U.S. Spending Bill Includes Sweeping New Copyright and Trademark Measures

On Monday, 21 December, U.S. Congressional leaders passed a spending bill that included government funding and folded in several controversial intellectual property provisions that will expand the rights of intellectual property owners. These provisions include the Copyright Alternative in Small-Claims Enforce (CASE) Act, the Trademark Modernization Act (TMA), and a law to make certain illegal streaming a felony. The bill was signed into law by President Trump on 27 December 2020.

The CASE Act establishes a new administrative tribunal in the United States Copyright Office where individuals could bring infringement claims for limited damages to be adjudicated by experts. Successful copyright holders could be awarded up to US$15,000 per work infringed and US$30,000 total. While some argue the bill would allow independent artists to bring infringement claims easily and decrease litigation expenses, critics assert that such a tribunal potentially would deny jury trials and subject defendants to monetary penalties for engaging in ordinary online behavior.

Additionally, the bill’s TMA provision allows third parties to request the United States Patent and Trademark Office to reject trademark applications from “trademark trolls” or others who apply for registrations for marks they never plan to use and to present evidence in new re-examination and expungement proceedings. The provision also would afford plaintiff trademark owners a rebuttable presumption of irreparable harm in infringement actions, making it easier to obtain an injunction. This provision’s effective date appears to be one year after enactment.

Finally, the bill includes a provision making it a felony for illegal commercial streaming of publicly performed works punishable by a fine and years in prison. The law, as written in the bill, applies only to organizations and piracy services, not individuals, non-commercial activities, or good-faith business disputes. Advocates of the bill believe more stringent penalties will push the Department of Justice to pursue illegal streaming enterprises.

These changes will be implemented through rules and regulations over the next year. Copyright owners will want to examine the efficacy of the new “small claims” procedure as it is rolled out. Trademark owners will need to re-assess their enforcement, clearance, and maintenance procedures in light of these new provisions.

By David Byer, John Cotter, and Brittany Kaplan

Copyright © 2020, K&L Gates LLP. All Rights Reserved.