THE DIGITAL MILLENNIUM COPYRIGHT ACT OF 1998

THE DIGITAL MILLENNIUM COPYRIGHT ACT OF 1998

THE DIGITAL MILLENNIUM COPYRIGHT ACT OF 1998
Copyright Office Summary
December 1998

INTRODUCTION

The Digital Millennium Copyright Act (DMCA)1 was signed into law by
President Clinton on October 28, 1998. The legislation implements two 1996 World
Intellectual Property Organization (WIPO) treaties: the WIPO Copyright Treaty and
the WIPO Performances and Phonograms Treaty. The DMCA also addresses a
number of other significant copyright-related issues.

The DMCA is divided into five titles:

!
Title I, the “WIPO Copyright and Performances and Phonograms
Treaties Implementation Act of 1998,” implements the WIPO
treaties.

!
Title II, the “Online Copyright Infringement Liability Limitation
Act,” creates limitations on the liability of online service providers for
copyright infringement when engaging in certain types of activities.

!
Title III, the “Computer Maintenance Competition Assurance
Act,” creates an exemption for making a copy of a computer program
by activating a computer for purposes of maintenance or repair.

!
Title IV contains six miscellaneous provisions, relating to the
functions of the Copyright Office, distance education, the exceptions
in the Copyright Act for libraries and for making ephemeral recordings,
“webcasting” of sound recordings on the Internet, and the applicability
of collective bargaining agreement obligations in the case of transfers
of rights in motion pictures.

!
Title V, the “Vessel Hull Design Protection Act,” creates a new form
of protection for the design of vessel hulls.

This memorandum summarizes briefly each title of the DMCA. It provides
merely an overview of the law’s provisions; for purposes of length and readability a
significant amount of detail has been omitted. A complete understanding of any
provision of the DMCA requires reference to the text of the legislation itself.

Title I implements the WIPO treaties. First, it makes certain technical
amendments to U.S. law, in order to provide appropriate references and links to the
treaties. Second, it creates two new prohibitions in Title 17 of the U.S. Code—one on
circumvention of technological measures used by copyright owners to protect their
works and one on tampering with copyright management information—and adds civil
remedies and criminal penalties for violating the prohibitions. In addition, Title I
requires the U.S. Copyright Office to perform two joint studies with the National
Telecommunications and Information Administration of the Department of
Commerce (NTIA).

Technical Amendments

National Eligibility

The WIPO Copyright Treaty (WCT) and the WIPO Performances and
Phonograms Treaty (WPPT) each require member countries to provide protection to
certain works from other member countries or created by nationals of other member
countries. That protection must be no less favorable than that accorded to domestic
works.

Section 104 of the Copyright Act establishes the conditions of eligibility for
protection under U.S. law for works from other countries. Section 102(b) of the
DMCA amends section 104 of the Copyright Act and adds new definitions to section
101 of the Copyright Act in order to extend the protection of U.S. law to those works
required to be protected under the WCT and the WPPT.

Restoration of Copyright Protection

Both treaties require parties to protect preexisting works from other member
countries that have not fallen into the public domain in the country of origin through
the expiry of the term of protection. A similar obligation is contained in both the
Berne Convention and the TRIPS Agreement. In 1995 this obligation was implemented
in the Uruguay Round Agreements Act, creating a new section 104A in the
Copyright Act to restore protection to works from Berne or WTO member countries
that are still protected in the country of origin, but fell into the public domain in the
United States in the past because of a failure to comply with formalities that then
existed in U.S. law, or due to a lack of treaty relations. Section 102(c) of the DMCA
amends section 104A to restore copyright protection in the same circumstances to
works from WCT and WPPT member countries.

 

The remaining technical amendment relates to the prohibition in both treaties
against conditioning the exercise or enjoyment of rights on the fulfillment of
formalities. Section 411(a) of the Copyright Act requires claims to copyright to be
registered with the Copyright Office before a lawsuit can be initiated by the copyright
owner, but exempts many foreign works in order to comply with existing treaty
obligations under the Berne Convention. Section 102(d) of the DMCA amends section
411(a) by broadening the exemption to cover all foreign works.

