Copyright Law: Digital Rights Management Legislation in the 107th and 108th Congresses

Congressional research reportJan 5, 2005

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Order Code RL32035

CRS Report for Congress

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Digital Rights Management

Legislation in the 107th and 108th Congresses

Updated January 5, 2005

Robin Jeweler

Legislative Attorney

American Law Division

Congressional Research Service ˜ The Library of Congress

in the 107th and 108th Congresses

Summary

Digital Rights Management (DRM) refers to the technology that copyright

owners use to protect digital media. This report surveys several of the DRM bills

that were introduced in the 107th and 108th Congresses. Generally, the bills are

directed at two separate goals. One goal is to increase access to digitally-protected

media for lawful purposes. The other attempts to thwart digital piracy and would do

so by enhancing civil and criminal sanctions for digital (and traditional) copyright

infringement and educating the public about the rights of copyright holders.

Two of the bills introduced during the 107th Congress focusing on access were

reintroduced in the 108th Congress. Representatives Boucher and Lofgren

reintroduced their bills from the 107th Congress. They are H.R. 107, the “Digital

Media Consumers’ Rights Act of 2003” and H.R. 1066, respectively. H.R. 1066 is

renamed the “Benefit Authors without Limiting Advancement or Net Consumer

Expectations (BALANCE) Act of 2003.” And Senator Wyden introduced S. 692, a

labeling disclosure bill entitled the “Digital Consumers Right to Know Act.”

S. 1621, the “Consumers, Schools, and Libraries Digital Management

Awareness Act of 2003,” addresses several DRM issues. It would prohibit the

Federal Communication Commission from establishing mandatory technology

standards and require disclosure requirements for access controlled digital media and

consumer electronics. It also addresses the subpoena process by which copyright

owners acquire personal information about suspected infringers. And the “Family

Movie Act of 2004,” originally introduced as H.R. 4586 and subsequently

incorporated into H.R. 4077, would amend the law to expressly authorize the inhome use of filtering technology designed to edit out sexual, violent, or profane

content in movies available for consumers’ home viewing.

Bills addressing piracy include H.R. 4077, the “Piracy Deterrence and Education

Act of 2004” which passed the House on September 28, 2004; S. 1932, the “Artists

Rights and Theft Prevention Act of 2004”; and, S. 2237, the “Protecting Intellectual

Rights Against Theft and Expropriation Act of 2004.” S. 1932 and S. 2237 passed

the Senate. Because digital transmission poses the greatest distribution risk to

entertainment content owners, these bills attempt to thwart the initial unauthorized

copying and/or uploading to the Internet. Hence, sanctions for illegal distribution of

pre-release commercial works and surreptitious recording of movies in theaters are

emphasized. Many of these provisions, including the Family Movie Act of 2004,

were reintroduced in S. 3021, which passed the Senate on November 20, 2004. On

June 22, 2004, S. 2560, the “Inducing Infringement of Copyrights Act of 2004” was

introduced in the Senate. This bill would add a new section to the Copyright Act

defining intentional inducement of copyright infringement as an express form of

statutory infringement.

Although this report will not be updated, many of these issues are likely to be

revisited during the 109th Congress and will be tracked as warranted.

Contents

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Fair Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Legislation in the 107th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Bills introduced in the 108th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Bills Addressing Digital Access and Disclosure . . . . . . . . . . . . . . . . . . 6

Bills Addressing Copyright Piracy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Management Legislation in the 107th and

108th Congresses

Background. Digital technology has radically altered the landscape of

media poses new challenges to copyright owners. Copyright law gives a copyright

holder the exclusive right to reproduce, adapt, distribute, perform publicly and

display protected material for a limited term.1 Historically, technology (or lack

thereof) presented an obstacle to wide-spread piracy. For example, repeated copying

of analog video or audio tapes could result in a degradation of the quality of the

reproduction; packaging and transportation for distribution could be cumbersome.

There are no comparable impediments to copying and distributing media in a digital

format.

The legal basis for protecting copyright has traditionally been through the

initiation of a civil proceeding by the copyright holder against the infringer for

injunctive relief and/or money damages, although there are criminal sanctions for

willful infringement as well.2 The efficacy of this remedy is diminished in a digital

environment where distribution may be decentralized, instantaneous, and global.

Unauthorized peer-to-peer (P2P) file sharing of music illustrates this problem.

Instituting a civil suit against thousands of individuals for each unauthorized

download has traditionally been presumed to be infeasible. Recently, however, the

Recording Industry Association of American (RIAA) has embarked on an aggressive

litigation enforcement effort against college students and others who upload or

download copyrighted sound recordings on P2P file-sharing sites.3 The efficacy of

this effort remains to be seen. Nevertheless, copyright owners believe that

prevention of piracy is preferable. The technology-based approaches and

mechanisms that copyright owners utilize to protect digital media are referred to as

digital rights management (DRM).

Congress has enacted two laws to date which facilitate DRM to enhance

technology-based regulatory program for consumer goods designed to copy analog

17 U.S.C. § 106.

Id. at §§ 501- 505.

See Frank Ahrens, 4 Students Sued Over Music Sites; Industry Group Targets File Sharing

at Colleges, THE WASHINGTON POST, April 4, 2003 at E1; Ted Bridis, RIAA’s Subpoena

Onslaught Aimed at Illegal File Sharing, THE WASHINGTON POST, July 19, 2003 at E1.

