104TH CONGRESS; 2ND SESSION
IN THE HOUSE OF REPRESENTATIVES
AS INTRODUCED IN THE HOUSE
 

H. R. 3531
 

1996 H.R. 3531; 104 H.R. 3531

SYNOPSIS:
 A BILL To amend title 15, United States Code, to promote investment and prevent intellectual property piracy with respect to databases.

DATE OF INTRODUCTION: MAY 23, 1996
 
DATE OF VERSION: MAY 31, 1996 -- VERSION: 3
 
TEXT:

*  Be it enacted by the Senate and House of Representatives of the United*
*States of America in Congress assembled,                                *
SECTION 1. SHORT TITLE.
  This Act may be cited as the "Database Investment and Intellectual
Property Antipiracy Act of 1996".
SEC. 2. DEFINITIONS.
  "Change of commercial significance" means a change that a reasonable
user of a database would regard as affecting the quality, quantity or
value of contents of that database as a whole.
  "Commerce" means all commerce that may lawfully be regulated by
Congress.
  "Database" means a collection, assembly or compilation, in any form or
medium now or later known or developed, of works, data or other
materials, arranged in a systematic or methodical way.
  "Database maker" means the natural or juristic person making a
substantial investment, qualitatively or quantitatively, in the
collection, assembly, verification, organization and/or presentation of
the contents of the database. Unless provided otherwise by contract-
      (1) where two or more persons qualify as the makers of a database,
    they are jointly the database maker;
      (2) where a database is made by employees within the scope of their
    employment, the employer is the database maker; and
      (3) where a database is made pursuant to special order or
    commission, the person who ordered or commissioned the database is
    the database maker.
  "Database management information" means the name and other identifying
information of the database maker, the name and other identifying
information of the database owner, and terms and conditions for
extraction and use or reuse of the contents of the database.
  "Database owner" means the database maker or the natural or juristic
person who is the database maker's successor in interest.
  "Extraction" means the permanent or temporary transfer of all or a
substantial part of the contents of a database or of a copy or copies
thereof. Such transfer may be to an identical or different medium, and by
any means or in any form, now or later known or developed.
  "Governmental entity" means the United States Government, any State,
any agency or instrumentality of either, and any officer or employee of
any of the foregoing acting in his or her official capacity.
  "Insubstantial part" of a database means any portion of the contents of
a database whose extraction, use or reuse does not diminish the value of
the database, conflict with a normal exploitation of the database or
adversely affect the actual or potential market for the database.
  "Juristic person" means any firm, corporation, union, association,
non-profit institution, or other organization capable of suing and being
sued in a court of law, but does not include a governmental entity.
  "Place in commercial use" means to use or reuse, or to authorize use or
reuse, for direct or indirect commercial advantage or for financial gain.
  "Person" means any natural person, any juristic person, and any
governmental entity.
  "Use" and "reuse" means making available all or a substantial part,
qualitatively or quantitatively, of the contents of a database, or access
to all or such substantial part, whether or not for direct or indirect
commercial advantage or financial gain, by any means now known or later
developed, including any of the following: (i) marketing, selling, or
renting; (ii) in the form of permanent or temporary copies; or (iii) by
distribution, any online or other form of transmission.
SEC. 3. DATABASES SUBJECT TO THE ACT.
  (a) A database is subject to the Act if it is the result of a
qualitatively or quantitatively substantial investment of human,
technical, financial or other resources in the collection, assembly,
verification, organization or presentation of the database contents, and
(i) the database is used or reused in commerce; or (ii) the database
owner intends to use or reuse the database in commerce.
  (b) A database otherwise subject to this Act shall remain subject,
regardless of whether it is made available to the public or in commercial
use; the form or medium in which it is embodied; or whether the database
or any contents of the database are intellectual creations.
  (c) Except for a database made by a governmental entity, any database
otherwise subject to this Act, is not excluded herefrom because its
