A bill to provide criminal penalties for unauthorized recording of motion pictures in a motion picture exhibition facility, to provide criminal and civil penalties for unauthorized distribution of commercial prerelease copyrighted works, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Artists' Rights and Theft Prevention 
Act of 2004'' or the ``ART Act''.

SEC. 2. CONGRESSIONAL FINDINGS.

    Congress finds the following:
            (1) Intellectual property--
                    (A) represents the ideas, imagination and 
                creativity needed to innovate long before a product is 
                brought to market;
                    (B) is fundamental to the continued economic, 
                social, and cultural development of society; and
                    (C) deserves the protection of our laws.
            (2) Music, film, software, and all other forms of 
        intellectual property represent one of the strongest and most 
        significant sectors of the United States economy, as 
        demonstrated by the fact that these industries--
                    (A) accounted for more than 5 percent of the United 
                States Gross Domestic Product, or $535,100,000,000 in 
                2001;
                    (B) represent almost 6 percent of all United States 
                employment; and
                    (C) led all major industry sectors in foreign sales 
                and exports in 2001.
            (3) In an attempt to combat the growing use of the Internet 
        and technology for the illegal reproduction and distribution of 
        copyrighted materials, Congress unanimously passed and 
        President Clinton signed the ``No Electronic Theft (NET) Act'' 
        in 1997. The NET Act is designed to strengthen copyright and 
        trademark laws and to permit the prosecution of individuals in 
        cases involving large-scale illegal reproduction or 
        distribution of copyrighted works where the infringers act 
        willfully.
            (4) Under the No Electronic Theft (NET) Act's economic harm 
        requirement, investigations by law enforcement of copyright 
        infringements are particularly resource intensive and pose 
        significant challenges. In the interest of broader deterrence 
        and in order to facilitate the prosecution of particularly 
        egregious copyright violations, it is important to recognize 
        that a significant level of economic harm can be reached by the 
        distribution of prerelease commercial works.
            (5) The use of camcorders and other audiovisual recording 
        devices in movie theaters to make illegal copies of films is 
        posing a serious threat to the motion picture industry. 
        According to a recent industry study, 92.4 percent of the first 
        copies of movies available for download on the Internet 
        originate from camcorders.
            (6) Given the difficulty of enforcement, online theft of 
        music, film, software, and all forms of intellectual property 
        continues to rise. The negative effects on this large segment 
        of the United States economy are significant, as exemplified by 
        almost a 31 percent drop in sales for the music industry from 
        the middle of 2000 to the middle of 2003.
            (7) Federal legislation is necessary and warranted to 
        combat the most egregious forms of online theft of intellectual 
        property and its significant, negative economic impact on the 
        United States economy because--
                    (A) Article 1, section 8 of the United States 
                Constitution gives Congress the power ``[t]o promote 
                the Progress of Science and useful Arts, by securing 
                for limited Times to Authors and Inventors the 
                exclusive Right to their respective Writings and 
                Discoveries,'' as well as the power ``[t]o regulate 
                Commerce with foreign nations, and among the several 
                States.'';
                    (B) the importance of the music, film, software and 
                other intellectual property-based industries to the 
                overall health of the United States economy is well 
                documented and significant; and
                    (C) theft and unauthorized distribution of 
                intellectual property across State and international 
                lines occurs on a regular basis.

SEC. 3. CRIMINAL PENALTIES FOR UNAUTHORIZED RE-CORDING OF MOTION 
              PICTURES IN A MOTION PICTURE EXHIBITION FACILITY.

