DIGITAL MILLENNIUM COPYRIGHT ACT, P.L. 105-304: SUMMARY AND ANALYSIS

CRS Report for Congress
Digital Millennium Copyright Act,
P.L. 105-304:
Summary and Analysis
November 10, 1998
Dorothy Schrader
Senior Specialist
American Law Division

Congressional Research Service ˜ The Library of Congress

ABSTRACT
The Digital Millennium Copyright Act, P.L. 105-304, was enacted October 28,1998 by
passage of H.R. 2281. The Act amends and updates the Copyright Act, title 17 U.S.C. with
respect to use of copyrighted works on the Internet and in other digital, electronic contexts.
Title I implements two new intellectual property treaties (the World Intellectual Property
Organization Copyright Treaty and the World Intellectual Property Organization
Performances and Phonograms Treaty), to which the Senate gave its advice and consent to
ratification on October 21, 1998. Title II establishes certain exemptions from copyright
liability for online service and access providers. Title III exempts computer maintenance and
repair companies from copyright liability for the reproduction of a computer program that
occurs by mere activation of the computer. Title IV contains miscellaneous provisions
relating to ephemeral recordings of digital broadcasts; exemptions for preservation activities
of libraries and archives; new compulsory licenses to make ephemeral recordings of, and
to transmit, digital sound recordings; the assumption of contractual obligations relating to
motion picture collective bargaining agreements; and the rank and authority of the Register
of Copyrights and the rank of the Commissioner of Patents and Trademarks. Title V creates
federal design protection for vessel hulls, which is sunset after 2 years. This report
summarizes and analyzes the Digital Millennium Copyright Act.

Digital Millennium Copyright Act, P.L. 105-304:
Summary and Analysis
Summary
The Digital Millennium Copyright Act (DMCA), P.L. 105-304, amends the
Copyright Act, title 17 U.S.C. to legislate new rights in copyrighted works, and
limitations on those rights, when copyrighted works are used on the Internet or in
other digital, electronic environments. The Act is the outcome of several years of
congressional consideration of Internet copyright policy issues. Initially, these policy
issues were considered in the context of development of a National Information
Infrastructure. Within the last two years, with the development of two new
intellectual property treaties by the World Intellectual Property Organization
(WIPO), the focus shifted to implementation of the new treaties.
The DMCA, which generally took effect October 28, 1998, consists of five
Titles. Title I implements the new treaties — the WIPO Copyright Treaty and the
WIPO Performances and Phonograms Treaty. The Senate gave its advice and
consent to United States ratification of the Treaties on October 21, 1998. The
Copyright Treaty covers copyright protection for computer programs, those
databases that qualify as intellectual works, and digital communications over the
Internet and other computer networks. The Performances-Phonograms Treaty
extends protection to performers and producers of sound recordings that is
essentially equivalent to the protection afforded copyright subject matter by the
Copyright Treaty. Both Treaties were implemented by amendment of the Copyright
Act to create new protection against circumvention of anti-copying technologies, and
protection assuring the integrity of copyright management information (CMI)
systems.
Title II of the DMCA establishes certain exemptions from copyright liability for
online service and access providers when they act merely as “conduits” of
information transferred over their networks, without having any control over the
content of the transmission.
Title III exempts computer maintenance and repair companies from copyright
liability for the reproduction of a computer program that occurs automatically by
mere activation of the computer in order to repair or maintain the machine.
Title IV contains miscellaneous provisions relating to 1) an exemption for
ephemeral recordings of digital broadcasts; 2) a broader exemption for use of digital
technologies by libraries and archives when they engage in preservation; 3) new
compulsory licenses for making ephemeral recordings, and for the transmission, of
digital sound recordings; 4) the assumption of contractual obligations relating to
motion picture collective bargaining agreements; and 5) the rank and functions of the
Register of Copyright and the rank of the Commissioner of Patents and Trademarks.
Title V creates a new federal design right to protect vessel hulls against copying
of their artistic and utilitarian features. The boat design right terminates 2 years
after enactment.

Contents
Background ......................................................1
WIPO Treaties Implementation — Title I...............................4
Protection against Circumvention of Anti-Copying Technology.........5
Basic nature of violations...................................5
Exemptions from violations..................................6
Technological measures for analog VCR.......................7
Protection for the Integrity of Copyright Management Information.......7
Basic rights..............................................7
Exemptions ..............................................8
Civil and Criminal Remedies.....................................8
Civil remedies............................................8
Title I Studies or Reports........................................9
Encryption research........................................9
Impact on electronic commerce...............................9
Effective Date................................................9
Online Copyright Infringement Liability Limitation — Title II.............10
Digital Network Communications................................11
System Caching..............................................12
Information Storage...........................................12
Information Location Tools.....................................12
Limitations on Liability of Nonprofit Educational Institutions..........12
Teaching/research function.................................12
Non-teaching/non-research function..........................13
Injunctive Relief.............................................13
Section 512 (b)-(d) injunctive relief..........................13
Section 512(a) injunctive relief..............................14
Other Limitations on Liability...................................14
Computer Maintenance or Repair Exemption — Title III..................14
Miscellaneous Provisions — Title IV.................................15
Ephemeral Recordings of Digital Broadcasts.......................15
New Digital Audio Transmission License and New Ephemeral Recording
Statutory License.........................................16
Background .............................................16
New digital audio transmission license........................17
Ephemeral recording license................................18
Contractual Obligations Related to Transfers of Motion Picture Rights...18
Report by Comptroller General..............................19
Exemption for Libraries and Archives.............................19
Distance Education Report.....................................20
Rank and Authority of Register of Copyrights; Rank of the Commissioner of
Patents and Trademarks....................................20
Vessel Hull Design Protection — Title V..............................21
Background .............................................21

Exclusions from protection.................................22
Conclusion ......................................................23

Digital Millennium Copyright Act,
P. L. 105 - 304:
Summary and Analysis
Background
The Internet, other computer networks, and advances in electronic and digital
technologies provide unparalleled opportunities for worldwide communications and
economic growth, in the judgment of most experts. In order to tap fully the potential
of these new technologies, it is also generally agreed that legislatures will need to
confront and resolve many difficult technical and legal policy issues. The scope of
copyright protection, and any limitations on the rights of copyright owners, for the
use of copyrighted works in digital, electronic environments was addressed by the

105^th Congress in enacting the Digital Millennium Copyright Act (DMCA), P.L. 105-

304.¹

The Digital Millennium Copyright Act is the outcome of several years of
congressional consideration of copyright policy issues relating to domestic
development of the national information infrastructure (once called the “information
superhighway”; now referred to as the “Internet”), and to international development
of two new intellectual property treaties.
A Working Group on Intellectual Property of the White House National
Information Infrastructure (NII) Task Force convened a series of conferences
exploring the copyright policy issues relating to the NII. Their September 1995
report led to the introduction in the 104^th Congress of S. 1284 and H.R. 2441, which
would have implemented the Working Group’s recommendations.² Hearings were
held on the NII copyright policy issues, but the bills were not enacted.
At the international level, two new intellectual property treaties were created
by a diplomatic conference of States in Geneva, Switzerland, on December 20, 1996,
under the auspices of the World Intellectual Property Organization (WIPO). These
are the WIPO Copyright Treaty and the WIPO Performances and Phonograms

¹ The Act of October 28, 1998 consists of 5 Titles, which generally took effect on the date
of enactment, except for the technical amendments made by Title I concerning treaty
relationships and miscellaneous provisions in Title IV.
² DEPARTMENT OF COMMERCE, INTELLECTUAL PROPERTY AND THE
NATIONAL INFORMATION INFRASTRUCTURE, REPORT OF THE WORKING
GROUP ON INTELLECTUAL PROPERTY RIGHTS OF THE INFORMATION
INFRASTRUCTURE TASK FORCE (1995)

