H. Rept. 109-33 - 109th Congress (2005-2006)
April 12, 2005, As Reported by the Judiciary Committee

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House Report 109-33 - FAMILY ENTERTAINMENT AND COPYRIGHT ACT OF 2005




[House Report 109-33]
[From the U.S. Government Printing Office]



109th Congress                                             Rept. 109-33
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 1

======================================================================



 
             FAMILY ENTERTAINMENT AND COPYRIGHT ACT OF 2005

                                _______
                                

 April 12, 2005.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

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

                              R E P O R T

                             together with

                             MINORITY VIEWS

                         [To accompany S. 167]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on the Judiciary, to whom was referred the bill 
(S. 167) to provide for the protection of intellectual property 
rights, and for other purposes, having considered the same, 
reports favorably thereon without amendment and recommends that 
the bill do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     2
Background and Need for the Legislation..........................     2
Materials Submitted for the Record...............................     8
Hearings.........................................................    19
Committee Consideration..........................................    19
Vote of the Committee............................................    19
Committee Oversight Findings.....................................    19
New Budget Authority and Tax Expenditures........................    19
Congressional Budget Office Cost Estimate........................    19
Performance Goals and Objectives.................................    22
Constitutional Authority Statement...............................    23
Section-by-Section Analysis and Discussion.......................    23
Changes in Existing Law Made by the Bill, as Reported............    24
Committee Jurisdiction Letters...................................    37
Markup Transcript................................................    39
Minority Views...................................................    69

                          Purpose and Summary

    S. 167 penalizes those who camcord motion pictures in movie 
theaters; creates civil and criminal penalties for those who 
willfully distribute pre-release works; clarifies the legal 
status of certain services and technologies that enable 
individuals to skip and mute content on certain works in the 
privacy of their own home; reauthorizes the National Film 
Preservation Board and Foundation; and corrects a technical 
error in the ``Sonny Bono Copyright Term Extension Act'' that 
limited library and archive access to certain works during the 
last 20 years of term.

                Background and Need for the Legislation

    Testimony received at several Congressional hearings 
highlighted the need for the different Titles of this 
legislation, which is similar to portions of H.R. 4077, H.R. 
4586, and S. 2391 of the 108th Congress. The legislation is 
also a companion to H.R. 357, introduced by Congressman Lamar 
Smith during the 109th Congress.
    Title I of the Act is similar to S. 1932 and Sec. 8 of H.R. 
4077 from the 108th Congress. This title is the ``Artists 
Rights and Theft Prevention Act of 2005.'' Section 102 of Title 
I creates a new Sec. 2319B in Title 18, of the United States 
Code prohibiting the act of using or attempting to use an 
audiovisual recording device to transmit or make a copy of a 
motion picture or other audiovisual work in a motion picture 
exhibition facility. The new section is modeled after the 
existing ``anti-bootlegging'' statute found in Sec. 2319A of 
Title 18, of the United States Code which prohibits the 
unauthorized recording of, and trafficking in, sound recordings 
and music videos from live musical performances.
    This new provision deals with the very specific problem of 
illicit ``camcording'' of motion pictures in motion picture 
exhibition facilities. Typically, an offender attends a pre-
opening ``screening'' or a first-weekend theatrical release, 
and uses sophisticated digital equipment to record the movie. A 
camcorded version is then sold to a local production factory or 
to an overseas producer where it is converted into DVDs or 
similar products and sold on the street for a few dollars per 
copy. This misuse of camcorders is a significant factor in the 
estimated $3.5 billion in annual losses the movie industry 
suffers because of hard-goods piracy.
    Causing greater financial harm, these camcorded versions 
are posted on the Internet through certain peer-to-peer 
networks and made available for millions of users to download. 
According to studies by the Motion Picture Association of 
America (``MPAA''), camcorded versions of movies in theatrical 
release account for more than 90 percent of the first copies of 
motion pictures illegally distributed on the Internet. S. 167 
will provide prosecutors with resources to stem the piracy of 
commercially valuable motion pictures at its source.
    The Act would not, and is not intended to, reach the 
conduct of a person who uses a camera, picture phone, or other 
photographic device to capture a still photo from an exhibition 
of a motion picture. Rather, the Act reaches the conduct of a 
person who uses an audiovisual recording device to capture or 
transmit a ``series of related images that are intrinsically 
intended to be shown by the use of machines or devices such as 
projectors, viewers, or electronic equipment, together with 
accompanying sounds, if any.'' \1\
---------------------------------------------------------------------------
    \1\ 17 U.S.C. Sec. 101.
---------------------------------------------------------------------------
    Notwithstanding this clarification, nothing in this 
legislation shall be interpreted to suggest that taking 
photographs in a movie theater is in any way condoned. Engaging 
in such conduct could still subject a person to civil or 
criminal liability under the Copyright Act. However, this 
provision is drafted narrowly to address the specific and 
pernicious problem of ``camcording'' copyrighted motion 
pictures.
    In addition, the bill makes clear that ``possession of an 
audiovisual device in a motion picture exhibition facility may 
be considered as evidence in any proceeding involving this 
offense, but shall not, by itself, constitute sufficient 
evidence to support a conviction of this offense.'' The 
Committee recognizes that the fact that someone has brought an 
audiovisual device may be critical evidence in a case against 
that person under this section. For example, smuggling a high-
quality miniature camera and recording equipment into a movie 
theater may be highly probative of the intent to camcord. 
However, the Committee does not intend that the ``attempt'' 
language be used to convict, for example, a tourist who ends a 
day of sightseeing by bringing his camcorder to a motion 
picture theater but does not attempt to use it to record or 
transmit a motion picture. This language is intended to guard 
against such an injustice.
    Further, the bill is not intended to permit a prosecution 
of, for instance, a salesperson at a store who uses a camcorder 
to record portions of a movie playing to demonstrate the 
capabilities of a widescreen television. The offense is only 
applicable to transmitting or copying a movie in a motion 
picture exhibition facility, which has to be a movie theater or 
similar venue ``that is being used primarily for the exhibition 
of a copyrighted motion picture.'' In the example of the 
salesperson, the store is being used primarily to sell 
electronic equipment, not to exhibit motion pictures. (For the 
same reason, the statute would not cover a university student 
who records a short segment of a film being shown in film 
class, as the venue is being used primarily as a classroom, and 
not as a motion picture exhibition facility.)
    Moreover, Sec. 102 is not intended to permit prosecution of 
individuals making camcorded copies of movies off their 
television screens. The definition of a motion picture 
exhibition facility includes the concept that the exhibition 
must be ``open to the public or is made to an assembled group 
of viewers outside of a normal circle of a family and its 
social acquaintances.'' This definition makes clear that 
someone recording from a television in his home does not meet 
that definition.
    It is important to emphasize that the clause ``open to the 
public'' applies specifically to the exhibition, not to the 
facility. An exhibition in a place open to the public that is 
itself not made to the public is not the subject of this bill. 
Thus, for example, a university film lab may be ``open to the 
public.'' However, a student who is watching a film in that lab 
for his or her own study or research would not be engaging in 
an exhibition that is ``open to the public.'' Thus, if that 
student copied an excerpt from such an exhibition, he or she 
would not be subject to liability under this Section.
    The Committee will oversee the Justice Department to ensure 
that it exercises appropriate prosecutorial discretion when 
enforcing Sec. 102 of S. 167. While ``fair use'' is not a 
defense against a Sec. 2319(B) violation, Federal prosecutors 
should use their discretion not to bring criminal prosecutions 
against activities within movie theaters that would constitute 
fair use under the copyright laws. Additionally, prosecutors 
should consider whether a potential defendant was on notice 
that camcording violated the law. The Committee appreciates the 
commitment by the National Association of Theatre Owners (NATO) 
and MPAA to make available to every motion picture theater in 
the United States a conspicuous sign informing patrons that 
camcording in the theater is punishable by a Federal criminal 
penalty. The Committee fully expects that NATO and the MPAA 
will abide by that commitment. The posting of such a warning 
will serve as an important factor to help authorities determine 
whether a prosecution under this statute would be appropriate.
    An immunity provision has been included for good faith 
efforts by theater owners and other associated individuals to 
detain in a reasonable manner those they suspected of 
camcording. This provision and the reasonableness test should 
be viewed as a companion to shopkeeper privilege statutes found 
in all States. This section does not pre-empt any State laws.
    Section 103 creates a criminal penalty for the willful 
distribution of works being prepared for commercial 
distribution. The Committee has been made aware of numerous 
examples of efforts to camcord new movies during their opening 
days of release followed immediately by either mass duplication 
and distribution of DVD copies or Internet distribution of the 
same movie. Although the harm to the distribution of physical 
or Internet copies of works when legal copies are available has 
long been established, the Committee notes the larger harm 
caused by those who distribute copies of works even before they 
are legally available to the consumer. Moreover, the Committee 
is aware of pre-release activity surrounding the creation and 
duplication of physical advertising signs prior to their 
initial installation. Finally, the Committee is aware of, and 
encouraged by, Department of Justice investigations and 
prosecutions of pre-release cases involving motion pictures, 
sound recordings, business software, videogame software, and 
book publications once the works have been released in final 
form. Section 103 will ensure that there is a specific penalty 
for such illegal pre-release activity.
    Section 104 expressly requires the Register of Copyrights 
to issue regulations to establish a preregistration system for 
copyrighted works. Since works are generally not formally 
copyrighted until they are in final form and ready for 
distribution to the public, civil remedies for the distribution 
of pre-release works are lacking. This section will give the 
Register flexibility to determine which classes of works are 
appropriate for preregistration. The Committee believes that a 
class of work with only a few instances of infringement prior 
to authorized commercial distribution do not meet the test of a 
``history of infringement,'' but otherwise leaves the decision 
to the discretion of the Register.
    To encourage and ensure that preregistered works are 
formally registered when they are ready for such a filing, the 
new 17 U.S.C. Sec. 408(f)(4) created by Sec. 104 limits civil 
suits in certain circumstances. By its express terms, the 
prohibition on infringement suits contained in Sec. 408(f)(4) 
does not apply to suits concerning infringements commencing 
later than 2 months after first publication of a copyrighted 
work that had been preregistered with the Copyright Office. 
Therefore, notwithstanding a failure to meet the deadlines set 
forth in Sec. 408(f)(4)(A) and (B), a copyright owner of a 
preregistered work can register his or her work under current 
law and bring infringement actions for infringements occurring 
more than 2 months after first publication.
    Further, a preregistration of a sound recording does not by 
itself constitute preregistration of the musical works embodied 
in the sound recording. Accordingly, a later infringement of a 
musical work contained in a preregistered sound recording would 
not be subject to the dismissal provision in Sec. 408(f)(4) 
based on the preregistration of the sound recording.
    Section 105 directs the United States Sentencing Commission 
to review and update, if appropriate, the sentencing guidelines 
and policy statements surrounding several intellectual property 
rights crimes. The Commission has previously and successfully 
updated the guidelines to account for changes in the manner of 
intellectual property piracy. The Committee has included 
Sec. 105 because of the unique harms and aspects related to the 
infringement of pre-release works. The existing guidelines 
allow for an increase in the base level offense in certain 
circumstances.\2\ Although the guidelines highlight two reasons 
for consideration of upward departures, the specific and 
magnified harms caused by the display, performance, 
publication, reproduction or distribution of a pre-release work 
appear to warrant their inclusion as a third reason for upward 
departure.
---------------------------------------------------------------------------
    \2\ Sec. 2B5.3 (b).
---------------------------------------------------------------------------
    Title II of the legislation includes text based upon 
legislation from the 108th Congress, H.R. 4586, the ``Family 
Movie Act of 2004.'' The Committee strongly believes that, 
subject to certain conditions, copyright and trademark law 
should not be used to limit a parent's right to control what 
their children watch in the privacy of their own home. A 
dispute involving this issue is currently being heard in the 
U.S. District Court for the District of Colorado.\3\ Testimony 
provided by the Register on June 17, 2004, makes clear that 
some parties to the suit should not face liability for their 
current actions, while others appear to be in violation of 
existing copyright law. The ``Family Movie Act'' clarifies the 
liability, if any, for the companies that are a party to this 
case and to other companies not a party to this case that may 
be interested in providing such services in the future.
---------------------------------------------------------------------------
    \3\ Huntsman v. Soderbergh, 180 F.3d 1072 (9th Cir.)
---------------------------------------------------------------------------
    Objections to this legislation centered on four issues:

