[Federal Register Volume 86, Number 168 (Thursday, September 2, 2021)]
[Proposed Rules]
[Pages 49273-49278]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-18567]


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LIBRARY OF CONGRESS

 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: Notice of proposed rulemaking.

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SUMMARY: The U.S. Copyright Office is issuing a notice of proposed 
rulemaking regarding the procedures for libraries and archives to 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. The Office invites public comments on this proposed rule.

DATES: Comments on the proposed rule must be made in writing and 
received by the U.S. Copyright Office no later than 11:59 p.m. EDT on 
October 4, 2021.

ADDRESSES: For reasons of government efficiency, the Copyright Office 
is using the regulations.gov system for the submission and posting of 
public comments in this proceeding. All comments are therefore to be 
submitted electronically through regulations.gov. Specific instructions 
for submitting comments are available on the Copyright Office website 
at https://www.copyright.gov/rulemaking/case-act-implementation/library-opt-out. If electronic submission of comments is not feasible 
due to lack of access to a computer and/or the internet, please contact 
the Office using the contact information below for special 
instructions.

FOR FURTHER INFORMATION CONTACT: Kevin. R. Amer, Acting General Counsel 
and Associate Register of Copyrights, by email at [email protected], 
or John R. Riley, Assistant General Counsel, by email at 
[email protected]. Each can be contacted 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 disputes with a 
low economic value. This notice of proposed rulemaking is being issued 
subsequent to a notification of inquiry (``NOI'') published in the 
Federal Register on March 26, 2021, which describes in detail the 
legislative background and regulatory scope of the present rulemaking 
proceeding.\2\ The Office assumes the reader's familiarity with that 
document.
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    \1\ Public Law 116-260, sec. 212, 134 Stat. 1182, 2176 (2020).
    \2\ 86 FR 16156, 16161 (Mar. 26, 2021). Comments received in 
response to the March 26, 2021 NOI are available at https://www.regulations.gov/document/COLC-2021-0001-0001/comment. References 
to these comments are by party name (abbreviated where appropriate), 
followed by ``Initial NOI Comments'' or ``Reply NOI Comments,'' as 
appropriate.
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A. Library and Archives Opt Out

    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\ In 
promulgating these regulations, the Register cannot ``charge a library 
or archives a fee to preemptively opt out of proceedings'' or ``require 
a library or archives to renew a decision to preemptively opt out of 
proceedings.'' \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)(3)(A).
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    For the purposes of this provision, the statute defines ``library'' 
and ``archives'' as ``any library or archives, respectively, that 
qualifies for the limitations on exclusive rights under section 108 [of 
title 17].'' \6\ Section 108 provides exemptions to libraries and 
archives from liability for infringement for specified uses of 
copyrighted works.\7\ For an institution to qualify for those 
exemptions, ``the collections of the library or archives [must be] . . 
. open to the public, or . . . available not only to researchers 
affiliated with the library or archives or with the institution of 
which it is a part, but also to other persons doing research in a 
specialized

[[Page 49274]]

field.'' \8\ The Copyright Act of 1976's House Report provides further 
guidance as to entities intended to be covered by section 108:
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    \6\ Id. at 1506(aa)(3)(B). 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 S. 1273, 116th 
Cong. (2019) and H.R. 2426, 116th Cong. (2019), the CASE Act of 
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.
    \7\ 17 U.S.C. 108.
    \8\ Id. at 108(a).

    Under [section 108], a purely commercial enterprise could not 
establish a collection of copyrighted works, call itself a library 
or archive, and engage in for-profit reproduction and distribution 
of photocopies. Similarly, it would not be possible for a non-profit 
institution, by means of contractual arrangements with a commercial 
copying enterprise, to authorize the enterprise to carry out copying 
and distribution functions that would be exempt if conducted by the 
non-profit institution itself.\9\
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    \9\ H.R. Rep. No. 94-1476 at 74.

