Copyright Legislation in Coronavirus Relief
Tucked away in the coronavirus relief bill passed on December 21st, Congress included two pieces of legislation that affect copyright holders. The first is a law providing for felony charges and up to 10 years of imprisonment and fines for certain digital transmission services making unauthorized uses of copyright-protected works for profit, and the second is the Copyright Alternative in Small-Claims Enforcement Act of 2020 (the CASE Act). These acts could become law as soon as this week when the president signs the stimulus relief bills.
The Protecting Lawful Streaming Act amends Chapter 113 of title 18 USC by adding Section 2319C against illicit digital transmission services. This Act focuses on “commercial, for-profit streaming piracy services” that profit from illegally streaming copyrighted material. It does not apply to individual content streamers. Violators who are prosecuted could be subject to 10 years imprisonment, and fines may also be imposed. This bipartisan effort has been applauded by groups like the National Association of Broadcasters as a means to further protect against illegal streaming.
The CASE Act is a big development in copyright litigation allowing for small claims to be decided right within the U.S. Copyright Office, heard by Copyright Claims Officers (not necessarily judges) and decided with the assistance of Copyright Claims Attorneys who have subject matter expertise. This Act instructs the Copyright Office to establish within a year the Copyright Claims Board to adjudicate copyright infringement claims that do not exceed $30,000.
With copyright infringement claims taking up client resources and slowly progressing through federal district court, the Copyright Claims Board is a welcome chance to resolve infringement disputes through a streamlined, less expensive procedure. Concurrently, clients should be aware that the new Board could be attractive to claimants who have registered their visual works in bulk and scour the internet for infringements, making monetary demands for settlement. Whether an offensive or defensive case, participation will be voluntary, with either party able to elect to pursue a claim, counterclaim or defense in federal district court, another forum or seek a jury trial if desired.
Registration and Available Claims
Many aspects of this litigation will look familiar to those involved in infringement actions: copyright registration remains a prerequisite to bringing a claim, and the Board may hear any claims for infringement of an exclusive right in a copyrighted work provided under Section 106 of the US Copyright Act, 17 USC Section 106, as well as a claim for a declaration of noninfringement of such an exclusive right. In addition, the Board may hear claims for misrepresentation under Section 512(f) of the Digital Millennium Copyright Act (DMCA) in connection with a notification of claimed infringement or a counter notification seeking to replace removed or disabled material from a website. Counterclaims have some limitations in the Board, and must be solely against the claimant in a proceeding.
It is important to note that there are claims that are statutorily excluded including, inter alia, claims against a federal or state governmental entity and claims or counterclaims against a person or entity residing outside of the United States (except where the person or entity initiated the proceeding before the Board and is, therefore, subject to counterclaims).
Proceedings before the Copyright Claims Board will occur through written submissions, hearings, and conferences through telecommunications and internet programs. The proceeding will begin with a written claim providing for material facts, service of process and an opt-out option for respondents.
The true streamlining of the procedure comes with the discovery stage and trial stage. Discovery is limited to production of relevant information of documents, written interrogatories, and written requests for admission. For good cause, the Board may permit additional limited discovery and voluntary submissions from nonparticipants in the proceeding. A protective order to limit disclosure of confidential information is allowable. The CASE Act does not contemplate a live trial, but does permit for hearings that could include oral presentations on fact and law and witness testimony. The Board will consider documentary and nontestimonial evidence that is relevant to the claims, counterclaims or defenses, and will allow written testimonial evidence such as statements of the parties and nonexpert witnesses. Expert witness testimony will be permitted for good cause shown only in exceptional cases.
Like in federal district court litigation, the CASE Act permits the Board to award actual damages, profits and statutory damages for infringement pursuant to Section 504 of the Copyright Act, 17 USC Section 504. Statutory damages have restrictions in the Board. First, for works timely registered under Section 412 of the Copyright Act, 17 USC Section 412, statutory damages may not exceed $15,000 for each work infringed. Second, for works not timely registered but eligible for an award of statutory damages under Section 412, the statutory damages may not exceed $7,500 per work infringed, or a total of $15,000 in any one proceeding. Third, the Board will not consider whether the infringement was willful when making an award of statutory damages. Fourth, the Board may consider as a factor in awarding statutory damages whether the infringer has agreed to cease or mitigate the infringing activity. In no proceeding may the total damages exceed $30,000. With small exception, attorneys’ fees are not available.
Congress and the Copyright Office expect this new forum to be a popular selection for small claims. To combat against aggressive filings, the CASE Act permits the Register of Copyrights to establish regulations relating to the number of proceedings a claimant may bring each year.
Review of Orders
A party may request reconsideration of a determination and, if denied, may seek review by the Register of Copyrights, which will be conducted under an abused of discretion standard. A party who seeks to enforce an award of damages may do so in federal district court. Final Board determinations and Register of Copyright decisions are appealable to a court of competent jurisdiction under limited circumstances.
We expect to see an uptick in copyright enforcement through this new Copyright Claims Board. We have strong copyright experience and are advantageously positioned to assist clients via our copyright practitioners, especially those in our Honigman DC office.