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<title>Federal Relations Hatch testimony 1/9/99</title>
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<h1>Federal Relations<font color="#000080"><br>
</font><img src="Production/RWB_LINE.gif" width="590" height="10"></h1>
<blockquote>
<font FACE="Arial" SIZE="3"><div align="left"><table border="0" cellpadding="2" width="692">
<tr>
<td width="8"></td>
<td width="626"></font><p align="center"><strong><font size="4">Senator Hatch's statement
in the January 19 Congressional Record (pp. S316-S326) concerning Database Antipiracy
Legislation. </font></strong><font FACE="Courier New" SIZE="2"></p>
<p><strong><em><font size="2">After these comments, three separate bills were inserted in
the Record.:<br>
1) A new misapropriation bill introduced by Representative Coble (R-NC)<br>
2) Legislation supported by library, education, scientific communities and certain
commercial database users<br>
3) The discussion draft from Senate negotiations in 1998 (exhibit 1)</font></em></strong></p>
<p>DATABASE ANTIPIRACY LEGISLATION (Senate - January 19, 1999) Page: S316]Mr. HATCH.</p>
<p> Mr. President, I rise today to speak on an issue of great and escalating</p>
<p> importance: database piracy. While perhaps not an issue on the tips of most</p>
<p> Americans' tongues, it is nevertheless an issue that has garnered considerable</p>
<p> attention in recent years both in the United States and in international forums.</p>
<p> The 106th Congress is now the third consecutive Congress in which database</p>
<p> legislation will be considered. This is an appropriate reflection of the fact that</p>
<p> while intellectual property has become the heart of our Nation's economy,</p>
<p> information is its lifeblood. Utahns are interested in an appropriate balance of</p>
<p> interest here. Utah is a leader in the hi-tech and information industries, and is</p>
<p> home to both producers and users of information and database collections. Utah is</p>
<p> blessed with world class scientists and scholars, genealogists, and computer and</p>
<p> hi-tech companies that create new information, organize information, and use</p>
<p> information--often using information created by others in innovative ways to</p>
<p> create new information or to make it more easily or inexpensively accessible. I</p>
<p> would guess that most of my colleagues would find that similarly in their own home</p>
<p> states that many of their constituents are interested in this issue at some level</p>
<p> because so many are producers or users of information, and often both. </p>
<p>American database providers render an invaluable service by collecting, organizing,</p>
<p> and disseminating billions of bits of information from myriad sources of every</p>
<p> possible sector of our economy. They give us such widely-used tools as phone</p>
<p> books, directories, catalogs, almanacs, encyclopedias, and other reference guides.</p>
<p> They provide specialized products like statistical abstracts, medical and</p>
<p> pharmaceutical reference tools, stock quotes, pricing guides, genealogical data and</p>
<p> countless other sources of information for businesses, researchers, scientists,</p>
<p> educators, and consumers. Indeed, it is the information they collect that allows</p>
<p> us to predict the weather, to treat disease, to preserve our national security, to</p>
<p> use computers to communicate over global networks, like the Internet, to travel,</p>
<p> to buy a home, and even to watch the evening news. </p>
<p>It is not surprising that the cost of creating and maintaining accurate, reliable,</p>
<p> and user-friendly databases is significant. Yet, the commercial viability of these</p>
<p> products has, for many years, served as an incentive to investment and spawned a</p>
<p> thriving information industry in the United States. Nevertheless, events in the</p>
<p> past several years have caused some to question the continued viability of these</p>
<p> products, raising the question of whether current law is sufficient to maintain</p>
<p> the same sort of incentives that have served to keep the United States on the</p>
<p> cutting edge of the information age. </p>
<p>The most debated among these is perhaps the 1991 decision in Feist Publications v.</p>
<p> Rural Telephone Service Co., 499 U.S. 340, in which the Supreme Court rejected the</p>
<p> so-called `sweat of the brow' theory as a basis for copyright protection for</p>
<p> databases. Under Feist, the degree of labor and investment associated with</p>
<p> producing a database is irrelevant to the question of copyrightability. Rather, a</p>
<p> database may be protected by copyright only where it exhibits a minimum level of</p>
<p> originality in the selection and arrangement of its contents. And, even then, the</p>
<p> copyright in the database is said to be `thin' in that it extends only to the</p>
<p> original selection and arrangement of the material but does not protect against</p>
<p> the wholesale appropriation of the facts themselves. Thus, Feist made clear that a</p>
<p> database owner who spends several years and a substantial amount of money to</p>
<p> respond to an unmet market for data cannot look to copyright law for protection</p>
<p> against a competitor who seeks `to reap where he has not sown' by reproducing and</p>
<p> commercializing the same information in a different format, so long as the</p>
<p> competing product does not copy the original selection or arrangement of the</p>
<p> underlying information, if any. For example, in Martindale-Hubbell, Inc. v.</p>
<p> Dunhill Int'l List Co., No. 88-6767-CIV-ROETTGER (S.D. Fla. Dec. 30, 1994), the</p>
<p> court held that wholesale copying of attorney's names, addresses, and other</p>
<p> information from the Martindale-Hubbell directory for inclusion in a competing</p>
<p> directly was not infringing. </p>
<p>Having no recourse to copyright law, such database producers must rely on state law</p>
<p> regimes of contract and unfair competition to protect their investment. While</p>
<p> there has been an ongoing and healthy debate as to whether such protections are</p>
<p> sufficient, it is clear that the varying nature of the patchwork of state laws has</p>
<p> led, at the very least, to some uncertainty among database producers regarding the</p>
<p> degree of protection they may expect. </p>
<p>Also of growing importance is the effect of technology on the database industry as</p>
<p> a whole. To a large extent, technology has been the fire that has fueled the</p>
<p> growth of the database industry. Many also look to emerging technology as the</p>
<p> solution to many of the problems sought to be addressed in the current debate. </p>
<p>But while technological measures for protecting databases are still emerging,</p>
<p> current technology has greatly contributed to the uncertainty that surrounds</p>
<p> existing database protections. As databases move from hard-bound printed text</p>
<p> versions to fully searchable electronic information-bases, selection and</p>
<p> arrangement of the material becomes less important, and copyright protection is</p>
<p> further removed. Thus, a database that in print form might be protected by</p>
<p> copyright based on its arrangement of facts would likely no be protected by</p>
<p> copyright when the same information is placed in a searchable electronic database</p>
<p> where the arrangement of the facts is unimportant. And the digital networked</p>
<p> environment has made piracy of databases much easier, both in terms of the</p>
<p> facility of reproduction and in terms of the ease of unauthorized access to the</p>
<p> contents of the database itself. </p>
<p>Finally, recent international proposals for database legislation and have</p>
<p> heightened awareness of database piracy and prompted a greater sense of urgency</p>
<p> among some to elevate the level of protection for databases in the United States.</p>
<p> Most significant among these is the 1996 directive of the European Union requiring</p>
<p> its member states to adopt certain protections for both copyrightable and</p>
<p> noncopyrightable databases by January 1, 1998. Of particular relevance is a</p>
<p> provision withholding protection for those databases produced in countries that do</p>
<p> not afford a similar level of protection for European databases. Thus, failure by</p>
<p> the United States to exact legislation extending federal protection to</p>
<p> noncopyrightable databases will likely result in the withholding of protection for</p>
<p> American databases in Europe--a significant market for U.S. database providers. </p>
<p>Mr. President, I have long been on record as supporting some form of federal</p>
<p> protection to fill the gap of protection created by Feist for those databases that</p>
<p> are the result of significant effort and investment. Nearly 2 years ago I</p>
<p> initiated a process that I hoped would enable Congress to balance the varied</p>
<p> interests at stake in order to preserve appropriate incentives for investment in </p>
<p>information while promoting the widest possible dissemination of information, as </p>
<p>well as the greatest innovation in making information inexpensive and easy to </p>
<p>use. I began this process by asking the Copyright Office to conduct a </p>
<p>comprehensive study of the issues involved and to make recommendations to the </p>
<p>Judiciary Committee. The Register of Copyrights and her staff did an outstanding </p>
<p>job in responding to my request, and the Copyright Office issued a formal report </p>
<p>in August 1997, shortly before the 104th Congress adjourned. </p>
<p>Congressman Coble, chairman of the Subcommittee on Courts and Intellectual </p>
<p>Property in the House of Representatives, spearheaded the effort to report </p>
<p>database legislation in the 105th Congress. His subcommittee reported </p>
<p>legislation, which was ultimately passed twice by the House of Representatives </p>
<p>in the 105th Congress--once under suspension of the rules an then again as title </p>
<p>V of the H.R. 2281, the Digital Millenium Copyright Act. I commend him for the </p>
<p>hard work that he has done and for his work in bringing the various parties </p>
<p>together on this particular issue. </p>
<p>As my Senate colleagues will recall, while the Coble bill encountered very </p>
<p>limited opposition on the House floor, it proved to be more controversial in the </p>
<p>Senate. In order to address the outstanding concerns of various information </p>
<p>users, I requested that the parties sit down under the auspices of the Judiciary </p>
<p>Committee to discuss their differences and seek a resolution that was favorable </p>
<p>to all. These discussions went on almost daily for approximately three weeks, </p>
<p>and considerable progress was made. Based on these meetings, I put forward a </p>
<p>series of discussion drafts that sought to narrow the gaps and arrive at an </p>
<p>acceptable solution. While ultimately a solution could not be reached before the </p>
<p>Congress adjourned, we did make considerable progress. Each of these discussion </p>
<p>drafts represented an additional step toward a resolution, and I believe that in </p>
<p>the end we were close to a workable compromise. </p>
<p>As we begin the 106th Congress, I want to stand before my colleagues to </p>
<p>reiterate my commitment to the timely enactment of database legislation. There </p>
<p>are many people that stand to be affected by such legislation, and many points </p>
<p>of view about what the proper approach should be. While I am not wedded to a </p>
<p>specific proposal or a particular approach, I do believe that any bill should </p>
<p>keep in mind the dual priorities of providing the protections necessary to </p>
<p>ensure the continued proliferation of databases in the United States and of </p>
<p>protecting widespread access to and dissemination of information. In an effort </p>
<p>to build upon the progress we made in the Senate last year, I am sharing with my </p>
<p>colleagues a discussion draft that is identical to the last of the </p>
<p>discussion drafts I offered last year. I ask unanimous consent that the text of </p>
<p>this draft be included in the Record immediately after my statement. </p>
<p>The PRESIDING OFFICER. Without objection, it is so ordered. </p>
<p>(See exhibit 1.) </p>
<p>[Page: S317]</p>
<p>Mr. HATCH. By putting forward this particular draft I do not mean to suggest </p>
<p>that this is necessarily the appropriate starting point for debate in the 106th </p>
<p>Congress. Provisions of this draft must be read in light of the circumstances in </p>
<p>which they were written, mainly the consideration of the conference report on </p>
<p>the Digital Millennium Copyright Act. It does, however, represent a number of </p>
<p>significant advances toward consensus as well as ideas and principles that I </p>
<p>expect will prove useful in crafting a database bill that meets the above-stated </p>
<p>objectives. For these reasons I commend it to my colleagues for their </p>
<p>consideration. But there are other approaches we should be cognizant of as we </p>
<p>work toward the best possible solution. </p>
<p>First, there is a broad unfair competition model that approaches in some ways a </p>
<p>property rights model. The foremost example of this approach has been the </p>
<p>House's bills over the past few years. I understand that Chairman Coble has </p>
<p>introduced a bill in the House that largely reflects the bill that passed by the </p>
<p>House last year and that he will be seeking to forge a consensus in the House </p>
<p>based on that proposal. I am pleased that he has made this a priority again this </p>
