20 May 1998
Source: http://www.access.gpo.gov/su_docs/aces/aaces002.html

See related bill: http://jya.com/hr2652.txt

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[DOCID: f:hr525.105]
From the House Reports Online via GPO Access
[wais.access.gpo.gov]

105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     105-525
_______________________________________________________________________


               COLLECTIONS OF INFORMATION ANTIPIRACY ACT

                                _______


  May 12, 1998.--Committed to the Committee of the Whole House on the
              State of the Union and ordered to be printed

_______________________________________________________________________

Mr. Coble, from the Committee on the Judiciary, submitted the following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 2652]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to whom was referred the
bill (H.R. 2652) to amend title 17, United States Code, to
prevent the misappropriation of collections of information,
having considered the same, report favorably thereon with an
amendment and recommend that the bill as amended do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     5
Background and Need for Legislation..............................     6
Hearings.........................................................     9
Committee Consideration..........................................     9
Committee Oversight Findings.....................................    10
Committee on Government Reform and Oversight Findings............    10
New Budget Authority and Tax Expenditures........................    10
Congressional Budget Office Estimate.............................    10
Constitutional Authority Statement...............................    11
Section-by-Section Analysis and Discussion.......................    11
Changes in Existing Law Made by the Bill, as Reported............    22
Dissenting Views.................................................    28

  The amendment is as follows:
  Strike out all after the enacting clause and insert in lieu
thereof the following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Collections of Information Antipiracy
Act''.

SEC. 2. MISAPPROPRIATION OF COLLECTIONS OF INFORMATION.

  Title 17, United States Code, is amended by adding at the end the
following new chapter:

      ``CHAPTER 12--MISAPPROPRIATION OF COLLECTIONS OF INFORMATION

``Sec.
``1201. Definitions.
``1202. Prohibition against misappropriation.
``1203. Permitted acts.
``1204. Exclusions.
``1205. Relationship to other laws.
``1206. Civil remedies.
``1207. Criminal offenses and penalties.
``1208. Limitations on actions.

``Sec. 1201. Definitions

  ``As used in this chapter:
          ``(1) Collection of information.--The term `collection of
        information' means information that has been collected and has
        been organized for the purpose of bringing discrete items of
        information together in one place or through one source so that
        users may access them.
          ``(2) Information.--The term `information' means facts, data,
        works of authorship, or any other intangible material capable
        of being collected and organized in a systematic way.
          ``(3) Potential market.--The term `potential market' means
        any market that a person claiming protection under section 1202
        has current and demonstrable plans to exploit or that is
        commonly exploited by persons offering similar products or
        services incorporating collections of information.
          ``(4) Commerce.--The term `commerce' means all commerce which
        may be lawfully regulated by the Congress.

``Sec. 1202. Prohibition against misappropriation

  ``Any person who extracts, or uses in commerce, all or a substantial
part, measured either quantitatively or qualitatively, of a collection
of information gathered, organized, or maintained by another person
through the investment of substantial monetary or other resources, so
as to cause harm to the actual or potential market of that other
person, or a successor in interest of that other person, for a product
or service that incorporates that collection of information and is
offered or intended to be offered for sale or otherwise in commerce by
that other person, or a successor in interest of that person, shall be
liable to that person or successor in interest for the remedies set
forth in section 1206.

``Sec. 1203. Permitted acts

  ``(a) Individual Items of Information and Other Insubstantial
Parts.--Nothing in this chapter shall prevent the extraction or use of
an individual item of information, or other insubstantial part of a
collection of information, in itself. An individual item of
information, including a work of authorship, shall not itself be
considered a substantial part of a collection of information under
section 1202. Nothing in this subsection shall permit the repeated or
systematic extraction or use of individual items or insubstantial parts
of a collection of information so as to circumvent the prohibition
contained in section 1202.
  ``(b) Gathering or Use of Information Obtained Through Other Means.--
Nothing in this chapter shall restrict any person from independently
gathering information or using information obtained by means other than
extracting it from a collection of information gathered, organized, or
maintained by another person through the investment of substantial
monetary or other resources.
  ``(c) Use of Information for Verification.--Nothing in this chapter
shall restrict any person from extracting information, or from using
information within any entity or organization, for the sole purpose of
verifying the accuracy of information independently gathered,
organized, or maintained by that person. Under no circumstances shall
the information so extracted or used be made available to others in a
manner that harms the actual or potential market for the collection of
information from which it is extracted or used.
  ``(d) Nonprofit Educational, Scientific, or Research Uses.--Nothing
in this chapter shall restrict any person from extracting or using
information for nonprofit educational, scientific, or research purposes
in a manner that does not harm the actual or potential market for the
product or service referred to in section 1202.
  ``(e) News Reporting.--Nothing in this chapter shall restrict any
person from extracting or using information for the sole purpose of
news reporting, including news gathering, dissemination, and comment,
unless the information so extracted or used is time sensitive, has been
gathered by a news reporting entity for distribution to a particular
market, and has not yet been distributed to that market, and the
extraction or use is part of a consistent pattern engaged in for the
purpose of direct competition in that market.
  ``(f) Transfer of Copy.--Nothing in this chapter shall restrict the
owner of a particular lawfully made copy of all or part of a collection
of information from selling or otherwise disposing of the possession of
that copy.

``Sec. 1204. Exclusions

  ``(a) Government Collections of Information.--
          ``(1) Exclusion.--Protection under this chapter shall not
        extend to collections of information gathered, organized, or
        maintained by or for a government entity, whether Federal,
        State, or local, including any employee or agent of such
        entity, or any person exclusively licensed by such entity,
        within the scope of the employment, agency, or license. Nothing
        in this subsection shall preclude protection under this chapter
        for information gathered, organized, or maintained by such an
        agent or licensee that is not within the scope of such agency
        or license, or by a Federal or State educational institution in
        the course of engaging in education or scholarship.
          ``(2) Exception.--The exclusion under paragraph (1) does not
        apply to any information required to be collected and
        disseminated by either a national securities exchange under the
        Securities Exchange Act of 1934 or a contract market under the
        Commodity Exchange Act.
  ``(b) Computer Programs.--
          ``(1) Protection not extended.--Subject to paragraph (2),
        protection under this chapter shall not extend to computer
        programs, including, but not limited to, any computer program
        used in the manufacture, production, operation, or maintenance
        of a collection of information, or any component of a computer
        program necessary to its operation.
          ``(2) Incorporated collections of information.--A collection
        of information that is otherwise subject to protection under
        this chapter is not disqualified from such protection solely
        because it is incorporated into a computer program.

``Sec. 1205. Relationship to other laws

  ``(a) Other Rights Not Affected.--Subject to subsection (b), nothing
in this chapter shall affect rights, limitations, or remedies
concerning copyright, or any other rights or obligations relating to
information, including laws with respect to patent, trademark, design
rights, antitrust, trade secrets, privacy, access to public documents,
and the law of contract.
  ``(b) Preemption of State Law.--On or after the effective date of
this chapter, all rights that are equivalent to the rights specified in
section 1202 with respect to the subject matter of this chapter shall
be governed exclusively by Federal law, and no person is entitled to
any equivalent right in such subject matter under the common law or
statutes of any State. State laws with respect to trademark, design
rights, antitrust, trade secrets, privacy, access to public documents,
and the law of contract shall not be deemed to provide equivalent
rights for purposes of this subsection.
  ``(c) Relationship to Copyright.--Protection under this chapter is
independent of, and does not affect or enlarge the scope, duration,
ownership, or subsistence of, any copyright protection in any work of
authorship that is contained in or consists in whole or part of a
collection of information. This chapter does not provide any greater
protection to a work of authorship contained in a collection of
information, other than a work that is itself a collection of
information, than is available to that work under any other chapter of
this title.
  ``(d) Antitrust.--Nothing in this chapter shall limit in any way the
constraints on the manner in which products and services may be
provided to the public that are imposed by Federal and State antitrust
laws, including those regarding single suppliers of products and
services.
  ``(e) Licensing.--Nothing in this chapter shall restrict the rights
of parties freely to enter into licenses or any other contracts with
respect to the use of collections of information.
  ``(f) Communications Act of 1934.--Nothing in this chapter shall
affect the operation of section 222(e) of the Communications Act of
1934 (47 U.S.C. 222(e)), or shall restrict any person from extracting
or using subscriber list information, as such term is defined in
section 222(f)(3) of the Communications Act of 1934 (47 U.S.C.
222(f)(3)), for the purpose of publishing telephone directories in any
format.

``Sec. 1206. Civil remedies

  ``(a) Civil Actions.--Any person who is injured by a violation of
section 1202 may bring a civil action for such a violation in an
appropriate United States district court without regard to the amount
in controversy, except 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 under this section shall have the power
to grant temporary and permanent injunctions, according to the
principles of equity and upon such terms asthe court may deem
reasonable, to prevent a violation of section 1202. Any such injunction
may be served anywhere in the United States on the person enjoined, and
may be enforced by proceedings in contempt or otherwise by any United
States district court having jurisdiction over that person.
  ``(c) Impoundment.--At any time while an action under this section is
pending, the court may order the impounding, on such terms as it deems
reasonable, of all copies of contents of a collection of information
extracted or used in violation of section 1202, 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 1202, order the remedial
modification or destruction of all copies of contents of a collection
of information extracted or used in violation of section 1202, 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 1202 has been
established in any civil action arising under this section, the
plaintiff shall be entitled to recover any damages sustained by the
plaintiff and defendant's profits not taken into account in computing
the damages sustained by the plaintiff. 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 gross revenue only; defendant must prove all elements
of cost or deduction claims. 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. The court in its discretion may award reasonable costs and
attorney's fees to the prevailing party and shall award such costs and
fees where it determines that an action was brought under this chapter
in bad faith against a nonprofit educational, scientific, or research
institution, library, or archives, or an employee or agent of such an
entity, acting within the scope of his or her employment.
  ``(e) Reduction or Remission of Monetary Relief for Nonprofit
Educational, Scientific, or Research Institutions.--The court shall
reduce or remit entirely monetary relief under subsection (d) in any
case in which a defendant believed and had reasonable grounds for
believing that his or her conduct was permissible under this chapter,
if the defendant was an employee or agent of a nonprofit educational,
scientific, or research institution, library, or archives acting within
the scope of his or her employment.
  ``(f) Actions Against United States Government.--Subsections (b) and
(c) shall not apply to any action against the United States Government.
  ``(g) Relief Against State Entities.--The relief provided under this
section shall be available against a State governmental entity to the
extent permitted by applicable law.

