5/22. Rep. Lamar Smith (R-TX) introduced HR 5439 [PDF], the "Orphan Works Act of 2006". This bill is based upon the Copyright Office's report [133 pages in PDF] titled "Report on Orphan Works".

The bill was referred to the House Judiciary Committee (HJC). It is on agenda for the HJC's Subcommittee on Courts, the Internet and Intellectual Property (CIIP) mark up session scheduled for 4:00 PM on Wednesday, May 24. Rep. Smith is the Chairman of the CIIP Subcommittee.

Rep. Smith (at right) stated in a release that "The orphan works issue arises when someone who wants to use a copyrighted work cannot find the owner, no matter how diligently they search ... The owner may have moved several times, died, or in the case of businesses, changed their name or gone bankrupt. For example, a local civic association may want to include old photographs from the local library archive in their monthly newsletter, but there are no identifying marks on the photo".

He added that "Under current law, the civic association must locate the owner to ask permission and in many cases may not be able to find the owner. Under the Orphan Works Act, they could follow guidelines posted by the Copyright Office as a show of due diligence to reduce the threat of litigation for simply doing the right thing."

The bill is supported by representatives of libraries, museums, and universities. It is also supported by the trade groups that represent the major copyright industries, including the music, movie, book, and software industries. All would be net beneficiaries of the bill. While the bill would weaken the protection afforded to creators, it would primarily harm individuals and very small businesses. Representatives of those who create works in photography, illustration, and the visual arts have adamantly opposed the Copyright Office's proposal.

See also, story titled "House CIIP Subcommittee Holds Hearing on Orphan Works" in TLJ Daily E-Mail Alert No. 1,326, March 9, 2006, and story titled "Copyright Office Recommends Orphan Works Legislation" in TLJ Daily E-Mail Alert No. 1,302, February 2, 2006.

This bill would amend the Copyright Act by adding a new Section 514 titled "Limitation on remedies in cases involving orphan works".

The bill would limit the remedies available to copyright owners in actions for infringement brought under Sections 502-505, but not for actions brought under Sections 512, 1201, or 1202(b), where the infringer, before infringing, "performed and documented a reasonably diligent search in good faith to locate the owner of the infringed copyright".

Circumstances Under Which the Limitation on Remedies Would Apply. Subsection (a) of this new Section 514, provides as follows:

"Notwithstanding sections 502 through 505, in an action brought under this title for infringement of copyright in a work, the remedies for infringement shall be limited under subsection (b) if the infringer sustains the burden of proving, and the court finds, that---
   (A) before the infringing use of the work began, the infringer, a person acting on behalf of the infringer, or any person jointly and severally liable with the infringer for the infringement of the work---(i) performed and documented a reasonably diligent search in good faith to locate the owner of the infringed copyright; but (ii) was unable to locate the owner; and
   (B) the infringing use of the work provided attribution, in a manner reasonable under the circumstances, to the author and owner of the copyright, if known with a reasonable degree of certainty based on information obtained in performing the reasonably diligent search."

This is similar to the language the was proposed in the Copyright Office's report. However, the CO report did not contain the documentation requirement. Nor did the CO report identify what is meant by the term "reasonably diligent search".

This bill provides more language regarding diligent searches, without providing much more certainty or predictability to copyright holders. It provides, in part, as follows:

   "(i) ... a search to locate the owner of an infringed copyright in a work---(I) is ‘reasonably diligent’ only if it includes steps that are reasonable under the circumstances to locate that owner in order to obtain permission for the use of the work; and (II) is not ‘reasonably diligent’ solely by reference to the lack of identifying information with respect to the copyright on the copy or phonorecord of the work.
   (ii) The steps referred to in clause (i)(I) shall ordinarily include, at a minimum, review of the information maintained by the Register of Copyrights under subparagraph (C).
   (iii) A reasonably diligent search includes the use of reasonably available expert assistance and reasonably available technology, which may include, if reasonable under the circumstances, resources for which a charge or subscription fee is imposed."