Treaty.³ The WIPO Copyright Treaty covers copyright protection for computer
programs, for databases (to the extent they are “intellectual creations”), and for
digital, electronic uses of copyrighted works in general. The WIPO Performances
and Phonograms Treaty covers protection for performers and producers of sound
recordings (called “phonograms” internationally), and generally applies the same or
equivalent protection to sound recordings as that applied to other copyright subject
matter by the WIPO Copyright Treaty.⁴
The President forwarded the two WIPO treaties to the Senate for its advice and
consent to ratification by the United States and requested the introduction of
legislation to implement the two substantive provisions of the treaties which the
Administration deemed would require legislation to satisfy the obligations of the
treaties. S. 1121 and H.R. 2281, as originally introduced, embodied the
Administration’s recommended “minimalist approach” to implementing legislation.
The bills were premised on the assumption that existing United States copyright
law was largely consistent with the treaty obligations. S. 1121 and H.R. 2281 would
have created new legal protection against devices and activities that are primarily
designed to circumvent anti-copying technologies and against fraudulent removal,
alteration, or provision of copyright management information (“CMI”). Technical
amendments were also included in the bills to update the Copyright Act’s references
to treaty relationships.
After the introduction of the Administration’s implementation bills, alternative
implementation bills were introduced (S. 1146 and H.R. 3048)⁵ that addressed
Internet copyright policy issues as well as WIPO Treaties implementation. Two other
bills (H.R. 2180 and H.R. 3209) proposed amendments solely concerning the
copyright liability of online service providers (OSPs).

³ For an overview of these treaties, see D. Schrader, World Intellectual Property
Organization Copyright Treaty: An Overview, CRS Report No. 97-444 A, and D. Schrader,
World Intellectual Property Organization Performances and Phonograms Treaty: An
Overview, CRS Report No. 97-523 A.
⁴ Two treaties, rather than one treaty, were developed because a majority of countries do
not protect sound recordings as copyright subject matter. The United States protects sound
recordings as copyright subject matter, but other countries (and especially the members of
the European Union) protect sound recordings under so-called “related” or “neighboring
rights,” unfair competition, or other non-copyright legal theories. Also, the fact of a separate
treaty for phonograms allows for the extension of protection to performers (most of whom
are not considered “authors” within the meaning of the copyright law in those countries that
protect sound recordings as copyright subject matter).
⁵ H.R. 3048 and S. 1146 contained the same proposals relating to fair use, library
reproduction, distance learning, ephemeral recordings, operational copying by computers,
and protection against removal or alteration of CMI. The provisions dealing with anti-
circumvention of copying technologies were virtually identical except for a definition of
“effective technological measure.” H.R. 3048, moreover, contained other amendments
relating to the first sale doctrine and “shrink-wrap” licenses not found in S. 1146 but did not
contain any provisions on online service provider ( OSP) liability, which were included in
S. 1146.

The Senate Judiciary Committee held hearings on S. 1121 and S. 1146 on
September 4, 1997. The House Subcommittee on Courts and Intellectual Property
held hearings on H.R. 2281 and H.R. 2180 on September 16 and 17, 1997. The
House Judiciary Committee on April 1, 1998 approved an amended version of H.R.
2281, which included the core elements of a private sector agreement on online
service provider liability.⁶ The Senate Judiciary Committee on May 11, 1998
approved a new bill, S. 2037, as a successor to S. 1121.⁷
S. 2037, which was entitled the “Digital Millennium Copyright Act of 1998,”
embodied the full private sector agreement on OSP copyright liability, made changes
in the anti-circumvention and CMI provisions, and included amendments concerning⁸
several other Internet copyright policy issues.
The Senate passed S. 2037 by unanimous voice vote on May 14, 1998.
H.R. 2281 (under the short title, the “WIPO Copyright Treaties Implementation
Act”) was subject to sequential referral to the House Commerce Committee. The
Subcommittee on Telecommunications, Trade, and Consumer Protection held a
hearing on H.R. 2281 on June 5, 1998. The full Commerce Committee made several
amendments to H.R. 2281 and reported the bill on July 22, 1998 under the short⁹
title, the “Digital Millennium Copyright Act of 1998.” This version of H.R. 2281
generally included the amendments already embodied in S. 2037 as passed by the
Senate. The Commerce Committee made additional amendments, especially
concerning anti-circumvention, fair use, the first sale doctrine, and encryption
research.
The House of Representatives passed H.R. 2281 on August 4, 1998 under the
short title, the “Digital Millennium Copyright Act of 1998.” The House-passed
version combined the Senate amendments to S. 2037 with additional amendments by
the House Judiciary and Commerce Committees. The Floor Manager’s Amendment
to H.R. 2281 also added two new forms of intellectual property protection (in

⁶ H.Rept. 105-551 (Part I), 105^th Cong., 2d Sess. (1998).
⁷ S.Rept. 105-190, 105^th Cong., 2d Sess. (1998).
⁸ The amendments embodied in S. 2037: 1) declared that nothing in the anti-circumvention
provisions enlarges or diminishes the existing doctrines of vicarious or contributory
infringement, or affects existing defenses such as fair use; 2) clarified that electronics
manufacturers have no obligation to design consumer products to achieve protection against
circumvention; 3) expanded the exemption of 17 U.S.C. 112 for ephemeral copying by
broadcasters to apply in digital contexts and to override the new anti-circumvention
measures under certain conditions; 4) expanded the exemption of 17 U.S.C. 198 for libraries
and archives to preserve copies for their collections in digital formats; 5) protected personal
privacy interests on the Internet; 6) provided exceptions from the anti-circumvention
provisions for computer interoperability, for libraries and nonprofit educational institutions
in making purchasing decisions, and with respect to the right to control access by minors to
the Internet; 7) excepted law enforcement and intelligence activities from the anti-
circumvention and CMI provisions; and 8) directed the Copyright Office to report on
distance learning and on the liability of nonprofit educational institutions and libraries when
they act as OSPs for patrons.
⁹ H.Rept. 105-551 (Part II), 105^th Cong. 2d Sess. (1998).

separate titles) that were not earlier considered part of the WIPO Treaties
implementation process. Title V incorporated the “Collections of Information
Antipiracy Act,” which had passed the House earlier as H.R. 2652. This Title would
have created 15 years of federal misappropriation-style protection for databases that
are not sufficiently creative to be eligible for copyright protection. Title VI of the
House version of H.R. 2281 would have enacted the Vessel Hull Design Protection
Act, which also passed the House as separate legislation in the form of H.R. 2696.
This Title would have created 10 years of design protection for boat hulls larger than
a rowboat and smaller than 201 feet in length.
Senate and House conferees agreed on a common bill (H.R. 2281), which
passed the Senate on October 8, 1998 and passed the House on October 12, 1998.
The Senate consented to United States ratification of the two WIPO Treaties on
October 21, 1998. The President signed H.R. 2281, the Digital Millennium
Copyright Act, into law on October 28, 1998 (P.L. 105-304).
The Digital Millennium Copyright Act consists of five Titles. Title I
implements the two WIPO treaties. Title II establishes certain exemptions from
copyright liability for online service and access providers. Title III exempts
computer maintenance and repair companies from copyright liability for the
reproduction of a computer program that occurs by mere activation of the computer.
Title IV contains miscellaneous provisions relating to ephemeral recordings of digital
broadcasts; exemptions for preservation activities of libraries and archives; new
compulsory licenses for making ephemeral recordings and transmissions of digital
sound recordings; the assumption of contractual obligations in collective bargaining
agreements between motion picture producers and artistic contributors; and the rank
and authority of the Register of Copyrights and the rank of the Commissioner of
Patents and Trademarks. Title V creates federal design protection for vessel hulls,
which sunsets after 2 years.
WIPO Treaties Implementation — Title I
Title I of the Digital Millennium Copyright Act bears the short title the “WIPO
Copyright and Performances and Phonograms Treaties Implementation Act of 1998.”
This Act amends title 17 of the U.S. Code by adding a new Chapter 12, which creates
civil and criminal liability for circumvention of copyright protection technologies
and for the knowing provision of false copyright management information (“CMI”)
or the intentional removal or alteration of CMI. The technological protection
measures typically include encryption, scrambling, passwords, and electronic
envelopes. Devices to bypass these measures are usually described as “black boxes.”