    The House Report also notes that there may be factual questions as 
to whether libraries or archives ``within industrial, profitmaking, or 
proprietary institutions'' would qualify for the section 108 
exemptions.\10\
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    \10\ Id.
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    In the NOI, the Office requested input on issues related to this 
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.\11\
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    \11\ 86 FR 16156, 16161 (Mar. 26, 2021).
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1. Proof or Certification Requirement
    The NOI asked ``whether a library or archive should be required to 
prove or certify its qualification for the limitations on exclusive 
rights under 17 U.S.C. 108, and thus for the blanket opt-out 
provisions, and how to address circumstances where a library or 
archives ceases qualifying.'' \12\ In comments submitted in response, 
parties representing libraries and archives generally opposed any 
requirement that these entities be required to ``prove'' that they 
qualify for the opt-out provision, although some supported a provision 
allowing such an entity to self-certify that it qualifies.\13\ 
University Information Policy Officers and the University of Michigan 
Library stated that libraries and archives should not be required to 
certify their eligibility to submit a preemptive blanket opt-out 
notice.\14\ AALL suggested 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.'' \15\ LCA initially 
stated a library should only have to ``assert'' that it qualifies for 
the preemptive opt-out,\16\ but subsequently suggested that self-
certification would be preferred to a ``legal conclusion by a 
government agency that could influence a court's assessment concerning 
a library's qualification for section 108.'' \17\
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    \12\ Id.
    \13\ Am. Ass'n of L. Libraries (``AALL'') NOI Initial Comments 
at 1-2; Univ. of Mich. Library NOI Initial Comments at 4-5.
    \14\ Univ. of Mich. Library NOI Initial Comments at 4-5 
(``Libraries and archives that would like to file a blanket opt-out 
notice should be able to do so without needing to certify or prove 
their eligibility for uses authorized by [section] 108.''); Univ. 
Infor. Pol'y Officers NOI Reply Comments at 1 (``libraries and 
archives should not be required to certify their eligibility in 
order to submit a preemptive blanket opt-out''); see also Library 
Copyright All. (``LCA'') NOI Initial Comments at 1 (``it should be 
sufficient for the library merely to assert that it meets the 
statutory definition''). But see LCA NOI Reply Comments at 2 
(contemplating a preemptive opt out by ``certification'').
    \15\ AALL NOI Initial Comments at 1-2; see also Anthony Davis 
Jr. & Katherine Luce NOI Initial Comments at 2 (``If there is any 
approval or certification process, it should not be onerous.'').
    \16\ LCA NOI Initial Comments at 1.
    \17\ LCA NOI Reply Comments at 2.
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    Others suggested that an entity that preemptively opts out of CCB 
proceedings should be required to submit a formal affidavit or 
declaration ``certifying its limitations on exclusive rights under 17 
U.S.C 108,'' \18\ potentially under penalty of perjury.\19\ The 
Copyright Alliance et al. argued that Congress granted libraries and 
archives ``a unique and narrow exception'' to preemptively opt out of 
CCB proceedings, but in doing so ``expressly limited the ability to 
blanket opt out to [libraries or archives] that qualify for the 
limitations on exclusive rights under section 108.'' \20\ They voiced 
concern that ``[t]o 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.'' \21\
