Hf 4278ANNOUNCEMENT BY THESPEAKER PRO TEMPORE

The SPEAKER pro tempore (Mr.KILDEE). Pursuant to the provisions ofclause 5, rule I, the Chair announcesthat he will reduce to a minimum of 5minutes the period of time withinWhich a vote by electronic device maybe taken on all the additional motionsto suspend the rules on which theChair has postponed further proceed-ings.

EXPRESSING SENSE OF CON-GRESS THAT PARTICIPANTS INTHE NEW IRELAND ,FORUMARE TO BE COMMENDED

The SPEAKER pro tempore. Thepending business is the question ofsuspending the rules and agreeing tothe concurrent resolution, House Con-current Resolution 310.

The Clerk read the title of the con-current resolution.

The SPEAKER pro tempore. Thequestion is on the motion offered bythe gentleman from Florida (Mr. FAs-Cs.L) that the House suspend the rulesand agree to the concurrent resolu-tion, House Concurrent Resolution310, on which the yeas and nays areordered.

The vote was taken by electronicdevice, and there were-yeas 417, nays0, not voting 16, as follows:

[Roll No. 1571

AckermanAddabboAkakaAlbostaAlexanderAndersonAndrews (NC)Andrews (TX)AnnunzioAnthonyApplegateArcherAspinAuConBadlhamBarnardBarnesBartlettBatemanBatesBedellBeilensonBennettBereuterBermanBethuneBvlllBiaggiBllirakisBlileyBoehiertBoegsBolandBoner

BonlorBokcerOrskl-

Box erBreauxBrooksBromfleldBrown (CA)Browwn (CO)B rOYhllBryantBUrton (CA)

u Iton ( IN)

YEAS-417

ByronCampbellCarneyCarperCarrChandlerChappellCheneyClarkeClayClingerCoatsCoelhoColeman (MO)Coleman (TX)CollinsConableConteConyersCooperCorcoranCoughlinCourterCoyneCraigCrane. DanielCrane. PhilipCrockettD'AmoursDanielDannemeyerDardenDaschleDaubDavisde I GarzaDellumsDerrickDeWine -DickinsonDicks -Dixon-'DonnellyDorganDowdyDowneyDrelerDuncanDurbin

DwyerDymnallyDysonEarlyEckartEdgarEdwards (AL)Edwards (CA)Edwards (OK)EmersonEnglishErdreichErlenbornEvans (IA)Evans (IL)FascellFazioFeighanFerraroFiedlerFieldsFishFlippoFlorioFoglietta.FoleyFord (MI)Ford (TN)FowlerFrankFranklinFrenzelFrostFuquaGarciaGaydosGeJdensonGekasGephardtGibbonsGilmanGingrichGlickmanponzalezGoodling'GoreGradisonGrammGray

CONGRESSIONAL RECORD - HOUSEGreen Mavroules SavageGregg Mazzoll SawyerGuarini McCain SchaeferGunderson McCandless ScheucrHall (OH) McCloskey SchneideHall. Ralph McCollum SchroedeHall, Sam McCurdy SchulzeHamilton McDade SchumerHansen (UT) McEwen SeiberlintHarkin MdcGrath SensenbrHarrison McHugh ShannonHartnett McKernan ShawHatcher McKinney ShelbyHawkins McNiuty Shumwa3Hayes Mica ShusterHefner Michel SikorskiHeftel Miklolskl SlljanderHertel Miller (CA) SisiskyHightower Miller (OH) SkeenHiler .Mineta SkeltormHillis Minish SlatteryHolt Mithell Smith (FtHopkins Moskley Smith (UIHorton Molinari Smith (NHoward .Mollohan - Smith (N.Hoyer Montgomery Smith, D1Huckaby Moody Smith. RMHughes- Moore SnoweHunter Moorhead SnyderHutto Morrison (CT) SolarzHyde Morrison (VA) SolomonIreland Mrazek SpenceJacobs Murphy SprattJeffords Murtha St GermaJenkins Myers StaggersJohnson Natcher StangelanJones (NC) Neal StarkJones (OK) Nelson StenholmJones (TN) Nichols StokesKaptur Nielson StrattonKasich Nowak . StuddsKastenmeier O'Brien StumpKazen Oakar SundquistKemp Oberstar Sw iftKeinnelly Obey SynarKildee Olin TallonKindness Ortiz TaukaKleczka Ottinger TauzinKolter Owens TaylorKostmayer Oxlcy Thomas (Kramer Packard Thomas (LaFalce Panetta TorresLagomarino Parris TorrlcelliLs.ntos Pashayan TownsLatta Patman TraxlerLeach Patterson UdallLeath Paul ValentineLehmr.an (CA) Pease Vander JiLehman (FL) Penny VandergriLeland Pepper VentoLent ' Perirns VolkmerLevin - Petri VucanovilLevine Pickle WalgrenLevitas Porter WalkerLewis (CA) Price WatkinsLewi (FL) Pritchard WeaverLipinski -Pursell WeberLivingston Quillen WeissLloyd Ratchford WheatLoefler Ray WhitehurLong (LA) Reaula WhitleyLong (MD) Reid WhittakeLott Richardson WhittenLowery (CA) Ridge WilliamsLowry (WA) Rinaldo WilliamsLujan Ritter WilsonLuken Roberts WinnLundine Rotinson WirthLungren Rodino WolfMack Roe WolpeMacKay Roemer WortleyMadigan Rogers WrightMarkey Rostenkowskl WydenMarlenee Roth WylieMarriott Roukema Yates ·Martin (IL) Rowland YatronMartin (NC) Roybal Young (AMartin (NY) Rudd . Young (FMartinez Russo Young (v.Matsiu Sabo Zschau

NAYS-0

NOT VOTING-16

Britt Hansen (ID) SharpChapple , Hubbard SimonDingell Kogovsek WaxmanHall (IN) Rahall WiseHaminerschnmldt RangelHance Rose

r

LA)()E)J)

Dbert

in

dh

t

CA)GA)

16-tiff

ch

,St

r

(MT)(OH)

K)L)0O)

May 22, 198_So (two-thirds having voted -in favor

thereof) the rules were suspended andthe concurrent resolution was agreedto.

The result of the vote was at-nounced as above recorded.

A motion to reconsider was laid omthe table.

0 1410

STATE JUSTICE INSTITUTE ACTOF 1983

Mr. SPEAKER pro tempore. Theunfinished business is the question ofsuspending the rules and passing thebill, H.R. 4145, as amended.

The clerk read the title of the bill.Mr. SPEAKER pro tempore. The

question is on the motion offered bythe gentleman from Wisconsin (Mr.KAsTNMEIER) that the-House suspendthe rules and pass the bill, H.R. 4145as amended, on which the yeas andnays are ordered.

The Chair reminds the Membersthat this is a 5-minute vote.

The vote was taken by electronicdevice, and there were-yeas 243, nays176, not voting 14, as follows:

AckermanAddabboAkakaAlbostaAlexanderAndersonAndrews (NC)AnnunzioAspinAuColnBarnardBarnesBatesBedellBeilensonBermanBevillBiaggiBoehlertBoggsBolandBonerBonlorBorkerBorskiBoucherBoxerBreauxBrooksBrown (CA)BryantBurton (CA)CarrClarkeClayCoelhoColeman (TX)CollinsConteConyersCooperCoyneCrockettDardende Is GarzaDellumsDicksDixonDonnellyDowneyDwyerDymallyEarlyEdgarEdwards (AL)Edwards (CA)

[Roll No. 1581

YEAS-243ErdreichEvans (IL)FascellFazioFeighanFerraroFledlerFishFlippoFlorioFogliettaFoleyFord (LMI)Ford (TN)FowlerFrankFranklinFrostGarciaGejdensonGephardtGilmanGlickmanGonzalezGoreGreyGreenGreggGuariniHall. RalphHaIL SamHarkinHarrtsonHatcherHawkinsHasesHefnerReftelHertelHightowerHortonHowardHoyerHuckabyHughesHydeJeffordsJenkinsJohnsonJones (TN)KapturKastenrmeierKazenKetmellyKildeeKindness

KleczkaLaFalceLantosLehman (CA)Lehman (FL)LelandLevinLevineLevitasLpLnskhLloydLong (LA)Long (MD)Lowry (WA)LundineMarkeyMarriottMartin (NY)MartinezMatsuiMavroulesMazzoliMcCollumMcCurdyMcDadeMcGrathMcHughMcKernanMcKlnneyMeNultyMicaMiller (CA)MinetaMinishMitchellMoakleyMontgomeryMoodyMooreMoorheadMorrison (CT)Morrlson (WA)MrazekMurthaNatcherNealNicholsNowakOakarOberstarObeyOrtizOttingerOwensOxleyPanetta

w

May 22, 1984patman Sabo Thomas (GA)Patterson Savage Torrespepper Sawyer Torricelliperklins Scheuer Townspetri Schneider Traxlerpickle Schroeder Udallporter Schumer Valentineprice Seiberling Ventopritchard Shannon VucanovichRatchford Shelby Walgren

Smith (FL) WaxmanReid Smith (IA) WeaverRichardson Smith (NJ) WeissRidge Snowe WheatRinaldo Solarz WhitleyRodino Spratt Williams (MT)Roe St Germain Williams (OH)Roemer Staggers W!rthRogers Stark WolfRose Stokes WolpeRostenkowski Stratton WrightRoth Studds YatesRowland Swift YatronRoybal Synar Young -. lURusso Tauzin Young (MO)

NAYS-176

Andrews (TX) Gekas O'BrienAnthony Gibbons OlinApplegate Gingrich PackardArcher Goodling ParrisBadham Gradison PashayanBartlett Granmm PaulBateman Gunderson PeaseBennett Hall (OH) PennyBereuter Hamilton PursellBethune Hansen (UT) QuillenBilirakis Hartnett RegulaBliley Hiler RitterBosco Hillis RobertsBroomfield Holt RobinsonBrown (CO) Hopkins RoukemaBrovhill Hunter RuddBurton (IN) Hutto SchaeferByron Ireland SchulzeCampbell Jacobs SensenbrennerCarney Jones (NC) ShawCarper Jones (OK) ShumwayChandler Kasich ShusterChappell Kemp SikorskiCheney HaKolter SiljanderClinger Kostmayer SisiskyCoats Kramer SkeenColeman (MO) Lagomarsino SkeltonConable Latta SlatteryCorcoran Leach Smith (NE)Coughlin Leath Smith. DennyCourter Lent Smith, RobertCraig Lewis (CA) SnyderCrane, Daniel Lewis (FL) SolomonCrane, Philip Livingston SpenceD'Amours Loeffler StangelandDaniel Lott StenholmDannemeyer Lowery (CA) StumpDaschile Lujan SundouistDaub Luken TallonDavis Lungren TaukeDerrick Mack TaylorDeWine MacKay Thomas (CA)Dickinson Madigan Vander JagtDorgan Marlenee Vandergriff

·Dowdy Martin (IL) VolkmerDreier Martin (NC) WalkerDuncan McCain WatkinsDurbin McCandless WeberDyson McCloskey WhitehurstEckart McEwen WhittakerEdwards (OK) Michel WhittenEmerson Mikulski WilsonEnglish Miller (OH) WinnErlenborn Molinari WortleyEvans (IA) Mollohan WydenFields Murphy WylieFrenzel Myers Young (FL)Puqua Nelson ZschauGaydos NieLson

NOT VOTING-14Brltt Hanoc RangelChappie Hansen (ID) SharpDingell Hubbard SimonHall (IN) Kogovsek WiselHammerschmidt Rahall

-Mr. FRANKLIN changed his votefrom "nay" to "yea."