``Sec. 1207. Criminal offenses and penalties

  ``(a) Violation.--
          ``(1) In general.--Any person who violates section 1202
        willfully, and--
                  ``(A) does so for direct or indirect commercial
                advantage or financial gain, or
                  ``(B) causes loss or damage aggregating $10,000 or
                more in any 1-year period to the person who gathered,
                organized, or maintained the information concerned,
        shall be punished as provided in subsection (b).
          ``(2) Inapplicability.--This section shall not apply to an
        employee or agent of a nonprofit educational, scientific, or
        research institution, library, or archives acting within the
        scope of his or her employment.
  ``(b) Penalties.--An offense under subsection (a) shall be punishable
by a fine of not more than $250,000 or imprisonment for not more than 5
years, or both. A second or subsequent offense under subsection (a)
shall be punishable by a fine of not more than $500,000 or imprisonment
for not more than 10 years, or both.

``Sec. 1208. Limitations on actions

  ``(a) Criminal Proceedings.--No criminal proceeding shall be
maintained under this chapter unless it is commenced within three years
after the cause of action arises.
  ``(b) Civil Actions.--No civil action shall be maintained under this
chapter unless it is commenced within three years after the cause of
action arises or claim accrues.
  ``(c) Additional Limitation.--No criminal or civil action shall be
maintained under this chapter for the extraction or use of all or a
substantial part of a collection of information that occurs more than
15 years after the investment of resources that qualified the portion
of the collection of information for protection under this chapter that
is extracted or used.''.

SEC. 3. CONFORMING AMENDMENT.

  The table of chapters for title 17, United States Code, is amended by
adding at the end the following:

``12. Misappropriation of Collections of Information........    1201''.

SEC. 4. CONFORMING AMENDMENTS TO TITLE 28, UNITED STATES CODE.

  (a) Jurisdiction.--Section 1338 of title 28, United States Code, is
amended--
          (1) in the section heading by inserting ``misappropriations
        of collections of information,'' after ``trade-marks,''; and
          (2) by adding at the end the following:
  ``(d) The district courts shall have original jurisdiction of any
civil action arising under chapter 12 of title 17, relating to
misappropriation of collections of information. Such jurisdiction shall
be exclusive of the courts of the States.''.
  (b) Conforming Amendment.--The item relating to section 1338 in the
table of sections for chapter 85 of title 28, United States Code, is
amended by inserting ``misappropriations of collections of
information,'' after ``trade-marks,''.

SEC. 5. EFFECTIVE DATE.

  (a) In General.--This Act and the amendments made by this Act shall
take effect on the date of the enactment of this Act, and shall apply
to acts committed on or after that date.
  (b) Prior Acts Not Affected.--No person shall be liable under chapter
12 of title 17, United States Code, as added by section 2 of this Act,
for the use of information lawfully extracted from a collection of
information prior to the effective date of this Act, by that person or
by that person's predecessor in interest.

                          Purpose and Summary

    H.R. 2652, the ``Collections of Information Antipiracy
Act,'' responds to a need to complement copyright law with a
federal misappropriation law that prevents the wholesale
copying of another's collection of information so as to harm
the market for that collection. The bill ensures incentives for
investment in the production and dissemination of collections
of information, while maintaining continued access to
information contained in such collections for public interest
purposes such as education, science and research.
    The Collections of Information Antipiracy Act prohibits the
misappropriation of commercially valuable collections by those
who pirate data collected by others through substantial effort
and expense, and use it in a way that causes market injury to
the producer of the original collection. This protection is
modeled in part on the Lanham Act, which already makes various
types of unfair competition a civil wrong under federal law.
Importantly, existing protections for collections of
information afforded by other bodies of law, most notably
copyright and contract rights, are maintained in their present
form. The bill is intended to supplement these legal rights,
not replace them.