The Act also makes technical amendments to 17 U.S.C. 101,¹⁰ 104,¹¹ 104A(h),¹²¹³¹⁴

411(a), and 507(a).

Protection against Circumvention of Anti-Copying Technology
The WIPO Treaties contain “substantively identical provisions on technological
measures of protection (also commonly referred to as the ‘black box’ or
‘anticircumvention’ provisions). These provisions require contracting parties to
provide ‘adequate legal protection and effective legal remedies against the¹⁵
circumvention of effective technological measures’” used by authors and other
copyright owners to restrict unlawful access to their copyrighted works.
Basic nature of violations. New Section 1201, 17 U.S.C., implements the
“anticircumvention” obligations of the WIPO Treaties. Subparagraph (a)1(A)
provides that “[n]o person shall circumvent a technological measure that effectively
controls access to a work protected under this title [17].”
This prohibition is, however, delayed for two years after the date of enactment,
in order to allow time “for the development of a record as to how the implementation
of these technologies is affecting availability of works in the market place for non-
infringing uses,”¹⁶ and for the conduct of a rulemaking proceeding by the Librarian
of Congress. That proceeding can be repeated every 3 years. “It is anticipated that
the main focus of the rulemaking proceeding will be on whether a substantial
diminution of that availability is actually occurring in the market for particular
classes of copyrighted works....[T]he rule-making may also, to the extent required,
assess whether an adverse impact is likely to occur over the time period relevant to
each rule-making proceeding. However, the determination should be based upon
anticipated, rather than actual, adverse impacts only in extraordinary circumstances
in which the evidence of likelihood of future adverse impact... is highly specific,
strong and persuasive.” ¹⁷

¹⁰ Section 101 defines terms and phrases used in the Copyright Act.
¹¹ Section 104 specifies the “points of attachment,” i.e., the conditions under which works
by foreign nationals are eligible for copyright protection in the United States.
¹² Section 104A restored copyright in certain foreign works that fell into the public domain
in the United States because of a failure to comply with copyright formalities.
¹³ Section 411(a) makes registration with the United States Copyright Office a prerequisite
to a suit for copyright infringement for works of United States origin but excepts certain
works of foreign origin from mandatory registration.
¹⁴ Section 507 is a statute of limitations provision.
¹⁵ CONFERENCE REPORT ON THE DIGITAL MILLENNIUM COPYRIGHT ACT, 105-

796, 105^th Cong., 2d Sess. 63-64 (1998) (hereafter: “DMCA Conference Report”).

¹⁶ Section-By-Section Analysis of H. R. 2281 As Passed By the United States House of
Representatives on August 4, 1998, Committee on the Judiciary, House of Representatives,^th
105 Cong., 2d Sess. 6 (Comm. Print, Serial No. 6, 1998) (hereafter: “Sectional Analysis of
H.R. 2281, August 4, 1998").
¹⁷ Sectional Analysis of H.R. 2281, August 4, 1998, at 6 (Emphasis in original).

Section 1201(a)(2) also prohibits the manufacture, importation, offering to the
public or other trafficking in any technology, product, service, device, component
or part thereof that is primarily designed or produced to circumvent an anti-copying
system. The 2-year delay affecting subparagraph (1) does not apply to violations
of this subparagraph (2). The prohibition against manufacture or sale of devices
applies if one of three conditions is met: (1) the device is primarily designed for
circumvention; (2) the device has only a limited commercially significant purpose
other than circumvention; or (3) the device is marketed by someone who is
trafficking in circumvention devices.
Section 1201(b) creates another anticircumvention violation that parallels the
violation fixed by subparagraph (a)(2) of Section 1201. The “1201(b)” type of
violation occurs when a person who has obtained authorized access to the
copyrighted work circumvents the limits of the controls that the copyright owner has
placed on lawful access to the work. Again, the prohibition on manufacture and sale,
etc., of “black boxes” applies if one of three conditions is met — the device or
service was primarily designed for circumvention, has only a limited commercially
significant purpose other than circumvention, or is marketed by someone who
traffics in circumvention technologies.
Exemptions from violations. In the course of legislative debate on WIPO
Treaties implementation, several new or clarifying exemptions were added. Section
1201(c) declares that the circumvention provisions do not: (1) affect fair use or any
other existing limitations on copyright infringement or the existing rights and
remedies of the Copyright Act; (2) enlarge or diminish the existing doctrines of
vicarious or contributory copyright infringement; (3) obligate electronics-computer
manufacturers to design consumer products to achieve protection against
circumvention so long as the products or parts do not otherwise fall within the ban
of Section 1201(a)(2) or (b)(1); or (4) enlarge or diminish free speech or press rights
for activities using consumer electronics, telecommunications, or computer products.
Circumvention for purposes of achieving interoperability of computers and
reverse engineering by persons with access to a lawful copy are generally
permissible under Section 1201(f), unless the activities otherwise constitute
copyright infringement.
Law enforcement and intelligence activities are generally exempt from
violations of the circumvention provisions.¹⁸ Nonprofit libraries, archives, and
educational institutions are exempt for purposes of making decisions about acquiring
a copy of the work.¹⁹ Persons engaging in encryption research are generally exempt
if they lawfully obtained the encrypted copy, made a good faith effort to obtain
authorization before circumvention, and their acts are necessary to conduct
encryption research and do not otherwise constitute copyright infringement or violate
the Computer Fraud and Abuse Act of 1986.²⁰ Similarly, Section 1201(j) exempts
circumvention for purposes of legitimate security testing of a computer or computer

¹⁸ Section 1201(e), 17 U.S.C.
¹⁹ Section 1201(d), 17 U.S.C.
²⁰ Section 1201(g), 17 U.S.C.