CONGRESSIONAL RECORD - HOUSE

So (two-thirds not having voted infavor thereof) the motion was reject-ed.

The result of the vote was an-nounced as above recorded.

U.S. MARSHAIS SERVICE ANDWITNESS SECURITY REFORMACT OF 1934

The SPEAKER' pro tempore. Theunfinished business is the question ofsuspending the rules and passing thebill, H.R. 4249, as amended.

The Clerk read the title of the bill.The SPEAKER pro tempore. The

question is on the motion offered bythe gentleman from Wisconsin (Mr.KASTENMEIER) that the House suspendthe rules and pass the bill, H.R. 4249,as amended, on which the yeas andnays are ordered.

The vote was taken by electronicdevice, and there were-yeas 376, nays41, not voting 16, as follows:

AckermanAddabboAkakaAlbostaAlexanderAndersonAr.drews (NC)Andrews (TX)AnnunzioAnthonyApplegateArcherAspinAuCoin'BarnardBarnesBatlettBatesBedellBeilensonBennettBereuterBermanBethuneEiaggiBllirakisBlileyBoehlertBoggsBolandBonerBoniorBonkerBorskiBoscoBoucherBoxerBreauxBrnttBrooksBroomfieldBrown (CA)BroyhillBryantBurton (CA)CampbellCarneyCarperCarrChandlerChappellCheneyClarkeClayClingerCoatsCoelhoColeman (MO)Coleman (TX)CollinsConteConyersCooper

[Roll No. 1591

YEAS-376CoughlinCourterCoyneCraigCrockettD'AmoursDanielDannemeyerDardenDaschleDaubDavisde la GarzaDellumsDerrickDeWineDicksDixonDonnellyDorganDowdyDowneyDreierDuncanDurbinDwyerDymallyDysonEarlyEckartEdgarEdwards (AL)Edwards (CA)Edwards (OK)EnglishErdreichErlenbornEvans (IA)Evans (IL.)FascellFazioFeighanFerraroFied!erFieldsFishFlippoFlorioFogliettaFoleyFord (MI)Ford (TN)FowlerFrankFranklinFrostFuquaGarciaGaydosGeJdensonGekasGephardtGibbons

GilmanGingrichGlickmanGonzalezGoodlingGoreGradisonGrammGrayGreenGreggGundersonHall (OH)Hall. RalphHall. SamHamiltonHarkinHarrisonHatcherHawkinsHayesHefnerHeftelHertelHightowerHilerHillisHortonHowardHoyerHuckabyHughesHunterHuttoHydeIrelandJacobsJeffordsJenkinsJohnsonJones (NC)Jones (OK)Jones (TN)KapturKasich.KastenmeierKazenKempKenneilyKildeeKindnessKleczkaKolterKostmayerKramerLayalceLagomarsinoLantosLattaLeachLehman (CA)Lehman (FL)Leland

II 4279Lent Nichols Smith (FL)Levin Nowak Smith (IA)Levine O'Brien Smith (NE)Lcvitas Oskar Smith (NJ)Lewis (CA) Oberstar Smith. RobertLewis (FL) Obey SnoweLipinski Olin SolarzLloyd Ortiz SolomonLoeifler Ottinger SpenceLong (LA) Owens SprattLong (MD) Oxley St GermainLott Packard StaggersLowery (CA) Panetta StangelandLowry (WA) Parris StarkLuken Pashayan StenholmLundine Patman StokesLungren Patterson StrattonMacKay Pease StuddsMadigan Penny SwiftMarkey PePper SynarMarlenee Pekins TallonMarriott Petri TaukeMartin (IL) Pickle TauzinMartin (NC) Porter .Thomas (CA)Martin (NY) Price Thomas (GA)Martinez Pritchard TorresMatsui Pursell TorricelliMavxroules Ratchford TownsMazzoll Ray TraxlerMcCain Regula UdallMcCloskey Reid ValentineMcCollum Richardson Vander JagtMcCurdy Ridge VandergriffMcDade Rinaldo VentoMcEwen Ritter VolkmerMcGrath Rodino WalgrenMcHugh Roemer WalkerMcKernan Rose WatkinsMcKinney Rostenkowski WaxmanMcNulty Roukema WeaverMica Rowland WeberMichel - Roybal WeissMikulski RDssso WheatMiller (CA) Sabo WhitehurstMineta Savage WhitleyMinish Sawyer WhittakerMitchell Schaefer WhittenMoakley Scheuer WilsonMolinari Schneider WinnMollohan Schroeder WirthMontgomery Sehulze WolfMoody Sehumer WolpeMoore Seiberling WortleyMoorhead Sensenbrenner WrightMorrison (CT) Shannon WydenMorrison (WA) Shaw YatesMrazek Shelby YatronMurphy Sikorski Young (AK)Murtha S3jander Young (FL)Myers Sisisky Young (MO)Natcher -Skeen ZschauNeal SkeltonNelson Slattery

NAYS-41

Badham Hartriett RogersBateman Holt RothBevill Hopkins RuddBrown (CO) Leath ShumwayBurton (IN) IAvingston ShusterByron Lijan Smith. DennyConable Mack SnyderCorcoran McCandless StumpCrane. Daniel Miller (OH) SundquistCrane. Philip lielson . .TaylorDickinson Paul VucanovichEmerson Quillen Williams (MTD

Fremel Roberts WyleHansen (UT) - obinson

NOT VOTING--li

Chappie - ansen (ID) SharpDingell - - bbard SimonGuarini XIogovsek Willlams (OH,Hall (IN) Rahall WiseHammerschmldt Ra.ngelHance : oe

1420

Mr. WILLIAMS of Montana and P}rROGERS changed their votes frozn"yea" to "nay."

Mr. TAUKE and Mr. RALPH kl.HALL changed their votes from "na:r"to "yea"

I

i

I.,

June 11, 1984 CO]The SPEAKER pro tempore. Is

there objection to the request of thegentleman from Wisconsin?

There was no objection.

SEMICONDJUCTOR CHIPPROTECTION ACT OF 1934

Mr. KASTENMEIER. Mr. Speaker, Imove to suspend the rules and passthe bill (H.R. ,5525) to amend title 17,United States Code, to protect maskworks of semiconductor chips againstunauthorized duplication, and forother purposes, as araended,

The Clerk read as follows:I-R.& 5525

Be it enacted by the Senate and House ofRepresentatives of the United States ofAmerica in Congress assembled,

SHORT TITLESECTION 1. This Act may be cited as the

"Semiconductor Chip Protection Act of1984".

PROTECTION OF SEMICONDUCTOR CHIPPRODUCTS

Src. 2. Title 17, United States- Code, isamended by adding at the end thereof thefollowing new chapter:

"CHAPTER 9-PROTECTION OFSEMICONDUCTOR CHIP PRODUCTS

"Sec."901. Definitions."902. Subject matter of protection"903. Ownership and transfer."904. Duration of protection."905. Exclusive rights in mask works."906. Limitation on exclusive rights: reverse

engineering: first sale.'907. Limitation on exclusive rights: inno-

cent infringement."908. Registration of claims of protection."909. Mask work notice."910. Enforcement of exclusive rights."911. Remedies for infringement."912. Relation to other laws.

'1901. Definitions"As used in this chapter-"(1) a 'semiconductor chip product' is the

final or intermediate form of any product-"(A) having two or more layers of metal-

lic, insulating, or semiconductor material de-posited or otherwise placed on, or etchedaway or otherwise removed from, a piece ofsemiconductor material in accordance witha predetermined pattern; and

"(B) that isintended to perform electroniccircuitry functions;

"(2) a 'mask work' means the 2-dimension-al and 3-dimensional features of shape, pat-tern. and configuration of the surface of thelayers of a semiconductor chip product, re-gardless of whether such features have anintrinsic utilitarian function that is not onlyto portray the appearance of the product orto convey information;

"(3) a mask work is 'fixed' in a semicon-ductor chip product when its embodiment inthe product, by or under the authority ofthe owner of the mask work, is sufficientlypermanent or stable to permit the maskwork to be perceived, reproduced, or other-wise communicated for a period of morethan transitory duration;

"(4) a mask work is 'original' if it is the in-dependent creation of an author who didnot copy it from another source;

"(5) to 'commercially expolit' a mask workis to sell, offer for sale after the mask workis fixed in a semiconductor chip product, orotherwise distribute to the public for profitsemiconductor chip products embodying themask work:

NGRESSIONAL RECORD -- HOUSE"(6) the 'owner' of a mask work is the

author of the mask work, the legal repre-sentatives of a deceased author or of anauthor under a legal incapacity, the employ-er of an author who created the mask workfor the employer in the case of a work madewithin the scope of the author's employ-ment, or a person to whom the rights of theauthor or of such employer are transferredin accordance with this chapter;

"(7) an 'innocent purchaser' is a personwho purchases a semiconductor chip prod-uct in good faith and without having noticeof protection with respect to that semicon-ductor chip product;

"(3) having 'notice of protection' meanshaving actual knowledge that, or reasonablegrounds to believe that, a mask work fixedin a semiconductor chip product is protectedunder this chapter; and

"(9) an 'infringing semiconductor chipproduct' is a semiconductor chip productwhich is made, imported, or distributed inviolation of the exclusive rights of theowner of a mask work under this chapter.'§ 902. Subject matter of protection

"(aXI) An original mask work fixed in asemiconductor chip product is eligible forprotection under this chapter if-

"(A) on the date on which the mask workis registered under section 908, or the dateon which the mask work is first commercial-ly exploited, whichever occurs first, theowner of the mask work is a national ordomiciliary of the United States, or is a na-tional domiciliary, or sovereign authority ofa foreign nation that is a party to a treatyaffording protection to mask works to whichthe United States is also a party, or is astateless person, wherever that person maybe domiciled;

"(B) the mask work is first commerciallyexploited in the United States; or

"(C) the mask work comes within thescope of a Presidential proclamation issuedunder paragraph (2).