 

Technological Protection and Copyright Management Systems

Each of the WIPO treaties contains virtually identical language obligating
member states to prevent circumvention of technological measures used to protect
copyrighted works, and to prevent tampering with the integrity of copyright
management information. These obligations serve as technological adjuncts to the
exclusive rights granted by copyright law. They provide legal protection that the
international copyright community deemed critical to the safe and efficient exploitation
of works on digital networks.

Circumvention of Technological Protection Measures

General approach

Article 11 of the WCT states:

Contracting Parties shall provide adequate legal protection
and effective legal remedies against the circumvention
of effective technological measures that are used
by authors in connection with the exercise of their
rights under this Treaty or the Berne Convention and
that restrict acts, in respect of their works, which are
not authorized by the authors concerned or permitted
by law.

Article 18 of the WPPT contains nearly identical language.

Section 103 of the DMCA adds a new chapter 12 to Title 17 of the U.S. Code.
New section 1201 implements the obligation to provide adequate and effective
protection against circumvention of technological measures used by copyright owners
to protect their works.

Section 1201 divides technological measures into two categories: measures that
prevent unauthorized access to a copyrighted work and measures that prevent

2 of a copyrighted work. Making or selling devices or services that
are used to circumvent either category of technological measure is prohibited in certain
circumstances, described below. As to the act of circumvention in itself, the provision
prohibits circumventing the first category of technological measures, but not the
second.

This distinction was employed to assure that the public will have the continued
ability to make fair use of copyrighted works. Since copying of a work may be a fair use
under appropriate circumstances, section 1201 does not prohibit the act of circumventing
a technological measure that prevents copying. By contrast, since the fair use
doctrine is not a defense to the act of gaining unauthorized access to a work, the act of
circumventing a technological measure in order to gain access is prohibited.

Section 1201 proscribes devices or services that fall within any one of the
following three categories:

! they are primarily designed or produced to circumvent;
! they have only limited commercially significant purpose or use other
than to circumvent; or
! they are marketed for use in circumventing.

No mandate

Section 1201 contains language clarifying that the prohibition on circumvention
devices does not require manufacturers of consumer electronics, telecommunications
or computing equipment to design their products affirmatively to respond to any
particular technological measure. (Section 1201(c)(3)). Despite this general ‘no
mandate’ rule, section 1201(k) does mandate an affirmative response for one particular
type of technology: within 18 months of enactment, all analog videocassette recorders
must be designed to conform to certain defined technologies, commonly known as
Macrovision, currently in use for preventing unauthorized copying of analog
videocassettes and certain analog signals. The provision prohibits rightholders from
applying these specified technologies to free television and basic and extended basic tier
cable broadcasts.

2“Copying” is used in this context as a short-hand for the exercise of any of the exclusive
rights of an author under section 106 of the Copyright Act. Consequently, a technological
measure that prevents unauthorized distribution or public performance of a work would fall
in this second category.

 

Section 1201 contains two general savings clauses. First, section 1201(c)(1)
states that nothing in section 1201 affects rights, remedies, limitations or defenses to
copyright infringement, including fair use. Second, section 1201(c)(2) states that
nothing in section 1201 enlarges or diminishes vicarious or contributory copyright
infringement.

 

Exceptions

Finally, the prohibitions contained in section 1201 are subject to a number of
exceptions. One is an exception to the operation of the entire section, for law
enforcement, intelligence and other governmental activities. (Section 1201(e)). The
others relate to section 1201(a), the provision dealing with the category of technological
measures that control access to works.

The broadest of these exceptions, section 1201(a)(1)(B)-(E), establishes an
ongoing administrative rule-making proceeding to evaluate the impact of the
prohibition against the act of circumventing such access-control measures. This
conduct prohibition does not take effect for two years. Once it does, it is subject to
an exception for users of a work which is in a particular class of works if they are or are
likely to be adversely affected by virtue of the prohibition in making noninfringing uses.
The applicability of the exemption is determined through a periodic rulemaking by the
Librarian of Congress, on the recommendation of the Register of Copyrights, who is
to consult with the Assistant Secretary of Commerce for Communications and
Information.

