The recently passed stimulus package quietly incorporates consequential changes to American intellectual property laws via the advent of the Trademark Modernization Act of 2020 (“the TMA”), the Copyright Alternative in Small-Claims Enforcement Act of 2020 (the “CASE Act”), and the Protecting Lawful Streaming Act (the “PLSA”).
On December 21, 2020, about eight months into the sudden and persistent COVID-19 pandemic, Congress swiftly passed the Consolidated Appropriations Act, 2021 (“the Act”), a long-awaited bill focused on providing another round of pandemic relief and economic stimulus; and avoiding a government shutdown. Six days later, then President Donald Trump signed the Act into law.
Buried within $900 billion in stimulus provisions and a $1.4 trillion federal agency funding deal, the Act includes provisions that amend trademark and copyright laws and thus, impact creators in the booming digital economy. The TMA, the CASE Act, and the PLSA will offer trademark and copyright owners, thereby many content creators, meaningful benefits, including (i) making it easier for trademark owners to obtain injunctive relief; (ii) creating a small-claims court for copyright infringement disputes; and (iii) imposing a felony on unlawful streaming of copyrighted material.
The Trademark Modernization Act (TMA) of 2020: Resolving a Circuit Split
The TMA, among other initiatives to expand and fortify the accuracy and integrity of the federal trademark register, settles a long-standing circuit split: whether the Supreme Court’s ruling in eBay, Inc. v. MercExchange LLC, 547 U.S. 388 (2006) (holding that irreparable harm could not be presumed in a patent infringement lawsuit) applies to trademark infringement. Historically, to obtain preliminary injunctive (PLI) relief, the movant has the burden of proving four factors with the court applying the most weight to movant proving irreparable harm—that a party cannot be made whole by monetary damages. Yet, in cases involving intellectual property infringement, courts have granted PLIs by presuming irreparable harm once a plaintiff proved the first factor, a likelihood of success on the merits, rather than requiring he or she prove irreparable harm. Then, the eBay Court invalidated the presumption. Fortunately for a trademark owner seeking a PLI to freeze infringements, the TMA codifies, via amending 15 U.S.C. § 1116, and restores the valuable protection: a rebuttable presumption of irreparable harm upon a finding of infringement or a likelihood of success on the merits.
The Copyright Alternative in Small-Claims Enforcement (CASE) Act of 2020: Streamlining Adjudication
In an effort to make copyright adjudication more accessible, the CASE Act inaugurates a small claims court, the Copyright Claims Board (“CCB”), for copyright owners to efficiently enforce their rights, so long as the claim does not exceed $30,000. Traditionally, to bring a copyright infringement case, movants must have their claim litigated by a federal court as federal courts have exclusive jurisdiction over copyright. Federal litigation is expensive and not feasible for many, especially small-scale digital content creators (artists, authors, and songwriters) and small businesses. Now, the small fish in the large creative industry and digital domain pond have a voluntary and realistic opportunity to exercise their rights in a streamlined fashion.
The CCB is made up of three “judges” or Officers appointed by the Librarian of Congress, and unlike any given federal court judge, they are subject matter experts. And like a federal court judge, they are bound by judicial precedent in resolving a dispute; but unlike a federal judge, their decision may not be relied upon as legal precedent. Unfortunately, an alleged infringer may opt out of defending themselves in CCB proceeding and instead force movant to have the dispute adjudicated in federal court. The CASE Act, nevertheless, is not without incentives to incite alleged infringers to participate.
The Protecting Lawful Streaming Act (PLSA): Criminalizing Unlawful Streaming
Further expanding protections to creators and copyright owners, the PLSA, introducing Section 2319C “Illicit digital transmission services” to Title 18 of the U.S.C., closes a frustrating loophole that has existed in copyright law amid the evolution of digital streaming. This loophole “allowed large-scale commercial enterprises to avoid serious consequences for their illegal streaming of copyrighted works” and enabling them to build profitable businesses through harmful streaming privacy. The PLSA provides the Department of Justice with the authority to bring felony charges against these large-scale commercial, for-profit streaming piracy services, excluding individual users. Prior to the PLSA, only violations of reproduction and distribution rights were subject to felony charges, creating a discrepancy between works available for download and works available for streaming (a public performance right violation), with the latter being subject only to misdemeanor penalties. Now, the latter is subject to felony charges, allowing law enforcement to meaningfully punish rampant, large-scale commercial streaming piracy, and hopefully revive economic growth in the creative industries.
The impact of the TMA, CASE Act, and the PLSA has yet to be seen. The TMA shall be implemented by December 27, 2021, along with the CASE Act. For the latter, the Register of Copyrights has the ability to extend the date of implementation to June 25, 2022 for good cause. Meanwhile, the PLSA is immediately applicable. While these laws provide creatives and trademark and copyright owners important protections and greater access to adjudication relief, they leave room for adverse consequences. In the copyright realm, the CASE Act potentially provides new incentives for more bothersome copyright troll-initiated suits and can harm everyday internet users without the means and competence to protect themselves.
Although the impact of these laws is likely to remain nebulous for an extended period, it is difficult to dismiss that the Consolidated Appropriations Act of 2021, known largely as a stimulus package for pandemic relief, has substantially altered and modernized American intellectual property law, and will, consequently, transform the digital economy.
*Briana Sooy is an Executive Editor on the Michigan Technology Law Review.