        1. A desire to limit the content that could be skipped 
        to a narrow type of content for specific reasons and/or 
        purposes;

        2. The for-profit nature of some of the companies that 
        offer such services;

        3. The impact upon television advertising in 
        commercial, over-the-air broadcasts;

        4. The impact upon the moral rights of the director.

    To respect the First Amendment of the Constitution, the 
``Family Movie Act'' is drafted in a content-neutral manner so 
that its operation and impact do not depend upon whether the 
content that was made imperceptible contains items that are 
often viewed as offensive, such as profanity, violence, or 
sexual acts. This content-neutrality also pertains to content 
made imperceptible that is rarely, if ever, viewed as 
offensive. The goal of the legislation has been to give the 
viewer the ability to make imperceptible limited portions of 
work that he or she chooses not to see for themselves or their 
family, whether or not the skipped content is viewed as 
objectionable by most, many, few, or even one viewer. Efforts 
to limit the application of the legislation to specific types 
of content were rejected by the Committee for First Amendment 
reasons.
    The for-profit nature of the entities providing services to 
the public that the legislation addresses has no bearing on the 
operation of the immunity from liability. The Committee is 
unable to discern a credible basis for creating a distinction 
between the for-profit or non-profit nature of companies that 
offer services covered by the Act. The vast majority of movies 
are made by for-profit companies. In addition, many motion 
picture companies now partner with advertisers to embed 
advertising within a movie. Television broadcasts of major 
sporting events often contain embedded advertising that in some 
cases appear to be part of the stadium hosting the event. Few, 
if any, disclosures are even made to all of the viewers that 
this is occurring and that they are seeing a modified version 
of the actual event. There is of course no option given to 
viewers to stop these for-profit entities from making such 
changes.
    One difference between this version of the ``Family Movie 
Act'' and the version that passed the House in the 108th 
Congress is the deletion of a reference in Sec. 112 of H.R. 
4077 to commercial advertisements and network or station 
promotional announcements. The Committee is aware of some 
dispute concerning automated television commercial-skipping 
devices. A copy of an exchange of letters between the Committee 
and the Register is attached. The Committee concurs with the 
Register's determination that this Act has no bearing on either 
the legality or illegality of such services or any litigation 
over the issue.
    Although the Committee has not adopted a specific 
percentage or quantity of time test in place of the ``limited 
portions'' language, the Committee will rely upon judicial 
determination for what is a ``limited portion'' of the work as 
a whole. It would be contrary to the legislation to interpret 
the ``limited portions'' test in a manner that would exclude 
actions that result in making imperceptible of 20 minutes of a 
particular type of content (violence, sexual scenes, profanity, 
etc.) from a 100-minute motion picture. The 20-minute exclusion 
may in fact remove 100 percent of one or more types of such 
content in a movie, but it represents only 20 percent of the 
total running time of the movie, easily satisfying the plain 
meaning of ``limited portions.''
    The plain meaning of S. 167 exempts actions brought under 
U.S. copyright and trademark law the ``making imperceptible . . 
. of limited portions of audio or video content'' provided no 
fixed copy is created. The Act does not create an exemption for 
actions that result in fixed copies of altered works. The 
Committee is aware of services and companies that create fixed 
derivative copies of motion pictures and believes that such 
practices are illegal under the Copyright Act.
    The Committee is aware of concerns regarding the 
legislation's impact upon moral rights, particularly those of 
movie directors. The Committee had hoped to receive testimony 
from a representative of the director's community on this issue 
at one of the Committee hearings on the issue, but no director 
was willing to testify. The Committee is aware of numerous 
motion pictures being edited for screen size, content, and time 
purposes with or without the director's consent so that a 
motion picture can be displayed on the 43 aspect ratios of 
standard definition televisions, on an airplane with 
objectionable language removed, and on television channels in 
the traditional 90 or 120-minute time slots. The Committee sees 
no difference between the impact upon the moral rights of 
directors of such modifications and someone wanting to prevent 
certain content from being displayed on their television.
    Finally, the Committee notes the failure of private sector 
negotiations with respect to one editing service to resolve the 
Huntsman v. Soderbergh civil suit. Although private sector 
negotiations and out-of-court settlements are an important part 
of the legal process, they cannot be expected to create a 
lasting solution when one party to the case is repeatedly 
burdened with the sole responsibility of traveling to all of 
the parties in the case to seek a settlement. Had some of the 
parties to the litigation have been more willing to act in good 
faith and resolve their differences out of court, the need for 
this legislation for at least one party would have been 
eliminated.
    Title III of the legislation reauthorizes the National Film 
Preservation Board (``Board'') and makes changes to the 
structure of the Board. It also reauthorizes the National Film 
Preservation Foundation (``Foundation'') with a corresponding 
authorization of Congressional funding for the program. The 
authorization for both had expired previously. The Committee 
expects the Board and Foundation to continue their effort to 
preserve older works and hopes that those companies and 
individuals who work in the motion picture business will be the 
primary source of donations to the Foundation.
    Title IV of the legislation fixes a technical, cross 
reference error in Sec. 104 of the 1998 ``Sonny Bono Copyright 
Term Extension Act'' \4\ that inadvertently limited access by 
libraries and archives to certain categories of works during 
the last 20 of a term. The Committee has confirmed with the 
relevant groups that the addition of ``(h)'' to Sec. 108(i) of 
Title 17 is appropriate and that it was inadvertently omitted 
from the 1998 Act. This is important because it limited library 
and archive access to certain works.
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    \4\ P.L. 105-298.
---------------------------------------------------------------------------

                   Materials Submitted for the Record

<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>

                                Hearings

    The Committee's Subcommittee on Courts, the Internet, and 
Intellectual Property held a hearing in the 108th Congress on 
H.R. 2517 on July 17, 2003, and received testimony from one 
witness on the issues addressed in Title I of S. 167. The 
Subcommittee held an oversight hearing in the 108th Congress on 
the issues addressed in Title II of S. 167 on May 20, 2004, 
with testimony received from five witnesses representing five 
organizations. The Subcommittee subsequently held a legislative 
hearing in the 108th Congress on a very similar version of 
Title II of S. 167. Testimony was received from four witnesses 
representing four organizations.

                        Committee Consideration

    On March 3, 2005, the Subcommittee on Courts, the Internet, 
and Intellectual Property met in open session and ordered 
favorably reported the bill S. 167, by a voice vote, a quorum 
being present. On March 9, 2005, the Committee on the Judiciary 
met in open session and ordered favorably reported the bill S. 
167 without an amendment by voice vote, a quorum being present.

                         Vote of the Committee

    In compliance with clause 3(b) of Rule XIII of the Rules of 
the House of Representatives, the Committee notes that there 
were no recorded votes during the Committee consideration of S. 
167.

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of Rule XIII 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.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of Rule XIII of the Rules of the House of 
Representatives is inapplicable because this legislation does 
not provide new budgetary authority or increased tax 
expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 3(c)(3) of Rule XIII of the Rules 
of the House of Representatives, the Committee sets forth, with 
respect to the bill, S. 167, the following estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, March 14, 2005.
Hon. F. James Sensenbrenner, Jr., Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 167, the ``Family 
Entertainment and Copyright Act of 2005.''
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Melissa E. 
Zimmerman (for Federal costs), who can be reached at 226-2860, 
and Page Piper/Bach (for private-sector mandates), who can be 
reached at 226-2940.
            Sincerely,
                                       Douglas Holtz-Eakin.

Enclosure

cc:
        Honorable John Conyers, Jr.
        Ranking Member
S. 167--Family Entertainment and Copyright Act of 2005.

                                SUMMARY

    S. 167 would make several changes to current law regarding 
copyrighted works. The bill would specifically authorize the 
appropriation of $530,000 each year over the 2005-2009 period 
to the Library of Congress for preserving films in the 
Library's collection. Assuming appropriation of the specified 
amounts, CBO estimates that implementing the bill would have no 
significant cost in 2005 and would cost nearly $3 million over 
the 2005-2009 period. Enacting the bill would not have a 
significant effect on revenues or direct spending.
    S. 167 contains no intergovernmental mandates as defined in 
the Unfunded Mandates Reform Act (UMRA) and would not affect 
the budgets of State, local, or tribal governments. S. 167 
would impose private-sector mandates as defined in UMRA. CBO 
estimates that the direct cost of those mandates would fall 
well below the annual threshold established by UMRA for 
private-sector mandates ($123 million in 2005, adjusted 
annually for inflation).

                ESTIMATED COST TO THE FEDERAL GOVERNMENT

    The estimated budgetary impact of S. 167 is shown in the 
following table. For this estimate, CBO assumes that the bill 
will be enacted in fiscal year 2005. CBO assumes that the 
amounts authorized by the bill will be appropriated for each 
fiscal year and that outlays will follow the historical rate of 
spending for these activities. The costs of this legislation 
fall within budget function 370 (commerce and housing credit).

                 By Fiscal Year, in Millions of Dollars
------------------------------------------------------------------------
                                 2005   2006   2007   2008   2009   2010
------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Authorization Level                 1      1      1      1      1      0
Estimated Outlays                   *      1      1      1      1      0
------------------------------------------------------------------------

                           BASIS OF ESTIMATE

    S. 167 would make several changes to laws affecting 
copyrighted materials. Assuming the appropriation of the 
specified amounts, CBO estimates that implementing the act 
would not have a significant cost in 2005 and would cost nearly 
$3 million over the 2005-2009 period. Enacting this legislation 
would not have a significant effect on direct spending or 
revenues.
Spending Subject to Appropriation
    Filtering Technology. Title II of S. 167 would specify that 
technology used to filter certain material out of movies for 
private viewing would not constitute a violation of copyright 
or trademark law. CBO estimates that implementing title II 
would have no effect on Federal spending.
    Film Preservation. Title III would authorize the 
appropriation of nearly $3 million over the 2005-2009 period to 
the Library of Congress for preserving films in the Library's 
collection. It also would make technical changes to current law 
regarding film preservation. CBO estimates that implementing 
title III would not have a significant cost in 2005 and would 
cost about $3 million over the 2005-2009 period.
Revenues and Direct Spending
    Title I would establish new Federal crimes for the 
unauthorized recording of motion pictures in movie theaters or 
other venues and would provide for increased penalties for 
other acts relating to copyright infringement. Because those 
prosecuted and convicted under the act could be subject to 
criminal fines, the Federal Government might collect additional 
fines if the legislation is enacted. Collections of such fines 
are recorded in the budget as revenues (i.e., governmental 
receipts), which are deposited in the Crime Victims Fund and 
later spent. CBO expects that any additional revenues and 
direct spending would be less than $500,000 annually because of 
the relatively small number of cases likely to be affected.

        ESTIMATED IMPACT ON STATE, LOCAL, AND TRIBAL GOVERNMENTS

    S. 167 contains no intergovernmental mandates as defined in 
UMRA and would not affect the budgets of States, local, or 
tribal governments.

                 ESTIMATED IMPACT ON THE PRIVATE SECTOR

    S. 167 would impose two private-sector mandates as defined 
in UMRA. CBO estimates that the direct cost of those mandates 
would fall well below the annual threshold established by UMRA 
for private-sector mandates ($123 million in 2005, adjusted 
annually for inflation).
    First, the bill would impose a private-sector mandate on 
copyright owners. Section 202 would limit the right of 
copyright owners to collect compensation under copyright law 
from persons using or manufacturing a technology that enables 
making limited changes to a motion picture for a private home 
viewing. According to testimony from the Patent and Trademark 
Office and other sources, no such compensation is currently 
received by copyright owners. Therefore, CBO estimates that the 
direct cost of the mandate, measured as net income forgone, 
would be small or zero.
    Second, section 202 would impose a private-sector mandate 
on manufacturers, licensees, and licensors of technology 
(manufactured 6 months or more after the bill's enactment) that 
enables the making of limited portions of audio or video 
content of a motion picture imperceptible. Such manufacturers, 
licensees, or licensors would be required to ensure that the 
technology provides a clear and conspicuous notice that the 
performance of the motion picture is altered from the 
performance intended by the director or copyright holder of the 
motion picture. Complying with the mandate would exempt such 
manufacturers, licensees, or licensors from liability under 
section 32 of the Trademark Act of 1946. The direct cost of the 
mandate on those private-sector entities would be the total 
cost of providing the notice less the direct savings achieved 
by limiting their liability. CBO has no basis for determining 
the direct savings for the exemption from trademark liability. 
However, according to government and other sources, the 
technology to provide the required notice is readily available 
and is currently used by some manufacturers. Thus, CBO expects 
that the direct cost to comply with the mandate, if any, would 
be minimal.