system or network provided the acts do not constitute copyright infringement or
violate the Computer Fraud and Abuse Act of 1986.
In applying Section 1201(a) to a component or part, the court may take account
of the fact that the part has the sole purpose of preventing access by minors to
material on the Internet.²¹ Also, it is not a violation of Section 1201 (a)(1)(A) to
circumvent a technological measure that also has the purpose or capability of
collecting or disseminating personally identifying information about the online
activities of a natural person.²²
Technological measures for analog VCR. As noted, the anticircumvention
provisions generally do not require the design of consumer electronics or computer
products to achieve protection against circumvention. In a departure from that
general principle, Section 1201(k) requires that “analog video cassette recorders
must conform to the two forms of copy control technology that are in wide use in
the market today — the automatic gain control copy control technology and the²³
colorstripe copy control technology.”
The House-Senate conferees explained that this provision was included “in
order to deal with a very specific situation involving the protection of analog
television programming and prerecorded movies and other audiovisual works in
relation to recording capabilities of ordinary consumer analog video cassette
recorders. ... Before agreeing to include this requirement in the final legislation, the
conferees assured themselves in relation to two critical issues — that these analog
copy control technologies do not create ‘playability’ problems on normal consumer
electronics products and that the intellectual property necessary for the operation of
these technologies will be available on reasonable and non-discriminatory terms.”²⁴
Protection for the Integrity of Copyright Management Information
The two WIPO Treaties contain substantively identical obligations to protect
the integrity of copyright management information (“CMI”), i.e., information which
identifies the work, the author, or the owner of rights or which specifies the terms
and conditions of use. CMI also includes any identifying numbers or codes.
Basic rights. The Digital Millennium Copyright Act implements the treaty
obligations to protect CMI in the new Chapter 12 to title 17 U.S.C. The Act
generally prohibits the knowing provision, distribution, or importation of false CMI
and the intentional removal or alteration of CMI or the distribution or importation
of CMI knowing that information has been altered or removed.
The purpose of the CMI provisions is to facilitate widespread use of CMI by
copyright owners in order to make licensing of works (or obtaining permission to use

²¹ Section 1201(h), 17 U.S.C.
²² Section 1201(i), 17 U.S.C.
²³ DMCA Conference Report, 105-796 at 67.
²⁴ Id. at 68.

works) easier and more beneficial both to the public and copyright owners. Pursuant
to the WIPO Treaties, the provisions cannot, and are not, legislated as a formality
(i.e., as a condition of the exercise or enjoyment of the copyright), nor can the CMI
requirements prohibit the free movement of goods.
The new rights to protect the integrity of CMI systems apply both to analog and
digital formats. In this respect, the DMCA exceeds the minimum treaty obligations
since the WIPO Treaties require protection only for electronic rights management
information.
The prohibitions do not apply to “the ordinary and customary practices of
broadcasters or the inadvertent omission of credits from broadcasts of audiovisual
works, since such acts do not involve the provision of false CMI with the requisite²⁵
knowledge and intent.”
Exemptions. The lawfully authorized activities of law enforcement and²⁶
intelligence agencies are exempt from the CMI requirements.
Broadcasters, cable systems, and those who provide programming to these
entities are also generally exempt from liability under the CMI provisions, if they do
not intend to induce, enable, facilitate or conceal a copyright infringement.²⁷ The
conditions for applying the limitation on liability differ depending upon whether the
transmission is an analog or a digital one.
In the case of an analog transmission, an eligible person will not be liable if it
is not technically feasible to avoid the violation or if avoidance would create an
undue financial hardship.
In the case of a digital transmission, the exemption is dependent upon the status
of efforts to create voluntary standards for transmission of CMI. The Act
contemplates that voluntary standards will be developed. Until a standard is set, an
eligible person is not liable if the transmission would cause a perceptible visual or
aural degradation of the digital signal, or if the transmission would conflict with an
applicable government regulation or industry standard other than CMI standards. If
a voluntary CMI standard has been set, the eligible person will not be liable if the
CMI was not located in accordance with the industry standard.
Civil and Criminal Remedies
The Digital Millennium Copyright Act establishes nearly the same civil and
criminal remedies for violations of either the anticircumvention provisions of 17
U.S.C. 1201 or the CMI provisions of 17 U.S.C. 1202.
Civil remedies. The civil remedies for violations of the anticircumvention and
CMI provisions are found in Section 1203, 17 U.S.C. They include: injunctions,

²⁵ Sectional Analysis of H.R. 2281, August 4, 1998, at 19.
²⁶ Section 1202(d), 17 U.S.C.
²⁷ Section 1202(e), 17 U.S.C.

impoundment of infringing material or equipment, actual damages and any additional
profits of the violator not counted as part of damages or statutory damages, at the
option of the plaintiff. The statutory damages for violation of Section 1201 range
from $200-$2500 per act of circumvention. For violation of the Section 1202 CMI
provisions, the plaintiff may be awarded between $2500-$25,000 for each violation.
If there are repeated violations within a 3-year period, the court may award
triple damages. The court also has the discretion to reduce or remit damages if the
violator proves, and the court finds, the offender was not aware and had no reason
to believe that the law was violated. Under the same circumstances, in the case of
a nonprofit library, archive, or educational institution, the court must reduce or remit
damages for innocent violations.
Criminal penalties. Nonprofit libraries, archives, or educational institutions are
exempt from any criminal liability for violation of Sections 1201 or 1202.
Other violators shall be fined no more than $500,000 or imprisoned up to 5
years, or both, for first offenses. For subsequent offenses, the maximum fines and
prison time are doubled.
Title I Studies or Reports
Encryption research. New Section 1201(g) of Title 17 U.S.C., in addition to
creating certain exemptions for encryption research from the anticircumvention
provisions, also directs the Register of Copyrights and the Assistant Secretary for
Communications and Information of the Department of Commerce (hereafter: the
“Assistant Secretary for Comm.-Info”) to report back to the Congress on the effect²⁸
of the legislation on encryption research. The report, which is due 1 year after
enactment, will also assess the adequacy and effectiveness of the anti-copying
measures used by copyright owners.
Impact on electronic commerce. Section 104 of Title I directs the Register of
Copyrights and the Assistant Secretary for Comm.-Info to report back to the
Congress on the effects of Title I on the development of electronic commerce and
associated technologies. The report must also evaluate the DMCA’s effect on the
operations of the first sale doctrine of 17 U.S.C. 109 and the computer program
exemptions of 17 U.S.C. 117. This report is due within 2 years after enactment.
Effective Date
The amendments to title 17 U.S.C. made by Title I of the DMCA are generally
effective on the date of enactment, October 28, 1998. The technical amendments
relating to international treaty relationships will take effect when the United States
becomes bound by the two new WIPO Treaties. The Senate on October 21, 1998
gave its consent to United States ratification of the Treaties. The instruments of
ratification will be deposited with the Director General of WIPO in due course. The

²⁸ 17 U.S.C. 1201(g)(5).

WIPO Treaties will not enter into force, however, until 30 States have deposited²⁹
instruments of accession or ratification.
Online Copyright Infringement Liability Limitation —
Title II
The potential liability of online service and access providers (OSPs) for
infringing activities of their customers was originally one of the major controversies
regarding WIPO Treaties implementation.³⁰ The original implementation bills
recommended by the Administration did not address the issue, on the theory that,
since the Treaties themselves do not address who is liable for any copyright
infringements, the matter could be left to judicial interpretation.
That outcome was opposed by many groups including coalitions representing
the OSPs, telecommunications entities, the electronics industry, and library and
educational institutions. Without legislative guidance, these groups argued there
would be unacceptable business uncertainty and protracted litigation to delineate
who is liable for infringements by OSP customers. The issue of OSP liability was
resolved by a negotiated agreement among the private sector interests most directly³¹
affected by use of copyrighted works on the Internet. That agreement formed the
basis for most of Title II of the DMCA.
Title II of the DMCA — the “Online Copyright Infringement Liability
Limitation Act” — amends Chapter 5 of the Copyright Act by adding a new section
512 relating to limitations on OSP liability for online infringements by their
customers. The limitations on liability benefit persons or entities who act as online³²
service providers.
The Act gives a two-part definition of the term “service provider.” With respect
to digital network communications [17 U.S.C. 512(a)], a “service provider” is “an
entity offering the transmission, routing, or providing of connections for digital
online communications, between or among points specified by a user, of material of

