted to the public using the
phonorecord; and
‘‘(D) phonorecords of the sound recording have
been distributed to the public in the United States
102
HR 2281 PCS
under the authority of the copyright owner or the
copyright owner authorizes the transmitting entity
to transmit the sound recording, and the transmit-
ting entity makes the transmission from a phono-
record lawfully made and acquired under this title.
‘‘(3) Notwithstanding any provision of the antitrust
laws, any copyright owners of sound recordings and any
transmitting organizations entitled to obtain a statutory
license under this subsection may negotiate and agree
upon royalty rates and license terms and conditions for
ephemeral recordings of such sound recordings and the
proportionate division of fees paid among copyright own-
ers, and may designate common agents to negotiate, agree
to, pay, or receive such royalty payments.
‘‘(4) No later than 30 days after the date of the en-
actment of the Digital Millennium Copyright Act, the Li-
brarian of Congress shall cause notice to be published in
the Federal Register of the initiation of voluntary negotia-
tion proceedings for the purpose of determining reasonable
terms and rates of royalty payments for the activities spec-
ified by paragraph (2) of this subsection during the period
beginning on the date of the enactment of such Act and
ending on December 31, 2000, or such other date as the
parties may agree. Such rates shall include a minimum
fee for each type of service. Any copyright owners of sound
103
HR 2281 PCS
recordings or any transmitting organizations entitled to
obtain a statutory license under this subsection may sub-
mit to the Librarian of Congress licenses covering such
activities with respect to such sound recordings. The par-
ties to each negotiation proceeding shall bear their own
costs.
‘‘(5) In the absence of license agreements negotiated
under paragraph (3), during the 60-day period commenc-
ing 6 months after publication of the notice specified in
paragraph (4), and upon the filing of a petition in accord-
ance with section 803(a)(1), the Librarian of Congress
shall, pursuant to chapter 8, convene a copyright arbitra-
tion royalty panel to determine and publish in the Federal
Register a schedule of reasonable rates and terms which,
subject to paragraph (6), shall be binding on all copyright
owners of sound recordings and transmitting organiza-
tions entitled to obtain a statutory license under this sub-
section during the period beginning on the date of the en-
actment of the Digital Millennium Copyright Act and end-
ing on December 31, 2000, or such other date as the par-
ties may agree. Such rates shall include a minimum fee
for each type of service. The copyright arbitration royalty
panel shall establish rates that most clearly represent the
fees that would have been negotiated in the marketplace
between a willing buyer and a willing seller. In determin-
104
HR 2281 PCS
ing such rates and terms, the copyright arbitration royalty
panel shall base its decision on economic, competitive, and
programming information presented by the parties, includ-
ing—
‘‘(A) whether use of the service may substitute
for or may promote the sales of phonorecords or oth-
erwise interferes with or enhances the copyright
owner’s traditional streams of revenue;
‘‘(B) the relative rules of the copyright owner
and the copyright user in the copyrighted work and
the service made available to the public with respect
to relative creative contribution, technological con-
tribution, capital investment, cost, and risk.
In establishing such rates and terms, the copyright arbi-
tration royalty panel may consider the rates and terms
under voluntary license agreements negotiated as provided
in paragraphs (3) and (4). The Librarian of Congress
shall also establish requirements by which copyright own-
ers may receive reasonable notice of the use of their sound
recordings under this section, and under which records of
such use shall be kept and made available by transmitting
organizations entitled to obtain a statutory license under
this subsection.
‘‘(6) License agreements voluntarily negotiated at
any time between 1 or more copyright owners of sound
105
HR 2281 PCS
recordings and 1 or more transmitting organizations enti-
tled to obtain a statutory license under this subsection
shall be given effect in lieu of any determination by a copy-
right arbitration royalty panel or decision by the Librarian
of Congress.
‘‘(7) Publication of a notice of the initiation of vol-
untary negotiation proceedings as specified in paragraph
(4) shall be repeated, in accordance with regulations that
the Librarian of Congress shall prescribe, in the first week
of January 2000, and at 2-year intervals thereafter, ex-
cept to the extent that different years for the repeating
of such proceedings may be determined in accordance with
paragraph (4). The procedures specified in paragraph (5)
shall be repeated, in accordance with regulations that the
Librarian of Congress shall prescribe, upon filing of a peti-
tion in accordance with section 803(a)(1) during a 60-day
period commencing on July 1, 2000, and at 2-year inter-
vals thereafter, except to the extent that different years
for the repeating of such proceedings may be determined
in accordance with paragraph (4). The procedures speci-
fied in paragraph (5) shall be concluded in accordance
with section 802.
‘‘(8)(A) Any person who wishes to make an ephem-
eral recording of a sound recording under a statutory li-
cense in accordance with this subsection may do so with-
106
HR 2281 PCS
out infringing the exclusive right of the copyright owner
of the sound recording under section 106(1)—
‘‘(i) by complying with such notice requirements
as the Librarian of Congress shall prescribe by regu-
lation and by paying royalty fees in accordance with
this subsection; or
‘‘(ii) if such royalty fees have not been set, by
agreeing to pay such royalty fees as shall be deter-
mined in accordance with this subsection.
‘‘(B) Any royalty payments in arrears shall be made
on or before the 20th day of the month next succeeding
the month in which the royalty fees are set.
‘‘(9) If a transmitting organization entitled to make
a phonorecord under this subsection is prevented from
making such phonorecord by reason of the application by
the copyright owner of technical measures that prevent the
reproduction of the sound recording, the copyright owner
shall make available to the transmitting organization the
necessary means for permitting the making of such phono-
record within the meaning of this subsection, if it is tech-
nologically feasible and economically reasonable for the
copyright owner to do so. If the copyright owner fails to
do so in a timely manner in light of the transmitting orga-
nization’s reasonable business requirements, the transmit-
ting organization shall not be liable for a violation of sec-
107
HR 2281 PCS
tion 1201(a)(1) of this title for engaging in such activities
as are necessary to make such phonorecords as permitted
under this subsection.’’.
SEC. 416. ASSUMPTION OF CONTRACTUAL OBLIGATIONS
RELATED TO TRANSFERS OF RIGHTS IN MO-
TION PICTURES.
(a) IN GENERAL.—Part VI of title 28, United States
Code, is amended by adding at the end the following new
chapter:
‘‘CHAPTER 180—ASSUMPTION OF CERTAIN
CONTRACTUAL OBLIGATIONS
‘‘Sec.