<p>year, and I look forward to working with him as I have been privileged to do on </p>
<p>so many prior occasions. For the reference of my colleagues, I ask unanimous </p>
<p>consent that Mr. Coble's bill be printed in the Record as an exemple of the </p>
<p>broad model of database protection. </p>
<p>There being no objection, the material was ordered to be printed in the Record, </p>
<p>as follows: </p>
<p>H. --</p>
<p>Be it enacted by the Senate and House of Representatives of the United States of </p>
<p>America in Congress assembled, </p>
<p>SECTION 1. SHORT TITLE. </p>
<p>This Act may be cited as the `Collections of Information Antipiracy Act'. </p>
<p>SEC. 2. MISAPPROPRIATION OF COLLECTIONS OF INFORMATION. </p>
<p>Title 17, United States Code, is amended by adding at the end the following new </p>
<p>chapter: </p>
<p>`CHAPTER 14--MISAPPROPRIATION OF COLLECTIONS OF INFORMATION </p>
<p>`Sec. </p>
<p>`1401. Definitions. </p>
<p>`1402. Prohibition against misappropriation. </p>
<p>`1403. Permitted acts. </p>
<p>`1404. Exclusions. </p>
<p>`1405. Relationship to other laws. </p>
<p>`1406. Civil remedies. </p>
<p>`1407. Criminal offenses and penalties. </p>
<p>`1408. Limitations on actions. </p>
<p>`1401. Definitions </p>
<p>`As used in this chapter: </p>
<p>`(1) Collection of information: The term `collection of information' means </p>
<p>information that has been collected and has been organized for the purpose of </p>
<p>bringing discrete items of information together in one place or through one </p>
<p>source so that users may access them. </p>
<p>`(2) Information: The term `information' means facts, data, works of authorship, </p>
<p>or any other intangible material capable of being collected and organized in a </p>
<p>systematic way. </p>
<p>`(3) Potential market: The term `potential market' means any market that a </p>
<p>person claiming protection under section 1402 has current and demonstrable plans </p>
<p>to exploit or that is commonly exploited by persons offering similar products or </p>
<p>services incorporating collections of information. </p>
<p>`(4) Commerce: The term `commerce' means all commerce which may be lawfully </p>
<p>regulated by the Congress. </p>
<p>[Page: S318]</p>
<p>`1402. Prohibition against misappropriation </p>
<p>`Any person who extracts, or uses in commerce, all or a substantial part, </p>
<p>measured either quantitatively or qualitatively, of a collection of information </p>
<p>gathered, organized, or maintained by another person through the investment of </p>
<p>substantial monetary or other resources, so as to cause harm to the actual or </p>
<p>potential market of that other person, or a successor in interest of that other </p>
<p>person, for a product or service that incorporates that collection of </p>
<p>information and is offered or intended to be offered for sale or otherwise in </p>
<p>commerce by that other person, or a successor in interest of that person, shall </p>
<p>be liable to that person or successor in interest for the remedies set forth in </p>
<p>section 1406. </p>
<p>`1403. Permitted acts </p>
<p>`(a) Educational, Scientific, Research, and Additional Reasonable Uses: </p>
<p>`(1) Certain nonprofit educational, scientific, or research uses: </p>
<p>Notwithstanding section 1402, no person shall be restricted from extracting or </p>
<p>using information for nonprofit educational, scientific, or research purposes in </p>
<p>a manner that does not harm directly the actual market for the product or </p>
<p>service referred to in section 1402. </p>
<p>`(2) Additional reasonable uses: </p>
<p>`(A) In general: Notwithstanding section 1402, an individual act of use or </p>
<p>extraction of information done for the purpose of illustration, explanation, </p>
<p>example, comment, criticism, teaching, research, or analysis, in an amount </p>
<p>appropriate and customary for that purpose, is not a violation of this chapter, </p>
<p>if it is reasonable under the circumstances. In determining whether such an act </p>
<p>is reasonable under the circumstances, the following factors shall be </p>
<p>considered: </p>
<p>`(i) The extent to which the use or extraction is commercial or nonprofit. </p>
<p>`(ii) The good faith of the person making the use or extraction. </p>
<p>`(iii) The extent to which and the manner in which the portion used or extracted </p>
<p>is incorporated into an independent work or collection, and the degree of </p>
<p>difference between the collection from which the use or extraction is made and </p>
<p>the independent work or collection. </p>
<p>`(iv) Whether the collection from which the use or extraction is made is </p>
<p>primarily developed for or marketed to persons engaged in the same field or </p>
<p>business as the person making the use or extraction. </p>
<p>In no case shall a use or extraction be permitted under this paragraph if the </p>
<p>used or extracted portion is offered or intended to be offered for sale or </p>
<p>otherwise in commerce and is likely to serve as a market substitute for all or </p>
<p>part of the collection from which the use or extraction is made. </p>
<p>`(B) Definition: For purposes of this paragraph, the term `individual act' means </p>
<p>an act that is not part of a pattern, system, or repeated practice by the same </p>
<p>party, related parties, or parties acting in concert with respect to the same </p>
<p>collection of information or a series of related collections of information. </p>
<p>`(b) Individual Items of Information and Other Insubstantial Parts: Nothing in </p>
<p>this chapter shall prevent the extraction or use of an individual item of </p>
<p>information, or other insubstantial part of a collection of information, in </p>
<p>itself. An individual item of information, including a work of authorship, shall </p>
<p>not itself be considered a substantial part of a collection of information under </p>
<p>section 1402. Nothing in this subsection shall permit the repeated or systematic </p>
<p>extraction or use of individual items or insubstantial parts of a collection of </p>
<p>information so as to circumvent the prohibition contained in section 1402. </p>
<p>`(c) Gathering or Use of Information Obtained Through Other Means: Nothing in </p>
<p>this chapter shall restrict any person from independently gathering information </p>
<p>or using information obtained by means other than extracting it from a </p>
<p>collection of information gathered, organized, or maintained by another person </p>
<p>through the investment of substantial monetary or other resources. </p>
<p>`(d) Use of Information for Verification: Nothing in this chapter shall restrict </p>
<p>any person from extracting or using a collection of information within any </p>
<p>entity or organization, for the sole purpose of verifying the accuracy of </p>
<p>information independently gathered, organized, or maintained by that person. </p>
<p>Under no circumstances shall the information so used be extracted from the </p>
<p>original collection and made available to others in a manner that harms the </p>
<p>actual or potential market for the collection of information from which it is </p>
<p>extracted or used. </p>
<p>`(e) News Reporting: Nothing in this chapter shall restrict any person from </p>
<p>extracting or using information for the sole purpose of news reporting, </p>
<p>including news gathering, dissemination, and comment, unless the information so </p>
<p>extracted or used is time sensitive and has been gathered by a news reporting </p>
<p>entity, and the extraction or use is part of a consistent pattern engaged in for </p>
<p>the purpose of direct competition. </p>
<p>`(f) Transfer of Copy: Nothing in this chapter shall restrict the owner of a </p>
<p>particular lawfully made copy of all or part of a collection of information from </p>
<p>selling or otherwise disposing of the possession of that copy. </p>
<p>`1404. Exclusions </p>
<p>`(a) Government Collections of Information: </p>
<p>`(1) Exclusion: Protection under this chapter shall not extend to collections of </p>
<p>information gathered, organized, or maintained by or for a government entity, </p>
<p>whether Federal, State, or local, including any employee or agent of such </p>
<p>entity, or any person exclusively licensed by such entity, within the scope of </p>
<p>the employment, agency, or license. Nothing in this subsection shall preclude </p>
<p>protection under this chapter for information gathered, organized, or maintained </p>
<p>by such an agent or licensee that is not within the scope of such agency or </p>
<p>license, or by a Federal or State educational institution in the course of </p>
<p>engaging in education or scholarship. </p>
<p>`(2) Exception: The exclusion under paragraph (1) does not apply to any </p>
<p>information required to be collected and disseminated-- </p>
<p>`(A) under the Securities Exchange Act of 1934 by a national securities </p>
<p>exchange, a registered securities association, or a registered securities </p>
<p>information processor, subject to section 1405(g) of this title; or </p>
<p>`(B) under the Commodity Exchange Act by a contract market, subject to section </p>
<p>1405(g) of this title. </p>
<p>`(b) Computer Programs: </p>
<p>`(1) Protection not extended: Subject to paragraph (2), protection under this </p>
<p>chapter shall not extend to computer programs, including, but not limited to, </p>
<p>any computer program used in the manufacture, production, operation, or </p>
<p>maintenance of a collection of information, or any element of a computer program </p>
<p>necessary to its operation. </p>
<p>`(2) Incorporated collections of information: A collection of information that </p>
<p>is otherwise subject to protection under this chapter is not disqualified from </p>
<p>such protection solely because it is incorporated into a computer program. </p>
<p>`(c) Digital Online Communications: Protection under this chapter shall not </p>
<p>extend to a product or service incorporating a collection of information </p>
<p>gathered, organized, or maintained to address, route, forward, transmit, or </p>
<p>store digital online communications or provide or receive access to connections </p>
<p>for digital online communications. </p>
<p>`1405. Relationship to other laws </p>
<p>`(a) Other Rights Not Affected: Subject to subsection (b), nothing in this </p>
<p>chapter shall affect rights, limitations, or remedies concerning copyright, or </p>
<p>any other rights or obligations relating to information, including laws with </p>
<p>respect to patent, trademark, design rights, antitrust, trade secrets, privacy, </p>
<p>access to public documents, and the law of contract. </p>
<p>`(b) Preemption of State Law: On or after the effective date of this chapter, </p>
<p>all rights that are equivalent to the rights specified in section 1402 with </p>
<p>respect to the subject matter of this chapter shall be governed exclusively by </p>
<p>Federal law, and no person is entitled to any equivalent right in such subject </p>
<p>matter under the common law or statutes of any State. State laws with respect to </p>
<p>trademark, design rights, antitrust, trade secrets, privacy, access to public </p>
<p>documents, and the law of contract shall not be deemed to provide equivalent </p>
<p>rights for purposes of this subsection. </p>
<p>`(c) Relationship to Copyright: Protection under this chapter is independent of, </p>
<p>and does not affect or enlarge the scope, duration, ownership, or subsistence </p>
<p>of, any copyright protection or limitation, including, but not limited to, fair </p>
<p>use, in any work of authorship that is contained in or consists in whole or part </p>
<p>of a collection of information. This chapter does not provide any greater </p>
<p>protection to a work of authorship contained in a collection of information, </p>
<p>other than a work that is itself a collection of information, than is available </p>
<p>to that work under any other chapter of this title. </p>
<p>`(d) Antitrust: Nothing in this chapter shall limit in any way the constraints </p>
<p>on the manner in which products and services may be provided to the public that </p>
<p>are imposed by Federal and State antitrust laws, including those regarding </p>
<p>single suppliers of products and services. </p>
<p>`(e) Licensing: Nothing in this chapter shall restrict the rights of parties </p>
<p>freely to enter into licenses or any other contracts with respect to the use of </p>
<p>collections of information. </p>
<p>`(f) Communications Act of 1934: Nothing in this chapter shall affect the </p>
<p>operation of the provisions of the Communications Act of 1934 (47 U.S.C. 151 et </p>
<p>seq.), or shall restrict any person from extracting or using subscriber list </p>
<p>information, as such term is defined in section 222(f)(3) of the Communications </p>
<p>Act of 1934 (47 U.S.C. 222(f)(3)), for the purpose of publishing telephone </p>
<p>directories in any format. </p>
<p>`(g) Securities and Commodities Market Information: </p>
<p>`(1) Federal agencies and acts: Nothing in this chapter shall affect-- </p>
<p>`(A) the operation of the provisions of the Securities Exchange Act of 1934 (15 </p>
<p>U.S.C. 78a et seq.) or the Commodity Exchange Act (7 U.S.C. 1 et seq.); </p>
<p>`(B) the jurisdiction or authority of the Securities and Exchange Commission and </p>
<p>the Commodity Futures Trading Commission; or </p>
<p>`(C) the functions and operations of self-regulatory organizations and </p>
<p>securities information processors under the provisions of the Securities </p>
<p>Exchange Act of 1934 and the rules and regulations thereunder, including making </p>