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and digital musical recordings.4 It requires manufacturers and distributors of audio

recording devices to employ copy control technology. However, a “digital musical

recording” is defined as a “material object” that does not include “one or more

computer programs.”5 Hence, the AHRA does not cover songs fixed on computer

hard drives and extends only to recordings from the material objects in which songs

are otherwise normally fixed, such as recorded compact discs (CDs), digital audio

tapes, audio cassettes, long-playing albums, digital compact cassettes, and minidiscs.6

The act requires consumer goods manufacturers to incorporate the Serial

is technology that sends, receives, and acts upon information about the generation

and copyright status of the files that it plays. It allows copies to be made from an

authorized recording, but prevents the SCMS-equipped machine from making copies

of copies. The AHRA prohibits circumvention of the SCMS system as well. In

consideration for permission to facilitate consumer copying of music recordings,

manufacturers are required to pay music royalties based on sales of the devices. And,

as a consequence of and in consideration for the technology-limited copying and

royalty payments program, manufacturers, importers, and distributors of audio

recording devices, and consumers who use them for noncommercial use, are

protected from suit for copyright infringement.

A more controversial DRM law is the Digital Millennium Copyright Act

(DMCA) of 1998. This law added a new chapter 12 to the Copyright Act entitled

“Copyright Protection and Management Systems.”7 Subject to relatively narrow

exceptions, this law makes it illegal to circumvent a technological copyright-control

measure. This includes activity to descramble a scrambled work, to decrypt an

encrypted work, or to avoid, bypass, remove, deactivate, or impair a technological

measure, without the authority of the copyright owner.8 In contrast to copyright

infringement, which prohibits unauthorized or unexcused use of copyrighted

material, the anticircumvention provisions of the DMCA prohibit the design,

manufacture, import, offer to the public, or trafficking in technology produced to

circumvent copyright encryption programs, regardless of the actual existence or

absence of copyright infringement. Even though the anticircumvention provisions

of the DMCA have, to date, been upheld by the courts, critics argue that they have

a chilling effect on rights of free speech and that their implementation will thwart the

public’s ability to access copyrighted works, which is ultimately necessary in order

to exercise “fair use.”9

17 U.S.C. §§ 1001 - 1010.

17 U.S.C. § 1001(5).

See Recording Industry Ass’n of America v. Diamond Multimedia Sys., Inc., 180 F.3d

1073 (9th Cir. 1999).

17 U.S.C. § 1201 et seq.

Id. at § 1201(a)(3)(A).

For more detail, see CRS Report RL31827, “Digital Rights” and Fair Use in Copyright

(continued...)

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Fair Use. The doctrine of “fair use” is a limitation upon a copyright holder’s

exclusive rights. It permits the public to use a copyrighted work for limited purposes,

such as criticism, comment, news reporting, teaching, scholarship or research.10 And,

although the concept of “personal use” (i.e., copying lawfully acquired copyrighted

materials for one’s personal use) is not expressly protected by statute, it is widelyaccepted and judicially sanctioned.11 Fair use protects the public interest in a free

exchange of ideas and discourse.

The ever-changing state of technology and DRM laws raise many issues, several

of which paradoxically confound one another. To the extent that copyrighted digital

material is not encrypted, it may be subject to piracy on a massive scale. But, as

digital material is increasingly encrypted to protect against piracy, the public is in

jeopardy of restricted access, which may impede the exercise of fair use. And, some

observers assert that protection controls give copyright holders more exclusive

control over their creations than the copyright law intends.12 Content owners,

however, argue that allowing limited circumvention only to facilitate fair use,

including personal use, is impracticable; once the circumvention technology becomes

publicly available, its protective value is compromised.

Members of 107th Congress responded by introducing bills which address two

sides of the issue – piracy prevention and fair use access. Legislative proposals

would have mandated government-sponsored encryption technology and enhanced

content owners’ abilities to fight P2P piracy over the Internet. Other bills were

intended to clarify and expand content users’ fair use, including personal use, access

to digital media. While none of these bills were enacted during the 107th Congress,

the underlying policy issues have not been resolved, and the matter continues to be

the subject of interest in the 108th Congress. This report surveys several of the DRM

bills introduced in the 107th and 108th Congresses. Many of these issues are likely to

be reconsidered in the 109th Congress.

Legislation in the 107th Congress.

Bills Promoting Enhanced DRM Anti-piracy Protection in the 107th

Congress. S. 2048, 107th Cong., 2d Sess. (2002), the “Consumer

Broadband and Digital Television Promotion Act”. This bill, introduced on

March 21, 2002 by Senator Hollings, would have directed digital media device

manufacturers, consumer groups, and copyright owners to attempt to reach an

agreement on security system standards for use in digital media devices and encoding

rules within a year after enactment. If parties were unable to agree on acceptable

standards, the Federal Communications Commission (FCC), in consultation with the

(...continued)

Law by Robin Jeweler (March 24, 2003).

17 U.S.C. § 107.

See Sony Corp. v. Universal Studios, Inc., 464 U.S. 417 (1984)(authorizing consumer use

of home videocassette recorders to “time-shift” television broadcasts) .

See, e.g., Glynn S. Lunney, Jr., The Death of Copyright: Digital Technology, Private

Copying, and the Digital Millennium Copyright Act, 87 VA. L. REV. 813 (2001).