                Background and the Need for Legislation

    Electronic collections, and other collections of factual
material, are indispensable to the American economy on the
verge of the 21st century. These information products put a
wealth of data at the fingertips of business people,
professionals, scientists, scholars, and consumers, and enable
them to retrieve from this haystack of information the factual
needles that they need to solve a particular economic,
research, or educational problem. Whether databases contain
financial, scientific, legal, medical, bibliographic, news, or
other information, they are essential tools for improving
productivity, advancing education and training, and creating a
more informed citizenry. They are also the linchpins of a
dynamic commercial information industry in the United States.
    Developing, compiling, distributing commercially
significant collections of information, and maintaining them in
current and accurate form, requires substantial investments of
time, personnel, and money. Information companies must dedicate
massive resources to gathering and verifying factual material,
presenting it in a user-friendly way, and keeping it up to date
and easily accessible to customers. U.S. firms have been the
world leaders in this field. They have brought to market a wide
range of valuable collections that meet the information needs
of businesses, professionals, researchers, and consumers
worldwide. But recent legal and technological developments
threaten to cast a pall over this progress, by eroding the
incentives for the continued investment needed to maintain and
build upon the U.S. lead in world markets for information
resources.
    Here in the U.S., the 1991 Supreme Court decision in Feist
Publications v. Rural Telephone Service Co.<SUP>1</SUP> marked
a more restrictive approach toward claims of copyright in
databases.<SUP>2</SUP> The Court definitively rejected the
longstanding ``sweat of the brow'' basis for copyright
protection of compilations that was still prevalent in certain
jurisdictions, and held that at least a minimal spark of
creativity in selection, coordination or arrangement was
required to protect a compilation under copyright. While
reaffirming that most--although not all--compilations satisfy
the ``originality'' standard, the Court emphasized that this
protection is ``necessarily thin.'' Several subsequent lower
court decisions have underscored that copyright cannot be
relied on to prevent a competitor from lifting massive amounts
of factual material from a copyrighted database to use in
preparing its own competing product.<SUP>3</SUP>
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    \1\ 499 U.S. 340 (1991).
    \2\ For a fuller explanation of the ``sweat of the brow'' doctrine,
the Feist case, and its impact see The Collection of Information
Antipiracy Hearing on H.R. 2652 before the Subcommittee on Courts and
Intellectual Property of the House Committee on the Judiciary, 105th
Cong., 1st Sess., Transcript (see testimony of Prof. Jane C. Ginsburg,
and testimony of Register of Copyrights Marybeth Peters).
    \3\ See, e.g., Warren Publ. Inc. v. Microdos Data Corp., 115 F.3d
1509 (11th Cir. 1997) (en banc); Martindale-Hubbell, Inc. v. Dunhill
Int'l List Co., No. 88-6767-CIV-ROETTGER (S.D. Fla. Dec. 30, 1994).
---------------------------------------------------------------------------
    In Europe, a six-year process culminated in the issuance of
a European Union Directive onLegal Protection of Databases in
1996. Among other things, the Directive requires member states to
create by 1998 a new, sui generis property right for databases, to
supplement copyright. But this new protection will not be extended to
U.S.-originated databases unless the U.S. is found to offer
``comparable'' protection to European databases. When fully
implemented, the European Directive could place U.S. firms at an
enormous competitive disadvantage throughout the entire European Union
market. This Act is intended to remedy that problem by providing
protection comparable to that outlined in the Directive without regard
to a database producer's country of origin. While based on a
misappropriation approach rather than a grant of property rights, this
protection addresses the core concerns of the Directive. Despite its
different theoretical basis and formulation, the Act will prevent
commercial harm to database producers and therefore ensure adequate
incentives for the continued production and dissemination of databases.
Producers of collections of information will be capable of continuing
to transfer and license their collections, and to waive the protection
provided under the Act.
    At the World Intellectual Property Organization (WIPO) in
Geneva, discussions are ongoing as to the advisability of a new
international treaty on protection for databases outside of
copyright law, although no treaty language is currently under
consideration. A previous WIPO draft treaty circulated in 1996
proposed a sui generis property right approach, similar to the
model in the European Union Directive, which is rejected in
favor of a misappropriation model in this Act.
    Other relevant developments have been technological in
nature. In cyberspace, new technology represents a threat as
well as an opportunity for collections of information, as for
other kinds of materials. Copying large quantities of materials
from another's collection, and using it in a competing
information product--behavior that copyright protection may not
effectively prevent--is cheaper and easier than ever, through
digital technology now in widespread use. Scanning permits non-
electronic collections to be digitized, and even massive
quantities of copied material can be distributed
instantaneously once in digital form.
    Various legal and technological options exist today for
producers of collections of information to protect their
investments. In 1997, the Copyright Office issued a Report on
Legal Protection of Databases, which lists these options, and
explains the benefits and shortcomings of each. Copyright, on
the federal level, and the state contract law underlying
licensing agreements, remain essential tools. But the coverage
of copyright law is limited after Feist, and the protection of
a contract binds only the parties to that contract. In at least
some jurisdictions, state misappropriation law today offers
protection to certain types of collections in certain
circumstances. State misappropriation law, however, is
unsettled and does not provide nationwide consistency.
Moreover, to the extent that it is not preempted by federal
copyright law, it is limited in scope, protecting only time-
sensitive information and only against direct
competition.<SUP>4</SUP> Other sources of protection, primarily
trademark and trade secrecy law, or technological means such as
encryption, are also available, but none is adequate to address
the crux of the problem. Moreover, a balanced statutory
solution may provide consumers with greater access to
information than the restrictive contractual terms and
technological protection measures likely to be adopted in the
absence of adequate legal protections. In sum, there are
meaningful gaps in protection that can best be filled by a new
federal statute.
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    \4\ See National Basketball Ass'n v. Motorola, Inc., 105 F.3d 841
(2d Cir. 1997).
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    When all of these legal and technological factors are added
together, the bottom line is clear: there is a need to act to
ensure adequate incentives for continued investment in the
production and dissemination of collections of information.
Already today, the lack of appropriate protection has begun to
have a negative impact, with several court decisions that have
resulted in serious damage to markets, and producers exhibiting
a reluctance to make their products widely available over the
Internet or in other easily copied formats. As noted by the
Register of Copyrights in her testimony, appropriately
delineated incentives should cause the public to benefit
overall from increased availability of greater quantities of
more accurate information. New federal legislation can serve to
improve the market climate for collections of information in
the U.S.; ensure protection for U.S. collections abroad on an
equitable basis; place the U.S. on the leading edge of an
emerging international consensus; and provide a balanced and
measured response to the new challenges of cyberspace.
    The Collections of Information Antipiracy Act is such a
balanced proposal. It is aimed at actual or threatened market
injury from misappropriation of collections of information. The
goal is to stimulate the creation of more collections, as well
as increased dissemination to the public, and to encourage more
competition among producers. The bill avoids conferring a
monopoly on facts, or providing a breadth of protection that
would be inconsistent with these goals.
    This bill differs significantly in approach and scope of
coverage from H.R. 3531, introduced in the last Congress by
then-Chairman Carlos Moorhead. H.R. 3531 proposed to enact a
new form of sui generis exclusive property right in collections
of information. In response to the concerns raised by
interested parties and outlined in the Copyright Office Report
on Legal Protection for Databases, H.R. 2652 adopts a different
model for protection. It represents a minimalist approach
grounded in the misappropriation branch of unfair competition
law, focusing more precisely on the damage that can be done
from substantial takings from collections of information. It
also contains several additional provisions responsive to
concerns of users, including more exceptions to and exclusions
from the prohibition; specific definitions of important terms
to clarify and narrow its coverage; a statute of limitations
provision that limits the duration of the prohibition and
prevents ``perpetual'' protection; and a reduction or
elimination of civil and criminal penalties that could have a
negative impact on public interest uses.
    The bill would prohibit the extraction or the use in
commerce of all or a substantial part of a collection of
information in a manner which causes harm to the market of the
producer of the collection. Those who violate this act would be
liable to the producer of the collection for damages in an
amount equal to that the producer's damages plus any additional
profits of the defendant, with the possibility of costs and
attorney's fees, and could be held criminally liable in
appropriate circumstances.
    In essence, the Act would restore a modified form of the
``sweat of the brow'' protection available in the past as a
separate doctrine and then under copyright law, but under
appropriate Constitutional power and with appropriate
limitations. Enactment of the bill is within Congress'
authority to regulate interstate commerce under Article I,
Section 8, Clause 3 of the Constitution. The form of protection
provided is sufficiently different from copyright so as to
avoid constitutionality issues under the Supreme Court's
interpretation of the Patent and Copyright Clause in Feist. The
Act does not create a property right like copyright, but rather
a tort-based cause of action against misappropriation, founded
on proof of market harm.<SUP>5</SUP> It promotes different
policies and by different means, encouraging investment rather
than creativity and does so through a prohibition of harmful
conduct rather than a grant of exclusive control regardless of
harm. It is a form of unfair competition law, which like
trademark and trade secrecy law is within Congress' commerce
power.<SUP>6</SUP>
---------------------------------------------------------------------------
    \5\ The Collection of Information Anti-Piracy Act: Hearing on H.R.
2652 before the Subcommittee on Courts and Intellectual Property of the
House Committee on the Judiciary, 105th Congress., 1st Sess, Transcript
at 70 (Testimony of Prof. Jane C. Ginsburg).
    \6\ See The Collection of Information Antipiracy Hearing on H.R.
2652 before the Subcommittee on Courts and Intellectual Property of the
House Committee on the Judiciary, 105th Cong., 1st Sess, Transcript
(see testimony of Prof. Jane C. Ginsburg, and testimony of Register of
Copyrights Marybeth Peters).
---------------------------------------------------------------------------

                                Hearings

    The Subcommittee on Courts and Intellectual Property
conducted two days of legislative hearings on this legislation
on October 23, 1997 and on February 12, 1998. Testifying on
October 23 were Marybeth Peters, Register of Copyrights, U.S.
Copyright Office; Paul Warren, Executive Publisher, Warren
Publishing Incorporated; Laura D'Andrea Tyson, Professor,
University of California at Berkeley, former National Economic
Advisor to the President, and former Chair of theWhite House
Counsel of Economic Advisors; James G. Neal, Sheridan Director of the
Milton S. Eisenhower Library at John Hopkins University; Dr. William A.
Wulf, President, National Academy of Engineering on behalf of the
National Research Council; Professor Jerome Reichman, Senior Advisor to
the National Research Council; and Dr. Robert S. Ledley, Director of
Medical Computing, Biophysics Division, Georgetown University Medical
Center. Testifying on February 12 were Robert Aber, Senior Vice
President and General Counsel, NASDAQ Stock Market; Dr. Debra W.
Stewart, Dean of the Graduate School, North Carolina State University,
on behalf of the Association of American Universities; Dr. Richard
Corlin, Speaker of the House of Delegates, American Medical
Association; William Hammack, President of the Sunshine Pages;
Professor Jane Ginsberg, Columbia University School of Law; Jonathan
Band, on behalf of the On-Line Banking Association; and Tim Casey, for
the Information Technology Association of America.

                        Committee Consideration

    The Subcommittee on Courts and Intellectual Property
conducted a markup on this legislation on March 18, 1998. The
Subcommittee reported the bill, H.R. 2652, as amended, to the
full Committee, by voice vote, a quorum being present. On March
24, 1998, the Committee conducted a markup and reported the
bill, H.R. 2652, as amended, to the House by voice vote, a
quorum being present.

                      Committee Oversight Findings

    In compliance with clause 2(l)(3)(A) of rule XI of the
Rules of the House of Representatives, the Committee reports
that the findings and recommendations of the Committee, based
on oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.

         Committee on Government Reform and Oversight Findings

    No findings or recommendations of the Committee on
Government Reform and Oversight were received as referred to in
clause 2(l)(3)(D) of rule XI of the Rules of the House of
Representatives.

               New Budget Authority and Tax Expenditures

    Clause 2(l)(3)(B) of House rule XI is inapplicable because
this legislation does not provide new budget authority or
increased tax expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 2(l)(3)(C) of rule XI of the
Rules of the House of Representatives, the Committee sets
forth, with respect to H.R. 2652, the following estimate and
comparison prepared by the Director of the Congressional Budget
Office under Section 403 of the Congressional Budget Act of
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, April 14, 1998.
Hon. Henry J. Hyde,
Chairman, Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 2652, the
Collections of Information Antipiracy Act.
    If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts for this
estimate are Mark Grabowicz (for federal costs) and Pepper
Santalucia (for the state and local impact).
            Sincerely,
                                         June E. O'Neill, Director.
    Enclosure.

H.R. 2652--Collections of Information Antipiracy Act

    CBO estimates that enacting this legislation would have no
significant impact on the federal budget. While the bill could
lead to increases in both direct spending and receipts, the
amounts involved would be less than $500,000 a year. Because
H.R. 2652 could affect direct spending and receipts, pay-as-
you-go procedures would apply.
    H.R. 2652 would attempt to protect substantial investments
made in the collecting of information or the establishing of
databases with commercial value. The legislation generally
would prohibit the misappropriation of a substantial portion of
such information in a way that would decrease its potential
market value. Violators of the bill's provisions would be
subject to a criminal fine, imprisonment, or civil action.
    Because H.R. 2652 would establish a new federal crime, CBO
anticipates that the U.S. government would be able to pursue
cases that it otherwise would be unable to prosecute. Based on
information from the Department of Justice, however, we do not
expect the government to pursue many additional cases. Thus,
CBO estimates that enacting the bill would not have a
significant impact on the cost of federal law enforcement
activity. Implementing the bill also could increase costs to
the federal courts if more civil suits are filed by private
parties, but we do not expect many additional cases. Any
additional costs to federal law enforcement agencies or to the
federal courts would be subject to the availability of
appropriated funds.
    Enacting H.R. 2652 could increase governmental receipts
from fines, but we estimate that any such increase would be
less than $500,000 annually. Criminal fines are deposited as
revenues in the Crime Victims Fund and spent in the following
year. Thus, any change in direct spending from the fund would
match the increase in revenues with a one-year lag.
    H.R. 2652 would impose an intergovernmental mandate as
defined in the Unfunded Mandates Reform Act of 1995 (UMRA),
because it would preempt state laws regarding the protection of
collections of information. However, CBO estimates that
complying with this mandate would not have a significant impact
on state budgets. The bill contains no private-sector mandates
as defined in UMRA.
    The CBO staff contacts for this estimate are Mark Grabowicz
(for federal costs) and Pepper Santalucia (for the state and
local impact). This estimate was approved by Robert A.
Sunshine, Deputy Assistant Director for Budget Analysis.