"(2) Whenever the President finds that aforeign nation extends, to mask works ofowners who are nationals or domiciliaries ofthe United States or to mask works on thedate on which the mask works are regis-tered under section 908, or the date onwhich the mask works are first commercial-ly exploited, whichever occurs first, protec-tion (A) on substantially the same basis asthat on which the foreign national extendsprotection to mask works of its own nation-als and domiciliaries and mask works firstcommercially exploited in that nation, or(B) on substantially the same basis as pro-vided in this chapter, the President may by

'proclamation extend protection under thischapter to mask works (i) of owners whoare, on the date on which the mask worksare registered under section 908, or the dateon which the mask works are first commer-cially exploited, whichever occurs first, na-tionals, domiciliaries, or sovereign authori-ties of that nation. or (ii) which are firstcommercially exploited in that nation.

"Ib) Protection under this chapter shallnot be available for a mask work that-

"(1) is not original; or"(2) consists of designs that are staple,

commonplace, or familiar in the semicon-ductor industry, or variations of such de-signs, combined in a way that is not original.

"(c) In no case does protection under thischapter for a mask work extend to any idea,procedure, process, system, method of oper-ation, concept, principle, or discovery, re-gardless of the form in which it is described.explained, illustrated, or embodied In themask work."§ 903. Ownership and transfer

"(a) The exclusive rights in a mask worksubject to protection under this chaptershall vest in the owner of the mask work.

H 5489"(b) The exclusive rights in a mask work

registered under section 908, or a mask workfor which an application for registration hasbeen or is eligible to be filed under section908, may be transferred in whole or in partby any means of conveyance or by operationof law, and may be bequeathed by will orpass as personal Property by the applicablelaws of intestate succession,

"(c) In any case in which conflicting trans-fers of the exclusive rights in a mask workare made, the transfer first executed shallbe void as against a subsequent transferwhich is made for a valuable considerationand without notice of the first transfer.unless the first transfer is -recorded in theCopyright Office within three months afterthe date on which it is executed, but in nocase later than the day before the date ofsuch subsequent transfer.

"(d) Mask works prepared by an officer oremployee of the United States Governmentas part of that person's official duties arenot protected under this chapter, but theUnited States Government is not precludedfrom receiving and holding exclusive rightsin mask works transferred to the Govern-ment under subsection (b)."§ 904. Duration of protection

"(a) The protection provided for a maskwork under this chapter shall commence onthe date on which the mask work is regis-tered under section 908, or the date onwhich the mask work is first commerciallyexploited, whichever occurs first.

"(b) Subject to the provisions of this chap-ter, the protection provided under thischapter to a mask work shall continue for aterm of ten years beginning on the date onwhich such protection commences undersubsection (a)."§ 905. Exclusive rights in mask works

"Subject to the other provisions of thischapter, the owner of a mask work has theexclusive rights to do and to authorize anyof the following:

"(1) to reproduce the mask work by opti-cal, electronic, or any other means;

"(2) to roport or distribute a semiconduc-tor chip product in which the mask work isembodied; and

"(3) to induce or knowingly to cause an-other person to do any of the acts describedin paragraphs (1) and (2)."§ 906. Limitation on exclusive rights: reverse en-

gineering; fist sale"(a) Notwithstanding the provisions of

section 9C5L1). it is not an infringement ofthe exclusive rights of the owner of a maskwork. to reproduce the work solely for thepurpose of teaching, analyzing, or evaluate-ing the concepts or techniques embodied inthe mask work;or the circuitry or organiza-tion of components used in the mask work.

"(b) Notwithstanding the provisions ofsection 905(2). the owner of a particularsemiconductor chip product lawfully madeunder this chapter, or any person author-ized by such owner, is entitled, without theauthority of the owner of the mask work, tosell or otherwise dispose of that semicon-ductor chip product."§ 907. Limitation on exclusive rights innocent

infringement"(a) Notwithstanding any other provision

of this chapter, an innocent purchaser of aninfringing semiconductor chip product-

"(1) shall incur no liability under thischapter with respect to the distribution ofunits of the infringing semiconductor chipproduct that occurred before that innocentpurchaser had notice of protection with re-spect to that semiconductor chip product;and

5490 COIC[(2) shall be liable only for a reasonable

Fyaclty on each unit of the infringing semi-Eonductor chip product that the innocentpurc.haser distributed after having notice ofProtection with respect to that semiconduc-tor chip product.

e amount of the royalty referred to inparagraph (2) shall be determined by volun-tary negotiation between the parties, media-tion. or binding arbitration, or, if the parties

;do not resolve the issue, by the court in acivil action for infringement.

, (b) The immunity from liability and limi-tation on liability referred to in subsection

i:; (a) shall apply to any person who directly orIindirectly purchases an infringing semicon-C dactor chip product from an innocent pur-chaser.

"(c) The provisions of subsections (a) and(b) apply only with respect to units of an in-fringing semiconductor chip product that aninnocent purchaser purchased beforehaving notice of protection with respect tothat semiconductor chip product.§908. Registration of claims of protection

"(a) Protection of a mask work under thischapter shall terminate if application forregistration of a claim of protection in themask work is not made as provided by thischapter within two years after the date onwhich the mask work is first commerciallyexploited.

"(b) The Register of Copyrights shall beresponsible for all administrative functionsand duties under this chapter. Except forsection 708, the provisions of chapter 7 ofthis title relating to the general responsibil-ities, organization, regulatory authority, ac-tions, records, and publications of the Copy-right Office shall apply to this chapter,except that the Register of Copyrights maymake such changes as may be necessary inapplying those provisions to this chapter.

"(c) The application for registration of a* mask work shall be made on a form pre-

sribed by the Register of Copyrights and'shall include any information regarded bythe Register of Copyrights as bearing upon;the preparation or identification of thework, the existence or duration of protec-tion, or ownership of the work.

.. "(d) The Register of Copyrights shall byregulation set reasonable fees for the filingof applications to register claims of protec-tion in mask works under this chapter, andfor other services relating to the administra-ion of this chapter or the rights under thischapter, taking into consideration the costof providing those services, the benefits of apublic record, and statutory fee schedulesUnder this title. The Register shall alsospecify the identifying material to be depos-ited in connection with the claim for regis-tration." (e) If the Register of Copyrights, after

examining an application for registration;;determiines. in accordance with the provi-i/dons of this chapter, that the application

relates to a mask work which warrants pro-tetion under this chapter, then the Regis-

i ter shall register the claim and issue to theI tpplicant a certificate of registration of thetlMalm' under the seal of the CopyrightOffice. The effective date of registration of* claim of protection shall be the date on

~Which an application, deposit, and fee,Which are determined by the Register ofCopyrights or by a court of competent juris-

Fdltion to be acceptable for registration,vie all been received in the Copyright

( "' In any action for infringement under4Nis chapter, the certificate of registrationf a mfask work shall constitute prima facie

?e~idence (1) of the facts stated in the certifi-,te.and (2) that the applicant issued the

itlficate has met the requirements of this

NGRESSIONAL RECORD - HOUSEchapter, and the regulations issue underthis chapter, with respect to the registrationof claims.

"(g) Any applicant for registration underthis section who is dissatisfied with the re-fusal of the-Register of Copyrights to issuea certificate of registration under this sec-tion may seek judicial review of ths refusalby bringing an action for such review in anappropriate United States district court, inaccordance with chapter 7 of title 5, notlater than sixty days after the refusal. Thefailure of the Register of Copyrights toissue a certificate of registration withinthree months after an application for regis-tration is filed shall be deemed to be a refus-al to issue a certificate of registration forpurposes of this subsection and section910(c).

"§ 909. MASK WORK NOTICE"(a) The owner of a mask work provided

protection under this chapter may affixnotice to the mask work or to the semicon-ductor ship product embodying the maskwork in such manner and location as to givereasonbable notice of such protection. TheRegister of Copyrights shall prescribe byregulation, as examples, specific methods ofaffixation and positions of notice for pur-poses of this section, but these specifica-tions shall not be considered exhaustive.The affixation of such notice is not a condi-tion of protection under this chapter, butshall constitute prima facie evidence ofnotice of protection.

"(b) The notice referred to in subsection(a) shall consist of-

"(1) the words 'mask work', or the letterM in a circle R;

"(2) the year in which the mask work wasfirst fixed in a semiconductor chip product;and

"(3) the name of the owner or owners ofthe mask work or an abbreviation by whichthe name is recognized or is generallyknown."' 910. Enforcement of exclusive rights

"(a) Except as otherwise provided by thischapter, any person who violates any of theexclusive rights of the owner of a maskwork under this chapter shall be liable as aninfringer of such rights.

"(b) The owner of a mask work-protectedunder this chapter shall be entitled to insti-tute a civil action for infringement after acertificate of registration of a claim in thatmask work is issued under section 908.

"(c) In any case in which an applicationfor registration' and the required depositand fee have been received in the CopyrightOffice in proper form and registration ofthe mask work has been refused, the appli-cant is entitled to institute a civil action forInfringement under this chapter if notice ofthe action, together with a copy of the com-plaint, is served on the Register of Copy-rights, in accordance with the Federal Rulesof Civil Procedure. The Register may, at hisor her option, become a party to the actionwith respect to the issue of whether theclaim is eligible for registration by enteringan appearance within sixty days after suchservice, but the failure of the Register tobecome a party to the action shall not de-prive the court of Jurisdiciton to determinethat issue.

"(d)(1) The Secretary of the Treasury andthe United States Postal Service shall sepa-rately or jointly issue regulations for the en-forcement of the right to import set forth insection 905. These regulations may require,as a condition for the exclusion of articles.from the United States, that the personseeking exclusion-

"(A) obtain a court order enjoining, or anorder of the International Trade Commis-sion under section 337 of the Tariff Act of

June 11, 19841930 excluding, importation of the articles;or

"(B) furnish proof that the mask work in-volved is protected under this chapter andthat the importation of the articles wouldinfringe the rights in the mask work underthis chapter, and also post a surety bond forany injury that may result if the -detentionor exclusion of. the articles proves to be un-Justified.

"(2) Articles imported in violation of theright to import set forth in section 905 aresubject to seizure and forfeiture in the samemanner as property imported in violation ofthe customs laws. Any such forfeited arti-cles shall be destroyed as directed by theSecretary of the Treasury or the court, asthe case may be, except that thke articlesmay be returned to the country cf exportwhenever it is shown to the satisfaction ofthe Secretary of the Treasury that the.ir.:porter had no reasonable grounds for believ-ing that his or her acts constituted a viola-tion of the law."§ 911. Remedies for infringement

"(a) Any court having jurisdiction of acivil action arising under this chapter maygrant temporary and permanent injunctionson such terms as the court may deem rea-sonable to prevent or restrain infringementof the exclusive rights in a mask work underthis chapter.