The six additional exceptions are as follows:

1.
Nonprofit library, archive and educational institution exception
(section 1201(d)). The prohibition on the act of circumvention of
access control measures is subject to an exception that permits
nonprofit libraries, archives and educational institutions to circumvent
solely for the purpose of making a good faith determination as to
whether they wish to obtain authorized access to the work.
2.
Reverse engineering (section 1201(f)). This exception permits
circumvention, and the development of technological means for such
circumvention, by a person who has lawfully obtained a right to use a
copy of a computer program for the sole purpose of identifying and
analyzing elements of the program necessary to achieve interoperability
with other programs, to the extent that such acts are permitted under
copyright law.
3.
Encryption research (section 1201(g)). An exception for encryption
research permits circumvention of access control measures, and the
Copyright Office Summary December 1998 
flaws and vulnerabilities of encryption technologies.

4.
Protection of minors (section 1201(h)). This exception allows a court
applying the prohibition to a component or part to consider the
necessity for its incorporation in technology that prevents access of
minors to material on the Internet.
5.
Personal privacy (section 1201(i)). This exception permits circumvention
when the technological measure, or the work it protects, is capable
of collecting or disseminating personally identifying information about
the online activities of a natural person.
6.
Security testing (section 1201(j)). This exception permits circumvention
of access control measures, and the development of technological
means for such circumvention, for the purpose of testing the security
of a computer, computer system or computer network, with the
authorization of its owner or operator.
Each of the exceptions has its own set of conditions on its applicability, which
are beyond the scope of this summary.

Integrity of Copyright Management Information

Article 12 of the WCT provides in relevant part:

Contracting Parties shall provide adequate and effective
legal remedies against any person knowingly performing
any of the following acts knowing, or with respect to
civil remedies having reasonable grounds to know, that
it will induce, enable, facilitate or conceal an infringement
of any right covered by this Treaty or the Berne
Convention:

(i) to remove or alter any electronic rights
management information without authority;
(ii) to distribute, import for distribution, broadcast
or communicate to the public, without authority,
works or copies of works knowing that electronic rights
management information has been removed or altered
without authority.
Article 19 of the WPPT contains nearly identical language.

New section 1202 is the provision implementing this obligation to protect the
integrity of copyright management information (CMI). The scope of the protection

 

Subsection (c) defines CMI as identifying information about the work, the
author, the copyright owner, and in certain cases, the performer, writer or director of
the work, as well as the terms and conditions for use of the work, and such other
information as the Register of Copyrights may prescribe by regulation. Information
concerning users of works is explicitly excluded.

 

Section 1202 is subject to a general exemption for law enforcement, intelligence
and other governmental activities. (Section 1202(d)). It also contains limitations on the
liability of broadcast stations and cable systems for removal or alteration of CMI in
certain circumstances where there is no intent to induce, enable, facilitate or conceal
an infringement. (Section 1202(e)).

Remedies

Any person injured by a violation of section 1201 or 1202 may bring a civil
action in Federal court. Section 1203 gives courts the power to grant a range of
equitable and monetary remedies similar to those available under the Copyright Act,
including statutory damages. The court has discretion to reduce or remit damages in
cases of innocent violations, where the violator proves that it was not aware and had
no reason to believe its acts constituted a violation. (Section 1203(c)(5)(A)). Special
protection is given to nonprofit libraries, archives and educational institutions, which
are entitled to a complete remission of damages in these circumstances. (Section
1203(c)(5)(B)).

In addition, it is a criminal offense to violate section 1201 or 1202 wilfully and
for purposes of commercial advantage or private financial gain. Under section 1204
penalties range up to a $500,000 fine or up to five years imprisonment for a first
offense, and up to a $1,000,000 fine or up to 10 years imprisonment for subsequent
offenses. Nonprofit libraries, archives and educational institutions are entirely
exempted from criminal liability. (Section 1204(b)).

 

Title I of the DMCA requires the Copyright Office to conduct two studies
jointly with NTIA, one dealing with encryption and the other with the effect of
technological developments on two existing exceptions in the Copyright Act. New
section 1201(g)(5) of Title 17 of the U.S. Code requires the Register of Copyrights and
the Assistant Secretary of Commerce for Communications and Information to report
to the Congress no later than one year from enactment on the effect that the
exemption for encryption research (new section 1201(g)) has had on encryption
research, the development of encryption technology, the adequacy and effectiveness
of technological measures designed to protect copyrighted works, and the protection
of copyright owners against unauthorized access to their encrypted copyrighted works.