                   Constitutional Authority Statement

    Pursuant to rule XI, clause 2(l)(4) of the Rules of the
House of Representatives, the Committee finds the authority for
this legislation in Article I, section 8, clause 3 of the
Constitution.

                      Section-by-Section Analysis

                      1. Section One--Short Title

    The short title of the act will be the ``Collections of
Information Antipiracy Act.''

          2. Section Two--Prohibition Against Misappropriation

    Section 1202 sets out the central prohibition of the Act.
It states that any person who extracts, or uses in commerce,
all or a substantial part of a collection of information of
another so as to cause harm to that other person's actual or
potential market for a product or service is liable for the
remedies established in this act. To be eligible for
protection, the collection of information must be gathered,
organized, or maintained through the investment of substantial
monetary or other resources. The maintenance that is referred
to may include updating or ongoing verification of the
information collected. In order to qualify, the investment must
be substantial, whether it consists of money, time, or effort.
The protection would extend to any successor in interest of the
person that produced the collection of information.
    The use of a substantial part of a collection of
information cannot be unlawful under this act unless it is a
use made in commerce. Accordingly, the use of information for
purely private purposes, without a nexus to commerce such as
dissemination to others, would not be prohibited. The intent of
the Committee is to ensure that those with lawful access to a
collection have the ability freely to use its contents for
purposes of noncommercial internal study, research or analysis.
In contrast, the act of extraction itself could fall within the
prohibition of the bill even if it is noncommercial and
private, in order to safeguard against the destruction of a
market from the members of the intended market simply
downloading a collection for their own use without
authorization or payment.
    The prohibition of the Act applies only if either the
entire collection, or a substantial part of the collection, is
taken. The intent is to prohibit piratical takings that
misappropriate the value of the collection itself, rather than
particular items of information it contains. Since the taking
of a substantial part of a collection may seriously harm the
collection's market, the prohibition cannot be limited to the
taking of the entire collection. Only portions of the
collection that are substantial in amount or importance to the
value of the collection as a whole would be covered.
Qualitative harm may occur through the extraction of a
quantitatively small but valuable portion of a collection of
information. For example, the Physician's Desk Reference, a
work that compiles generally available information about every
prescription drug approved by the FDA, contains some several
thousand drugs and is available to both consumers and medical
professionals. If a second comer extracted information about
the thousand most commonly prescribed medications and offered
it for sale to the general public--for example under the title
``Drugs Every Consumer Should Know''--that extraction and use,
although a fraction of the total collection of information,
would cause the kind of market harm that the Committee intends
H.R. 2652 to prevent. Similarly, the extraction or use of real-
time quotes for all technology stocks from a securities
database, while constituting a relatively small portion of
actively traded or volatile securities, may be of such
``qualitative''importance to the value of the database that it
creates the type of commercial harm that the Committee intends section
1202 to prevent.
    Under the misappropriation approach of this bill, liability
is premised on harm to the actual or potential market for the
collection of information. The element of market harm is
therefore critical, and should be properly understood.
Misappropriation under the chapter occurs only if the
extraction or use in commerce directly causes harm to the
actual or potential market for a collection of information
produced by the aggrieved person. Clearly, extracting
information from a database and using it in a new database
which competes with the first database causes harm to the
actual market for the first database. Similarly, if a person
extracts so much of an online database that the person would be
able, in the future, to avoid paying a subscription fee for
access to the data it contains, that person has harmed the
market for the database.
    The prohibition is written so as to avoid preventing
consumer, scientific, or educational uses of information which
has been acquired through lawful access. It would not, for
example, prevent scientists from sharing data sets, or
publishing the results of their analysis of data, since such
acts do not ordinarily involve use in commerce that would harm
the market for the database. Nor is the Act intended to cover
indirect harm to the market for a product. For example, a
chemical company which uses the information in a database (for
which it paid) to create a new chemical which revolutionizes a
segment of the industry, and thereby diminishes demand for the
database by decreasing the number of companies in the industry,
has not misappropriated information within the meaning of this
chapter. The harm to the market was not directly caused by the
use of the information, but by the changes to the industry that
came about through the effect of the use of the information.
    Section 1201 provides several definitions. It defines
``collection of information'' to mean information that has been
collected and has been organized for the purpose of bringing
discrete items of information together in one place or through
one source so that users may access them. The definition is
intended to avoid sweeping too broadly, particularly in the
digital environment, where all types of material when in
digital form could be viewed as collections of information. It
makes clear that the statute protects what has been
traditionally thought of as a database, involving a collection
made by gathering together multiple discrete items with the
purpose of forming a body of material that consumers can use as
a resource in order to obtain the items themselves. This is in
contrast to elements of information combined and ordered in a
logical progression or other meaningful way in order to tell a
story, communicate a message, represent something, or achieve a
result. Thus, a novel would not be considered a ``collection of
information'' even if it appears in electronic form, and
therefore could be described as made up of elements of
information that have been put together in some logical way.
Similarly, material such as interface specifications would not
ordinarily be covered, although a collection of such
specifications created in order to provide consumers access to
the individual specifications could be covered. The term ``in
one place or through one source'' denotes the availability of
the information to consumers in a single material object or
through a specific address, location or other source. It does
not require that all of the information be present at any
particular physical site.
    The section also contains a definition of ``potential
market,'' which means ``any market that a person claiming
protection under section 1202 has current and demonstrable
plans to exploit or that is commonly exploited by persons
offering similar products or services incorporating collections
of information.'' This definition, which is drawn from judicial
interpretations of the fair use doctrine under copyright law,
is intended to clarify that ``potential market'' is not to be
interpreted in a circular way, so that any market that the
producer of the collection could someday exploit is deemed a
potential market sufficient to lead to liability.
    ``Information'' is defined to mean facts, data, works of
authorship, or other intangible material capable of being
collected and organized in a systematic way. It is important to
ensure that databases made through substantial investments in
collecting and organizing copyrightable works of authorship,
which will be a critical source of entertainment and
educational material for consumers on the Internet, may be
protected under this Chapter.
    Paragraph (4) defines ``commerce'' as all commerce which
may be lawfully regulated by the Congress. Given the breadth of
this definition, a collection of information that is utilized
within a particular organization or group of customers, but not
made available to the general public, may qualify for
protection under this Chapter as ``offered or intended to be
offered for sale or otherwise . . . in commerce.'' Since many
collections will be disseminated through licensing mechanisms,
the relevant offer is not limited to one made for sale.