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stipulated that the rules “shall take into account the limitations on the exclusive rights

of copyright owners, including the fair use doctrine.” It further provided that “[n]o

person may apply a security measure that uses a standard security technology to

prevent a lawful recipient from making a personal copy for lawful use... .”13

The bill would have implemented the standards by requiring interactive

computer services to incorporate security measures associated with standard security

technologies and by requiring manufacturers, importers and sellers of digital media

devices to include the security technologies. It would have prohibited removal or

alteration of the technology from the devices. How fair use access and the security

technology would interface was not expressly addressed.

H.R. 5211, 107th Cong., 2d Sess. (2002), a bill “to limit the liability of

Sponsored by Representative Berman, this bill was designed to create “a safe harbor

from liability so that copyright owners could use technological means to prevent the

unauthorized distribution of that owner’s copyrighted works via a P2P network.”14

It would have added a new section to the Copyright Act, 17 U.S.C. § 514, which

would exempt copyright owners from liability under state and federal law for

disabling, interfering with, blocking, diverting, or otherwise impairing the

unauthorized distribution, display, performance, or reproduction of his or her

copyrighted work on a publicly accessible peer-to-peer file trading network, if

such impairment does not, without authorization, alter, delete, or otherwise

impair the integrity of any computer file or data residing on the computer of a file

trader.15

The bill included exceptions to the safe harbor for copyright owners, and required

them to notify the Department of Justice before employing specific blocking

technologies. It created a new cause of action, in addition to existing ones, for file

traders to deter harassment or abuse of P2P networks by copyright owners.

Because the bill aimed to allow the prevention of unauthorized file trading over

decentralized P2P networks, its sponsors suggested that it would not adversely

impact consumers’ fair use of digital media.16

Bills Addressing Digital Access. In addition to the bills noted below,

Senator Wyden and Representative Cox introduced, respectively, Senate and House

S. 2048, § 3(e).

Introductory statement of Rep. Berman, 148 CONG. REC. E1395 (daily ed. July 25, 2002).

H.R. 5211 at § 514(a).

Note 14, supra. (“Because its scope is limited to unauthorized distribution, display,

performance or reproduction of copyrighted works on publicly accessible P2P systems, the

legislation only authorizes self-help measures taken to deal with clear copyright

infringements. Thus, the legislation does not authorize any interdiction actions to stop fair

or authorized uses of copyrighted works ... or any interdiction of public domain works.”)

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joint resolutions entitled the “Consumer Technology Bill of Rights.”17 They were

reportedly based upon a proposal of the same name by the advocacy group,

DigitalConsumer.org.18 Their premise was that copyright law should not curtail

consumers’ fair use rights with respect to digital and electronic entertainment media.

The resolutions’ enumeration of consumer rights included the right to use technology

for

“time-shifting” (i.e., recording legally acquired audio or video for

later listening or viewing);

! “space-shifting” (i.e., using legally acquired content in different

places);

! making backup or archival copies;

! using legally acquired content on the electronic platform or device

of choice; and,

! translating legally acquired content into comparable formats.

Discussed below are two bills addressing digital fair use which were introduced

in the latter part of the 107th Congress.

H.R. 5522, 107th Cong.,2d Sess. (2002), the “Digital Choice and

Freedom Act”. On October 2, 2002, Representative Zoe Lofgren introduced this

bill. Among its findings is the observation that “[D]igital technology threatens the

rights of copyright holders. Perfect digital copies of songs and movies can be

publicly transmitted without authorization to thousands of people at little or no cost.

On the other hand, technological control measures give copyright holders the

capacity to limit non-public performances and threaten society’s interest in the free

flow of ideas, information and commerce.”19

In order to recalibrate the balance between the copyright interests of authors and

society, H.R. 5522 would have amended the Copyright Act to effect three goals:

To expressly provide that it is not a copyright infringement for a

person who lawfully possesses or receives a transmission of a digital

work to reproduce, store, adapt or access it for archival purposes or

to transfer it to a preferred digital media device in order to effect a

non-public performance or display;

! To amend 17 U.S.C. § 109, to allow one who lawfully possesses

a digital work to sell or otherwise dispose of it by means of a

transmission to a single recipient, provided that the owner does not

retain his or her copy; and

S.J.Res. 51, 107th Cong., 2d Sess. (2002) and H.J.Res. 116, 107th Cong. 2d Sess. (2002).

Wyden Offers Digital Fair Use Resolution, 64 BNA Patent, Trademark & Copyright J. 585

(Oct. 25, 2002).

H.R. 5522 at § 2(5).

17 U.S.C. § 109. This provision, known as the “first sale” doctrine, permits the owner of

a copyrighted book or record to sell or otherwise dispose of it without violating copyright

holder’s right to control distribution.

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To amend the DMCA, 17 U.S.C. § 1201, to permit circumvention

of copyright encryption technology, including the manufacture and

import of, and trafficking in technology, if it is necessary to enable

a non-infringing use and the copyright owner fails to make available

the necessary means for circumvention.

H.R. 5544, 107th Cong., 2d Sess. (2002), the “Digital Media Consumers’

Rights Act of 2002”. Introduced on October 4, 2002 by Representatives Boucher

and Doolittle, the Digital Media Consumers’ Rights Act addresses copy-protected

(i.e, non-standard) audio CDs through consumer disclosure via labeling requirements.

Specifically, the bill would have amended the Federal Trade Commission Act by

adding a new section entitled “Inadequately Labeled Copy-Protected Compact

Discs.” The new labeling requirements were intended to notify consumers when a

non-standard CD has copy-protection measures which could preclude playing on

and/or copying to a computer hard drive or other consumer electronic devices. The

Federal Trade Commission would be empowered to engage in rulemaking regarding

audio CD labeling to prevent consumer confusion about playability and

recordability.

