6
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)).
The Digital Millennium Copyright Act of 1998
The Fairness in Musical Licensing Act, Title II of Pub. L. No. 105-298, 112 Stat. 2827, 3
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.
Copyright Office Summary December 1998 Page 8
Copyright Office and NTIA Studies Relating to Technological Development
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 Act to create 3
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;


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