    (a) In General.--Chapter 113 of title 18, United States Code, is 
amended by adding after section 2319A the following new section:
``Sec. 2319B. Unauthorized recording of motion pictures in a motion 
              picture exhibition facility
    ``(a) Offense.--Any person who, without the authorization of the 
copyright owner, knowingly uses or attempts to use an audiovisual 
recording device to transmit or make a copy of a motion picture or 
other audiovisual work protected under title 17, or any part thereof, 
from a performance of such work in a motion picture exhibition 
facility, shall--
            ``(1) be imprisoned for not more than 3 years, fined under 
        this title, or both; or
            ``(2) if the offense is a second or subsequent offense, be 
        imprisoned for no more than 6 years, fined under this title, or 
        both.
    ``(b) Forfeiture and Destruction.--When a person is convicted of a 
violation of subsection (a), the court in its judgment of conviction 
shall, in addition to any penalty provided, order the forfeiture and 
destruction or other disposition of all unauthorized copies of motion 
pictures or other audiovisual works protected under title 17, or parts 
thereof, and any audiovisual recording devices or other equipment used 
in connection with the offense.
    ``(c) Authorized Activities.--This section does not prevent any 
lawfully authorized investigative, protective, or intelligence activity 
by an officer, agent, or employee of the United States, a State, or a 
political subdivision of a State, or a person acting under a contract 
with the United States, a State, or a political subdivision of a State.
    ``(d) Immunity for Theaters.--With reasonable cause, the owner or 
lessee of a facility where a motion picture is being exhibited, the 
authorized agent or employee of such owner or lessee, the licensor of 
the motion picture being exhibited, or the agent or employee of such 
licensor--
            ``(1) may detain, in a reasonable manner and for a 
        reasonable time, any person suspected of a violation of this 
        section for the purpose of questioning or summoning a law 
        enforcement officer; and
            ``(2) shall not be held liable in any civil or criminal 
        action arising out of a detention under paragraph (1).
    ``(e) Victim Impact Statement.--
            ``(1) In general.--During the preparation of the 
        presentence report under rule 32(c) of the Federal Rules of 
        Criminal Procedure, victims of an offense under this section 
        shall be permitted to submit to the probation officer a victim 
        impact statement that identifies the victim of the offense and 
        the extent and scope of the injury and loss suffered by the 
        victim, including the estimated economic impact of the offense 
        on that victim.
            ``(2) Contents.--A victim impact statement submitted under 
        this subsection shall include--
                    ``(A) producers and sellers of legitimate works 
                affected by conduct involved in the offense;
                    ``(B) holders of intellectual property rights in 
                the works described in subparagraph (A); and
                    ``(C) the legal representatives of such producers, 
                sellers, and holders.
    ``(f) Definitions.--In this section, the following definitions 
shall apply:
            ``(1) Title 17 definitions.--The terms `audiovisual work', 
        `copy', `copyright owner', `motion picture', `motion picture 
        exhibition facility', and `transmit' have, respectively, the 
        meanings given those terms in section 101 of title 17.
            ``(2) Audiovisual recording device.--The term `audiovisual 
        recording device' means a digital or analog photographic or 
        video camera, or any other technology or device capable of 
        enabling the recording or transmission of a copyrighted motion 
        picture or other audiovisual work, or any part thereof, 
        regardless of whether audiovisual recording is the sole or 
        primary purpose of the device.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
chapter 113 of title 18, United States Code, is amended by inserting 
after the item relating to section 2319A the following:

``2319B. Unauthorized recording of motion pictures in a motion picture 
                            exhibition facility.''.
    (c) Definition.--Section 101 of title 17, United States Code, is 
amended by inserting after the definition of ``Motion pictures'' the 
following:
    ``The term `motion picture exhibition facility' means a movie 
theater, screening room, or other venue that is being used primarily 
for the exhibition of a copyrighted motion picture, if such exhibition 
is open to the public or is made to an assembled group of viewers 
outside of a normal circle of a family and its social acquaintances.''.

SEC. 4. CRIMINAL INFRINGEMENT OF A WORK BEING PREPARED FOR COMMERCIAL 
              DISTRIBUTION.