                         ESTIMATE PREPARED BY:

Federal Costs: Melissa E. Zimmerman and Mark Grabowicz (226-
    2860)
Impact on State, Local, and Tribal Governments: Theresa Gullo 
    (225-3220)
Impact on the Private Sector: Paige Piper/Bach (226-2940)

                         ESTIMATE APPROVED BY:

Peter H. Fontaine
Deputy Assistant Director for Budget Analysis

                    Performance Goals and Objectives

    The Committee states that pursuant to clause 3(c)(4) of 
Rule XIII of the Rules of the House of Representatives, S. 167 
will assist the Department of Justice in its efforts to 
prosecute intellectual property theft; clarify the legal status 
of certain services and technologies that enable individuals to 
skip and mute content on certain works in the privacy of their 
own home; reauthorize the National Film Preservation Board and 
Foundation at the Library of Congress; and extend the 
availability of copyrighted works to libraries and archives.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of Rule XIII of the Rules of the 
House of Representatives, the Committee finds the authority for 
this legislation in Article I, Section 8, Clause 8 of the 
Constitution.

               Section-by-Section Analysis and Discussion

    Section 1. Short Title. This section states that the 
legislation may be cited as the ``Family Entertainment and 
Copyright Act of 2005.''
    Title I. The Artists' Rights and Theft Prevention Act of 
2005. Title I contains two primary components: the first 
creates new criminal penalties for those who camcord motion 
pictures in motion picture exhibition theaters; the second 
creates new civil and criminal causes of action for the willful 
distribution of works being prepared for commercial 
distribution.
    Subsection (a) of the new Sec. 2319B created by Title I of 
S. 167 sets forth the substantive elements of the offense. 
Under this subsection, a person violates the statute when he or 
she, without the authorization of the copyright owner, 
knowingly uses or attempts to use an audiovisual recording 
device in a motion picture exhibition facility to transmit or 
make a copy of a motion picture or other audiovisual work 
protected under Title 17 or any part thereof. The legislation 
creates a new definition for the term ``motion picture 
exhibition facility.'' Other terms used in the legislation are 
defined in Section 101 of Title 17.
    Subsection (d) creates an immunity from liability for 
theater owners and associated individuals for their good faith 
efforts to reasonably detain someone they suspect of violating 
this Section in their theater(s). This provision is modeled 
upon numerous shopkeeper privilege statutes that exist in state 
and local laws.
    Subsection (f) clarifies that States may regulate the use 
of audiovisual recording devices in specific locations through 
the use of their police powers without impermissibly 
interfering with Federal copyright policy. The Committee is 
aware that several states have enacted legislation with 
proscriptions similar to those in the Federal law against using 
or attempting to use the recording functions of a camcorder or 
similar device without the express consent of a theater 
owner.\5\
---------------------------------------------------------------------------
    \5\ See, e.g., Ariz. Rev. Stat.13-3723(a); Cal. Penal Code 653z 
(a). Other states have added the copyright owner to the permission 
chain. See, e.g., Ohio Rev. Code Ann. 2913.07(A)(1) (requiring consent 
of the licensor).
---------------------------------------------------------------------------
    Preemption of State criminal statutes may occur under 
either Sec. 301 of Title 17 where the gravamen of the state 
cause of action contains an element in addition to an 
allegation of wrongful copying or under the doctrine of 
conflict preemption. The Committee believes that statutes such 
as those above are qualitatively different for purposes of the 
``extra element'' statutory preemption test under Sec. 301. 
They contain the extra elements of operation or attempted 
operation of a device, which does not involve copying at all 
and, perhaps more importantly, the entry onto property to 
perform an act that is both unauthorized by the real property 
owner and harmful to the lawful use of that property. 
Nonetheless, the purpose of this section is to make it 
unequivocally clear that neither Sec. 301 nor the non-statutory 
doctrine of conflict preemption precludes the enforcement of 
such statutes on the basis that they interfere with the express 
or implicit policies of the Copyright Act.
    Section 105 directs the United States Sentencing Commission 
to review and update, if appropriate, the sentencing guidelines 
and policy statements surrounding several intellectual property 
rights crimes.
    Title II. The Family Movie Act. Section 202(a) of the 
legislation creates a new subsection Sec. 110 (11) of Title 17. 
This new subsection ensures that U.S. copyright law does not 
prohibit sanctions the use of any filtering service or 
technology that mutes or skips content, provided the service or 
technology:

        1. Lis confined to private, in-home use;

        2. Lfor the household of the purchasing consumer only; 
        and

        3. Ldoes not create a fixed copy of the alternate 
        version.

    Section 202(b) of the legislation clarifies existing U.S. 
trademark law to ensure that it cannot be interpreted to 
proscribe the operation of services identified in Sec. 202(a) 
so long as they display a clear and conspicuous notice that the 
altered version is not the performance intended by the director 
or copyright holder of the motion picture.
    The Committee believes that an on-screen disclaimer in 
large font at the beginning of a performance of a particular 
work that is displayed for a length of time suitable for the 
average viewer to read the notice is sufficient. Such notice 
would be similar to the FBI anti-piracy warnings shown at the 
beginning of most major motion pictures. This requirement 
begins 180 days after the legislation becomes law. Since the 
manufacturer of a physical device complying with the 
requirements maintains control over the device before the 
retail purchase point, consumer electronics manufacturers are 
the most likely point of inclusion of such notices.
    Title III. National Film Preservation Act of 2005. Title 
III reauthorizes the National Film Preservation Board and 
Foundation and makes several changes to the operation of each. 
Section 312(a) also authorizes appropriations not to exceed 
$530,000 in each of the fiscal years 2005 through 2009.
    Title IV. Preservation of Orphan Works Act. Title IV 
inserts a missing cross reference to 17 U.S.C. Sec. 108(h) in 
17 U.S.C. Sec. 108(i). The inadvertent omission of the cross 
reference limited libraries and archives access to certain 
works during the last 20 years of term. This was not the 
Committee's intent when it passed the ``Sonny Bono Copyright 
Term Extension Act of 1998.''

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) 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 (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, existing law in which no change 
is proposed is shown in roman):


TITLE deg.TITLE 18, UNITED STATES CODE

           *       *       *       *       *       *       *


PART I--CRIMES

           *       *       *       *       *       *       *


                      CHAPTER 113--STOLEN PROPERTY

Sec.
2311.    Definitions
     * * * * * * *
2319B.    Unauthorized recording of motion pictures in a motion picture 
          exhibition facility.

           *       *       *       *       *       *       *


Sec. 2319. Criminal infringement of a copyright

    (a) [Whoever] Any person who violates section 506(a) 
(relating to criminal offenses) of title 17 shall be punished 
as provided in subsections (b) [and (c) of this section], (c), 
and (d) and such penalties shall be in addition to any other 
provisions of title 17 or any other law.
    (b) Any person who commits an offense under [section 
506(a)(1)] section 506(a)(1)(A) of title 17--
            (1) * * *

           *       *       *       *       *       *       *

    (c) Any person who commits an offense under [section 
506(a)(2) of title 17, United States Code] section 506(a)(1)(B) 
of title 17--
            (1) * * *

           *       *       *       *       *       *       *

    (d) Any person who commits an offense under section 
506(a)(1)(C) of title 17--
            (1) shall be imprisoned not more than 3 years, 
        fined under this title, or both;
            (2) shall be imprisoned not more than 5 years, 
        fined under this title, or both, if the offense was 
        committed for purposes of commercial advantage or 
        private financial gain;
            (3) shall be imprisoned not more than 6 years, 
        fined under this title, or both, if the offense is a 
        second or subsequent offense; and
            (4) shall be imprisoned not more than 10 years, 
        fined under this title, or both, if the offense is a 
        second or subsequent offense under paragraph (2).
    [(d)] (e)(1) * * *

           *       *       *       *       *       *       *

    [(e)] (f) As used in this section--
            (1) the terms ``phonorecord'' and ``copies'' have, 
        respectively, the meanings set forth in section 101 
        (relating to definitions) of title 17; [and]
            (2) the terms ``reproduction'' and ``distribution'' 
        refer to the exclusive rights of a copyright owner 
        under clauses (1) and (3) respectively of section 106 
        (relating to exclusive rights in copyrighted works), as 
        limited by sections 107 through 122, of title 17[.];
            (3) the term ``financial gain'' has the meaning 
        given the term in section 101 of title 17; and
            (4) the term ``work being prepared for commercial 
        distribution'' has the meaning given the term in 
        section 506(a) of title 17.

           *       *       *       *       *       *       *


Sec. 2319B. Unauthorized recording of Motion pictures in a Motion 
                    picture exhibition facility

    (a) Offense.--Any person who, without the authorization of 
the copyright owner, knowingly uses or attempts to use an 
audiovisual recording device to transmit or make a copy of a 
motion picture or other audiovisual work protected under title 
17, or any part thereof, from a performance of such work in a 
motion picture exhibition facility, shall--
            (1) be imprisoned for not more than 3 years, fined 
        under this title, or both; or
            (2) if the offense is a second or subsequent 
        offense, be imprisoned for no more than 6 years, fined 
        under this title, or both.
The possession by a person of an audiovisual recording device 
in a motion picture exhibition facility may be considered as 
evidence in any proceeding to determine whether that person 
committed an offense under this subsection, but shall not, by 
itself, be sufficient to support a conviction of that person 
for such offense.
    (b) Forfeiture and Destruction.--When a person is convicted 
of a violation of subsection (a), the court in its judgment of 
conviction shall, in addition to any penalty provided, order 
the forfeiture and destruction or other disposition of all 
unauthorized copies of motion pictures or other audiovisual 
works protected under title 17, or parts thereof, and any 
audiovisual recording devices or other equipment used in 
connection with the offense.
    (c) Authorized Activities.--This section does not prevent 
any lawfully authorized investigative, protective, or 
intelligence activity by an officer, agent, or employee of the 
United States, a State, or a political subdivision of a State, 
or by a person acting under a contract with the United States, 
a State, or a political subdivision of a State.
    (d) Immunity for Theaters.--With reasonable cause, the 
owner or lessee of a motion picture exhibition facility where a 
motion picture or other audiovisual work is being exhibited, 
the authorized agent or employee of such owner or lessee, the 
licensor of the motion picture or other audiovisual work being 
exhibited, or the agent or employee of such licensor--
            (1) may detain, in a reasonable manner and for a 
        reasonable time, any person suspected of a violation of 
        this section with respect to that motion picture or 
        audiovisual work for the purpose of questioning or 
        summoning a law enforcement officer; and
            (2) shall not be held liable in any civil or 
        criminal action arising out of a detention under 
        paragraph (1).
    (e) Victim Impact Statement.--
            (1) In general.--During the preparation of the 
        presentence report under rule 32(c) of the Federal 
        Rules of Criminal Procedure, victims of an offense 
        under this section shall be permitted to submit to the 
        probation officer a victim impact statement that 
        identifies the victim of the offense and the extent and 
        scope of the injury and loss suffered by the victim, 
        including the estimated economic impact of the offense 
        on that victim.
            (2) Contents.--A victim impact statement submitted 
        under this subsection shall include--
                    (A) producers and sellers of legitimate 
                works affected by conduct involved in the 
                offense;
                    (B) holders of intellectual property rights 
                in the works described in subparagraph (A); and
                    (C) the legal representatives of such 
                producers, sellers, and holders.
    (f) State Law Not Preempted.--Nothing in this section may 
be construed to annul or limit any rights or remedies under the 
laws of any State.
    (g) Definitions.--In this section, the following 
definitions shall apply:
            (1) Title 17 definitions.--The terms ``audiovisual 
        work'', ``copy'', ``copyright owner'', ``motion 
        picture'', ``motion picture exhibition facility'', and 
        ``transmit'' have, respectively, the meanings given 
        those terms in section 101 of title 17.
            (2) Audiovisual recording device.--The term 
        ``audiovisual recording device'' means a digital or 
        analog photographic or video camera, or any other 
        technology or device capable of enabling the recording 
        or transmission of a copyrighted motion picture or 
        other audiovisual work, or any part thereof, regardless 
        of whether audiovisual recording is the sole or primary 
        purpose of the device.

