HR 3531

SECTION 1. SHORT TITLE.

This Act may be cited as the 'Database Investment and Intellectual Property Antipiracy Act of 1996'.

SEC. 2. DEFINITIONS.

'Change of commercial significance' means a change that a reasonable user of a database would regard as affecting the quality, quantity or value of contents of that database as a whole.

'Commerce' means all commerce that may lawfully be regulated by Congress.

'Database' means a collection, assembly or compilation, in any form or medium now or later known or developed, of works, data or other materials, arranged in a systematic or methodical way.

'Database maker' means the natural or juristic person making a substantial investment, qualitatively or quantitatively, in the collection, assembly, verification, organization and/or presentation of the contents of the database. Unless provided otherwise by contract--

(1) where two or more persons qualify as the makers of a database, they are jointly the database maker;

(2) where a database is made by employees within the scope of their employment, the employer is the database maker; and

(3) where a database is made pursuant to special order or commission, the person who ordered or commissioned the database is the database maker.

'Database management information' means the name and other identifying information of the database maker, the name and other identifying information of the database owner, and terms and conditions for extraction and use or reuse of the contents of the database.

'Database owner' means the database maker or the natural or juristic person who is the database maker's successor in interest.

'Extraction' means the permanent or temporary transfer of all or a substantial part of the contents of a database or of a copy or copies thereof. Such transfer may be to an identical or different medium, and by any means or in any form, now or later known or developed.

'Governmental entity' means the United States Government, any State, any agency or instrumentality of either, and any officer or employee of any of the foregoing acting in his or her official capacity.

'Insubstantial part' of a database means any portion of the contents of a database whose extraction, use or reuse does not diminish the value of the database, conflict with a normal exploitation of the database or adversely affect the actual or potential market for the database.

'Juristic person' means any firm, corporation, union, association, non-profit institution, or other organization capable of suing and being sued in a court of law, but does not include a governmental entity.

'Place in commercial use' means to use or reuse, or to authorize use or reuse, for direct or indirect commercial advantage or for financial gain.

'Person' means any natural person, any juristic person, and any governmental entity.

'Use' and 'reuse' means making available all or a substantial part, qualitatively or quantitatively, of the contents of a database, or access to all or such substantial part, whether or not for direct or indirect commercial advantage or financial gain, by any means now known or later developed, including any of the following: (i) marketing, selling, or renting; (ii) in the form of permanent or temporary copies; or (iii) by distribution, any online or other form of transmission.

SEC. 3. DATABASES SUBJECT TO THE ACT.

(a) A database is subject to the Act if it is the result of a qualitatively or quantitatively substantial investment of human, technical, financial or other resources in the collection, assembly, verification, organization or presentation of the database contents, and (i) the database is used or reused in commerce; or (ii) the database owner intends to use or reuse the database in commerce.

(b) A database otherwise subject to this Act shall remain subject, regardless of whether it is made available to the public or in commercial use; the form or medium in which it is embodied; or whether the database or any contents of the database are intellectual creations.

(c) Except for a database made by a governmental entity, any database otherwise subject to this Act, is not excluded herefrom because its contents have been obtained from a governmental entity.

(d) Computer programs are not subject to this Act, including without limitation any computer programs used in the manufacture, production, operation or maintenance of a database. However, the contents of a database otherwise subject to this Act remain subject, notwithstanding their direct or indirect incorporation in a computer program or other work.

SEC. 4. PROHIBITED ACTS.

(a) No person shall, without the authorization of the database owner--

(1) extract, use or reuse all or a substantial part, qualitatively or quantitatively, of the contents of a database subject to this Act in a manner that conflicts with the database owner's normal exploitation of the database or adversely affects the actual or potential market for the database;

(2) engage, notwithstanding section 5(a), in the repeated or systematic extraction, use or reuse of insubstantial parts, qualitatively or quantitatively, of the contents of a database subject to this Act in a manner that cumulatively conflicts with the database owner's normal exploitation of the database or adversely affects the actual or potential market for the database; or

(3) procure, direct or commission any act prohibited by subsections (i) or (ii).

(1) in a product or service that directly or indirectly competes in any market with the database from which it was extracted; or

(2) in a product or service that directly or indirectly competes in any market in which the database owner has a demonstrable interest or expectation in licensing or otherwise using or reusing the database; or

(3) in a product or service for customers who might otherwise reasonably be expected to be customers for the database; or

(4) by or for multiple persons within an organization or entity in lieu of the authorized additional use or reuse (by license, purchase or otherwise) of copies of the database by or for such persons.