contents have been obtained from a governmental entity.
  (d) Computer programs are not subject to this Act, including without
limitation any computer programs used in the manufacture, production,
operation or maintenance of a database. However, the contents of a
database otherwise subject to this Act remain subject, notwithstanding
their direct or indirect incorporation in a computer program or other
work.
SEC. 4. PROHIBITED ACTS.
  (a) No person shall, without the authorization of the database owner-
      (1) extract, use or reuse all or a substantial part, qualitatively
    or quantitatively, of the contents of a database subject to this Act
    in a manner that conflicts with the database owner's normal
    exploitation of the database or adversely affects the actual or
    potential market for the database;
      (2) engage, notwithstanding section 5(a), in the repeated or
    systematic extraction, use or reuse of insubstantial parts,
    qualitatively or quantitatively, of the contents of a database
    subject to this Act in a manner that cumulatively conflicts with the
    database owner's normal exploitation of the database or adversely
    affects the actual or potential market for the database; or
      (3) procure, direct or commission any act prohibited by subsections
    (i) or (ii).
  (b) Acts that conflict with a normal exploitation of the database or
adversely affect the actual or potential market for the database include
but are not limited to the extraction, use or reuse of all or a
substantial part of the contents of a database-
      (1) in a product or service that directly or indirectly competes in
    any market with the database from which it was extracted; or
      (2) in a product or service that directly or indirectly competes in
    any market in which the database owner has a demonstrable interest or
    expectation in licensing or otherwise using or reusing the database;
    or
      (3) in a product or service for customers who might otherwise
    reasonably be expected to be customers for the database; or
      (4) by or for multiple persons within an organization or entity in
    lieu of the authorized additional use or reuse (by license, purchase
    or otherwise) of copies of the database by or for such persons.
SEC. 5. EXCEPTIONS TO PROHIBITED ACTS.
  (a) Subject to section 4(a)(ii), a lawful user of a database made
available to the public or placed in commercial use is not prohibited
from extracting, using or reusing insubstantial parts of its contents,
qualitatively or quantitatively, for any purposes whatsoever.
  (b) Nothing in this Act shall in any way restrict any person from
independently collecting, assembling or compiling works, data or
materials from sources other than a database subject to this Act.
SEC. 6. DURATION OF PROHIBITIONS.
  (a) A database becomes subject to this Act when the necessary
investment has been made to qualify its maker as such under section 2.
The database shall remain subject to this Act for a period of twenty-five
years from the first of January following the date when it was first made
available to the public or the date when it was first placed in
commercial use, whichever is earlier.
  (b) Any change of commercial significance, qualitatively or
quantitatively, to a database, including any such change through the
accumulation of successive additions, deletions, reverifications,
alterations, modifications in organization or presentation, or other
modifications, shall make the resulting database subject to this Act for
its own term, as calculated under subsection (a).
SEC. 7. CIVIL REMEDIES FOR VIOLATION OF SECTION 4.
  (a) CIVIL ACTIONS.-A database owner injured by a violation of section 4
may bring a civil action for such a violation in an appropriate United
States district court without regard to the amount in controversy:       *
**Provided however, *That any action against a State governmental entity
may be brought in any court that has jurisdiction over claims against
such entity.
  (b) TEMPORARY AND PERMANENT INJUNCTIONS.-Any court having jurisdiction
of a civil action arising hereunder shall have the power to grant
temporary and permanent injunctions, according to the principles of
equity and upon such terms as the court may deem reasonable, to prevent
the violation of section 4. Any such injunction granted upon hearing,
after notice to the party sought to be enjoined, by any district court of
the United States, may be served on the party against whom such
injunction is granted anywhere in the United States where such person may
be found, and shall be operative and may be enforced by proceedings in
contempt or otherwise by any United States district court having
jurisdiction over such party.