The Copyright Act now contains no requirement that a creator register a work for the copyright to exist. The Berne Convention, to which the U.S. is a party, prohibits the imposition of such formalities. This bill does not expressly require registration, or other formalities. However, the above language, especially the reference to registration, is in the nature of a reinstitution of formalities.

Limitations on Remedies. The bill would substantially limit the copyright holder's ability to recover financially, or obtain injunctive relief, for infringement.

The bill provides that "an award for monetary relief (including actual damages, statutory damages, costs, and attorney’s fees) may not be made, other than an order requiring the infringer to pay reasonable compensation for the use of the infringed work." (Parentheses in original.)

The bill does not define the term "reasonable compensation".

Moreover, the bill provides for the recovery of no monetary relief where the infringement was "without any purpose of direct or indirect commercial advantage and primarily for a charitable, religious, scholarly, or educational purpose".

The bill also provides that the "owner of the infringed copyright has the burden of establishing the amount on which a reasonable willing buyer and a reasonable willing seller in the positions of the owner and the infringer would have agreed with respect to the infringing use of the work immediately before the infringement began." Satisfying this burden would likely require copyright owners to retain expert witnesses to perform analyses, write reports, and testify in depositions and trial. The cost of this would not be recoverable, but in many cases would likely exceed "reasonable compensation".

The bill also limits the owner's right to exclude. It provides that "the court may impose injunctive relief to prevent or restrain the infringing use, except that, if the infringer has met the requirements of subsection (a), the relief shall, to the extent practicable, account for any harm that the relief would cause the infringer due to its reliance on having performed a reasonably diligent search under subsection (a)." Subsection (a) of Section 514 is the language stating when an infringer qualifies for the limitations on remedies.

The bill also imposes an almost complete ban on injunctive relief where the infringer "recasts, transforms, adapts, or integrates the infringed work with the infringer's original expression in a new work of authorship". The bill provides that in these situations, "the court may not, in granting injunctive relief, restrain the infringer's continued preparation or use of that new work, if the infringer ... pays reasonable compensation ..."

The bill would limit remedies in actions for infringement. In contrast, the bill would not limit the procedures and remedies available to copyright owners under Section 512 with respect to the notice and takedown of online infringing publication. Nor would it limit liability under Section 1201 for violation of the prohibition against circumvention of technological measures that effectively control access to a protected work. Nor would it limit liability under Section 1202(b) for removal or alteration of copyright management information. Section 1203(c)(3) provides that "a complaining party may elect to recover an award of statutory damages of reach violation of section 1202 in the sum of not less that $2,500 or more than $25,000."

Also, there are asymmetries in the limitations on remedies. The bill would preclude the recovery of attorneys fees by the plaintiff in an action for infringement where the court accords Section 514 status to the defendant. However, nothing in the bill limits the attorneys fees recoverable by the defendant in such an action who successfully asserts counterclaims. Also, while the bill limits the plaintiff in such an action to "reasonable compensation", there is no parallel limitation of the recovery of damages by the defendant for counterclaims.

Also, the bill, if interpreted literally, appears not to apply in declaratory judgment actions brought by infringers seeking Section 514 status. That is, the bill provides that in "an action brought under this title for infringement of copyright in a work, the remedies for infringement shall be limited". If a copyright holder sends a demand to an infringer, and the infringer believes that it is entitled to Section 514 status, if the infringer files a complaint for a declaration that it is entitled to Section 514 status, this is not "an action ... for infringement".

Retroactive Application. The bill provides that "The amendments made by this section shall apply only to infringing uses that commence on or after June 1, 2008." This clause refers only to "uses". The bill would extend to any works, not just those created after June 1, 2008.

This is significant because the Congress, in enacting the Copyright Act of 1978, provided that copyright exists in the creation of any work that is copyrightable subject matter, regardless of whether or not the owner has performed any legal formalities, such as registration, or publication of notices, or taken any steps to protect or defend the copyright. Since 1978 many creators have relied upon the Copyright Act of 1978, and employed business practices based upon the protections of the 1978 Act.