The bill, in a vein similar to H.R. 5522, would have amended the DMCA to

broaden the exemption for scientific research from the anti-circumvention rule; to

permit circumvention for non-infringing uses; and, to permit the manufacture and

sale of circumvention software capable of a significant non-infringing use.

Bills introduced in the 108th Congress.

Bills Addressing Digital Access and Disclosure. Representatives

Boucher and Lofgren reintroduced their bills from the 107th Congress. In the 108th

Congress, Representative Boucher’s bill is H.R. 107, the “Digital Medial Consumers

Rights Act of 2003.” The House Subcommittee on Commerce, Trade, and Consumer

Protection held a hearing on H.R. 107 on May 12, 2004. Representative Lofgren’s

bill, H.R. 1066, is renamed the “Benefit Authors without Limiting Advancement or

Net Consumer Expectations (BALANCE) Act of 2003.”

S. 692, 108th Cong., 1st Sess. (2003), the “Digital Consumer Right to

Know Act.” Introduced by Senator Wyden, this bill emphasizes and would require

disclosure of DRM anti-piracy protections that would restrict consumers’ use of

digital content. Specifically, the Federal Trade Commission (FTC) is directed to

issue rules governing disclosures of technological features that limit the practical

ability of a purchaser “to play, copy, transmit, or transfer such content on, to, or

between devices or classes of devices that consumers commonly use ... prior to

sale.”21 Examples of limitations subject to the disclosure requirement include:

limitations on “time shifting” (recording for later viewing or

listening) of free over-the-air and certain subscription packaged

audio or video programming;

S. 692, § 3(b).

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limitations on reasonable and noncommercial use of legally acquired

video or audio programing to facilitate “space shifting” (recording

for use in different physical locations), including the transfer of the

content to different electronic platforms or devices;

! limitations on making backup copies of legally acquired content;

! limitations on using limited excerpts of legally acquired content for

criticism, comment, news reporting, teaching, scholarship, or

research; and

! limitations on engaging in the transfer or sale of legally acquired

content.

The goal of the legislation is to address legitimate consumer expectations

regarding how they may use and manipulate content in concert with developing

technology, and to promote development of an acceptable balance between protecting

against piracy and preserving utility and flexibility for consumers.22

S. 1621, 108th Cong., 1st Sess. (2003), the “Consumers, Schools, and

Libraries Digital Rights Management Awareness Act of 2003”. Introduced by

Senator Brownback on September 16, 2003, the DRM Awareness Act addresses

several issues, including mandatory technology standards, disclosure requirements

for access controlled digital media and consumer electronics, the subpoena process

by which copyright owners acquire personal information about suspected infringers,

and the secondary market for digital consumer goods. Among the bill’s findings are:

it is not in public interest for the federal government to mandate the

inclusion of access or redistribution control technologies used with

digital media into consumer electronics;

! access controlled compact discs have created confusion and

inconvenience for consumers, educational institutions, and libraries;

! it is not in the public interest for Internet service providers to

disclose personal information about subscribers for whom they

transport electronic communications; and

! it is not in the public interest to allow access or redistribution control

technologies to limit the secondary market for digital media

products.

To this end, S. 1621 would prohibit the Federal Communications Commission

from establishing mandatory access control technology (including redistribution

control technology) standards for consumer digital media machines and devices. The

FCC could not require manufacturers and importers of digital media devices to

incorporate access or redistribution control technology. It would, however,

grandfather in two pending FCC rulemaking proceedings, namely, “cable plug and

play” and digital broadcast copy protection, subject to the requirement that objective

standards, not specific technologies, be adopted.

In addition, the bill would:

149 CONG. REC. S4327 (daily ed. March 24, 2003)(Statement of Sen. Wyden).

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direct the Federal Trade Commission to establish an advisory

committee to study and report on the ways in which access and

redistribution control technology affect consumers, educational

institutions, and libraries and how to better inform them of the

impact of such technologies;

! direct the FTC to establish labeling requirements to inform

consumers of the existence of access or redistribution control

technology-protected digital products;

! address litigation over the DMCA’s requirement that Internet service

providers (ISPs) respond to subpoenas obtained by copyright holders

who suspect copyright infringement. The bill provides that ISPs not

make information about its subscribers available unless a subpoena

is issued pursuant to state law or the Federal Rules of Civil

Procedure, or unless the information requested relates to allegedly

infringing digital products residing on the system or network of the

ISP;

! create a consumer “first sale” doctrine for digital media by providing

that an owner may transmit a digital product to a single recipient as

long as the transmission technology contemporaneously deletes the

transmitter’s copy; and

! prohibit manufacturers and vendors of digital media from imposing

any access or redistribution control technology that prevents a

consumer from donating the item to an educational institution or

library, or that limits consumer resale or donations to specific venues

or distribution channels.

H.R. 4586, 108th Cong., 2d Sess. (2004), the “Family Movie Act of

2004”. Introduced on June 16, 2004, this bill was reported favorably by a vote of 18

to 9 by the House Judiciary Committee on July 21, 2004.23 The bill would amend 17

U.S.C. § 110 which establishes limitations on the exclusive rights of copyright

holders to permit the marketing and home use of devices intended to edit out sexual,

violent and/or profane scenes and language from motion picture DVDs. The

language of this bill was incorporated into H.R. 4077, the Piracy Deterrence and

Education Act of 2004, discussed infra, which passed the House on September 28,

2004.

