To prohibit the misappropriation of certain databases.

October 8, 2003

Mr. COBLE (for himself, Mr. SMITH of Texas, Mr. HOBSON, Mr. GREENWOOD, Mr. TAUZIN, and Mr. SENSENBRENNER) introduced the following bill; which was referred to the Committee on the Judiciary

To prohibit the misappropriation of certain databases.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Database and Collections of Information Misappropriation Act'.

SEC. 2. DEFINITIONS.

In this Act:

(1) COLLECTIVE WORK- The term `collective work' means a work, such as a periodical issue, anthology, or encyclopedia, in which a number of contributions, constituting separate and independent works in themselves, are assembled into a collective whole.

(2) COMMERCE- The term `commerce' means all commerce which may be lawfully regulated by the Congress.

(3) COMPILATION- The term `compilation' means a work formed by the collection and assembling of preexisting materials or of data that are selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work of authorship. The term `compilation' includes collective works.

(4) COVERED ENTITY- The term `covered entity' means a legal entity that is--

(A) a telecommunications carrier engaged in the provision of a telecommunications service;

(B) a person engaged in the business of providing an Internet access service;

(C) a person engaged in the business of providing an Internet information location tool; and

(D) a person similarly engaged in the transmission, storage, retrieval, hosting, formatting, or translation (or any combination thereof) of a communication made by another person, without selection or alteration of the content of the communication, except that such person's deletion of a particular communication or material made available in commerce by another person in violation of section 3 shall not constitute such selection or alteration of the content of the communication.

(5) DATABASE-

(A) IN GENERAL- Subject to subparagraph (B), the term `database' means a collection of a large number of discrete items of information produced for the purpose of bringing such discrete items of information together in one place or through one source so that persons may access them.

(B) EXCLUSIONS- The term database does not include any of the following:

(i) A work of authorship, other than a compilation or a collective work.

(ii) A collection of information that principally performs the function of addressing, routing, forwarding, transmitting, or storing digital online communications or receiving access to connections for digital communications, except that the fact that a collection of information includes or consists of online location designations shall not by itself be the basis for applying this clause.

(iii) A collection of information gathered, organized, or maintained to perform the function of providing multichannel audio or video programming.

(iv) A collection of information gathered, organized, or maintained to register domain name registrant contact data maintained by a domain name registration authority, unless such registration authority takes appropriate steps to ensure the integrity and accuracy of such information and provides real-time, unrestricted, and fully searchable public access to the information contained in such collection of information.

(C) DISCRETE SECTIONS- The fact that a database is a subset of a database shall not preclude such subset from treatment as a database under this Act.

(6) DOMAIN NAME- The term `domain name' means any alphanumeric designation which is registered with or assigned by any domain name registrar, domain name registry, or other domain name registration authority as part of an electronic address on the Internet.

(7) IN CONCERT- A person acts `in concert' with another person who makes a database available in commerce if the act of making available in commerce is planned, arranged, coordinated, adjusted, agreed upon, or settled between the two persons acting together, in pursuance of some design or in accordance with some scheme.

(8) INFORMATION- The term `information' means facts, data, works of authorship, or any other intangible material capable of being generated or gathered.

(9) INTERNET- The term `Internet' means the combination of computer facilities and electromagnetic transmission media, and related equipment and software, comprising the interconnected worldwide network of computer networks that employ the Transmission Control Protocol/Internet Protocol or any successor protocol to transmit information.

(10) INTERNET ACCESS SERVICE- The term `Internet access service' means a service that enables users to access content, information, electronic mail, or other services offered over the Internet, and may also include access to proprietary content, information, and other services as part of a package of services offered to consumers. Such term does not include telecommunications services.

(11) INTERNET INFORMATION LOCATION TOOL- The term `Internet information location tool' means a service that refers or links users to an online location on the World Wide Web. Such term includes directories, indices, references, pointers, and hypertext links.

(12) LEGAL ENTITY- The term `legal entity' means a person, other than an individual, including a firm, corporation, union, or other organization, which is organized under the laws of the United States, a State, the District of Columbia, or any

commonwealth, territory, or possession of the United States, or the laws of a foreign country.

(13) MAINTAIN- To `maintain' a database means to update, validate, or supplement the information contained in the database.

(14) MAKING AVAILABLE IN COMMERCE TO OTHERS- The term `making available in commerce to others' means making available in commerce to--

(A) a substantial number of members of the public; or

(B) a number of persons that extends beyond--

(i) a family and its social acquaintances; or

(ii) those who could reasonably anticipate to have a database made available in commerce to them without a customary commercial relationship.