           *       *       *       *       *       *       *

                              ----------                              


                      TITLE 17, UNITED STATES CODE



           *       *       *       *       *       *       *
CHAPTER 1--SUBJECT MATTER AND SCOPE OF COPYRIGHT

           *       *       *       *       *       *       *


Sec. 101. Definitions

    Except as otherwise provided in this title, as used in this 
title, the following terms and their variant forms mean the 
following:
            An ``anonymous work'' is a work on the copies or 
        phonorecords of which no natural person is identified 
        as author.

           *       *       *       *       *       *       *

            ``Motion pictures'' are audiovisual works 
        consisting of a series of related images which, when 
        shown in succession, impart an impression of motion, 
        together with accompanying sounds, if any. The term 
        ```motion picture exhibition facility''' means a movie 
        theater, screening room, or other venue that is being 
        used primarily for the exhibition of a copyrighted 
        motion picture, if such exhibition is open to the 
        public or is made to an assembled group of viewers 
        outside of a normal circle of a family and its social 
        acquaintances.

           *       *       *       *       *       *       *


Sec. 108. Limitations on exclusive rights: Reproduction by libraries 
                    and archives

    (a) * * *

           *       *       *       *       *       *       *

    (i) The rights of reproduction and distribution under this 
section do not apply to a musical work, a pictorial, graphic or 
sculptural work, or a motion picture or other audiovisual work 
other than an audiovisual work dealing with news, except that 
no such limitation shall apply with respect to rights granted 
by subsections [(b) and (c)] (b), (c), and (h), or with respect 
to pictorial or graphic works published as illustrations, 
diagrams, or similar adjuncts to works of which copies are 
reproduced or distributed in accordance with subsections (d) 
and (e).

           *       *       *       *       *       *       *


Sec. 110. Limitations on exclusive rights: Exemption of certain 
                    performances and displays

    Notwithstanding the provisions of section 106, the 
following are not infringements of copyright:
            (1) * * *

           *       *       *       *       *       *       *

            (9) performance on a single occasion of a dramatic 
        literary work published at least ten years before the 
        date of the performance, by or in the course of a 
        transmission specifically designed for and primarily 
        directed to blind or other handicapped persons who are 
        unable to read normal printed material as a result of 
        their handicap, if the performance is made without any 
        purpose of direct or indirect commercial advantage and 
        its transmission is made through the facilities of a 
        radio subcarrier authorization referred to in clause 
        (8)(iii), Provided, That the provisions of this clause 
        shall not be applicable to more than one performance of 
        the same work by the same performers or under the 
        auspices of the same organization; [and]
            (10) notwithstanding paragraph (4), the following 
        is not an infringement of copyright: performance of a 
        nondramatic literary or musical work in the course of a 
        social function which is organized and promoted by a 
        nonprofit veterans' organization or a nonprofit 
        fraternal organization to which the general public is 
        not invited, but not including the invitees of the 
        organizations, if the proceeds from the performance, 
        after deducting the reasonable costs of producing the 
        performance, are used exclusively for charitable 
        purposes and not for financial gain. For purposes of 
        this section the social functions of any college or 
        university fraternity or sorority shall not be included 
        unless the social function is held solely to raise 
        funds for a specific charitable purpose[.]; and
            (11) the making imperceptible, by or at the 
        direction of a member of a private household, of 
        limited portions of audio or video content of a motion 
        picture, during a performance in or transmitted to that 
        household for private home viewing, from an authorized 
        copy of the motion picture, or the creation or 
        provision of a computer program or other technology 
        that enables such making imperceptible and that is 
        designed and marketed to be used, at the direction of a 
        member of a private household, for such making 
        imperceptible, if no fixed copy of the altered version 
        of the motion picture is created by such computer 
        program or other technology.

           *       *       *       *       *       *       *

    For purposes of paragraph (11), the term ``making 
imperceptible'' does not include the addition of audio or video 
content that is performed or displayed over or in place of 
existing content in a motion picture.
    Nothing in paragraph (11) shall be construed to imply 
further rights under section 106 of this title, or to have any 
effect on defenses or limitations on rights granted under any 
other section of this title or under any other paragraph of 
this section.

           *       *       *       *       *       *       *


CHAPTER 4--COPYRIGHT NOTICE, DEPOSIT, AND REGISTRATION

           *       *       *       *       *       *       *


Sec. 408. Copyright registration in general

    (a) * * *

           *       *       *       *       *       *       *

    (f) Preregistration of Works Being Prepared for Commercial 
Distribution.--
            (1) Rulemaking.--Not later than 180 days after the 
        date of enactment of this subsection, the Register of 
        Copyrights shall issue regulations to establish 
        procedures for preregistration of a work that is being 
        prepared for commercial distribution and has not been 
        published.
            (2) Class of works.--The regulations established 
        under paragraph (1) shall permit preregistration for 
        any work that is in a class of works that the Register 
        determines has had a history of infringement prior to 
        authorized commercial distribution.
            (3) Application for registration.--Not later than 3 
        months after the first publication of a work 
        preregistered under this subsection, the applicant 
        shall submit to the Copyright Office--
                    (A) an application for registration of the 
                work;
                    (B) a deposit; and
                    (C) the applicable fee.
            (4) Effect of untimely application.--An action 
        under this chapter for infringement of a work 
        preregistered under this subsection, in a case in which 
        the infringement commenced no later than 2 months after 
        the first publication of the work, shall be dismissed 
        if the items described in paragraph (3) are not 
        submitted to the Copyright Office in proper form within 
        the earlier of--
                    (A) 3 months after the first publication of 
                the work; or
                    (B) 1 month after the copyright owner has 
                learned of the infringement.

           *       *       *       *       *       *       *


Sec. 411. Registration and infringement actions

    (a) Except for an action brought for a violation of the 
rights of the author under section 106A(a), and subject to the 
provisions of subsection (b), no action for infringement of the 
copyright in any United States work shall be instituted until 
preregistration or registration of the copyright claim has been 
made in accordance with this title. In any case, however, where 
the deposit, application, and fee required for registration 
have been delivered to the Copyright Office in proper form and 
registration has been refused, the applicant is entitled to 
institute an action for infringement if notice thereof, with a 
copy of the complaint, is served on the Register of Copyrights. 
The Register may, at his or her option, become a party to the 
action with respect to the issue of registrability of the 
copyright claim by entering an appearance within sixty days 
after such service, but the Register's failure to become a 
party shall not deprive the court of jurisdiction to determine 
that issue.

           *       *       *       *       *       *       *


Sec. 412. Registration as prerequisite to certain remedies for 
                    infringement

    In any action under this title, other than an action 
brought for a violation of the rights of the author under 
section 106A(a), an action for infringement of the copyright of 
a work that has been preregistered under section 408(f) before 
the commencement of the infringement and that has an effective 
date of registration not later than the earlier of 3 months 
after the first publication of the work or 1 month after the 
copyright owner has learned of the infringement, or an action 
instituted under section 411(b), no award of statutory damages 
or of attorney's fees, as provided by sections 504 and 505, 
shall be made for--
            (1) * * *

           *       *       *       *       *       *       *


CHAPTER 5--COPYRIGHT INFRINGEMENT AND REMEDIES

           *       *       *       *       *       *       *


Sec. 506. Criminal offenses

    [(a) Criminal Infringement.--Any person who infringes a 
copyright willfully either--
            [(1) for purposes of commercial advantage or 
        private financial gain, or
            [(2) by the reproduction or distribution, including 
        by electronic means, during any 180-day period, of 1 or 
        more copies or phonorecords of 1 or more copyrighted 
        works, which have a total retail value of more than 
        $1,000,
shall be punished as provided under section 2319 of title 18, 
United States Code. For purposes of this subsection, evidence 
of reproduction or distribution of a copyrighted work, by 
itself, shall not be sufficient to establish willful 
infringement.]
    (a) Criminal Infringement.--
            (1) In general.--Any person who willfully infringes 
        a copyright shall be punished as provided under section 
        2319 of title 18, if the infringement was committed--
                    (A) for purposes of commercial advantage or 
                private financial gain;
                    (B) by the reproduction or distribution, 
                including by electronic means, during any 180-
                day period, of 1 or more copies or phonorecords 
                of 1 or more copyrighted works, which have a 
                total retail value of more than $1,000; or
                    (C) by the distribution of a work being 
                prepared for commercial distribution, by making 
                it available on a computer network accessible 
                to members of the public, if such person knew 
                or should have known that the work was intended 
                for commercial distribution.
            (2) Evidence.--For purposes of this subsection, 
        evidence of reproduction or distribution of a 
        copyrighted work, by itself, shall not be sufficient to 
        establish willful infringement of a copyright.
            (3) Definition.--In this subsection, the term 
        ``work being prepared for commercial distribution'' 
        means--
                    (A) a computer program, a musical work, a 
                motion picture or other audiovisual work, or a 
                sound recording, if, at the time of 
                unauthorized distribution--
                            (i) the copyright owner has a 
                        reasonable expectation of commercial 
                        distribution; and
                            (ii) the copies or phonorecords of 
                        the work have not been commercially 
                        distributed; or
                    (B) a motion picture, if, at the time of 
                unauthorized distribution, the motion picture--
                            (i) has been made available for 
                        viewing in a motion picture exhibition 
                        facility; and
                            (ii) has not been made available in 
                        copies for sale to the general public 
                        in the United States in a format 
                        intended to permit viewing outside a 
                        motion picture exhibition facility.

           *       *       *       *       *       *       *

                              ----------                              


                SECTION 32 OF THE TRADEMARK ACT OF 1946

    Sec. 32. (1) * * *

           *       *       *       *       *       *       *

    (3)(A) Any person who engages in the conduct described in 
paragraph (11) of section 110 of title 17, United States Code, 
and who complies with the requirements set forth in that 
paragraph is not liable on account of such conduct for a 
violation of any right under this Act. This subparagraph does 
not preclude liability, nor shall it be construed to restrict 
the defenses or limitations on rights granted under this Act, 
of a person for conduct not described in paragraph (11) of 
section 110 of title 17, United States Code, even if that 
person also engages in conduct described in paragraph (11) of 
section 110 of such title.
    (B) A manufacturer, licensee, or licensor of technology 
that enables the making of limited portions of audio or video 
content of a motion picture imperceptible as described in 
subparagraph (A) is not liable on account of such manufacture 
or license for a violation of any right under this Act, if such 
manufacturer, licensee, or licensor ensures that the technology 
provides a clear and conspicuous notice at the beginning of 
each performance that the performance of the motion picture is 
altered from the performance intended by the director or 
copyright holder of the motion picture. The limitations on 
liability in subparagraph (A) and this subparagraph shall not 
apply to a manufacturer, licensee, or licensor of technology 
that fails to comply with this paragraph.
    (C) The requirement under subparagraph (B) to provide 
notice shall apply only with respect to technology manufactured 
after the end of the 180-day period beginning on the date of 
the enactment of the Family Movie Act of 2005.
    (D) Any failure by a manufacturer, licensee, or licensor of 
technology to qualify for the exemption under subparagraphs (A) 
and (B) shall not be construed to create an inference that any 
such party that engages in conduct described in paragraph (11) 
of section 110 of title 17, United States Code, is liable for 
trademark infringement by reason of such conduct.
                              ----------                              


                 NATIONAL FILM PRESERVATION ACT OF 1996



           *       *       *       *       *       *       *
SEC. 103. DUTIES OF THE LIBRARIAN OF CONGRESS.