<p>market information available pursuant to the provisions of that Act and the </p>
<p>rules and regulations promulgated thereunder. </p>
<p>`(2) Prohibition: Notwithstanding any provision in subsection (a), (b), (c), </p>
<p>(d), or (f) of section 1403, nothing in this chapter shall permit the </p>
<p>extraction, use, resale, or other disposition of real-time market information </p>
<p>except as the Securities Exchange Act of 1934, the Commodity Exchange Act, and </p>
<p>the rules and regulations thereunder may otherwise provide. In addition, nothing </p>
<p>in subsection (e) of section 1403 shall be construed to permit any person to </p>
<p>extract or use real-time market information in a manner that constitutes a </p>
<p>market substitute for a real-time market information service (including the </p>
<p>real-time systematic updating of or display of a substantial part of market </p>
<p>information) provided on a real-time basis. </p>
<p>`(3) Definition: As used in this subsection, the term `market information' means </p>
<p>information relating to quotations and transactions that is collected, </p>
<p>processed, distributed, or published pursuant to the provisions of the </p>
<p>Securities Exchange Act of 1934 or by a contract market that is designated by </p>
<p>the Commodity Futures Trading Commission pursuant to the Commodity Exchange Act </p>
<p>and the rules and regulations thereunder. </p>
<p>[Page: S319]</p>
<p>`1406. Civil remedies </p>
<p>`(a) Civil Actions: Any person who is injured by a violation of section 1402 may </p>
<p>bring a civil action for such a violation in an appropriate United States </p>
<p>district court without regard to the amount in controversy, except that any </p>
<p>action against a State governmental entity may be brought in any court that has </p>
<p>jurisdiction over claims against such entity. </p>
<p>`(b) Temporary and Permanent Injunctions: Any court having jurisdiction of a </p>
<p>civil action under this section shall have the power to grant temporary and </p>
<p>permanent injunctions, according to the principles of equity and upon such terms </p>
<p>as the court may deem reasonable, to prevent a violation of section 1402. Any </p>
<p>such injunction may be served anywhere in the United States on the person </p>
<p>enjoined, and may be enforced by proceedings in contempt or otherwise by any </p>
<p>United States district court having jurisdiction over that person. </p>
<p>`(c) Impoundment: At any time while an action under this section is pending, the </p>
<p>court may order the impounding, on such terms as it deems reasonable, of all </p>
<p>copies of contents of a collection of information extracted or used in violation </p>
<p>of section 1402, and of all masters, tapes, disks, diskettes, or other articles </p>
<p>by means of which such copies may be reproduced. The court may, as part of a </p>
<p>final judgment or decree finding a violation of section 1402, order the remedial </p>
<p>modification or destruction of all copies of contents of a collection of </p>
<p>information extracted or used in violation of section 1402, and of all masters, </p>
<p>tapes, disks, diskettes, or other articles by means of which such copies may be </p>
<p>reproduced. </p>
<p>`(d) Monetary Relief: When a violation of section 1402 has been established in </p>
<p>any civil action arising under this section, the plaintiff shall be entitled to </p>
<p>recover any damages sustained by the plaintiff and defendant's profits not taken </p>
<p>into account in computing the damages sustained by the plaintiff. The court </p>
<p>shall assess such profits or damages or cause the same to be assessed under its </p>
<p>direction. In assessing profits the plaintiff shall be required to prove </p>
<p>defendant's gross revenue only and the defendant shall be required to prove all </p>
<p>elements of cost or deduction claims. In assessing damages the court may enter </p>
<p>judgment, according to the circumstances of the case, for any sum above the </p>
<p>amount found as actual damages, not exceeding three times such amount. The court </p>
<p>in its discretion may award reasonable costs and attorney's fees to the </p>
<p>prevailing party and shall award such costs and fees where it determines that an </p>
<p>action was brought under this chapter in bad faith against a nonprofit </p>
<p>educational, scientific, or research institution, library, or archives, or an </p>
<p>employee or agent of such an entity, acting within the scope of his or her </p>
<p>employment. </p>
<p>`(e) Reduction or Remission of Monetary Relief for Nonprofit Educational, </p>
<p>Scientific, or Research Institutions: The court shall reduce or remit entirely </p>
<p>monetary relief under subsection (d) in any case in which a defendant believed </p>
<p>and had reasonable grounds for believing that his or her conduct was permissible </p>
<p>under this chapter, if the defendant was an employee or agent of a nonprofit </p>
<p>educational, scientific, or research institution, library, or archives acting </p>
<p>within the scope of his or her employment. </p>
<p>`(f) Actions Against United States Government: Subsections (b) and (c) shall not </p>
<p>apply to any action against the United States Government. </p>
<p>`(g) Relief Against State Entities: The relief provided under this section shall </p>
<p>be available against a State governmental entity to the extent permitted by </p>
<p>applicable law. </p>
<p>`1407. Criminal offenses and penalties </p>
<p>`(a) Violation: </p>
<p>`(1) In general: Any person who violates section 1402 willfully, and-- </p>
<p>`(A) does so for direct or indirect commercial advantage or financial gain, or </p>
<p>`(B) causes loss or damage aggregating $10,000 or more in any 1-year period to </p>
<p>the person who gathered, organized, or maintained the information concerned, </p>
<p>shall be punished as provided in subsection (b). </p>
<p>`(2) Inapplicability: This section shall not apply to an employee or agent of a </p>
<p>nonprofit educational, scientific, or research institution, library, or archives </p>
<p>acting within the scope of his or her employment. </p>
<p>`(b) Penalties: An offense under subsection (a) shall be punishable by a fine of </p>
<p>not more than $250,000 or imprisonment for not more than 5 years, or both. A </p>
<p>second or subsequent offense under subsection (a) shall be punishable by a fine </p>
<p>of not more than $500,000 or imprisonment for not more than 10 years, or both. </p>
<p>`1408. Limitations on actions </p>
<p>`(a) Criminal Proceedings: No criminal proceeding shall be maintained under this </p>
<p>chapter unless it is commenced within three years after the cause of action </p>
<p>arises. </p>
<p>`(b) Civil Actions: No civil action shall be maintained under this chapter </p>
<p>unless it is commenced within three years after the cause of action arises or </p>
<p>claim accrues. </p>
<p>`(c) Additional Limitation: No criminal or civil action shall be maintained </p>
<p>under this chapter for the extraction or use of all or a substantial part of a </p>
<p>collection of information that occurs more than 15 years after the portion of </p>
<p>the collection that is extracted or used was first offered for sale or otherwise </p>
<p>in commerce, following the investment of resources that qualified that portion </p>
<p>of the collection for protection under this chapter. In no case shall any </p>
<p>protection under this chapter resulting from a substantial investment of </p>
<p>resources in maintaining a preexisting collection prevent any use or extraction </p>
<p>of information from a copy of the preexisting collection after the 15 years have </p>
<p>expired with respect to the portion of that preexisting collection that is so </p>
<p>used or extracted, and no liability under this chapter shall thereafter attach </p>
<p>to such acts of use or extraction.'. </p>
<p>SEC. 3. CONFORMING AMENDMENTS. </p>
<p>(a) Table of Chapters: The table of chapters for title 17, United States Code, </p>
<p>is amended by adding at the end the following: </p>
<p>`14. Misappropriation of Collections of Information </p>
<p>1401'. </p>
<p>(b) District Court Jurisdiction: (1) Section 1338 of title 28, United States </p>
<p>Code, is amended-- </p>
<p>(A) in the section heading by inserting `misappropriations of collections of </p>
<p>information,' after `trade-marks,'; and </p>
<p>(B) by adding at the end the following: </p>
<p>`(d) The district courts shall have original jurisdiction of any civil action </p>
<p>arising under chapter 14 of title 17, relating to misappropriation of </p>
<p>collections of information. Such jurisdiction shall be exclusive of the courts </p>
<p>of the States, except that any action against a State governmental entity may be </p>
<p>brought in any court that has jurisdiction over claims against such entity.'. </p>
<p>(2) The item relating to section 1338 in the table of sections for chapter 85 of </p>
<p>title 28, United States Code, is amended by inserting `misappropriations of </p>
<p>collections of information,' after `trade-marks,'. </p>
<p>(c) Place for Bringing Actions: (1) Section 1400 of title 28, United States </p>
<p>Code, is amended by adding at the end the following: </p>
<p>`(c) Civil actions arising under chapter 14 of title 17, relating to </p>
<p>misappropriation of collections of information, may be brought in the district </p>
<p>in which the defendant or the defendant's agent resides or may be found.'. </p>
<p>(2) The section heading for section 1400 of title 28, United States Code, is </p>
<p>amended to read as follows: </p>
<p>`1400. Patents and copyrights, mask works, designs, and collections of </p>
<p>information'. </p>
<p>(3) The item relating to section 1400 in the table of sections at the beginning </p>
<p>of chapter 87 of title 28, United States Code, is amended to read as follows: </p>
<p>`1400. Patents and copyrights, mask works, designs, and collections of </p>
<p>information.'. </p>
<p>(d) Court of Federal Claims Jurisdiction: Section 1498(e) of title 28, United </p>
<p>States Code, is amended by inserting `and to protections afforded collections of </p>
<p>information under chapter 14 of title 17' after `chapter 9 of title 17'. </p>
<p>SEC. 4. EFFECTIVE DATE. </p>
<p>(a) In General: This title and the amendments made by this title shall take </p>
<p>effect on the date of the enactment of this Act, and shall apply to acts </p>
<p>committed on or after that date. </p>
<p>(b) Prior Acts Not Affected: No person shall be liable under chapter 14 of title </p>
<p>17, United States Code, as added by section 2 of this Act, for the use of </p>
<p>information lawfully extracted from a collection of information prior to the </p>
<p>effective date of this Act, by that person or by that person's predecessor in </p>
<p>interest. </p>
<p>Mr. HATCH. Second, there are many who believe a narrower unfair competition </p>
<p>model is preferable to the model set forth in the Coble bill. One such proposal </p>
<p>has been proposed by certain commercial database users, with the support of the </p>
<p>scientific, education, and library communities. I ask unanimous consent that </p>
<p>this proposal also be printed in the Record. </p>
<p>There being no objection, the material was ordered to be printed in the Record, </p>
<p>as follows: </p>
<p>[Page: S320]</p>
<p>Proposed Bill To Amend Title 17, United States Code, To Promote Research and </p>
<p>Fair Competition in the Databases Industry</p>
<p>Be it enacted by the Senate and House of Representatives of the United States of </p>
<p>America in Congress assembled, </p>
<p>SECTION 1. SHORT TITLE. </p>
<p>This Act may be cited as the `Database Fair Competition and Research Promotion </p>
<p>Act of 1999'. </p>
<p>SEC. 2. FINDINGS. </p>
<p>Congress finds that-- </p>
<p>(1) the United States workforce is increasingly engaged in the creation, </p>
<p>processing, distribution, and maintenance of information in interstate and </p>
<p>foreign commerce; </p>
<p>(2) comprehensive, trustworthy databases are increasingly a fundamental </p>
<p>component of scientific, educational, and social progress; </p>
<p>(3) such databases are also critical to the operation of financial markets and </p>
<p>the burgeoning electronic commerce; </p>
<p>(4) the United States public benefits from having ready access to reliable, </p>
<p>up-to-date databases concerning virtually all the endeavors of mankind; </p>
<p>(5) the production of accurate, trustworthy databases requires the investment of </p>
<p>substantial amounts of human, technical, and financial resources to compile, </p>
<p>sort, organize, maintain, verify, and distribute; </p>
<p>(6) the wholesale, unauthorized duplication and dissemination of another </p>
<p>person's information product constitutes market-destructive free riding on the </p>
<p>investment of the information compiler; </p>
<p>(7) advances in digital technology render information products increasingly </p>
<p>vulnerable to database piracy as unauthorized copies may be made and transmitted </p>
<p>around the world in a few seconds; </p>
<p>(8) current Federal and State laws, including laws governing copyright, </p>
<p>contract, and misappropriation, do not adequately protect investments against </p>
<p>this free riding; </p>
<p>(9) the continuing development of digital technology has enabled even the </p>
<p>smallest information provider to transact business on a national scale, </p>
<p>rendering uniformity essential to the continued growth of interstate commerce; </p>
<p>(10) technology safeguards do not adequately deter database piracy, because such </p>
<p>safeguards are not foolproof, add to the cost and difficulty of accessing and </p>