‘‘4001. Assumption of contractual obligations related to transfers of rights in
motion pictures.
‘‘§ 4001. Assumption of contractual obligations relat-
ed to transfers of rights in motion pic-
tures
‘‘(a) ASSUMPTION OF OBLIGATIONS.—In the case of
a transfer of copyright ownership in a motion picture (as
defined in section 101 of title 17) that is produced subject
to 1 or more collective bargaining agreements negotiated
under the laws of the United States, if the transfer is exe-
cuted on or after the effective date of this chapter and
is not limited to public performance rights, the transfer
instrument shall be deemed to incorporate the assumption
agreements applicable to the copyright ownership being
transferred that are required by the applicable collective
108
HR 2281 PCS
bargaining agreement, and the transferee shall be subject
to the obligations under each such assumption agreement
to make residual payments and provide related notices, ac-
cruing after the effective date of the transfer and applica-
ble to the exploitation of the rights transferred, and any
remedies under each such assumption agreement for
breach of those obligations, as those obligations and rem-
edies are set forth in the applicable collective bargaining
agreement, if—
‘‘(1) the transferee knows or has reason to
know at the time of the transfer that such collective
bargaining agreement was or will be applicable to
the motion picture; or
‘‘(2) in the event of a court order confirming an
arbitration award against the transferor under the
collective bargaining agreement, the transferor does
not have the financial ability to satisfy the award
within 90 days after the order is issued.
‘‘(b) FAILURE TO NOTIFY.—If the transferor under
subsection (a) fails to notify the transferee under sub-
section (a) of applicable collective bargaining obligations
before the execution of the transfer instrument, and sub-
section (a) is made applicable to the transferee solely by
virtue of subsection (a)(2), the transferor shall be liable
109
HR 2281 PCS
to the transferee for any damages suffered by the trans-
feree as a result of the failure to notify.
‘‘(c) DETERMINATION OF DISPUTES AND CLAIMS.—
Any dispute concerning the application of subsection (a)
and any claim made under subsection (b) shall be deter-
mined by an action in United States district court, and
the court in its discretion may allow the recovery of full
costs by or against any party and may also award a rea-
sonable attorney’s fee to the prevailing party as part of
the costs.’’.
(b) CONFORMING AMENDMENT.—The table of chap-
ters for part VI of title 28, United States Code, is amend-
ed by adding at the end the following:
‘‘180. Assumption of Certain Contractual Obligations ........ 4001’’.
SEC. 417. FIRST SALE CLARIFICATION.
Section 109(a) of title 17, United States Code, is
amended by striking the first sentence and inserting the
following: ‘‘Notwithstanding the provisions of section
106(3), the owner of a particular lawfully made copy or
phonorecord that has been distributed in the United
States by the authority of the copyright owner, or any per-
son authorized by the owner of that copy or phonorecord,
is entitled, without the authority of the copyright owner,
to sell or otherwise dispose of the possession of that copy
or phonorecord.’’.
110
HR 2281 PCS
TITLE V—COLLECTIONS OF
INFORMATION ANTIPIRACY ACT
SEC. 501. SHORT TITLE.
This title may be cited as the ‘‘Collections of Infor-
mation Antipiracy Act’’.
SEC. 502. MISAPPROPRIATION OF COLLECTIONS OF INFOR-
MATION.
Title 17, United States Code, is amended by adding
at the end the following new chapter:
‘‘CHAPTER 13—MISAPPROPRIATION OF
COLLECTIONS OF INFORMATION
‘‘Sec.
‘‘1301. Definitions.
‘‘1302. Prohibition against misappropriation.
‘‘1303. Permitted acts.
‘‘1304. Exclusions.
‘‘1305. Relationship to other laws.
‘‘1306. Civil remedies.
‘‘1307. Criminal offenses and penalties.
‘‘1308. Limitations on actions.
‘‘§ 1301. Definitions
‘‘As used in this chapter:
‘‘(1) COLLECTION OF INFORMATION.—The term
‘collection of information’ means information that
has been collected and has been organized for the
purpose of bringing discrete items of information to-
gether in one place or through one source so that
users may access them.
‘‘(2) INFORMATION.—The term ‘information’
means facts, data, works of authorship, or any other
111
HR 2281 PCS
intangible material capable of being collected and or-
ganized in a systematic way.
‘‘(3) POTENTIAL MARKET.—The term ‘potential
market’ means any market that a person claiming
protection under section 1302 has current and de-
monstrable plans to exploit or that is commonly ex-
ploited by persons offering similar products or serv-
ices incorporating collections of information.
‘‘(4) COMMERCE.—The term ‘commerce’ means
all commerce which may be lawfully regulated by the
Congress.
‘‘(5) PRODUCT
OR
SERVICE.—A product or
service incorporating a collection of information does
not include a product or service incorporating a col-
lection of information gathered, organized, or main-
tained to address, route, forward, transmit, or store
digital online communications or provide or receive
access to connections for digital online communica-
tions.
‘‘§ 1302. Prohibition against misappropriation
‘‘Any person who extracts, or uses in commerce, all
or a substantial part, measured either quantitatively or
qualitatively, of a collection of information gathered, orga-
nized, or maintained by another person through the invest-
ment of substantial monetary or other resources, so as to
112
HR 2281 PCS
cause harm to the actual or potential market of that other
person, or a successor in interest of that other person, for
a product or service that incorporates that collection of
information and is offered or intended to be offered for
sale or otherwise in commerce by that other person, or
a successor in interest of that person, shall be liable to
that person or successor in interest for the remedies set
forth in section 1306.
‘‘§ 1303. Permitted acts
‘‘(a) INDIVIDUAL
ITEMS
OF
INFORMATION
AND
OTHER INSUBSTANTIAL PARTS.—Nothing in this chapter
shall prevent the extraction or use of an individual item
of information, or other insubstantial part of a collection
of information, in itself. An individual item of information,
including a work of authorship, shall not itself be consid-
ered a substantial part of a collection of information under
section 1302. Nothing in this subsection shall permit the
repeated or systematic extraction or use of individual
items or insubstantial parts of a collection of information
so as to circumvent the prohibition contained in section
1302.
‘‘(b) GATHERING
OR USE
OF INFORMATION OB-
TAINED THROUGH OTHER MEANS.—Nothing in this
chapter shall restrict any person from independently gath-
ering information or using information obtained by means
113
HR 2281 PCS
other than extracting it from a collection of information
gathered, organized, or maintained by another person
through the investment of substantial monetary or other
resources.