    (a) Prohibited Acts.--Section 506(a) of title 17, United States 
Code, is amended to read as follows:
    ``(a) Criminal Infringement.--
            ``(1) In general.--Any person who willfully infringes a 
        copyright shall be punished as provided under section 2319 of 
        title 18, if the infringement was committed--
                    ``(A) for purposes of commercial advantage or 
                private financial gain;
                    ``(B) by the reproduction or distribution, 
                including by electronic means, during any 180-day 
                period, of 1 or more copies or phonorecords of 1 or 
                more copyrighted works, which have a total retail value 
                of more than $1,000; or
                    ``(C) by the distribution of a work being prepared 
                for commercial distribution, by making it available on 
                a computer network accessible to members of the public, 
                if such person knew or should have known that the work 
                was intended for commercial distribution.
            ``(2) Evidence.--For purposes of this subsection, evidence 
        of reproduction or distribution of a copyrighted work, by 
        itself, shall not be sufficient to establish willful 
        infringement of a copyright.
            ``(3) Definition.--In this subsection, the term `work being 
        prepared for commercial distribution' means--
                    ``(A) a computer program, a musical work, a motion 
                picture or other audiovisual work, or a sound 
                recording, if at the time of unauthorized 
                distribution--
                            ``(i) the copyright owner has a reasonable 
                        expectation of commercial distribution; and
                            ``(ii) the copies or phonorecords of the 
                        work have not been commercially distributed; or
                    ``(B) a motion picture, if at the time of 
                unauthorized distribution, the motion picture--
                            ``(i) has been made available for viewing 
                        in a motion picture exhibition facility; and
                            ``(ii) has not been made available in 
                        copies for sale to the general public in the 
                        United States in a format intended to permit 
                        viewing outside a motion picture exhibition 
                        facility.''.
    (b) Criminal Penalties.--Section 2319 of title 18, United States 
Code, is amended--
            (1) in subsection (a)--
                    (A) by striking ``Whoever'' and inserting ``Any 
                person who''; and
                    (B) by striking ``and (c) of this section'' and 
                inserting ``, (c), and (d)'';
            (2) in subsection (b), by striking ``section 506(a)(1)'' 
        and inserting ``section 506(a)(1)(A)'';
            (3) in subsection (c), by striking ``section 506(a)(2) of 
        title 17, United States Code'' and inserting ``section 
        506(a)(1)(B) of title 17'';
            (4) by redesignating subsections (d) and (e) as subsections 
        (e) and (f), respectively;
            (5) by adding after subsection (c) the following:
    ``(d) Any person who commits an offense under section 506(a)(1)(C) 
of title 17--
            ``(1) shall be imprisoned not more than 3 years, fined 
        under this title, or both;
            ``(2) shall be imprisoned not more than 5 years, fined 
        under this title, or both, if the offense was committed for 
        purposes of commercial advantage or private financial gain;
            ``(3) shall be imprisoned not more than 6 years, fined 
        under this title, or both, if the offense is a second or 
        subsequent offense; and
            ``(4) shall be imprisoned not more than 10 years, fined 
        under this title, or both, if the offense is a second or 
        subsequent offense under paragraph (2).''; and
            (6) in subsection (f), as redesignated--
                    (A) in paragraph (1), by striking ``and'' at the 
                end;
                    (B) in paragraph (2), by striking the period at the 
                end and inserting a semicolon; and
                    (C) by adding at the end the following:
            ``(3) the term `financial gain' has the meaning given the 
        term in section 101 of title 17; and
            ``(4) the term `work being prepared for commercial 
        distribution' has the meaning given the term in section 506(a) 
        of title 17.''.

SEC. 5. CIVIL REMEDIES FOR INFRINGEMENT OF A WORK BEING PREPARED FOR 
              COMMERCIAL DISTRIBUTION.

    (a) Preregistration.--Section 408 of title 17, United States Code, 
is amended by adding at the end the following:
    ``(f) Preregistration of Works Being Prepared for Commercial 
Distribution.--
            ``(1) Rulemaking.--Not later than 180 days after the date 
        of enactment of this Act, the Register of Copyrights shall 
        issue regulations to establish procedures for preregistration 
        of a work that is being prepared for commercial distribution 
        and has not been published.
            ``(2) Class of works.--The regulations established under 
        paragraph (1) shall permit preregistration for any work that is 
        in a class of works that the Register determines has had a 
        history of infringement prior to authorized commercial 
        distribution.
            ``(3) Application for registration.--Not later than 3 
        months after the first publication of the work, the applicant 
        shall submit to the Copyright Office--
                    ``(A) an application for registration of the work;
                    ``(B) a deposit; and
                    ``(C) the applicable fee.
            ``(4) Effect of untimely application.--An action for 
        infringement under this chapter shall be dismissed, and no 
        award of statutory damages or attorney fees shall be made for a 
        preregistered work, if the items described in paragraph 3 are 
        not submitted to the Copyright Office in proper form within the 
        earlier of--
                    ``(A) 3 months after the first publication of the 
                work; or
                    ``(B) 1 month after the copyright owner has learned 
                of the infringement.''.
    (b) Infringement Actions.--Section 411(a) of title 17, United 
States Code, is amended by inserting ``preregistration or'' after 
``shall be instituted until''.
    (c) Exclusion.--Section 412 of title 17, United States Code, is 
amended by inserting ``, an action for infringement of the copyright of 
a work that has been preregistered under section 408(f) before the 
commencement of the infringement,'' after ``section 106A(a)''.

SEC. 6. FEDERAL SENTENCING GUIDELINES.

