Rule2022-04747
Small Claims Procedures for Library and Archives Opt-Outs and Class Actions
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
March 9, 2022
Effective
April 8, 2022
Issuing agencies
Library of CongressCopyright Office, Library of Congress
Abstract
The U.S. Copyright Office is issuing a final rule regarding the procedures for libraries and archives to preemptively opt out of proceedings before the Copyright Claims Board ("CCB") and the procedures for a party before the CCB with respect to a class action proceeding, under the Copyright Alternative in Small-Claims Enforcement Act of 2020.
Full Text
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<title>Federal Register, Volume 87 Issue 46 (Wednesday, March 9, 2022)</title>
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[Federal Register Volume 87, Number 46 (Wednesday, March 9, 2022)]
[Rules and Regulations]
[Pages 13171-13177]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-04747]
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LIBRARY OF CONGRESS
U.S. Copyright Office
37 CFR Part 223
[Docket No. 2021-4]
Small Claims Procedures for Library and Archives Opt-Outs and
Class Actions
AGENCY: U.S. Copyright Office, Library of Congress.
ACTION: Final rule.
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SUMMARY: The U.S. Copyright Office is issuing a final rule regarding
the procedures for libraries and archives to preemptively opt out of
proceedings before the Copyright Claims Board (``CCB'') and the
procedures for a party before the CCB with respect to a class action
proceeding, under the Copyright Alternative in Small-Claims Enforcement
Act of 2020.
DATES: Effective April 8, 2022.
FOR FURTHER INFORMATION CONTACT: Megan Efthimiadis, Assistant to the
General Counsel, by email at <a href="/cdn-cgi/l/email-protection#9ef3fbf8eadefdf1eee7ecf7f9f6eab0f9f1e8"><span class="__cf_email__" data-cfemail="8be6eeedffcbe8e4fbf2f9e2ece3ffa5ece4fd">[email protected]</span></a>, or by telephone at
202-707-8350.
SUPPLEMENTARY INFORMATION:
I. Background
The Copyright Alternative in Small-Claims Enforcement (``CASE'')
Act of 2020 \1\ directs the Copyright Office to establish the Copyright
Claims Board (``CCB'' or ``Board''), a voluntary tribunal within the
Office comprised of three Copyright Claims Officers who have the
authority to render determinations on certain copyright claims for
economic recoveries under the statutory threshold. The Office issued a
notification of inquiry (``NOI'') to describe the CASE Act's
legislative background and regulatory scope and to ask for public input
on various topics, including procedures addressing a preemptive opt-out
from CASE Act proceedings (sometimes referred to as a ``blanket'' opt-
out) for libraries and archives and procedures associated with class
actions.\2\
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\1\ Public Law 116-260, sec. 212, 134 Stat. 1182, 2176 (2020).
\2\ 86 FR 16156, 16161 (Mar. 26, 2021).
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The CASE Act directs the Register of Copyrights to ``establish
regulations allowing for a library or archives that does not wish to
participate in proceedings before the Copyright Claims Board to
preemptively opt out of such proceedings.'' \3\ The Office must also
``compile and maintain a publicly available list of the libraries and
archives that have successfully opted out of proceedings.'' \4\ For a
library or archives to qualify for the opt-out election, it must
``qualif[y] for the limitations on exclusive rights under section 108
[of title 17].'' \5\
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\3\ 17 U.S.C. 1506(aa)(1).
\4\ Id. at 1506(aa)(2)(B).
\5\ Id. at 1506(aa)(4). The CASE Act's legislative history does
not discuss the library and archives opt-out provision. See
generally S. Rep. No. 116-105 (2019); H.R. Rep. No. 116-252 (2019)
(Note, the CASE Act's legislative history cited is for the CASE Act
of 2019, S. 1273, 116th Cong. (2019) and H.R. 2426, 116th Cong.
(2019), bills largely identical to the CASE Act of 2020, with the
notable exception that these earlier bills did not contain the
libraries and archives opt-out provision.).
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The CASE Act also provides that the Register will establish
procedures for a claimant ``who receives notice of a pending class
action, arising out of the same transaction or occurrence as the
proceeding before the [CCB],'' including the ability to ``opt out of
the class action.'' \6\
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\6\ Id. at 1507(b)(2).
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In September 2021, the Office published a notice of proposed
rulemaking (``NPRM'') addressing these two topics in depth and
proposing regulatory language.\7\ In both the NOI and the NPRM, the
Office requested input on issues related to the library and archives
opt-out provision, including whether the Office should require proof or
a certification that a library or archives qualifies for the opt-out
provision; which entities, principals, or agents should be allowed to
opt out on behalf of a library or archives; how the opt-out provision
would apply to library or archives employees; and various transparency
and functionality considerations related to publication of the opt-out
list.\8\ Commenters were generally supportive of the proposed library
and archives opt-out regulations, with the exception of the matters
addressed below. No parties submitted comments addressing the proposed
class action regulations. The Office is adopting the proposed class
action regulations with one clarification, as addressed below.
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\7\ 86 FR 49273 (Sept. 2, 2021). Comments received in response
to the March 26, 2021 NOI and September 2, 2021 NPRM are available
at <a href="https://www.regulations.gov/document/COLC-2021-0001-0001/comment">https://www.regulations.gov/document/COLC-2021-0001-0001/comment</a>
and <a href="https://www.regulations.gov/document/COLC-2021-0003-0001/comment">https://www.regulations.gov/document/COLC-2021-0003-0001/comment</a>, respectively. References to these comments are by party
name (abbreviated where appropriate), followed by ``Initial NOI
Comments,'' ``Reply NOI Comments,'' or ``NPRM Comments,'' as
appropriate.
\8\ 86 FR at 16161; 86 FR at 49274-77.