                    3. Section 1203--Permitted Acts

    Section 1203 sets out a list of acts that are permitted
despite the language of the prohibition in section 1202. These
permitted acts are designed for public policy purposes, to
ensure that the statute does not have the unintended effect of
providing ownership of information itself, or impeding
appropriate and beneficial types of uses.
    Subsection (a) makes clear that the extraction or use of
individual items of information is not prohibited. This is
crucial in establishing that this legislation does not allow
the producer of a collection to ``lock up'' individual pieces
of information contained in the collection. The second sentence
ensures that a single item in a collection cannot be considered
either quantitatively or qualitatively substantial so as to
give rise to liability under section 1202, even if it is in
itself a valuable copyrighted work. On the other hand, this
subsection would not excuse the extraction or use of many
individual items in a repeated or systematic way, in order to
evade the prohibition against extraction of a substantial
portion.
    Subsection (b) further clarifies that the act does not
grant protection of the information itself, despite its
inclusion within a collection. Others remain free to
independently gather and use the same information which is
contained in another's collection of information, whether for
their own use or to produce a competing collection.
    Subsection (c) exempts the use of information for purposes
of verifying the accuracy of information independently gathered
by the verifier. This concept stems from the early ``sweat of
the brow'' copyright cases, which permitted subsequent
compilers to use earlier compilations to verify the fruits of
their own independent labor.<SUP>7</SUP> Potential abuse is
avoided by the limitations in the subsection requiring the
information to be used only internally, not for distribution to
others, and for the sole purpose of verifying accuracy rather
than adding to or supplementing the information in the
verifier's own collection. The exemption will be particularly
important for scientists and other researchers, permitting them
to use collections of information produced by others to check
the results of their research.
---------------------------------------------------------------------------
    \7\ See Illinois Bell Tel. Co. v. Haines & Co., 683 F. Supp. 1204
(N.D. Ill. 1988), aff'd, 905 F.2d 1081 (7th Cir. 1990), vacated and
remanded, 499 U.S. 944 (1991); Rural Tel. Serv. Co. v. Feist
Publications, Inc., 916 F.2d 718 (10th Cir. 1990).
---------------------------------------------------------------------------
    It will also be important for the securities and
commodities industries, where it is a common practice to verify
the current market as part of placing an order for a security
or commodity. For example, investors frequently decide to
purchase investments through an online securities trading
system that they have followed by means of a delayed data
service. Typically, the online trading system will allow the
investor to verify electronically the last sale price or
prevailing quote for the investment as a last step before the
investor places the buy order--called a ``market check'' or
``market verification'' service. In today's marketplace,
providers of these services distribute millions of real-time
quotations each month, aiding individuals by allowing them to
attain easy and quick access to accurate information on which
to decide whether to invest or trade in without unduly
burdening them with the costs that would be associated with
accessing a continual stream of real-time data. This subsection
seeks to maintain the status quo and not to supercede any
agreements with market verification services concerning the use
of market quotation information. This provision permits the
extraction of information for verification purposes unless it
harms the market for those collections of information. Nothing
in this subsection would permit delayed data subscribers to
avoid fees when they verify delayed data by retrieving a real
time price, a practice which is widespread within the industry.
    This subsection is not intended to allow unscrupulous
pirates to extract and use real-time quotations of securities
and commodities markets and clearing organizations without the
permission of the securities and commodities markets that
gather, organize and maintain that information. Such activities
are not undertaken for legitimate accuracy verification
purposes.
    Subsection (d) seeks to alleviate the concerns expressed by
members of the research, scientific, and university communities
that any new protection for collections of information would
hinder their ability to carry on basic research. The subsection
recognizes the value and importance of nonprofit educational,
scientific and research purposes, permitting the extraction or
use of information for such purposes as long as doing so does
not harm the market for the original product or service.
Ordinarily such uses will not cause market harm; it is
typically where the user is a member of the intended market for
the collection that the bill's prohibition would be called into
play. The act also supplements this limitation by providing
special relief for nonprofit educational, scientific or
research institutions, libraries and archives, from substantial
civil and criminal liability under the Act. As described below,
such an institution is exempt from criminal liability and
entitled to a reduction or remittal of monetary relief for good
faith conduct, and may also obtain attorney's fees and costs
when sued in bad faith.
    This provision seeks to maintain the status quo in relation
to how academic institutions use market quotations. Security
and futures markets and clearing organizations have
traditionally made available unprecedented portions of their
collections of information to academics and researchers and
will continue to do so under the belief that such activity is
in the pubic interest to do so. For example, a university
professor could not open an account with a brokerage firm which
grants access to real time quotations and subsequently
disseminate those quotations university wide to the extent that
he or she replicate a real time service. Such activity would
fall outside of the permitted acts under this subsection.
    Section 1203(e) is premised on the Committee's cognizance
of the essential role that the press plays in our
constitutional system. This subsection reflects the Committee's
intent that the act neither inhibit legitimate news gathering
activities nor permit the labeling of conduct as ``news
reporting'' as a pretext for usurping a compiler's investment
in collecting information.<SUP>8</SUP>
---------------------------------------------------------------------------
    \8\ Cf. Wainwright Sec. v. Wall Street Transcript Corp., 558F.2d 91
(2d Cir. 1977).
---------------------------------------------------------------------------
    For purposes of this subsection, ``news reporting'' should
be construed to mean dissemination of news to the public,
including sports scores and statistics, without regard to the
means through which it is disseminated, whether by print media
such as newspapers, by television news programs, or online.
    The Committee expects that news reporting will seldom fall
within the prohibition of section 1202, and therefore this
exemption will rarely need to be invoked. News articles
typically use particular items of information from a collection
rather than the collection as a whole. Even if substantial
portions of a collection are used, the use often will not
affect the market for the collection and therefore will not
implicate section 1202.
    Section 1203(e) is applicable only if the extraction or use
of all or a substantial part of another's collection of
information is ``for the sole purpose of news reporting or
comment.'' Courts should be ``chary of deciding what is and
what is not news,'' <SUP>9</SUP> and should examine, on a case-
by-case basis, whether a claim under this provision is
justified. In some circumstances, the amount taken from the
collection may be relevant to a determination of whether the
defendant's sole purpose was in fact news reporting. For
example, the republication of an entire collection of
information as an insert to a newspaper would not usually be
excused by the mere fact that the newspaper as a whole is
engaged in news reporting, or by the inclusion of an article
related to the subject matter of only one distinct portion of
the collection. Courts should, however, avoid second-guessing
how much information is appropriate to use for a valid news
reporting purpose.
---------------------------------------------------------------------------
    \9\ Harper & Row, Publishers, Inc. v. Nation Enterprises, Inc., 723
F.2d 197, 215 (2d Cir. 1983) (Meskill, J., dissenting), rev'd on other
grounds, 471 U.S. 539 (1985).
---------------------------------------------------------------------------
    This provision seeks to maintain the status quo in relation
to how news operations use market quotations. While security
and futures markets and clearing organizations have
traditionally allowed news organizations to use market data in
a reasonable manner that legitimately contributes to the news
functions, this section would not allow news organizations to
replicate real time quote services which harm the market for
those collections of information. For example, an entity which
establishes itself as a news service and opens an account with
a brokerage firm which grants access to real time quotations
and subsequently disseminates those quotations to the public to
such an extent that it would replicate a real time service
would not be protected from the prohibition contained in
section 1202 by this subsection.
    The final clause of this subsection, excepting from its
application a consistent pattern of competitive takings of
time-sensitive information, is intended to preserve the holding
in International News Service v. Associated Press \10\ and is
therefore tailored to the specific facts in that case. It
should not be interpreted to have any other meaning, including
any implication as to the permissibility of conduct not falling
within its narrow scope.
---------------------------------------------------------------------------
    \10\ 248 U.S. 215 (1918).
---------------------------------------------------------------------------
    Subsection (f) establishes the principle permitting resale
or other sharing of a physical copy of a collection of
information once that copy has been lawfully obtained. It does
so by using language similar to that of the ``first sale
doctrine'' in the Copyright Act, stating that the owner of a
particular lawful copy of all or part of a collection of
information may sell or otherwise dispose of that copy.

                      4. Section Four--Exclusions

    Subsection (a) rules out protection for government
collections of information. It provides that the act's
protection does not extend to collections of information
gathered, organized or maintained by or for governmental
entities, their employees, agents, or exclusive licensees. It
is designed to ensure that information collected by the
government at taxpayer expense will be made available for
public knowledge and basic research. The provision responds to
concerns that the bill would thwart access to government
information currently available to the public, especially to
the scientific, research and educational communities. The
exclusion is broader than the similar provision in section 105
of the Copyright Act; it applies to state and local governments
as well as the federal government, and covers collections
prepared for the government by independent contractors and
exclusive licensees as well as employees.
    This subsection does not apply, however, to collections of
information gathered, organized or maintained by agents or
licensees of the government created outside the scope of their
agency or license, or by Federal or State educational
institutions in the course of engaging in education or
scholarship. When a party retained by the government to perform
one particular task also invests in producing databases that
add value to the information it has produced or collected for
the government, it should not be precluded from protection.
Similarly, educational institutions that happen to be
government owned should not be disadvantaged relative to
private institutions when producing databases unrelated to the
provision of regulatory government functions.
    Nor does the exclusion apply to information required to be
collected and disseminated by securities, futures exchanges and
clearing organizations operating under the Securities and
Exchange Act of 1934 or the Commodity Exchange Act. Under the
authority of both Acts, the dissemination of market data and
price quotes in collections of information supplied by
securities and commodities markets are regulated by the SEC and
the CFTC, respectively. Because of the fact that the Securities
Exchange Act of 1934 requires securities exchanges, securities
associations, securities information processors and clearing
organizations to register with the SEC, and the fact that the
Commodity Exchange Act requires commodities markets to register
with the CFTC, might cause the financial markets to be deemed
agents or exclusive licensees of the SEC and CFTC, this
language clarifies that the unique relationship between
government regulatory authorities and the securities and
commodities markets does not bar protection under this chapter
for the collections of information those markets produce.
    Subsection (b) rules out protection under this chapter for
computer programs. Computer programs are already closely linked
with collections of information, and in the future will be even
more so. The search engine for a large collection of
information stored on CD-ROM is a type of computer program.
Similarly, computer programs referred to as ``intelligent
agents'' can gather information from the World Wide Web and
create a collection of information. Section 1204(b)(1) is
intended to make clear that notwithstanding the often close
relationship between a program and a collection of information,
computer programs are not protected under this chapter,
including programs that are used in the manufacture,
production, operation, or maintenance of a collection of
information, or any elements of the program that are necessary
for the program's operation.
    At the same time, Section 1204(b)(2) makes clear that a
collection of information does not lose protection by virtue of
its inclusion within a computer program. For example, a set of
engineering constants contained in a program which performs
mathematical calculations using those constants remains a
protected collection of information, assuming it meets the
criteria of the Act. Section 1204(b)(2) recognizes that the
information in a data-file is distinct from the instructions
that perform operations on that information.

