It is the intent of this legislation that a subsequent unlawful use by a user of a copy or phonorecord of a work lawfully made by a library, shall not make the library liable for such improper use.

e.  House Report:  Discussion of Multiple Copies and Systematic
   Reproduction

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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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Multiple copies and systematic reproduction

Subsection (g) provides that the rights granted by this section extend only to the “isolated and unrelated reproduction of a single copy or phonorecord of the same material on separate occasions.”  However, this section does not authorize the related or concerted reproduction of multiple copies or phonorecords of the same material, whether made on one occasion or over a period of time, and whether intended for aggregate use by one individual or for separate use by the individual members of a group.

With respect to material described in subsection (d)—­articles or other contributions to periodicals or collections, and small parts of other copyrighted works—­subsection (g) (2) provides that the exemptions of section 108 do not apply if the library or archive engages in “systematic reproduction or distribution of single or multiple copies or phonorecords.”  This provision in S.22 provoked a storm of controversy, centering around the extent to which the restrictions on “systematic” activities would prevent the continuation and development of interlibrary networks and other arrangements involving the exchange of photocopies.  After thorough consideration, the Committee amended section 108 (g) (2) to add the following proviso: 

Provided, that nothing in this clause prevents a library or archives from participating in interlibrary arrangements that do not have, as their purpose or effect, that the library or archives receiving such copies or phonorecords for distribution does so in such aggregate quantities as to substitute for a subscription to or purchase of such work.

In addition, the Committee added a new subsection (i) to section 108, requiring the Register of Copyrights, five years from the effective date of the new Act and at five year intervals thereafter, to report to Congress upon “the extent to which this section has achieved the intended statutory balancing of the rights of creators, and the needs of users,” and to make appropriate legislative or other recommendations.  As noted in connection with section 107, the Committee also amended section 504(c) in a way that would insulate librarians from unwarranted liability for copyright infringement; this amendment is discussed below.