<p>delivering information, and provide no recourse once the safeguards have been </p>
<p>circumvented; </p>
<p>(11) the United States should set the world standard for effective and balanced </p>
<p>database protection, and make a determined effort to ensure similar </p>
<p>international protection of these valuable information products; </p>
<p>(12) while wholesale duplication by a competitor diminishes the incentive to </p>
<p>invest in database creation, transformative use of the information in new </p>
<p>products promotes fair competition, innovation, and consumer welfare; </p>
<p>(13) transformative uses of information are also critical to scientific research </p>
<p>and the advancement of knowledge; </p>
<p>(14) transformative uses of information are essential to free speech, a free </p>
<p>press, and democratic institutions; </p>
<p>(15) any legal regime designed to prevent unfair competition in databases must </p>
<p>be carefully crafted so as not to prevent fair competition; </p>
<p>(16) in addition to database piracy, database publishers are also harmed by </p>
<p>other publishers misrepresenting various aspects of the information included in </p>
<p>their database, including its source, currency, and comprehensiveness; </p>
<p>(17) these misrepresentations also harm consumers who rely upon them, thereby </p>
<p>diminishing the credibility of the database industry as a whole; </p>
<p>(18) new legislation is needed to protect the substantial investments involved </p>
<p>in the production and dissemination of databases in interstate commerce. </p>
<p>SEC. 3. PROMOTION OF FAIR DATABASE COMPETITION. </p>
<p>Title 17, United States Code, is amended by adding at the end the following new </p>
<p>chapter: </p>
<p>`CHAPTER 14--FAIR DATABASE COMPETITION</p>
<p>Sec. </p>
<p>`1401. Prohibition Against Duplication. </p>
<p>`1402. Permitted acts. </p>
<p>`1403. Exclusions. </p>
<p>`1404. Prohibition Against Misrepresentation. </p>
<p>`1405. Definitions. </p>
<p>`1406. Relationship to other laws. </p>
<p>`1407. Limitations on Liability. </p>
<p>`1408. Civil remedies. </p>
<p>`1409. Limitations on actions. </p>
<p>`SEC. 1401. PROHIBITION AGAINST DUPLICATION. </p>
<p>`It is unlawful for a person to duplicate a database collected and organized by </p>
<p>another person in a database that competes in commerce with that other database. </p>
<p>`SEC. 1402. PERMITTED ACTS. </p>
<p>`(a) Collecting or Use of Information Obtained Through Other Means: Nothing in </p>
<p>this chapter shall restrict any person from independently collecting information </p>
<p>or using information obtained by means other than by duplicating it from a </p>
<p>database collected and organized by another person. </p>
<p>`(b) News Reporting: Nothing in this chapter shall restrict any person from </p>
<p>duplicating a database for the sole purpose of news reporting, including news </p>
<p>gathering and dissemination, or comment, unless the information duplicated is </p>
<p>time sensitive and has been collected by a news reporting entity, and the </p>
<p>duplication is part of a consistent pattern engaged in for the purpose of direct </p>
<p>competition. </p>
<p>`(c) Law Enforcement and Intelligence Activities: Nothing in this chapter shall </p>
<p>prohibit an officer, agent, or employee of the United States, a State, or a </p>
<p>political subdivision of a State, or a person acting under contract of one of </p>
<p>the enumerated officers, agents or employees, from duplicating a database as </p>
<p>part of lawfully authorized confidential investigative, protective, or </p>
<p>intelligence activities. </p>
<p>`(d) Genealogical Information: </p>
<p>`(1) In general: No person shall be restricted from using genealogical </p>
<p>information for nonprofit, religious purposes, or from using, for private, </p>
<p>noncommercial purposes, genealogical information that has been gathered, </p>
<p>organized, or maintained for nonprofit, religious purposes. </p>
<p>`(2) Definition: For purposes of this subsection, `genealogical information' </p>
<p>includes, but is not limited to, data indicating the date, time, and/or place of </p>
<p>an individual's birth, christening, marriage, death, or burial, the identity of </p>
<p>an individual's parents, spouse, children or siblings, and other information </p>
<p>useful in determining the identity of ancestors. </p>
<p>`(e) Scientific, Educational, or Research Uses: No person or entity who for </p>
<p>scientific, educational, or research purposes duplicates the same information </p>
<p>that has been collected or generated by another person or entity shall incur </p>
<p>liability under this chapter so long as such conduct is not part of a consistent </p>
<p>pattern engaged in either for the purpose of direct competition with that other </p>
<p>person or for the purpose of avoiding payment of reasonable fees for access to a </p>
<p>database incorporated into a product or service specifically marketed for </p>
<p>educational or research purposes. </p>
<p>`SEC. 1403. EXCLUSIONS. </p>
<p>`(a) Government Information: </p>
<p>`(1) Exclusion: Protection under Section 1 shall not extend to government </p>
<p>databases. </p>
<p>`(2) The incorporation of all or part of a government database into a </p>
<p>non-government database does not preclude protection for the portions of the </p>
<p>non-government database which came from a source other than the government </p>
<p>database. </p>
<p>`(3) Nothing in this chapter shall prevent a federal, state, or local government </p>
<p>entity from determining that a database, the creation or maintenance of which is </p>
<p>substantially funded by that entity, shall not be subject to the protection </p>
<p>afforded under this chapter. </p>
<p>`(b) Databases Related to Digital Communications: Protection under Section 1 </p>
<p>does not extend to a database incorporating information collected or organized </p>
<p>to perform the function of addressing, routing, forwarding, transmitting, or </p>
<p>storing digital online communications or the function of providing or receiving </p>
<p>connections for digital online communications. </p>
<p>`(c) Computer Programs: </p>
<p>`(1) Protection not extended: Subject to paragraph (2), protection under Section </p>
<p>1 shall not extend to computer programs, including, but not limited to, any </p>
<p>computer program used in the manufacture, production, operation, or maintenance </p>
<p>or a database, or any element of a computer program necessary to its operation. </p>
<p>`(2) Incorporated databases: A database that is otherwise subject to protection </p>
<p>under Section 1 is not disqualified from such protection solely because it </p>
<p>resides in a computer program, so long as the database does not, in whole or in </p>
<p>part, function as an element necessary to the operation of the computer program. </p>
<p>`(d) Nonprotectable Subject Matter: Protection for databases under Section 1 </p>
<p>does not extend to any idea, fact, procedure, system, method of operation, </p>
<p>concept, principle or discovery, as distinct from a database protected under </p>
<p>Section 1. </p>
<p>`SEC. 1404. PROHIBITION AGAINST MISREPRESENTATION. </p>
<p>`It shall be unlawful for any person, in connection with the use in commerce of </p>
<p>any database, to misrepresent: </p>
<p>`(a) the sponsorship or approval of the database by any other person; </p>
<p>`(b) the affiliation, connection, or association of the person with any other </p>
<p>person; </p>
<p>`(c) the qualities of the information contained in the database, including its </p>
<p>source, currency, or comprehensiveness; or </p>
<p>`(d) the extent of the person's responsibility for the collection and </p>
<p>organization of the information contained in the database. </p>
<p>`SEC. 1405. DEFINITIONS. </p>
<p>`As used in this chapter: </p>
<p>`(1) Database: The term `database' means a collection of discrete items of </p>
<p>information that have been collected and organized in a single place, or in such </p>
<p>a way as to be accessible through a single source, through the investment of </p>
<p>substantial monetary or other resources, for the purpose of providing access to </p>
<p>those discrete items of information by users of the database. </p>
<p>`(2) Information: The term `information' means facts, data, or any other </p>
<p>intangible material capable of being collected and organized in a systematic </p>
<p>way, with the exception of works of authorship. </p>
<p>`(3) Commerce: The term `commerce' means all commerce which may be lawfully </p>
<p>regulated by the Congress. </p>
<p>`(4) Competes in commerce: The term `competes in commerce' means that the </p>
<p>database (A) is substantially the same as the protected database, (B) displaces </p>
<p>substantial sales or licenses of the protected database; and (C) is either </p>
<p>offered for sale or license for commercial advantage or is distributed to the </p>
<p>public over a digital network, in such a manner as to significantly diminish the </p>
<p>incentive to invest in the collecting or organizing of the protected database. </p>
<p>`(5) Government database: The term `government database' means a database (A) </p>
<p>that has been collected or maintained by the United States of America; or (B) </p>
<p>that is required by federal statute or regulation to be collected or maintained, </p>
<p>to the extent so required. </p>
<p>[Page: S321]</p>
<p>`SEC. 1406. RELATIONSHIP TO OTHER LAWS. </p>
<p>`(a) Other Rights Not Affected: Subject to subsection (b), nothing in this </p>
<p>chapter shall affect rights, limitations, or remedies concerning copyright, or </p>
<p>any other rights or obligations relating to information, including laws with </p>
<p>respect to patent, trademark, design rights, antitrust, trade secrets, privacy, </p>
<p>access to public documents, misuse, and the law of contract. </p>
<p>`(b) Preemption of State Law: On or after the effective date of this chapter, </p>
<p>all rights that are equivalent to the rights specified in section 1 with respect </p>
<p>to the subject matter of this chapter shall be governed exclusively by Federal </p>
<p>law, and no person is entitled to any equivalent right in such subject matter </p>
<p>under the common law or statutes of any State. </p>
<p>`(c) Licensing: Subject to the provisions on misuse in Section 7(b), nothing in </p>
<p>this chapter shall restrict the rights of parties freely to enter into licenses </p>
<p>or any other contracts with respect to the use of information. </p>
<p>`(d) Communications Act of 1934: Nothing in this chapter shall affect the </p>
<p>operation of the Communications Act of 1934 (47 U.S.C. 151 et seq.). Nor shall </p>
<p>this chapter restrict any person from using subscriber list information, as such </p>
<p>term is defined in section 222(f)(3) of the Communications Act of 1934 (47 </p>
<p>U.S.C. 222(f)(3)). </p>
<p>`(e) Securities Exchange and Commodity Exchange Act: Nothing in this chapter </p>
<p>shall affect the operation of the provisions of the Securities Exchange Act of </p>
<p>1934 of the Commodity Exchange Act. </p>
<p>`SEC. 1407. LIMITATIONS ON LIABILITY. </p>
<p>`(a) Service Provider Liability: </p>
<p>`(1) Subject to the limitations of paragraph (2), a provider of online services </p>
<p>or network access, or the operator of facilities therefor, shall not be liable </p>
<p>for a violation of Section 1 by reason of: </p>
<p>`(A) transmitting, routing, or providing connections for, material through a </p>
<p>system or network controlled or operated by or for the service provider; </p>
<p>`(B) providing storage of that material on a system or network controlled by or </p>
<p>operated for the service provider; or </p>
<p>`(C) referring or linking users to an online location at which infringing </p>
<p>material is located. </p>
<p>`(2) Conditions: The limitation on liability set forth in paragraph (1)(B) and </p>
<p>(C) shall apply, provided that-- </p>
<p>`(A) the service provider did not initially place the material on the system; </p>
<p>`(B) the service provider does not have actual knowledge that the material </p>
<p>violates Section 1 or, in the absence of such actual knowledge, is not aware of </p>
<p>facts or circumstances from which such violation is apparent; or </p>
<p>`(C) upon obtaining such knowledge or awareness, acts expeditiously to remove </p>
<p>the material or to disable its use, to the extent such removal or disablement is </p>
<p>technically feasible, effective and economically reasonable. </p>
<p>`(3) Notification of claimed violation: A service provider will be presumed to </p>
<p>have actual knowledge of a violation of Section 1 if it receives adequate </p>
<p>notification of a claimed violation in compliance with the requirements as set </p>
<p>forth in 17 U.S.C. 512(c)(4) from a person who is injured by a violation of </p>
<p>Section 1 or his designated agents. </p>
<p>`(4) Reenabling of use: If a person claiming to be injured by a violation of </p>
<p>Section 1 does not obtain a court order enjoining the alleged violation within </p>
<p>ten days of the service provider disabling the use, the alleged infringer may </p>
<p>request the service provider to reenable the use; and upon receiving such </p>
<p>request in compliance with the requirements as set forth in 17 U.S.C. 512(f)(3), </p>
<p>the service provider may reenable the use without becoming liable for a </p>
<p>violation of Section 1. </p>
<p>`(5) Limitation on other liability: A service provider shall not be liable to </p>
<p>any claim based on the service provider's good faith removal, or disabling of a </p>
<p>use, of material claimed to violate Section 1 or based on facts or circumstances </p>
<p>from which such violation is apparent, regardless of whether a violation is </p>