              5. Section Five--Relationship to Other Laws

    Section 1205 deals with the relationship of the Act to
existing legal rights or obligations relating to information.
Subsection (a) clarifies that nothing in this act will affect
the rights, limitations or remedies available to a party under
current law, other than state rights preempted under subsection
(b). For example, nothing in this act would negate the ability
of a party to receive copyright protection for a collection of
information should that collection qualify for protection as a
``compilation'' under the Copyright Act. Similarly, other laws
that may provide affirmative rights of access to information
would remain unaffected. This subsection establishes the
general principle of non-interference; subsequent subsections
provide specific examples of areas of law particularly relevant
to the coverage of this Chapter.
    Subsection (b) provides for preemption of state law to the
extent it provides equivalent rights in the same subject
matter. This subsection makes clear that federal law controls
in this specific area, with state common law or statutes
dealing with misappropriation of collections of information, as
defined in section 1201, preempted by this Act. On the other
hand, state law providing differentrights in collections of
information are not preempted. The Act specifies that state laws
regarding trademark, design rights, antitrust, trade secrets, privacy,
access to public documents and the law of contract shall not be deemed
to provide equivalent rights.
    Subsection (c) addresses the relationship between the
protection provided by this Act and by copyright law. The first
sentence clarifies that protection under this chapter is
independent of, but complementary to, any copyright protection
that may subsist in a work of authorship that is contained in
or consists in whole or in part of a collection of information.
In evaluating a claim under this chapter, it is not relevant
whether copyright protection exists in the collection of
information or any component thereof. Rather, a court's task is
to determine whether the defendant has misappropriated all or a
substantial portion of the plaintiff's collection of
information in violation of this chapter--irrespective of
whether or not part or all of the contents of such collection
of information consists of copyrighted material. When a
defendant's use or extraction is also alleged to constitute
copyright infringement, the court should determine that issue
exclusively under the Copyright Act.
    The second sentence of subsection (c) amplifies this
principle. Because a collection of information protected under
this chapter can consist, in whole or part, of one or more
copyrighted works, this sentence affirms that an original work
of authorship that is one of the items contained in a
collection of information does not receive greater protection
under this Act than it does under the copyright law. A work
that is itself a collection of information, however, may
receive greater protection against misappropriation under this
chapter than it would receive against infringement as a
compilation protected by copyright. Because the nature of the
protection is distinct, a court evaluating a claim under this
chapter need not distinguish between copyrightable and
uncopyrightable components of collections of information. If
the use or extraction of all or a substantial part of a
collection of information violates this chapter, it is
irrelevant whether copyright subsists in any part of that
collection.
    Subsection (d) deals with the relationship to antitrust
law. It states that this chapter will not limit application of
antitrust laws, including those laws regarding single suppliers
of products and services. The subsection is intended to address
the so-called ``sole source'' issue, involving situations where
the information within a collection is not available elsewhere
for others to obtain, giving the producer of the collection a
de facto monopoly over the facts contained therein. The
Committee believes that an appropriate response to potential
abuse, to the extent it is not dealt with by existing
regulatory authorities overseeing certain industries, can be
found in the antitrust laws, which are specifically designed to
deal with such monopoly concerns. The essential facilities
doctrine in particular may be particularly relevant to this
issue.
    Subsection (e) reaffirms the basic principle of freedom of
contract. It makes clear that nothing in this Act prevents the
producer of the collection of information from entering into
any licensing agreements or contracts concerning the use of the
collection. In today's marketplace, licensing and other
contractual mechanisms are widely relied upon in disseminating
collections of information. The Committee intends to preserve
the ability to structure and enforce contractual arrangements
tailored to the particular circumstances of a transaction. The
enforceability of such licenses was recently upheld in ProCD,
Inc. v. Zeidenberg,\11\ which recognized the important role
that private arrangements play in the efficient exploitation of
information-based products to the benefit of both producers and
users of these products.
---------------------------------------------------------------------------
    \11\ 86 F.3d 1447 (7th Cir. 1996).
---------------------------------------------------------------------------
    Subsection (f) provides that nothing in this chapter shall
affect the operation of provisions of the Communications Act of
1934, as amended. Consequently, nothing in this bill shall
affect the operations of sections 251, 252, 271 or 272 of the
Communications Act of 1934, as amended, and this bill shall not
have any effect on any existing right contained in the
Communications Act to extract or use information from a
collection of information for the purpose of obtaining access
to a network element, as such term is defined in section
153(29) of the Communications Act of 1934, as amended, (47
U.S.C. 153(29)), or otherwise to provide a telecommunications
service as provided for under the Communications Act of 1934,
as amended. Nor shall anything in this chapter affect the
operation of section 222(e) of the Communications Act of 1934,
as amended, (47 U.S.C. 222(e)), or shall restrict any person
from extracting or using subscriber list information, as such
term is defined in section 222(f)(3) of the Communications Act
of 1934 (47 U.S.C. 222(f)(3)), for the purpose of publishing
telephone directories in any format. This provision addresses
the concerns of companies which presently use such information
to publish independent directories separate from those
published by the telephone service provider.

                     6. section six--civil remedies

    This section sets out the civil penalties which may be
imposed for a violation of the act. Subsection (a) establishes
exclusive subject matter jurisdiction in United States district
courts. Subsection (b) gives courts the power to grant
permanent and temporary injunctions to prevent violations of
section 1202. An injunction may be served on a party anywhere
in the United States and may be enforced by any district court
having jurisdiction over the party.
    Subsection (c) allows the appropriate court to impound
copies of contents of a collection of information extracted or
used in violation of this act. The court may also, as part of a
final judgement or decree, order the remedial modification or
destruction of all contents of a collection of databases
extracted or used in violation of this act. Both the injunction
and order of destruction may extend to all masters, tapes,
disks, diskettes, or other articles by means of which copies
may be produced.
    Subsection (d) authorizes monetary damages for a violation
of this act. The plaintiff is entitled to recover any damages
it sustained as well as the defendant's profits not taken into
account in computing damages. The plaintiff is required to
prove the defendant's gross revenue only, while the defendant
has the burden of proving all elements of cost or deduction
claimed. The court may assess treble damages up to three times
the amount of actual damages. The court may also award
reasonable costs and attorney's fees to the prevailing party,
and shall award such costs and fees if the action was brought
in bad faith against a nonprofit educational, scientific or
research institution, library or archives.
    Subsection (e) requires a court to reduce or remit entirely
monetary relief in any case where a defendant believed and had
reasonable grounds for believing that his or her conduct was
permissible under this Act, if the defendant was acting within
the scope of his or her employment by a nonprofit educational,
scientific, or research institution, library or archives.
    The injunction and impoundment provisions of this act do
not apply to any action against the United States Government.
The relief provided under this section is available against a
state entity only to the extent permitted by law.

                  7. section seven--criminal penalties

    Any person who willfully violates this Act for direct or
indirect commercial advantage or financial gain, or causes loss
or damages aggregating $10,000 or more in any one-year calendar
period is criminally liable. Such an offense is 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 is
punishable by a fine of not more than $500,000 or imprisonment
for not more than 10 years, or both. Section 1207 does not
apply to an employee or agent of a nonprofit educational,
scientific, or research institution, library or archives,
acting within the scope of his or her employment. Like the
similar limitations on civil remedies, this exception is
intended to avoid the chilling effect these substantial
penalties might have on legitimate public interest uses of
collections of information.

                8. section eight--limitations on actions

    Section 1208 establishes a two-prong statute of
limitations. First, no criminal or civil proceedings may be
maintained unless it is commenced within three years after the
cause of action arises. Additionally, no action can be
maintained more than fifteen years after the investment of
resources that qualified for protection that portion of the
collection of information that is extracted or used. This
language means that new investments in an existing collection,
if they are substantial enough to be worthy of protection, will
themselves be able to be protected, ensuring that producers
have the incentive to make such investments in expanding and
refreshing their collections. At the same time, however,
protection will not be perpetual; the substantial investment
that is protected under the Act cannot be protected for more
than fifteen years. By focusing on that investment that made
the particular portion of the collection that has been
extracted or used eligible for protection, the provision avoids
providing ongoing protection to the entire collection every
time there is an additional substantial investment made in its
scope or maintenance.

                    9. section nine--effective date

    The provisions of this Act take effect upon enactment and
are applicable to acts committed on or after that date, with
respect to collections of information existing on that date or
produced after that date. However, no person can be liable for
the use of information from a collection of information where
the information was lawfully extracted prior to the date of
enactment of this Act.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the
House of Representatives, changes in existing law made by the
bill, as reported, are shown as follows (new matter is printed
in italic and existing law in which no change is proposed is
shown in roman):

                      TITLE 17, UNITED STATES CODE

Chap.                                                               Sec.
      Subject Matter and Scope of Copyright..........................101
     * * * * * * *
      Misappropriation of Collections of Information................1201
     * * * * * * *

       CHAPTER 12--MISAPPROPRIATION OF COLLECTIONS OF INFORMATION

Sec.
1201. Definitions.
1202. Prohibition against misappropriation.
1203. Permitted acts.
1204. Exclusions.
1205. Relationship to other laws.
1206. Civil remedies.
1207. Criminal offenses and penalties.
1208. Limitations on actions.

Sec. 1201. Definitions

  As used in this chapter:
          (1) Collection of information.--The term ``collection
        of information'' means information that has been
        collected and has been organized for the purpose of
        bringing discrete items of information together in one
        place or through one source so that users may access
        them.
          (2) Information.--The term ``information'' means
        facts, data, works of authorship, or any other
        intangible material capable of being collected and
        organized in a systematic way.
          (3) Potential market.--The term ``potential market''
        means any market that a person claiming protection
        under section 1202 has current and demonstrable plans
        to exploit or that is commonly exploited by persons
        offering similar products or services incorporating
        collections of information.
          (4) Commerce.--The term ``commerce'' means all
        commerce which may be lawfully regulated by the
        Congress.

Sec. 1202. Prohibition against misappropriation

  Any person who extracts, or uses in commerce, all or a
substantial part, measured either quantitatively or
qualitatively, of a collection of information gathered,
organized, or maintained by another person through the
investment of substantial monetary or other resources, so as to
cause harm to the actual or potential market of that other
person, or a successor in interest of that other person, for a
product or service that incorporates that collection of
information and is offered or intended to be offered for sale
or otherwise in commerce by that other person, or a successor
in interest of that person, shall be liable to that person or
successor in interest for the remedies set forth in section
1206.