    (a) * * *
    (b) Use of Seal.--The seal provided under subsection (a)(3) 
may only be used on [film copies] film or other approved copies 
of the Registry version of a film. Such seal may be used only 
after the Librarian has given approval to those persons seeking 
to apply the seal in accordance with the guidelines under 
subsection (a)(3). In the case of [copyrighted] copyrighted, 
mass distributed, broadcast, or published works, only the 
copyright owner or an authorized licensee of the copyright 
owner may place or authorize the placement of the seal on any 
[film copy] film or other approved copy of a Registry version 
of a film selected for inclusion in the National Film Registry, 
and the Librarian may place the seal on any [film copy] film or 
other approved copy of the Registry version of any film that is 
maintained in the National Film Registry Collection in the 
Library of Congress. Anyone authorized to place the seal on any 
[film copy] film or other approved copy of any Registry version 
of a film may accompany such seal with the following language: 
``This film was selected for inclusion in the National Film 
Registry by the National Film Preservation Board of the Library 
of Congress because of its cultural, historical, or aesthetic 
significance.''.
    (c) Coordination of Program With Other Collection, 
Preservation, and Accessibility Activities.--In carrying out 
the comprehensive national film preservation program for motion 
pictures established under the National Film Preservation Act 
of 1992, the Librarian, in consultation with the Board 
established pursuant to section 104, shall--
            (1) carry out activities to make films included in 
        the National Film registry more broadly accessible for 
        research and educational purposes, and to generate 
        public awareness and support of the Registry and the 
        comprehensive national film preservation program;
            (2) review the comprehensive national film 
        preservation plan, and amend it to the extent necessary 
        to ensure that it addresses technological advances in 
        the preservation and storage of, and access to film 
        collections in multiple formats; and
            (3) wherever possible, undertake expanded 
        initiatives to ensure the preservation of the moving 
        image heritage of the United States, including film, 
        videotape, television, and born digital moving image 
        formats, by supporting the work of the National Audio-
        Visual Conservation Center of the Library of Congress, 
        and other appropriate nonprofit archival and 
        preservation organizations.

SEC. 104. NATIONAL FILM PRESERVATION BOARD.

    (a) Number and Appointment.--
            (1) Members.--The Librarian shall establish in the 
        Library of Congress a National Film Preservation Board 
        to be comprised of [20] 22 members, who shall be 
        selected by the Librarian in accordance with this 
        section. Subject to subparagraphs (C) and (N), the 
        Librarian shall request each organization listed in 
        subparagraphs (A) through (Q) to submit a list of three 
        candidates qualified to serve as a member of the Board. 
        Except for the members-at-large appointed under 
        subparagraph (2), the Librarian shall appoint one 
        member from each such list submitted by such 
        organizations, and shall designate from that list an 
        alternate who may attend at Board expense those 
        meetings to which the individual appointed to the Board 
        cannot attend. The organizations are the following:
                    (A) * * *

           *       *       *       *       *       *       *

            (2) Members-at-large.--In addition to the members 
        appointed under paragraph (1), the Librarian shall 
        appoint up to [three] 5 members-at-large. The Librarian 
        shall also select an alternate for each member at-
        large, who may attend at Board expense those meetings 
        which the member at-large cannot attend.

           *       *       *       *       *       *       *

    (d) Quorum.--[11] 12 members of the Board shall constitute 
a quorum but a lesser number may hold hearings.
    [(e) Reimbursement of Expenses.--Members of the Board shall 
serve without pay, but may be reimbursed for the actual and 
necessary traveling and subsistence expenses incurred by them 
in the performance of the duties of the Board.]
    (e) Reimbursement of Expenses.--Members of the Board shall 
serve without pay, but may receive travel expenses, including 
per diem in lieu of subsistence, in accordance with sections 
5702 and 5703 of title 5, United States Code.

           *       *       *       *       *       *       *


SEC. 106. NATIONAL FILM REGISTRY COLLECTION OF THE LIBRARY OF CONGRESS.

    (a) * * *

           *       *       *       *       *       *       *

    (e) National Audio-Visual Conservation Center.--The 
Librarian shall utilize the National Audio-Visual Conservation 
Center of the Library of Congress at Culpeper, Virginia, to 
ensure that preserved films included in the National Film 
Registry are stored in a proper manner, and disseminated to 
researchers, scholars, and the public as may be appropriate in 
accordance with--
            (1) title 17, United States Code; and
            (2) the terms of any agreements between the 
        Librarian and persons who hold copyrights to such 
        audiovisual works.

SEC. 107. SEAL OF THE NATIONAL FILM REGISTRY.

    (a) Use of the Seal.--
            (1) Prohibition on distribution and exhibition.--No 
        person shall knowingly distribute or exhibit to the 
        public a version of a film or any copy in any format of 
        a film which bears the seal described in section 
        103(a)(3) if such film--
                    (A) * * *

           *       *       *       *       *       *       *

            (2) Prohibition on promotion.--No person shall 
        knowingly use the seal described in section 103(a)(3) 
        to promote any version of a film [or film copy] in any 
        format other than a Registry version.

           *       *       *       *       *       *       *


SEC. 113. EFFECTIVE DATE.

    The provisions of this title shall be effective for [7] 13 
years beginning on the date of the enactment of this Act. The 
provisions of this title shall apply to any copy of any film, 
including those copies of films selected for inclusion in the 
National Film Registry under the National Film Preservation Act 
of 1988 and the National Film Preservation Act of 1992, except 
that any film so selected under either Act shall be deemed to 
have been selected for the National Film Registry under this 
title.

           *       *       *       *       *       *       *

                              ----------                              


                      TITLE 36, UNITED STATES CODE



           *       *       *       *       *       *       *
SUBTITLE II--PATRIOTIC AND NATIONAL ORGANIZATIONS

           *       *       *       *       *       *       *


PART B--ORGANIZATIONS

           *       *       *       *       *       *       *


CHAPTER 1517--NATIONAL FILM PRESERVATION FOUNDATION

           *       *       *       *       *       *       *


Sec. 151703. Board of directors

    (a) * * *
    (b) Members and Appointment.--(1) * * *
    (2)(A) The board consists of [nine] 12 directors.

           *       *       *       *       *       *       *

    (4) The terms of office of the directors are 4 years. [An 
individual may not serve more than two consecutive terms.] 
There shall be no limit to the number of terms to which any 
individual may be appointed.

           *       *       *       *       *       *       *


Sec. 151705. Powers

    (a) * * *
    (b) Powers as Trustee.--To carry out its purposes, the 
corporation has the usual powers of a corporation acting as a 
trustee in the [District of Columbia] the jurisdiction in which 
the principal office of the corporation is located, including 
the power--
            (1) * * *

           *       *       *       *       *       *       *


Sec. 151706. Principal office

    The principal office of the corporation shall be in the 
District of Columbia, or another place as determined by the 
board of directors. However, the corporation may conduct 
business throughout the States, territories, and possessions of 
the United States.

           *       *       *       *       *       *       *


Sec. 151711. Authorization of appropriations

    [(a) Authorization.--There are authorized to be 
appropriated to the Library of Congress amounts necessary to 
carry out this chapter, not to exceed $250,000 for each of the 
fiscal years ending September 30, 2000-2005. These amounts are 
to be made available to the corporation to match private 
contributions (whether in currency, services, or property) made 
to the corporation by private persons and State and local 
governments.
    [(b) Limitation Related to Administrative Expenses.--
Amounts authorized under this section may not be used by the 
corporation for administrative expenses of the corporation, 
including salaries, travel, transportation, and overhead 
expenses.]
    (a) Authorization of Appropriations.--There are authorized 
to be appropriated to the Library of Congress amounts necessary 
to carry out this chapter, not to exceed $530,000 for each of 
the fiscal years 2005 through 2009. These amounts are to be 
made available to the corporation to match any private 
contributions (whether in currency, services, or property) made 
to the corporation by private persons and State and local 
governments.
    (b) Limitation Related to Administrative Expenses.--Amounts 
authorized under this section may not be used by the 
corporation for management and general or fundraising expenses 
as reported to the Internal Revenue Service as part of an 
annual information return required under the Internal Revenue 
Code of 1986.

           *       *       *       *       *       *       *


                     Committee Jurisdiction Letters

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                           Markup Transcript



                            BUSINESS MEETING

                        WEDNESDAY, MARCH 9, 2005

                  House of Representatives,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:00 a.m., in 
Room 2141, Rayburn House Office Building, Hon. F. James 
Sensenbrenner, Jr. [Chairman of the Committee] presiding.
    Chairman Sensenbrenner. The Committee will be in order. A 
working quorum is present comprised entirely of Members of the 
majority party. So rather than doing a ratification of minority 
Committee assignments, since there is no one here to make a 
motion to do that, we will now go to the next item on the 
agenda which is the adoption of S. 167, the ``Family 
Entertainment and Copyright Act of 2005,'' and the Chair 
recognizes the gentlemen from Texas, Mr. Smith, the Chairman of 
the Subcommittee on Courts, the Internet, and Intellectual 
Property for a motion.
    Mr. Smith. Mr. Chairman, I ask unanimous consent that we 
consider the following bills en bloc: S. 167, H.R. 683, H.R. 
1036, H.R. 1037, H.R. 1038.
    Chairman Sensenbrenner. How about House Concurrent 
Resolution----
    Mr. Smith. It's my understanding, Chairman, that needs to 
be considered separately.
    Chairman Sensenbrenner. Okay. Without objection, the 5 
bills mentioned by the gentleman from Texas will be considered 
en bloc, and the Chair recognizes the gentleman from Texas to 
explain them.
    Mr. Smith. I'll try to be brief, Mr. Chairman. The first 
bill, S. 167 really consists of three previous bills that this 
Committee has approved and that passed the House last year. The 
first one is the Family Movie Act, and I think Members will 
recall that that simply gives parents the right to determine 
what their children see when they rent or buy a movie video.
    The second part of this particular bill is the Art Act 
which creates new penalties for those who camcord movies in 
public theaters and who willfully infringe copyright law by 
distributing copies of prereleased works, movies or otherwise.
    The Trademark Dilution Revision Act of 2005 simply, 
basically protects trademarks in a better way and also makes 
sure that people cannot infringe trademarks as easily as they 
do now. It also does a good job of trying to keep us out of 
court to determine some of the ambiguities of that particular 
subject.
    The two technical correction bills are just that, technical 
corrections of the Satellite Viewer, Home Viewer Movie Act, and 
the technical corrections, in addition to the satellite 
corrections are technical corrections of the CARP bill, which 
we approved last year and which passed the House.
    The last bill in the en bloc package, Mr. Chairman, is your 
bill, the Multidistrict Litigation Restoration Act of 2005, and 
I will yield to you to make any comments on that.
    And that would be the quick summary of the five bills en 
bloc.
    [The bill, S. 167, follows:]


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    Chairman Sensenbrenner. The Chair passes on this.
    Without objection, all Members may place opening statements 
in the record on each of the bills being considered en bloc at 
this time. Hearing no objection, so ordered.
    [The prepared statement of Mr. Conyers follows:]
Prepared Statement of the Honorable John Conyers, Jr., a Representative 
 in Congress from the State of Michigan, and Ranking Member, Committee 
                            on the Judiciary
    I rise in support of this legislation with reservations about one 
part. At the outset, I strongly support efforts to make it more 
difficult to steal content and to encourage preservation of historic 
content.
    As I have said before, the content industries are a boon to our 
economy, providing this country's number one export. Their products, 
which include music, movies, books, and software, survive on the 
protection given by copyright law. Without protection from rampant 
copying and other infringement, creators would have no reason to keep 
creating and investing in new content.
    The success of copyrighted content, however, is also its Achilles' 
Heel. People now camcord movies in theaters to sell online or in DVD 
format. They obtain pre-release copies of content and sell it online. 
Of course, this is illegal because it is done without the permission of 
the content owners and without payment to them. This bill clarifies 
that these two acts are illegal even if technology makes it easy and 
fast and cheap. While I believe we should do more to stop piracy, S. 
167 is a step in the right direction.
    Having said that, I would like to clarify one issue. The civil 
enforcement side of the pre-release provision imposes a statute of 
limitations on certain copyright lawsuits. Because it imposes the limit 
only for infringements that occur no more than two months after pre-
registered content is first distributed, it is clear that the bill does 
not impose any time limit on filing lawsuits for infringements that 
occur more than two months after distribution.
    The bill also contains two provisions that will encourage the 
preservation of historically-significant content. First, it 
reauthorizes the National Film Preservation Board and National Film 
Preservation Foundation, which review initiatives to ensure the 
preservation of valued films and issue grants to libraries and other 
institutions that can save films from degradation. The Directors Guild 
of America and the Academy of Motion Picture Arts and Sciences have 
applauded these efforts. The program expired in 2003, so S. 167 extends 
it until 2009.
    The second preservation piece, the ``Preservation of Orphan Works 
Act,'' will empower libraries and archives to make additional copies of 
musical works, movies, and other content.
    My one objection to S. 167, however, is with the ``Family Movie 
Act,'' which would allow private companies to sell movie editing 
software without permission from the filmmakers. This was proposed in 
response to a lawsuit between one company and filmmakers. From our 
consideration of this provision last year, we know this section will 
take away the copyrights and artistic rights of filmmakers to the 
financial benefit of one private company. It is important to note that 
the bill does not immunize those who make fixed copies of edited 
content; such copies would still be illegal, as they are today, and the 
legislative history should reflect that.
    I urge my colleagues to vote ``Aye'' on this legislation.