<p>ultimately determined to have occurred. </p>
<p>`(6) Misrepresentations: Any person who knowingly misrepresents that material or </p>
<p>activities violate Section 1 shall be liable for any damages, including costs </p>
<p>and attorneys' fees, incurred by the alleged violator or by the service provider </p>
<p>who is injured by such misrepresentation. </p>
<p>`(b) Misuse: The relief provided under this chapter shall not be available to a </p>
<p>person who misuses the protection afforded a database under this chapter. In </p>
<p>determining whether a person has misused the protection afforded under this </p>
<p>chapter, a court shall consider, among other factors: </p>
<p>`(1) The extent to which the ability of persons to engage in the permitted acts </p>
<p>under this chapter has been frustrated by contractual arrangements or </p>
<p>technological measures; </p>
<p>`(2) the extent to which information contained in a database that is the sole </p>
<p>source of the information contained therein is made available through licensing </p>
<p>or sale on reasonable terms and conditions; </p>
<p>`(3) the extent to which the license or sale of information contained in a </p>
<p>database protected under this chapter has been conditioned on the acquisition or </p>
<p>license of any other product or service, or on the performance of any action, </p>
<p>not directly related to the license or sale; </p>
<p>`(4) the extent to which access to information necessary to research, </p>
<p>competition, or innovation purposes has been prevented; </p>
<p>`(5) the extent to which the manner of asserting rights granted under this </p>
<p>chapter constitutes a barrier to entry into the relevant database market; and </p>
<p>`(6) the extent to which the judicially developed doctrines of misuse in other </p>
<p>areas of the law may appropriately be extended to the case in controversy. </p>
<p>`SEC. 1408. CIVIL REMEDIES. </p>
<p>`(a) Civil Actions: Any person who is injured by a violation of Section 1 or </p>
<p>Section 4 may bring a civil action for such a violation in an appropriate United </p>
<p>States district court without regard to the amount in controversy, except that </p>
<p>any action against a State government entity may be brought in any court that </p>
<p>has jurisdiction over claims against such entity. </p>
<p>`(b) Temporary and Permanent Injunctions.--Any court having jurisdiction of a </p>
<p>civil action under this section shall have the power to grant temporary and </p>
<p>permanent injunctions, according to the principles of equity and upon such terms </p>
<p>as the court may deem reasonable, to prevent a violation of section 1 or 4. Any </p>
<p>such injunction may be served anywhere in the United States on the person </p>
<p>enjoined, and may be enforced by proceedings in contempt or otherwise by any </p>
<p>United States district court having jurisdiction over that person. </p>
<p>`(c) Impoundment: At any time while an action under this section is pending, the </p>
<p>court may order the impounding, on such terms as it deemds reasonable, of all </p>
<p>copies of databases made in violaiton of section 1, and of all masters, tapes, </p>
<p>disks, diskettes, or other articles by means of which such copies may be </p>
<p>reproduced. The court may, as part of a final judgment or decree finding a </p>
<p>violation of section 1, order the remedial modification or destruction of all </p>
<p>copies of databases made in violation of section 1, and of all masters, tapes, </p>
<p>disks, diskettes, or other articles by means of which such copies may be </p>
<p>reproduced. </p>
<p>`(d) Monetary Relief: </p>
<p>`(1) When a violation of section 1 has been established in any civil action </p>
<p>arising under this section, the plaintiff shall be entitled, subject to the </p>
<p>principles of equity, to recover defendant's profits and any damages sustained </p>
<p>by the plaintiff. In assessing profits the plaintiffs shall be required to prove </p>
<p>defendant's sales only; defendant must prove all elements of cost or deduction </p>
<p>claims. In assessing damages the court may enter judgment, according to the </p>
<p>circumstances of the case, for any sum above the amount found as actual damages, </p>
<p>not exceeding three times such amount. </p>
<p>`(2) When a violation of Section 4 has been established, the plaintiff shall be </p>
<p>entitled to recover, subject to the principles of equity, any damages sustained. </p>
<p>`(3) The court in its discretion may award reasonable costs and attorney's fees </p>
<p>to the prevailing party and shall award such costs and fees where it determines </p>
<p>that an action was brought under this chapter in bad faith against a nonprofit </p>
<p>scientific, research, or educational institution, library or archives, or </p>
<p>against an employee or agent of such entity, acting within the scope of his or </p>
<p>her employment. </p>
<p>`(e) Reduction or Remission of Remedies for Nonprofit Scientific, Educational, </p>
<p>or Research Institutions: The court shall reduce or remit entirely monetary </p>
<p>relief under subsection (d) in any case in which the defendant believed, and had </p>
<p>reasonable grounds for believing, that his or her conduct was permissible under </p>
<p>this chapter, if the defendant was an employee or agent of a nonprofit </p>
<p>scientific, educational, or research institution, library or archives, acting </p>
<p>within the scope of his or her employment. </p>
<p>`(f) Actions Against United States Government: Subsections (b) and (c) shall not </p>
<p>apply to any action against the United States Government. </p>
<p>`(g) Relief Against State Entities: The relief provided under this section shall </p>
<p>be available against a State governmental entity to the extent permitted by </p>
<p>applicable law. </p>
<p>`(h) Sole Source Databases: If the court determines that a defendant who has </p>
<p>violated Section 1 could not have independently collected the information taken </p>
<p>from the plaintiff's database in a commercially practicable manner, the relief </p>
<p>available to the plaintiff shall be limited to the plaintiff's actual damages, </p>
<p>measured by a reasonable royalty. </p>
<p>`SEC. 1409. LIMITATIONS ON ACTIONS. </p>
<p>`(a) No civil action shall be maintained under the provisions of this chapter </p>
<p>unless it is commenced within three years after the claim accrued. </p>
<p>`(b) No civil action shall be maintained under the provisions of this chapter </p>
<p>for the duplication of a database collected and organized prior to the effective </p>
<p>date of this Act. </p>
<p>[Page: S322]</p>
<p>SEC. 4. CONFORMING AMENDMENT. </p>
<p>The table of chapters for title 17, United States Code, is amended by adding at </p>
<p>the end the following: </p>
<p>CHAPTER 14--PROTECTION OF DATABASES</p>
<p>SEC. 5. EFFECTIVE DATE. </p>
<p>(a) In General: This Act and the amendments made by this Act shall take effect </p>
<p>on the date of the enactment of this Act, and shall apply to acts committed on </p>
<p>or after that date. </p>
<p>`(b) Prior Acts Not Affected: No person shall be liable under chapter 14 of </p>
<p>title 17, United States Code, as added by section 2 of this Act, for the acts </p>
<p>done prior to the effective date of this Act, by that person or by that person's </p>
<p>predecessor in interest. </p>
<p>SEC. 6. REPORT TO CONGRESS. </p>
<p>Not later than 24 months after the date of enactment of this Act, the Copyright </p>
<p>Office, after consultation with appropriate agencies, which may include the </p>
<p>Department of Justice, the Patent and Trademark Office, and the Federal Trade </p>
<p>Commission, shall report to the Congress on the effect this Act has had on the </p>
<p>United States database industry and related parties, including-- </p>
<p>(a) the extent of competition between database producers, including the </p>
<p>concentration of market power within the database industry; </p>
<p>(b) the investment in the development and maintenance of databases, including </p>
<p>changes in the number and size of databases; </p>
<p>(c) the availability of information to industries and researchers which rely </p>
<p>upon such availability; and </p>
<p>(d) whether in the period after enactment of this legislation database producers </p>
<p>have faced unfair competition, particularly from publishers in the European </p>
<p>Union. </p>
<p>The report shall include legislative recommendations, if any. </p>
<p>Mr. HATCH. I include this proposal in the Record hoping that it will also help </p>
<p>our deliberations be more fully informed and spur discussion of the merits of </p>
<p>each approach. The existence of, and my dissemination of, these various </p>
<p>approaches, however, should not be used to delay prompt action on this important </p>
<p>issue. </p>
<p>In short, Mr. President, as we rapidly approach the new millennium, it is time </p>
<p>for Congress to act to ensure adequate federal protection for American </p>
<p>investment in information. I intend this to be a high priority in the Judiciary </p>
<p>Committee this year and intend to move forward with hearings and timely </p>
<p>consideration of appropriate legislation. I look forward to working with the </p>
<p>interested parties in an effort to build consensus in this area, and I encourage </p>
<p>my colleagues to join with me in support of this process. </p>
<p>Exhibit 1</p>
<p>S. --</p>
<p>Be it enacted by the Senate and House of Representatives of the United States of </p>
<p>America in Congress assembled, </p>
<p>SECTION 1. SHORT TITLE. </p>
<p>This Act may be cited as the `Database Antipiracy Act of 1999.' </p>
<p>SEC. 2. FINDINGS. </p>
<p>Congress finds that-- </p>
<p>(1) the United States workforce is increasingly engaged in the creation, </p>
<p>processing, distribution, and maintenance of information in interstate and </p>
<p>foreign commerce; </p>
<p>(2) comprehensive, trustworthy collections of information are increasingly a </p>
<p>fundamental component of scientific, educational, and social progress; </p>
<p>(3) the United States public benefits from having ready access to reliable, </p>
<p>up-to-date collections of information concerning virtually all the endeavors of </p>
<p>mankind; </p>
<p>(4) the production of accurate, trustworthy collections of information requires </p>
<p>the investment of substantial amounts of human, technical, and financial </p>
<p>resources to compile, sort, organize, maintain, verify, and distribute; </p>
<p>(5) the wholesale, unauthorized copying, and dissemination of another person's </p>
<p>information product constitutes market-destructive free riding on the investment </p>
<p>of the information compiler; </p>
<p>(6) advances in digital technology render informational products increasingly </p>
<p>vulnerable to database piracy as unauthorized copies may be made and transmitted </p>
<p>around the world in a few seconds; </p>
<p>(7) current Federal and State laws, including laws governing copyright, </p>
<p>contract, and misappropriation, do not adequately protect investments against </p>
<p>this free riding; </p>
<p>(8) as a result of the decision of the United States Supreme Court in Feist </p>
<p>Publications, Inc. v. Rural Telephone Services Co., 499 United States 340 </p>
<p>(1991), and certain decisions of the inferior courts of the United States, the </p>
<p>copyright law affords members of the United States business community, both </p>
<p>individuals and entities who create and distribute compilations of data less </p>
<p>certain protection against piracy; </p>
<p>(9) legislation is needed to ensure that legitimate access to discrete data is </p>
<p>not impaired while also encouraging persons to identify, collect, verify, and </p>
<p>add value to such information and make it available for study, enjoyment, and </p>
<p>use; </p>
<p>(10) the piecemeal, inconsistent protection for databases provided by State </p>
<p>misappropriation and contract laws inadequately protects the investment of </p>
<p>database compilers from destructive acts of free riding; </p>
<p>(11) the continuing development of digital technology has enabled even the </p>
<p>smallest information provider to transact business on a national scale, </p>
<p>rendering uniformity essential to the continued growth of interstate commerce; </p>
<p>(12) technology safeguards do not adequately deter database piracy, because such </p>
<p>safeguards are not foolproof, add to the cost and difficulty of accessing and </p>
<p>delivering information, and provide no recourse once the safeguards have been </p>
<p>circumvented; </p>
<p>(13) the United States should set the world standard for effective and balanced </p>
<p>database protection, and make a determined effort to ensure similar </p>
<p>international protection of these valuable information products; </p>
<p>(14) database piracy, if left unchecked by Congress, will so reduce the </p>
<p>incentive to produce these products that the quality or existence will be </p>
<p>significantly threatened or eliminated; and </p>
<p>(15) new legislation is needed to protect the substantial investments involved </p>
<p>in the production and dissemination of collections of information in interstate </p>
<p>commerce. </p>
<p>SEC. 3. MISAPPROPRIATION OF DATABASES. </p>
<p>Title 17, United States Code, is amended by adding at the end the following new </p>
<p>chapter: </p>
<p>`CHAPTER 13--MISAPPROPRIATION OF DATABASES</p>
<p>`Sec. </p>
<p>`1301. Definitions. </p>
<p>`1302. Prohibition against misappropriation. </p>
<p>`1303. Permitted acts. </p>
<p>`1304. Permitted use for certain purposes. </p>
<p>`1305. Exclusions. </p>
