106 STAT. 4240 PUBLIC LAW 102-563—OCT. 28, 1992

"SUBCHAFTER B—COPYING CONTROLS

M§ 1002. Incorporation of copying controls

"(a) PROHIBITION ON IMPORTATION, MANUFACTURE, AND DIS-
TRIBUTION.—No person shall import, manufacture, or distribute
any digital audio recording device or digital audio interface device
that does not conform to—

"(1) the Serial Copy Management System;
"(2) a system that has the same functional characteristics
as the Serial Copy Management System and requires that
copyright and generation status information be accurately sent,
received, and acted upon between devices using the system's
method of serial copying regulation and devices using the Serial
Copy Management System; or

"(3) any other system certified by the Secretary of Com-
merce as prohibiting unauthorized serial copying.
"(b) DEVELOPMENT OF VERIFICATION PROCEDURE.—The Sec-
retary of Commerce shall establish a procedure to verify, upon
the petition of an interested party, that a system meets the stand-
ards set forth in subsection (aX2).

"(c) PROHIBITION ON CIRCUMVENTION OF THE SYSTEM.—No per-
son shall import, manufacture, or distribute any device, or offer
or perform any service, the primary purpose or effect of which
is to avoid, bypass, remove, deactivate, or otherwise circumvent
any program or circuit which implements, in whole or in part,
a system described in subsection (a).

"(d) ENCODING OF INFORMATION ON DIGITAL MUSICAL RECORD-
INGS.—

"(1) PROHIBITION ON ENCODING INACCURATE INFORMA-
TION.—No person shall encode a digital musical recording of
a sound recording with inaccurate information relating to the
category code, copyright status, or generation status of the
source material for the recording.

"(2) ENCODING OF COPYRIGHT STATUS NOT REQUIRED.—
Nothing in this chapter requires any person engaged in the
importation or manufacture of digital musical recordings to
encode any such digital musical recording with respect to its
copyright status.

"(e) INFORMATION ACCOMPANYING TRANSMISSIONS IN DIGITAL
FORMAT.—Any person who transmits or otherwise communicates
to the public any sound recording in digital format is not required
under this chapter to transmit or otherwise communicate the
information relating to the copyright status of the sound recording.
Any such person who does transmit or otherwise communicate
such copyright status information shall transmit or communicate
such information accurately.

"SUBCHAPTER C—ROYALTY PAYMENTS

"§ 1003. Obligation to make royalty payments

"(a) PROHIBITION ON IMPORTATION AND MANUFACTURE.—No per-
son shall import into and distribute, or manufacture and distribute,
any digital audio recording device or digital audio recording medium
unless such person records the notice specified by this section
and subsequently deposits the statements of account and applicable
royalty payments for such device or medium specified in section
1004.