"(b) Upon finding for the owner of themask work, the court shall award the owneractual damages suffered by the owner as aresult of the infringement. The court shallalso award the owner the infringe$'s profitsthat are attributable to the infrfingementand are not taken into account im comput-ing the award of actual damages. [n estab-lishing the infringer's profits, the aowner ofthe mask work is required to present proofonly of the infringer's gross revenue, andthe infringer is required to prove his or herdeductible expenses and the eleaments ofprofit attributable to factors other than themask work.

"(c) At any time before final judigment isrendered, the owner of the mask work mayelect, instead of actual damages and profitsas provided by subsection (b), an award ofstatutory damages for all infringements in-volved in the action, with respect to any onemask work for which any one infringer isliable individually, or for which any two ormore infringers are liable jointly amd sever-ally, in an amount not more than :250,000as the court considers Just.

"(d) In any action for infringement underthis chapter, the court in its discre/tion mayallow the recovery of full costs, Includingreasonable attorneys' fees, to the pnrevailing-party.

"(e) An action for infringement under thischapter shall not be maintained uniless theaction is commenced within three yearsafter the claim accures.

"(f),As part of a final Judgment or decree,the court may order the destruction orother disposition of any infringing semicon-ductor chip such products, and any masks,tapes, or other articles by means aif whichsuch products may be reproduced.'" 912. Relation to other laws

"(a) Nothing In this chapter shaill affectany right or remedy held by any personunder chapters 1 through 8 of this 'title, orunder title 35.

"(b) Except as provided in sectiom 908(b)of this title, references to 'this title' or 'title17' in chapters 1 through 8 of this title shallbe deemed not to apply to this chaptier.

"(c) The provisions of this chapter shallpreempt the laws of any State to the extentthose laws provide any rights or remedieswith respect to a mask work whlich are

I

June 11, 19384equivalent to these provided by this chap-ter. except tihat such preemption shall be ef-fective only with respect to actions filed onor after January 1. 1986.

"(d) The provisions of sections 1338,1400(a). and 1498 (b) and (c) of title 28 shallapply with respect to exclusive rights inmask works under this chapter.".

TECHNI'ICAL AMENDMENTSEC. 3. The table of chapters of title 17,

United States Code. is amended by addingat the end thereof ' he following new item:"9. Protec.son of Semiconductor

Chip Prodlcts ......................... 901".

EFFECTIVE DATE

SEC 4. (a) The amendments made by thisAct shall take effect on January 1, 1985.

(b,(1) Sub'ect to paragraph (2) of this sub-secticn, protection -hall be available underchapter 9 of title 17, United States Code, asadded by section 2 of this Act, to any maskwork fixed in a semiconductor chip productthat was first commercially exploited on orafter January 1, 1984. and before January 1,1985, if a claim of protection in the maskwork is registered in the Copyright Officebefore January 1. 1986, under section 908 oftitle 17, United States Code, as added by sec-tion 2 of this Act.

(2) In the case of any mask work providedprotection under chapter 9 of title 17,United States Code, in accordance withparagraph (1) of this subsection, any in-fringing semiconductor chip products manu-factured before the effective date of thisAct may be imported into or distributed inthe United States, or both, subject to thepayment by the importer or distributor, asthe case may be, of the reasonable royaltyspecified in section 907(a)(2) of title 17.United States Code, as added by section 2 ofthis Act.

(3) For purposes of this subsection, theterms "mask work", "fixed", "semiconduc-tor chip product", "commercially exploit",and "infringing semiconductor chip prod-uct" have the meanings given those terms insection 901- of title 17, United States Code,as added by section 2 of this Act., - IRTHORIZATION OF APPROPRIATIONS

SEc. 5. There are authorized to be appro-priated such sums as may be necessary tocarry out this Act and the amendmentsmade by this Act.

The SPEAKER pro tempore. Pursu-ant to the rule, a second is not re-quired on this motion.

The gentleman from Wisconsin (Mr.KASTENMEIER) will be recognized for 20mninutes and the gentleman from Cali-fornia (Mr. MOORHEAD) will be recog-nized for 20 minutes.

The Chair recognizes the gentlemanfrom Wisconsin (Mr. KASTENMEIER).

(Mr. KASTENMEIER asked and wasgiven permission to revise and extendhis remarks.)

Mr. KASTENMEIER. Mr. Speaker, Iyield myself such time as I may con-sume.

Mr. Speaker, today I bring to thefloor a bill to protect semiconductorchip products in such a way as toreward creativity, encourage innova-tion, research, -research and develop-ment in the semiconductor industry,and prevent future piracy, while at thesame time, promoting and protectingthe public interest. Current law-be it:copyright, patent, or trademark law-offers innovating chip firms very littleprotection against the misappropria-tion of their technology.

CONGRESSIONAL RECORD - HOUSEH.R. 5525, therefore, changes

present law by adding a new, free-standing, and unitary chapter 9 totitle 17 of the United States Code. Pro-tection of semiconductor chip prod-ucts by a sui generis approach, ratherthan through extension of the Copy-right Act to admittedly utilitarian ob-jects (as is the case with the Senatebill), carries with it a number of bene-fits in addition to providing requisiteprotection. These benefits are clearlyand concisely set forth in the Housereport (No. 98-781) under the rubric"sui generis versus copyright ap-proach" and also in the sectional anal-ysis.

Before commencing my discussion ofH.R. 5525, I should note that it hasbeen processed without dissent. Toparaphrase my subcommittee col-league - from Massachusetts (Mr.FRANK), the enormous consensusbehind H.R. 5525 should not under-mine a realization of its importance.

I should also mention that H.R. 5525is supported by the administration,the Copyright Office of the UnitedStates, the Semiconductor IndustryAssociation, the Information IndustryAssociation, the Association of Ameri-can Publishers, ADAPSO, and theAmerican Patent Law Association. Adiverse group of respected law profes-sors and lawyers-also support the bill.

In addition, I would like to thank myentire subcommittee for its assistancein drafting and developing H.R. 5525-Mr. BROOKS, Mr. MAZZOLI, Mr. SYNAR,Mrs. SCHROEDER, Mr. GLICKMIAN. Mr.FRANK, Mr. MORRISON, Mr. BERAN,Mr. MOORHEAD, Mr. HYDE, Mr. KIND-NESS, Mr. SAWYER, and Mr. DEWINE.The lead sponsors from California(Mr. EDWARDS and Mr. MINETA), whohave worked arduously since 1979 onattaining passage of a bill, also deservegreat recognition. Last, but not least,Senator CHARLES McC. MATHIAS-mycounterpart chairman, who chairs theSenate Judiciary Subcommittee onPatents, Trademarks and Copyright,and Senator PAT LEAHY-ranking mi-nority member, deserve commendationfor steering a bill, S. 1201, through theSenate.

It is clearly within the power of Con-gress to modify or amend this Nation'sintellectual property laws. Article I,section 8 of the Constitution providesthat:

The Congress shall have power .. toPromote the Progress of Science and usefulArts, by securing for limited Times to Au-thors and Inventors the exclusive Right totheir respective Writings and Discoveries.

The monopoly privileges that Con-gress may confer under the Constitu-tion "* * * are neither unlimited norprimarily designed to provide a specialprivate benefit. Rather, the limitedgrant is a means by which an impor-tant public purpose may be achieved."Sony Corp. v. Universal City Studios,Inc., 104 S. Ct. 774 (1984) (copyright);accord, United States v. MasoniteCorp., 316 U.S. 265, 278 (1942) (sameas to patents).

H 5491

The congressional role therefore be-comes to define the scope of limitedmonopoly that should be granted anauthor in order to give the public ap-propriate access to a creation. Balanc-ing between the rights of the creatorand the needs of the public clearly isnecessary. In fact, where changes haveoccurred and new technologies havebeen developed, Congress consistentlyhas engaged in precisely such a bal-ancing approach.

H.R. 5525, therefore, represents thecommittee's commitment to navigat-ing the oft turbulent waters between"* * ' the interests of authors and in-ventors in the control and exploitationof their writinrg and discoveries onthe one hand, a7Td society's competing,interest in the free flow of ideas, infor-mation, and commerce on the otherhand." Sony Corp. v. Universal CityStudios, Inc., supra.

Now, let me give you some informa-tion about HHR. 5525, how it was devel-oped from the original bill (HLR. 1028).and its contents.

H.R. 1028, as originally introduced,amended the Copyright Act to protectsemiconductor chips and mask worksagainst unauthorized duplication. Itconferred 10 years of copyright protec-tion to those who develop new inte-grated circuit mask designs, grantingthe copyright owner exclusive rightsto make, distribute, and reproduceimages of the mask design and thechips embodying that design. At thesame time, the bill protected semicon-ductor chip users from innocent con-duct and made compulsory, reasonableroyalty licenses available to innocentinfringers when necessary to protecttheir reasonable interests in their on-going business activities as users ofchips. The bill keyed into copyrightlaw in several specific areas, and ex-cepts others. This drafting approach,however, created a great deal of confu-sion, which in turn would have bredlitigation.

The substitute amendment that I of-fered in subcommittee and that wasapproved by the full committee-nowincorporated in H.R. 5525--is theresult of a comprehensive hearingprocess. It represents a consensus andcompromise position that somethingshould be done to protect creativity inthe semiconductor industry, yet thatprotection should come through a suigeneris or hybrid approach. As statedabove, my substitute accomplishes thisgoal by creating a new form of legalprotection in a separate and independ-ent chapter 9 of title 17, United StatesCode. The term of protection is 10years.

In addition to the sui generis ap-proach, H.R. 5525 differs from H.R.1028 in several other ways. Ratherthan delineate during debate the dif-ferences between the original bill andH.R. 5525, I merely refer interestedMembers to the House report, whichcontains both a discussion and a chartcontrasting the two bills.

1H 5492 COSuffice it to say that H.R. 5525 is a

vastly improved work product. Thecreation of a sui generis approach forprotecting mask works gets the jobdone and, at the same time, avoidsconceptual confusion in copyright lawto accommodate a form of intellectualproperty which is better protected byreference to the background and prac--tices of the semiconductor industry.