Now, Rep. Smith proposes legislation that would have the effect of depriving certain creators of the ability to enforce their copyrights because they did not take steps that the Copyright Act of 1978 did not require them to take.

State Sovereign Immunity. The bill does not mention state sovereign immunity, the 11th Amendment of the Constitution, of the Supreme Court's opinion in Florida Prepaid, and its progeny. Nevertheless, one subsection appears to address this subject. The bill provides as follows:

"TREATMENT OF PARTIES NOT SUBJECT TO SUIT.---The limitations on remedies under this paragraph shall not be available to an infringer that asserts in an action under section 501(b) that neither it nor its representative acting in an official capacity is subject to suit in Federal court for an award of damages to the copyright owner under section 504, unless the court finds that such infringer has---(i) complied with the requirements of subsection (a) of this section; (ii) made a good faith offer of compensation that was rejected by the copyright owner; and (iii) affirmed in writing its willingness to pay such compensation to the copyright owner upon the determination by the court that such compensation was reasonable under paragraph (3) of this subsection."

The bill goes on to assert that this does not constitute a waiver, or a statutory authorization for the award of damages.

The Supreme Court has held that the Congress cannot abrogate state sovereign immunity in claims for damages under intellectual property laws. However, the Congress can enact intellectual property laws that define the intellectual property rights regime.

There have been failed attempts, for example, to enact a blanket provision that would provide that states can enforce their intellectual property rights only if they have waived their sovereign immunity to claims for damages for their violation of the intellectual property rights of others.

State universities that infringe the intellectual property rights of others have endeavored to block all such legislation. If this bill were enacted, this provision would be a very targeted and limited application of this approach. It would be the first such provision enacted into law.

Perhaps it should be noted that California is an abuser of state sovereign immunity, and that Sen. Dianne Feinstein (D-CA) sits on the Senate Judiciary Committee, while the House Judiciary Committee, and its CIIP Subcommittee, are packed with Californians.

Title of the Bill is Not Descriptive. To the extent that this bill would create no class of works know as "orphan works", the use of the word "works" in the title of the bill, and in the title of the new Section 514, is not descriptive of the subject matter. Neither the Copyright Act, nor implementing regulations, create or define any class of "orphan works". The bill would do nothing to change this.

This bill is more in the nature of a use based limitation on remedies. The phrase "use of orphans" would be less misleading.

However, the term "orphans" is also not descriptive. Again, neither the Copyright Act, regulations, nor this bill define the term "orphans". Under this bill, a single copyrighted work could be accorded orphan status in one legal proceeding, but not accorded orphan status in another. Moreover, while the use of the word "orphan" in this bill is a metaphor that suggests the death of parents, or metaphorically, of authors, the bill would result in Section 514 status being extending by courts to works that were infringed immediately upon creation, where the author is alive, in business, and licensing the work. In particular, there is no minimum age for a work to be accorded Section 514 status.

5/23. President Bush nominated Clifford Sobel to be Ambassador to Brazil. Sobel was previously the Chairman of Net 2 Phone, Inc., an voice over internet protocol (VOIP) company. He is currently P/Ch of SJJ Investment Corporation. See, White House release and release. Federal Election Commission (FEC) filings show that Sobel has been a major financial contributor to Republican entities in recent years. Back in 2001, Bush appointed Sobel Ambassador to the Netherlands. See, 2001 White House release.

5/22. The Senate Finance Committee approved the nomination of Susan Schwab to be the U.S. Trade Representative, by a vote of 18-1. Sen. Kent Conrad (D-ND) voted no, and Sen. Charles Schumer (D-NY) did not vote. This Committee permits voting by proxy. Schwab will replace Robert Portman. See, Congressional Record, May 22, 2006, at Page S4891.

5/22. The Senate Committee on Homeland Security and Governmental Affairs approved the nomination of Robert Portman to be Director of the Office of Management and Budget (OMB). See, Congressional Record, May 22, 2006, at Page S4891.