A court may take into account repeated acts directed to different persons by the same or concerted parties in determining the limits imposed by subparagraph (B)(ii) have been exceeded.

(15) TELECOMMUNICATIONS- The term `telecommunications' means the transmission, between or among points specified by the user, of information of the user's choosing, without change in the form or content of the information as sent and received.

(16) TELECOMMUNICATIONS CARRIER- The term `telecommunications carrier' means any provider of telecommunications services, except that such term does not include any person that, in the ordinary course of its operations, makes telephones available to the public or to transient users of its premises, for interstate telephone calls using a provider of operator services.

(17) TELECOMMUNICATIONS SERVICE- The term `telecommunications service' means the offering of telecommunications for a fee directly to the public, or to such classes of users as to be effectively available directly to the public, regardless of the facilities used.

SEC. 3. PROHIBITION AGAINST MISAPPROPRIATION OF DATABASES.

(a) LIABILITY- Any person who makes available in commerce to others a quantitatively substantial part of the information in a database generated, gathered, or maintained by another person, knowing that such making available in commerce is without the authorization of that person (including a successor in interest) or that person's licensee, when acting within the scope of its license, shall be liable for the remedies set forth in section 7 if--

(1) the database was generated, gathered, or maintained through a substantial expenditure of financial resources or time;

(2) the unauthorized making available in commerce occurs in a time sensitive manner and inflicts injury on the database or a product or service offering access to multiple databases; and

(3) the ability of other parties to free ride on the efforts of the plaintiff would so reduce the incentive to produce the product or service that its existence or quality would be substantially threatened.

(b) INJURY- For purposes of subsection (a), the term `inflicts an injury' means serving as a functional equivalent in the same market as the database in a manner that causes the displacement, or the disruption of the sources, of sales, licenses, advertising, or other revenue.

(c) TIME SENSITIVE- In determining whether an unauthorized making available in commerce occurs in a time sensitive manner, the court shall consider the temporal value of the information in the database, within the context of the industry sector involved.

SEC. 4. PERMITTED ACTS.

(a) INDEPENDENTLY GENERATED OR GATHERED INFORMATION- This Act shall not restrict any person from independently generating or gathering information obtained by means other than extracting it from a database generated, gathered, or maintained by another person and making that information available in commerce.

(b) ACTS OF MAKING AVAILABLE IN COMMERCE BY NONPROFIT EDUCATIONAL, SCIENTIFIC, OR RESEARCH INSTITUTIONS- The making available in commerce of a substantial part of a database by a nonprofit educational, scientific, and research institution, including an employee or agent of such institution acting within the scope of such employment or agency, for nonprofit educational, scientific, and research purposes shall not be prohibited by section 3 if the court determines that the making available in commerce of the information in the database is reasonable under the circumstances, taking into consideration the customary practices associated with such uses of such database by nonprofit educational, scientific, or research institutions and other factors that the court determines relevant.

(c) HYPERLINKING- Nothing in this Act shall restrict the act of hyperlinking of one online location to another or the providing of a reference or pointer (including such reference or pointer in a directory or index) to a database.

(d) NEWS REPORTING- Nothing in this Act shall restrict any person from making available in commerce information for the primary purpose of news reporting, including news and sports gathering, dissemination, and comment, unless the information is time sensitive and has been gathered by a news reporting entity, and making available in commerce the information is part of a consistent pattern engaged in for the purpose of direct competition.

SEC. 5. EXCLUSIONS.

(a) GOVERNMENT INFORMATION-

(1) IN GENERAL- Except as provided in paragraph (2), protection under this Act shall not extend to--

(A) a database generated, gathered, organized, or maintained by a Federal, State, or local governmental entity, or by an employee or agent of such an entity, acting within the scope of such employment or agency; or

(B) a database generated, gathered, or maintained by an entity pursuant to and to the extent required by a Federal statute or regulation requiring such a database.

(2) EXCEPTION- Nothing in this section shall preclude protection under this Act for a database gathered, organized, or maintained by an employee or agent of an entity described in paragraph (1) that is acting outside the scope of such employment or agency, or by a Federal, State, or local educational institution, or its employees or agents, in the course of engaging in education, research, or scholarship.

(b) COMPUTER PROGRAMS-

(1) PROTECTION NOT EXTENDED- Subject to paragraph (2), protection under section 3 shall not extend to computer programs, including any computer program used in the manufacture, production, operation, or maintenance of a database, or to any element of a computer program necessary to its operation.