The bill is intended to create a “safe harbor” from copyright and trademark

infringement liability for movie filtering technology such as that currently sold by

ClearPlay that skips over dialog and scenes deemed offensive but does not create a

fixed copy of the altered version.24 It emphasizes that the filtering technology must

be used for private household use.

See H.Rept. 108-670, 108th Cong., 2d Sess. (2004).

The requirement that filtering not result in a fixed copy of the edited version should

distinguish ClearPlay’s skipping technology from practices of other businesses, such as that

of CleanFlicks, which does its own editing without authorization from copyright holders to

offer family-friendly versions of movies for rental to the public.

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In order to avoid liability for trademark infringement, the manufacturer must

ensure that the technology provides notice that the edited motion picture will be

altered from the performance intended by the movie’s director or copyright holder.

With respect to copyright law, the bill’s sponsors wish to preclude a

manufacturer’s liability for the unauthorized preparation of a derivative work.25

However, it is not clear that manufacture, sale, or use of the skipping technology does

in fact violate a copyright holder’s exclusive right to prepare a derivative work based

upon the copyrighted work.26 Litigation is currently pending with respect to both

filtering technology and the offering for rental of movies edited without permission

of copyright holders.

Bills Addressing Copyright Piracy.

H.R. 2517, 108th Cong., 1st Sess. (2003), the “Piracy Deterrence and

Education Act of 2003”. Introduced on June 19, 2003 by Representative Lamar

Smith, this bill takes a two-pronged approach to copyright piracy. It would enhance

criminal copyright infringement enforcement and public education about use of

copyrighted material. Section 1 of the bill sets forth a lengthy recitation of

congressional findings of problems that warrant corrective legislation.27

The bill directs the Federal Bureau of Investigations (FBI) to develop programs

to deter copyright infringement over the Internet, including the issuance of

appropriate warnings and facilitating information sharing about infringing activities

among law enforcement agencies, ISPs and copyright owners. The Attorney General

is directed to designate at least one agent to investigate IP theft in any unit of the

Department of Justice (DOJ) responsible for investigating computer hacking and IP

crimes.

The DOJ is directed to establish an “Internet Use Education Program” to

educate the general public about the damage resulting from IP theft; the privacy and

security risks of P2P file-sharing to obtain unauthorized copies of copyrighted work;

and, to coordinate and consult with the Departments of Education and Commerce

regarding copyright law and Internet use. The Attorney General will also establish

criteria for use by specified copyright owners of the seal of the FBI for deterrent

purposes in connection with digital works of authorship.

The bill also waives certain copyright registration requirements, considered to

be formalities, which hinder or delay enforcement actions by the government,

17 U.S.C. § 106(2).

See, e.g., H.R. 4586, The Family Movie Act of 2004: Hearing before the House Subcomm.

on Courts, the Internet, and Intellectual Property, 108th Cong., 2d Sess. (2004)(Statement

of Marybeth Peters, Register of Copyrights, that the legislation is not needed because it

seems reasonably clear that such conduct is not prohibited under existing law.)

See also The Piracy Deterrence and Education Act of 2003: Hearing on H.R. 2517 before

the House Subcomm. on Courts, the Internet, and Intellectual Property, 108th Cong., 1st Sess.

(2003).

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including actions to prevent importation of infringing materials by the Bureau of

Customs and Border Protection of the Dept. of Homeland Security.

H.R. 2752, 108th Cong., 1st Sess. (2003), the “Author, Consumer, and

Computer Owner Protection and Security Act (ACCOPS) Act of 2003.”

Introduced by Representative Conyers as a companion bill to H.R. 2517, ACCOPS

would increase international and domestic anti-piracy IP law enforcement efforts.

In addition to increasing appropriations for criminal law enforcement and procedures

directing U.S. cooperation with foreign authorities in international investigations, the

bill increases criminal sanctions for domestic copyright infringement. Title III of the

bill would, among other things:

amend 17 U.S.C. § 506 to provide that willful, unauthorized

uploading of a single copyrighted work on the Internet satisfies the

standards for a felony as opposed to a misdemeanor offense.

! require P2P file-swapping software distributors to give notice of

potential security risks posed by the software and to receive consent

from the downloader of such software;

! make it a federal crime to surreptitiously record a movie being

performed in a movie theater; and

! direct the courts to consider that providing misleading or false

contact information to a domain registry by a domain name

registrant is evidence of “willfulness” with respect to any copyright

infringement committed through the use of the domain name.

H.R. 4077, 108th Cong., 2d Sess. (2004), the “Piracy Deterrence and

Education Act of 2004.” Introduced by Representative Smith, this bill combines

aspects of H.R. 2517, H.R. 2752, and H.R. 4586, discussed supra. The bill was

reported favorably by the House Judiciary Committee on September 8, 2004,28 and

passed by the House on September 28, 2004.29

Section 102 of the bill makes findings of fact similar to those set forth in H.R.

2517. Among the findings are:

IP theft through electronic means causes great economic damage;

Many computer users do not know that copyright laws apply to the

Internet or believe that they will not be caught or prosecuted for their

conduct;

! Use of P2P systems may pose serious security and privacy threats to

computer users;

! It is important that federal law enforcement agencies prosecute theft

of copyright and that the public be educated about the security and

privacy risks associated with being connected to unauthorized P2P

networks; and

See H.Rept. 108-700, 108th Cong., 2d Sess. (2004).