‘‘(c) USE OF INFORMATION FOR VERIFICATION.—
Nothing in this chapter shall restrict any person from ex-
tracting or using a collection of information within any
entity or organization, for the sole purpose of verifying
the accuracy of information independently gathered, orga-
nized, or maintained by that person. Under no cir-
cumstances shall the information so used be extracted
from the original collection and made available to others
in a manner that harms the actual or potential market
for the collection of information from which it is extracted
or used.
‘‘(d) NONPROFIT EDUCATIONAL, SCIENTIFIC, OR RE-
SEARCH USES.—Notwithstanding section 1302, no person
shall be restricted from extracting or using information
for nonprofit educational, scientific, or research purposes
in a manner that does not harm directly the actual market
for the product or service referred to in section 1302.
‘‘(e) NEWS REPORTING.—Nothing in this chapter
shall restrict any person from extracting or using informa-
tion for the sole purpose of news reporting, including news
gathering, dissemination, and comment, unless the infor-
116
HR 2281 PCS
‘‘§ 1305. Relationship to other laws
‘‘(a) OTHER RIGHTS NOT AFFECTED.—Subject to
subsection (b), nothing in this chapter shall affect rights,
limitations, or remedies concerning copyright, or any other
rights or obligations relating to information, including
laws with respect to patent, trademark, design rights,
antitrust, trade secrets, privacy, access to public docu-
ments, and the law of contract.
‘‘(b) PREEMPTION OF STATE LAW.—On or after the
effective date of this chapter, all rights that are equivalent
to the rights specified in section 1302 with respect to the
subject matter of this chapter shall be governed exclusively
by Federal law, and no person is entitled to any equivalent
right in such subject matter under the common law or
statutes of any State. State laws with respect to trade-
mark, design rights, antitrust, trade secrets, privacy, ac-
cess to public documents, and the law of contract shall
not be deemed to provide equivalent rights for purposes
of this subsection.
‘‘(c) RELATIONSHIP
TO
COPYRIGHT.—Protection
under this chapter is independent of, and does not affect
or enlarge the scope, duration, ownership, or subsistence
of, any copyright protection or limitation, including, but
not limited to, fair use, in any work of authorship that
is contained in or consists in whole or part of a collection
of information. This chapter does not provide any greater
117
HR 2281 PCS
protection to a work of authorship contained in a collec-
tion of information, other than a work that is itself a col-
lection of information, than is available to that work under
any other chapter of this title.
‘‘(d) ANTITRUST.—Nothing in this chapter shall limit
in any way the constraints on the manner in which prod-
ucts and services may be provided to the public that are
imposed by Federal and State antitrust laws, including
those regarding single suppliers of products and services.
‘‘(e) LICENSING.—Nothing in this chapter shall re-
strict the rights of parties freely to enter into licenses or
any other contracts with respect to the use of collections
of information.
‘‘(f) COMMUNICATIONS ACT OF 1934.—Nothing in
this chapter shall affect the operation of the provisions
of the Communications Act of 1934 (47 U.S.C. 151 et
seq.), or shall restrict any person from extracting or using
subscriber list information, as such term is defined in sec-
tion 222(f)(3) of the Communications Act of 1934 (47
U.S.C. 222(f)(3)), for the purpose of publishing telephone
directories in any format.
‘‘(g) SECURITIES AND COMMODITIES MARKET IN-
FORMATION.—
‘‘(1) FEDERAL AGENCIES AND ACTS.—Nothing
in this Act shall affect:
118
HR 2281 PCS
‘‘(A) the operation of the provisions of the
Securities Exchange Act of 1934 (15 U.S.C.
78a et seq.) or the Commodity Exchange Act (7
U.S.C. 1 et seq.);
‘‘(B) the jurisdiction or authority of the
Securities and Exchange Commission and the
Commodity Futures Trading Commission; or
‘‘(C) the functions and operations of self-
regulatory organizations and securities informa-
tion processors under the provisions of the Se-
curities Exchange Act of 1934 and the rules
and regulations thereunder, including making
market information available pursuant to the
provisions of that Act and the rules and regula-
tions promulgated thereunder.
‘‘(2) PROHIBITION.—Notwithstanding any pro-
vision in subsection (a), (b), (c), (d), or (f) of section
1303, nothing in this chapter shall permit the ex-
traction, use, resale, or other disposition of real-time
market information except as the Securities Ex-
change Act of 1934, the Commodity Exchange Act,
and the rules and regulations thereunder may other-
wise provide. In addition, nothing in subsection (e)
of section 1303 shall be construed to permit any
person to extract or use real-time market informa-
119
HR 2281 PCS
tion in a manner that constitutes a market sub-
stitute for a real-time market information service
(including the real-time systematic updating of or
display of a substantial part of market information)
provided on a real-time basis.
‘‘(3) DEFINITION.—As used in this subsection,
the term ‘market information’ means information re-
lating to quotations and transactions that is col-
lected, processed, distributed, or published pursuant
to the provisions of the Securities Exchange Act of
1934 or by a contract market that is designated by
the Commodity Futures Trading Commission pursu-
ant to the Commodity Exchange Act and the rules
and regulations thereunder.
‘‘§ 1306. Civil remedies
‘‘(a) CIVIL ACTIONS.—Any person who is injured by
a violation of section 1302 may bring a civil action for
such a violation in an appropriate United States district
court without regard to the amount in controversy, except
that any action against a State governmental entity may
be brought in any court that has jurisdiction over claims
against such entity.
‘‘(b) TEMPORARY AND PERMANENT INJUNCTIONS.—
Any court having jurisdiction of a civil action under this
section shall have the power to grant temporary and per-
120
HR 2281 PCS
manent injunctions, according to the principles of equity
and upon such terms as the court may deem reasonable,
to prevent a violation of section 1302. Any such injunction
may be served anywhere in the United States on the per-
son enjoined, and may be enforced by proceedings in con-
tempt or otherwise by any United States district court
having jurisdiction over that person.
‘‘(c) IMPOUNDMENT.—At any time while an action
under this section is pending, the court may order the im-
pounding, on such terms as it deems reasonable, of all cop-
ies of contents of a collection of information extracted or
used in violation of section 1302, and of all masters, tapes,
disks, diskettes, or other articles by means of which such
copies may be reproduced. The court may, as part of a
final judgment or decree finding a violation of section
1302, order the remedial modification or destruction of
all copies of contents of a collection of information ex-
tracted or used in violation of section 1302, and of all
masters, tapes, disks, diskettes, or other articles by means
of which such copies may be reproduced.