Sec. 1203. Permitted acts

  (a) Individual Items of Information and Other Insubstantial
Parts.--Nothing in this chapter shall prevent the extraction or
use of an individual item of information, or other
insubstantial part of a collection of information, in itself.
An individual item of information, including a work of
authorship, shall not itself be considered a substantial part
of a collection of information under section 1202. Nothing in
this subsection shall permit the repeated or systematic
extraction or use of individual items or insubstantial parts of
a collection of information so as to circumvent the prohibition
contained in section 1202.
  (b) Gathering or Use of Information Obtained Through Other
Means.--Nothing in this chapter shall restrict any person from
independently gathering information or using information
obtained by means other than extracting it from a collection of
information gathered, organized, or maintained by another
person through the investment of substantial monetary or other
resources.
  (c) Use of Information for Verification.--Nothing in this
chapter shall restrict any person from extracting information,
or from using information within any entity or organization,
for the sole purpose of verifying the accuracy of information
independently gathered, organized, or maintained by that
person. Under no circumstances shall the information so
extracted or used be made available to others in a manner that
harms the actual or potential market for the collection of
information from which it is extracted or used.
  (d) Nonprofit Educational, Scientific, or Research Uses.--
Nothing in this chapter shall restrict any person from
extracting or using information for nonprofit educational,
scientific, or research purposes in a manner that does not harm
the actual or potential market for the product or service
referred to in section 1202.
  (e) News Reporting.--Nothing in this chapter shall restrict
any person from extracting or using information for the sole
purpose of news reporting, including news gathering,
dissemination, and comment, unless the information so extracted
or used is time sensitive, has been gathered by a news
reporting entity for distribution to a particular market, and
has not yet been distributed to that market, and the extraction
or use is part of a consistent pattern engaged in for the
purpose of direct competition in that market.
  (f) Transfer of Copy.--Nothing in this chapter shall restrict
the owner of a particular lawfully made copy of all or part of
a collection of information from selling or otherwise disposing
of the possession of that copy.

Sec. 1204. Exclusions

  (a) Government Collections of Information.--
          (1) Exclusion.--Protection under this chapter shall
        not extend to collections of information gathered,
        organized, or maintainedby or for a government entity,
whether Federal, State, or local, including any employee or agent of
such entity, or any person exclusively licensed by such entity, within
the scope of the employment, agency, or license. Nothing in this
subsection shall preclude protection under this chapter for information
gathered, organized, or maintained by such an agent or licensee that is
not within the scope of such agency or license, or by a Federal or
State educational institution in the course of engaging in education or
scholarship.
          (2) Exception.--The exclusion under paragraph (1)
        does not apply to any information required to be
        collected and disseminated by either a national
        securities exchange under the Securities Exchange Act
        of 1934 or a contract market under the Commodity
        Exchange Act.
  (b) Computer Programs.--
          (1) Protection not extended.--Subject to paragraph
        (2), protection under this chapter shall not extend to
        computer programs, including, but not limited to, any
        computer program used in the manufacture, production,
        operation, or maintenance of a collection of
        information, or any component of a computer program
        necessary to its operation.
          (2) Incorporated collections of information.--A
        collection of information that is otherwise subject to
        protection under this chapter is not disqualified from
        such protection solely because it is incorporated into
        a computer program.

Sec. 1205. Relationship to other laws

  (a) Other Rights Not Affected.--Subject to subsection (b),
nothing in this chapter shall affect rights, limitations, or
remedies concerning copyright, or any other rights or
obligations relating to information, including laws with
respect to patent, trademark, design rights, antitrust, trade
secrets, privacy, access to public documents, and the law of
contract.
  (b) Preemption of State Law.--On or after the effective date
of this chapter, all rights that are equivalent to the rights
specified in section 1202 with respect to the subject matter of
this chapter shall be governed exclusively by Federal law, and
no person is entitled to any equivalent right in such subject
matter under the common law or statutes of any State. State
laws with respect to trademark, design rights, antitrust, trade
secrets, privacy, access to public documents, and the law of
contract shall not be deemed to provide equivalent rights for
purposes of this subsection.
  (c) Relationship to Copyright.--Protection under this chapter
is independent of, and does not affect or enlarge the scope,
duration, ownership, or subsistence of, any copyright
protection in any work of authorship that is contained in or
consists in whole or part of a collection of information. This
chapter does not provide any greater protection to a work of
authorship contained in a collection of information, other than
a work that is itself a collection of information, than is
available to that work under any other chapter of this title.
  (d) Antitrust.--Nothing in this chapter shall limit in any
way the constraints on the manner in which products and
services may be provided to the public that are imposed by
Federal and State antitrust laws, including those regarding
single suppliers of products and services.
  (e) Licensing.--Nothing in this chapter shall restrict the
rights of parties freely to enter into licenses or any other
contracts with respect to the use of collections of
information.
  (f) Communications Act of 1934.--Nothing in this chapter
shall affect the operation of section 222(e) of the
Communications Act of 1934 (47 U.S.C. 222(e)), or shall
restrict any person from extracting or using subscriber list
information, as such term is defined in section 222(f)(3) of
the Communications Act of 1934 (47 U.S.C. 222(f)(3)), for the
purpose of publishing telephone directories in any format.

Sec. 1206. Civil remedies

  (a) Civil Actions.--Any person who is injured by a violation
of section 1202 may bring a civil action for such a violation
in an appropriate United States district court without regard
to the amount in controversy, except 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 under this section 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 a violation of
section 1202. Any such injunction may be served anywhere in the
United States on the person enjoined, and may be enforced by
proceedings in contempt or otherwise by any United States
district court having jurisdiction over that person.
  (c) Impoundment.--At any time while an action under this
section is pending, the court may order the impounding, on such
terms as it deems reasonable, of all copies of contents of a
collection of information extracted or used in violation of
section 1202, 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 1202, order the remedial modification or
destruction of all copies of contents of a collection of
information extracted or used in violation of section 1202, 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 1202 has
been established in any civil action arising under this
section, the plaintiff shall be entitled to recover any damages
sustained by the plaintiff and defendant's profits not taken
into account in computing the damages sustained by the
plaintiff. 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
gross revenue only; defendant must prove all elements of cost
or deduction claims. 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. The court in its discretion may award
reasonable costs and attorney's fees to the prevailing party
and shall award such costs and fees where it determines that an
action wasbrought under this chapter in bad faith against a
nonprofit educational, scientific, or research institution, library, or
archives, or an employee or agent of such an entity, acting within the
scope of his or her employment.
  (e) Reduction or Remission of Monetary Relief for Nonprofit
Educational, Scientific, or Research Institutions.--The court
shall reduce or remit entirely monetary relief under subsection
(d) in any case in which a defendant believed and had
reasonable grounds for believing that his or her conduct was
permissible under this chapter, if the defendant was an
employee or agent of a nonprofit educational, scientific, or
research institution, library, or archives acting within the
scope of his or her employment.
  (f) Actions Against United States Government.--Subsections
(b) and (c) shall not apply to any action against the United
States Government.
  (g) Relief Against State Entities.--The relief provided under
this section shall be available against a State governmental
entity to the extent permitted by applicable law.

Sec. 1207. Criminal offenses and penalties

  (a) Violation.--
          (1) In general.--Any person who violates section 1202
        willfully, and--
                  (A) does so for direct or indirect commercial
                advantage or financial gain, or
                  (B) causes loss or damage aggregating $10,000
                or more in any 1-year period to the person who
                gathered, organized, or maintained the
                information concerned,
        shall be punished as provided in subsection (b).
          (2) Inapplicability.--This section shall not apply to
        an employee or agent of a nonprofit educational,
        scientific, or research institution, library, or
        archives acting within the scope of his or her
        employment.
  (b) Penalties.--An offense under subsection (a) shall be
punishable by a fine of not more than $250,000 or imprisonment
for not more than 5 years, or both. A second or subsequent
offense under subsection (a) shall be punishable by a fine of
not more than $500,000 or imprisonment for not more than 10
years, or both.

Sec. 1208. Limitations on actions

  (a) Criminal Proceedings.--No criminal proceeding shall be
maintained under this chapter unless it is commenced within
three years after the cause of action arises.
  (b) Civil Actions.--No civil action shall be maintained under
this chapter unless it is commenced within three years after
the cause of action arises or claim accrues.
  (c) Additional Limitation.--No criminal or civil action shall
be maintained under this chapter for the extraction or use of
all or a substantial part of a collection of information that
occurs more than 15 years after the investment of resources
that qualified the portion of the collection of information for
protection under this chapter that is extracted or used.
                              ----------

TITLE 28, UNITED STATES CODE

           *       *       *       *       *       *       *

PART IV--JURISDICTION AND VENUE

           *       *       *       *       *       *       *

               CHAPTER 85--DISTRICT COURTS; JURISDICTION

Sec.
1330. Actions against foreign states.
     * * * * * * *
1338. Patents, plant variety protection, copyrights, mask works, trade-
          marks, misappropriations of collections of information, and
          unfair competition.
     * * * * * * *

Sec. 1338. Patents, plant variety protection, copyrights, mask works,
                    trade-marks, misappropriations of collections of
                    information, and unfair competition

  (a) The district courts shall have original jurisdiction of
any civil action arising under any Act of Congress relating to
patents, plant variety protection, copyrights and trade-marks.
Such jurisdiction shall be exclusive of the courts of the
states in patent, plant variety protection and copyright cases.
  (b) The district courts shall have original jurisdiction of
any civil action asserting a claim of unfair competition when
joined with a substantial and related claim under the
copyright, patent, plant variety protection or trade-mark laws.
  (c) Subsections (a) and (b) apply to exclusive rights in mask
works under chapter 9 of title 17 to the same extent as such
subsections apply to copyrights.
  (d) The district courts shall have original jurisdiction of
any civil action arising under chapter 12 of title 17, relating
to misappropriation of collections of information. Such
jurisdiction shall be exclusive of the courts of the States.