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    \18\ Ben Vient NOI Initial Comments at 3 (suggesting that ``[t]o 
the extent that a Library or Archive wishes to keep its opt-out 
current with the CCB, it is the responsibility of the Library or 
Archive to have an Affidavit or Declaration with its current 
Director on file with the CCB'').
    \19\ Am. Intell. Prop. L. Ass'n (``AIPLA'') NOI Initial 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 United States, 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.'') NOI Initial Comments at 20; Science 
Fiction and Fantasy Writers of Am. NOI Reply Comments at 2 (agreeing 
that ``a library or archive should make its declaration under 
penalty of perjury''); see also Ass'n of Medical Illustrators 
(``AMI'') NOI Initial Comments at 2 (``AMI strongly believes that 
[library and archives] proof and certification should be a 
requirement in implementing regulations'' and ``that the pre-emptive 
opt-out is not available to companies that are not eligible for 
Internal Revenue Code of 501[(c)(3)] treatment.'').
    \20\ Copyright Alliance et al. NOI Reply Comments at 12-13.
    \21\ Id.
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    AIPLA, AMI, and Copyright Alliance et al. proposed creating a 
Copyright Office or CCB procedure, separate from a CCB infringement 
proceeding, to review the qualifying status of a library or archives 
for the preemptive opt-out.\22\ AIPLA recommended that ``anyone, 
including members of the public not bringing a CCB claim, should be 
permitted to challenge whether a Library or Archive qualifies [for the 
preemptive opt-out].'' \23\ Both AIPLA and the Copyright Alliance et 
al. proposed that the Office could charge a fee for its review, with 
AIPLA suggesting that the fee would be ``paid by the challenger if the 
CCB finds the Library or Archive still qualifies, and by the Library or 
Archive if it is found not to comply.'' \24\ Finally, the Copyright 
Alliance et al. proposed an additional mechanism to address any 
circumstance where a federal court ``determines that [an] entity does 
not qualify for the section 108 exceptions.'' \25\ In such a case, the 
court or the entity would be directed to notify the Copyright Office of 
that determination, so that it can ``reconsider the blanket opt-out 
after giving the [library or archive] an opportunity to defend its 
status.'' \26\
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    \22\ AIPLA NOI Initial Comments at 4 (``If the CCB determines 
that a Library or Archive does not qualify, the Library or Archive 
should be permitted to appeal the decision for a fee.''); Copyright 
Alliance et al. NOI Initial Comments at 20 (same); see AMI NOI 
Initial Comments at 2 (``Library/Archive opt-outs should be open to 
public comment and granted for 2-year terms then must reapply (using 
the 1201 exemption to prohibition on of circumvention process as a 
potential model).''); Univ. of Mich. Library NOI Initial Comments at 
4-5 (``If a challenge is later brought concerning the library or 
archive's status, the library or archive should be required to 
attest that they meet the requirements of [section] 108(a)(2).'').
    \23\ AIPLA NOI Initial Comments at 4.
    \24\ Id.; Copyright Alliance et al. NOI Initial Comments at 20 
(``If it is determined that a [library or archives] does not 
qualify, the [library or archives] should be permitted to request 
that the Board reconsider the decision for a fee (the statute only 
precludes a fee to apply not to request reconsideration when the 
application is denied).'').
    \25\ Copyright Alliance et al. NOI Initial Comments at 20; see 
Copyright Alliance et al. NOI Reply Comments at 14-15 (same); AIPLA 
NOI Initial Comments at 4 (same).
    \26\ Copyright Alliance et al. NOI Initial Comments at 20; see 
Copyright Alliance et al. NOI Reply Comments at 14-15 (same); AIPLA 
NOI Initial Comments at 4 (same).