150 CONG. REC. H7654 (daily ed. Sept. 28, 2004).

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Formal copyright registration requirements unnecessarily burden

criminal and civil litigation efforts to enforce the laws protecting

Section 103 directs Department of Justice (DOJ) to establish a voluntary 18month program to deter the public from copyright infringement over the Internet by

issuing warning letters advising of suspected infringement and penalties therefor to

Internet Service Providers (ISPs). The ISP would forward the warning letter to the

suspected infringer but would not be permitted to disclose any identifying

information about the subscriber to the DOJ. The DOJ is limited to issuance of not

more than 10,000 warning letters and would reimburse the ISPs for costs incurred in

identifying the proper recipients of the warning letters.

The Attorney General, in section 104, is directed to designate at least one agent

to investigate IP theft in any unit of the DOJ responsible for investigating computer

hacking and IP crimes.

The DOJ is directed to establish an “Internet Use Education Program” to

educate the general public about the damage resulting from IP theft; the privacy and

security risks of P2P file-sharing to obtain unauthorized copies of copyrighted work;

and, to coordinate and consult with the Copyright Office and the Department of

Commerce regarding copyright law and Internet use. The Program will develop

sector-specific materials for Internet users where criminal copyright infringement is

a concern. Section 105.

Section 106 would amend 17 U.S.C. § 411 to permit the government to file

ordinarily a prerequisite to filing an action for infringement. Section 107 sets forth

authorized appropriations.

Section 108 creates criminal penalties for unauthorized recording of motion

pictures in a movie theater. The statute’s provisions are similar to those of the

“Artists Rights and Theft Prevention Act of 2004 or the ART Act.” ( S. 1932 infra).

It would add a new law, 18 U.S.C. § 2319B, expressly prohibiting unauthorized

recording of motion pictures in a motion picture exhibition facility. Offenders would

be subject to imprisonment for three to six years and forfeiture or destruction of the

bootlegged copies. Owners and lessees of exhibition facilities receive immunity for

reasonable detention, for a reasonable time, for the purpose of questioning or

summoning law enforcement, of any person suspected of committing an offense. It

would permit a victim of the crime to submit a victim impact statement to a

probation officer.

Section 109 sets forth a Sense of the Congress on the need to take steps to

prevent illegal activity on P2P services. It lists many findings regarding the

widespread use of P2P file-sharing technology, including massive volumes of illegal

activity such as distribution of child pornography, viruses, and confidential personal

information. It identifies studies documenting the ways in which children are

exposed to pornography through P2P technology. It concludes with a Sense of

Congress that while responsible software developers should be recognized and

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commended, Congress and the executive branch should consider all appropriate

measure to protect consumers and children and prevent illegal activity.

Section 110, entitled “Enhancement of Criminal Copyright Infringement,”

would amend 17 U.S.C. § 506 dealing with criminal offenses. Activity constituting

criminal infringement would be expanded. Current § 506(a) makes criminal willful

infringement for purposes of commercial advantage or private gain, or willful

reproduction or distribution within 180 days of 1 or more copyrighted works with

a retail value of more than $1000. New categories are: within any 180-day period,

knowingly, with reckless disregard of the risk of further infringement, distributing

by electronic means or otherwise (1) 1000 or more copies of 1 or more copyrighted

works; (2) 1 or more copies of 1 work with a total retail value of more than $1000;

or, (3) 1 or more copies of 1 or more copyrighted pre-release works. Evidence of

reproduction alone will not be sufficient to establish criminal intent. Punishment may

include fines and/or imprisonment for between 3 and 10 years as required by 18

U.S.C. § 2319, as amended by the bill. Under current § 2319, imprisonment for not

more than five years is authorized only for the distribution “of at least 10 copies or

phonorecords, of 1 or more copyrighted works, which have a total retail value of

more than $2500[.]”

ISPs are immune from liability for transmitting, routing, providing connections

of infringing material when they are engaging in the types of “passive conduit”

activity described in 17 U.S.C. § 512.

17 U.S.C. 504 would be amended to permit copyright owners to seek civil

damages for infringement of pre-release works.

Section 111 directs the U.S. Sentencing Commission to review and, if

appropriate, amend sentencing guidelines for persons convicted of IP crimes.

Emphasis is on ensuring that guidelines are sufficiently stringent to deter and punish

such offenses, especially those involving pre-release copyrighted work. The

Commission must also determine wether the definition of “uploading” in its

Guidelines is adequate to address losses attributable to unauthorized distribution of

copyrighted work over the Internet. And, whether the guidelines adequately reflect

harm to victims from infringement where law enforcement cannot determine how

many times copyrighted material is reproduced and distributed.

Section 112 adds the “Family Movie Act of 2004.”30 The act would amend 17

U.S.C. § 110 which establishes limitations on the exclusive rights of copyright

holders to permit the marketing and home use of devices and/or technology intended

to edit out sexual, violent and/or profane scenes and language from motion picture

DVDS.

It is intended to create a “safe harbor” from copyright and trademark

infringement liability for movie filtering technology such as that currently sold by

ClearPlay that skips over dialog and scenes deemed offensive. The bill emphasizes

that the filtering technology must be used “at the direction of a member of a private

See discussion of H.R. 4586, supra.