    [The prepared statement of Mr. Berman follows:]

Prepared Statement of the Honorable Howard L. Berman, a Representative 
     in Congress from the State of California, and Ranking Member, 
    Subcommittee on Courts, the Internet, and Intellectual Property

    Mr. Chairman, thank you for scheduling a mark-up of S. 167. S. 167 
strives to protect copyright owners from rampant infringement and is 
overall a good bill. However, it does little to confront many of the 
important issues we addressed last year with the passage of H.R. 4077. 
I am disappointed that with this bill we seem to have moved backwards, 
but I have been convinced that at this point, a bird in hand is better 
then two in the bush.
    S. 167 attempts to prevent the first step for those distributing 
pirated movies--obtaining the first copy. Copies of brand new movies--
still showing in the theaters--are available on street corners 
throughout the world for two dollars as a result of people using a 
camcorder in theaters. Therefore, as did H.R. 4077, S. 167 criminalizes 
the recording of a movie in a theater with a camcorder. The bill 
extends to the theater owner the right to detain an individual 
suspected of copying a movie. Furthermore, it provides for the 
confiscation of the property used to commit the crime.
    However, preventing the camcording of movies does not solve the 
piracy problem. Pirates will always seek treasure, and where they have 
truly found gold is in obtaining a pre-released copy of a movie, sound 
recording or video game. In testimony on this issue almost two years 
ago, industry representatives testified that two weeks before the 
motion picture THE HULK was to be released in theaters, an incomplete 
work print version of the film had been illegally uploaded onto the 
internet. In fact, reviews for THE HULK were available before its 
release in theaters. The harm to the market of a copyrighted work 
exponentially increases if the work is released before the editing or 
promotion for the product is completed. Therefore, S. 167 imposes civil 
and criminal penalties for the willful distribution of a work being 
prepared for commercial distribution.
    A very important provision of S. 167 is the reauthorization of the 
National Film Preservation Board and the National Film Preservation 
Foundation. These organizations play a vital role in maintaining the 
history of film. Finally, included in S. 167 is a bill I introduced 
with Mr. Smith and Ms. Lofgren, in the last Congress. The orphan works 
provision is designed to allow libraries and archives to use certain 
copyrighted materials during the last 20 years of term of the 
copyright, under specific conditions. In this way, we have addressed 
concerns by the user community and made copyrighted works more 
accessible.
    What I find problematic about S. 167 is that it fails to address 
core problems facing copyright owners today, including the effect of 
Peer-to- Peer Networks, lack of resources for prosecution of 
intellectual property crimes, and the paucity of education on these 
subjects. Instead of protecting an owner's copyright by addressing the 
problems caused by Peer-to-Peer Networks, the bill shields a technology 
which is harmful to an intellectual property owner. (Clearplay)
    In addition, the drafters of this bill have chosen not to add an 
education provision from H.R. 4077 which would establish a program in 
the Department of Justice to educate public users of the internet of 
the risks involved in downloading illegal copies of copyrighted works. 
Such education would go a long way toward protecting our children from 
pornography, security and privacy threats. What the drafters have 
chosen to include instead is the Family Movie Act, under the guise that 
an exception for this technology provided by Clearplay is adequate to 
shield minor children from violence, sex or profanity. What the bill in 
fact does is provide an exemption from copyright liability for a 
company like Nissam, the claimed owner of the patent to the Clearplay 
technology, which offers a movie viewer the option of enhancing the 
level of violence, sex or profanity.
    Ironically, in H.R. 4077, we had worked out a compromise relating 
to modernizing the Net Act. However, today's legislation remains silent 
on necessary fixes to the Net Act. These fixes could help copyright 
owners deal with 21st Century problems.
    While I am disappointed that this legislation does not go far 
enough to protect against piracy, at least it is a starting point. 
Overall, I am pleased with most of the provisions in the bill. However, 
I look forward to working with the Chairman of the Subcommittee in 
drafting a bill later in this Congress that further protects the rights 
of copyright holders. In the meanwhile, I urge my colleagues to support 
this bill.

    Chairman Sensenbrenner. Are there any amendments to any of 
the bills?
    [No response.]
    There being no amendments, without objection, the previous 
question is ordered on reporting the bills favorably and the 
vote on reporting these bills favorably will be taken when a 
reporting quorum is present.
    Without objection the order for the previous question is 
vitiated. There is a Subcommittee amendment on H.R. 683, the 
Dilution Bill. Without objection, the Subcommittee amendment is 
agreed to. Hearing none, so ordered.
    And now without objection, the previous question is ordered 
on reporting the bills favorably with H.R. 683 being reported 
favorably as amended. And the vote will be taken at the time 
that a reporting quorum appears.
    [Intervening business.]
    Chairman Sensenbrenner. The gentleman from California.
    Mr. Berman. Thank you, Mr. Chairman. Could I ask unanimous 
consent that we, I guess, rescind the motion to close debate on 
S. 167 so I could simply seek to raise an issue to get into the 
Committee report on that bill?
    Chairman Sensenbrenner. Without objection, the motion on 
the previous question to order favorably reported S. 167 is 
vitiated, and the gentleman from California is recognized for 5 
minutes to strike the last word.
    Mr. Berman. Thank you, Mr. Chairman. I appreciate that. I 
will simply incorporate by reference all critical comments 
about that portion of S. 167, known as the Family Movie Act, 
but I would like to bring to the Chairman both of the full 
Committee and the Subcommittee's attention, an issue involved 
in this part of the bill. We had a conversation last year about 
whether the bill might be read to provide a defense to 
manufacturers of ad-skipping devices. You at that time argued 
that it could not, but promised to work with me to make that 
clear. We did that, and it resulted in the explicit language 
for H.R. 4077, from which this provision comes, which was in 
the bill last year that passed the House.
    That specific language did not come over in the Senate 
bill, and I was wondering if you would be willing to commit, as 
you did last year, to make sure the Committee's report on the 
bill underscores the removal of the language in H.R. 4077 in no 
way renders the bill applicable in litigation over ad skipping.
    Chairman Sensenbrenner. If the gentleman will yield?
    Mr. Berman. I will be happy to.
    Chairman Sensenbrenner. I am happy to make sure that that 
will be in the Committee's report and instruct the staff on 
both sides of the aisle to make sure that the observations of 
the gentleman from California are contained in the Committee 
report before it is filed.
    Mr. Berman. I thank you very much, and I yield back my 
time.
    Chairman Sensenbrenner. The gentleman yields back the 
balance of his time. Are there further amendments to Senate 
167?
    [No response.]
    Chairman Sensenbrenner. If there are no further amendments, 
without objection, the previous question is ordered favorably 
reporting Senate 167.
    We are still one short of a reporting quorum. I would ask 
the Members present to be patient, and as soon as we round up--
here we go. They have been rounded up. [Laughter.]
    The previous question has been ordered on reporting 
favorably the following bills: Senate 167, H.R. 683, H.R. 1036, 
H.R. 1037 and H.R. 1038. So many as are in favor of reporting 
these bills favorably will say aye.
    Opposed, no?
    The ayes appear to have it. The ayes have it, and the bills 
are reported favorably.
    Without objection, those bills which were amended here, 
meaning H.R. 683, will be reported favorably to the House in 
the form of a single amendment in the nature of a substitute, 
incorporating the amendments adopted here today. That unanimous 
consent request also includes Senate 167 as amended.
    Is there any objection?
    Mr. Scott. Mr. Chairman, reserving the right to object.
    Chairman Sensenbrenner. The gentleman from Virginia.
    Mr. Scott. Mr. Chairman, I want the record to reflect that 
on S. 167 I do not approve of the Family Movie Act of 2005, and 
I withdraw my reservation.
    Chairman Sensenbrenner. The Chair would observe that people 
who disagree with the Family Movie Act provisions have got the 
authority to file additional views as a part of the Committee 
report. Without----
    Mr. Watt. Mr. Chairman?
    Chairman Sensenbrenner. Does the gentleman----
    Mr. Watt. Reserving the right to object.
    Chairman Sensenbrenner. Does the gentleman from Virginia 
withdraw his reservation?
    Mr. Scott. I did, Mr. Chairman.
    Chairman Sensenbrenner. Okay. The gentleman from North 
Carolina.
    Mr. Watt. Simply--and I will not object, Mr. Chairman. I 
simply wanted to note that I was the only dissenting voice in a 
favorable report and wanted the record to show that that was 
because of my opposition to H.R. 1038, and I just wanted that 
in the record.
    Chairman Sensenbrenner. With the next unanimous consent 
request, the gentleman will be given the right to file 
dissenting views on that bill. There will be separate Committee 
reports that will be filed on each of the bills considered en 
bloc. Does the gentleman withdraw his reservation?
    Mr. Watt. Yes.
    Chairman Sensenbrenner. Okay. Without objection, all 
Members will be given 2 days as provided by House rules, in 
which to submit additional dissenting, supplemental or minority 
views, and without objection the staff is directed to make any 
technical and conforming changes.
    [Intervening business.]
    Chairman Sensenbrenner. There being no further business to 
come before the Committee, the Committee stands adjourned.
    [Whereupon, at 10:17 a.m., the Committee was adjourned.]

                             Minority Views

    While we support the anti-piracy provisions of S. 167, we 
oppose title II of the bill. Title II consists of the ``Family 
Movie Act of 2004.'' \1\ With the purported goal of sanitizing 
undesired content in motion pictures, the Family Movie Act 
immunizes from copyright and trademark liability any for-profit 
companies that develop movie-editing software to make content 
imperceptible without permission from the movies' creators. 
Title II takes sides in a private lawsuit, interferes with 
marketplace negotiations, fails to achieve its goal, is 
unnecessary and overbroad, may increase the level of undesired 
content, and impinges on artistic freedom and rights.
---------------------------------------------------------------------------
    \1\ The Family Movie Act was introduced as H.R. 4586 in the 108th 
Congress and was added to H.R. 4077 at full Committee markup in the 
108th Congress. A hearing on H.R. 4586 was held at the Subcommittee 
level.
---------------------------------------------------------------------------
    The bill's proponents would have us believe that this bill 
is about whether children should be forced to watch undesired 
content, but it is not. The issue in this debate is who should 
make editorial decisions about what movie content children see: 
parents or a for-profit company. Supporters of the Family Movie 
Act believe companies should be allowed to do the editing for 
profit, and without permission of film creators, while 
opponents believe parents are the best qualified to know what 
their children should not see. The legislation would accomplish 
little beyond inflaming the debate over indecent content in 
popular media and interfering with marketplace solutions to 
parental concerns.
    That is why the Family Movie Act is opposed by: (1) 
entities concerned with the intellectual property and artistic 
rights of creators, including the Directors Guild of 
America,\2\ the Motion Picture Association of America,\3\ and 
the Dean of the UCLA Film School; \4\ and (2) experts on 
copyright law, such as the Register of Copyrights.\5\
---------------------------------------------------------------------------
    \2\ See Derivative Rights, Moral Rights, and Movie Filtering 
Technology: Hearing Before the Subcomm. on Courts, the Internet, and 
Intellectual Property of the House Comm. on the Judiciary, 108th Cong., 
2d Sess. 86 (May 20, 2004) (written statement of Taylor Hackford, 
Directors Guild of America) [hereinafter May 20, 2004 Hearing].
    \3\ Family Movie Act of 2004: Hearing on H.R. 4586 Before the 
Subcomm. on Courts, the Internet, and Intellectual Property of the 
House Comm. on the Judiciary, 108th Cong., 2d Sess. 67-70 (June 17, 
2004) (statement of Jack Valenti, President and Chief Executive 
Officer, Motion Picture Ass'n of America) [hereinafter H.R. 4586 
Hearing]
    \4\ Declaration of Dean Robert Rosen In Support of the Director 
Parties' Opposition to ClearPlay, Inc.'s, Trilogy Studios, Inc.'s, and 
Family Shield Technologies, LLC's Motion for Summary Judgment, Huntsman 
v. Soderbergh (D. Colo.) (02-M-1662) [hereinafter Rosen Decl.].
    \5\ H.R. 4586 Hearing at 6 (statement of Marybeth Peters, Register 
of Copyrights).
---------------------------------------------------------------------------