²⁹ Three countries (Belarus, Indonesia, and The Republic of Moldova) have ratified the
Copyright Treaty. Two countries (Belarus and The Republic of Moldova) have ratified the
Performances and Phonograms Treaty.
³⁰ This Report uses “OSP” as short-hand for persons and entities who transmit, route,
provide connections, or otherwise facilitate computer network service and access for
customers without initiating or altering the content of the transmission. Although OSPs are
the main beneficiaries of the liability provisions in Title II of the DMCA, entities other than
OSPs can claim the exemption if they meet the statutory conditions.
³¹ The negotiations that culminated in an agreement on OSP copyright liability on March
31, 1998 were conducted for several years under the auspices of the Senate Judiciary
Committee and the Subcommittee on Courts and Intellectual Property of the House Judiciary
Committee. The private sector negotiators included representatives of copyright owners and
authors; the telecommunications industry, electronics industry, and computer equipment
industry; and online service providers.
³² Title II of the DMCA took effect upon enactment, October 28, 1998.

the user’s choosing, without modification to the content of the material as sent or³³
received.” The term service provider as used in subsections (b)-(j) and (l)-(m) of
section 512 means “a provider of online services or network access, or the operator
of facilities therefor,” as well as entities that meet the first part of the definition of³⁴
a “service provider.” The second part of the definition includes universities that act
as service providers, and entities that provide Internet access, e-mail, chat room, and
web page hosting services.
The Digital Millennium Copyright Act basically absolves the OSPs from
copyright liability when they merely act as “conduits” of information transferred
over their networks, without having any control over the content of the transmission.
The DMCA creates “safe harbors” from either direct, vicarious, or contributory
copyright infringement when the conditions of the exemption are met.
Upon receiving a notice of infringement that complies with statutory
requirements,³⁵ an OSP is expected expeditiously to remove, disable, or block access,
to the extent blocking is technologically feasible and economically reasonable. Upon
receipt of a counter-notice from a provider of the blocked site, the OSP shall retain
the block for 10-14 days but no longer, unless the copyright owner files suit for
copyright infringement.
The exemptions from liability apply both to network service transmissions and
to private and real-time communications services.
The Senate-House conferees reached an agreement on further limits on the
liability of nonprofit educational institutions that act as service providers.
Digital Network Communications
An OSP is not liable for monetary relief and injunctive relief is carefully
circumscribed when an OSP acts as a “mere conduit” in transmitting the copyrighted
work(s). Some of the specific restrictions to qualify for this exemption are:
!the transmission was initiated by someone other than the OSP;
!the transmission is provided through automatic, technical processes without
selection of content by the OSP;
!the OSP does not select the recipients of the copyrighted material, except as
an automatic response to provide service;

³³ Section 512 (k)(1), title 17 U.S.C.
³⁴ Ibid.
³⁵ Among other requirements, the notice must be in writing, describe the infringing material,
give information about location of infringing material on the network, identify the
copyrighted work(s), contain a sworn statement that the notice of infringement is accurate,
and be signed physically or electronically by an authorized person.

!the OSP does not maintain a copy of the copyrighted material that is
accessible to recipients for a longer period than is necessary for the
communications; and
!the material is transmitted without change.
System Caching
The OSP is not liable for monetary relief and injunctive relief is carefully
circumscribed when the copyrighted material is temporarily stored on the system or
network as part of an automatic process without change for use in refreshing,
reloading, or other updating in accordance with accepted industry standards for data
communications.
Information Storage
An OSP is not liable for monetary relief and injunctive relief is carefully
circumscribed when an OSP stores infringing material on its network at the direction
of a system user, if the OSP does not have actual knowledge of the infringement, is
not aware of facts or circumstances that make the infringement apparent, or, upon
obtaining such knowledge or awareness, acts expeditiously to remove or disable
access to the infringing material.
Information Location Tools
The standards applicable to storage of information apply generally to OSP
liability for referring or linking users to an online location that may contain
infringing material. That is, the OSP is not liable without actual knowledge or an
awareness of facts that make the infringement apparent, or if the OSP acts
expeditiously to remove or disable access upon obtaining knowledge or awareness
of an infringement.
Limitations on Liability of Nonprofit Educational Institutions
In general, a university or other nonprofit educational institution is eligible for
the same limitations on OSP liability as those described above for commercial OSPs.
In recognition, however, of the special nature of the university environment,
additional limitations on liability were added in Section 512(e). Special rules were
developed for determining whether universities are liable for the acts of faculty
members or graduate students.
Teaching/research function. Online infringing activities of faculty members
or graduate students, which occur when they are teaching or engaging in research,
will not be attributed to the university, if certain conditions are met. These conditions
are:
(l) the infringing activities must not involve online access to instructional
materials that are required or recommended for a course taught by the infringing
instructor within the last 3 years;

(2) the institution must not have received more than 2 claims of copyright
infringement concerning the particular instructor within the last 3 years; and
(3) the institution must provide to the users of its system or network materials
that accurately describe and promote compliance with copyright law.
When these conditions are met, the instructor’s knowledge or awareness of
infringing activities will not be attributed to the university.
Non-teaching/non-research function. The special rules on liability do not
apply when a faculty member or graduate student is performing a non-teaching/non-
research function (for example, when the person is exercising administrative
responsibilities or is carrying out operational responsibilities that relate to the
institution’s role as a service provider). In those cases, the knowledge, awareness,
and actions of the employee can be attributed to the university. However, in those
cases, the limitations on liability available to commercial service providers would be
available to the university.
Nothing in subsection 512(e) creates any new liability for universities under the
doctrines of respondent superior, or contributory infringement, where liability did not
exist before enactment of the DMCA. Also, “subsection (e) has no impact on the fair
use (section 107) doctrine or the availability of fair use in a university setting;
similarly, section 110 of the Copyright Act dealing with classroom performance and
distance learning is not changed by subsection (e).”³⁶
Injunctive Relief
Monetary relief is not available against a qualifying service provider and
injunctive relief is circumscribed. Section 512 (j) limits the scope of injunctive relief
that may be obtained against a qualifying service provider. Distinctions are drawn
between service providers qualifying for the limitations under Section 512 (a)
(digital communications networks) and those qualifying under Section 512 (b)-(d).
Section 512 (b)-(d) injunctive relief. Only three forms of injunctive relief may
be granted if a qualified service provider has cached, temporarily stored, or
unknowingly facilitated the location of infringing material.
1) The court may provide for the removal or blocking of infringing
materialresiding at a specific location on the provider’s network. This is
essentially an order to comply with the “removal-blocking” provisions of
Section 512 (c) (l)(C).
2) The court may order the provider to terminate service to the subscriber
who is engaging in the infringing activity.
3) In unusual cases, if the court considers it necessary, the court may grant
other injunctive relief than that specified in Clauses (l) and (2), but must

³⁶ DMCA Conference Report, 105-796 at 75-76.