The House will meet at 10:00 AM for legislative business. See, Republican Whip Notice.

The Senate will meet at 8:30 AM. It will resume consideration of S 2611, the "Comprehensive Immigration Reform Act of 2006".

9:00 AM - 4:35 PM. The Federal Communications Bar Association (FCBA) will host a continuing legal education (CLE) seminar titled "Enforcement CLE Seminar". The participants will include FCC Commissioner Jonathan Adelstein and FCC Enforcement Bureau Chief Kris Monteith. Reservations and cancellations are due by May 23 at 12:00 NOON. Prices vary. See, registration form [PDF]. Location: Holland & Knight, 2099 Pennsylvania Ave., NW.

9:30 - 11:30 AM. The House Science Committee's (HSC) Subcommittee on Environment, Technology, and Standards will hold a hearing titled "Views of the NIST Nobel Laureates on Science Policy". The witnesses will be William Phillips (Nobel Laureate, Physics, 1997), Eric Cornell (Physics, 2001), and John Hall (Physics, 2005). The hearing will be webcast by the HSC. Location: Room 2318, Rayburn Building.

10:00 AM. The House Commerce Committee (HCC) will meet to mark up several bills, including HR 3997, the "Financial Data Protection Act of 2006", as reported by the House Financial Services Committee, and HR 5126, the "Truth in Caller ID Act of 2006". The meeting will be webcast by the HCC. See, notice. Press contact: 202-225-5735. Location: Room 2123, Rayburn Building.

10:00 AM. The House Financial Services Committee will meet to mark up several bills, including HR 4127, the "Data Accountability and Trust Act (DATA)". Location: Room 2128, Rayburn Building.

RESCHEDULED FOR MAY 25. 1:00 PM. The House Judiciary Committee (HJC) will meet to mark up several technology related bills: HR 5417, the "Internet Freedom and Nondiscrimination Act of 2006", HR 4777, the "Internet Gambling Prohibition Act"; HR 4411, the "Unlawful Internet Gambling Enforcement Act of 2006", HR 4894, a bill "To provide for certain access to national crime information databases by schools and educational agencies for employment purposes, with respect to individuals who work with children", HR 5318, the "Cyber-Security Enhancement and Consumer Data Protection Act of 2006", and HR 4127, the "Data Accountability and Trust Act (DATA)".

4:00 PM. The House Judiciary Committee's (HJC) Subcommittee on Courts, the Internet and Intellectual Property (CIIP) will meet to mark up several bills, including HR 5440, the "Federal Courts Jurisdiction Clarification Act" and HR 5439 [PDF], the "Orphan Works Act of 2006". See also, Copyright Office's report [133 pages in PDF] titled "Report on Orphan Works". See, notice of hearing. The meeting will be webcast by the HJC. Press contact: Jeff Lungren or Terry Shawn at 202-225-2492. Location: Room 2141, Rayburn Building.

4:00 PM. The House Ways and Means Committee (HWMC) will meet to mark up HR 4157, the "Health Information Technology Promotion Act of 2005". Location: Room 1100, Longworth Building.

2:00 PM. The Senate Judiciary Committee (SJC) may hold a hearing on judicial nominations. See, notice. The SJC frequently cancels or postpones hearings without notice. Location: Room 226, Dirksen Building.

Deadline to submit reply comments to the Federal Communications Commission (FCC) regarding the National Exchange Carrier Association's (NECA) annual payment formula and fund size estimate for the Interstate TRS Fund. The NECA is the Interstate Telecommunications Relay Service (TRS) Fund Administrator. This proceeding is CG Docket No. 03-123. See, notice in the Federal Register, May 10, 2006, Vol. 71, No. 90, at Pages 27252-27253.

The House will meet at 10:00 AM for legislative business. See, Republican Whip Notice.

9:00 AM. The Senate Judiciary Committee (SJC) may hold an executive business meeting. The SJC frequently cancels or postpones meetings without notice. See, notice. Location: Room 226, Dirksen Building.