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II. Discussion of Final Rule
A. Proof or Certification Requirement
The Office's NPRM proposed ``that any library or archives that
wishes to take advantage of the statutory preemptive opt-out option
must submit a self-certification that it `qualifies for the limitations
on exclusive rights under section 108.' '' \9\ The Office explained
that this requirement could ``balance the statutory goals of ensuring
that only libraries and archives are eligible for a preemptive opt-out,
but also that any such entities are not overly burdened in effecting
that election.'' \10\ The proposed rule also stated that any library or
archives that had preemptively opted out, but that was later found by a
federal court not to qualify for the section 108 exemptions, must
report this finding to the CCB.
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\9\ 86 FR at 49275 (quoting 17 U.S.C. 1506(aa)(4)).
\10\ Id.
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The Office proposed to ``accept the facts stated in the opt-out
submission unless they are implausible or conflict with sources of
information that are known to the Office or the general public.'' \11\
Where the CCB believes that an entity does not qualify under section
108, that entity would be not be added to, or would be removed from,
the preemptive opt-out list. The Office would communicate its
conclusion and
[[Page 13172]]
its intent to either not add the entity to the preemptive opt-out list
or remove the entity from that list, as appropriate, and would allow
the entity to provide evidence supporting its qualification for the
exemption within 30 days of the Office's notice. If the Register
subsequently determined that the evidence submitted by the entity
demonstrates that it qualifies under section 108, the entity would be
added to, or remain on, the preemptive opt-out list. The Office did not
believe it was necessary to establish a separate adversarial procedure
for parties to raise objections that an entity does not qualify for the
opt-out list. Instead, the Office proposed that claimants who attempt
to bring claims against entities on the opt-out list can assert that
the subject library or archives does not qualify for inclusion on the
list as part of their claim.\12\
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\11\ Id. The Office takes a similar approach regarding
registration materials. See U.S. Copyright Office, Compendium of
U.S. Copyright Office Practices sec. 309.2 (3d ed. 2021).
\12\ 86 FR at 49275.
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The American Association of Law Libraries (``AALL'') supported the
self-certification provision, calling it ``[e]specially important'' and
one of several provisions that would allow easy and efficient opt-out
elections.\13\ The Niskanen Center also favored the self-certification
approach, but suggested that any misrepresentation penalty ``should not
necessarily be perjury,'' and that ``any sanctions applied (other than
the loss [of] the ability to opt out as defined in the Act) should only
be applied if the party which made the misrepresentations did so with
intent.'' \14\ Those representing libraries generally favored self-
certification.\15\
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\13\ Am. Ass'n of L. Libraries (``AALL'') NPRM Comments at 1;
see also AALL Initial NOI Comments at 1-2 (noting that a self-
certification approach ``would meet the intent of Congress, which
created the preemptive opt out for libraries and archives to provide
an efficient and streamlined system for these organizations and to
help them avoid the burdensome administrative requirements of
repeated opt outs'').
\14\ Niskanen Ctr. NPRM Comments at 2.
\15\ See Library Copyright All. (``LCA'') Initial NOI Comments
at 1; Univ. of Mich. Library Initial NOI Comments at 4-5; Univ.
Infor. Pol'y Officers Reply NOI Comments at 1.
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Other commenters suggested that a self-certification process could
lead to fraudulent opt-outs \16\ and would lead to delays or
inefficiencies in CCB proceedings.\17\ Some supported a requirement
that any certifications be made under penalty of perjury.\18\ Commenter
Terisa Shoremount suggested that the Office should require ``a short
statement about the entity's basis for qualifying to opt-out,'' which
would ``not overly burden libraries and archives'' and ``could promote
efficiency,'' and that publishing this statement on the library and
archives opt-out list would increase transparency by ``allow[ing]
potential adversaries to view why the library or archive[s] qualifies
which may reduce opt-out status challenges.'' \19\
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\16\ Sci. Fiction & Fantasy Writers of Am. (``SFWA'') NPRM
Comments at 2 (noting the potential for ``internet pirates'' who
``describe themselves as `libraries' or `archives' to mislead
others'' who would try to use the blanket opt-out option); Am.
Intell. Prop. L. Ass'n (``AIPLA'') Initial NOI Comments at 4;
Copyright Alliance, Am. Photographic Artists, Am. Soc'y for
Collective Rights Licensing, Am. Soc'y of Media Photographers, The
Authors Guild, CreativeFuture, Digital Media Licensing Ass'n,
Graphic Artists Guild, Indep. Book Pubs. Ass'n, Music Creators N.
Am., Nat'l Music Council of the U.S., Nat'l Press Photographers
Ass'n, N. Am. Nature Photography Ass'n, Prof. Photographers of Am.,
Recording Academy, Screen Actors Guild-Am. Fed. of Television and
Radio Artists, Soc'y of Composers & Lyricists, Songwriters Guild of
Am. & Songwriters of N. Am. (``Copyright Alliance et al.'') Reply
NOI Comments at 12-13 (``To allow entities to `self-certify' would
be to open the blanket opt out to any entity claiming to be a
`library' or `archive' regardless of whether the entity rightfully
qualifies under the law.'').
\17\ SFWA NPRM Comments at 2-3 (noting concerns that a library
or archives would remain on the opt-out list until the CCB makes a
final determination on its status and suggesting that the CCB should
thus ``refrain from granting the entity status as a library or
archives until such time as it has conducted an adequate review'').
\18\ Copyright Alliance et al. NPRM Comments at 6; SFWA Reply
NOI Comments at 2 (agreeing that a ``library or archive[s] should
make its declaration under penalty of perjury''); see also Copyright
Alliance et al. Initial NOI Comments at 20 (supporting that opt-out
elections should be made under ``penalty of perjury'' and voicing
concerns related to courts relying on an Office or CCB section 108
qualification determination).
\19\ Terisa Shoremount NPRM Comments at 1.