SEC. 5. EXCEPTIONS TO PROHIBITED ACTS.

(a) Subject to section 4(a)(ii), a lawful user of a database made available to the public or placed in commercial use is not prohibited from extracting, using or reusing insubstantial parts of its contents, qualitatively or quantitatively, for any purposes whatsoever.

(b) Nothing in this Act shall in any way restrict any person from independently collecting, assembling or compiling works, data or materials from sources other than a database subject to this Act.

SEC. 6. DURATION OF PROHIBITIONS.

(a) A database becomes subject to this Act when the necessary investment has been made to qualify its maker as such under section 2. The database shall remain subject to this Act for a period of twenty-five years from the first of January following the date when it was first made available to the public or the date when it was first placed in commercial use, whichever is earlier.

(b) Any change of commercial significance, qualitatively or quantitatively, to a database, including any such change through the accumulation of successive additions, deletions, reverifications, alterations, modifications in organization or presentation, or other modifications, shall make the resulting database subject to this Act for its own term, as calculated under subsection (a).

SEC. 7. CIVIL REMEDIES FOR VIOLATION OF SECTION 4.

(a) CIVIL ACTIONS- A database owner injured by a violation of section 4 may bring a civil action for such a violation in an appropriate United States district court without regard to the amount in controversy: Provided however, That any action against a State governmental entity may be brought in any court that has jurisdiction over claims against such entity.

(b) TEMPORARY AND PERMANENT INJUNCTIONS- Any court having jurisdiction of a civil action arising hereunder shall have the power to grant temporary and permanent injunctions, according to the principles of equity and upon such terms as the court may deem reasonable, to prevent the violation of section 4. Any such injunction granted upon hearing, after notice to the party sought to be enjoined, by any district court of the United States, may be served on the party against whom such injunction is granted anywhere in the United States where such person may be found, and shall be operative and may be enforced by proceedings in contempt or otherwise by any United States district court having jurisdiction over such party.

(c) IMPOUNDMENT- At any time while an action hereunder is pending, the court may order the impounding, on such terms as it deems reasonable, of all copies of contents of databases extracted and or used or reused in violation of section 4, and of all masters, tapes, disks, diskettes, or other articles by means of which such copies may be reproduced. The court may, as part of a final judgment or decree finding a violation of section 4, order the remedial modification or destruction of all copies of contents of databases extracted, used or reused in violation of section 4, and of all masters, tapes, disks, diskettes, or other articles by means of which such copies may be reproduced.

(d) MONETARY RELIEF- When a violation of section 4 has been established in any civil action arising hereunder, the plaintiff shall be entitled, subject to principles of equity, to recover (i) defendant's profit, (ii) any damages sustained by the plaintiff, and (iii) the costs of the action. The court shall assess such profits or damages or cause the same to be assessed under its direction. In assessing profits the plaintiff shall be required to prove defendant's sales only; defendant must prove all elements of cost or deduction claimed. In assessing damages the court may enter judgment, according to the circumstances of the case, for any sum above the amount found as actual damages, not exceeding three times such amount. If the court shall find that the amount of the recovery based on profits is either inadequate or excessive, the court may in its discretion enter judgment for such sum as it finds just. The court in its discretion may award reasonable attorney fees to the prevailing party.

(e) Subsections (b) and (c) shall not apply to any action against the United States Government.

(f) The relief provided under this section shall be available against a State governmental entity to the extent allowed by applicable law.

SEC. 8. CRIMINAL OFFENSES AND PENALTIES FOR VIOLATION OF SECTION 4.

(a) Any person who violates section 4 willfully, and--

(1) does so for direct or indirect commercial advantage or financial gain; or

(2) thereby causes loss or damage to a database owner aggregating $10,000 or more in any one-year calendar period, shall be punished as provided in subsection (b).

SEC. 9. RELATIONSHIP TO OTHER LAWS.

(a) The remedies against violations hereunder shall be without prejudice to any remedies under any copyright that may subsist in the database, any contents of the database, or the selection, coordination or arrangement of such contents. Such remedies shall not limit, impair, or otherwise affect the existence, scope or duration of protection under any such copyright.

(b) Nothing in this Act shall restrict the rights of parties freely to enter into licenses or any other contracts with respect to databases or their contents.

(c) Nothing in this Act shall prejudice provisions concerning copyright, rights related to copyright or any other rights or obligations in the database or its contents, including laws in respect of patent, trademark, design rights, antitrust or competition, trade secrets, data protection and privacy, access to public documents, and the law of contract.