‘‘(d) MONETARY RELIEF.—When a violation of sec-
tion 1302 has been established in any civil action arising
under this section, the plaintiff shall be entitled to recover
any damages sustained by the plaintiff and defendant’s
profits not taken into account in computing the damages
121
HR 2281 PCS
sustained by the plaintiff. The court shall assess such
profits or damages or cause the same to be assessed under
its direction. In assessing profits the plaintiff shall be re-
quired to prove defendant’s gross revenue only and the
defendant shall be required to prove all elements of cost
or deduction claims. In assessing damages the court may
enter judgment, according to the circumstances of the
case, for any sum above the amount found as actual dam-
ages, not exceeding three times such amount. The court
in its discretion may award reasonable costs and attor-
ney’s fees to the prevailing party and shall award such
costs and fees where it determines that an action was
brought under this chapter in bad faith against a non-
profit educational, scientific, or research institution, li-
brary, or archives, or an employee or agent of such an
entity, acting within the scope of his or her employment.
‘‘(e) REDUCTION OR REMISSION OF MONETARY RE-
LIEF
FOR NONPROFIT EDUCATIONAL, SCIENTIFIC, OR
RESEARCH INSTITUTIONS.—The court shall reduce or
remit entirely monetary relief under subsection (d) in any
case in which a defendant believed and had reasonable
grounds for believing that his or her conduct was permis-
sible under this chapter, if the defendant was an employee
or agent of a nonprofit educational, scientific, or research
122
HR 2281 PCS
institution, library, or archives acting within the scope of
his or her employment.
‘‘(f) ACTIONS AGAINST UNITED STATES GOVERN-
MENT.—Subsections (b) and (c) shall not apply to any ac-
tion against the United States Government.
‘‘(g) RELIEF AGAINST STATE ENTITIES.—The relief
provided under this section shall be available against a
State governmental entity to the extent permitted by ap-
plicable law.
‘‘§ 1307. Criminal offenses and penalties
‘‘(a) VIOLATION.—
‘‘(1) IN
GENERAL.—Any person who violates
section 1302 willfully, and—
‘‘(A) does so for direct or indirect commer-
cial advantage or financial gain; or
‘‘(B) causes loss or damage aggregating
$10,000 or more in any 1-year period to the
person who gathered, organized, or maintained
the information concerned,
shall be punished as provided in subsection (b).
‘‘(2) INAPPLICABILITY.—This section shall not
apply to an employee or agent of a nonprofit edu-
cational, scientific, or research institution, library, or
archives acting within the scope of his or her em-
ployment.
123
HR 2281 PCS
‘‘(b) PENALTIES.—An offense under subsection (a)
shall be punishable by a fine of not more than $250,000
or imprisonment for not more than 5 years, or both. A
second or subsequent offense under subsection (a) shall
be punishable by a fine of not more than $500,000 or im-
prisonment for not more than 10 years, or both.
‘‘§ 1308. Limitations on actions
‘‘(a) CRIMINAL PROCEEDINGS.—No criminal pro-
ceeding shall be maintained under this chapter unless it
is commenced within three years after the cause of action
arises.
‘‘(b) CIVIL ACTIONS.—No civil action shall be main-
tained under this chapter unless it is commenced within
three years after the cause of action arises or claim ac-
crues.
‘‘(c) ADDITIONAL LIMITATION.—No criminal or civil
action shall be maintained under this chapter for the ex-
traction or use of all or a substantial part of a collection
of information that occurs more than 15 years after the
investment of resources that qualified the portion of the
collection of information for protection under this chapter
that is extracted or used.’’.
SEC. 503. CONFORMING AMENDMENT.
The table of chapters for title 17, United States
Code, is amended by adding at the end the following:
‘‘13. Misappropriation of Collections of Information .......... 1301’’.
124
HR 2281 PCS
SEC. 504. CONFORMING AMENDMENTS TO TITLE 28, UNITED
STATES CODE.
(a) DISTRICT COURT JURISDICTION.—Section 1338
of title 28, United States Code, is amended—
(1) in the section heading by inserting ‘‘mis-
appropriations of collections of informa-
tion,’’ after ‘‘trade-marks,’’; and
(2) by adding at the end the following:
‘‘(d) The district courts shall have original jurisdic-
tion of any civil action arising under chapter 13 of title
17, relating to misappropriation of collections of informa-
tion. Such jurisdiction shall be exclusive of the courts of
the States, except that any action against a State govern-
mental entity may be brought in any court that has juris-
diction over claims against such entity.’’.
(b) CONFORMING AMENDMENT.—The item relating
to section 1338 in the table of sections for chapter 85 of
title 28, United States Code, is amended by inserting
‘‘misappropriations of collections of information,’’ after
‘‘trade-marks,’’.
(c) COURT OF FEDERAL CLAIMS JURISDICTION.—
Section 1498(e) of title 28, United States Code, is amend-
ed by inserting ‘‘and to protections afforded collections of
information under chapter 13 of title 17’’ after ‘‘chapter
9 of title 17’’.
125
HR 2281 PCS
SEC. 505. EFFECTIVE DATE.
(a) IN GENERAL.—This title and the amendments
made by this title shall take effect on the date of the en-
actment of this Act, and shall apply to acts committed
on or after that date.
(b) PRIOR ACTS NOT AFFECTED.—No person shall
be liable under chapter 13 of title 17, United States Code,
as added by section 502 of this Act, for the use of informa-
tion lawfully extracted from a collection of information
prior to the effective date of this Act, by that person or
by that person’s predecessor in interest.
TITLE VI—PROTECTION OF
CERTAIN ORIGINAL DESIGNS
SEC. 601. SHORT TITLE.
This Act may be referred to as the ‘‘Vessel Hull De-
sign Protection Act’’.
SEC. 602. PROTECTION OF CERTAIN ORIGINAL DESIGNS.
Title 17, United States Code, is amended by adding
at the end the following new chapter:
‘‘CHAPTER 14—PROTECTION OF ORIGINAL DESIGNS
‘‘Sec.
‘‘1401. Designs protected.
‘‘1402. Designs not subject to protection.
‘‘1403. Revisions, adaptations, and rearrangements.
‘‘1404. Commencement of protection.
‘‘1405. Term of protection.