10:00 AM. The Senate Commerce Committee (SCC) will hold the second of three hearings on S 2686 [135 pages in PDF], the "Communications, Consumer's Choice, and Broadband Deployment Act of 2006". See, notice of hearing, statement [5 pages in PDF] by Sen. Stevens, and Sen. Stevens' section by section summary [7 pages in PDF]. See also, stories titled "Stevens Introduces Telecom Reform Bill" and "Section by Section Summary of Sen. Stevens' Telecom Reform Bill" in TLJ Daily E-Mail Alert No. 1,362, May 2, 2006. Press contact: Aaron Saunders (Stevens) at 202-224-3991 or Andy Davis (Inouye) at 202-224-4546. The hearing will be webcast by the SCC. Location: Room 106, Dirksen Building.

RESCHEDULED FROM MAY 24. 10:00 AM. The House Judiciary Committee (HJC) will meet to mark up several technology related bills: HR 5417, the "Internet Freedom and Nondiscrimination Act of 2006", HR 4777, the "Internet Gambling Prohibition Act"; HR 4411, the "Unlawful Internet Gambling Enforcement Act of 2006", HR 4894, a bill "To provide for certain access to national crime information databases by schools and educational agencies for employment purposes, with respect to individuals who work with children", HR 5318, the "Cyber-Security Enhancement and Consumer Data Protection Act of 2006", and HR 4127, the "Data Accountability and Trust Act (DATA)". See, notice. The meeting will be webcast by the HJC. Press contact: Jeff Lungren or Terry Shawn at 202-225-2492. Location: Room 2141, Rayburn Building.

10:00 AM. The House Science Committee HSC) will meet to mark up several bills, including HR 5356, the "Early Career Research Act of 2006", HR 5357, the "Research for Competitiveness Act of 2006", and HR 5358, the "Science and Mathematics Education for Competitiveness Act of 2006". The hearing will be webcast by the HSC. Location: Room 2318, Rayburn Building.

1:00 PM. The House Financial Services Committee (HFSC) will hold a hearing titled "Protecting Investors and Fostering Efficient Markets: A Review of the S.E.C. Agenda". Location: Room 2128, Rayburn Building.

2:00 - 4:00 PM. The Department of State's International Telecommunication Advisory Committee will meet to prepare for meetings of the Organization for Economic Co-operation and Development (OECD) WPIE and CISP committee meetings of May 29-31, 2006. See, notice in the Federal Register, April 19, 2006, Vol. 71, No. 75, at Pages 20153-20154. Location: Room 2533, Harry Truman Building, 2201 C Street, NW.

The House will meet at 10:00 AM for legislative business. See, Republican Whip Notice.

Deadline to submit comments to the Federal Communications Commission (FCC) regarding the April 27, 2006, recommendations of the World Radiocommunication Conference Advisory Committee (WRC-07 Advisory Committee). See, FCC notice [145 pages in PDF], with the recommendations attached. This proceeding is IB Docket No. 04-286.

Memorial Day.

The House will not meet on Monday, May 29, through Friday, June 2. See, Majority Whip's calendar.

The Senate will not meet on Monday, May 29, through Friday, June 2. See, 2006 Senate calendar.

The Federal Communications Commission (FCC) and other federal offices will be closed. See, Office of Personnel Management's (OPM) list of federal holidays.

8:30 AM - 5:30 PM. Day one of a two day workshop on public participation in nanotechnology hosted by the National Nanotechnology Coordination Office (NNCO). See, notice in the Federal Register, May 3, 2006, Vol. 71, No. 85, at Page 26117. Location: Westin Arlington Gateway Hotel, 801 North Glebe Road, Arlington, VA.