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household ... during a performance in or transmitted to that household for private

home viewing, from an authorized copy of the motion picture[.]” The filtering cannot

result in a fixed copy of the altered version, and no changes, deletions, or additions

are to be made to commercial advertisements or promotional announcements that

would otherwise be performed or displayed before, during, or after the performance.

In order to avoid liability for trademark infringement, the manufacturer must

ensure that the technology provides notice that the edited motion picture will be

altered from the performance intended by the movie’s director or copyright holder.

The notice requirement applies only with respect to technology manufactured six

months after enactment of the Family Movie Act.

S. 1932, 108th Cong., 1st Sess. (2003), the “Artists Rights and Theft

Prevention Act of 2004.” Introduced on November 22, 2003 by Senator Cornyn,

the bill was reported favorably with an amendment in the nature of a substitute by the

Senate Judiciary Committee on April 29, 2004 and passed by the Senate on June 25,

2004. If enacted, S. 1932, the “ART Act,” would add new criminal penalties for

unauthorized recording or filming of motion pictures in a theater. It is intended to

stem bootlegging and unauthorized distribution of “pre-release commercial works.”

Movie studios have complained that all too frequently an unauthorized version

of a film is available online even before or shortly after it is commercially released.

Problems have been attributed to piracy by people in the film industry who have

access to pre-release commercial works.31 S. 1932 would add a new law, 18 U.S.C.

§ 2319B, expressly prohibiting unauthorized recording of motion pictures in a motion

picture exhibition facility.

The provision is conceptually related to current 18 U.S.C. § 2319A which

establishes criminal sanctions for unauthorized filming or recording of live musical

concerts.32 S. 1932 would subject offenders to imprisonment for three to six years

and forfeiture or destruction of the bootlegged copies. Movie theaters and exhibitors

receive civil and criminal immunity from liability for a reasonable detention for

questioning or arrest of any person suspected of violating the law. It would permit

a victim of the crime to submit a victim impact statement to a probation officer.

S. 1932 would establish another category of criminal infringement:

unauthorized distribution of a pre-release commercial copyrighted work.33 Section

4 of the bill adds a new class of prohibited activity to 17 U.S.C. § 506 governing

criminal copyright infringement. § 506(a) currently defines criminal infringement as

willfully infringing for (1) commercial advantage or private financial gain or (2) by

reproducing or distributing within 180 days one or more copyrighted works having

See, e.g., Bernard Weinraub, Advance Film Copies Halted for Oscar Voters, N.Y. TIMES,

Oct. 1, 2003.

See United States v. Moghadam, 175 F.3d 1269 (11th Cir. 1999), cert. den. 529 U.S. 1036

(2000) upholding 18 U.S.C. § 2319A under congressional authority to legislate pursuant to

the Commerce Clause. Contra, United States v. Martignon, 2004 WL 2149105, (S.D.N.Y.,

Sep 24, 2004).

18 U.S.C. § 2319 sets forth conditions and penalties for criminal copyright infringement.

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a retail value of $1000. A new category – knowingly making a work being prepared

for commercial distribution available on a computer network accessible to the public

– would be added. Works covered include computer programs, motion pictures, and

sound recordings. Punishment includes fines and/or imprisonment for 3 to 10 years.

Section 5 of the bill directs the Copyright Office to establish procedures to allow

preregistration of a work that is being prepared for commercial distribution and has

not been published.34 The work must be of a class that the Register determines

suffers a history of pre-commercial distribution infringement. Copyright registration

facilitates an action for infringement.

Section 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 IP crimes.

S. 2237, 108th Cong., 2d Sess. (2004), the “Protecting Intellectual Rights

Against Theft and Expropriation Act of 2004.” Introduced on March 25, 2004

by Senators Leahy and Hatch, the PIRATE Act was reported by the Senate Judiciary

Committee on April 29, 2004 and passed by the Senate on June 25, 2004. The bill

would add a new 17 U.S.C. § 506a to the Copyright Act entitled “Civil penalties for

violations of section 506” which authorizes the U.S. Attorney General to file civil

standards for criminal infringement under § 506. Upon proof of conduct by a

preponderance of the evidence, a defendant would be subject to a civil penalty under

§ 504, which encompasses actual damages, profits, and statutory damages. Although

imposition of a civil penalty would not preclude additional civil or criminal actions,

any restitution received by a copyright owner as a result of a civil action brought by

the Department of Justice would be offset against an award of damages in a

subsequent suit brought by the copyright owner.

The bill authorizes funding for a civil copyright enforcement litigation training

and pilot programs for personnel in the DOJ and U.S. Attorneys Offices. The DOJ

is directed to report annually on litigation under a newly enacted § 506a.

S. 2560,108th Cong., 2d Sess. (2004), the “Inducing Infringement of

Copyrights Act of 2004.” Introduced on June 22, 2004, a hearing on the bill was

held on July 22, 2004.35 The bill would amend 17 U.S.C. § 501 which sets forth

elements of and procedures to address copyright infringement. It specifies that

whoever “intentionally induces” another to violate a copyright is liable for copyright

infringement. The term means to intentionally aid, abet, induce or procure

infringement by another; intent may be shown by acts from which a reasonable

person would find such intent, including factors such as whether the inducing

activity relies on infringement for commercial viability.

Section 5 of the bill would amend 17 U.S.C. § 408.

An Examination of S. 2560, The Inducing Infringement of Copyrights Act of 2004:

Hearing Before the Senate Judiciary Committee, 108th Cong., 2d Sess. (2004).