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Regarding the effect of a library or archives opt-out election, the
Copyright Alliance et al. reiterated their position that these
regulations ``should clearly state that a determination by the CCB
regarding an entity's status as qualifying for the blanket opt-out
should not be relied upon or cited by any other tribunal in determining
whether an entity qualifies for the exceptions under section 108 of the
Copyright Act.'' \20\ Relatedly, the Science Fiction and Fantasy
Writers of America ``strongly advise[d] the [Office] to refrain from
placing entities on its list of libraries and archives that have opted
out if those entities are parties in ongoing, related litigation,''
believing that the Office's ``official acceptance of a self-serving
declaration could well affect the course of the judicial proceeding and
its ultimate outcome.'' \21\ They also suggested that the CCB hold its
determination in abeyance pending ongoing litigation.\22\ The Niskanen
Center also argued that the Copyright Office should make a
determination whether a library or archives qualifies for the opt-out,
``only if there are no appeals pending in superior courts.'' \23\
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\20\ Copyright Alliance et al. NPRM Comments at 6; see also MPA,
RIAA & SIIA Reply NOI Comments at 10; LCA Reply NOI Comments at 1-2.
\21\ SFWA NPRM Comments at 3.
\22\ Id.
\23\ Niskanen Ctr. NPRM Comments at 2.
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The Office believes that the proposed rule addresses commenters'
concerns, but will include additional language in the final rule
confirming that the CCB's acceptance of an entity's representation
regarding its qualifying status for the preemptive opt-out does not
constitute a legal conclusion by the Board or the Register of
Copyrights for any other purpose. To help identify the entity that is
seeking to preemptively opt out of CCB proceedings, the final rule will
require those libraries and archives that have a website to supply its
address. Further, the requirement that any certification must be made
under the penalty of perjury will deter fraudulent submissions and, as
the federal law prohibiting fraudulent statements made to legislative
agencies already requires an intent element,\24\ the rule does not need
to include a separate intent element.
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\24\ See 18 U.S.C. 1001(a)(3) (requiring that any document
submitted to a Federal agency must be ``materially false,
fictitious, or fraudulent statement or entry'' and made ``knowingly
and willfully'' to be a violation).
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Finally, the Office does not believe the CCB should be required to
hold its determination in abeyance pending appeals or ongoing
litigation where an entity's qualification for section 108 is at issue.
As federal litigation can take years to resolve, waiting for a court's
final determination regarding a purported library's or archives' status
could undercut the CCB's value in resolving claims expeditiously.
Further, if the court ultimately determines that the entity qualifies
under section 108, the claimant could unwittingly exhaust the statute
of limitations. Importantly, the preemptive opt-out option only offers
a jurisdictional privilege--respondents can always opt out of
individual CCB proceedings, even if the preemptive opt-out is
unavailable.
B. Opt-Out Election Timing and Disqualification
The NPRM stated that ``[t]he Office will accept the facts stated in
the opt-out submission unless they are implausible or conflict with
sources of information that are known to the Office or the general
public.'' \25\ The proposed rule also required that ``any library or
archives that has been found by a federal court not to qualify for the
[[Page 13173]]
section 108 exemptions report this information to the CCB.'' \26\ In
either circumstance, the entity would not be added to, or would be
removed from, the opt-out list. Third parties would not be allowed to
challenge an entity's preemptive opt-out eligibility, separate from the
CCB's adjudication of individual cases.\27\ The proposed rule did not
address the review criteria and standards by which a library or
archives would not be added to, or be removed from, the opt-out list;
the effect of such a removal; and the timing of an opt-out election
with respect to active claims.
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\25\ 86 FR at 49275 (citing U.S. Copyright Office, Compendium of
U.S. Copyright Office Practices sec. 309.2 (3d ed. 2021)).
\26\ Id.
\27\ Id.
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Commenters asked the Office to clarify rules related to these
issues. With respect to the CCB's review criteria and standards, the
Science Fiction and Fantasy Writers of America and Copyright Alliance
et al. each noted that the proposed regulations do not identify either
a review scope or timeline for when the CCB must evaluate whether a
library or archives qualifies for the preemptive opt-out list.\28\ The
Copyright Alliance et al. suggested that ``[t]he scope of the review in
the library and archives opt-out context would require, at minimum, a
simple web search to determine if in fact the facts stated within the
opt-out submission are in conflict with information known to the
public'' and, further, that ``it is unclear whether the Office intends
to take a ministerial approach, whereby it places entities on the list
with little or no initial review, with the ability to later remove
those entities, or if it will take a more proactive and discretionary
approach, whereby it reviews each submission before placing the entity
on the list, while maintaining the ability to remove the entity later
if appropriate,'' concluding that it preferred the ``proactive and
discretionary'' approach.\29\ The Science Fiction and Fantasy Writers
of America stated that the CCB should have ``the affirmative obligation
to look beyond a mere declaration in determining whether an entity is
actually a library or archive[s] in accordance with case law when there
is strong reason to do so.'' \30\ Taking an opposing view, the Niskanen
Center stated that it would be preferable for an Article III court to
handle disputes over whether an entity qualifies as a library or
archives under section 108, elaborating that ``[t]his would reduce the
burden on the Copyright Office and the Copyright Claims Board and keep
implementation within the spirit of the CASE Act as an efficient-low
cost tool to apply legal questions which have already been answered by
a traditional Article III Court.'' \31\
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\28\ Copyright Alliance et al. NPRM Comments at 7-8; SFWA NPRM
Comments at 2-3.
\29\ Copyright Alliance et al. NPRM Comments at 7-8.
\30\ SFWA NPRM Comments at 2.
\31\ Niskanen Ctr. NPRM Comments at 2 (citing 17 U.S.C.
1506(a)(1)).
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The Office concludes that the NPRM approach, which neither requires
nor prohibits the CCB from inquiring into whether an entity qualifies
for the library and archives preemptive opt-out election, appropriately
balances efficiency and the need to exclude ineligible entities. The
aforementioned additional requirement to supply a website address in
the opt-out request should help flag whether the entity qualifies for
the opt-out election. The Office also believes that a modification to
the procedure when a claim is filed against a library or archives that
is included on the opt-out list will result in greater efficiency. As
provided in the proposed rule, a claim filed against a library or
archives on the opt-out list must assert material factual allegations
supporting the claimant's challenge to the subject library's or
archives' eligibility for the opt-out. The Office concludes that an
initial determination of the viability of the challenge will be made
prior to approving service of the claim. If the claim's allegations are
colorable, the CCB will notify the subject library or archives of the
challenge to its qualifications and the library or archives will have
an opportunity to provide evidence supporting its qualifications before
a decision is made either to dismiss the claim against it or to remove
the entity from the opt-out list and allow the claim to proceed to
compliance review. As mentioned above, if the claim is permitted to
proceed, the respondent entity would retain the ability to opt out of
the individual claim.