    A. THE FAMILY MOVIE ACT WOULD IMPROPERLY INTERFERE WITH PENDING 
LITIGATION AND PREMATURELY TERMINATE MARKETPLACE NEGOTIATIONS TO SETTLE 
                              THE DISPUTE

    As a preliminary matter, the legislation is inappropriate 
because it not only addresses the primary issues in a pending 
lawsuit but also takes sides with one of the parties to that 
suit. The U.S. District Court for the District of Colorado 
currently has before it a case that began as an action brought 
by a company called Clean Flicks against directors of 
movies.\6\ Clean Flicks sought a declaratory judgment against 
several directors that its business practice of providing 
edited versions of movies to consumers does not violate the 
rights of those who own the copyrights and trademarks for the 
original movies.\7\
---------------------------------------------------------------------------
    \6\ Huntsman v. Soderbergh, No. 02-M-1662 (D. Colo. filed Aug. 29, 
2002). The parties are awaiting a ruling on a motion for summary 
judgment.
    \7\ Complaint and Jury Demand, Huntsman v. Soderbergh (D. Colo.) 
(No. 02-M-1662).
---------------------------------------------------------------------------
    In the course of litigation, the number of parties 
expanded. Because Clean Flicks claimed that its conduct was 
lawful under the Copyright Act, the directors sought to join 
the movie studios in the dispute. In addition, a Utah-based 
company known as ClearPlay joined on the side of Clean Flicks. 
ClearPlay employees view motion pictures and create software 
filters that tag scenes they find offensive in each movie; this 
editing is done without notice to or permission from the 
copyright owners (the movie studios) or movie directors.\8\ 
When downloaded to a specially-adapted DVD player, the 
ClearPlay software filter instructs the player to ``skip and 
mute'' the tagged content when the affiliated DVD movie is 
played. Consumers who play a DVD they have rented or purchased 
would thus not see or hear the scenes that ClearPlay has tagged 
for filtering.
---------------------------------------------------------------------------
    \8\ ClearPlay has fourteen filter settings: (1) strong action 
violence, (2) gory/brutal violence, (3) disturbing images (i.e., 
macabre and bloody images), (4) sensual content, (5) crude sexual 
content, (6) nudity (including art), (7) explicit sexual situations, 
(8) vain references to deity, (9) crude language and humor, (10) ethnic 
and racial slurs, (11) cursing, (12) strong profanity, (13) graphic 
vulgarity, and (14) explicit drug use.
---------------------------------------------------------------------------
    The bill directly addresses copyright and trademark issues 
raised in the case and inappropriately takes the side of one 
party. First, the content creators allege in the lawsuit that 
ClearPlay makes derivative works in violation of the Copyright 
Act; in particular, they argue ClearPlay's editing software 
violates their exclusive rights as movie copyright owners to 
make modifications or other derivations of the original 
movies.\9\
---------------------------------------------------------------------------
    \9\ See The Player Control Parties' Opening Brief in Support of 
Their Motion for Summary Judgment, Huntsman v. Soderbergh (D. Colo.) 
(No. 02-M-1662). Section 106(2) of title 17, United States Code, gives 
to authors the exclusive right to ``prepare derivative works based on 
the copyrighted work.'' The Copyright Act further defines a 
``derivative work'' as ``a work based upon one or more preexisting 
works, such as a translation, musical arrangement, dramatization, 
fictionalization, motion picture version, sound recording, art 
reproduction, abridgment, condensation, or any other form in which a 
work may be recast, transformed, or adapted. A work consisting of 
editorial revisions, annotations, elaborations, or other modifications, 
which, as a whole, represent an original work of authorship, is a 
`derivative work.' '' 17 U.S.C. Sec. 101.
---------------------------------------------------------------------------
  The Register of Copyrights has testified as to her opinion about the 
copyright issues involved in the case. The Register believes that 
infringement of the exclusive right under 17 U.S.C. Sec. 106(2) to make 
derivative works requires creation of a fixed copy of a derivative 
work. H.R. 4586 Hearing at 7. While the Register's opinion clearly 
bears much authority, it is neither binding on a court nor dispositive 
of the pending lawsuit. Due to the novelty of both the legal and 
technological issues involved, the court may very well reach a 
different conclusion from that drawn by the Register.
    Though no court has ruled on this issue, the bill would 
assist ClearPlay by preemptively vitiating this legal claim. It 
would amend the law to state that certain technology that makes 
portions of motion picture content imperceptible during 
playback does not violate copyright law. While not benefitting 
Clean Flicks and certain other defendants, the bill is 
specifically designed to legalize ClearPlay technology.
    Second, film directors claim that ClearPlay violates their 
trademark rights under section 43(a) of the Lanham Act.\10\ The 
directors allege that ClearPlay uses their trademarked names in 
a way that is likely to cause confusion as to the affiliation, 
connection, or association of ClearPlay with the director, or 
as to the origin, sponsorship, or approval of ClearPlay by the 
director.\11\ Their allegation is based on the fact that a 
ClearPlay-sanitized film still indicates the name of the 
director, making it incorrectly appear as if the director has 
approved the sanitized version.
---------------------------------------------------------------------------
    \10\ See The Player Control Parties' Opening Brief in Support of 
Their Motion for Summary Judgment, Huntsman v. Soderbergh (D. Colo.) 
(No. 02-M-1662).
    \11\ See 15 U.S.C. Sec. 1125(a)(1).
---------------------------------------------------------------------------
    As with the copyright claims against ClearPlay, the bill 
would usurp judicial consideration of the trademark claims 
against ClearPlay by legalizing the very conduct at issue in 
the pending litigation. The bill would make it legal under 
trademark law to sell a product that alters a work so long as 
clear and conspicuous notice is provided at the beginning of 
each performance indicating it has been altered from the 
performance intended by the director or copyright owner. The 
effect would again be to specifically benefit one party, 
ClearPlay, to the detriment of all others involved in pending 
litigation.
    In summary, the directors and movie studios have non-
frivolous legal claims against ClearPlay. Because the case has 
not proceeded past the most preliminary stages at the trial 
level, there has not been any statutory interpretation, let 
alone a problematic one, that would justify a legislative 
solution. In other words, the law has yet to be interpreted in 
this area, so there is no rational basis for Congress to pass 
legislation that eliminates certain copyright and trademark 
rights that are at issue between specific parties.
    Passage of this legislation is even more problematic 
considering that the movie creators have negotiated in good 
faith to settle their dispute with ClearPlay. The movie 
creators had offered ClearPlay terms that would allow it to 
deploy its technology without fear of copyright or trademark 
liability.\12\ Unfortunately, due to the two hearings on this 
issue and the movement of this legislation, those negotiations 
have stalled; ClearPlay has been emboldened to present several 
new demands that represent a significant step back from its 
previous positions. The growing prospects for a legislative fix 
have caused ClearPlay to abandon good-faith negotiation and 
have made it less likely that consumers will have the choices 
the bill's proponents allegedly desire.
---------------------------------------------------------------------------
    \12\ Despite the extremely complicated nature of these 
negotiations, they had proceeded quite far. In December 2003, the DGA 
agreed not to object under its collective bargaining agreement if the 
studios offered ClearPlay a license to utilize the edits contained in 
television and airplane versions of movies. The DGA believed this 
compromise was tolerable because a film's director usually makes the 
necessary edits for television and airplane versions and is able to 
control the integrity of such edited versions. Over the course of the 
next several months, the studios conveyed an offer along these lines to 
ClearPlay.
---------------------------------------------------------------------------
  More recently, ClearPlay presented the studios with a counteroffer. 
The studios forwarded this counteroffer to the DGA for its response. In 
a May 29, 2004 response, the DGA relaxed certain limitations on a 
previous agreement to allow ClearPlay to license the television and 
airplane versions of movies. Rather than accept this offer, or present 
a good-faith counteroffer, ClearPlay apparently has enlarged its 
demands: (1) for movies where, no airplane or television version is 
available, it has sought the ability to edit them; and (2) with regard 
to films for which television or airplane versions have been made 
available, it is asking that it be able to make its own edits, rather 
than use the pre-existing edited versions.
    In short, fundamental fairness prohibits Congress from 
passing legislation to influence a pending case and private 
business negotiations. As a matter of equity, it is unfair to 
change the rules in the middle of the game, particularly to 
help one specific entity; if passed, title II would be an 
unfortunate example of such unfairness. For these reasons, 
title II should not be considered while litigation is 
pending.\13\
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    \13\ See H.R. 4586 Hearing at 8 (statement of Marybeth Peters, 
Register of Copyrights) (``I do not believe that such legislation 
should be enacted--and certainly not at this time. As you know, 
litigation addressing whether the manufacture and distribution of such 
software violates the copyright law and the Lanham Act is currently 
pending in the United States District Court for the District of 
Colorado. A summary judgment motion is pending. The court has not yet 
ruled on the merits. Nor has a preliminary injunction been issued--or 
even sought.'').
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                 B. THE FAMILY MOVIE ACT IS UNNECESSARY

    Regardless of the outcome of the pending litigation, this 
legislation should not be brought before the House because it 
is unnecessary. Its supposed rationale is to make it easier for 
parents and children to avoid watching motion pictures with 
undesired content, but parents and children already have such 
options.
    At the outset, there is an obvious marketplace solution to 
undesired content in that consumers can merely elect not to 
view it. As the Register of Copyrights testified at a hearing 
on the issue of whether a legislative fix was necessary:

        I cannot accept the proposition that not to permit 
        parents to use such products means that they are 
        somehow forced to expose their children (or themselves) 
        to unwanted depictions of violence, sex and profanity. 
        There is an obvious choice--one which any parent can 
        and should make: don't let your children watch a movie 
        unless you approve of the content of the entire 
        movie.\14\
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    \14\ H.R. 4586 Hearing at 9 (written statement of Marybeth Peters) 
(emphasis added).

    The motion picture industry has even enhanced the ability 
of consumers to exercise this choice. For decades and on a 
voluntary basis, it has implemented a rating system for its 
products that indicates the level of sexual or violent content 
and the target audience age.\15\ Each and every major motion 
picture released in theaters or on DVD or VHS bears such a 
rating. Such ratings effectively enable parents to steer their 
children away from movies they consider inappropriate.
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    \15\ Motion Picture Ass'n of America, Movie Rating System 
Celebrates 34th Anniversary with Overwhelming Parental Support (Oct. 
31, 2002) (press release). The industry has five rating categories: G 
for General Audiences, PG for Parental Guidance Suggested, PG-13 for 
Parental Caution Suggested for children under 13, R for Restricted 
(parent or guardian required for children under 17), and NC-17 for No 
Children 17 and under admitted.
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    Most importantly, the film rating system enable parents to 
identify movies that they consider appropriate for their 
children, and the industry has acted to make this choice 
meaningful. The industry annually releases dozens of films 
geared toward audiences who do not wish to see sexual, violent, 
or profane content.\16\ As a result, it is clear that the movie 
industry provides parents with abundant opportunity to find 
films they will consider appropriate for their children. The 
movie industry has, therefore, already met the request of a 
Family Movie Act supporter who looked forward to a day when 
``the industry will get around to issue us age-appropriate 
products.'' \17\
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    \16\ In 1999, filmmakers released 14 G-rated and 24 PG-rated major 
motion pictures. In 2000, there were 16 G-rated and 27 PG-rated films. 
In 2001, 8 G-rated and 27 PG-rated movies were released. In 2002, 12 G-
rated and 50 PG-rated pictures were distributed. Finally, in 2003, 11 
G-rated and 34 PG-rated motion pictures were released.
    \17\ H.R. 4586 Hearing at 15 (statement of Amitai Etzioni, Founder 
and Director, The Institute for Communitarian Policy Studies, George 
Washington University).
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    While some of the bill's supporters say these choices are 
meaningless on the grounds that the entertainment industry 
markets violent and sexual content to youth,\18\ that claim is 
false according to the most recent and objective report. The 
Federal Trade Commission conducted the most recent study on 
this issue and concluded the following:
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    \18\ May 20, 2004 Hearing at 20 (statement of Jeff J. McIntyre, 
Senior Legislative and Federal Affairs Officer, American Psychological 
Ass'n).