    (a) Review and Amendment.--Not later than 180 days after the date 
of enactment of this Act, the United States Sentencing Commission, 
pursuant to its authority under section 994 of title 28, United States 
Code, and in accordance with this section, shall review and, if 
appropriate, amend the Federal sentencing guidelines and policy 
statements applicable to persons convicted of intellectual property 
rights crimes, including any offense under--
            (1) section 506, 1201, or 1202 of title 17, United States 
        Code; or
            (2) section 2318, 2319, 2319A, 2319B, or 2320 of title 18, 
        United States Code.
    (b) Authorization.--The United States Sentencing Commission may 
amend the Federal sentencing guidelines in accordance with the 
procedures set forth in section 21(a) of the Sentencing Act of 1987 (28 
U.S.C. 994 note) as though the authority under that section had not 
expired.
    (c) Responsibilities of United States Sentencing Commission.--In 
carrying out this subsection, the United States Sentencing Commission 
shall--
            (1) take all appropriate measures to ensure that the 
        Federal sentencing guidelines and policy statements described 
        in subsection (a) are sufficiently stringent to deter, and 
        adequately reflect the nature of, intellectual property rights 
        crimes;
            (2) determine whether to provide a sentencing enhancement 
        for those convicted of the offenses described in subsection 
        (a), if the conduct involves the display, performance, 
        publication, reproduction, or distribution of a copyrighted 
        work before it has been authorized by the copyright owner, 
        whether in the media format used by the infringing party or in 
        any other media format;
            (3) determine whether the scope of ``uploading'' set forth 
        in application note 3 of section 2B5.3 of the Federal 
        sentencing guidelines is adequate to address the loss 
        attributable to people who broadly distribute copyrighted works 
        without authorization over the Internet; and
            (4) determine whether the sentencing guidelines and policy 
        statements applicable to the offenses described in subsection 
        (a) adequately reflect any harm to victims from copyright 
        infringement if law enforcement authorities cannot determine 
        how many times copyright material has been reproduced or 
        distributed.

SEC. 7. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to the Department of 
Justice $5,000,000 for each of the fiscal years 2005, 2006, 2007, 2008, 
and 2009 to prosecute violations of intellectual property rights as set 
forth under sections 2318, 2319, 2319A, 2319B, and 2320 of title 18, 
United States Code.

            Passed the Senate June 25, 2004.

            Attest:

                                             EMILY J. REYNOLDS,

                                                             Secretary.

Summary: Artists' Rights and Theft Prevention Act of 2004 (ART Act) - (Sec. 3) Amends the Federal criminal code to prohibit use of an audiovisual recording device to transmit or copy a protected audiovisual work from a performance in a motion picture exhibition facility without the authorization of the copyright owner. Authorizes a court, upon a conviction, to order the forfeiture and destruction of unauthorized copies and of equipment used in such an offense. Permits a facility owner, motion picture licensor, or employee thereof to detain any person suspected of violating such prohibition for purposes of questioning or summoning a law enforcement officer. Grants such parties immunity from liability for such detention. Requires that victims be permitted to submit for inclusion in the presentence report a victim impact statement identifying the injuries and losses suffered.

(Sec. 4) Establishes criminal penalties for willful copyright infringement by the distribution of a computer program, musical work, motion picture or other audiovisual work, or sound recording being prepared for commercial distribution by making it available on a computer network accessible to members of the public, if the person knew or should have known that the work was intended for commercial distribution.

(Sec. 5) Directs the Register of Copyrights to issue regulations to establish procedures for preregistration of a work that is being prepared for commercial distribution and has not been published. Requires such regulations to permit preregistration for any work that is in a class of works that the Register determines has had a history of infringement prior to authorized commercial distribution. Requires the applicant to submit, within three months after the work's first publication, an application for registration, a deposit, and the applicable fee. Directs that an application for infringement be dismissed, and prohibits any award of statutory damages or attorney fees, for a preregistered work if those items are not submitted to the Copyright Office in proper form within the earlier of: (1) three months after the work's first publication; or (2) one month after the copyright owner has learned of the infringement.

(Sec. 6) Directs the U.S. Sentencing Commission to review and, if appropriate, amend the Federal sentencing guidelines and policy statements applicable to persons convicted of intellectual property rights offenses, including trafficking in counterfeit labels for phonorecords and copies of motion pictures and unauthorized fixation of and trafficking in sound recordings and music videos of live musical performances. Directs the Commission to: (1) take measures to ensure that the guidelines and policy statements are sufficiently stringent to deter, and adequately reflect the nature of, intellectual property crimes; (2) determine whether to provide a sentencing enhancement for those convicted of the listed offenses if the conduct involves the display, performance, publication, reproduction, or distribution of a copyrighted work before it has been authorized; (3) determine whether the scope of "uploading" set forth in the sentencing guidelines is adequate to address the loss attributable to people who broadly distribute copyrighted works without authorization over the Internet; and (4) determine whether the sentencing guidelines and policy statements adequately reflect any harm to victims from copyright infringement if law enforcement authorities cannot determine how many times copyright material has been reproduced or distributed.

(Sec. 7) Authorizes appropriations to the Department of Justice for FY 2005 through 2009 to prosecute violations of intellectual property rights.