  (c) IMPOUNDMENT.-At any time while an action hereunder is pending, the
court may order the impounding, on such terms as it deems reasonable, of
all copies of contents of databases extracted and or used or reused in
violation of section 4, and of all masters, tapes, disks, diskettes, or
other articles by means of which such copies may be reproduced. The court
may, as part of a final judgment or decree finding a violation of section
4, order the remedial modification or destruction of all copies of
contents of databases extracted, used or reused in violation of section
4, and of all masters, tapes, disks, diskettes, or other articles by
means of which such copies may be reproduced.
  (d) MONETARY RELIEF.-When a violation of section 4 has been established
in any civil action arising hereunder, the plaintiff shall be entitled,
subject to principles of equity, to recover (i) defendant's profit, (ii)
any damages sustained by the plaintiff, and (iii) the costs of the
action. The court shall assess such profits or damages or cause the same
to be assessed under its direction. In assessing profits the plaintiff
shall be required to prove defendant's sales only; defendant must prove
all elements of cost or deduction claimed. In assessing damages the court
may enter judgment, according to the circumstances of the case, for any
sum above the amount found as actual damages, not exceeding three times
such amount. If the court shall find that the amount of the recovery
based on profits is either inadequate or excessive, the court may in its
discretion enter judgment for such sum as it finds just. The court in its
discretion may award reasonable attorney fees to the prevailing party.
  (e) Subsections (b) and (c) shall not apply to any action against the
United States Government.
  (f) The relief provided under this section shall be available against a
State governmental entity to the extent allowed by applicable law.
SEC. 8. CRIMINAL OFFENSES AND PENALTIES FOR VIOLATION OF SECTION 4.
  (a) Any person who violates section 4 willfully, and-
      (1) does so for direct or indirect commercial advantage or
    financial gain; or
      (2) thereby causes loss or damage to a database owner aggregating
    $10,000 or more in any one-year calendar period, shall be punished as
    provided in subsection (b).
  (b) An offense under subsection (a) shall be punishable by a fine of
not more than $250,000 or imprisonment for not more than five years, or
both. A second or subsequent offense under subsection (a) shall be
punishable by a fine of not more than $500,000, imprisonment for not more
than ten years, or both.
SEC. 9. RELATIONSHIP TO OTHER LAWS.
  (a) The remedies against violations hereunder shall be without
prejudice to any remedies under any copyright that may subsist in the
database, any contents of the database, or the selection, coordination or
arrangement of such contents. Such remedies shall not limit,
impair, or otherwise affect the existence, scope or duration of
protection under any such copyright.
  (b) Nothing in this Act shall restrict the rights of parties freely to
enter into licenses or any other contracts with respect to databases or
their contents.
  (c) Nothing in this Act shall prejudice provisions concerning
copyright, rights related to copyright or any other rights or obligations
in the database or its contents, including laws in respect of patent,
trademark, design rights, antitrust or competition, trade secrets, data
protection and privacy, access to public documents, and the law of
contract.
SEC. 10. CIRCUMVENTION OF DATABASE PROTECTION SYSTEMS.
  No person shall import, manufacture or distribute any device, product,
or component incorporated into a device or product, or offer or perform
any service, the primary purpose or effect of which is to avoid, bypass,
remove, deactivate, or otherwise circumvent, without the authority of the
database owner or the law, any process, treatment, mechanism or system
which prevents or inhibits the extraction, use or reuse of the contents
of the database in violation of section 4 hereof.
SEC. 11. INTEGRITY OF DATABASE MANAGEMENT INFORMATION.
  (a) FALSE DATABASE MANAGEMENT INFORMATION.-No person shall knowingly
provide database management information that is false, or knowingly
publicly distribute or import for public distribution database management
information that is false.
  (b) REMOVAL OR ALTERATION OF DATABASE MANAGEMENT INFORMATION.-No person
shall, without authority of the database owner or the law, (i) knowingly
remove or alter any database management information, (ii) knowingly
distribute or import for distribution database management information
that has been altered without authority of the database owner or the law;