12:00 NOON - 5:00 PM. The American Enterprise Institute (AEI) will host an event titled "The SEC's Interactive Data Revolution: Improved Disclosure for Investors, Less Expensive Reporting for Companies". Lunch will be served at 12:00 NOON. Peter Wallison (AEI) will introduce the program at 12:45 PM. Chris Cox, Chairman of the Securities and Exchange Commission (SEC), will give the keynote address at 12:45 PM. At 1:45 PM there will be a panel titled "XBRL, the New Computer Language: How It Creates Interactive Data". The speakers will be Richard Daly (Automatic Data Processing, Inc.), Mark Schnitzer (Morgan Stanley), Louis Thompson (National Investor Relations Institute), Mike Willis (Pricewaterhouse Coopers), and James Glassman (AEI). At 3:30 PM there will be a panel titled "Enhanced Business Reporting: Why It Is Necessary and How It Works with XBRL". The speakers will be Alan Anderson (Franklin Templeton Investments, Inc.), Robert Eccles (Advisory Capital Partners), John Philip (Infosys Technologies Limited), Mike Willis (PWC), and Peter Wallison (AEI). See, notice and registration page. Location: AEI, 1150, 17th Street, NW.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its notice of proposed rulemaking (NPRM) regarding licensing and use of frequencies in the 904-909.75 and 919.75-928 MHz portions of the 902-928 MHz band that are used for the provision of multilateration Location and Monitoring Service (M-LMS band). This NPRM is FCC 06-24 in WT Docket No. 06-49. See, text [24 pages in PDF] of NPRM; notice in the Federal Register, March 29, 2006, Vol. 71, No. 60, at Pages 15658-15666; and story titled "FCC Releases NPRM on M-LMS Systems" in TLJ Daily E-Mail Alert No. 1,325, March 8, 2006.

Deadline to submit comments to the U.S. Patent and Trademark Office (USPTO) in response to its notice of proposed rulemaking (NPRM) regarding changes to the rules of practice relating to ex parte and inter partes reexamination. See, notice in the Federal Register, March 30, 2006, Vol. 71, No. 61, at Pages 16072-16086.

8:30 AM - 5:00 PM. Day two of a two day workshop on public participation in nanotechnology hosted by the National Nanotechnology Coordination Office (NNCO). See, notice in the Federal Register, May 3, 2006, Vol. 71, No. 85, at Page 26117. Location: Westin Arlington Gateway Hotel, 801 North Glebe Road, Arlington, VA.

5/22. The Senate approved SenRes 486, which designates June of 2006 as "National Internet Safety Month''.

5/23. Vice President Dick Cheney gave a speech in San Diego, California, at an event for former Rep. Brian Bilbray (R-CA), who is again running for Congress. Cheney said that the people who advocate "surrender in Iraq" are "also the crowd that objects to the terrorist surveillance program". Cheney was speaking of the National Security Agency (NSA) surveillance program disclosed by the New York Times in December of 2005, and not the NSA program disclosed by USA Today in May of 2006. Cheney said that "the President authorized a surveillance program to intercept a certain category of terrorist-linked international communications. Let me emphasize that because on occasion you will hear the press or our opponents talk about domestic surveillance. This is not domestic surveillance. One end has to be outside the United States, and therefore international, one end has to be affiliated in some fashion with al Qaeda. It's hard to think of any category of information that could be more important to the safety of the United States. The program is a wartime measure ..."

5/16. The state of Texas filed a civil complaint [21 pages in PDF] in state court in El Paso, Texas, against JAGJRTX, and its principal, John A. Gill, alleging violation of the Texas Deceptive Trade Practices -- Consumer Protection Act, and the Texas Credit Title, in connection with their sale of internet access services. The complaint alleges that the defendants, doing business as "Advance Internet" and "Texas Advance Internet", "purport to sell internet access services to the public. As a ``rebate´´ to consumers who buy internet access, the offices of JAGJRTX, L.L.C., a/k/a JAG TX L.L.C. offer cash advances which are in fact usurious loans." The Office of the Attorney General wrote in a release that "a consumer would receive an instant $100 cash ``rebate´´ for signing up for ``Internet access,´´ but the company would withdraw $30 from the consumer's bank account every two weeks for up to a year until the $100 is repaid."

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