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This paragraph is substantially the same in the Senate and House
Reports.
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Notwithstanding the exclusive rights of the owners of copyright, section
108 provides that under certain conditions it is not an infringement of
copyright for a library or archives, or any of its employees acting
within the scope of their employment, to reproduce or distribute not
more than one copy or phonorecord of a work, provided (1) the
reproduction or distribution is made without any purpose of direct or
indirect commercial advantage and (2) the collections of the library or
archives are open to the public or available not only to researchers
affiliated with the library or archives, but also to other persons doing
research in a specialized field, and (3) the reproduction or
distribution of the work includes a notice of copyright.

b. House Report: Discussion of Libraries and Archives in Profit-Making
Institutions

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The Senate and House Reports differ substantially on this point.
The Senate Report's discussion is reprinted at page 17, above.
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Under this provision, a purely commercial enterprise could not establish
a collection of copyrighted works, call itself a library or archive, and
engage in for-profit reproduction and distribution of photocopies.
Similarly, it would not be possible for a non-profit institution, by
means of contractual arrangements with a commercial copying enterprise,
to authorize the enterprise to carry out copying and distribution
functions that would be exempt if conducted by the non-profit
institution itself.

The reference to "indirect commercial advantage" has raised questions as
to the status of photocopying done by or for libraries or archival
collections within industrial, profitmaking, or proprietary institutions
(such as the research and development departments of chemical,
pharmaceutical, automobile, and oil corporations, the library of a
propriatary hospital, the collections owned by a law or medical
partnership, etc.).

There is a direct interrelationship between this problem and the
prohibitions against "multiple" and "systematic" photocopying in section
108 (g) (1) and (2). Under section 108, a library in a profit-making