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The provision would essentially codify common-law principles of secondary

liability for copyright infringement, usually referred to as contributory and vicarious

liability. It is intended to address illegal downloading facilitated by P2P file sharing

software companies and to overcome legal impediments to imposing secondary

liability on them presented by the Ninth Circuit Court of Appeals decision in MetroGoldwyn-Mayer Studios, Inc. v. Grokster, Ltd.36 The bill’s sponsors contend that it

will protect children and college students, often the direct infringers, who use the

software to download copyright-protected media, including pornography.37 Critics

fear that it will overrule the U.S. Supreme Court’s decision in Sony Corp. of America

v. Universal City Studios, Inc.,38 which protects technology that may facilitate or

arguably “induce” infringement but supports substantial noninfringing uses as well.39

S. 3021, 108th Cong., 2d Sess. (2004), the “Family Entertainment and

2004, this omnibus IP bill includes provisions from S. 1932, the “Artists Rights and

Theft Prevention Act” in Title I and the “Family Movie Act of 2004”in Title II.40 As

explained in a colloquy between Senators Cornyn and Hatch, the Senate’s version of

the Family Movie Act differs slightly from the House version in H.R. 4077. The

House-passed version specified that the exemption from copyright infringement for

filtering technology does not apply to ad skipping. The Senate version omits this

express exclusion from the exemption because the permissibility of ad-skipping

devices and technology is generally unsettled and it is not the intention of the Senate

to resolve the question.41 A section-by-section analysis of the Family Movie Act

explains:

The House-passed bill included an explicit exclusion to the new section [17

U.S.C. §] 110(11) exemption in cases involving the making imperceptible of

commercial advertisements or network or station promotional announcements.

This provision was added on the House floor to respond to concerns expressed

by Members during the House Judiciary Committee markup that the bill might

be read somehow to exempt from copyright infringement liability devices that

allow for skipping of advertisements in the playback of recorded television (so

called “ad-skipping devices). Such a reading is not consistent with the language

of the bill or its intent.

380 F.3d 1145 (9th Cir.) cert. granted ,___U.S.___, 2004 U.S. LEXIS 8173, 73 U.S.L.W.

3350 (U.S. Dec. 10, 2004).

See 150 CONG. REC. S7189-93(daily ed. June 22, 2004)(Statements of Sens. Hatch and

Leahy).

464 U.S. 417 (1984).

Critics Fear <Induce Act’ Will Undo Sony, 68 BNA PATENT, TRADEMARK & COPYRIGHT

J. 318 (July 16, 2004).

Provisions in Title V of S. 3021, the “Anti-counterfeiting Provisions and Fraudulent

Online Identity Sanctions Act” were enacted in a free-standing bill and is P.L. 108-482;

Title VI, the “Cooperative Research and Technology Enhancement (CREATE) Act, was

likewise enacted separately and is P.L. 108-453.

150 CONG. REC. S11852 (daily ed. Nov. 24, 2004).

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The phrase “limited portions of audio or video content of a motion picture”

applies only to the skipping and muting of scenes or dialog that are part of the

motion picture itself, and not to the skipping of commercial advertisements,

which are themselves considered motions pictures under the Copyright Act. It

also should be noted that the phrase “limited portions” is intended to refer to

portions that are both quantitatively and qualitatively insubstantial in relation to

the work as a whole. Where any substantial part of a complete work (including

a commercial advertisement) is made imperceptible, the section 110(11)

exemption would not apply.

The House-passed bill adopted a “belt and suspenders” approach to this question

by adding exclusionary language in the statute itself. Ultimately that provision

raised concerns in the Senate that such exclusionary language would result in an

inference that the bill somehow expresses an opinion, or even decides, the

unresolved legal questions underlying recent litigation related to these so-called

“ad-skipping” devices. In the meantime, the Copyright Office also made clear

that such exclusionary language is not necessary. In other words, the

exclusionary language created unnecessary controversy without adding any

needed clarity to the statute.

Thus, the Senate amendment omits the exclusionary language while leaving the

scope and application of the bill exactly as it was when it passed the House. The

legislation does not provide a defense in cases involving so-called “ad-skipping”

devices, and it also does not affect the legal issues underlying such litigation, one

way or another. Consistent with the intent of the legislation to fix a narrow and

specific copyright issue, this bill seeks very clearly to avoid unnecessarily

interfering with current business models, especially with respect to advertising,

promotional announcements, and the like. Simply put, the bill as amended in the

Senate is narrowly targeted to the use of technologies and services that filter out

content in movies that a viewer finds objectionable, and it in no way relates to

or affects the legality of so-called “ad-skipping” technologies.42

The copyright status of ad-skipping technology and devices utilized for private,

in-home use is unresolved. And, like all copyright matters, the question and any

answer will be highly context specific. While the Sony decision does not address ad

skipping at length, the ability of a tv viewer to do so is implicit in the Court’s

decision that use of a Betamax to “time shift” in-home viewing of broadcast tv is a

fair use. Nevertheless, the permissibility of ad skipping is not resolved with regard

to the wide variety of digital media, recording devices, technology, and services. In

some cases, the anticircumvention provisions of the Digital Millennium Copyright

Act may implicated. Given the presumed impracticability of monitoring personal

viewing in any given household, it seems likely that copyright owners, as they did in

Sony, would attempt to preclude consumer access to ad-skipping devices and/or

services through suits against vendors thereof based on principles of secondary

Id. at S11853-4.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.