or (iii) knowingly distribute or import for distribution copies of a
database from which database management information has been removed
without the authority of the database owner or the law.
SEC. 12. CIVIL REMEDIES FOR VIOLATION OF SECTIONS 10 OR 11.
  (a) CIVIL ACTIONS.-Any person injured by a violation of section 10 or
section 11 may bring a civil action for such violation in an appropriate
United States district court, without regard to the amount in
controversy: *Provided, however, *That any action against a State
governmental entity may be brought in any court that has jurisdiction
over claims against such entity.
  (b) POWERS OF THE COURT.-In an action brought under subsection (a), the
court-
      (1) may grant temporary and permanent injunctions on such terms as
    it deems reasonable to prevent or restrain a violation;
      (2) at any time while an action is pending, may order the
    impounding, on such terms as it deems reasonable, of any device or
    product that is in the custody or the control of the alleged violator
    and that the court has reasonable cause to believe was involved in a
    violation;
      (3) may award damages under subsection (c);
      (4) in its discretion may allow the recovery of costs by or against
    any party other than the United States or an officer thereof;
      (5) in its discretion may award reasonable attorney's fees to the
    prevailing party; and
      (6) may, as part of a final judgment or decree finding a violation,
    order the remedial modification or the destruction of any device or
    product involved in the violation that is in the custody or control
    of the violator or has been impounded under subsection (ii).
  (c) AWARDS OF DAMAGES.-
      (1) IN GENERAL.-Except as otherwise provided in this Act, a
    violator is liable for either (A) the actual damages and any
    additional profits of the violator, as provided by subsection (ii),
    or (B) statutory damages, as provided by subsection (iii).
      (2) ACTUAL DAMAGES.-The court shall award to the complaining party
    the actual damages suffered by him or her as a result of the
    violation, and any profits of the violator that are attributable to
    the violation and are not taken into account in computing the actual
    damages, if the complaining party elects such damages at any time
    before final judgment is entered.
      (3) STATUTORY DAMAGES.-
          (A) At any time before final judgment is entered, a complaining
        party may elect to recover an award of statutory damages for each
        violation of section 10 in the sum of not less than $200 or more
        than $2,500 per device, product, offer or performance of service,
        as the court considers just.
          (B) At any time before final judgment is entered, a complaining
        party may elect to recover an award of statutory damages for each
        violation of section 11 in the sum of not less than $2,500 or
        more than $25,000.
      (4) REPEATED VIOLATIONS.-In any case in which the injured party
    sustains the burden of proving, and the court finds, that a person
    has violated section 10 or 11 within three years after a final
    judgment was entered against that person for another such violation,
    the court may increase the award of damages up to triple the amount
    that would otherwise be awarded, as the court considers just.
      (5) INNOCENT VIOLATIONS.-The court in its discretion may reduce or
    remit altogether the total award of damages in any case in which the
    violator sustains the burden of proving, and the court finds, that
    the violator was not aware and had no reason to believe that its acts
    constituted a violation.
  (d) Subsections (b) (i) and (ii) shall not apply to any action against
the United States Government.
  (e) The relief provided under subsection (b) shall be available against
a State governmental entity to the extent allowed by applicable law.
SEC. 13. CRIMINAL OFFENSES AND PENALTIES FOR VIOLATION OF SECTION 11.
  Any person who violates section 11 with intent to defraud shall be
fined not more than $500,000 or imprisoned for not more than five years,
or both.
SEC. 14. LIMITATIONS ON ACTIONS.
  No action shall be maintained under this Act unless it is commenced
within three years after the database owner knew or should have known of
the claim.
SEC. 15. EFFECTIVE DATE.
  (a) This Act shall take effect immediately upon enactment, and shall be
applicable to acts committed on or after that date.
  (b) No person shall be liable under this Act for use or reuse of
database contents lawfully extracted from a database, prior to the
effective date of this Act, by that person or by that person's
predecessor in interest.