 

Section 104 of the DMCA requires the Register of Copyrights and the Assistant
Secretary of Commerce for Communications and Information to jointly evaluate (1)
the effects of Title I of the DMCA and the development of electronic commerce and
associated technology on the operation of sections 109 (first sale doctrine) and 117
(exemption allowing owners of copies of computer programs to reproduce and adapt
them for use on a computer), and (2) the relationship between existing and emergent
technology and the operation of those sections. This study is due 24 months after the
date of enactment of the DMCA.

TITLE II: ONLINE COPYRIGHT INFRINGEMENT LIABILITY LIMITATION

Title II of the DMCA adds a new section 512 to the Copyright Act3 to create
four new limitations on liability for copyright infringement by online service providers.
The limitations are based on the following four categories of conduct by a service
provider:

1.
Transitory communications;
2.
System caching;
3.
Storage of information on systems or networks at direction of users;
and
4.
Information location tools.
New section 512 also includes special rules concerning the application of these
limitations to nonprofit educational institutions.

3The Fairness in Musical Licensing Act, Title II of Pub. L. No. 105-298, 112 Stat. 2827,
2830-34 (Oct. 27, 1998) also adds a new section 512 to the Copyright Act. This duplication of
section numbers will need to be corrected in a technical amendments bill.

 

The failure of a service provider to qualify for any of the limitations in section
512 does not necessarily make it liable for copyright infringement. The copyright
owner must still demonstrate that the provider has infringed, and the provider may still
avail itself of any of the defenses, such as fair use, that are available to copyright
defendants generally. (Section 512(l)).

 

In addition to limiting the liability of service providers, Title II establishes a
procedure by which a copyright owner can obtain a subpoena from a federal court
ordering a service provider to disclose the identity of a subscriber who is allegedly
engaging in infringing activities. (Section 512(h)).

Section 512 also contains a provision to ensure that service providers are not
placed in the position of choosing between limitations on liability on the one hand and
preserving the privacy of their subscribers, on the other. Subsection (m) explicitly
states that nothing in section 512 requires a service provider to monitor its service or
access material in violation of law (such as the Electronic Communications Privacy Act)
in order to be eligible for any of the liability limitations.

Eligibility for Limitations Generally

A party seeking the benefit of the limitations on liability in Title II must qualify
as a “service provider.” For purposes of the first limitation, relating to transitory
communications, “service provider” is defined in section 512(k)(1)(A) as “an entity
offering the transmission, routing, or providing of connections for digital online
communications, between or among points specified by a user, of material of the user’s
choosing, without modification to the content of the material as sent or received.” For
purposes of the other three limitations, “service provider” is more broadly defined in
section 512(k)(l)(B) as “a provider of online services or network access, or the operator
of facilities therefor.”

In addition, to be eligible for any of the limitations, a service provider must
meet two overall conditions: (1) it must adopt and reasonably implement a policy of
terminating in appropriate circumstances the accounts of subscribers who are repeat
infringers; and (2) it must accommodate and not interfere with “standard technical
measures.” (Section 512(i)). “Standard technical measures” are defined as measures
that copyright owners use to identify or protect copyrighted works, that have been
developed pursuant to a broad consensus of copyright owners and service providers
in an open, fair and voluntary multi-industry process, are available to anyone on

 

Limitation for Transitory Communications

 

In general terms, section 512(a) limits the liability of service providers in
circumstances where the provider merely acts as a data conduit, transmitting digital
information from one point on a network to another at someone else’s request. This
limitation covers acts of transmission, routing, or providing connections for the
information, as well as the intermediate and transient copies that are made automatically
in the operation of a network.

In order to qualify for this limitation, the service provider’s activities must meet
the following conditions:

! The transmission must be initiated by a person other than the provider.
! The transmission, routing, provision of connections, or copying must
be carried out by an automatic technical process without selection of
material by the service provider.
! The service provider must not determine the recipients of the material.
! Any intermediate copies must not ordinarily be accessible to anyone
other than anticipated recipients, and must not be retained for longer
than reasonably necessary.
! The material must be transmitted with no modification to its content.

Limitation for System Caching

Section 512(b) limits the liability of service providers for the practice of
retaining copies, for a limited time, of material that has been made available online by
a person other than the provider, and then transmitted to a subscriber at his or her
direction. The service provider retains the material so that subsequent requests for the
same material can be fulfilled by transmitting the retained copy, rather than retrieving
the material from the original source on the network.