‘‘1406. Design notice.
‘‘1407. Effect of omission of notice.
‘‘1408. Exclusive rights.
‘‘1409. Infringement.
‘‘1410. Application for registration.
‘‘1411. Benefit of earlier filing date in foreign country.
126
HR 2281 PCS
‘‘1412. Oaths and acknowledgments.
‘‘1413. Examination of application and issue or refusal of registration.
‘‘1414. Certification of registration.
‘‘1415. Publication of announcements and indexes.
‘‘1416. Fees.
‘‘1417. Regulations.
‘‘1418. Copies of records.
‘‘1419. Correction of errors in certificates.
‘‘1420. Ownership and transfer.
‘‘1421. Remedy for infringement.
‘‘1422. Injunctions.
‘‘1423. Recovery for infringement.
‘‘1424. Power of court over registration.
‘‘1425. Liability for action on registration fraudulently obtained.
‘‘1426. Penalty for false marking.
‘‘1427. Penalty for false representation.
‘‘1428. Enforcement by Treasury and Postal Service .
‘‘1429. Relation to design patent law.
‘‘1430. Common law and other rights unaffected.
‘‘1431. Administrator; Office of the Administrator.
‘‘1432. No retroactive effect.
‘‘§ 1401. Designs protected
‘‘(a) DESIGNS PROTECTED.—
‘‘(1) IN
GENERAL.—The designer or other
owner of an original design of a useful article which
makes the article attractive or distinctive in appear-
ance to the purchasing or using public may secure
the protection provided by this chapter upon comply-
ing with and subject to this chapter.
‘‘(2) VESSEL HULLS.—The design of a vessel
hull, including a plug or mold, is subject to protec-
tion under this chapter, notwithstanding section
1402(4).
‘‘(b) DEFINITIONS.—For the purpose of this chapter,
the following terms have the following meanings:
127
HR 2281 PCS
‘‘(1) A design is ‘original’ if it is the result of
the designer’s creative endeavor that provides a dis-
tinguishable variation over prior work pertaining to
similar articles which is more than merely trivial and
has not been copied from another source.
‘‘(2) A ‘useful article’ is a vessel hull, including
a plug or mold, which in normal use has an intrinsic
utilitarian function that is not merely to portray the
appearance of the article or to convey information.
An article which normally is part of a useful article
shall be deemed to be a useful article.
‘‘(3) A ‘vessel’ is a craft, especially one larger
than a rowboat, designed to navigate on water, but
does not include any such craft that exceeds 200
feet in length.
‘‘(4) A ‘hull’ is the frame or body of a vessel,
including the deck of a vessel, exclusive of masts,
sails, yards, and rigging.
‘‘(5) A ‘plug’ means a device or model used to
make a mold for the purpose of exact duplication,
regardless of whether the device or model has an in-
trinsic utilitarian function that is not only to portray
the appearance of the product or to convey informa-
tion.
128
HR 2281 PCS
‘‘(6) A ‘mold’ means a matrix or form in which
a substance for material is used, regardless of
whether the matrix or form has an intrinsic utilitar-
ian function that is not only to portray the appear-
ance of the product or to convey information.
‘‘§ 1402. Designs not subject to protection
‘‘Protection under this chapter shall not be available
for a design that is—
‘‘(1) not original;
‘‘(2) staple or commonplace, such as a standard
geometric figure, a familiar symbol, an emblem, or
a motif, or another shape, pattern, or configuration
which has become standard, common, prevalent, or
ordinary;
‘‘(3) different from a design excluded by para-
graph (2) only in insignificant details or in elements
which are variants commonly used in the relevant
trades;
‘‘(4) dictated solely by a utilitarian function of
the article that embodies it; or
‘‘(5) embodied in a useful article that was made
public by the designer or owner in the United States
or a foreign country more than 1 year before the
date of the application for registration under this
chapter.
130
HR 2281 PCS
‘‘(c) TERMINATION OF RIGHTS.—Upon expiration or
termination of protection in a particular design under this
chapter, all rights under this chapter in the design shall
terminate, regardless of the number of different articles
in which the design may have been used during the term
of its protection.
‘‘§ 1406. Design notice
‘‘(a) CONTENTS OF DESIGN NOTICE.—(1) Whenever
any design for which protection is sought under this chap-
ter is made public under section 1410(b), the owner of
the design shall, subject to the provisions of section 1407,
mark it or have it marked legibly with a design notice con-
sisting of—
‘‘(A) the words ‘Protected Design’, the abbre-
viation ‘Prot’d Des.’, or the letter ‘D’ with a circle,
or the symbol *D*;
‘‘(B) the year of the date on which protection
for the design commenced; and
‘‘(C) the name of the owner, an abbreviation by
which the name can be recognized, or a generally ac-
cepted alternative designation of the owner.
Any distinctive identification of the owner may be used
for purposes of subparagraph (C) if it has been recorded
by the Administrator before the design marked with such
identification is registered.
131
HR 2281 PCS
‘‘(2) After registration, the registration number may
be used instead of the elements specified in subparagraphs
(B) and (C) of paragraph (1).
‘‘(b) LOCATION OF NOTICE.—The design notice shall
be so located and applied as to give reasonable notice of
design protection while the useful article embodying the
design is passing through its normal channels of com-
merce.
‘‘(c) SUBSEQUENT REMOVAL OF NOTICE.—When the
owner of a design has complied with the provisions of this
section, protection under this chapter shall not be affected
by the removal, destruction, or obliteration by others of
the design notice on an article.
‘‘§ 1407. Effect of omission of notice
‘‘(a) ACTIONS WITH NOTICE.—Except as provided in
subsection (b), the omission of the notice prescribed in sec-
tion 1406 shall not cause loss of the protection under this
chapter or prevent recovery for infringement under this
chapter against any person who, after receiving written
notice of the design protection, begins an undertaking
leading to infringement under this chapter.
‘‘(b) ACTIONS WITHOUT NOTICE.—The omission of
the notice prescribed in section 1406 shall prevent any re-
covery under section 1423 against a person who began an
undertaking leading to infringement under this chapter
132
HR 2281 PCS
before receiving written notice of the design protection. No
injunction shall be issued under this chapter with respect
to such undertaking unless the owner of the design reim-
burses that person for any reasonable expenditure or con-
tractual obligation in connection with such undertaking
that was incurred before receiving written notice of the
design protection, as the court in its discretion directs.
The burden of providing written notice of design protec-
tion shall be on the owner of the design.