The Copyright Alliance et al. also suggested that an entity that
fails to notify the Office of changes in relevant contact information
or of a determination by a court that it does not qualify for the
section 108 exceptions should lose the ability to preemptively opt out
of CCB proceedings.\32\ The Office believes that the CCB should be able
to take any reasonable corrective action against a library or archives
that violates these regulations. While a court determination that a
library or archives does not qualify for section 108 will automatically
result in the entity losing the ability to preemptively opt out of CCB
proceedings, the CCB may determine that willful conduct or a pattern of
noncompliance should have the same result, although the Office
anticipates that such corrective action would be necessary on only rare
occasions.
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\32\ Copyright Alliance et al. NPRM Comments at 7 (``In both
instances, we believe that the ability of a library or archives to
take advantage of the privilege of a blanket opt-out should be
contingent on it properly notifying the Office of these changes.'').
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With respect to the effective date of a preemptive opt-out
election, the Copyright Alliance et al. argued that such an election
should be ``forward reaching only'' and not apply to any claims that
were filed against the libraries or archives before they were added to
the publicly available list, even if their opt-out request had been
filed and was under review prior to the filing date of the claim.\33\
Alternatively, they asked that ``any fees paid by the claimant [be]
refundable if a claimant is prevented from moving forward with a case
because the library or archives had filed to preemptively opt-out
before the case was filed.'' \34\
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\33\ Copyright Alliance et al. NPRM Comments at 6.
\34\ Id.
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The Office agrees that the statute clearly provides that the opt-
out election for library and archives should be prospective, because it
is a preemptive election. Accordingly, once a claimant has been
instructed by the CCB to serve its claim on an entity, a subsequently-
approved preemptive opt-out election would not apply to that claim. In
that situation, the library or archives would be in the same position
as other respondents and may file an opt-out election to the specific
claim.
The Office acknowledges that there could be a situation where an
entity has submitted its application for the preemptive opt-out, but
its application is filed or still under review at a point in time when
the CCB has already found a claim against the entity to be compliant
and has instructed the claimant to serve the claim. To provide for this
limited situation, the Office concludes that the effective date of a
preemptive opt-out request is the date the library or archives is added
to the public opt-out list.\35\ Practically, this should not pose a
significant problem for entities seeking to opt out preemptively, as
the opt-out election will become available to libraries and
[[Page 13174]]
archives in advance of the CCB beginning operations, and new opt-out
elections should be available on the opt-out list as soon as feasible
after receipt. Where a prospective claimant is concerned that a library
or archives may have submitted an opt-out election that has not yet
posted on the CCB's website, that claimant is encouraged to contact the
CCB before submitting its claim to inquire whether the entity has
submitted a form that has not yet been processed.
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\35\ The one exception to this rule is for library and archives
opt-out elections that are filed before this rule's effective date.
These filings will become effective on the rule's effective date.
This provision will allow more time for libraries and archives to
make an opt-out election far in advance of the date that the CCB
commences operations, and addresses the circumstance that the
libraries and archives opt-out form will be posted before this
rule's effective date.
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If a library or archives intends to opt out of a pending claim and
also submit a preemptive opt-out for future claims, it should file both
a proceeding-specific opt-out election and a preemptive opt-out
election.
C. Transparency and Public Content
The NPRM reflected the Office's agreement with commenters who
suggested that ``the list of libraries and archives that have
preemptively opted out of participating in CCB proceedings should be
made publicly available online.'' \36\ Responding to the NPRM, parties
commented that this information should be made available as soon as
possible after being received.\37\ The Niskanen Center further
suggested allowing users to view the entire opt-out list or to allow
users to search the list ``by state, locality, type of institution
(e.g. library or archive), and name.'' \38\ AALL suggested that the
Office include more information ``geared toward potential
respondents,'' which would help law librarians and legal information
professionals learn about the opt-out provision and their rights and
responsibilities with the CCB.\39\ AALL also offered ``to collaborate
with the Copyright Office on a webinar or other educational programs
and resources about the CCB geared toward law librarians and legal
information professionals.'' \40\
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\36\ 86 FR at 49276 (citing AIPLA Initial NOI Comments at 5;
Copyright Alliance et al. Initial NOI Comments at 21; LCA Initial
NOI Comments at 2.).
\37\ See Copyright Alliance et al. NPRM Comments at 8
(``Ideally, the list will be updated immediately upon any changes .
. . but, at minimum, the list should be updated biweekly.'');
Niskanen Ctr. NPRM Comments at 3 (``The Copyright Office and the
Copyright Claims Board should make as available as possible the
opportunity to look up which institutions have chosen the blanket
opt-out option.'').
\38\ Niskanen Ctr. NPRM Comments at 3.
\39\ AALL NPRM Comments at 1-2.
\40\ Id. at 2.
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Although these comments do not require amendments to the proposed
rule, the Office can confirm that the initial opt-out list will be
posted in Portable Document Format (``PDF''), and will be updated as
soon as feasible after receipt and approval of preemptive opt-out
requests. While the PDF will be generally searchable, the Office hopes
to add additional search functionality in any future technology
updates. The Office also confirms that there will be information
provided on its website and on the CCB website, when it launches,
directed at libraries and archives regarding the availability and
impact of the preemptive opt-out. Finally, the Office and CCB welcome
collaboration on CCB-related outreach from all interested parties.