In short, from a congressional per-spective, the unique problems posedby the need to reward creativity, en-courage innovation, research and in-vestment in the semiconductor indus-try while at the same time protectingthe interests of the public has calledfor unique solutions. The approachtaken in H.R. 5525, the creation of asui generis form of protection, reflectssound judgment that such an ap-proach is uniquely suited to the pro-tection of mask works, which repre-sent a form of industrial intellectualproperty. This is to be contrasted withthe so-called author's copyright in lit-erary and artistic works protectedunder traditional copyright principles.As floor manager of the bill thatbecame the Copyright Reform Act of1976, I am aware that copyright hasbeen expanded to encompass newforms of protection, many of whichhave commercial applications. Thecommercial application or character ofa given copyrighted work, however,presents a far different case from thatof mask works, which are intended tobe and are used as part of an integralpart of a manufacturing process. Thismanufacturing purpose and use is, infact, the reason for the Copyright Of-fice's refusal to accept chip productsfor deposit as copies of pictorial graph-ic or sculputural works under theCopyright Act.

My strong feelings are perhaps bestexpressed by the following statementof Prof. L. Ray Patterson, Emory Uni-versity School of Law:

:The ultimate issue is the problem of integ-rity in the law of copyright. By integrity, Imean consistency in the principles whichthe law encompasses. While consistency forits own sake is a virtue of small conse-quence, consistent principles for a body oflaw are essential for integrity in the inter-pretation and administration of that law.' It, therefore is extremely unwise for

Congress to provide cobyright protec-tion for semiconductor chips byamendment to the present statute.The basis for this conclusion is thatthe present copyright statute purportsto provide for an author's copyright.The appropriate solution to the prob-

-lern of protection for semiconductorchips is the creation of a sui generisproprietary right, separate and dis-tinct from the author's copyright.

Stated somewhat differently, a maskwork is not a book: The proposed legis-lation does not engage in the legal fic-tion of treating books and mask workssimilarly. In the long run, we will reapgreat benefits by not proceeding fromfalse analogies.

H.R. 5525 is good legislation. Myhope is not only that it passes the

NGRESSIONAL RECORD - HOUSEHouse, but that it passes the Houseunanimously.

0 1230Mr. MOORHEAD. Mr. Speaker, I

yield such time as he may consume tothe distinguished gentleman from NewYork (Mr. FISH), the ranking Republi-can member on the Committee on theJudiciary.

Mr. FISH. I thank the gentleman foryielding time to me.

Mr. Speaker, I would like to indicatestrong support for H.R. 5525, theSemiconductor Chip Protection Act of1984. This legislation provides neededprotection against chip piracy for U.S.manufacturers of semiconductor chipproducts. The Members and especiallythe chairman of the Subcommittee onCourts, Civil Liberties, and the Admin-istration of Justice (Mr. KASTENMEIER)are to be commended for their work informulating H.R. 5525. By the sametoken, my distinguished colleaguesfrom California (Messrs. EDWARDS andMINETA) have provided valuable lead-ership on this important issue. In theother body, Senators CHARLES McC.MATHIAS and PATRICK LEAHY havedone excellent work on S. 1201, theSemiconductor Chip Protection Act of1983.

The semiconductor industry, is avital and rapidly growing part of theU.S. economy. The Bureau of Industri-al Economics of the Department ofCommerce forecasts that in 1983 theindustry will ship more than $12.2 bil-lion worth of semiconductor and relat-ed devices, a substantial increase fromthe $10.5 billion 1982 value of ship-ments. It is projected that in 10 yearsthe semiconductor market will havesales of more than $90 billion, thus be-coming one of the world's most impor-tant product markets, and the basisfor computers and telecommunica-tions, two out of the four major indus-tries of the 1990's.

As the level of complexity of semi-conductor circuits has grown, so hasthe cost of creating new chip designsto embody those circuits economicallyand efficiently. In testimony duringhearings before the House JudiciarySubcommittee on Courts, Civil Liber-ties, and the Administration of Justice,a spokesman for the SemiconductorIndustry Association noted that theresearch and development costs for asingle complex chip now can cost ap-proximately $5 million, while relatedsupport and development costs forthat chip could amount to another $50million or more. These increasing costfactors have both made the returnfrom piracy greater to would-be chippirates and made the cost of theirpiracy greater to legitimate chip man-ufacturers.

The net effect of chip copying is tosharply curtail the normal recoveryperiod during which an innovativechip manufacturer can recoup the re-search and development costs that themanufacturer invests in creating a newchip and putting it on the market.

June 11, 1984Unless investments in chip creationcan be recovered, fewer and fewercompanies will make the research anddevelopment investment necessary foradvancing chip technology. Instead,more and more companies will engagein chip copying to the detriment ofthe worldwide technological competi-tive edge of the United States.

H.R. 5525 provides a 10-year term ofprotection for the layout of chipts and'at the same time protects inrxocentgoodfaith purchasers of these prod-ucts. Moreover, I believe that this leg-islation by creating a separate and in-dependent chapter of protection forsemiconductor chips adequately re-sponds to the questions raised by thevarious parties who were concernedabout amending the Copyright Act forthat purpose. H.R. 5525 will go a longway toward eliminating chip piracyand in so doing encourage companiesto engage in the necessary researchand development to produce newchips. Accordingly, I urge its adoption.

Mr. IKSTENMEIER. Mr. Speaker, Iyield 4 minutes to the gentleman iromCalifornia (Mr. EDWARDS), the authorof the bill.

(Mr. EDWARDS of California askedand was given permission to revise andextend his remarks.)

Mr. EDWARDS of California. Ithank the gentleman from Wisconsin,the chairman of the subcommittee.

Mr. Speaker, I want to commend thechairman, Congressman KYaSTENIMEIER,and the distinguished members of theJudiciary's Subcommittee on Courts,Civil Liberties. and the Administrationof Justice, for the many hours of hardwork they spent in finding the bestpossible way to close the gap in the in-tellectual property laws and to affordlegal protection to the maskworks ofsemiconductor chips. I am delightedthat, because of these fruitful labors;we are able to be here on the floortoday.

Several years ago, after many dlscus-sions with people in the field, itbecame very clears to CongressmnanMINETA and me that such protectionwas essential. On October 12, 1978., weintroduced our bill to remove the bar-rier to innovation in an industry inwhich innovation is absolutely essen-tial. I would like to touch briefly onwhy such a bill is needed.

We all know the significance of thesemiconductor revolution, which nowpervades and enriches our entire wayof life. This enrichment is possible be-cause innovating firms spend years inresearch and development and mil-lions of dollars to produce new chips.Indeed, the development costs of asingle new chip can reach $100 million.Yet, a pirate firm can come along andin several months, for less than$50,000, duplicate the mask work ofthe innovating firm, without having tobear the enormous research and devel-opment costs borne by the innovator.By flooding the market with cheapcopies, the pirate firm robs the inno-

CONGRESSIONAL RECORD - HOUSE

vating firm from a return on its R&Dinvestment, thus destroying the incen-tive for innovating firms to set asideinternal funds for the development offuture generations of semiconductorproducts. Such piracy is a clear threatto the economic health of our semi-conductor industry and has a rippleeffect throughout our economy.

Current law offers innovating chipfirms only limited protection againstthe misappropriation of their technol-ogy. The current copyright laws givelittle, if any, protection to semiconduc-tor chips. Patent law can protect thebasic electronic circuitry for new mi-croprocessors or other new such prod-ucts. But patent law does not protectthe particular layouts and art-workperformed by the different chip manu-facturers in adapting those electroniccircuits for a particular industrial pur-pose. Yet, it is those layouts and artworks that consume the resources ofthe innovating firms and that are pir-ated by free riders.

H.R. 5525 will help innovating firmscombat unfair chip piracy and allowthem the necessary incentive to con-tinue to invest in research and devel-opment, by protecting them againstthe piracy of the results of that re-search and development. By includingsections protecting innocent infringersand legitimate reverse engineering,H.R. 5525 also protects the interests ofconsumers and researchers.

Again, I thank and complimentChairman KASTENMEIER and all themembers of his subcommittee for thesplendid work product they have craft-ed. I am also grateful to my colleaguesfrom Silicon Valley, Mr. MINETA andMr. ZSCHAU, for the support they haveprovided.

With great pleasure, Mr. Speaker, Iyield to my colleague, the gentlemanfrom California (Mr. MINETA), whoalso represents a part of Silicon Valleyin California.

(Mr. MINETA asked and was givenpermission to revise and extend his re-marks.)

0 1240Mr. MINETA. Mr. Speaker, I thank

the gentleman for yielding to me.Mr. Speaker, at the outset, I wish to

thank my colleagues, Mr. KASTEN-MEIER and Mr. EDWARDS of California,and the members of both sides of theaisle of the Judiciary Committee fortheir care and their wisdom in prepar-ing this legislation for floor consider-ation.

To many, the semiconductor chip isjust a part of the gadgetry which goesinto computers, automobiles, weapon-ry, and space ships. However, the semi-conductor chip-as tiny and as com-plex as it is-is in fact the foundationof the electronics industry as we knowit today.

Before a single semiconductor chipis ready for production, millions ofdollars and hours upon hours of cre-ative energy and craftsmanship mustfirst be expended. Blatant copying of

chip designs by rival companies canundermine the financial investmentand the personal accomplishment ofcompanies and their highly skilled en-gineers.

Pirating firms which bear none ofthe costs of research and developmentprior to production of a semiconductorchip can set lower prices for theirproduct and, ultimately, can pervadethe market originally intended for thepioneering company. In a highly com-petitive market, innovation and thecommensurate return on investment isthe lifeblood of this industry.

Today, we have the opportunity toprovide protection against unauthor-ized copying and sales of someoneelse's product. Moreover, we are, ineffect, acknowledging that the infor-mation age now encompasses muchmore than books and recordings-and,therefore, demands of us refinementsand additions to existing laws to ac-commodate creative output in nontra-ditional areas.

I urge my colleagues to support thislegislation and, again, I thank themembers of the Judiciary Committeefor their recognition of the changingrealities of this Nation's high technol-ogy industries.

Mr. MOORHEAD. Mr. Speaker, Iyield myself 3 minutes.

Mr. Speaker, I would like to com-mend the chairman and members ofthe subcommittee, as well as my fourdistinguished colleagues from Califor-nia, Mr. EDWARDS, Mr. ZSCHAU, Mr.LUNGREN, and Mr. MINETA, for theirwork in developing this important leg-islation, which I strongly support.

Recently, the Cabinet Council onCommerce and Trade directed itsWorking Group on Intellectual Prop-erty which is chaired by the Commis-sioner of Patents and Trademarks,Jerry Mossinghoff, to consider theneed to protect semiconductor chip de-signs. It found that while the UnitedStates dominates this importantmarket, it faces a serious challengefrom foreign competition. It alsofound that the R&D costs for a singlecomplex chip could reach $4 million,while the costs of copying such a chipcould be less than $100,000.

The Cabinet Council unanimouslyendorsed legislation to protect semi-conductor chip designs, with the fol-lowing specific characteristics:

First, it should accord prompt inex-pensive protection to original semicon-ductor chip design through a registra-tion system without substantive-exam-ination.