‘‘§ 1408. Exclusive rights
‘‘The owner of a design protected under this chapter
has the exclusive right to—
‘‘(1) make, have made, or import, for sale or
for use in trade, any useful article embodying that
design; and
‘‘(2) sell or distribute for sale or for use in
trade any useful article embodying that design.
‘‘§ 1409. Infringement
‘‘(a) ACTS OF INFRINGEMENT.—Except as provided
in subjection (b), it shall be infringement of the exclusive
rights in a design protected under this chapter for any
person, without the consent of the owner of the design,
within the United States and during the term of such pro-
tection, to—
133
HR 2281 PCS
‘‘(1) make, have made, or import, for sale or
for use in trade, any infringing article as defined in
subsection (e); or
‘‘(2) sell or distribute for sale or for use in
trade any such infringing article.
‘‘(b) ACTS OF SELLERS AND DISTRIBUTORS.—A sell-
er or distributor of an infringing article who did not make
or import the article shall be deemed to have infringed
on a design protected under this chapter only if that per-
son—
‘‘(1) induced or acted in collusion with a manu-
facturer to make, or an importer to import such ar-
ticle, except that merely purchasing or giving an
order to purchase such article in the ordinary course
of business shall not of itself constitute such induce-
ment or collusion; or
‘‘(2) refused or failed, upon the request of the
owner of the design, to make a prompt and full dis-
closure of that person’s source of such article, and
that person orders or reorders such article after re-
ceiving notice by registered or certified mail of the
protection subsisting in the design.
‘‘(c) ACTS WITHOUT KNOWLEDGE.—It shall not be
infringement under this section to make, have made, im-
port, sell, or distribute, any article embodying a design
134
HR 2281 PCS
which was created without knowledge that a design was
protected under this chapter and was copied from such
protected design.
‘‘(d) ACTS IN ORDINARY COURSE OF BUSINESS.—A
person who incorporates into that person’s product of
manufacture an infringing article acquired from others in
the ordinary course of business, or who, without knowl-
edge of the protected design embodied in an infringing ar-
ticle, makes or processes the infringing article for the ac-
count of another person in the ordinary course of business,
shall not be deemed to have infringed the rights in that
design under this chapter except under a condition con-
tained in paragraph (1) or (2) of subsection (b). Accepting
an order or reorder from the source of the infringing arti-
cle shall be deemed ordering or reordering within the
meaning of subsection (b)(2).
‘‘(e) INFRINGING ARTICLE DEFINED.—As used in
this section, an ‘infringing article’ is any article the design
of which has been copied from a design protected under
this chapter, without the consent of the owner of the pro-
tected design. An infringing article is not an illustration
or picture of a protected design in an advertisement, book,
periodical, newspaper, photograph, broadcast, motion pic-
ture, or similar medium. A design shall not be deemed to
have been copied from a protected design if it is original
135
HR 2281 PCS
and not substantially similar in appearance to a protected
design.
‘‘(f) ESTABLISHING ORIGINALITY.—The party to any
action or proceeding under this chapter who alleges rights
under this chapter in a design shall have the burden of
establishing the design’s originality whenever the opposing
party introduces an earlier work which is identical to such
design, or so similar as to make prima facie showing that
such design was copied from such work.
‘‘(g) REPRODUCTION
FOR TEACHING
OR ANALY-
SIS.—It is not an infringement of the exclusive rights of
a design owner for a person to reproduce the design in
a useful article or in any other form solely for the purpose
of teaching, analyzing, or evaluating the appearance, con-
cepts, or techniques embodied in the design, or the func-
tion of the useful article embodying the design.
‘‘§ 1410. Application for registration
‘‘(a) TIME LIMIT FOR APPLICATION FOR REGISTRA-
TION.—Protection under this chapter shall be lost if appli-
cation for registration of the design is not made within
two years after the date on which the design is first made
public.
‘‘(b) WHEN DESIGN IS MADE PUBLIC.—A design is
made public when an existing useful article embodying the
design is anywhere publicly exhibited, publicly distributed,
136
HR 2281 PCS
or offered for sale or sold to the public by the owner of
the design or with the owner’s consent.
‘‘(c) APPLICATION BY OWNER OF DESIGN.—Applica-
tion for registration may be made by the owner of the de-
sign.
‘‘(d) CONTENTS OF APPLICATION.—The application
for registration shall be made to the Administrator and
shall state—
‘‘(1) the name and address of the designer or
designers of the design;
‘‘(2) the name and address of the owner if dif-
ferent from the designer;
‘‘(3) the specific name of the useful article em-
bodying the design;
‘‘(4) the date, if any, that the design was first
made public, if such date was earlier than the date
of the application;
‘‘(5) affirmation that the design has been fixed
in a useful article; and
‘‘(6) such other information as may be required
by the Administrator.
The application for registration may include a description
setting forth the salient features of the design, but the
absence of such a description shall not prevent registration
under this chapter.
137
HR 2281 PCS
‘‘(e) SWORN STATEMENT.—The application for reg-
istration shall be accompanied by a statement under oath
by the applicant or the applicant’s duly authorized agent
or representative, setting forth, to the best of the appli-
cant’s knowledge and belief—
‘‘(1) that the design is original and was created
by the designer or designers named in the applica-
tion;
‘‘(2) that the design has not previously been
registered on behalf of the applicant or the appli-
cant’s predecessor in title; and
‘‘(3) that the applicant is the person entitled to
protection and to registration under this chapter.
If the design has been made public with the design notice
prescribed in section 1406, the statement shall also de-
scribe the exact form and position of the design notice.
‘‘(f) EFFECT OF ERRORS.—(1) Error in any state-
ment or assertion as to the utility of the useful article
named in the application under this section, the design
of which is sought to be registered, shall not affect the
protection secured under this chapter.
‘‘(2) Errors in omitting a joint designer or in naming
an alleged joint designer shall not affect the validity of
the registration, or the actual ownership or the protection
138
HR 2281 PCS
of the design, unless it is shown that the error occurred
with deceptive intent.
‘‘(g) DESIGN MADE IN SCOPE OF EMPLOYMENT.—
In a case in which the design was made within the regular
scope of the designer’s employment and individual author-
ship of the design is difficult or impossible to ascribe and
the application so states, the name and address of the em-
ployer for whom the design was made may be stated in-
stead of that of the individual designer.