D. Application of the Opt-Out Provision to Persons Acting in the Course
of Their Employment
The CASE Act is silent on whether a library's or archives'
preemptive opt-out election would apply to those entities' employees
acting within the scope of their employment. In its NOI, the Office
asked whether it ``should include a regulatory provision that specifies
that this opt out extends to employees operating in the course of their
employment.'' \41\ Those representing libraries and archives supported
such a rule, while other commenters were opposed. The NPRM as issued
did not include a provision to extend a preemptive opt-out election to
libraries' or archives' employees.
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\41\ 86 FR at 16161.
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In initially declining to include such a provision, the Office made
two observations. The first was that under agency law, ``[u]nless an
applicable statute provides otherwise, an actor remains subject to
liability although the actor acts as an agent or an employee, with
actual or apparent authority, or within the scope of employment.'' \42\
The second observation was that ``the CASE Act expressly offers the
preemptive opt-out option to `a library or archives,' but does not
mention employees.'' \43\
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\42\ 86 FR at 49276.
\43\ Id.
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Numerous commenters representing libraries or archives responded
that the final rule should extend a library's or archives' preemptive
opt-out election to cover those entities' employees.\44\ The Office
received many similar comments from employees of libraries or archives
stating that these employees ``would be unable to perform [their]
regular daily work for fear of liability if the preemptive opt out does
not cover employees.'' \45\
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\44\ See, e.g., Ass'n of Am. Univs. NPRM Comments at 1; Ass'n of
Southeastern Research Libraries, Greater Western Library All., &
Triangle Research Libraries Network (``ASERL, GWLA & TRLN'') NPRM
Comments at 1; Univ. Infor. Pol'y Officers NPRM Comments at 2-4; LCA
NPRM Comments at 1-3; Univ. of Cal., Berkeley NPRM Comments at 1-3;
Harvard Library NPRM Comments at 1-3; Software Preservation Network
NPRM Comments at 2; Univ. of Mich. Library NPRM Comments at 1-2;
Univ. of N. Tex. Libraries NPRM Comments at 1; Niskanen Ctr. NPRM
Comments at 3-4; Cornell Univ. Library NPRM Comments at 1-2; Univ.
of N.C., Chapel Hill Univ. Libraries NPRM Comments at 1; Kent State
Univ. Libraries NPRM Comments at 1; Duke Univ. Libraries NPRM
Comments at 1-2; SPARC NPRM Comments at 1; Univ. of Nebraska NPRM
Comments at 1; AALL NPRM Comments at 1; Va. Commonwealth Univ.
Libraries NPRM Comments at 1-2; Columbia Univ. Libraries NPRM
Comments at 1; UCLA Library NPRM Comments at 1-2; SAA NPRM Comments
at 1-2; Univ. of Fla. Smathers Libraries NPRM Comments at 1; see
also Fight for the Future NPRM Comments. While one commenter voiced
their opposition ``to permitting pre-emptive opt-outs by individuals
who claim to be employees of websites responsible for uploading
infringing material,'' SFWA NPRM Comments at 3-4, it is unclear
whether this party is addressing a specific circumstance related to
libraries or archives who provide materials online or to libraries'
and archives' employees, generally.
\45\ See, e.g., Abby Nafziger NPRM Comments at 1. But see, e.g.,
Abby Adams NPRM Comments at 1 (omitting this claim from an otherwise
substantially similar comment).
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Other comments in support of including a regulatory provision
addressing employees broadly made three legal arguments. The first
argument responded to the Office's observations regarding agency law
and generally asserted that including employees with a library's or
archives' opt out is consistent with other principles of agency law or
is not inconsistent with agency law.\46\ In particular, commenters
noted that under agency law, a principal (the library or archives) may
delegate a privilege (the preemptive opt-out election) to an agent
(their employees).\47\ University Information Policy Officers reasoned
that, ``[i]f participation in the CASE Act adjudication process is akin
to liability, then the opt[-]out provision in the statute is akin to a
privilege, and `[m]ost privileges held by a principal may be delegated
to an agent.' '' \48\ University Information Policy Officers further
argued that an agent whom the principal directed to perform an act
cannot be held liable if a principal cannot be held liable for
performing the act, even if the
[[Page 13175]]
agent would have been liable absent this privilege.\49\
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\46\ See id. at 1-2 (stating that agency law does not prohibit a
principal from taking action on behalf of an agent, so extending the
preemptive opt out to employees is not inconsistent with agency
law); Ass'n of Am. Univs. NPRM Comments at 1 (stating that the
inclusion of employees would be consistent with agency law
principles ``[i]n accordance with current law''); Univ. Infor. Pol'y
Officers NPRM Comments at 3.
\47\ See Univ. Infor. Pol'y Officers NPRM Comments at 3; LCA
NPRM Comments at 1-2; Univ. of Cal. Libraries NPRM Comments at 2-3;
Software Preservation Network NPRM Comments at 2.
\48\ Univ. Infor. Pol'y Officers NPRM Comments at 3 (citing 2
Restatement (Third) of Agency at 122).
\49\ See id. (citing PYCA Indus., Inc. v. Harrison Cty. Waste
Water Mgmt. Dist., 177 F.3d 351, 378-79 (5th Cir. 1999)).
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It is not clear, however, the extent to which the cited agency law
principles are applicable here. The preemptive opt-out is not a
liability privilege, but rather a privilege to preemptively elect to
decline using an optional tribunal to determine a copyright claim, or a
``jurisdictional privilege.'' \50\ As the University of California
correctly observes, the CASE Act does not ``create[ ] or waive[ ] tort
liability by principals or agents.'' \51\ Considering the differences
between liability privileges and jurisdictional privileges, principles
governing the former may not be determinative for the latter.
---------------------------------------------------------------------------
\50\ Univ. of Cal., Berkeley NPRM Comments at 3 (emphasis
omitted).
\51\ Id.
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The second argument made by commenters supporting extending a
library's or archives' opt-out election to its employees related to the
texts of both the CASE Act and the Copyright Act. Commenters recognized
that the libraries' and archives' preemptive opt-out provision does not
have any associated legislative history,\52\ including in the Office's
Copyright Small Claims policy report, as it was a late amendment in the
legislative process.\53\ Therefore, they made legislative intent
arguments based on the statutory language itself.