        On the whole, the motion picture industry has continued 
        to comply with its pledge not to specifically target 
        children under 17 when advertising films rated R for 
        violence. In addition, the studios generally are 
        providing clear and conspicuous ratings and rating 
        information in advertisements for their R- and PG-13 
        rated films.\19\
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    \19\ Federal Trade Comm'n, Marketing Violent Entertainment to 
Children: A Fourth Follow-up Review of Industry Practices in the Motion 
Picture, Music Recording & Electronic Game Industries 10 (July 2004).

The industry is, therefore, doing its part to keep undesired 
content away from children.
    The facts demonstrate that parents have the information and 
tools necessary to make and enforce informed choices about the 
media their children experience and have plenty of wholesome 
media alternatives to offer their children.

C. THE FAMILY MOVIE ACT WOULD LEGALIZE EDITING THAT IS INCOMPREHENSIBLE 
    AND OVERBROAD AND WOULD LEAD TO AN INCREASE IN UNDESIRED CONTENT

    The Family Movie Act would lead to editing that is 
inconsistent, overbroad, and counterproductive. First, 
ClearPlay does not screen out the content it purportedly is 
designed to filter. The New York Times found that ClearPlay's 
editing does not conform to its own standards:

        For starters, its editors are wildly inconsistent. They 
        duly mute every ``Oh my God,'' ``You bastard,'' and 
        ``We're gonna have a helluva time'' (meaning sex). But 
        they leave intact various examples of crude teen slang 
        and a term for the male anatomy.

        In ``Pirates of the Caribbean,'' ``God-forsaken 
        island'' is bleeped, but ``heathen gods'' slips 
        through.\20\
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    \20\ David Pogue, Add ``Cut'' and ``Bleep'' to a DVD's Options, 
N.Y. Times, May 27, 2004, at G1.

In this regard, ClearPlay is seemingly ineffective, and the 
legislation would be, as well.
    Second, the legislation is overbroad and would go beyond 
its allegedly intended effects of legalizing tools for 
sanitizing movies of sex, violence, and profanity. In fact, 
title II would legalize a far wider and less desirable universe 
of filters for profit than its sponsors have disclosed. Filters 
could be based on social, political, and professional 
prejudices and could edit more than just movies.
    For instance, because the bill is not explicitly limited to 
the deletion of sex, violence, and profanity, it would legalize 
socially-undesirable editing, such as:

        
 A filter that edits out racial conflict 
        between law enforcement and minorities in The 
        Hurricane, conflict that sets the context for how the 
        minorities later react to the police; \21\
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    \21\ ClearPlay actually has made such edits. ``In its alterations 
of the film, ClearPlay chooses to omit the racist language [used by 
white police officers against a young Rubin Carter] that is integral to 
our understanding of the story. . . . ClearPlay skips these lines in 
full, choosing to fast-forward its version of the movie to a later part 
of the interrogation scene. However, it is via this racist and 
threatening language that the audience connects with the intimidation 
that the young Carter must feel and the racism he is encountering at 
the very center of law enforcement.'' Rosen Decl., supra note 4, at 6-
7.

        
 A filter that skips over the nude scenes from 
        Schindler's List, scenes that are critical to conveying 
        the debasement and dehumanization suffered by 
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        concentration camp prisoners;

        
 A filter that strips Jungle Fever of scenes 
        showing interracial romance and leaves only those 
        scenes depicting interracial conflict; and

        
 A filter marketed by Holocaust revisionists 
        that removes from World War II documentaries any 
        footage of concentration camps.

    The legislation also would immunize products that filter 
political or business content based on the opinions of the 
creator, including:

        
 A filter that skips over political 
        advertisements contrary to the positions of the 
        developer's beliefs;

        
 A filter that cleanses news stories, such as 
        by editing out comments in support of or in opposition 
        to government policies; and

        
 A filter that deletes television stories 
        either helpful to the filter developer's competitor or 
        critical of the developer's corporate parent.

    We would hope that none of the bill's proponents would 
condone such malicious editing. Unfortunately, at last year's 
full Committee markup of similar legislation, the sponsors 
rejected an effort to limit the proposal to its purported scope 
of profane, sexual, and violent content.\22\ If enacted, title 
II could lead to the editing of artistic works based upon 
racial, religious, social, political, and business biases.
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    \22\ See Markup of H.R. 4586 Before the House Comm. on the 
Judiciary, 108th Cong., 2d Sess. (July 21, 2004) (amendment offered by 
Rep. Adam Schiff (D-CA) to limit editing to profane, sexual, and 
violent content) [hereinafter H.R. 4586 Markup]. The amendment was 
defeated by voice vote. Id.
---------------------------------------------------------------------------
    Finally, the legislation could lead to increased violence 
and sexual content in entertainment. Just as title II allows 
nudity to be edited out, it allows everything except nudity to 
be deleted. This concern is not merely hypothetical. Nissim 
Corporation has patented a technology called CustomPlay that, 
among other things, enables viewers of pornographic movies to 
filter out the non-pornographic scenes and ``enhance'' the 
adult-viewing experience.\23\
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    \23\ Using CustomPlay, ``[a]n adult can play a version of an adult 
video that seamlessly excludes content inconsistent with the viewer's 
adult content preferences, and that is presented at a level of 
explicitness preferred by the adult. Adult content categories are 
standardized and are organized into five groups Who, What, Camera, 
Position, and Fetish.'' CustomPlay, Content Preferences (visited Aug. 
24, 2004) <http://www.customplay.com/mccontent.htm>.
---------------------------------------------------------------------------
    Because title II only protects technology developers like 
ClearPlay from liability for copyright and trademark 
infringement, Nissim may cause the bill to backfire on its 
sponsors. Nissim has sued ClearPlay for patent infringement, 
claiming to have a patent on ClearPlay-type film-editing 
technology.\24\ If Nissim's claims are valid, then only Nissim 
could distribute such film-editing software.\25\ Thus, contrary 
to its stated purpose, the Family Movie Act could succeed in 
legalizing only Nissim's technology, which enables users to 
increase the proportion of sex or violence in a movie.\26\
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    \24\ Nissim Corp. v. ClearPlay, No. 04-21140 (S.D. Fla. filed May 
13, 2004).
    \25\ In response to a cease-and-desist letter from Nissim, a 
manufacturer of DVD players, Thomson, pulled ClearPlay-enabled players 
from the retail market.
    \26\ In analyzing the overbreadth of the legislation, we also note 
that it does not legalize technology that would skip over 
advertisements in broadcast television. The Copyright Office has stated 
that the bill would not permit commercial ad skipping on the grounds 
that each ad, in and of itself, would be a separate ``motion picture;'' 
skipping the entirety of an ad would go beyond the extent of the bill's 
authority of making ``limited portions imperceptible.'' See Letter from 
Marybeth Peters, Register of Copyrights, to the Honorable F. James 
Sensenbrenner, Jr., and the Honorable Lamar Smith (Nov. 15, 2004).
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  Moreover, the legislation's original sponsor, Sen. Orrin Hatch (R-
UT), further noted in his statement introducing the bill:

      An advertisement, under the Copyright Act, is itself a 
      ``motion picture,'' and thus a product or service that 
      enables the skipping of an entire advertisement, in any 
      media, would be beyond the scope of the exemption. 
      Moreover, the phrase ``limited portions'' is intended to 
      refer to portions that are both quantitatively and 
      qualitatively insubstantial in relation to the work as a 
      whole. Where any substantial part of a complete work, such 
      as a commercial advertisement, is made imperceptible, the 
      new section 110(11) exemption would not apply. 151 Cong. 
      Rec. S495 (daily ed. Jan. 25, 2005) (statement of Sen. 
      Hatch).

         D. THE FAMILY MOVIE ACT WOULD IMPAIR ARTISTIC FREEDOM 
                             AND INTEGRITY

    The problems with this legislation are compounded by the 
fact that it violates principles of artistic freedom and 
expression. The concept of protecting artistic freedom is well 
recognized.\27\ The National Endowment for the Arts states 
``[a]rtistic work and freedom of expression are a vital part of 
any democratic society.'' \28\ For this reason, the NEA seeks 
to preserve works of art,\29\ and an important part of 
preservation is to ensure artists are involved in how their 
creations are portrayed.
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    \27\ Sam Ricketson, The Berne Convention: 1886-1986 456 (1997) 
(``Any author, whether he writes, paints, or composes, embodies some 
part of himself--his thoughts, ideas, sentiments and feelings--in his 
work, and this gives rise to an interest as deserving of protection as 
any of the other personal interests protected by the institutions of 
positive law, such as reputation, bodily integrity, and confidences. 
The interest in question here relates to the way in which the author 
presents his work to the world, and the way in which his identification 
with the work is maintained.'').
    \28\ National Endowment for the Arts, Strategic Plan: FY2003-2008 3 
(Feb. 2003).
    \29\ Id. at 8.
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    This principle, commonly referred to as a ``moral right,'' 
is so important that it is required by international agreements 
and is codified in U.S. law. For instance, the Berne Convention 
for the Protection of Literary and Artistic Works grants 
creators the right to object to ``any distortion, mutilation, 
or other modification of, or other derogatory action in 
relation to, the said work, which would be prejudicial to his 
honor or reputation.'' \30\ The United States, recognizing the 
importance of this right, subsequently enacted it into both 
copyright law \31\ and trademark law.\32\
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    \30\ Berne Convention for the Protection of Literary and Artistic 
Works, art. 6bis, 1971.
    \31\ 17 U.S.C. Sec. 106A.
    \32\ 15 U.S.C. Sec. 1125.
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    While moral rights protection for U.S. creators is far 
weaker than the protection afforded European creators, a 
certain level of protection for the moral rights of U.S. 
creators does exist. The ability of creators to bring claims 
under the Lanham Act, just as directors have done against 
ClearPlay, does provide creators with an important ability to 
protect their moral rights. In fact, the availability of 
section 43(a) was one of the specific reasons Congress decided, 
during adoption of the Berne Convention Implementation Act, 
that U.S. law met the moral rights obligations contained in the 
Berne Convention.\33\ By limiting the availability of Lanham 
Act suits, title II would limit the moral rights of directors 
in a way that conflicts with U.S. obligations under the Berne 
Convention.
---------------------------------------------------------------------------
    \33\ 133 Cong. Rec. H1293 (daily ed. Mar. 16, 1987) (statement of 
Rep. Robert Kastenmeier).
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    Contrary to our laws and international obligations, title 
II does not require that filtering be done with the permission 
of the content creator or owner, but rather creates an 
exemption from copyright and trademark liability for filtering. 
As the Register of Copyrights stated before the Subcommittee:

        I have serious reservations about enacting legislation 
        that permits persons other than the creators or 
        authorized distributors of a motion picture to make a 
        profit by selling adaptations of somebody else's motion 
        picture. It's one thing to say that an individual, in 
        the privacy of his or her home, should be able to 
        filter out undesired scenes or [dialogue] from his or 
        her private home viewing of a movie. It's another 
        matter to say that a for-profit company should be able 
        to commercially market a product that alters a 
        director's artistic vision.\34\
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    \34\ H.R. 4586 Hearing at 10 (written statement of Marybeth 
Peters).

    It is clear, therefore, that the legislation represents a 
threat to an artist's right to his or her artistic integrity. 
To permit editing of a creation without the permission of the 
creator is to encourage censorship and to vitiate freedom of 
expression.
    In conclusion, the Family Movie Act is ill-conceived, 
poorly-drafted legislation. Beyond its patent assault on 
intellectual property rights, the bill inappropriately involves 
Congress in a private business dispute and would lead to 
socially undesirable editing and actually permit the 
distribution of technology that makes pornography even more 
pornographic. Finally, it encourages unwarranted intrusions 
into artistic freedom.

                                   John Conyers, Jr.
                                   Howard L. Berman.
                                   Robert C. Scott.
                                   Melvin L. Watt.
                                   Maxine Waters.
                                   Linda T. Sanchez.