(2) INCORPORATED DATABASES- A database that is otherwise subject to protection under section 3 is not disqualified from such protection solely because it resides in a computer program, so long as the collection of information functions as a database within the meaning of this Act.

SEC. 6. RELATION TO OTHER LAWS.

(a) OTHER RIGHTS NOT AFFECTED-

(1) IN GENERAL- Subject to subsection (b), nothing in this Act shall affect rights, limitations, or remedies concerning copyright, patent, trademark, design rights, antitrust, trade secrets, privacy, access to public documents, and misuse.

(2) RIGHT OF CONTRACT- Notwithstanding subsection (b), nothing in this Act shall affect rights, limitations, or remedies concerning the common law right of contract.

(b) PREEMPTION OF STATE LAW-

(1) LAWS REGULATING CONDUCT THAT IS SUBJECT OF THE ACT- On or after the effective date of this Act, no State statute, rule, regulation, or common law doctrine that prohibits or otherwise regulates conduct that is the subject of this Act shall be effective.

(2) CLARIFICATION OF INAPPLICABILITY TO CASES NOT INVOLVING COMMERCIAL COMPETITION- Paragraph (1) shall not apply to preempt actions under State law against a person for taking actions that--

(A)(i) disrupt the sources of data supply to a database; or

(ii) substantially impair the perceived accuracy, currency, or completeness of data in a database by inaccurate, untimely, or incomplete replication and distribution of such data; and

(B) do not involve the person making available in commerce the data from such database in competition with such database.

(c) COMMUNICATIONS ACT OF 1934- Nothing in this Act shall affect the operation of section 222(e) or any other provision of the Communications Act of 1934 (47 U.S.C. 151 et seq.), or shall restrict any person from making available in commerce or extracting subscriber list information, as such term is defined in section 222(h)(3) of the Communications Act of 1934 (47 U.S.C. 222(h)(3)).

(d) SECURITIES- Nothing in this title shall--

(1) affect the operation of the Securities Act of 1933 (15 U.S.C. 78a et seq.), the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.), the Public Utility Holding Company Act of 1935 (15 U.S.C. 79a et seq.), the Trust Indenture Act of 1939 (15 U.S.C. 77aaa et seq.), the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.), the Investment Advisers Act of 1940 (15 U.S.C. 80b et seq.), or the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.), or the rules or regulations thereunder;

(2) affect the authority of the Securities and Exchange Commission; or

(3) apply to information with respect to quotations for, or indications, orders, or transactions in, securities.

(e) MISUSE- Judicial doctrines of misuse shall apply under this Act.

SEC. 7. CIVIL REMEDIES.

(a) CIVIL ACTIONS-

(1) COMMENCEMENT OF ACTIONS- Any person who is injured by a violation of section 3 may bring a civil action for such a violation in an appropriate United States district court. Any action against a State governmental entity may be brought in any court that has jurisdiction over claims against such entity.

(2) NOTICE OF COMMENCEMENT OF ACTIONS AND APPEALS- Any person who brings an action for such a violation, or who files an appeal from any final decision on such an action, shall transmit notice of such action or appeal with the Federal Trade Commission and the Patent and Trademark Office in accordance with subsection (j)(1).

(b) TEMPORARY AND PERMANENT INJUNCTIONS- Any court having jurisdiction of a civil action under this section 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 or restrain a violation or attempted violation of section 3. Any such injunction may be served anywhere in the United States on the person enjoined, and may be enforced by proceedings in contempt or otherwise by any United States district court having jurisdiction over that person.

(c) MONETARY RELIEF-

(1) ACTUAL DAMAGES AND ATTRIBUTABLE PROFITS- When a violation of section 3 has been established in any civil action arising under this section, the plaintiff shall be entitled to recover the actual damages sustained by the plaintiff as a result of the violation and any profits of the defendant that are attributable to the violation and are not taken into account in computing the actual damages sustained by the plaintiff. 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 gross revenue only and the defendant shall be required to prove all elements of cost or deduction claims.

(2) ADDITIONAL DAMAGES- In addition to actual damages, the court may enter judgment for an additional amount not exceeding 2 times such actual damages after considering the following factors:

(A) Whether the plaintiff notified the defendant of the alleged violation and the defendant continued to violate section 3.

(B) The willfulness of the defendant's conduct.

(C) Whether the defendant has a history of database misappropriation.

(D) The defendant's ability to pay.

(E) Whether the alleged violation had a serious negative financial impact on the plaintiff.