<p>`1306. Relationship to other laws. </p>
<p>`1307. Certain instructional activities and library uses. </p>
<p>`1308. Civil remedies. </p>
<p>`1309. Criminal offenses and penalties. </p>
<p>`1310. Limitations on actions. </p>
<p>`1311. Deposit of databases. </p>
<p>`1301. Definitions </p>
<p>`As used in this chapter: </p>
<p>`(1) Database: The term `database' means a collection of discrete items of </p>
<p>information that have been collected and organized in a single place, or in such </p>
<p>a way as to be accessible through a single source, for the purpose of providing </p>
<p>access to those discrete items of information by users of the database. </p>
<p>`(2) Information: The term `information' means facts, data, works of authorship, </p>
<p>or any other intangibles capable of being collected and organized in a </p>
<p>systematic way. </p>
<p>`(3) Neighboring market: The term `neighboring market' means any market that is </p>
<p>commonly exploited by persons offering similar products or services </p>
<p>incorporating databases. </p>
<p>`(4) Commerce: The term `commerce' means all commerce which may be lawfully </p>
<p>regulated by the Congress. </p>
<p>`(5) Product or service: A product or service incorporating a database does not </p>
<p>include a product or service incorporating a database that has been gathered, </p>
<p>organized, or maintained to perform the function of addressing, routing, </p>
<p>forwarding, transmitting or storing digital online communications or the </p>
<p>function of providing or receiving connections for digital online </p>
<p>communications. </p>
<p>`(6) Government database: The term `government database' means a database that </p>
<p>has been created or maintained by or for a government entity, whether Federal, </p>
<p>State, or local-- </p>
<p>`(A) that is created or maintained by an employee or agent of such government </p>
<p>entity, or any person exclusively licensed by such entity, acting within the </p>
<p>scope of his or her employment, agency, or license; </p>
<p>`(B) the creation or maintenance of which is substantially funded by such </p>
<p>government entity; or </p>
<p>`(C) that is required by statute or regulation to be created or maintained, to </p>
<p>the extent so required, except that such term does not include a database that </p>
<p>is required by a statute or regulation to be created or maintained where such </p>
<p>database or a prior version, was first created or maintained prior to the </p>
<p>enactment of such statute or regulation. </p>
<p>`(7) Government information: The term `government information' means information </p>
<p>produced or otherwise generated by or for a government entity, whether Federal, </p>
<p>State, or local-- </p>
<p>`(A) that is produced or otherwise generated by an employee or agent of such </p>
<p>government entity or any person exclusively licensed by such entity, acting </p>
<p>within the scope of his or her employment, agency, or exclusive license; or </p>
<p>`(B) the production or generation of which is substantially funded by such </p>
<p>government entity. </p>
<p>`1302. Prohibition against misappropriation </p>
<p>`Any person who extracts, or uses in commerce, all or a substantial part, </p>
<p>measured either quantitatively or qualitatively, of a database gathered, </p>
<p>organized, or maintained by another person through the investment of substantial </p>
<p>monetary or other resources, so as to cause substantial harm to the actual or </p>
<p>neighboring market of that other person, or a successor in interest of that </p>
<p>other person, for a product or service that incorporates that database and is </p>
<p>offered or intended to be offered for sale or otherwise in commerce by that </p>
<p>other person, or a successor in interest of that person, shall be liable to that </p>
<p>person or successor in interest for the remedies set forth in section 1308. </p>
<p>[Page: S323]</p>
<p>`1303. Permitted acts </p>
<p>`(a) Individual Items of Information and Other Insubstantial Parts: Nothing in </p>
<p>this chapter shall prevent the extraction or use of an individual item of </p>
<p>information, or other insubstantial part of a database, in itself. An individual </p>
<p>item of information, including a work of authorship, shall not itself be </p>
<p>considered a substantial part of a database under section 1302. Nothing in this </p>
<p>subsection shall permit the repeated or systematic extraction or use of </p>
<p>individual items or insubstantial parts of a database so as to circumvent the </p>
<p>prohibition contained in section 1302. </p>
<p>`(b) Gathering or Use of Information Obtained Through Other Means: Nothing in </p>
<p>this chapter shall restrict any person from independently gathering information </p>
<p>or using information obtained by means other than extracting it from a database </p>
<p>gathered, organized, or maintained by another person through the investment of </p>
<p>substantial monetary or other resources. </p>
<p>`(c) Nonprofit Educational, Scientific, or Research Uses: Notwithstanding </p>
<p>section 1302, no person shall be restricted from extracting or using information </p>
<p>for nonprofit educational, scientific, or research purposes in a manner that </p>
<p>does not harm directly the actual market for the product or service referred to </p>
<p>in section 1302. </p>
<p>`(d) Genealogical Information: </p>
<p>`(1) In general: Notwithstanding section 1302, no person shall be restricted </p>
<p>from extracting or using genealogical information for nonprofit, religious </p>
<p>purposes, or from extracting or using, for private, noncommercial purposes, </p>
<p>genealogical information that has been gathered, organized, or maintained for </p>
<p>nonprofit, religious purposes. </p>
<p>`(2) Definition: For purposes of this subsection, `genealogical information' </p>
<p>includes, but is not limited to, data indicating the date, time and/or place of </p>
<p>an individual's birth, christening, marriage, death, or burial, the identity of </p>
<p>an individual's parents, spouse, children or siblings, an other information </p>
<p>useful in determining the identity of ancestors. </p>
<p>`(e) News Reporting: Nothing in this chapter shall restrict any person from </p>
<p>extracting or using information for the sole purpose of news reporting, </p>
<p>including news gathering and dissemination, or comment, unless the information </p>
<p>so extracted or used is time sensitive and has been gathered by a news reporting </p>
<p>entity, and the extraction or use is part of a consistent pattern engaged in for </p>
<p>the purpose of direct competition. </p>
<p>`(f) Transfer of Copy: Nothing in this chapter shall restrict the owner of a </p>
<p>particular lawfully made copy of all or part of a database from selling or </p>
<p>otherwise disposing of the possession of that copy. </p>
<p>`(g) Law Enforcement and Intelligence Activities: Nothing in this chapter shall </p>
<p>prohibit an officer, agent, or employee of the United States, a State, or a </p>
<p>political subdivision of a State, or a person acting under contract of one of </p>
<p>the enumerated </p>
<p>officers, agents, or employees from extracting and using information as part of </p>
<p>lawfully authorized confidential investigative, protective, or intelligence </p>
<p>activities. </p>
<p>`1304. Permitted use for certain purposes </p>
<p>`(a) In General: Nothing in this Chapter shall prohibit or otherwise restrict </p>
<p>the extraction or use of a database protected under this chapter for the </p>
<p>following purposes-- </p>
<p>`(1) for illustration, explanation or example, comment or criticism, internal </p>
<p>verification, or scientific or statistical analysis of the portion used or </p>
<p>extracted; and </p>
<p>`(2) in the case of nonprofit scientific, educational or research activities by </p>
<p>nonprofit organizations, for similar customary or transformative purposes. </p>
<p>`(b) Certain Use Not Permitted: In no case may a use or extraction for a purpose </p>
<p>described in subsection (a) be permitted if the substantial harm referred to in </p>
<p>section 1302-- </p>
<p>`(1) arises because the amount of the portion used or extracted is more than is </p>
<p>reasonable and customary for the purpose; </p>
<p>`(2) consists of the use or extraction being intended to, or being likely to, </p>
<p>serve as a substitute for or to supplant all or a substantial part of the </p>
<p>database from which the extraction or use is made or an adaptation thereof that </p>
<p>is protected under this chapter; </p>
<p>`(3) arises because the extraction or use is intended to avoid payment of </p>
<p>reasonable fees for use of a database incorporated into a product or service </p>
<p>specifically marketed for educational, scientific or research purposes; or </p>
<p>`(4) arises because the use or extraction is part of a pattern, system, or </p>
<p>repeated practice by the same party, related parties, or parties acting in </p>
<p>concert with respect to the same database or a series of related databases. </p>
<p>`1305. Exclusions </p>
<p>`(a) Government Databases: </p>
<p>`(1) Exclusion.--Protection under this chapter shall not extend to government </p>
<p>databases. </p>
<p>`(2) The adoption or incorporation of, or reference to, a non-government </p>
<p>database otherwise protected under section 1302 into or in a government </p>
<p>publication, regulation, or statute does not preclude protection for such </p>
<p>non-government database under this chapter. </p>
<p>`(3) The incorporation of all or part of a government database into a </p>
<p>non-government database otherwise protected under section 1302 does not preclude </p>
<p>protection for such non-government database under this chapter. </p>
<p>`(b) Availability of Government Databases and Government Information </p>
<p>Incorporated Into Databases: </p>
<p>`(1) Any person, or a successor in interest, who has incorporated all or part of </p>
<p>a government database into a database subject to protection under section 1302 </p>
<p>of this chapter, or who has incorporated government information into a database </p>
<p>subject to protection under section 1302 of this chapter, shall provide the </p>
<p>ability to extract or use the information so incorporated to any person so </p>
<p>requesting, where such person is acting within the scope of his or her </p>
<p>employment by a nonprofit library, archives, educational, scientific, or </p>
<p>research institution, provided that-- </p>
<p>`(A) the request for such extraction or use is accompanied by a written </p>
<p>statement-- </p>
<p>`(i) clearly identifying the information to be extracted or used, in whole or in </p>
<p>part; and </p>
<p>`(ii) providing evidence of reasonable, good faith efforts made to obtain such </p>
<p>information from other sources; </p>
<p>`(B) the person requesting the ability to extract or use such information can </p>
<p>show that such extraction or use is necessary to further a legitimate nonprofit </p>
<p>educational, scientific, or research activity; </p>
<p>`(C) the person who has incorporated such information as part of his or her </p>
<p>database, or a successor in interest, can reasonably identify, extract, and </p>
<p>provide the requested information as first obtained from the government entity, </p>
<p>employee, agent, or exclusive licensee, in the original format, separate and </p>
<p>apart from other portions of the database; and </p>
<p>`(D) the person requesting such extraction or use reimburses the person who has </p>
<p>gathered, organized or maintained such information for the costs of </p>
<p>identification, extraction and delivery. </p>
<p>`(2) In cases where a dispute arises as to whether a request made for the </p>
<p>ability to extract or use government information or information incorporated </p>
<p>into a protected database from a government database, or a response thereto, </p>
<p>satisfies the requirements of subsection (b)(1), the court shall determine </p>
<p>whether such request was reasonably made or denied and may, upon finding that </p>
<p>the request was denied in bad faith, order the person to whom the request was </p>
<p>made to provide the ability extract or use the requested information without </p>
<p>reimbursement, to pay all costs and attorney's fees incurred by the person </p>
<p>making such request, or both </p>
<p>`(c) Exception: The exclusions under subsections (a)(1) and (b) do not apply to </p>
<p>any information required to be collected and disseminated-- </p>
<p>`(1) under the Securities Exchange Act of 1934 by a national securities </p>
<p>exchange, a registered securities association, or a registered securities </p>
<p>information processor, subject to section 1306(g) of this title; or </p>
<p>`(2) under the Commodity Exchange Act by a contract market, subject to section </p>
<p>1306(g) of this title. </p>
<p>`(d) Computer Programs: </p>
<p>`(1) Protection Not Extended: Subject to paragraph (2), protection under this </p>
<p>chapter shall not extend to computer programs, including, but not limited to, </p>
<p>any computer program used in the manufacture, production, operation, or </p>
<p>maintenance of a database, or any element of a computer program necessary to its </p>
<p>operation. </p>
<p>`(2) Incorporated Databases: A database that is otherwise subject to protection </p>
<p>under this chapter is not disqualified from such protection solely because it </p>
<p>resides in a computer program, so long as the database does not, in whole or in </p>
<p>part, function as an element necessary to the operation of the computer program. </p>
<p>`1306. Relationship to other laws </p>
<p>`(a) Other Rights Not Affected: Subject to subsection (b), nothing in this </p>
