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IP Alert: Congress Passes New Copyright Legislation in Spending Bill

January 20, 2021

On December 21, 2020, Congress passed the Copyright Alternative in Small-Claims Enforcement Act of 2019 (the “CASE Act”). Congress introduced the CASE Act as part of the COVID-19 relief bill signed into law on December 27, 2020.

The CASE Act provides a streamlined adjudication process in which parties may voluntarily institute copyright infringement claims for amounts up to $15,000 per registered work and up to $30,000 per dispute (and for amounts up to $7,500 per work for works not registered within three months of publication). Such claims may not be asserted unless (1) the legal or beneficial owner of the copyright has first delivered a completed application, a deposit, and the required fee for registration of the copyright to the Copyright Office; and (2) a registration certificate has either been issued or has not been refused. The Copyright Claims Board (referenced below) will not render a decision unless or until the registration certificate issues.

Once a claim is filed, respondents may opt out of the proceeding within 60 days of proper service of the notice and claim. If the respondent opts out of the proceeding within the 60-day period, the case will be dismissed without prejudice. (The petitioner may then choose to pursue the claim in court.) However, if an opt-out notice is not submitted within the 60-day period, the proceeding will be considered active, and the outcome of the case will bind the respondent.

The new legislation also establishes the Copyright Claims Board, which must be empaneled within one year of the enactment of the CASE Act. The panel will consist of three full-time Copyright Claims Officers who will engage in various functions, such as conducting hearings and conferences related to civil copyright claims, counterclaims, and defenses, rendering determinations on such matters, and facilitating settlements among parties. In addition, the Copyright Claims Board is empowered to hear claims of noninfringement and of knowing misrepresentations in takedown notices.

In addition to the CASE Act, the COVID-19 relief bill includes legislation that authorizes the Department of Justice to bring felony charges against certain digital transmission services that stream copyrighted works of others without authorization. Such digital transmission services are services designed, provided, or marketed solely for purposes of publicly performing unlicensed works for commercial advantage or financial gain. The legislation excludes the criminal prosecution of individuals who use or access the websites.

After years of congressional debate, the passage of the CASE Act provides an avenue for copyright owners to assert claims of infringement and accused infringers to defend such claims without the expense of federal litigation. Moreover, the accompanying legislation seeks to deter certain infringers with the threat of felony charges.

Because the Copyright Claims Board may award statutory damages up to $15,000 per work and $30,000 per claim for timely registered copyrights, copyright owners should consider registering their works in the Copyright Office within three months of publication, since works that are not registered within this requisite time period are eligible for only half of the per-work amount. Conversely, accused infringers should timely opt out of such proceedings within the 60-day period if they would prefer to assert their defenses in federal court and preserve their right to a jury trial. (Additionally, accused infringers may find that they are better off in federal court, for example, because statutory damages are not available in federal court for works that are not timely registered.) Accused infringers may also want to consider initiating a claim of non-infringement or of knowing misrepresentations in takedown notices with the Copyright Claims Board, especially if they wish to minimize costs.

For more information on the CASE Act and the law regarding unauthorized streaming services, please see the Copyright Office’s NewsNet service.

If you have any questions related to the new legislation, please contact Fitch Even attorney Kerianne A. Strachan, author of this alert.

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