determine that this relief is the least burdensome to the service provider
among comparably effective forms of relief.
Section 512(a) injunctive relief. In the case of transmission of infringing
material via transitory digital network communications, injunctive relief is further
narrowed. If a court determines that any injunctive relief is appropriate, it may
grant one or both of two forms of relief.
l) The court may order termination of service to the subscriber.
2) Where the infringement relates to a foreign online location, the court
mayenter an order to take reasonable steps to block access to a specific,
identified foreign online location.
Blocking orders are not available against a service provider qualifying under
Section 512(a) in the case of infringing activity on a site within the United States or
its territories.
In granting even this circumscribed injunctive relief, the court must first³⁷
consider new criteria relating to the digital online environment. The DMCA
prohibits most forms of ex parte injunctive relief (including temporary and
preliminary relief) against a service provider who qualifies for the Section 512
limitation on liability. An exception is made only for “orders ensuring the
preservation of evidence or other orders having no material adverse effect on the
operation of the service provider’s communications network.”³⁸
Other Limitations on Liability
The Digital Millennium Copyright Act also creates penalties for knowing,
material misrepresentations about infringing online activity; absolves OSPs of
noncopyright liability if the OSP in good faith acts to disable or remove allegedly
infringing material, subject to certain requirements for notifying the subscriber of
receipt of a statutory notice of infringement from the copyright owner; confirms that
traditional copyright defenses (such as fair use) are unaffected by an OSPs blockage
of, or failure to block, access to alleged infringing material; and provides that
copyright owners who seek the identification of the direct infringer from the OSP
must obtain a subpoena from a court.
Computer Maintenance or Repair Exemption — Title III
Title III of the DMCA enacts the “Computer Maintenance Competition
Assurance Act,” which amends Section 117 of title 17 U.S.C. Section 117 contains
certain limitations on copyright liability relating to computer programs. Title III adds
a new limitation relating to maintenance or repair of computers by independent
service organizations. The Act overturns a decision of the Ninth Circuit holding that

³⁷ Section 512 (j)(2), Title 17 U.S.C.
³⁸ Section 512 (j)(3), Title 17 U.S.C.

an independent computer service-repair company infringes the copyright in a
computer program by causing reproduction of the program through activation of the
computer, in the course of maintenance or repair work.³⁹
Under the revised Section 117 limitation, neither the owner or lessee of a
machine that makes a copy of a computer program upon activation of the machine
does not infringe the computer program copyright nor does the person authorized
to maintain or repair the machine. The copy of the computer program must be
destroyed immediately after the maintenance or repair work is completed
This Act “has the narrow and specific intent of relieving independent service
providers, persons unaffiliated with either the owner or lessee of the machine, from
liability under the Copyright Act when, solely by virtue of activating the machine in
which a computer program resides, they inadvertently cause an unauthorized copy
of that program to be made.”⁴⁰ This amendment does not affect the liability of
persons who make unauthorized adaptations, modifications or other changes to the
computer program. The amendment makes no change with respect to the scope of
the term “reproduction” as it is used in the Copyright Act.⁴¹
Miscellaneous Provisions — Title IV
Title IV of the Digital Millennium Copyright Act contains miscellaneous
provisions relating to ephemeral recordings of digital broadcasts; exemptions for the
preservation activities of libraries and archives in the digital environment: new
compulsory licenses for making ephemeral recordings and transmissions of digital
sound recordings; the assumption of contractual obligations relating to motion
picture collective bargaining agreements; and the rank and authority of the Register
of Copyrights and the rank of the Commissioner of Patents and Trademarks. The
amendment concerning motion picture contracts is made to title 28 rather than title

17. The miscellaneous provisions also mandate two studies of copyright issues —

distance education (SEC. 403) and assumption of motion picture contracts (SEC.

406).

Ephemeral Recordings of Digital Broadcasts
“Ephemeral recordings” are copies of transmission programs made by a
transmitting organization for delayed transmission and for archival purposes. Under

17 U.S.C. 112 of the copyright law in effect before enactment of the DMCA,

commercial and noncommercial broadcasters were given the benefit of an exemption
from the reproduction right to make at least one copy of a broadcast program for

³⁹ MAI Systems Corp. v. Advanced Computer Systems of Michigan, Inc., 991 F. 2d 511 (9^th
Cir. 1993).
⁴⁰ Sectional Analysis of H.R. 2281, August 4, 1998, at 41.
⁴¹ DMCA Conference Report 105-796 at 76.

delayed transmission or archival purposes.⁴² This exemption clearly applies to
analog transmissions, but its application to digital transmissions (which are now
occurring on an experimental basis) has been uncertain.
The DMCA amends 17 U.S.C. 112 and 114 to address two issues concerning
the scope of the ephemeral recording exemption in digital contexts.⁴³ One
amendment explicitly extends the Section 112 exemption to nonsubscription
broadcasts of sound recordings in digital formats.
Subscription music services, webcasters, satellite digital audio radio services
and similar entities who operate under statutory licenses for the performance of
sound recordings pursuant to 17 U.S.C. 114(f) are also entitled to make ephemeral
recordings of the sound recordings they transmit.⁴⁴
The second amendment concerns the relationship between the ephemeral
recording exemption and the anticircumvention provisions of new Section 1201 of
the Copyright Act. “Concerns were expressed that if use of copy protection
technologies became widespread, a transmitting organization might be prevented
from engaging in its traditional activities of assembling transmission programs and
making ephemeral recordings permitted by Section 112 for purposes of its own
transmissions within its local service area and of archival preservation and
security.”⁴⁵
The DMCA provides that if a broadcaster is prevented by the copyright owner’s
anti-copying measures from making the permitted ephemeral recordings, the
copyright owner must make available the necessary means to make the recording,
provided it is technologically feasible and economically reasonable to do so. If the
copyright owner fails to provide the necessary means in a timely manner in
accordance with reasonable business requirements, the broadcaster is not liable for
violation of the anti-copying measures.
New Digital Audio Transmission License and New Ephemeral
Recording Statutory License
Background. The Digital Performance Right in Sound Recordings Act of 1995⁴⁶
(“1995 Digital Audio Act”) created a limited public performance right in sound
recordings. Under existing copyright law, public performances of analog sound
recordings are not within the control of the copyright owner, i.e., analog sound
recordings can be played over radio and television or performed in other public
places without the need to obtain a license or permission from the sound recording

⁴² Noncommercial broadcasters and governmental entities can make up to 30 copies of a
broadcast program under certain conditions. 17 U.S.C. 112(b).
⁴³ SEC. 402 of Title IV of the DMCA.
⁴⁴ DMCA Conference Report 105-796 at 79.
⁴⁵ DMCA Conference Report 105-796 at 78.
⁴⁶ Pub L. 104-39, Act of November 1, 1995, which generally took effect on February 1,

1996.

copyright owner. (Of course, performance of any musical work embodied in the
recording must be licensed.) Effective February 1996, however, digital sound
recordings were granted limited rights of public performance.
Under the 1995 Digital Audio Act, public performance rights were granted in
subscription transmissions and interactive transmissions. The 1995 Act exempts
nonsubscription digital broadcasts that are not interactive. Moreover, the 1995 Act
distinguishes between interactive and noninteractive subscription performances.
Noninteractive subscription services may be eligible for a statutory license.
With respect to pay-per-listen, audio-on-demand, and similar interactive
services, copyright owners are granted an exclusive right. Interactive services must
negotiate with sound recording copyright owners to obtain the right to transmit the
sound recordings. The 1995 Act does, however, place some strict conditions on the
exclusive right relating to interactive services.
Since the enactment of the 1995 Digital Audio Act, “ services commonly known
as ‘webcasters’ have begun offering the public multiple highly-themed genre⁴⁷
channels of sound recordings [on the Internet] on a nonsubscription basis.” The
webcasters and sound recording copyright owners have disagreed about application
of the 1995 Act.⁴⁸
SEC. 405 of Title IV of the DMCA responds to this issue by adding two more
statutory licenses for digital audio transmissions of sound recordings and for making
multiple ephemeral recordings.⁴⁹ One new license applies to certain nonsubscription
and new subscription services that perform digital sound recordings. A second new
license applies to multiple “ephemeral” reproductions of sound recordings (stored
in computer system “servers”) in order to facilitate performances. The original
statutory license of the 1995 Act, in slightly modified form continues to apply to
“old” subscription services in operation on July 31, 1998, provided the pre-existing
service continues to use the same method of transmission.
New digital audio transmission license. In essence, 17 U.S.C. 114 is revised
to contain two separate statutory licenses relating to digital audio transmissions of
sound recordings. The new digital audio transmission license applies to
“webcasters” on the Internet and other new transmission services not in existence
before July 31, 1998. Pre-existing subscription services are “grandfathered” under
the original (but slightly modified) license of the 1995 Digital Audio Act.

