Studios Poised For Legislative Win With Inclusion Of Provisions For Felony Streaming Penalties In Year-End Funding Package

(Graeme Sloan/Sipa USA)(Sipa via AP Images)

The year-end, massive, 5,000-plus page government funding/Covid-19 relief package, expected to pass Congress in the next couple of days, includes a set of long-sought after copyright and content protection provisions, including a measure that will make it a felony to operate a pirated streaming service.

If the package passes, as expected, it will mark the first significant legislative win for Hollywood studios and other content companies in years. Legislation aimed at curbing piracy has been largely sidelined since 2012, when an industry push to pass legislation to try to curb online piracy, via the Stop Online Piracy Act, was met with an industry and user backlash. The bill was sidelined in the wake of a concerted internet campaign to protest the measure.

The new series of copyright and trademark provisions also have been met with some pushback from trade groups representing internet companies, but so far it hasn’t met anything like the kind of attention there was for SOPA.

The provisions in the legislation include:

Felony streaming. Establishes criminal penalties, including prison time, for those who “willfully, and for purposes of commercial advantage or private financial gain, offer or provide to the public a digital transmission service” that offers unauthorized movies and TV shows. Penalties include fines and sentences of up to three years, or five years if the offense involved one or more titles, and “the person knew or should have 7 known that the work was being prepared for 8 commercial public performance.” The punishment rises to up to 10 years for multiple offenses.

CASE Act. Creates a small claims court for copyright holders to pursue . Participation, however, will be voluntary, and any of the parties can object and pursue cases in federal district court. The cases would be heard by a Copyright Claims Board established through the Copyright Office, and, in general, any damages awards would not exceed $15,000. Parties who pursue more than one claim in a proceeding would not be able to recover more than $30,000. Parties also would in most cases bear their own costs.

Trademark modernization. Third parties would be able to submit evidence during the U.S. Patent and Trademark Office’s consideration of trademarks. It also would try to curb fraudulent foreign trademark filings.

The Motion Picture Association and other content trade groups have long sought felony streaming penalties, arguing that it brings the technology in line with other forms of unauthorized public performance. But the fight over SOPA made lawmakers on Capitol Hill skittish about jumping into another industry-against-industry fight.

In recent years, the tech industry has been on defense, particularly over issues like misinformation, piracy and antitrust, and doesn’t have the same lobbying luster that it did a decade ago. Sen. Thom Tillis (R-NC) added the streaming provision to the latest bill, but lawmakers in both parties have been supportive.

A number of public interest groups expressed concerns over the legislation, including the Internet Association and the Computer and Communications Industry Association, which wrote in a letter to congressional leaders earlier this month that they exclude the copyright provisions in a “must-pass government funding bill, and instead allow these bills to be considered through the regular order process.”

One public interest group that signed the letter, Public Knowledge, later issued a statement on Dec. 10 that acknowledged that the legislation was “narrowly tailored.”

“As a general matter, we do not see the need for further criminal penalties for copyright infringement,” senior policy counsel Meredith Rose said in a statement. “However, this bill is narrowly tailored and avoids criminalizing users, who may do nothing more than click on a link, or upload a file. It also does not criminalize streamers who may include unlicensed works as part of their streams.”

Separately, the legislation also includes and extension of a federal tax incentive for movie and TV productions, which has been known as Section 181. It allows producers to expense up to $15 million in production costs in the year they are incurred, rather than writing them off via depreciation. The extension is for five more years, through Dec. 31, 2025. That is significant in that Congress has typically renewed the provision on a year-by-year basis, sometimes doing so retroactively.

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