Music Business

Infringement Was The CASE: A Look At Intellectual Property Legislation In New COVID Relief Bill

Tucked inside the new 5500 page COVID Relief package which includes much need #SaveOurStages funding were several unrelated pieces of legislation that impact musicians, the music industry, and the entire creative sector.

Attorney John Miranda looks at these three important Acts.

by John Miranda

The latest COVID-19 relief bill, the Consolidated Appropriations Act, 2021, has been passed by both chambers of Congress as of December 21, 2020. Although public discussion of the relief bill has understandably been dominated by the size of the stimulus checks which will be sent out, the legislation has brought significant developments in the field of intellectual property. These new intellectual property statutes are poised to significantly disrupt the intersection of technology and digital content. The relief bill has not yet been finalized by the President, but the intellectual property provisions are unlikely to see any meaningful changes before becoming law. Here are summaries of the three new IP laws: The CASE Act, the Trademark Modernization Act, and the Protecting Lawful Streaming Act.

The CASE Act

The most anticipated and publicized of the new intellectual property statutes passed in the COVID-19 relief bill, the Copyright Alternative in Small-Claims Enforcement Act of 2019 (“CASE Act”) creates a type of “small claims court” for copyright infringement. The CASE Act establishes the Copyright Claims Board, an adjudicative body within the U.S. Copyright Office, which can hear claims and enter judgments for copyright infringement up to the amount of $30,000. In the case of registered copyrighted works, the Board can award maximum statutory damages of $30,000 per proceeding and $15,000 per work infringed; the maximum damages for unregistered copyrighted works are half of those amounts. Once a claim is filed, the responding party has 60 days to opt-out of the Copyright Claims Board procedure, so that the controversy may proceed in federal court. Otherwise, the parties give up their right for the claim to be litigated in traditional federal venues, though the Copyright Claims Board’s judgment can be appealed to the federal courts. The Board will be composed of both Copyright Claims Officers (Copyright Office employees, not necessarily judges or attorneys) and Copyright Claims Attorneys. Staff attorneys will walk parties through the process without providing legal advice, and this bill being passed in the COVID era, the entire process will be conducted remotely.

According to its proponents, the CASE Act is intended to provide independent artists and copyright holders with an affordable and accessible alternative to burdensome federal litigation. For copyright infringement claims which are likely to result in total judgment collection of less than $30,000, often due to the not-so-deep pockets of infringers, the time, effort, and costs of the litigation process generally make it impracticable for smaller copyright holders to enforce their rights. The CASE Act gives them a path to adjudicate these claims within the U.S. Copyright Office, hopefully resulting in a relatively cheap, speedy, and accurate disposition, and if appropriate, an enforceable judgment for an amount of no more than $30,000 which may have not been worth pursuing via traditional legal avenues.

Critics of the CASE Act find it most likely that the Copyright Claims Board will be used primarily by corporate copyright holders to bully internet users who post frequently shared content, such as memes. CASE Act skeptics believe that, much like large companies are better suited to shoulder the cost and time burden of litigation, big corporate copyright owners and their attorneys will have a strong advantage in navigating the bureaucracy of the Copyright Claims Board, especially when facing down pro se internet users. However, the manner in which the CASE Act is interpreted, implemented, and enforced will ultimately be determined by the U.S. Copyright Office and its regulatory promulgation of the Copyright Claims Board.

The Trademark Modernization Act

The Trademark Modernization Act of 2020 (“TM Act”) introduces several new avenues via which trademark owners and other interested parties can participate in the U.S. Patent & Trademark Office’s review of applications and registrations. First, the TM Act amends the Lanham Act to codify the USPTO’s longstanding practice of accepting “Letters of Protest”. Letters of Protest are submitted by third parties in the prosecution of trademark applications, and consist of (1) a claimed basis for which the application should be refused (ex: it is confusingly similar to an existing registration, often one owned by the third party), and (2) evidence supporting the third party’s claim. The identity of the third party is not disclosed to the trademark examining attorney reviewing the application. Letters of Protest present a cheaper and easier alternative to “opposition” proceedings in the Trademark Trial & Appeal Board, in which an interested party “opposes” the registration of an application which the USPTO has approved.