‘‘(h) PICTORIAL REPRESENTATION
OF DESIGN.—
The application for registration shall be accompanied by
two copies of a drawing or other pictorial representation
of the useful article embodying the design, having one or
more views, adequate to show the design, in a form and
style suitable for reproduction, which shall be deemed a
part of the application.
‘‘(i) DESIGN IN MORE THAN ONE USEFUL ARTI-
CLE.—If the distinguishing elements of a design are in
substantially the same form in different useful articles, the
design shall be protected as to all such useful articles when
protected as to one of them, but not more than one reg-
istration shall be required for the design.
‘‘(j) APPLICATION FOR MORE THAN ONE DESIGN.—
More than one design may be included in the same appli-
cation under such conditions as may be prescribed by the
139
HR 2281 PCS
Administrator. For each design included in an application
the fee prescribed for a single design shall be paid.
‘‘§ 1411. Benefit of earlier filing date in foreign coun-
try
‘‘An application for registration of a design filed in
the United States by any person who has, or whose legal
representative or predecessor or successor in title has, pre-
viously filed an application for registration of the same
design in a foreign country which extends to designs of
owners who are citizens of the United States, or to appli-
cations filed under this chapter, similar protection to that
provided under this chapter shall have that same effect
as if filed in the United States on the date on which the
application was first filed in such foreign country, if the
application in the United States is filed within 6 months
after the earliest date on which any such foreign applica-
tion was filed.
‘‘§ 1412. Oaths and acknowledgments
‘‘(a) IN GENERAL.—Oaths and acknowledgments re-
quired by this chapter—
‘‘(1) may be made—
‘‘(A) before any person in the United
States authorized by law to administer oaths; or
‘‘(B) when made in a foreign country, be-
fore any diplomatic or consular officer of the
140
HR 2281 PCS
United States authorized to administer oaths,
or before any official authorized to administer
oaths in the foreign country concerned, whose
authority shall be proved by a certificate of a
diplomatic or consular officer of the United
States; and
‘‘(2) shall be valid if they comply with the laws
of the State or country where made.
‘‘(b) WRITTEN DECLARATION IN LIEU OF OATH.—
(1) The Administrator may by rule prescribe that any doc-
ument which is to be filed under this chapter in the Office
of the Administrator and which is required by any law,
rule, or other regulation to be under oath, may be sub-
scribed to by a written declaration in such form as the
Administrator may prescribe, and such declaration shall
be in lieu of the oath otherwise required.
‘‘(2) Whenever a written declaration under paragraph
(1) is used, the document containing the declaration shall
state that willful false statements are punishable by fine
or imprisonment, or both, pursuant to section 1001 of title
18, and may jeopardize the validity of the application or
document or a registration resulting therefrom.
141
HR 2281 PCS
‘‘§ 1413. Examination of application and issue or re-
fusal of registration
‘‘(a) DETERMINATION OF REGISTRABILITY OF DE-
SIGN; REGISTRATION.—Upon the filing of an application
for registration in proper form under section 1410, and
upon payment of the fee prescribed under section 1416,
the Administrator shall determine whether or not the ap-
plication relates to a design which on its face appears to
be subject to protection under this chapter, and, if so, the
Register shall register the design. Registration under this
subsection shall be announced by publication. The date of
registration shall be the date of publication.
‘‘(b) REFUSAL TO REGISTER; RECONSIDERATION.—
If, in the judgment of the Administrator, the application
for registration relates to a design which on its face is
not subject to protection under this chapter, the Adminis-
trator shall send to the applicant a notice of refusal to
register and the grounds for the refusal. Within 3 months
after the date on which the notice of refusal is sent, the
applicant may, by written request, seek reconsideration of
the application. After consideration of such a request, the
Administrator shall either register the design or send to
the applicant a notice of final refusal to register.
‘‘(c) APPLICATION TO CANCEL REGISTRATION.—Any
person who believes he or she is or will be damaged by
a registration under this chapter may, upon payment of
142
HR 2281 PCS
the prescribed fee, apply to the Administrator at any time
to cancel the registration on the ground that the design
is not subject to protection under this chapter, stating the
reasons for the request. Upon receipt of an application for
cancellation, the Administrator shall send to the owner of
the design, as shown in the records of the Office of the
Administrator, a notice of the application, and the owner
shall have a period of 3 months after the date on which
such notice is mailed in which to present arguments to
the Administrator for support of the validity of the reg-
istration. The Administrator shall also have the authority
to establish, by regulation, conditions under which the op-
posing parties may appear and be heard in support of
their arguments. If, after the periods provided for the
presentation of arguments have expired, the Administrator
determines that the applicant for cancellation has estab-
lished that the design is not subject to protection under
this chapter, the Administrator shall order the registration
stricken from the record. Cancellation under this sub-
section shall be announced by publication, and notice of
the Administrator’s final determination with respect to
any application for cancellation shall be sent to the appli-
cant and to the owner of record.
145
HR 2281 PCS
cate, shall thereafter have the same effect as if it had been
originally issued in such corrected form.
‘‘§ 1420. Ownership and transfer
‘‘(a) PROPERTY RIGHT IN DESIGN.—The property
right in a design subject to protection under this chapter
shall vest in the designer, the legal representatives of a
deceased designer or of one under legal incapacity, the em-
ployer for whom the designer created the design in the
case of a design made within the regular scope of the de-
signer’s employment, or a person to whom the rights of
the designer or of such employer have been transferred.
The person in whom the property right is vested shall be
considered the owner of the design.
‘‘(b) TRANSFER OF PROPERTY RIGHT.—The prop-
erty right in a registered design, or a design for which
an application for registration has been or may be filed,
may be assigned, granted, conveyed, or mortgaged by an
instrument in writing, signed by the owner, or may be be-
queathed by will.
‘‘(c) OATH
OR ACKNOWLEDGEMENT
OF TRANS-
FER.—An oath or acknowledgment under section 1412
shall be prima facie evidence of the execution of an assign-
ment, grant, conveyance, or mortgage under subsection
(b).
146
HR 2281 PCS
‘‘(d) RECORDATION OF TRANSFER.—An assignment,
grant, conveyance, or mortgage under subsection (b) shall
be void as against any subsequent purchaser or mortgagee
for a valuable consideration, unless it is recorded in the
Office of the Administrator within 3 months after its date
of execution or before the date of such subsequent pur-
chase or mortgage.
‘‘§ 1421. Remedy for infringement
‘‘(a) IN GENERAL.—The owner of a design is enti-
tled, after issuance of a certificate of registration of the
design under this chapter, to institute an action for any
infringement of the design.