           *       *       *       *       *       *       *

                            DISSENTING VIEWS

    I agree with the stated goals of this legislation--to
protect database owners from misappropriation of their work
product--but I do not believe that we should try to provide
database owners with protection that is not within our power to
grant. More precisely, I am convinced that the Copyright Clause
and the First Amendment do not countenance the type of
protection that the proponents of this bill would seek to
bestow.
    Congress is of course limited in its authority by the
powers enumerated in Article I and the amendments to the
Constitution. Therefore, any power to provide protections for
``collections of information'' must fall within the bounds of
this authority.
    The Supreme Court has ruled out the establishment of
protection for databases under the Copyright Clause (Article I,
Section 8, clause 8) of the Constitution. In Feist Publications
v. Rural Telephone Service Co, 499 U.S. 340 (1991), the Court
unanimously held that the Copyright Clause protects only
original works of authorship and prohibits protection for data
and factual information. The Court outlined a two-part test for
this ``originality'' requirement:

          To qualify for copyright protection, a work must be
        original to the author. Harper & Row, [417 U.S. 539
        (1985)] at 547-549. Original, as the term is used in
        copyright, means only that the work was independently
        created by the author (as opposed to copied from other
        works), and that it possesses at least some minimal
        degree of creativity.

Feist, 499 U.S. at 345.
    Lower courts have clarified that as a consequence of the
requirement for originality for copyright protection, copyright
cannot prevent a competitor from extracting factual information
from a database, even if that work has been registered under
the Copyright Act. In other words, copyright will only protect
the original, creative material within a database.
    This legislation extends far beyond the original and
creative elements of ``collections of information,'' and
copyright cannot serve as the basis for its enactment by
Congress.
    The drafters of H.R. 2652 have attempted to avoid this
defect by styling the bill as a Federal ``misappropriation''
statute, as though we were not creating a new property right,
but establishing a new tort. However, the bill seeks to
establish a new property right for ``collections of
information,'' complete with civil and criminal remedies for
unauthorized use, and exceptions for the use of individual
items or ``insubstantial parts,'' scholarly activity, and news
reporting. Such characteristics belie the ``misappropriation''
label, and look suspiciously analogous to those of copyright
(infringement, fair use, etc.).
    It is possible that congressional authority for enactment
of H.R. 2652 could instead exist under the Commerce Clause
(Article I, Section 8, clause 3). However, the Supreme Court's
interpretation of the relationship between the Commerce Clause
and another enumerated power (the Bankruptcy Clause) in Railway
Labor Executives' Association v. Gibbons, 455 U.S. 457 (1982),
seems to rule out this possibility.
    In Railway Labor, the Court struck down a statute providing
protection to the employees of a railroad in bankruptcy. The
Court found that the proposed statute violated the
``uniformity'' requirement of the Bankruptcy Clause, which
Congress could not circumvent by purporting to legislate under
the Commerce Clause. Railway Labor, 455 U.S. at 469. The
Railway Labor opinion makes clear that Congress cannot avoid
the particular requirements (e.g., uniformity, originality) of
one enumerated power (e.g., the Bankruptcy Clause, the
Copyright Clause), by relying on the generality of the Commerce
Clause.
    Perhaps a true misappropriation law, which does not impinge
on the dictates of the Copyright Clause as elucidated by the
Feist decision, could conceivably coexist with copyright under
Congress' Commerce Clause authority. However, as the Court
explained in Feist, this protection would be ``available under
a theory of unfair competition.'' Feist, 499 U.S. at 354.
    Undoubtedly, supporters of H.R. 2652 will argue that
``misappropriation'' fits within the definition of ``unfair
competition,'' and that the bill is tailored to Justice
O'Connor's statement in Feist regarding ``protection for the
fruits of [data] research'' from unfair competition. However,
``misappropriation'' under H.R.2652 cannot be reconciled with
Justice O'Connor's, and the Supreme Court's, interpretation of
``unfair competition.''
    Again writing for a unanimous Court in Bonito Boats v.
Thunder Craft Boats, 489 U.S. 141 (1989) Justice O'Connor
explained the relationship between the law of unfair
competition and protection of property:

          The Law of unfair competition has its roots in the
        common-law tort of deceit: its general concern is with
        protecting consumers from confusion as to source. While
        that concern may result in the creation of ``quasi-
        property rights'' in communicative symbols, the focus
        is on the protection of consumers, not the protection
        of producers as an incentive to product innovation.

Bonito Boats, 489 U.S. at 157 (emphasis in original).
    Even the supporters of H.R. 2652 would be hard-pressed to
argue that this legislation is motivated by an intention to
protect consumers. The bill's focus is on the ``investment of
substantial monetary or other resources'' and the ``harm to the
actual or potential market'' of the database producer. The
courts have made clear that competition law is not intended to
serve as an instrument for one competitor to use against
another, but as a means of fostering competition for the
benefit of consumers. See Northwest Power Products, Inc. v.
Omark Indus., Inc., 576 F.2d 83, 89 (5th Cir. 1978);
Manufacturing Research Corp. v. Greenleetool Co., 693 F.2d
1037, 1043 (11th Cir. 1982).
    Finally, this legislation may also fall short of what is
necessary under the FirstAmendment. Factual information and
ideas are the building blocks of all forms of expression, and the
Supreme Court has recognized that the First Amendment leaves little
room for restrictions on the dissemination of ideas and factual
information. In fact, the Court's ruling in Harper & Row, Publishers,
Inc. v. Nation Enterprises, 471 U.S. 539 (1985), seems to indicate that
our rights of expression under the First Amendment preclude Congress
from limiting access to information in the manner contemplated by this
legislation.

          Our ``profound national commitment to the principle
        that debate on public issues should be uninhibited,
        robust, and wide-open,'' New York Times Co. v.
        Sullivan, 376 U.S. 254, 270 (1964), leaves no room for
        a statutory monopoly over information and ideas. ``The
        arena of public debate would be quiet, indeed, if a
        politician could copyright his speeches or a
        philosopher his treatises and thus obtain a monopoly on
        the ideas they contained.'' Lee v. Runge, 404 U.S. 887,
        893 (1971) (Douglas, J., dissenting from denial of
        certiorari). A broad dissemination of principles,
        ideas, and factual information is crucial to the robust
        public debate and informed citizenry that are ``the
        essence of self-government.'' Garrison v. Louisiana,
        379 U.S. 64, 74-75 (1964). And every citizen must be
        permitted freely to marshal ideas and facts in the
        advocacy of particular political choices.

Harper & Row, 471 U.S. at 582 (emphasis added).
    The Court distinguished copyright protection from the
rights protected by the First Amendment by making clear that
copyright protection is limited to the author's expression of
facts or ideas, not the facts or ideas themselves. In Harper &
Row, the Court recited with approval the Second Circuits
explanation that copyright's ``idea-expression'' dichotomy
``strike[s] a definitional balance between the First Amendment
and the Copyright Act by permitting free communication of facts
while still protecting an author's expression.'' Harper & Row,
471 U.S. at 556 (quoting 723 F.2d 195, 203 (2d Circuit 1983)).
The Court goes on to make clear that ``[n]o author may
copyright his ideas or the facts he narrates.'' Harper & Row,
471 U.S. at 556.
    As I stated initially, I am extremely sympathetic to the
efforts of my Colleagues to protect the misappropriation of the
work and efforts of database publishers. Without a doubt,
Congress should be concerned about the need to provide
incentives to produce and maintain valuable collections of
information. However, our efforts are nugatory if we do not
enact legislation that comports with the requirements of the
Constitution. I have attempted to lay out the relevant Supreme
Court decisions that bear on these requirements, and I am
convinced that the Court will not find the current bill
satisfactory under these standards.
    Finally, I would like to point out what I believe is an
unintended consequence of the legislation as it was reported by
the Judiciary Committee.
    The Internet is actually itself a collection of
interdependent databases linked through our telecommunications
infrastructure. Many of the most primary and crucial elements
of the Net are databases that make online communications
possible. For example, the list of domain names is a database
that depends on a lookup table (another database) to translate
the characters making up a domain name into a numerical
Internet address. Other tables (also databases) designate
pathways over which to route messages across the Internet to
the address of the intended recipient.
    As the legislation is currently drafted, a proprietary
claim over these or other databases that comprise the Internet
could be asserted. Such claims could restrict access to any
domain name system, unified directory, translation, routing, or
other lookup table essential to the functioning of the Internet
in an open systems environment. The result would be a
disastrous disruption in the operation of the Internet and for
the millions of people who depend on its proper performance.
The exploding growth of the Internet and online commerce would
be impaired in that case.
    The bill as reported by the Committee does include an
exception for subscriber list information necessary for the
publication of traditional telephone directories, which are
necessary for the use of the traditional, public switched-voice
network operated by common carriers under the
Telecommunications Act. However, not all communications
networks are covered--specifically, those operating in a
digital environment of computer-to-computer communications,
offering enhanced information and telecommunications services.
    Should the Supreme Court somehow find this legislation
constitutionally permissible, failure to include an exception
for collections of information necessary for the operation and
proper functioning of digital communications/computer networks
could threaten the open systems precepts that underpin the
almost unimaginable expansion of the Internet. I do not believe
this is what the authors of this bill intended, and I look
forward to working with them to rectify this oversight.

                                                       Zoe Lofgren.

                                <greek-d>