Second, the protection should grantto the owner of the chip design the ex-clusive right to copy; for commercialpurposes, the chip design, or chip em-bodied in that design, as well as theexclusive -right to distribute such achip.

Third, the protection should have arelatively short term; for example, 10years.

Fourth, as an exception to the exclu-sive rights, there should be an express

right to reverse engineer for the pur-pose of teaching, analyzing, or evaluat-ing the concepts or techniques em-bodied in the design of the semicon-ductor chip.

Fifth, unless there are overriding cir-cumstances to the contrary, the pro-tection should be prospective from thecurrent time.

H.R. 5525 clearly meets the criteriarecommended by the Cabinet Councilon Commerce and Trade.

Moreover, H.R. 5525 by creating aseparate and independent chapter ofprotection negates the potential prob-lem of blurring or distorting estab-lished copyright principles by amend-ing the Copyright Act to protect semi-conductor chips. H.R. 5525 will providesignificant and needed protection forthe semiconductor industry in amanner that will allow it to retain its

-competitive edge in this Importantmarket.

Mr. KASTENMEIER. Mr. Speaker, Iyield 3 minutes to the distinguishedchairman of the Committee on Energyand Commerce, the gentleman fromMichigan (Mr. DINGELL).

(Mr; DINGELL asked and was givenpermission to revise and extend his re-marks.)

Mr. DINGELL. I thank the gentle-man for yielding me this time.

Mr. Speaker, I am pleased to speakin favor of this legislation, which isneeded to protect the design of semi-conductor chips against unauthorizedcopying. Chairman KASTENMEIER, andhis colleagues on the committee are tobe commended for the thoughtful andinnovative solution in which they haveresponded to the problem of computerchip piracy.

For more than a year, Energy andCommerce's Subcommittee on Over-sight and Investigations has been in-vestigating the impact of unfair and il-legal trade practices on interstate andforeign commerce. We have foundthat violations of American intellectu-al property rights are a very seriousproblem. Based on our investigation,the subcommittee unanimously en-dorsed the idea of extending copyrightprotection to semiconductor chipdesign.

I understand that, under this bill,Customs would enforce the propertyrights on imports even though the billdoes not amend the copyright act perse.

Passing the Semiconductor ChipProtection Act is a necessary, but onlypartial, answer to the general need tostrengthen the protections affordedintellectual property rights. I stronglyurge my good friends on the JudiciaryCommittee to continue to work hardin this area. For example, I believethat strong legislation increasing thecivil penalties and adding criminalsanctions for trademark violations issorely needed to protect Americanjobs, businesses, and companies fromthe rising tide of counterfeit products.

Julne 11, 1984 H 5493

i 5494 COI thank the gentleman for giving me

;ihe opportunity to express mylthoughts on this subject and will close

by again commending him on the ex-cellent legislative work he has done.

Mr. MOORHEAD. Mr. Speaker, Iyield 3 minutes to the gentleman fromCalifornia (Mr. ZSCHAU).

(Mr. ZSCHAU asked and was givenpermission to revise and extend his re-marks.)

Mr. ZSCHAU. I thank the gentle-man for yielding.

Mr. Speaker, I rise in strong supportof H.R. 5525. This legislation is impor-tant and it is necessary. It would pro-vide protection for the designs of U.S.senmiconductor manufacturers so thatthey will have the incentive to investthe enormous amounts of money andtake the risks associated with advanc-ing the state of semiconductor tech-nology.

Mr. Speaker, the United States'today is experiencing massive tradedeficits. They are expected to rise towell over $100 billion this year. Overthe past several years, we have takensome solace in the fact that at leastthe electronics industry-has had tradesurpluses. In 1978, the trade surplusfor electronics products was about $12billion, but that surplus has beenebbing away in recent years. In 1978,the surplus was $7.4 billion. Last year,it was $1.5 billion. I predict that thisyear; 1984, for the first time in histo-ry, the United States will experience atrade deficit in electronics products.

This is a very bad trend for thiscountry's economy and its trade posi-tion. In order to restore our superiori-ty in the world markets of electronics,we must innovate. We must developnew technologies, new products. How-ever, so often, when we innovate inthe semiconductor field, our designsare copied by foreign competitors whothen offer the pirated products at lowprices. This prevents the U.S. compa-.ny from earning a fair return for itsinnovations.

Zylog, a company in my district, de-veloped the Z-80 microprocessor.Within a short period of time, the Jap-anese had copied it. The pirate firmsold the copy at half-price in the U.S.market. As a result, the Japanese cap-tured 50.percent of the market andZylog lost between $10 and $20 mil-lion. Such losses are hardly an incen-tive for innovating in this competitiveindustry.

Another example is the randomaccess memory (RAM). U.S. firms de-veloped the 4K RAM. It was a stand-ard in the industry. However, it wascopied by foreign firms, then theylinked four of them together to createthe 16k RAM. Later they combinedfour 16k RAM's together to create the64K RAM. The foreign 64k RAM,based on pirated U:S. designs, took aSubstantial market share away fromthe original U.S. innovators.

Now we are on the forefront of anew random access memory technolo-gy-the 256K RAM. It will require a

NGRESSIONAL RECORD - HOUSEnew design. Its development costs willexceed $50 million. However, thatdesign could be copied for about$100,000 by a private firm. We cannotallow that to happen without legalremedies. I urge my colleagues to voteto suspend the rules and pass H.R.5525 to provide protection for theseand other designs.

I might add that the House Republi-can Task Force on High TechnologyInitiatives has endorsed this legisla-tion.

Finally, I want to commend myfriends and colleagues from California,Mr. EDWARDS and Mr. MINETA, fortheir leadership over the years on thisimportant issue, the gentleman fromWisconsin, Mr. KASTENMEIER, and thegentleman from California, Mr. MOOR-HEAD, for bringing this needed and im-portant legislation to the floor of theHouse.

Mr. MOORHEAD. Mr. Speaker, Iyield 3 minutes to the gentleman fromMichigan (Mr. SAWYER).

(Mr. SAWYER asked and was givenpermission to revise and extend his re-marks. )

Mr. SAWYER. Mr. Speaker, I thankthe gentleman for yielding me thistime, and I yield to the gentlemanfrom Arizona (Mr. RUDD).

(Mr. RUDD asked and was given per-mission to revise and extend his re-marks.)

Mr. RUDD. I thank the gentlemanfor yielding to me.

Mr. Speaker, I rise in support of thispiece of legislation which is so.vital forthe protection of'the industry in ourcountry.

Mr. Speaker, developing and produc-ing semiconductor chip designs takesliterally years of effort and requiresmillions of dollars in investment. Asingle chip, typically small enough tofit on a fingertip, may contain over100,000 transistors. It is no wonderthat it has revolutionized industry andour very way of life, reaching intoevery American home. Semiconductorchips are found in everyday applianceslike televisions, refrigerators, micro-wave ovens, and telephones. Theyhave made possible the tremendousdevelopments in medical science-inX-ray and scanning machines, pace-makers, and monitoring devices.

Few inventions have ever changedour world so rapidly. Few have provid-ed such impetus for continuing ad-vances in every field, from medicine tocommunications to defense.

Continuing innovation in semicon-ductor chip design is threatened, how-ever, by the pirating of chip designs.These designs can be copied at rela-tively little cost and in -only a fewmonths time.

Legislation is therefore urgentlyneeded to combat piracy and theunfair competition which stifles fur-ther innovation in this field.

H.R. 5525 provides the protectionneeded to insure the continuing devel-opment of semiconductor chip tech-nology.

June 11, 1984I urge my colleague's support for

this legislation.Mr. SAWYER. Mr. Speaker, this is a

badly needed piece of legislation. Forthose who have not had the benefit ofsitting through some of the hearingson it, we have evolved very rapidlyfrom the old vacuum tube and the bigresistors and coils and whatnot, downto printed circuitry where it is all min-iaturized, and in effect, printed on aboard. Now it is even more drasticallyreduced to the so-called semiconductorchips, where they can take a set ofdrawn circuitry the size of a bed sheetand miniaturize it by photo engravingonto a chip maybe the size of yourlittle fingernail, which includes all ofthe components of the former circuits.

0 1250Unfortunately, it takes millions of

dollars to develop the patterns and thecircuitry, on this bed sheet for, ineffect, reduction and miniaturizationonto a chip. Somebody can copy whatcost many millions of dollars toproduce; just, in effect, copy it ontoanother chip for a matter of $50,000 orsome such amount and, of course,gaining a tremendous price advantagebecause they do not have to recapturethe investment of the original design-ing.

We have actually had testimonythat people have made an error indrawing their circuitry and put a cir-cuit on that is useless and, rather thanredo the whole print, they just ineffect disconnected the circuit, so itwas superfluous on the chip. They getcopies coming in from overseas thateven include the mistake, proving ir-refutably that it was pure theft of thework and research that went into thecomposition and development of thatchip.

So it was, strangely enough, not cov-erable by patents or covered by copy-rights, although the information thatmay be put in it was. So this legisla-tion now covers that great amount ofresearch and development, that in-valuable work, and helps protect ourlead in this very essential industry ofthe future.

Mr. KASTENMEIER. Mr. Speaker.at this point I have no further re-quests for time. I would ask that theSpeaker inquire of the gentlemanfrom California if he has any furtherrequests for time.

Mr. MOORHEAD. Mr. Speaker, Ihave a couple more requests for time.but I do not see the Members here_The gentleman from Pennsylvania(Mr. CLINGER) desired time.

The SPEAKER pro tempore. Wouldthe gentleman like to request that allMembers have 5 legislative days andthat the remarks of the specificallyenumerated gentlemen be printed irathe RECORD at this point?

Mr. MOORHEAD. The gentlemanfrom Texas (Mr. BARTLETT) may be inthe cloakroom. I have sent someoneback to check and see if he is there.

June 11, 1984 CO]Mr. Speaker, I reserve the balance of

my time.GENERAL LEAVE

Mr. KASTENMEIER. Mr. Speaker, Iask unanimous consent that all Mem-bers may have 5 legislative days inwhich to revise and extend their re-marks on the bill, H.R. 5525, nowunder consideration.

The SPEAKER pro tempore. Isthere objection to the request of thegentleman from Wisconsin?

There was no objection.Mr. KASTENMEIER. Mr. Speaker,

in conclusion, I would also like to com-pliment the staff. Michael Remington,Deborah Leavy of the majority, andJoe Wolfe and Tom Mooney of the mi-noritY, have all contributed to this leg-islation over a period of time. I thinktheir efforts should be recognized.

I would also, as I have said before,hope that Members will take the timeto read the House report not only forthe legislative background, but for thetechnical background. A better under-standing of the issue that we have dis-cussed here today will result. Last, Iagain express the view that the gentle-man from California (Mr. EDWARDS)who has worked on this legislation formany years, is primarily responsiblefor moving it through and I want tocongratulate him.