‘‘(b) REVIEW OF REFUSAL TO REGISTER.—(1) Sub-
ject to paragraph (2), the owner of a design may seek judi-
cial review of a final refusal of the Administrator to reg-
ister the design under this chapter by bringing a civil ac-
tion, and may in the same action, if the court adjudges
the design subject to protection under this chapter, en-
force the rights in that design under this chapter.
‘‘(2) The owner of a design may seek judicial review
under this section if—
‘‘(A) the owner has previously duly filed and
prosecuted to final refusal an application in proper
form for registration of the design;
147
HR 2281 PCS
‘‘(B) the owner causes a copy of the complaint
in the action to be delivered to the Administrator
within 10 days after the commencement of the ac-
tion; and
‘‘(C) the defendant has committed acts in re-
spect to the design which would constitute infringe-
ment with respect to a design protected under this
chapter.
‘‘(c) ADMINISTRATOR AS PARTY TO ACTION.—The
Administrator may, at the Administrator’s option, become
a party to the action with respect to the issue of
registrability of the design claim by entering an appear-
ance within 60 days after being served with the complaint,
but the failure of the Administrator to become a party
shall not deprive the court of jurisdiction to determine that
issue.
‘‘(d) USE OF ARBITRATION TO RESOLVE DISPUTE.—
The parties to an infringement dispute under this chapter,
within such time as may be specified by the Administrator
by regulation, may determine the dispute, or any aspect
of the dispute, by arbitration. Arbitration shall be gov-
erned by title 9. The parties shall give notice of any arbi-
tration award to the Administrator, and such award shall,
as between the parties to the arbitration, be dispositive
of the issues to which it relates. The arbitration award
148
HR 2281 PCS
shall be unenforceable until such notice is given. Nothing
in this subsection shall preclude the Administrator from
determining whether a design is subject to registration in
a cancellation proceeding under section 1413(c).
§ 1422. Injunctions
‘‘(a) IN GENERAL.—A court having jurisdiction over
actions under this chapter may grant injunctions in ac-
cordance with the principles of equity to prevent infringe-
ment of a design under this chapter, including, in its dis-
cretion, prompt relief by temporary restraining orders and
preliminary injunctions.
‘‘(b) DAMAGES FOR INJUNCTIVE RELIEF WRONG-
FULLY OBTAINED.—A seller or distributor who suffers
damage by reason of injunctive relief wrongfully obtained
under this section has a cause of action against the appli-
cant for such injunctive relief and may recover such relief
as may be appropriate, including damages for lost profits,
cost of materials, loss of good will, and punitive damages
in instances where the injunctive relief was sought in bad
faith, and, unless the court finds extenuating cir-
cumstances, reasonable attorney’s fees.
‘‘§ 1423. Recovery for infringement
‘‘(a) DAMAGES.—Upon a finding for the claimant in
an action for infringement under this chapter, the court
shall award the claimant damages adequate to compensate
149
HR 2281 PCS
for the infringement. In addition, the court may increase
the damages to such amount, not exceeding $50,000 or
$1 per copy, whichever is greater, as the court determines
to be just. The damages awarded shall constitute com-
pensation and not a penalty. The court may receive expert
testimony as an aid to the determination of damages.
‘‘(b) INFRINGER’S PROFITS.—As an alternative to
the remedies provided in subsection (a), the court may
award the claimant the infringer’s profits resulting from
the sale of the copies if the court finds that the infringer’s
sales are reasonably related to the use of the claimant’s
design. In such a case, the claimant shall be required to
prove only the amount of the infringer’s sales and the in-
fringer shall be required to prove its expenses against such
sales.
‘‘(c) STATUTE OF LIMITATIONS.—No recovery under
subsection (a) or (b) shall be had for any infringement
committed more than 3 years before the date on which
the complaint is filed.
‘‘(d) ATTORNEY’S FEES.—In an action for infringe-
ment under this chapter, the court may award reasonable
attorney’s fees to the prevailing party.
‘‘(e) DISPOSITION OF INFRINGING AND OTHER ARTI-
CLES.—The court may order that all infringing articles,
and any plates, molds, patterns, models, or other means
150
HR 2281 PCS
specifically adapted for making the articles, be delivered
up for destruction or other disposition as the court may
direct.
‘‘§ 1424. Power of court over registration
‘‘In any action involving the protection of a design
under this chapter, the court, when appropriate, may
order registration of a design under this chapter or the
cancellation of such a registration. Any such order shall
be certified by the court to the Administrator, who shall
make an appropriate entry upon the record.
‘‘§ 1425. Liability for action on registration fraudu-
lently obtained
‘‘Any person who brings an action for infringement
knowing that registration of the design was obtained by
a false or fraudulent representation materially affecting
the rights under this chapter, shall be liable in the sum
of $10,000, or such part of that amount as the court may
determine. That amount shall be to compensate the de-
fendant and shall be charged against the plaintiff and paid
to the defendant, in addition to such costs and attorney’s
fees of the defendant as may be assessed by the court.
‘‘§ 1426. Penalty for false marking
‘‘(a) IN GENERAL.—Whoever, for the purpose of de-
ceiving the public, marks upon, applies to, or uses in ad-
vertising in connection with an article made, used, distrib-
151
HR 2281 PCS
uted, or sold, a design which is not protected under this
chapter, a design notice specified in section 1406, or any
other words or symbols importing that the design is pro-
tected under this chapter, knowing that the design is not
so protected, shall pay a civil fine of not more than $500
for each such offense.
‘‘(b) SUIT BY PRIVATE PERSONS.—Any person may
sue for the penalty established by subsection (a), in which
event one-half of the penalty shall be awarded to the per-
son suing and the remainder shall be awarded to the
United States.
‘‘§ 1427. Penalty for false representation
‘‘Whoever knowingly makes a false representation
materially affecting the rights obtainable under this chap-
ter for the purpose of obtaining registration of a design
under this chapter shall pay a penalty of not less than
$500 and not more than $1,000, and any rights or privi-
leges that individual may have in the design under this
chapter shall be forfeited.
‘‘§ 1428. Enforcement by Treasury and Postal Service
‘‘(a) REGULATIONS.—The Secretary of the Treasury
and the United States Postal Service shall separately or
jointly issue regulations for the enforcement of the rights
set forth in section 1408 with respect to importation. Such
regulations may require, as a condition for the exclusion