The TM Act also provides two ex parte measures for challenging trademark registrations for which it is questionable whether the registrant has used the registered mark in U.S. commerce: Expungement and Reexamination. If a third party conducts a “reasonable investigation” and is able to set forth a prima facie case that a registrant has never used their mark in U.S. commerce for some or all of the goods and services covered by the registration, then the USPTO will institute an expungement proceeding in which the relevant goods and services will be deleted if the registrant cannot submit proof of use or excusable non-use. Reexamination is similar, except that the third party must only show that the registered mark was not in use in commerce in connection with some or all of the covered goods and services, on or before the relevant date (i.e., the claimed dates of use in the registration). Notably, both provisions give the USPTO authority to institute the proceedings based on the USPTO’s own independent investigation, with no third party intervention necessary; accordingly, this could signal the start of a new registration audit program. One of the main presumed purposes of these two provisions is to combat the massive influx of fraudulent registrations owned by Chinese nationals, the vast majority of which are applied for in the USPTO with the applicants never intending to use the marks in U.S. commerce, and often submitting doctored specimens in order to achieve registration.

Finally, the TM Act gives the USPTO discretion in setting timeframes for response deadlines for official actions, and gives trademark registrants a presumption of irreparable harm in certain situations, which will help trademark owners obtain injunctions against infringers in the context of federal litigation.

The Protecting Lawful Streaming Act

The Protecting Lawful Streaming Act differs from the previous two acts in that it provides for criminal liability. The new law makes it a felony to stream unauthorized copyrighted content. However, it only targets commercial or for-profit streamers who operate websites for the purpose of illegally broadcasting copyrighted content; it does not target individual internet users who view such bootleg streams, nor does it implicate streamers who happen to commit copyright infringement by incorporating unlicensed material (such as background music) into their own streams. The bill provides for up to 10 years of imprisonment for illegal streamers, and accordingly, it initially raised a large amount of concern from digital media and entertainment producers. However, the narrowly tailored language of the bill, which explicitly limits criminal liability to large-scale for-profit bootleg streamers, has assuaged most concerns.

Generally, all three of these acts are likely to improve the ability of intellectual property owners to protect their exclusive rights through efficient and accessible legal processes. Concerns abound, but as these statutes are implemented by agencies and courts, hopefully the ambiguities will be resolved in an equitable manner. The passage of these three acts serves as a reminder that the landscape of intellectual property law is always changing, and when billion dollar industries such as digital media streaming are dependent upon certain presumptions about IP law, it is essential for professionals in those fields to stayed informed and up-to-date on legal and legislative developments. 

John Miranda is an NYC-based Trademark & Copyright attorney. He currently works as an associate attorney for the IP boutique firm Abelman Frayne & Schwab, where he focuses his practice on U.S. trademark prosecution. Prior to that, he served as a USPTO trademark examining attorney for over 5 years, where he reviewed thousands of trademark applications for registrability. He can be reached at jmiranda@lawabel.com.

[1] https://copyrightalliance.org/news-events/press-releases/december-22-2020/
[2] https://techcrunch.com/2020/12/22/stimulus-bill-streaming/
[3] https://www.congress.gov/bill/116th-congress/house-bill/2426/text
[4] https://www.congress.gov/bill/116th-congress/house-bill/2426/text
[5] https://www.congress.gov/bill/116th-congress/house-bill/2426/text
[6] https://nppa.org/news/case-act-passes-congress-enacts-copyright-small-claims-bill
[7] https://copyrightalliance.org/news-events/press-releases/december-22-2020/
[8] https://www.theverge.com/2020/12/21/22193976/covid-relief-spending-congress-copyright-case-act-felony-streaming
[9] https://www.eff.org/deeplinks/2020/12/case-act-hidden-coronavirus-relief-bill-just-beginning-next-copyright-battle
[10] https://www.congress.gov/bill/116th-congress/house-bill/6196/text
[11] https://www.congress.gov/bill/116th-congress/house-bill/6196/text
[12] https://www.lathropgpm.com/newsroom-alerts-72617.html
[13] https://www.congress.gov/bill/116th-congress/house-bill/6196/text
[14] https://www.cnn.com/2020/12/22/tech/illegal-streaming-felony-covid-relief-bill/index.html
[15] https://www.eff.org/deeplinks/2020/12/case-act-hidden-coronavirus-relief-bill-just-beginning-next-copyright-battle

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