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the digital audio tape, or DAT. DAT as well as other new digital technologies will enable perfect copies to be made from digital recordings. Consequently, the problem of home taping is a matter of much greater exigency to the music industry.

At the urging of Congress, the music and record industries worked with the electronics industry to control home taping as we enter the digital age. They produced what was called the Athens agreement. H.R. 4069, which incorporated the Athens agreement, was introduced in the 101st Congress as a technological solution to the home taping problem. Music producers, authors

and performers whose products would still to a limited extent be taped at home opposed the legislation because it did not provide them with any compensation. Ultimately, this disagreement short circuited the legislation.

might add that this original agreement was not well received by this committee. Indeed, it was not received at all by this committee. Although my predecessor, Mr. Kastenmeier, and the chairman of the full committee, Mr. Brooks, were moving forces in encouraging the warring parties to propose a solution to the copyright problems they faced, the legislative solution proposed was specifically drafted to circumvent copyright-based jurisdiction.

Last year, the parties went back to the negotiating table and returned with a comprehensive agreement in hand. This agreement was incorporated into H.R. 3204, the Audio Home Recording Act of 1991. H.R. 3204 contains the following principal provisions.

First, it protects consumers and the electronic industry from copyright infringement suits when consumers tape digital or analog recordings for private, noncommercial use.

Second, the bill requires that all digital audio recorders incorporate a serial copy management system (SCMS). This SCMS system will prevent the making of second-generation copies of digital recordings. For example, the owner of a digital recorder

could make one or more copies of the original recordings, but the SCMS system would prevent any of these first generation copies from being

Third, the bill establishes a royalty system to compensate authors, performers, record companies, and music publishers. The royalty, which is modest, will be part of the cost of acquiring digital recording equipment and blank tapes. The royalty will be collected by the Copyright Office and distributed by the Copyright Royalty Tribunal.

Finally, the bill sets forth remedies for violations of the royalty or SCMS provisions. We are very pleased that industries with very different commercial interests have worked together to develop the consensus proposal we are considering today. Now, we must scrutinize this proposal to the same extent we review any legislative proposal to determine if the legislation is in the overriding public interest, whether it fits within the policy of our copyright laws and is flexible enough to accommodate new technological developments.

To the extent necessary, we will incorporate any necessary changes in the legislation that will advance these public policy goals. The Audio Home Recording Act is indeed landmark legislation, and I look forward to receiving testimony this morning from a broad array of experts from around the country.

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To amend title 17, United States Code, to implement a royalty payment

system and a serial copy management system for digital audio recording, to prohibit certain copyright infringement actions, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

AUGUST 2, 1991 Mr. BROOKS (for himself and Mr. HUGHES) introduced the following bill;

which was referred jointly to the Committees on the Judiciary, Energy and Commerce, and Ways and Means

A BILL To amend title 17, United States Code, to implement a

royalty payment system and a serial copy management system for digital audio recording, to prohibit certain copyright infringement actions, and for other purposes.

1

Be it enacted by the Senate and House of Representa

2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4

This Act may be cited as the “Audio Home Recording

5 Act of 1991”.

2

1 SEC. 2. IMPORTATION, MANUFACTURE, AND DISTRIBUTION

2

OF DIG

AL AUDIO RECORDING DEVICES

3

AND MEDIA.

4

Title 17, United States Code, is amended by adding

5 at the end the following:

6

“CHAPTER 10DIGITAL AUDIO RECORDING

7

DEVICES AND MEDIA

"SUBCHAPTER A-DEFINITIONS, PROHIBITION OF CERTAIN INFRINGEMENT ACTIONS, AND RULES OF CONSTRUCTION

“Sec.
"1001. Definitions.
“1002. Prohibition on certain infringement actions.
"1003. Effect on other rights and remedies with respect to private home copy*•

ing or otherwise.

"SUBCHAPTER BROYALTY PAYMENTS

“1011. Obligation to make royalty payments.
“1012. Royalty payments.
“1013. Deposit of royalty payments and deduction of expenses.
“1014. Entitlement to royalty payments.
“1015. Procedures for distributing royalty payments.
“1016. Negotiated collection and distribution arrangements.

"SUBCHAPTER C-THE SERIAL COPY MANAGEMENT SYSTEM

“1021. Incorporation of the serial copy management system.
“1022. Implementing the serial copy management system.

"SUBCHAPTER DREMEDIES

“1031. Civil remedies.
“1032. Binding arbitration.

8 "SUBCHAPTER A-DEFINITIONS, PROHIBITION 9 OF CERTAIN INFRINGEMENT ACTIONS, AND

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“As used in this chapter, the following terms and

13 their variant forms mean the following:

•HR 3204 IH

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“(1) A 'digital audio copied recording' is a reproduction in a digital recording format of a phonorecord, whether that reproduction is made directly

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from another phonorecord or indirectly from a trans

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"(2) A digital audio interface device is any

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machine or device, now known or later developed,

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whether or not included with or as part of some

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other machine or device, that supplies a digital audio signal through a nonprofessional interface, as the term 'nonprofessional interface' is used in the Digi

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tal Audio Interface Standard in part I of the techni

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cal reference document or as otherwise defined by

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the Secretary of Commerce under section 1022(b).

"(3) A digital audio recording device' is any

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machine or device, now known or later developed,

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whether or not included with or as part of some

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other machine or device, the recording function of

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which is designed or marketed for the primary purpose of, and that is capable of, making a digital audio copied recording for private use, except for

“(A) professional model products, and

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creation of sound recordings resulting from the

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fixation of nonmusical sounds.

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"(4)(A) A digital audio recording medium' is

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any material object, now known or later developed,

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in a form commonly distributed for use by individ

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uals (such as magnetic digital audio tape cassettes,

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optical discs, and magneto-optical discs), that is pri

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marily marketed or most commonly used by consum

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ers for the purpose of making digital audio copied recordings by use of a digital audio recording device.

"(B) Such term does not include any material

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has been so embodied in order to evade the obli

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