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\52\ UCLA Library NPRM Comments at 1; Univ. Infor. Pol'y
Officers NPRM Comments at 2; Software Preservation Network NPRM
Comments at 2.
\53\ No earlier copyright small claims bill contained this
provision. See S. 1273, 116th Cong.; H.R. 2426, 116th Cong.; H.R.
3945, 115th Cong. (2017); H.R. 6496, 114th Cong. (2016).
---------------------------------------------------------------------------
The CASE Act does not define a ``library'' or ``archives'' as
including or excluding employees, but applies the preemptive opt-out
election to ``any library or archives, respectively, that qualifies for
the limitations on exclusive rights under section 108.'' \54\
Commenters argued that since section 108's limitations include
employees,\55\ the CASE Act's libraries and archives opt-out election
should also apply to them.\56\ It is true that some of section 108's
provisions, namely 108(a), (f)(1), and (g), explicitly extend statutory
exemptions to a library's or archives' employees, but section 108(h),
which exempts enforcement of certain display or performance rights,
does not do so.\57\ At the same time, the exempted actions described in
this subsection cannot occur without the employees of libraries or
archives engaging in the described conduct at the direction of their
employers. While not conclusive, in light of the above, the treatment
of employees in section 108 overall weighs in favor of extending the
preemptive opt-out to employees in the CASE Act.
---------------------------------------------------------------------------
\54\ 17 U.S.C. 1506(aa)(4).
\55\ Id. at 108(a), (f)(1).
\56\ Niskanen Ctr. NPRM Comments at 3-4; Univ. of Cal. Libraries
NPRM Comments at 2 n.8.
\57\ 17 U.S.C. 108(h).
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Finally, commenters made related policy arguments that Congress
must have intended to include employees, even though the statutory text
is not explicit.\58\ Many noted that libraries and archives must act
through their employees,\59\ with the University of Michigan Library
suggesting that ``there is no alleged infringement claim against a
library that cannot also be brought against a corresponding library
employee.'' \60\ Other commenters suggested that excluding employees
from a library's or archives' preemptive opt-out election would result
in those libraries and archives becoming involved in CCB proceedings on
behalf of those employees and would effectively ``hollow out the
important intentional protections'' for libraries and archives in both
the Copyright Act and CASE Act.\61\ As the University of North Texas
Libraries observed, ``[e]ven in cases where [a claim before the CCB]
does not move forward or where an individual chooses to opt out, the
employing library will not truly be able to opt out of CCB proceedings
when considerable education and support for individual employees is
necessary to navigate this process.'' \62\ The Niskanen Center argued
that it would be ``inconsistent'' with the CASE Act's intent ``to
create a situation where an employee's failure to opt-out might result
in the library becoming enmeshed in the CCB proceeding on behalf of the
employee'' \63\ and that this would result in libraries needing to
``monitor [their] employees' receipt of any claims or rely on employees
to report claims themselves, a burdensome process with a high risk of
potential error.'' \64\
---------------------------------------------------------------------------
\58\ See, e.g., Univ. Infor. Pol'y Officers NPRM Comments at 2-
3; LCA NPRM Comments at 2-3; Univ. of Cal., Berkeley NPRM Comments
at 1; Harvard Library NPRM Comments at 2; Software Preservation
Network NPRM Comments at 2; Univ. of Minn. Libraries NPRM Comments
at 1; Univ. of N. Tex. Libraries NPRM Comments at 1; ASERL, GWLA &
TRLN NPRM Comments at 1; Niskanen Ctr. NPRM Comments at 3-4; Cornell
Univ. Library NPRM Comments at 1-2; Univ. of N.C., Chapel Hill Univ.
Libraries NPRM Comments at 1.
\59\ See, e.g., Harvard Library NPRM Comments at 2; Univ. of N.
Tex. Libraries NPRM Comments at 1; Univ. of Minn. Libraries NPRM
Comments at 2; Kent State Univ. Libraries NPRM Comments at 1; Univ.
of Mich. Library NPRM Comments at 1.
\60\ Univ. of Mich. Library NPRM Comments at 1.
\61\ SPARC NPRM Comments at 1; see also Ass'n of Am. Univs. NPRM
Comments at 1; Univ. of Mich. Library NPRM Comments at 1; Univ. of
Minn. Libraries NPRM Comments at 1; ASERL, GWLA & TRLN NPRM Comments
at 1; Univ. of Cal. Libraries NPRM Comments at 1-2.
\62\ Univ. of N. Tex. Libraries NPRM Comments at 1.
\63\ Niskanen Ctr. NPRM Comments at 4 (quoting LCA Reply NOI
Comments at 1).
\64\ Id.
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Upon careful evaluation of the statute and the submitted comments,
the Office is amending the proposed rule to include a regulatory
provision addressing libraries' and archives' employees. The final rule
will apply a library's or archives' opt-out election to both the
qualifying entity and its employees for activities within the
employee's scope of employment. As discussed above, neither the
statutory language nor agency law conclusively resolves this issue. The
Office therefore looks to the underlying intent and purpose of the CASE
Act as a whole for guidance.
As the Office noted in its March 2021 NOI, ``the statute and
legislative history make clear that Congress intended for the Office to
implement regulations in a manner that `furthers the goals of the
Copyright Claims Board' and establishes an `efficient, effective, and
voluntary' forum for parties to resolve their disputes.'' \65\ While
excluding employees of a library or archives from the preemptive opt-
out would allow employee respondents to make their own independent
decisions about participating in a CCB proceeding, commenters have made
a persuasive argument that a rule that excluded employees acting within
the scope of their employment would be generally inconsistent with the
section 108 provisions extending statutory exemptions to a library or
archive's employees, and that the absence of a rule extending the
library's or archives' opt-out to its employees could create
unnecessary complexity, uncertainty, and inefficiency, frustrating
Congress's goals in passing the CASE Act. Pursuant to its authority
under 17 U.S.C. 702 and 1510(a)(1) and to best reflect the statute's
goals in light of the rulemaking record, the Office is adopting final
regulations to address the statutory ambiguity with respect to whether
the library and archives preemptive opt-out election applies to
employees acting within the course of their employment. In doing so,
the Office is exercising its plenary regulatory authority to ``develop
clear regulations and practices to fairly balance the competing
interests of
[[Page 13176]]
claimants and respondents,'' as Congress directed.\66\
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\65\ 86 FR at 16157 (quoting 17 U.S.C. 1510(a)(2)(A) and H.R.