<p>chapter shall affect rights, limitations, or remedies concerning copyright, or </p>
<p>any other rights or obligations relating to information, including laws with </p>
<p>respect to patent, trademark, design rights, antitrust, trade secrets, privacy, </p>
<p>access to public </p>
<p>documents, fraud and other inequitable conduct (including, where applicable, </p>
<p>misuse), and the law of contract. </p>
<p>`(b) Preemption of State Law: On or after the effective date of this chapter, </p>
<p>all rights that are equivalent to the rights specified in section 1302 with </p>
<p>respect to the subject matter of this chapter shall be governed exclusively by </p>
<p>Federal law, and no person is entitled to any equivalent right in such subject </p>
<p>matter under the common law or statutes of any State. State laws with respect to </p>
<p>trademark, design rights, antitrust, trade secrets, privacy, access to public </p>
<p>documents, and the law of contract shall not be deemed to provide equivalent </p>
<p>rights for purposes of this subsection. </p>
<p>`(c) Relationship to Copyright: Protection under this chapter is independent of, </p>
<p>and does not affect or enlarge the scope, duration, ownership, or subsistence </p>
<p>of, any copyright protection or limitation, including, but not limited to, fair </p>
<p>use, in any work of authorship that is contained in or consists in whole or part </p>
<p>of a database. This chapter does not provide any greater protection to a work of </p>
<p>authorship contained in a database, other than a work that is itself a database, </p>
<p>than is available to that work under any other chapter of this title. </p>
<p>`(d) Antitrust: Nothing in this chapter shall limit in any way the constraints </p>
<p>on the manner in which products and services may be provided to the public that </p>
<p>are imposed by Federal and State antitrust laws, including those regarding </p>
<p>single suppliers of products and services. </p>
<p>`(e) Licensing: Nothing in this chapter shall restrict the rights of parties </p>
<p>freely to enter into licenses or any other contracts with respect to the use of </p>
<p>databases. </p>
<p>`(f) Communications Act of 1934: Nothing in this chapter shall affect the </p>
<p>operation of the provisions of the Communications Act of 1934 (47 U.S.C. 151 et </p>
<p>seq.). Nor shall this chapter restrict any person from extracting or using </p>
<p>subscriber list information, as such term is defined in section 222(f)(3) of the </p>
<p>Communications Act of 1934 (47 U.S.C. 222(f)(3)). </p>
<p>`(g) Securities and Commodities Market Information: </p>
<p>`(1) Federal agencies and acts: Nothing in this Act shall affect: </p>
<p>`(A) the operation of the provisions of the Securities Exchange Act of 1934 (15 </p>
<p>U.S.C. 78a et seq.) or the Commodity Exchange Act (7 U.S.C. 1 et seq.); </p>
<p>`(B) the jurisdiction or authority of the Securities and Exchange Commission and </p>
<p>the Commodity Futures Trading Commission; or </p>
<p>`(C) the functions and operations of self-regulatory organizations and </p>
<p>securities information processors under the provisions of the Securities </p>
<p>Exchange Act of 1934 and the rules and regulations thereunder, including making </p>
<p>market information available pursuant to the provisions of that Act and the </p>
<p>rules and regulations promulgated thereunder. </p>
<p>`(2) Rules of construction: Nothing in subsection (e) of section 1303 shall be </p>
<p>construed to permit any person to extract or use real-time market information in </p>
<p>a manner that constitutes a market substitute for a real-time market information </p>
<p>service (including the real-time systematic updating of or display of a </p>
<p>substantial part of market information) provided on a real-time basis. </p>
<p>`(3) Definition: As used in this subsection, the term `market information' means </p>
<p>information relating to quotations and transactions that is collected, </p>
<p>processed, distributed, or published pursuant to the provisions of the </p>
<p>Securities Exchange Act of 1934 or by a contract market that is designated by </p>
<p>the Commodity Futures Trading Commission pursuant to the Commodity Exchange Act </p>
<p>and the rules and regulations thereunder. </p>
<p>[Page: S324]</p>
<p>`1307. Certain instructional activities and library uses </p>
<p>`(a) It shall not be a violation of 1302 to display visually the content of a </p>
<p>lawfully obtained database if-- </p>
<p>`(1) such display occurs in the course of formal, face-to-face teaching </p>
<p>activities in a classroom or similar instructional location of a nonprofit </p>
<p>educational institution; or </p>
<p>`(2) such display occurs in the course of, and as a directly relevant and </p>
<p>integral part, of a transmission, where such transmission is a regular part of a </p>
<p>systematic instructional activity of a nonprofit educational institutional or </p>
<p>governmental body, and is made primarily for reception-- </p>
<p>`(A) in classrooms or similar places of information; </p>
<p>`(B) by persons whose disabilities prevent attendance at such classroom or place </p>
<p>of instruction; or </p>
<p>`(C) by government offices or employees as part of their official duties or </p>
<p>employment. </p>
<p>`(b) It shall not be a violation of 1302 for a nonprofit library accessible to </p>
<p>the public to make no more than-- </p>
<p>`(1) one copy, in either analog or digital form, of all or a portion of-- </p>
<p>`(A) an undisseminated database in the library's current collection if such copy </p>
<p>is made solely for the purpose of preservation and security in connection with </p>
<p>that library's collection; and </p>
<p>`(B) a disseminated and commercially available database for the sole purpose of </p>
<p>replacing in that library's collection, material that is damaged or </p>
<p>deteriorating, or has been lost or stolen if the library has reasonably </p>
<p>determined that a replacement cannot be commercially purchased, licensed or </p>
<p>otherwise obtained, </p>
<p>provided that any copy made in digital format is neither further reproduced or </p>
<p>distributed in that format nor made available to the public outside of the </p>
<p>physical premises of that library; </p>
<p>`(2) one analog copy of all or a portion of an undisseminated database in the </p>
<p>library's current collection for the sole purpose of research use in another </p>
<p>nonprofit publicly accessible library; or </p>
<p>`(3) one analog copy of a small portion of a database in connection with </p>
<p>standard and customary library transactions, including inter-library </p>
<p>arrangements, for the benefit of a specific user who takes permanent possession </p>
<p>of that copy, if the library-- </p>
<p>`(A) has no notice that the copy would be used for purposes other than private </p>
<p>study; </p>
<p>`(B) is not aware that it is involved in related or concerted multiple or </p>
<p>cumulative copying; and </p>
<p>`(C) is not engaged in systematic activity other than through its mere </p>
<p>participation in the interlibrary arrangement. </p>
<p>`(c) Nothing in this section affects any contractual obligation assumed by the </p>
<p>library, educational institution or governmental </p>
<p>body as part of a donor, subscription, license, or other arrangement. </p>
<p>`1308. Civil remedies </p>
<p>`(a) Civil Actions.--Any person who is injured by a violation of section 1302 </p>
<p>may bring a civil action for such a violation in an appropriate United States </p>
<p>district court without regard to the amount in controversy, except that any </p>
<p>action against a State governmental entity may be brought in any court that has </p>
<p>jurisdiction over claims against such entity. </p>
<p>`(b) Temporary and Permanent Injunctions.--Any court having jurisdiction of a </p>
<p>civil action under this section shall have the power to grant temporary and </p>
<p>permanent injunctions, according to the principles of equity and upon such terms </p>
<p>as the court may deem reasonable, to prevent a violation of section 1302. Any </p>
<p>such injunction may be served anywhere in the United States on the person </p>
<p>enjoined, and may be enforced by proceedings in contempt or otherwise by any </p>
<p>United States district court having jurisdiction over that person. </p>
<p>`(c) Impoundment.--At any time while an action under this section is pending, </p>
<p>the court may order the impounding, on such terms as it deems reasonable, of all </p>
<p>copies of contents of a database extracted or used in violation of section 1302, </p>
<p>and of all masters, tapes, disks, diskettes, or other articles by means of which </p>
<p>such copies may be reproduced. the court may, as part of a final judgment or </p>
<p>decree finding a violation of section 1302, order the remedial modification or </p>
<p>destruction of all copies of contents of a database extracted or used in </p>
<p>violation of section 1302, and of all masters, tapes, disks, diskettes, or other </p>
<p>articles by means of which such copies may be reproduced. </p>
<p>`(d) Monetary Relief.--When a violation of section 1302 has been established in </p>
<p>any civil action arising under this section, the plaintiff shall be entitled to </p>
<p>recover any damages sustained by the plaintiff and defendant's profits not taken </p>
<p>into account in computing the damages sustained by the plaintiff. the court </p>
<p>shall assess such profits or damages or cause the same to be assessed under its </p>
<p>direction. In assessing profits the plaintiff shall be required to prove </p>
<p>defendant's gross revenue only and the defendant shall be required to prove all </p>
<p>elements of cost or deduction claims. In assessing damages the court may enter </p>
<p>judgment, according to the circumstances of the case, for any sum above the </p>
<p>amount found as actual damages, not exceeding three times such amount, provided </p>
<p>that the database that is the subject of the judgment has been properly </p>
<p>deposited pursuant to section 1311. the court in its discretion may award </p>
<p>reasonable costs and attorney's fees to the prevailing party and shall award </p>
<p>such costs and fees where it determines that an action was brought under this </p>
<p>chapter in bad faith against a nonprofit educational, scientific, or research </p>
<p>institution, library, or archives, or an employee or agent of such an entity, </p>
<p>acting within the scope of his or her employment. </p>
<p>`(e) Reduction or Remission of Monetary Relief for Nonprofit Educational, </p>
<p>Scientific, or Research Institutions.--The court shall reduce or remit entirely </p>
<p>monetary relief under subsection (d) in any case in which a defendant believed </p>
<p>and had reasonable grounds for believing that his or her conduct was permissible </p>
<p>under this chapter, if the defendant was an employee or agent of a nonprofit </p>
<p>educational, scientific, or research institution, library, or archives acting </p>
<p>within the scope of his or her employment. </p>
<p>`(f) Actions Against United States Government.--Subsections (b) and (c) shall </p>
<p>not apply to any action against the United States Government. </p>
<p>`(g) Relief Against State Entities.--The relief provided under this section </p>
<p>shall be available against a State governmental entity to the extent permitted </p>
<p>by applicable law. </p>
<p>`1309. Criminal offenses and penalties </p>
<p>`(a) Violation.-- </p>
<p>`(1) In general.--Any person who violates section 1302 willfully shall be </p>
<p>punished as provided in subsection (b), provided such violation-- </p>
<p>`(A) is committed for direct or indirect commercial advantage or financial gain; </p>
<p>or </p>
<p>`(B) causes loss or damage aggregating $10,000 or more in any 1-year period to </p>
<p>the person who gathered, organized, or maintained the information concerned. </p>
<p>`(2) Inapplicability.--This section shall not apply to an employee or agent of a </p>
<p>nonprofit education, scientific, or research institution, library, or archives </p>
<p>acting within the scope of his or her employment. </p>
<p>`(b) Penalties.--(1) Any person who commits an offense under subsection (a) </p>
<p>shall be punishable by a fine of not more than $100,000 or imprisonment for not </p>
<p>more than 1 year; </p>
<p>`(2) Any person who commits an offense under subsection (a) and causes loss or </p>
<p>damage aggregating $20,000 or more in any 1-year period to the person who </p>
<p>gathered, organized, or maintained the information concerned, shall be </p>
<p>punishable by a fine of not more than $250,000 or imprisonment for not more than </p>
<p>5 years; </p>
<p>`(3) Any person who commits a second or subsequent offense under subsection (a) </p>
<p>shall be punishable by a fine of not more than $500,000 or imprisonment for not </p>
<p>more than 10 years. </p>
<p>`1310. Limitations on actions </p>
<p>`(a) Criminal Proceedings.--No criminal proceeding shall be maintained under </p>
<p>this chapter unless it is commenced within three years after the cause of action </p>
<p>arises. </p>
<p>`(b) Cvil Actions.--No civil action shall be maintained under this chapter </p>
<p>unless it is commenced within three years after the cause of action arises or </p>
<p>claim accrues. </p>
<p>`(c) Additional Limitation.--No criminal or civil action shall be maintained </p>
<p>under this chapter for the extraction or use of all or a substantial part of a </p>
<p>database that occurs more than 15 years after the end of the calendar year in </p>
<p>which the portion of the database that is extracted or used was first offered </p>
