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22 December 2020CopyrightMuireann Bolger

US Congress bill unveils controversial IP changes

A $2.3 trillion spending bill passed by the  US Congress yesterday will see sweeping changes to US IP law, including a controversial new law that makes unauthorised commercial streaming of copyrighted material a felony.

The coronavirus relief bill, which provides for $900 million in economic relief from the COVID-19 pandemic and $1.4 trillion in federal spending, will also see the creation of a small claims court at the US copyright office, and the alteration of trademark and patent procedures—proposals that significantly expand the rights and powers of IP owners.

Controversial implications for streamers

In a far-reaching measure, the bill stipulates that large-scale streaming services that provide unauthorised access to copyrighted material could face penalties of up to 10 years in prison.

Sponsors of the bill wanted to close a "loophole" that held that while reproducing and distributing copyrighted works is a felony, streaming them is only a misdemeanour.

Lead sponsor Senator Tillis said that the discrepancy is “particularly harmful to the US economy because streaming has become the most common form of criminal copyright infringement”.

Critics of the bill, such as consumer advocacy groups,  Electronic Frontier Foundation and  Fight for the Future, argue that the measure could fine ordinary internet users for engaging in everyday online behaviour such as sharing memes.

Evan Greer, deputy director of Fight for the Future, said in a  statement that the new measure was based on a “terribly written law that will threaten ordinary Internet users with huge fines for everyday online activity” and that it was “absurd that lawmakers included these provisions in a must-pass spending bill”.

Small copyright claims board

In a second far-reaching measure, the bill puts forward a lengthy proposal to set up a copyright claims board within the  US Copyright Office, to weigh in on disputes valued below $30,000.

The move comes after the  Copyright Alternative in Small-Claims Enforcement Act of 2020, held that litigation in federal courts is too costly for many copyright holders and that a panel within the copyright office would be more appropriate to manage such claims.

According to the bill, the cases before the board will have damages capped at $15,000 per claim or $30,000 for the entire case. This approach will also allow for remote participation without an attorney, according to proponents of the measure, including Senator Tillis.

However, a group of 18 organisations, including tech trade groups, advocacy organisations and multiple library associations, have expressed concerns that these procedures could be abused by copyright trolls or used to silence free speech.

These groups  claimed that the proposals could “have negative impacts on small and medium-sized businesses, creators, libraries and their patrons, students, teachers, educational institutions, religious institutions, fan communities, internet users, and free expression,” in a letter first reported by  Protocol earlier this month.

Changes to trademark law

The spending bill also includes the  Trademark Modernization Act, which creates a process to challenge issued trademarks. The bill permits people to file petitions arguing that a mark has never been used in commerce in connection with the goods and services listed in the registration and that they should be removed or reexamined.

Under the new stipulation, third parties can submit evidence during the trademark examination giving reasons as to why the application should be refused.

Other changes to trademark law will allow the director of the  US. Patent and Trademark Office "the authority to reconsider, and modify or set aside, a decision of the Trademark Trial and Appeal Board”. This measure has been rolled out to protect the board from the type of  constitutional challenge it presently faces in  US v Arthrex (2020).

The Act also enables a plaintiff in a trademark case to rebut a presumption of irreparable harm upon a finding of infringement when seeking a permanent injunction. Courts have previously held that trademark owners are not entitled to such a presumption, according to Supreme Court case law.

Finally, the bill includes changes to patent law that were passed by the Senate earlier this month, requiring the  US Food and Drug Administration's Purple Book, which provides information about biologic drugs, to include more information about patents.

Approved by the Senate by a vote of 92-6 shortly before midnight last night, after passing the House 359-53 earlier in the evening, the bill will now go to President Trump for his signature.

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