⁴⁷ Sectional Analysis of H.R. 2281, August 4, 1998, at 50.
⁴⁸ DMCA Conference Report 105-796 at 80.
⁴⁹ The details of this second 17 U.S.C. 114 statutory license are beyond the scope of this
summary of the Digital Millennium Copyright Act. Most of the amendments to section 114
take effect upon enactment, but an obligation in Clause (ix) of section 114(d)(2)(C) relating
to identification of the sound recording during transmission does not take effect until 1 year
after enactment.

A major distinction between the “old” and the “new” digital audio license is that
the rates under the new license must be fixed at marketplace value. “In establishing
rates and terms for transmissions by eligible nonsubscription services and new
subscription services, the copyright arbitration royalty panel shall establish rates and
terms that most clearly represent the rates and terms that would have been negotiated
in the marketplace between a willing buyer and a willing seller.”⁵⁰ Rates for pre-
existing subscription services and preexisting satellite digital radio services are fixed
under different criteria that basically permit comparison of rates for comparable
services but do not require marketplace fees.⁵¹
The amendments to 17 U.S.C. 114, and the statutory licenses created by the
amendments, “are all fully subject to the safeguards for copyright owners of sound
recordings and musical works contained in sections 114(c), 114(d)(4) and 114(i),
...[and] the conferees do not intend to affect any of the rights in section 115 that were⁵²
clarified and confirmed” in the 1995 Digital Audio Act.
Ephemeral recording license. Section 112, 17 U.S.C. is amended by adding
a new paragraph (e), which creates a new statutory license for making multiple
reproductions of sound recordings embodied in an “ephemeral recording.” This new
license is intended primarily for entities that transmit “sound recordings to business
establishments pursuant to the limitation on exclusive rights set forth in section

114(d)(1)(C)(iv).” ⁵³ The new “112(e)” license is also available to Section 114(f)

licensees who want to make more than the one recording permitted by the 112(a)
exemption. Webcasters might wish to reproduce multiple recordings for use on
different computer servers “or to make transmissions at different transmission rates⁵⁴
or using different transmission software.”
As was true under the law before enactment of the DMCA, to avail itself of the
ephemeral recording provisions, the transmitting organization must have voluntary
licenses to perform any music embodied in the transmission.
Contractual Obligations Related to Transfers of Motion Picture
Rights
SEC. 406 of Title IV of the DMCA amends Part VI of title 28 U.S.C., by adding
a new Chapter 180 regulating the assumption of contractual obligations in collective
bargaining agreements between motion picture producers and the craft guilds and
unions representing contributors to motion pictures, when rights in the motion
picture are transferred.
The guilds expressed concern “about their inability to obtain residual payments
that are due to their members in situations where the producer of the motion picture

⁵⁰ Section 114(f)(2)(B), 17 U.S.C.
⁵¹ Section 114(f)(1)(B), 17 U.S.C.
⁵² DMCA Conference Report 105-796 at 89.
⁵³ DMCA Conference Report 105-796 at 89.
⁵⁴ Id. at 90.

fails to make these payments, for example, where the producer/company no longer
exists or is bankrupt.... Although the collective bargaining agreements generally
require the production company to obtain assumption agreements from distributors
that would effectively create ...privity, some production companies apparently do not⁵⁵
always do so.”
SEC. 406 of the DMCA requires that transfers of motion picture rights
negotiated after enactment, shall be deemed to incorporate the collective bargaining
agreements, if the transferee knew or had reason to know about the collective
bargaining agreements, or, if there is an existing court order against the transferor
and the transferor does not have the financial ability to satisfy the obligation within

90 days after the order is issued.

Transfers relating to the public performance right alone are, however, excluded
from the assumption of contractual obligations. Also excluded are transfers related
to security interests. Banks and other financial institutions are not subject to the
statutory assumption of obligations in collective bargaining agreements merely⁵⁶
because they obtain a security interest in the motion picture.
Report by Comptroller General. SEC. 406(h) directs the Comptroller
General, in consultation with the Register of Copyrights, to study and report to the
Congress within 2 years of enactment on the conditions in the motion picture
industry that gave rise to the amendment concerning assumption of contractual
obligations, and on the impact of the amendment on the industry.
Exemption for Libraries and Archives
SEC. 404 of the DMCA amends the library reproduction exemption of 17
U.S.C. 108 to allow libraries and archives to take advantage of digital technologies
when engaging in certain permitted activities.
Under the law in effect before enactment of the DMCA, Section 108(b)
permitted the reproduction and distribution of one copy or phonorecord of an
unpublished work solely for preservation, security, or deposit for research use in
another library or archives. With respect to published works, Section 108(c)
permitted reproduction of an entire copy or phonorecord for the purpose of replacing
a damaged, deteriorating, lost, or stolen copy if an unused replacement could not be
obtained at a fair price.
The amendments in the DMCA permit the reproduction of 3 copies or
phonorecords rather than the one copy of the former law and delete the limiting
reference to reproduction only in “facsimile” form. Any reproduction in a digital
format of an unpublished work must not be distributed in that format to the public
outside the premises of the library or archive. Also, in the case of published works,
storage in an obsolete format is added as another justification for reproduction, if a
replacement copy is unavailable at a fair price. Any digital reproduction of a

⁵⁵ Sectional Analysis of H.R. 2281, August 4, 1998, at 62.
⁵⁶ DMCA Conference Report 105-796 at 92.

published work cannot be made available to the public in the digital format outside
the premises of the library or archives in lawful possession of the copy from which
the reproduction is made. References to the “premises” of the library or archive mean
only physical premises, and do not include online websites, bulletin boards, or⁵⁷
homepages.
Another amendment eases the burden of reproducing a copyright notice as a
condition of the Section 108 exemptions. A notice already appearing on the copy
that is being reproduced should be maintained and not deleted. If the copy being
reproduced lacks a copyright notice, the library or archive simply places a legend or
notation on the copy that “this work may be protected by copyright.”
Distance Education Report
Section 110(2) of title 17 U.S.C. exempts qualifying instructional broadcasts
from copyright liability for the public performance of copyrighted works embodied
in the broadcast transmissions. Nonprofit libraries and educational institutions urged
the Congress to adapt the instructional broadcasting exemption to the Internet
environment when enacting the Digital Millennium Copyright Act. Congress
deferred this issue for further consideration after receiving a report from the Register
of Copyrights.
SEC. 403 of the DMCA directs the Register of Copyrights, after consultation
with representatives of copyright owners and nonprofit libraries and educational
institutions, to submit a report to Congress on distance education, no later than 6
months after enactment.
The report shall include recommendations “on how to promote distance
education through digital technologies, including interactive digital networks, while
maintaining an appropriate balance between the rights of copyright owners and the
needs of users of copyrighted works.”⁵⁸ Paragraph (b) of SEC. 403 lists 8 factors that
the Register shall consider in formulating recommendations.
Rank and Authority of Register of Copyrights; Rank of the
Commissioner of Patents and Trademarks
SEC. 401(a) of the DMCA amends Section 3(d) of title 35, Section 701(e) of
title 17, and Section 5314 of title 5, to create parity in the compensation paid to the
Commissioner of Patents and Trademarks and the Register of Copyrights. Both
officials will be paid at the pay fixed for level III of the Executive Schedule under
Section 5314 of title 5 of the U.S. Code.
SEC. 401(b) clarifies the duties and functions of the Register of Copyrights by
adding a new paragraph to Section 701 of title 17 U.S.C. “The new subsection... sets
forth in express statutory language the functions presently performed by the Register
of Copyrights .... Existing subsection 701(a) addresses some of the [legislative and