<p>for sale or otherwise in commerce, by the person claiming protection under this </p>
<p>chapter or that person's predecessor in interest, after the investment of </p>
<p>resources was made that qualified that portion of the database for protection </p>
<p>under this chapter. In no case shall the renewal of protection for any part of </p>
<p>parts of an existing database owing to the substantial investment of resources </p>
<p>in updating or maintaining that database prevent any use or extraction of </p>
<p>information contained in the preexisting database at the expiration of the term </p>
<p>prescribed above, and no liability under this Chapter shall thereafter attach to </p>
<p>such acts or use or extraction. </p>
<p>`(d) Additional Defense for Database Not Deposited With the Copyright </p>
<p>Office.--In the case of a database that has not been deposited with the </p>
<p>Copyright Office before the extraction or use takes place and within one year of </p>
<p>its first offering for sale or otherwise in commerce, no civil or criminal </p>
<p>action shall be </p>
<p>maintained under this title if the person extracting or using the information </p>
<p>believed and had reasonable grounds to believe that fifteen years had elapsed </p>
<p>from the end of the calendar year in which the database was first offered for </p>
<p>sale or otherwise in commerce after the investment of resources was made that </p>
<p>qualified the portion of the database extracted or used for protection under </p>
<p>this chapter. </p>
<p>`(e) Service Provider Liability. </p>
<p>`(1) Limitation on liability: Subject to the limitations of paragraph (2), a </p>
<p>provider of online services or network access, or the operator of facilities </p>
<p>therefor, shall not be liable for a violation of section 1302 by reason of-- </p>
<p>`(A) transmitting, routing, or providing connections for, material through a </p>
<p>system or network controlled or operated by or for the service provider; </p>
<p>`(B) providing storage of that material on a system or network controlled by or </p>
<p>operated for the service provider; or </p>
<p>`(C) referring or linking users to an online location at which a database is </p>
<p>used in a manner prohibited by section 1302. </p>
<p>`(2) Conditions: The limitation on liability set forth in paragraph (1) (B) and </p>
<p>(C) shall apply, provided that-- </p>
<p>`(A) the service provider did not initially place the material on the system; </p>
<p>`(B) the service provider does not have actual knowledge that the use violates </p>
<p>section 1302 or, in the absence of such actual knowledge, is not aware of facts </p>
<p>or circumstances from which such violation is apparent; or </p>
<p>`(C) upon obtaining such knowledge or awareness, the service provider acts </p>
<p>expeditiously to remove the material, or to disable the use, to the extent such </p>
<p>removal or disablement is technically feasible, effective and economically </p>
<p>reasonable. </p>
<p>`(3) Notification of claimed violation: A service provider will be presumed to </p>
<p>have actual knowledge if it receives adequate notification of a claimed </p>
<p>violation in compliance with the requirements as set forth in section 512(c)(4) </p>
<p>of this title from a person who is injured by a violation of section 1302 or his </p>
<p>designated agents. </p>
<p>`(4) Reenabling of use: If a person claiming to be injured by a violation of </p>
<p>section 1302 does not obtain a court order enjoining the alleged violation </p>
<p>within 10 days of the service provider disabling the use, the alleged violator </p>
<p>may request the service provider to reenable the use, and upon receiving such </p>
<p>request in compliance with the requirements as set forth in section 512(f)(3) of </p>
<p>this title, the service provider may reenable the use without becoming liable </p>
<p>for a violation of section 1302. </p>
<p>`(5) Limitation on other liability: A service provider shall not be liable for </p>
<p>any claim based on the service provider's good faith removal, or disabling of a </p>
<p>use, or a database claimed to violate section 1302 or based on facts or </p>
<p>circumstances from which such violation is apparent, regardless of whether a </p>
<p>violation of section 1302 is ultimately determined to have occurred. </p>
<p>`(6) Misrepresentations: Any person who knowingly misrepresents that material or </p>
<p>activities violate section 1302 shall be liable for any damages, including costs </p>
<p>and attorneys' fees, incurred by the alleged violator or by the service provider </p>
<p>who is injured by such misrepresentation. </p>
<p>[Page: S325]</p>
<p>`1311. Deposit of databases </p>
<p>`(a) In General: Within one year from the date on which a database is first </p>
<p>offered for sale or otherwise in commerce after the investment that qualified </p>
<p>that database for protection under this chapter, a person claiming protection </p>
<p>under section 1302 for a database may deposit the database by delivering to the </p>
<p>Copyright Office a deposit copy, Statement of Deposit, and fee, as specified by </p>
<p>this section. </p>
<p>`(b) Copyright Office Regulations: The Register of Copyrights shall establish by </p>
<p>regulation procedures for the deposit of databases, including permissible </p>
<p>formats for deposit copies. </p>
<p>`(c) Deposit for Databases: The deposit for a database shall consist of one </p>
<p>complete copy of the databse and a Statement of Deposit. </p>
<p>`(1) Statement of Deposit: The Statement of Deposit shall be made on a form </p>
<p>prescribed by the Register of Copyrights and shall include-- </p>
<p>`(A) the name and address of the person claiming protection under section 1302; </p>
<p>`(B) a title or other information identifying the database; </p>
<p>`(C) a general statement of the nature of the investment qualifying the database </p>
<p>for protection; </p>
<p>`(D) the year in which the database was first offered for sale or otherwise in </p>
<p>commerce; </p>
<p>`(E) in the case of a new version or update of a database, an identification of </p>
<p>any preexisting database that it is based on or incorporates, and a general </p>
<p>statement of any additional investment covered by the new deposit; and </p>
<p>`(G) any other information regarded by the Register of Copyrights as bearing on </p>
<p>the identification of the database or the application of section 1310(c). </p>
<p>`(2) Supplementary statement of deposit: A depositor or its successor in </p>
<p>interest may file a supplementary Statement of Depsoit, to correct errors or </p>
<p>omissions in a prior Statement of Deposit for the same database, or to reflect </p>
<p>changed circumstances. </p>
<p>`(d) Fees.--The Register of Copyrights is authorized to set and adjust fees to </p>
<p>cover the reasonable costs of the deposit system for databases established by </p>
<p>this section. </p>
<p>`(e) Effect of Material False Statements: Any material false statement knowingly </p>
<p>made in a Statement of Deposit shall void the deposit of the database. </p>
<p>`(f) Issuance of Certificate and Date of Deposit: </p>
<p>`(1) The Register of Copyrights shall, upon receipt of the deposit copy, </p>
<p>Statment of Deposit, and fee specified by this section, issue to the person </p>
<p>claiming protection under section 1302 a certificate of deposit. </p>
<p>`(2) The effective date of deposit for a database is the day on which the </p>
<p>deposit copy, Statement of Deposit, and fee have all been received in the </p>
<p>Copyright Office. </p>
<p>`(g) Inspection and Copying of Records: </p>
<p>`(1) Statements of deposit: A record of all Statements of Deposit for database </p>
<p>deposited with the Copyright Office shall be maintained in the Copyright Office </p>
<p>and shall be available to the public for inspection and copying. </p>
<p>`(2) Deposit copies: </p>
<p>`(A) During the fifteen years following the end of the calendar year of the date </p>
<p>specified in the deposit statement as the date of the first offering in commerce </p>
<p>after the qualifying investment, the Copyright Office shall permit access to the </p>
<p>deposit copy of the database only upon authorization of the depositor or its </p>
<p>successor in interest, or the purposes of litigation under this chapter in </p>
<p>accordance with regulations issued by the Register. </p>
<p>`(B) Fifteen years from the end of the calendar year of the date specified in </p>
<p>the deposit statement as the date of the first offering in commerce after the </p>
<p>qualifying investment, the Copyright Office shall make the deposit copy of the </p>
<p>database available to the public for inspection and copying subject to the </p>
<p>conditions established by the Register under subsection. (C). </p>
<p>`(C) The Register shall by regulation specify conditions for access under </p>
<p>subsections (A) and (B) to the copies of databases deposited with the Copyright </p>
<p>Office, including measures to safeguard any copyrights, trade secrets, or other </p>
<p>legal rights of the depositor or its successor in interest. </p>
<p>`(3) Exclusion.--Deposit copies deposited with the Copyright Office pursuant to </p>
<p>this section are not subject to the provisions of the Freedom of Information </p>
<p>Act, 5 U.S.C. 552. </p>
<p>`(h) Effective Date.--This section and section 1310(d) shall take effect one </p>
<p>year from the date of the enactment of this Act.' </p>
<p>SEC. 4. STUDY REGARDING THE EFFECT OF THE ACT. </p>
<p>(A) In General.--Not later than 5 years after the effective date of this Act, </p>
<p>and every 10 years thereafter, the General Accounting Office, in consultation </p>
<p>with the Register of Copyrights and the Department of Justice, shall submit to </p>
<p>the Committees on the Judiciary of the Senate and the House of Representatives, </p>
<p>a report evaluating the effect of this Act. </p>
<p>(b) Elements for Consideration.--The study conducted under subsection (a) shall </p>
<p>consider-- </p>
<p>(1) The extent to which the ability of persons to engage in the permitted acts </p>
<p>under this Act has been frustrated by contractual arrangements or technological </p>
<p>measures, </p>
<p>(2) the extent to which information contained in databases that are the sole </p>
<p>source of the information contained therein is made available through licensing </p>
<p>or sale on reasonable terms and conditions; </p>
<p>(3) the extent to which the license or sale of information contained in </p>
<p>databases protected under this Act has been conditioned on the acquisition or </p>
<p>license of any other product or service, or on the performance of any action, </p>
<p>not directly related to the license or sale; </p>
<p>(4) the extent to which the judicially-developed doctrines of misuse in other </p>
<p>areas of the law have been extended to cases involving protection of databases </p>
<p>under this Act; </p>
<p>(5) the extent, if any, to which the provisions of this Act constitute a barrier </p>
<p>to entry, or have encouraged entry into, a relevant database market; </p>
<p>(6) the extent to which claims have been made that this Act prevented access to </p>
<p>valuable information for research, competition or innovation purposes and an </p>
<p>evaluation of these claims; </p>
<p>(7) the extent to which enactment of this Act resulted in the creation of </p>
<p>databases that otherwise would not exist; and </p>
<p>(8) such other matters necessary to accomplish the purpose of the report. </p>
<p>[Page: S326]</p>
<p>SEC. 5. CONFORMING AMENDMENT. </p>
<p>The table of chapters for title 17, United States Code, is amended by adding at </p>
<p>the end the following: </p>
<p>`13 Misappropriation of Databases </p>
<p>1301'. </p>
<p>SEC. 6. CONFORMING AMENDMENTS TO TITLE 28, UNITED STATES CODE. </p>
<p>(a) District Court Jurisdiction.--Section 1338 of title 28; United States Code, </p>
<p>is amended-- </p>
<p>(1) in the section heading by inserting `misappropriations of databases,' after </p>
<p>`trade-marks,'; and </p>
<p>(2) by adding at the end the following: </p>
<p>`(d) The district courts shall have original jurisdiction of any civil action </p>
<p>arising under chapter 13 of title 17, relating to misappropriation of databases. </p>
<p>Such jurisdiction shall be exclusive of the courts of the States, except that </p>
<p>any action against a State governmental entity may be brought in any court that </p>
<p>has jurisdiction over claims against such entity.' </p>
<p>(b) Conforming Amendment.--The item relating to section 1338 in the table of </p>
<p>sections for chapter 85 of title 28, United States Code, is amended by inserting </p>
<p>`misappropriations of database,' after `trade-marks,'. </p>
<p>(c) Court of Federal Claims Jurisdiction.--Section 1498(e) of title 28, United </p>
<p>States Code, is amended by inserting `and to protections afforded databases </p>
<p>under chapter 13 of title 17' after `chapter 9 of title 17'. </p>
<p>SEC. 7. EFFECTIVE DATE. </p>
<p>(a) In General.--This Act and the amendments made by this Act shall take effect </p>
<p>on the date of the enactment of this Act, and shall apply to acts committed on </p>
<p>or after that date. </p>
<p>(b) Prior Acts Not Affected.--No person shall be liable under chapter 13 of </p>
<p>title 17, United States Code, as added by section 2 of this Act, for the </p>
<p>extraction or use of all or a substantial part of a collection of information </p>
<p>for which the investment of resources which qualified the collection of </p>
<p>information for protection under this chapter occurred prior to the effective </p>
<p>date of this Act. </p>
<p>END</p>
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