Mr. NELSON of Florida. Mr. Speak-er, I rise in support of H.R. 5525, theSemiconductor Chip Protection Act.As one of the original cosponsors ofthis bill, I feel that this important leg-islation will encourage more researchand technology in the high-technologyindustries and will protect the inter-ests of the consumer.

This bill provides a 10-year copy-right on semiconductor chips, givingowners the exclusive right to make,distribute, and reproduce images ofthe "mask design" and the chips em-bodying that design.

After a company invests the time,energy, and money to create thedesign, pirate companies should notprofit by copying the design and flood-ing the market with reproductions.This undercuts the return on invest-ment that innovative companies mustcount on to engage in further researchand development. Without remedialmeasures, this problem could eventual-ly seriously affect our country's semi-conductor industry. This bill protectsthe integrity and capability of thishigh high-tech industry by helping toinsure its economic health.

Mr. Speaker, I thank you for the op-portunity to speak in support of thisimportant legislation and I urge mycolleagues to vote in favor of this bill.*Mr. BARTLETT. Mr. Speaker, I rise

in strong support of H.R. 5525 becauseit represents an evolution of tradition-al copyright and patent law to meetthe needs of evolving technology. Thegap in intellectual property law thatleaves the layout and design of semi-conductor chips prey to unauthorizedduplication is a threat to the vitalityand creativity of the chip industry. We

NGRESSIONAL RECORD - HO1cannot allow this industry's creativespark to be extinguished by chip copi-ers who do not have to bear the re-search and development expense of achip's original architects. If we do notact, the lifeblood of the informationage and the technical strength of theUnited States wil be diluted.

H.R. 5525 plugs a loophole in cur-rent copyright, patent, and trademarklaw. This body of law does not protectthe specific architecture which adaptsa chip to a particular industrial pur-pose. Chip design does not reach thelevel of inventiveness required bypatent law and because chip design isconsidered purely utilitarian it isbeyond the reach of copyright law.The consequence is that firms lose theincentive to invest millions of dollarsand years of work in the design of achip's microarchitecture. For $50,000or less, a chip pirate can copy andmarket the innovating firm's maskwork, reap the financial rewards, anddestroy the originator's investmentreturn. In the words of the JudiciaryCommittee's report, this arrangementacts as a "devastating disincentive toinnovative research and development."

The fundamental purpose of intel-lectual property law is to afford pro-tection against exploitation to thework of creators. The underlying pur-pose of these laws is to preserve incen-tive, for creators to take risks andmake investments that will ultimatelybenefit society in anticipation offuture reward. It is now necessary andin the public interest, to extend thelaw's protections to preserve techno-logical R&D incentive. As Prof. DavidLange testified before the House Judi-ciary Committee last year, the preser-vation of creative incentive throughthe extension of intellectual propertyprotection is meant to enrich thepublic domain.

The cardinal principal in copyright law,then, is that any decision to extend the lawor to recognize new interests ought to bebased on realistic expectation that one daythe public domain will bear new fruit.

It is precisely upon these groundsthat we extend new protections tosemiconductor chip designers in H.R.5525.

This legislation's importance ex-tends beyond the appropriate exten-sion of intellectual property law tosemiconductor chips. It is a commen-tary on what has come to be termedindustrial policy. Industrial policy gen-erally refers to the managed decline ofdying industries and the direction ofcredit flows to approved sectors of theeconomy. This concept is fatallyflawed; its proponents would foist onthe United States the very thing thatnations which currently have a man-aged industrial policy say makes theireconomies rigid, bureaucratic, and,most importantly, noninnovative. Thething that the United States does bestis innovation, an activity inimical togovernment management. The keys toinnovation are venture capital and risktaking. These keys are exactly the

USE H 5495ones that H.R. 5525 seeks to preservein our No. 1 field of innovation: com-puter chip microcircuitry. I submit toyou that this legislation thus embodiesthe essence of what our industrialpolicy should be: the encouragementof venture capital, risk taking, and i--novation.

Because the law of intellectual prop-erty needs to be extended to computerchip design and because our industrialpolicy should endorse the risk of veri-ture capital in ways that will ultimate-ly benefit the public domain, I urgeyou to support H.R. 5525.o* Mr. AuCOIN. Mr. Speaker, I rise instrong support of H.R. 5525,. the Semi-conductor Chip Protection Act of 1984.This legislation would prowide copy-right protection to the intsricate pat-terns that make up the desfgn of thiscountry's newest - technologicalwonder: the semiconductor chip.

Since the first integrated circuitsemiconductor chip was produced 25years ago, advances in the high-techindustry have been revolutionizing theway we live, the way we work and theway we play. Everything from kitchemappliances and robots to new manufac-turing techniques and video gameshave been made possible by progressin chip design. We can only speculateabout the tremendous opportunitiesthis new technology holds for ourfuture.

Beyond changing our lives, the chipis also transforming our economy. Aswe all know, a great deal of attentionis being focused all across the countryon the role our high-technology elec-tronics industry must play in develop-ing America's economic strength andcompetitiveness in world markets.

In Oregon, the high-tech electronicsindustry is a growing source of eco-nomic strength. The emergence of Or-egon's "Silicon Forest"-with compma-nies such as Intel, Tektronix, anmdMentor Graphics-has significantlycontributed to the diversification ofOregon's economic base-creatinghundreds of jobs and millions of dol-lars in revenue.

But, in recent years, the remarkableadvances in the chip industry havebeen threatened by chip piracy. Clippiracy involves the looting 6r copyingof chip design.

The development of an original in-novative chip, typically smaller than afingernail, takes years, consumes thou-sands of hours of engineer and techni-cian time and costs of millions of dopl-lars. Research and development costsfor a single new chip can reach $100million. Yet, a competing firm, canphotograph a chip and copy the paims-taking work of the innovating firm Fora cost of less than $50,000.

Because the pirating firm does nothave the enourmous costs borne bythe innovator, such a firm can undcer-sell the innovating firm and flood themarket with cheap copies of the senni-conductor chip.

CONGRESSIONAL RECORD - HOUSE June 11, 1984

ThiS causes the creative firm to losesales and profits to the pirate firm.Worst of all, once returns on invest-ment to the innovative firm arechoked off by the unfair competitionof the pirate competitor, the incentivefor innovating firms to invest in newproduct research is greatly reduced.

Unfortunately, current copyrightlaws give little protection to semicon-ductor chips. The Semiconductor ChipProtection Act before us today is in-tended to fill that -gap by extendingcopyright protection to new semicon-ductor designs. It would protect newsemiconductor chip design in such amanner as to reward creativity, en-courage research and innovation whileat the same time benefiting the public.

Mr. Speaker, America's entrepre-neurial spirit and ingenuity haveraised this country's high-tech indus-try to a position of world prominence.We must foster and strengthen thatinnovative edge by passing the semi-conductor Chip Protection Act. I urgemy colleagues to join me in supportingthis most important bill.o Mr. LUNGREN. Mr. Speaker, Amer-ica is on the verge of a second industri-al revolution. In places like Siliconvalley in my State of California newworlds of untold potential are unfold-ing out of grains of sand. The integrat-ed circuit is not only a product of tech-nological innovation but also thesource of such progress itself. GeorgeGilder has compared this phenomenawith a "breeder reactor, creating itsown fuel of knowledge."

However, if we as a Nation are to besuccessful in fully actualizing the po-tential of this cutting edge technologyin an environment of intense globalcompetition, it is essential for us toprovide a framework of law that willinsure the protection of intellectualproperty rights.

The development of mask designs orthe layout for computer chips, can in-volve the expenditure of millions ofdollars and years of effort. Foreign ordomestic competitors can pirate thesedesigns with relative ease and at littlecost through the process of micropho-tography. The pirate can then marketan identical chip minus the problem ofrecouping the costs of developmentand thereby putting the developingcompany at a significant competitivedisadvantage.

The current available legal protec-tions are wholly inadequate to protect

. the manufacturer's investment in de-veloping the masks used to producethe chip. The mask is usually devel-Oped by the application of standardengineering principles and generallydoes not meet the novelty and unob-viousness requisites for patentability.Likewise, a mask normally does notconstitute a work of authorship underthe Copyright Act. Therefore, it iscritical that the present law must beamended in order to enhance the in-centives for investment and innova-tion.

In this regard, I am pleased to havethis opportunity to rise in support ofthe Semiconductor Chip ProtectionAct of 1984. This legislation creates anew form of legal protection (a sui ge-neris approach) that avoids the poten-tial hazards of amending the Copy-right Act. It provides the much neededprotection of intellectual propertyrights without compromising entre-peneural incentives. H.R. 5525 canplay an important role in bringing lawinto conformity with an emerging gen-eration of of new technology and inno-vation. I commend it to you and askfor your support.s* Mr. GLICKMAN. Mr. Speaker, Irise in support of H.R. 5525, the Semi-conductor Chip Protection Act, andcommend our colleague, DON ED-WARDS, for his work on this bill and itspredecessor, as well as the chairmen ofthe Courts Subcormnittee, BOB KAs-TENMEIER, and of the full JudiciaryCommittee, PETER RODINo, for the at-tention they gave to this importantbill and the help they gave in movingit ahead expeditiously.

The technological advances whichare necessary to keep this Nation ofours at the forefront of the worldeconomy raise new challenges forthose of us here in the Congress. Flail-ing to address them in a constructivefashion would mean not only an abdi-cation of our responsibilities, but alsoa potential decline in the innovationwhich spurs this Nation on. This legis-lation is an example of our willingnessto tackle the problem. It shows thatwe are not going to let ourselves betrapped in a technological snakepit.but instead are willing to work withengineers and scientists to promotetechnological progress.

The bill we have before us was care-fully crafted to reflect the need forlegal protection for semiconductorchip mask works. It also takes into ac-count the need to encourage other na-tions to adopt protections againstfraudulent copying of these chipswhich are, indeed, intellectual proper-ties just like other works which bene-fit-and thrive-as a result of copy-right protection. This basic protectionis essential if the semiconductor chipon which so many advances have cometo rely is to continue to flourish.

Again, I commend all of those herein the House who have worked to re-spond creatively and sensibly to thistechnological challenge. I also encour-age every Member of this House tolend their support to H.R. 5525.o* Mr. LOWERY of California. Mr.Speaker, as an original sponsor of H-R.5525, the Semiconductor Chip Protec-tion Act of 1984, I rise in- strong sup-port of this measure on the Suspen-sion Calendar and urge my colleaguesto cast their votes likewise.

