program (including any tape, disk, or
other medium embodying such program), and in the case of a sound
recording in the musical works embodied therein, neither the owner of a
particular phonorecord nor any person in possession of a particular copy
of a computer program (including any tape, disk, or other medium
embodying such program), may, for the purposes of direct or indirect
commercial advantage, dispose of, or authorize the disposal of, the
possession of that phonorecord or computer program (including any tape,
disk, or other medium embodying such program) by rental, lease, or
lending, or by any other act or practice in the nature of rental, lease,
or lending. Nothing in the preceding sentence shall apply to the rental,
lease, or lending of a phonorecord for nonprofit purposes by a nonprofit
library or nonprofit educational institution. The transfer of possession
of a lawfully made copy of a computer program by a nonprofit educational
institution to another nonprofit educational institution or to faculty,
staff, and students does not constitute rental, lease, or lending for
direct or indirect commercial purposes under this subsection.

(B) This subsection does not apply to-

(i) a computer program which is embodied in a machine or product and
which cannot be copied during the ordinary operation or use of the
machine or product; or

(ii) a computer program embodied in or used in conjunction with a
limited purpose computer that is designed for playing video games and
may be designed for other purposes.

(C) Nothing in this subsection affects any provision of chapter 9 of
this title.

(2)(A) Nothing in this subsection shall apply to the lending of a
computer program for nonprofit purposes by a nonprofit library, if each
copy of a computer program which is lent by such library has affixed to
the packaging containing the program a warning of copyright in
accordance with requirements that the Register of Copyrights shall
prescribe by regulation.

(B) Not later than three years after the date of the enactment of the
Computer Software Rental Amendments Act of 1990, and at such times
thereafter as the Register of Copyrights considers appropriate, the
Register of Copyrights, after consultation with representatives of
copyright owners and librarians, shall submit to the Congress a report
stating whether this paragraph has achieved its intended purpose of
maintaining the integrity of the copyright system while providin