The benefit of this practice is that it reduces the service provider’s bandwidth
requirements and reduces the waiting time on subsequent requests for the same
information. On the other hand, it can result in the delivery of outdated information
to subscribers and can deprive website operators of accurate “hit” information —
information about the number of requests for particular material on a website — from
which advertising revenue is frequently calculated. For this reason, the person making
the material available online may establish rules about updating it, and may utilize
technological means to track the number of “hits.”

 

! The content of the retained material must not be modified.
! The provider must comply with rules about “refreshing” material—
replacing retained copies of material with material from the
original location— when specified in accordance with a generally
accepted industry standard data communication protocol.
! The provider must not interfere with technology that returns “hit”
information to the person who posted the material, where such
technology meets certain requirements.
! The provider must limit users’ access to the material in accordance with
conditions on access (e.g., password protection) imposed by the person
who posted the material.
! Any material that was posted without the copyright owner’s authorization
must be removed or blocked promptly once the service provider
has been notified that it has been removed, blocked, or ordered to be
removed or blocked, at the originating site.

 

Limitation for Information Residing on Systems or Networks at the
Direction of Users

Section 512(c) limits the liability of service providers for infringing material on
websites (or other information repositories) hosted on their systems. It applies to
storage at the direction of a user. In order to be eligible for the limitation, the
following conditions must be met:

! The provider must not have the requisite level of knowledge of the

infringing activity, as described below.
! If the provider has the right and ability to control the infringing activity,

it must not receive a financial benefit directly attributable to the

infringing activity.
! Upon receiving proper notification of claimed infringement, the

provider must expeditiously take down or block access to the material.

In addition, a service provider must have filed with the Copyright Office a
designation of an agent to receive notifications of claimed infringement. The Office
provides a suggested form for the purpose of designating an agent
(http://www.loc.gov/copyright/onlinesp/) and maintains a list of agents on the
Copyright Office website (http://www.loc.gov/copyright/onlinesp/list/).

 

The statute also establishes procedures for proper notification, and rules as to
its effect. (Section 512(c)(3)). Under the notice and takedown procedure, a copyright
owner submits a notification under penalty of perjury, including a list of specified
elements, to the service provider’s designated agent. Failure to comply substantially
with the statutory requirements means that the notification will not be considered in
determining the requisite level of knowledge by the service provider. If, upon receiving
a proper notification, the service provider promptly removes or blocks access to the
material identified in the notification, the provider is exempt from monetary liability.
In addition, the provider is protected from any liability to any person for claims based
on its having taken down the material. (Section 512(g)(1)).

 

In order to protect against the possibility of erroneous or fraudulent
notifications, certain safeguards are built into section 512. Subsection (g)(1) gives the
subscriber the opportunity to respond to the notice and takedown by filing a counter
notification. In order to qualify for the protection against liability for taking down
material, the service provider must promptly notify the subscriber that it has removed
or disabled access to the material. If the subscriber serves a counter notification
complying with statutory requirements, including a statement under penalty of perjury
that the material was removed or disabled through mistake or misidentification, then
unless the copyright owner files an action seeking a court order against the subscriber,
the service provider must put the material back up within 10-14 business days after
receiving the counter notification.

Penalties are provided for knowing material misrepresentations in either a
notice or a counter notice. Any person who knowingly materially misrepresents that
material is infringing, or that it was removed or blocked through mistake or misidentification,
is liable for any resulting damages (including costs and attorneys’ fees) incurred
by the alleged infringer, the copyright owner or its licensee, or the service provider.
(Section 512(f)).

Limitation for Information Location Tools

Section 512(d) relates to hyperlinks, online directories, search engines and the
like. It limits liability for the acts of referring or linking users to a site that contains
infringing material by using such information location tools, if the following conditions
are met:

The provider must not have the requisite level of knowledge that the
material is infringing. The knowledge standard is the same as under the
limitation for information residing on systems or networks.
! If the provider has the right and ability to control the infringing activity,
the provider must not receive a financial benefit directly attributable to
the activity.
! Upon receiving a notification of claimed infringement, the provider
must expeditiously take down or block access to the material.

These are essentially the same conditions that apply under the previous
limitation, with some differences in the notification requirements. The provisions
establishing safeguards against the possibility of erroneous or fraudulent notifications,
as discussed above, as well as those protecting the provider against claims based on
having taken down the material apply to this limitation. (Sections 512(f)-(g)).