The. U.S. semiconductor industryspends many millions of dollars devel-oping new semiconductor chips. Thedevelopment costs, including technicalsupport, for a new chip frequentlyreaches $50 million. This level of R&D

expenditure has placed America in theforefront of all other nations, but ourlead is threatened by chip piracy-thepractice of photographically copyingthe layout of a new chip and, in effect,making Xerox copies of the originalchip. Through chip piracy, foreigncompetitors can replicate the manu-facturing masks for about $50,000.Then, it can make and sell the sameproduct at a much lower price, sincethe pirate does not have to pay any ofthe huge up-front R&D costs by theinnovator. Besides being unfair, theresult discourages investment in inno-vation in the chip industry.

H.R. 5525 amends the U.S. Copy-right Act by. creating a new kind ofcopyrightable work-mask works.-The owner of this copyright can pre-vent unauthorized manufacture ofsemiconductor chips embodying thecopyrighted mask work. -

The enactment of H.R. 5525 will givesemiconductor companies new incen-tives to innovate and create better,more efficient chips. In addition, be-cause of the wide applicability of chips(autos, microwave ovens, computers,and so forth), I believe increased tnno-vation in the semiconductor industrywill be a tremendous boon to our econ-omy as a whole.

In sum, Mr. Speaker, support for theSemiconductor Chip Protection Act of1984 is essential to maintaining oAimeri-ca's technological leadership and in-dustrial competitiveness.oo Mr. McCAIN. Mr. Speaker, I rise instrong support of H.R. 5525, the Semi-conductor Chip Protection Act beingbrought to the House floor under sus-pension today. This bill would amendthe Copyright Act to provide copy--right protection for microscopic semi-conductor circuit patterns and masks.

Currently no form of intellectualproperty law is available to practectsemiconductor designers from umau-thorized copying of their products.Currently, semiconductors can becopied simply by photographically re-producing another firms chip for aslittle as $50,000. The developmentalcost frequently reaches up to $100 mnil-lion for an advanced microprocessorand its accompanying periphteralchips. Thus a competitor, who copies asuccessful design, can significantly un--dercut the innovator's price, therebygaining an unfair economic benefit-

This bill would allow a 10-year copy-right to the creator of a new nmaskwork, while establishing a maxirmumcivil penalty of $250,000 for infringe-ment. Those products are eligible forprotection if it is first commerciallymarketed inr the United States. 4Also,nations that protect U.S. rights bytreaty automatically qualify for recip-rocal treatment.

I also believe this measure has im-portance to more than those indiwid-uals manufacturing these items. VWeare all aware of the size of our cnuin-try's trade deficit and the threat itposes to our Nation's economy. ]For

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June 11, 1984 CONGRESSIONAL RECORD - HOUSE

various reasons, our country is havingtrouble competing with foreign pro-ducers, both in this country andabroad. If we lose our edge in this fieldit will have devastating consequencesfor our country. We must insure thisdoes not happen. By rewarding thoseinnovators of semiconductors, whokeep us preeminent in this area, we fa-cilitate American excellence in theeconomy of tomorrow, high technolo-gy. This measure contributes greatlyto this goal.

I urge my colleagues to cast a vote insupport of this long overdue meas-uile.0

Mr. KASTENMEIER. Mr. Speaker, Ihave no further requests for time.- andI yield back the balance of my time.

Mr. MOORHEAD. Mr. Speaker, Iyield back the balance of my time.

The SPEAKER pro tempore. Thequestion is on the motion offered bythe gentleman from Wisconsin (Mr.KASTEn.IA.ER) that the House suspendthe rules and pass the bill, H.R. 5525,as amended.

The question was taken.Mr. GUNDERSON. Mr. Speaker, on

that I demnand the yeas and nays.The yeas and nays were ordered.The SPEAKER pro tempore. Pursu-

ant to the provisions of clause 5, ruleI, and the Chair's prior announce-ment, further proceedings on thismotion will be postponed.

PARLIAMENTARY INQUIRY

Mr. KASTENMEIER. Mr. Speaker, Ihave a parliamentary inquiry.

The SPEAKER pro tempore. Thegentleman will state it.

Mr. KASTENMEIER. Mr. Speaker, Ihave a unanimous consent request re-garding the bill just tentativelypassed, and also a motion relating tothe Senate bill.

Is it in order for me to make thatmotion now, or subsequently?

The SPEAKER pro tempore. TheChair would advise the gentlemanthat such requests and motions wouldbe in order- following the passage ofthe bill in the House later today.

Mr. KASTENMFIER. I thank theSpeaker.

FEDERAL CHARTER FOR VIET-NAM VETERANS OF AMERICA.INC.Mr..SAM B. HALL, JR. Mr. Speaker,

I move to suspend the rules and passthe bill (H.R. 4772) to grant a Federalcharter to the Vietnam Veterans ofAmerica, Inc.. as amended.

The Clerk read as follows:H.R. 4772

Be it enacted by the Senate and House ofRepresentatives of the United States ofAmerica in Congress assembled,

RECOGNITION AS CORPORATION AND GRANT OFFEDERAL CHARTER.

SECTIoN 1. The Vietnam Veterans ofAmerica. Inc., a nonprofit corporation orga-nized tiunder the laws of the State of NewYork, is hereby recognized as such and isgranted a charter.

CORPORATE POWERS

SEC. 2. The Vietnam Veterans of America,Inc. (hereinafter in this Act referred to asthe "corporation"), shall have only thosepowers granted to It through its articles ofincorporation filed in the State in which itis incorporated and its constitution andbylaws, and subject to the laws of suchState.

OBJECTS AND PURPOSES OF CORPORATION

SEC. 3. The objects and purposes of thecorporation are those stated in its articles ofincorporation, constitution, and bylaws andinclude a com-mitment to-

(1) uphcld and defend the Constitution ofthe United States;

(2) foster the improvement of the condi-tion of Vietnam-era veterans;

(3) promote the social welfare (includingeducational, economic, soc;,l, physical, andcultural improvement) in the United Statesby encouraging the growth and develop-ment, readjustment, self-respect, self-confi-dence and usefulness of Vietnam-era veter-ans and other veterans;

(4) improve conditions for Vietnam-eraveterans and develop channels of communi-cations to assist Vietnam-era veterans;

(5) conduct and publish research, on anonpartisan basis, pertaining to the rela-tionship between Vietnam-era veterans andthe American society, to the Vietnam warexperience, to the role of the United Statesin securing peaceful coexistence for theworld community,. and to other matterswhich affect the social, economic, educa-tional, or physical welfare of Vietnam-eraveterans and other veterans and the fami-lies of such veterans;

(6) 2ssist disabled Vietnam-era veteransand other veterars in need of assistance andthe dependents and survivors of such veter-ans; and

(7) consecrate the efforts of the membersof the corporation and Vietnam-era veter-ans generally to mutual helpfulness andservice to their country.

SERVICE OF PROCESSSEC. 4. With respect to service of process,

the corporation shall comply with the lawsof the State in which it is incorporated andthose States in which it carries on its activi-ties in furtherance of its corporate pur-poses.

MEMBERSHIPSEC. 5. Eligibility for membership in the

corporation and the rights and privileges ofmembers shall, except as provided in thisAct, be as provided in the constitution andbylaws of the corporation, the terms ofmembership and requirements for holdingoffice within the corporation shall not bediscriminatory on the basis of race, color, re-ligion, sex, or national origin.".

BOARD OF DIRECTORS

SEC. 6. The board of directors of the cor-poration, and the responsibilities of theboard, shall be as provided in the constitu-tion and bylaws of the corporation and inconformity with the laws of the State inwhich it Is incorporated.

OFFICERSSEC. 7. The officers of the corporation,

and the election of such-officers, shall be asprovided in the constitution and bylaws of.the corporatlon and in conformity with thelaws of the State in which it is incorporated.

RESTRICTIONS ON CORPORATE POWERS

SEc. 8. (a) No part of the income or assetsof the corporation shall inure to any personwho is a member, officer, or director'of thecorporation or be distributed to any suchperson during the life of this charter. Noth-ing in this subsection shall be construed to

prevent the payment of reasonable compen-sation to the officers of the corporation orreimbursement for actual necessary ex-penses in amounts approved by the board ofdirectors.

(b) The corporation shall not make anyloan to any officer, director, or employee ofthe corporation.

(c) The corporation shall have no powerto issue any shares of stock nor to declare orpay any dividends.

(d) The corporation shall not claim con-gressional approval or Federal governmentauthority by virtue of this Act for any of itsactivities.

LIABILITY FOR ACTS OF OFFICERS AND AGENTS

SEC. 9. The corporation shall be liable forthe acts of its officers and agents whenacting within the scope of their authority.

BOOKS AND RECORDS; INSPECTION

SEC. 10. The corporation shall keep cor-rect and complete books and records of ac-counts and shall keep minutes of any pro-ceeding of the corporation involving any ofits members, the board of directors, or anycommittee having authority under theboard of directors. The corporation shallkeep at its principal office a record of thenames and addresses of all members havingthe right to vote. All books and records ofthe corporation may be inspected by anymember having the right to vote, or by anyagent or attorney of such member. for anyproper purpose, at any reasonable time.Nothing in this section shall be construed tocontravene any applicable State law.

AUDIT OF PINA.ICIAL TRANSACTIONS

SEC. 11. The first section of the Act enti-tled "An Act to provide for audit of ac-counts of private corporations establishedunder Federal law", approved August 30,1964 (36 U.S.C. 1101), is amended by insert-ing after paragraph (57) the following newparagaph:

"(58) The Vietnam Veterans of America.Inc." .

ANNUAL REPORT

SEC. 12. The corporation shall report an-nually to the Congress concerning the ac-tivities of the corporation during the pre-ceding fiscal year. Such annual report shallbe submitted at the same time as is thereport of the audit of the corporation re-quired by section 2 of the Act entitled "AnAct to provide for audit of accounts of pri-vate corporations established under Federallaw", approved August 30, 1964 (36 U.SC.1102). The report shall not be printed as a

'public document.RESERVATION OF RIGHT TO ALTER, AME.D, OR

REPEAL CHARTER

SEC. 13. The right to alter, amend, orrepeal this charter is expressly reserved tothe Congress.

DEFINITION or "STATE"SEC. 14. For purposes of this Act, the term

"State" includes the District of Columbia.the Commonwealth of Puerto Rico. andeach of the territories and possessions ofthe United States.

TAX-EXEMrPT STATUSSEC. 15. The corporation shall maintain its

status as an organization exempt from tax-ation as provided in the Internal RevenueCode of 1954.

EXCLUSIVE RIGHT TO NAMLESSEC. 16. The corporation shall have the

sole and exclusive right to use the name"The Vietnam Veterans of America, Inc.","Vietnam Veterans of America, Inc.", and"Vietnam Veterans of America", and suchseals, emblems, and badges as the corpora-tion may lawfully adopt. Nothing in this

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