(F) Any good faith effort by the defendant to rectify the misappropriation.

(G) Whether the assessment of additional damages is necessary in order to deter future violations.

(d) IMPOUNDMENT- At any time while an action under this section is pending, including an action seeking to enjoin a violation, the court may order the impounding, on such terms as it deems reasonable, of all copies of contents of a database made available in commerce or attempted to be made available in commerce potentially in violation of section 3, 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 or attempted violation of section 3, order the remedial modification or destruction of all copies of contents of a database made available in commerce or attempted to be made available in commerce in violation of section 3, and of all masters, tapes, disks, diskettes, or other articles by means of which such copies may be reproduced.

(e) COSTS AND ATTORNEY'S FEES- The court in its discretion may award reasonable costs and attorney's fees to the prevailing party. The court shall award costs and fees if it determines that an action was brought or a defense was raised under this chapter in bad faith.

(f) ACTIONS AGAINST UNITED STATES GOVERNMENT- Subsections (b) and (d) shall not apply to any action against the United States Government.

(g) RELIEF AGAINST STATE ENTITIES- The relief provided under this section shall be available against a State governmental entity to the extent permitted by applicable law.

(h) LIMITATION ON LIABILITY OF CERTAIN ENTITIES- A covered entity shall not be liable for a violation under section 3 unless--

(1) the person who made the database available in commerce in violation of section 3 is an officer, employee, or agent of the covered entity acting within the scope of the actor's duties or agency;

(2) an officer, employee, or agent of the covered entity, acting within the scope of the actor's duties or agency, actively directs or induces the act of making available in commerce in violation of section 3 by another person, or acts in concert with the person who made the database available in commerce in violation of section 3; or

(3) the covered entity receives a financial gain or benefit that--

(A) is directly attributable to the making available in commerce of the database, or the content thereof, in violation of section 3; and

(B) is in excess of the ordinary compensation for the rendering of the services described in subparagraph (A), (B), (C) or (D) of section 2(2) that are provided by the covered entity.

(i) OVERSIGHT OF CIVIL REMEDIES BY FTC AND PTO-

(1) NOTICE- The Federal Trade Commission and the Patent and Trademark Office shall, by regulation, prescribe the form and procedures by which persons shall transmit the notices required by subsection (a)(2).

(2) OVERSIGHT- The Federal Trade Commission and the Patent and Trademark Office shall review the actions conducted under this section for the purposes of identifying instances in which judicial interpretation of this Act adversely or otherwise materially affects the administration of laws and policies within their respective jurisdictions.

(3) AMICUS CUREA BRIEFS- The Federal Trade Commission, the Patent and Trademark Office, and the Register of Copyrights may, in appropriate instances, file briefs as friends of the court in appeals from final decisions of actions under this section.

(4) REPORTS- The Federal Trade Commission and the Patent and Trademark Office shall, within 18 months after the date of enactment of this Act, each transmit a report to the Committee on the Judiciary and the Committee on Energy and Commerce of the House of Representatives and the Committee on the Judiciary and Committee on Commerce, Science, and Transportation of the Senate on its operations under this subsection. Such reports shall include--

(A) a summary of any briefs filed;

(B) an explanation of the impact, if any, of the judicial decisions reviewed on existing laws and policies within its jurisdiction; and

(C) any recommendations for legislative or other changes that the agency considers appropriate.

SEC. 8. LIMITATION ON ACTIONS.

No civil action shall be maintained under this Act unless it is commenced within 2 years after the cause of action arises or claim accrues.

SEC. 9. EFFECTIVE DATE.

(a) IN GENERAL- This Act shall take effect on the date of the enactment of this Act, and shall apply to acts of making available in commerce on or after that date with respect to databases existing before, on, or after that date.

(b) PRIOR ACTS NOT AFFECTED- No person shall be liable under section 3 for making available in commerce after the date of the enactment of this Act of a quantitatively substantial part of the information in a database in violation of that section, when the information was lawfully extracted from the database before the date of the enactment of this Act, by that person or by that person's predecessor in interest.

SEC. 10. NONSEVERABILITY.

(a) IN GENERAL- If the Supreme Court of the United States holds that the provisions of section 3, relating to prohibition of misappropriation of databases, are invalid under Article I of, or the First Amendment to, the Constitution of the United States, then this Act is repealed, effective as of the date of the Supreme Court decision.

(b) TERMINATION- Subsection (a) shall cease to be effective at the end of the 10-year period beginning on the date of the enactment of this Act.

END