Special Rules Regarding Liability of Nonprofit Educational Institutions

Section 512(e) determines when the actions or knowledge of a faculty member
or graduate student employee who is performing a teaching or research function may
affect the eligibility of a nonprofit educational institution for one of the four limitations
on liability. As to the limitations for transitory communications or system caching, the
faculty member or student shall be considered a “person other than the provider,” so
as to avoid disqualifying the institution from eligibility. As to the other limitations, the
knowledge or awareness of the faculty member or student will not be attributed to the
institution. The following conditions must be met:

! the faculty member or graduate student’s infringing activities do not

involve providing online access to course materials that were required

or recommended during the past three years;
! the institution has not received more than two notifications over the

past three years that the faculty member or graduate student was

infringing; and
! the institution provides all of its users with informational materials

describing and promoting compliance with copyright law.

TITLE III: COMPUTER MAINTENANCE OR REPAIR

Title III expands the existing exemption relating to computer programs in
section 117 of the Copyright Act, which allows the owner of a copy of a program to
make reproductions or adaptations when necessary to use the program in conjunction
with a computer. The amendment permits the owner or lessee of a computer to make
or authorize the making of a copy of a computer program in the course of maintaining
or repairing that computer. The exemption only permits a copy that is made
automatically when a computer is activated, and only if the computer already lawfully

 

TITLE IV: MISCELLANEOUS PROVISIONS

 

Clarification of the Authority of the Copyright Office

Section 401(b), adds language to section 701 of the Copyright Act confirming

the Copyright Office’s authority to continue to perform the policy and international

functions that it has carried out for decades under its existing general authority.

Ephemeral Recordings for Broadcasters

Section 112 of the Copyright Act grants an exemption for the making of
“ephemeral recordings.” These are recordings made in order to facilitate a transmission.
Under this exemption, for example, a radio station can record a set of songs and
broadcast from the new recording rather than from the original CDs (which would
have to be changed “on the fly” during the course of a broadcast).

As it existed prior to enactment of the DMCA, section 112 permitted a
transmitting organization to make and retain for up to six months (hence the term
“ephemeral”) no more than one copy of a work if it was entitled to transmit a public
performance or display of the work, either under a license or by virtue of the fact that
there is no general public performance right in sound recordings (as distinguished from
musical works).

The Digital Performance Right in Sound Recordings Act of 1995 (DPRA)
created, for the first time in U.S. copyright law, a limited public performance right in
sound recordings. The right only covers public performances by means of digital
transmission and is subject to an exemption for digital broadcasts (i.e., transmissions
by FCC licensed terrestrial broadcast stations) and a statutory license for certain
subscription transmissions that are not made on demand (i.e. in response to the specific
request of a recipient).

Section 402 of the DMCA expands the section 112 exemption to include
recordings that are made to facilitate the digital transmission of a sound recording
where the transmission is made under the DPRA’s exemption for digital broadcasts or
statutory license. As amended, section 112 also permits in some circumstances the
circumvention of access control technologies in order to enable an organization to
make an ephemeral recording.

 

In the course of consideration of the DMCA, legislators expressed an interest
in amending the Copyright Act to promote distance education, possibly through an
expansion of the existing exception for instructional broadcasting in section 110(2).
Section 403 of the DMCA directs the Copyright Office to consult with affected parties
and make recommendations to Congress on how to promote distance education
through digital technologies. The Office must report to Congress within six months
of enactment.

 

The Copyright Office is directed to consider the following issues:

! The need for a new exemption;
! Categories of works to be included in any exemption;
! Appropriate quantitative limitations on the portions of works that may
be used under any exemption;
! Which parties should be eligible for any exemption;
! Which parties should be eligible recipients of distance education
material under any exemption;
! The extent to which use of technological protection measures should
be mandated as a condition of eligibility for any exemption;
! The extent to which the availability of licenses should be considered in
assessing eligibility for any exemption; and
! Other issues as appropriate.