Rep. No. 116-252, at 23 (footnotes omitted)).
\66\ See Nat'l Cable & Telecomms. Ass'n v. Brand X internet
Servs., 545 U.S. 967, 980 (2005) (``[A]mbiguities in the statutes
within an agency's jurisdiction to administer are delegations of
authority to the agency to fill the statutory gap in reasonable
fashion.'') (citing Chevron, U.S.A., Inc. v. Nat. Res. Def. Council,
Inc., 467 U.S. 837 (1984)).
---------------------------------------------------------------------------
Without such a rule, a library or archives that decided to
preemptively opt-out of CCB proceedings could, by law or practice,\67\
be compelled to participate in such a proceeding to defend an employee
who did not timely opt out individually. Employees could also be placed
in a position where they had to defend employer-directed actions on
their own. Further, the practical effect of not including employees in
the opt-out election of the library or archives could result in
unnecessary costs for copyright owners; for example, infringement
claims that would normally be jointly brought against the library or
archives and its employee could end up being brought in two venues--
federal court and the CCB. The Office concludes that it is more
consistent with Congressional intent behind the CASE Act to allow
libraries and archives to opt out of CCB proceedings without their
employees who acted within the scope of their employment being required
to file their own proceeding-specific opt-out elections.
---------------------------------------------------------------------------
\67\ Kent State University Libraries stated that ``many state
institutions, including in the State of Ohio, are legally obligated
to represent state employees acting in the scope of their
employment.'' Kent State Univ. Libraries NPRM Comments at 1.
---------------------------------------------------------------------------
E. Class Action Opt-Out Elections
Finally, the rule clarifies the CCB's ability to resolve conflicts
between CCB proceedings and class action cases arising from the same
transaction or occurrence in which a party before the CCB is a class
member. If a party in an active proceeding ``receives notice of a
pending or putative class action, arising out of the same transaction
or occurrence'' as the claim at issue before the CCB, the CASE Act
requires that party to make an affirmative choice between two
options.\68\ The party must either ``opt out of the class action, in
accordance with regulations established by the Register'' or ``seek
dismissal'' of the CCB proceeding in writing.\69\ The NPRM proposed a
14-day period for a party to either opt out of the class action and
provide notice to the CCB or to seek dismissal of the CCB
proceeding.\70\ The Office received no comments on this portion of the
proposed rule and promulgates it without amendment. The Office realizes
that the statute does not state what will happen if the party fails to
adhere to its obligation to make a timely election. The Office has
therefore added a provision clarifying that the CCB may take necessary
corrective action to resolve the conflicting proceedings, which may
include dismissal of the proceeding without prejudice or, in
circumstances where the class action has reached a determination on the
merits, vacating any CCB determination. This provision is consistent
with the goal of the statute to ensure the timely resolution of a
conflicting proceeding by requiring a party to choose to continue with
either the CCB proceeding or the class action. It is also consistent
with the CCB's power to control its own proceedings, but not federal
court class action proceedings.
---------------------------------------------------------------------------
\68\ 17 U.S.C. 1506(q)(3).
\69\ Id. at 1507(b)(2), 1506(q)(3).
\70\ 86 FR at 49277.
---------------------------------------------------------------------------
List of Subjects in 37 CFR Part 223
Copyright, Claims.
Final Regulations
For the reasons set forth in the preamble, the Copyright Office
amends chapter II, subchapter B, of title 37 Code of Federal
Regulations to read as follows:
CHAPTER II--U.S. COPYRIGHT OFFICE, LIBRARY OF CONGRES
SUBCHAPTER B--COPYRIGHT CLAIMS BOARD, LIBRARY OF CONGRESS
0
1. Under the authority of 17 U.S.C. 702, 1510, the heading for
subchapter B is revised to read as set forth above.
0
2. Part 223 is added to read as follows:
PART 223--OPT-OUT PROVISIONS
Sec.
223.1 [Reserved]
223.2 Libraries and archives opt-out procedures.
223.3 Class action opt-out procedures.
Authority: 17 U.S.C. 702, 1510.
Sec. 223.1 [Reserved]
Sec. 223.2 Libraries and archives opt-out procedures.
(a) Opt-out notification. (1) A library or archives that wishes to
preemptively opt out of participating in Copyright Claims Board
(``Board'') proceedings under 17 U.S.C. 1506(aa) may do so by
submitting written notification to the Board. The notification shall
include a signed certification under penalty of perjury that the
library or archives qualifies for the limitations on exclusive rights
under 17 U.S.C. 108 and the signatory is authorized to submit the form
on the library's or archives' behalf.
(2) The submission described in paragraph (a)(1) of this section
shall list the name and physical address of each library or archives to
which the preemptive opt out applies and shall be signed by a person
with the authority described in paragraph (c) of this section. The
library or archives must also provide a point of contact for future
correspondence, including phone number, mailing address, email address,
and the website for the library or archives, if available, and shall
notify the Board if this information changes.
(3) The Board will accept the facts stated in the submission
described in paragraphs (a)(1) and (2) of this section, unless they are
implausible or conflict with sources of information that are known to
the Board or the general public.
(4) If a Federal court determines that an entity described in
paragraph (a)(1) of this section does not qualify for the limitations
on exclusive rights under 17 U.S.C. 108, that entity must inform the
Board of that determination and submit a copy of the relevant order or
opinion, if any, within 14 days after the determination is issued.
