New Year, New IP Law - Protect Lawful Streaming Act, CASE Act, and Trademark Modernization Act

As the United States prepares to begin the first session of the 117th Congress on January 3rd, 2021, the present legislature finished their terms by coalescing several bills into one larger act. This became the Consolidated Appropriations Act, 2021, or H.R. 133, which included two intellectual property bills - Copyright Small Claims (pg 2544) and Trademark Modernization (pg 2606). The bill was amended to include a third, the Protect Lawful Streaming Act (pg 2539), before it was signed into law last week. To round out 2020, let's explore the new IP law that the US has to look forward to in 2021. 

Protect Lawful Streaming Act

Streaming Kat

In addition to civil remedies, US copyright law provides for criminal penalties for infringement in certain cases. The Protect Lawful Streaming Act clarified the applicability of these penalties to streaming copyrighted works over the internet. 

Willful copyright infringement for personal or commercial gain is already an act potentially subject to criminal punishment in the United States:

(A) for purposes of commercial advantage or private financial gain;
(B) by the reproduction or distribution, including by electronic means, during any 180–day period, of 1 or more copies or phonorecords of 1 or more copyrighted works, which have a total retail value of more than $1,000; or
(C) by the distribution of a work being prepared for commercial distribution, by making it available on a computer network accessible to members of the public, if such person knew or should have known that the work was intended for commercial distribution.

This infringement can pose felony punishments, with potential 5- and 10-year jail sentences. Following the Aereo decision, which ruled that online streaming constitutes making a work available (see Blogmeister Emeritus Jeremy Phillips' post), this Kat is not surprised to see the legislature clarify the rules for criminal penalties for offering online streaming services that:

• are primarily designed to allow for infringement through streaming copyrighted works;
• have no other commercially significant purpose other than infringing streams, or;
• is intentionally marketed or promoted for the purposes of infringement. 

The provision will only pose criminal liability to those who operate these services; individual users are not subject to these penalties.

CASE Act

Another change to copyright in the US, the CASE Act has now been signed into law. This Kat has written about the CASE Act in the past, both as it passed the House Judiciary Committee and the Senate Judiciary Committee. 

The CASE Act directs the Copyright Office to operate a small claims court for copyright infringement matters. The Copyright Claims Board would have a maximum damage award of $30,000 per case, $15,000 per work registered prior to the claim. Participation before the Board will be voluntary. However, defendants must opt-out of participation within 60 days or they are subject to the Board's determination. Determinations by the Board may be reviewed by the Board for reconsideration, or the decision may be appealed to the Register of Copyrights. 

The CASE Act will reduce the expense for artists to bring copyright claims; before now, copyright infringement could only be litigated in federal court, typically amounting to a lengthy and expensive process. Now, many more artists will have access to a means of redressing infringement. 

Some have expressed fears that this new system will embolden those who seek to abuse the copyright law through frivolous claims. This Kat does not share those fears. The opt-out procedure, as well as the limit on the number of filings any claimant may make in a year work in tandem to disincentivize false claims. The respondent to a false claim may simply opt-out, costing the false claimant their filing fee. Further, the Act provides that a bad faith claimant pays the attorneys fees of the respondent. Overall, this Kat is a strong supporter of the CASE Act both as an outlet for redress of smaller infringement claims and the reduced work-load it will have on the US federal court system.

Trademark Modernization Act

In addition to the above copyright provisions, 2020 signed off with an update to the Lanham Act as well. The Trademark Modernization Act provided for several discrete revisions to the law, including: third party submission of evidence relating to a trademark application, the establishment of ex parte expungement and reexamination proceedings relating to the validity of marks, and the provision of a rebuttal presumption of irreparable harm in certain proceedings.

The first revision allows for third parties to submit evidence concerning a ground for refusal for a particular trademark application. The Director of the United States Patent and Trademark Office has the discretion to determine whether or not such evidence will be accepted into the record. The PTO has one year to determine a procedure for these submissions.

Clean Paw, Clean TM Register

The second revision allows for any person to bring an ex parte expungement or reexamination proceeding to cancel a registered mark for non-use. The expungement proceeding requires that the movant show that the mark was never in use for some or all of the goods or services claimed; under that ground, the mark may be subject to an expungement proceeding any time after three years after registration. The reexamination proceeding is allowed on the same ground of non-use. However, it may be brought by the Director on his or her own initiative. These two provisions represent de-cluttering provisions, aimed at reducing the number of unused marks on the register.

Lastly, the TM Act provides for a rebuttable presumption of irreparable harm for plaintiffs seeking injunctions under the Lanham Act. 

"A plaintiff seeking any such injunction shall be entitled to a rebuttable presumption of irreparable harm upon a finding of a violation identified in this subsection in the case of a motion for a permanent injunction or upon a finding of likelihood of success on the merits for a violation identified in this subsection in the case of a motion for a preliminary injunction or temporary restraining order.’’

This Kat believes that this change is likely to increase the frequency with which such injunctions are granted. Through statute, this provision has shifted the ebay framework in favor of plaintiffs in the trademark context. 

Comment

These changes to US trademark and copyright law have been in the works for some time. Considering trends with Napster and Aereo, the criminalization of running an infringing streaming service was hardly unexpected for this Kat. The CASE Act has been in the works for several years, with this 116th Congress making substantial progress in 2019 to reach this point. The Trademark Modernization Act reflects a trend of increasing scrutiny over the trademark register, particularly following last year's rule change to require US licensed attorneys for foreign applicants and registrants. With the 116th headed into the history book, this Kat is excited to see what the 117th Congress has in store for the IP world.