Exemption for Nonprofit Libraries and Archives

Section 404 of the DMCA amends the exemption for nonprofit libraries and
archives in section 108 of the Copyright Act to accommodate digital technologies and
evolving preservation practices. Prior to enactment of the DMCA, section 108
permitted such libraries and archives to make a single facsimile (i.e., not digital) copy
of a work for purposes of preservation or interlibrary loan. As amended, section 108
permits up to three copies, which may be digital, provided that digital copies are not
made available to the public outside the library premises. In addition, the amended
section permits such a library or archive to copy a work into a new format if the
original format becomes obsolete—that is, the machine or device used to render the
work perceptible is no longer manufactured or is no longer reasonably available in the
commercial marketplace.

Webcasting Amendments to the Digital Performance Right in Sound
Recordings

As discussed above, in 1995 Congress enacted the DPRA, creating a
performance right in sound recordings that is limited to digital transmissions. Under

 

In the past several years, a number of entities have begun making digital
transmissions of sound recordings over the Internet using streaming audio technologies.
This activity does not fall squarely within any of the three categories that were
addressed in the DPRA. Section 405 of the DMCA amends the DPRA, expanding the
statutory license for subscription transmissions to include webcasting as a new category
of “eligible nonsubscription transmissions.”

 

In addition to expanding the scope of the statutory license, the DMCA revises
the criteria that any entity must meet in order to be eligible for the license (other than
those who are subject to a grandfather clause, leaving the existing criteria intact). It
revises the considerations for setting rates as well (again, subject to a grandfather
clause), directing arbitration panels convened under the law to set the royalty rates at
fair market value.

This provision of the DMCA also creates a new statutory license for making
ephemeral recordings. As indicated above, section 402 of the DMCA amends section
112 of the Copyright Act to permit the making of a single ephemeral recording to
facilitate the digital transmission of sound recording that is permitted either under the
DPRA’s broadcasting exemption or statutory license. Transmitting organizations that
wish to make more than the single ephemeral recording of a sound recording that is
permitted under the outright exemption in section 112 are now eligible for a statutory
license to make such additional ephemeral recordings. In addition, the new statutory
license applies to the making of ephemeral recordings by transmitting organizations
other than broadcasters who are exempt from the digital performance right, who are
not covered by the expanded exemption in section 402 of the DMCA.

Assumption of Contractual Obligations upon Transfers of Rights in
Motion Pictures

Section 416 addresses concerns about the ability of writers, directors and screen
actors to obtain residual payments for the exploitation of motion pictures in situations
where the producer is no longer able to make these payments. The guilds’ collective
bargaining agreements currently require producers to obtain assumption agreements
from distributors in certain circumstances, by which the distributor assumes the
producer’s obligation to make such residual payments. Some production companies
apparently do not always do so, leaving the guilds without contractual privity enabling
them to seek recourse from the distributor.

The provision also directs the Comptroller General, in consultation with the
Register of Copyrights, to conduct a study on the conditions in the motion picture
industry that gave rise to this provision, and the impact of the provision on the
industry. The study is due two years from enactment.

TITLE V: PROTECTION OF CERTAIN ORIGINAL DESIGNS

Title V of the DMCA, entitled the Vessel Hull Design Protection Act
(VHDPA), adds a new chapter 13 to Title 17 of the U.S. Code. It creates a new system
for protecting original designs of certain useful articles that make the article attractive
or distinctive in appearance. For purposes of the VHDPA, “useful articles” are limited
to the hulls (including the decks) of vessels no longer than 200 feet.

A design is protected under the VHDPA as soon as a useful article embodying
the design is made public or a registration for the design is published. Protection is lost
if an application for registration is not made within two years after a design is first made
public, but a design is not registrable if it has been made public more than one year
before the date of the application for registration. Once registered, protection
continues for ten years from the date protection begins.

The VHDPA is subject to a legislative sunset: the Act expires two years from
enactment (October 28, 2000). The Copyright Office is directed to conduct two joint
studies with the Patent and Trademark Office—the first by October 28, 1999 and the
second by October 28, 2000—evaluating the impact of the VHDPA.

EFFECTIVE DATES

Most provisions of the DMCA are effective on the date of enactment. There
are, however, several exceptions. The technical amendments in Title I that relate to
eligibility of works for protection under U.S. copyright law by virtue of the new WIPO
treaties do not take effect until the relevant treaty comes into force. Similarly,
restoration of copyright protection for such works does not become effective until the
relevant treaty comes into force. The prohibition on the act of circumvention of access