SEC. 10. CIRCUMVENTION OF DATABASE PROTECTION SYSTEMS.

No person shall import, manufacture or distribute any device, product, or component incorporated into a device or product, or offer or perform any service, the primary purpose or effect of which is to avoid, bypass, remove, deactivate, or otherwise circumvent, without the authority of the database owner or the law, any process, treatment, mechanism or system which prevents or inhibits the extraction, use or reuse of the contents of the database in violation of section 4 hereof.

SEC. 11. INTEGRITY OF DATABASE MANAGEMENT INFORMATION.

(a) FALSE DATABASE MANAGEMENT INFORMATION- No person shall knowingly provide database management information that is false, or knowingly publicly distribute or import for public distribution database management information that is false.

(b) REMOVAL OR ALTERATION OF DATABASE MANAGEMENT INFORMATION- No person shall, without authority of the database owner or the law, (i) knowingly remove or alter any database management information, (ii) knowingly distribute or import for distribution database management information that has been altered without authority of the database owner or the law; or (iii) knowingly distribute or import for distribution copies of a database from which database management information has been removed without the authority of the database owner or the law.

SEC. 12. CIVIL REMEDIES FOR VIOLATION OF SECTIONS 10 OR 11.

(a) CIVIL ACTIONS- Any person injured by a violation of section 10 or section 11 may bring a civil action for such violation in an appropriate United States district court, without regard to the amount in controversy: Provided, however, That any action against a State governmental entity may be brought in any court that has jurisdiction over claims against such entity.

(b) POWERS OF THE COURT- In an action brought under subsection (a), the court--

(1) may grant temporary and permanent injunctions on such terms as it deems reasonable to prevent or restrain a violation;

(2) at any time while an action is pending, may order the impounding, on such terms as it deems reasonable, of any device or product that is in the custody or the control of the alleged violator and that the court has reasonable cause to believe was involved in a violation;

(3) may award damages under subsection (c);

(4) in its discretion may allow the recovery of costs by or against any party other than the United States or an officer thereof;

(5) in its discretion may award reasonable attorney's fees to the prevailing party; and

(6) may, as part of a final judgment or decree finding a violation, order the remedial modification or the destruction of any device or product involved in the violation that is in the custody or control of the violator or has been impounded under subsection (ii).

(1) IN GENERAL- Except as otherwise provided in this Act, a violator is liable for either (A) the actual damages and any additional profits of the violator, as provided by subsection (ii), or (B) statutory damages, as provided by subsection (iii).

(2) ACTUAL DAMAGES- The court shall award to the complaining party the actual damages suffered by him or her as a result of the violation, and any profits of the violator that are attributable to the violation and are not taken into account in computing the actual damages, if the complaining party elects such damages at any time before final judgment is entered.

(3) STATUTORY DAMAGES-

(A) At any time before final judgment is entered, a complaining party may elect to recover an award of statutory damages for each violation of section 10 in the sum of not less than $200 or more than $2,500 per device, product, offer or performance of service, as the court considers just.

(B) At any time before final judgment is entered, a complaining party may elect to recover an award of statutory damages for each violation of section 11 in the sum of not less than $2,500 or more than $25,000.

(4) REPEATED VIOLATIONS- In any case in which the injured party sustains the burden of proving, and the court finds, that a person has violated section 10 or 11 within three years after a final judgment was entered against that person for another such violation, the court may increase the award of damages up to triple the amount that would otherwise be awarded, as the court considers just.

(5) INNOCENT VIOLATIONS- The court in its discretion may reduce or remit altogether the total award of damages in any case in which the violator sustains the burden of proving, and the court finds, that the violator was not aware and had no reason to believe that its acts constituted a violation.

(e) The relief provided under subsection (b) shall be available against a State governmental entity to the extent allowed by applicable law.

SEC. 13. CRIMINAL OFFENSES AND PENALTIES FOR VIOLATION OF SECTION 11.

Any person who violates section 11 with intent to defraud shall be fined not more than $500,000 or imprisoned for not more than five years, or both.

SEC. 14. LIMITATIONS ON ACTIONS.

No action shall be maintained under this Act unless it is commenced within three years after the database owner knew or should have known of the claim.

SEC. 15. EFFECTIVE DATE.

(a) This Act shall take effect immediately upon enactment, and shall be applicable to acts committed on or after that date.

(b) No person shall be liable under this Act for use or reuse of database contents lawfully extracted from a database, prior to the effective date of this Act, by that person or by that person's predecessor in interest.