Walters: Slipping IP Law Changes into Spending Bill “Irresponsible”

Late last month, when Congress passed a $1.4 trillion omnibus spending package and a $900 million COVID-19 relief measure, the legislation included two major changes to intellectual property law: the CASE Act, the Protecting Lawful Streaming Act and the Trademark Modernization Act.

During their lives as bills, these measures were controversial, as proposed changes to intellectual property law often are. Whatever your feelings may be about these bills may be, ramming their passage through by including them in a spending package that Congress knew it had essentially no choice but to pass – and to pass with no further debate, no less – strikes critics as a very questionable move.

“Slipping these significant intellectual property reforms into a must-pass spending bill with no real debate is irresponsible, but this kind of legislative activity has increasingly become the norm,” attorney Larry Walters told YNOT.

Making matters worse, it’s not as though Congress was unaware that many observers had serious concerns about the measures. Walters and I first spoke about the CASE Act a little over a year ago, and the issues he cited then are now all ensconced in law.

“Numerous objections were raised by stakeholders when the CASE Act was first introduced,” Walters noted. “However, these concerns were not addressed and the Act is now federal law.”

As Walters has consistently argued about the CASE Act, “those with the resources to navigate this new administrative bureaucracy will likely opt out of the ‘Copyright small claims court’ and ask to have any dispute heard in the traditional federal court forum. But others who are unfamiliar with the novel proceedings may be stuck with a judgment of up to $30,000, with few options for appeal.”

“Content creators may find the streamlined enforcement procedures useful, particularly for pursuing infringement of unregistered works,” Walters conceded. “But it remains to be seen whether the decision-makers, who are hand-picked by the Librarian of Congress, will protect important fair use rights as required by the First Amendment.”

As for the Trademark Modernization Act, Walters opined that it “includes some useful reforms, but could have benefitted from industry input and debate.”

“Importantly, this law will not become effective until a year after adoption,” Walters explained. “The new procedures will allow for elimination of ‘deadwood’ marks from the Trademark Register which will provide better information when searching USPTO.gov for available brand names. The law will allow parties to mount administrative challenges to certain trademark registrations that have never been used, or are no longer used, in commerce, without going through an expensive court proceeding.

“This is an effort to combat an increase in fraudulent registrations based on false statements or fake specimens,” Walters continued. “Some questions remain on the burden of proof in these proceedings which may be addressed by administrative rulemaking.”

Walters said another important aspect of the Act is “the codification of the ‘letter of protest’ procedure.”

“Protest letters have customarily been accepted by the USPTO when a new application may infringe on an existing registration,” Walters noted. “The protest letter is submitted by the registered owner, in an attempt to notify the USPTO examining attorney of a potential conflict. The Act creates formal procedures for this past informal practice and establishes a time frame.”

While he recognizes there’s need for intellectual property law to be revised to keep pace with the progress of technology and human behavior, more thought, debate and careful consideration should be given to these bills before they are signed into law.

“While changes to copyright and trademark law may be long overdue in light of developments in technology and distribution digital content, the deliberative process seems to be broken,” Walters said. “With drastic changes to the Digital Millennium Copyright Act on the horizon, we hope that Congress will take a more considered approach when making these vast amendments to critical intellectual property laws.”