(5) An opt-out under this section extends to a library's or
archives' employee acting within the scope of their employment, but
does not apply to employees acting outside the scope of their
employment.
(6) For the purposes of this section, the date that the Board posts
the opt-out information on its website as described in paragraph (b) in
this section, after receipt, review, and processing of the notification
described in paragraph (a)(1) of this section, will be the effective
date of a preemptive opt-out election, except as noted in paragraph
(a)(9) of this section. A preemptive opt-out election would not compel
dismissal of a claim that the Board has found compliant and has
instructed the claimant to serve prior to the preemptive opt-out
election's effective date. A respondent who wishes to opt out of such a
claim should follow the directions provided in the served notice of
proceeding.
(7) A library or archives may rescind its preemptive opt-out
election under this section, such that it may participate in Board
proceedings, by providing written notification to the Board in
accordance with such instructions as are provided on the Board's
website. A library or archives may submit no more than one such
rescission notification per calendar year.
(8) The notification described in paragraph (a)(1) of this section
shall be submitted to the Board in accordance
[[Page 13177]]
with such instructions as are provided on the Board's website.
(9) A blanket opt-out filed by a library or archives in accordance
with this section before April 8, 2022 will become effective on that
date.
(b) Review of eligibility. (1) The Board will maintain on its
website a public list of libraries and archives that have preemptively
opted out of Board proceedings pursuant to paragraph (a) of this
section. If the Register determines pursuant to paragraph (a)(3) of
this section that an entity does not qualify for the preemptive opt-out
provision, the Office will communicate to the point of contact
described in paragraph (a)(2) of this section that it does not intend
to add the entity to the public list, or that it intends to remove the
entity from that list, and will allow the entity to provide evidence
supporting its qualification for the exemption within 30 days. If the
entity fails to respond, or if, after reviewing the entity's response,
the Register determines that the entity does not qualify for the
limitations on exclusive rights under section 108 of title 17, the
entity will not be added to, or will be removed from, the public list.
If the Register determines that the entity qualifies for the
limitations on exclusive rights under 17 U.S.C. 108, the entity will be
added to, or remain on, the libraries and archives preemptive opt-out
list. This provision does not limit the Office's ability to request
additional information from the point of contact listed pursuant to
paragraph (a)(2) of this section. Any determination by the Register
regarding an entity's qualifying status for the limitations on
exclusive rights under 17 U.S.C. 108 is solely for the purpose of
determining whether the entity qualifies for the preemptive opt out
under 17 U.S.C. 1506(aa) and does not constitute a legal conclusion for
any other purpose.
(2) A claimant seeking to assert a claim under this section against
a library or archives, or an employee thereof acting within the scope
of their employment, that it believes is improperly included on the
public list described in paragraph (b)(1) of this section may file the
claim with the Board pursuant to 17 U.S.C. 1506(e) and applicable
regulations. The claimant must include in its statement of material
facts allegations sufficient to support that belief. If the Board
concludes, as part of its review of the claim pursuant to 17 U.S.C.
1506(f), that the claimant has alleged facts sufficient to support the
conclusion that the library or archives is ineligible for the
preemptive opt-out, and the Register agrees, the library or archives
will be given an opportunity to provide evidence supporting its
qualification for the exemption pursuant to paragraph (a)(1) of this
section. If the Register concludes that evidence submitted by the
library or archives supports its qualification for the exemption, the
library or archives will remain on the list and the associated
allegations by the claimant will be stricken. After these allegations
are stricken, if the claim includes other respondents and is otherwise
complaint, the claimant will be instructed to proceed with service of
the claim against the remaining respondents. Alternatively, if the
Register concludes that the library or archives has not provided
evidence to support its qualification for the exemption, the library or
archives will be removed from the blanket opt-out list. The claim will
then be reviewed for compliance and, if found to be compliant, the
claimant will be instructed to proceed with service of the claim.
(3) Any determination made under paragraph (b)(1) of this section
shall constitute final agency action under 5 U.S.C. 704.
(c) Authority. Any person with the authority to take legally
binding actions on behalf of a library or archives in connection with
litigation may submit a notification under paragraph (a) of this
section.
(d) Multiple libraries and archives in a single submission. A
notification under paragraph (a) of this section may include multiple
libraries or archives in the same submission if each library or
archives is listed separately in the submission and the submitter has
the authority described under paragraph (c) of this section to submit
the notification on behalf of all libraries and archives included in
the submission.
Sec. 223.3 Class action opt-out procedures.
(a) Opt-out or dismissal procedures. Any party to an active
proceeding before the Copyright Claims Board (``Board'') who receives
notice of a pending or putative class action, arising out of the same
transaction or occurrence as the proceeding before the Board, in which
the party is a class member, shall either opt out of the class action
or seek written dismissal of the proceeding before Board within 14 days
of receiving notice of the pending class action. If a party seeks
written dismissal of the proceeding before the Board, upon notice to
all claimants and counterclaimants, the Board shall dismiss the
proceeding without prejudice.
(b) Filing requirement. A copy of the notice indicating a party's
intent to opt out of a class action proceeding must be filed with the
Board within 14 days after the filing of the notice with the court.
(c) Timing. The time periods provided in paragraphs (a) and (b) of
this section may be extended by the Board for good cause shown.
(d) Failure to notify Board. If a party fails to make a timely
election under paragraph (a) of this section, the Board is authorized
to take corrective action as it deems necessary, which may include
dismissal of a pending claim before the Board with or without
prejudice, notifying the class action court of any final determination
by the Board, or vacating a final determination of the Board. The Board
may, in its discretion, direct a party to show cause why action under
paragraph (a) of this section was not taken.
Dated: February 28, 2022.
Shira Perlmutter,
Register of Copyrights and Director of the U.S. Copyright Office.
Approved by:
Carla D. Hayden,
Librarian of Congress.
[FR Doc. 2022-04747 Filed 3-8-22; 8:45 am]
BILLING CODE 1410-30-P
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