⁵⁷ Sectional Analysis of H.R. 2281, August 4, 1998, at 49.
⁵⁸ SEC. 403(a) of the DMCA.

executive or administrative] ... functions. New subsection 701(b) is intended to
codify the other traditional roles of the Copyright Office and to confirm the
Register’s existing areas of jurisdiction.”⁵⁹
The amendment confirms the following areas of authority and jurisdiction of the
Register of Copyrights and the Copyright Office of the Library of Congress: 1) the
longstanding role as advisor to Congress on copyright matters and all matters within
the scope of title 17; 2) the longstanding role in advising other federal agencies
(such as the State Department and U.S. Trade Representative) on the adequacy of
foreign copyright laws and as a technical consultant in bilateral, regional, and
multilateral negotiations with other countries on copyright-related issues; 3) the
longstanding role as a key participant in international meetings of various kinds,
including as part of U.S. delegations as authorized by the executive branch; and 4)
the preparation and submission to the Congress of studies and reports on various
copyright policy issues. These statutory functions and duties are illustrative and not
exhaustive.⁶⁰
Vessel Hull Design Protection — Title V
Title V of the Digital Millennium Copyright Act creates a new form of
intellectual property protection for the design of boat hulls. The “Vessel Hull
Design Protection Act” adds a new Chapter 13 to title 17 U.S.C. that protects the
design of the hull of boats larger than a rowboat and smaller than 201 feet in length
against copying. Protection extends both to the artistic and the utilitarian features.
The Vessel Hull Design Act is, however, subject to sunset 2 years after enactment.
Background. The boat design title enacts a design protection proposal that had
been considered and rejected in the form of broad design legislation for at least 20
years. The boat hull design proposal responds to a decision of the Supreme Court in⁶¹
Bonito Boats v. Thunder Craft Boats, in which the Court held that state law
protection of boat hulls was an unconstitutional interference with the federal patent
and copyright laws.
The boat hull design proposal first passed the House of Representatives as a
separate bill, H.R. 2696, and was added as a separate title to H.R. 2281 as passed by
the House on August 4, 1998. The House-Senate conferees compromised by
allowing the boat design Act to remain in H.R. 2281 as enacted, but subjected the
Act to termination after 2 years.
The Register of Copyrights and the Commissioner of Patents and Trademarks
shall submit a joint report to the Congress not later than 1 year after enactment,
evaluating the effect of the Vessel Hull Design Act.

⁵⁹ DMCA Conference Report 105-796 at 77.
⁶⁰ DMCA Conference Report 105-796 at 77-78.
⁶¹ 489 U.S. 141 (1989).

Boat design protection is intended to fill a gap that some perceive exists
between the current design patent and copyright laws. The same argument has been
made for legislation to enact a design right for useful articles in general. When
general design legislation was considered by earlier Congresses, objections from the
insurance industry, consumers, retailers, and others concerned about possible anti-
competitive effects, were sufficient to prevent enactment.
Basic boat design right. New Chapter 13 of title 17 U.S.C. is headed
“Protection of Original Designs,” although the definition of “useful article” is
intended to make clear the protection is limited to designs of boat hulls. Section 1301
creates new legal protection for the original design of a useful article, which makes
the design “attractive or distinctive in appearance.” A design is “original” if it is the
result of the designer’s own creative endeavor, and represents a “distinguishable
variation” compared to other designs. The distinguishable variation must be more
than trivial and not copied from another person.
The overall shape of a boat larger than a rowboat and smaller than 201 feet in
length can be protected against copying of its artistic or utilitarian features. The fact
that protection can extend to solely utilitarian design features is a departure from
gearlier design proposals, which would have excluded designs dictated solely by
utilitarian function.
In order to obtain boat hull design protection, an application for design
registration must be made to the Administrator (the Register of Copyrights) within

2 years after the design is made public.

The boat design right is enforced through civil remedies only. These remedies
include an injunction; actual damages or up to $50,000 or $1 a copy, as the court⁶²
considers just; the infringer’s profits; destruction of infringing articles; and
attorney’s fees to the prevailing party.
Exclusions from protection. The biggest “exclusion” from protection is
achieved by defining a useful article to mean only a “vessel hull, including a plug
or mold....” Also excluded from protection by Section 1302 are designs that are:
1) not original; 2) staple or commonplace; 3) different from staple designs only in
insignificant details or elements that are common variants; or 4) embodied in a useful
article made public by the designer/owner more than 1 year before an application for⁶³
registration is made to the Copyright Office.

⁶² Damages of $1 a copy would seem to have significance primarily for designs of useful
articles other than vessel hulls. This damages provision is another example of the way Title
V of the DMCA may lay the foundation for protection of the design of useful articles in
general.
⁶³ Section 1302 actually lists a fifth exclusion — for designs “dictated solely by utilitarian
function.” Another clause of the Vessel Hull Design Act, however, specifies that this
exclusion does not apply in the case of vessel hull designs.

Conclusion
The Digital Millennium Copyright Act, P.L. 105-304, amends the Copyright
Act, title 17 of the U.S. Code, to legislate new rights in copyrighted works — and
limitations on those rights — when those works are used on the Internet and in other
digital, electronic environments. The Act is the outcome of at least 5 years of
intensive congressional consideration of Internet copyright policy issues. Initially,
these policy issues were considered in the context of the development of a national
“information superhighway” or a national information infrastructure.
The focus shifted somewhat to international copyright policy issues and the
worldwide Internet with the creation of two new intellectual property treaties in
December 1996 under the auspices of the World Intellectual Property Organization
(WIPO). The WIPO Copyright Treaty covers copyright protection for computer
programs, those databases that qualify as intellectual works, digital communications
over the Internet, and use of copyrighted works in digital, electronic environments.
The WIPO Performances and Phonograms Treaty extends protection to performers
and producers of sound recordings that essentially is equivalent to the protection
afforded copyright subject matter by the WIPO Copyright Treaty.
Initially, the Clinton Administration and copyright owners proposed
implementation of the WIPO Treaties through a “minimalist” approach. They
advocated copyright law amendments to protect against circumvention of anti-
copying technologies and protection assuring the integrity of copyright management
information (CMI) systems. Other Internet copyright policy issues, under this
approach, would have been addressed in separate legislation at some future time or
left for resolution by the courts in copyright infringement cases.
Based on the arguments of online service providers, other telecommunications
entities, the electronics industry, libraries, and educational institutions, Congress
confronted most of the Internet copyright policy issues, and made policy choices,
in enacting the Digital Millennium Copyright Act. The Act, which generally took
effect October 28, 1998, in addition to implementing anticircumvention and CMI
protection, generally exempts online service providers from copyright liability;
exempts computer repair service companies; broadens the ephemeral recording
exemption to apply in digital contexts; creates new statutory licenses for multiple
ephemeral recordings, and transmissions, of digital sound recordings; and broadens
the application of the library reproduction exemption in digital contexts. The Act
also creates new federal design protection for vessel hulls, which sunsets after 2
years.
The Senate gave its advice and consent to the ratification by the United States
of the two WIPO Treaties on October 21, 1998. The Treaties will not come into
force, however, until 30 States deposit their instruments of ratification or accession
with the Director General of WIPO.