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[[Page 49275]]

    LCA did not support such a proceeding and suggested that, if a 
claimant wishes to bring a claim against a library or archives that it 
believes is ineligible for the preemptive opt out, ``it can file a 
claim against the library [or archives] with the CCB, indicating that 
the library [or archives] does not meet the [statutory] requirements.'' 
\27\ At that point, the CCB would review the claim to determine ``[i]f 
the claimant has pled facts sufficient to indicate that the library no 
longer is eligible for the preemptive opt-out,'' and then the library 
or archives would be served with a notice and given the opportunity to 
either ``demonstrate that it still meets the requirements of section 
108(a)(2), and thus that its preemptive opt-out is still valid,'' or 
``opt out of that specific proceeding before the CCB.'' \28\
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    \27\ LCA NOI Reply Comments at 2.
    \28\ Id.
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    While taking no position on any process for a library or archives 
to ``claim status . . . for purposes of a blanket opt-out,'' the Motion 
Picture Association (``MPA''), Recording Industry Association of 
America (``RIAA''), and Software and Information Industry Association 
(``SIIA'') asked that the Office make clear that ``an entity's status 
as a library or archive for the purposes of opting out under CCB does 
not constitute a determination of that entity's status, and may not be 
cited as such, in any other context, including in any federal court 
litigation in which that entity is a party.'' \29\
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    \29\ MPA, RIAA & SIIA NOI Reply Comments at 10. LCA agreed that 
any status determination by the CCB should not be treated as 
conclusive in other contexts. LCA NOI Reply Comments at 1-2.
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    The Office appreciates parties' comments on this issue and proposes 
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.'' \30\ In doing so, the Office is seeking to 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. The proposed rule also 
requires that any library or archives that has been found by a federal 
court not to qualify for the section 108 exemptions report this 
information to the CCB.
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    \30\ 17 U.S.C. 1506(aa)(4); see also Copyright Alliance et al. 
NOI Reply Comments at 13 n.7 (opposing ``comments suggesting that 
the CCB adopt a definition of `libraries and archives' other than 
the definition articulated in the statute''). But see Authors 
Alliance NOI Initial Comments at 5-6 (``[W]e support a broad 
definition of `libraries and archives' which encompasses public 
libraries, academic libraries, and other institutions serving the 
essential functions of preservation and sharing of knowledge and 
culture.'').
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    The 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.\31\ If the Office 
believes, based on such information, that the entity does not qualify, 
it will communicate to the submitter that it does not intend to add the 
entity to the preemptive opt-out list, or that it intends to remove the 
entity from the list. The Office will then allow the submitter to 
provide evidence supporting the entity's eligibility for the exemption. 
If, after reviewing the submitter's response, the Office determines 
that the entity does not qualify, the entity will not be added to, or 
will be removed from, the opt-out list. If the Office determines that 
the entity does qualify, it will be added to, or remain on, the opt-out 
list. Either determination will constitute final agency action under 
the Administrative Procedure Act.\32\
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    \31\ See U.S. Copyright Office, Compendium of U.S. Copyright 
Office Practices sec. 309.2 (3d ed. 2021) (noting the Office's 
similar approach regarding registration materials).
    \32\ 5 U.S.C. 704 (``[F]inal agency action for which there is no 
other adequate remedy in a court [is] subject to judicial 
review.'').
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    With respect to the requests to allow third-party challenges to an 
institution's eligibility for the preemptive opt-out, the Office does 
not believe it is necessary to establish a procedure for such 
objections that is separate from the CCB's adjudication of individual 
cases. Such a process would seem an inefficient use of CCB resources, 
as it could require the Board to resolve disputes over an institution's 
status before any claim involving that entity has been made. As LCA 
notes, a party seeking to bring a claim against a library or archives 
that it believes is improperly on the opt-out list may file the claim 
with the CCB and include the basis for that conclusion in its statement 
of material facts. If, during its review of the claim for compliance, 
the CCB determines that the claimant has alleged facts sufficient to 
support the conclusion that the entity is ineligible, and the claim is 
otherwise compliant, the claimant will be instructed to proceed with 
service on the respondent. The respondent may then include in its 
response any information to demonstrate that it is in fact eligible, or 
may simply opt out of that specific proceeding. This process is 
reflected in the proposed rule.
2. Persons Allowed To Opt Out on Behalf of a Library or Archives
    The NOI noted the ``prevalence of libraries and archives being 
located within larger entities, including but not limited to colleges 
and universities or municipalities,'' and asked for comments 
``addressing which entities, principals, or agents may opt out on 
behalf of a library or archive, as well as any associated 
certifications.'' \33\ In response, LCA suggested that Office 
regulations ``should allow the preemptive opt-out to be exercised by 
any person with the authority to take legally binding actions on behalf 
of the library in connection to litigation.'' \34\ In its view, 
``[b]ecause some institutions have many different libraries, an 
official with the appropriate authority should be able in a single 
process to exercise a preemptive opt-out with respect to all the 
eligible libraries within the institution.'' \35\ Other commenters 
suggested that those with the authority to opt out on behalf of a 
library or archives could include a university agent (e.g., a dean or 
associate dean) or a law firm.\36\ In contrast, AMI contended that ``a 
blanket, institutional opt-out should not be permitted'' for 
institutions or entities containing multiple archives.\37\ It argued 
that ``[o]therwise, a complainant could have wasted money and time on 
bringing an action only to have it thrown out because of ignorance of 
institutional affiliation of the infringer.'' \38\
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    \33\ 86 FR at 16161.
    \34\ LCA NOI Initial Comments at 2.
    \35\ Id.
    \36\ AALL NOI Initial Comments at 2; Anthony Davis Jr. & 
Katherine Luce NOI Initial Comments at 2.
    \37\ AMI NOI Initial Comments at 2.
    \38\ Id.
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    The Copyright Alliance et al. suggested that ``[w]here a [library 
or archives] is a part of a larger entity or municipality, such that 
the [library or archives] itself does not have standing to act as a 
Claimant or Counterclaimant on its own, only the larger entity or 
municipality should be allowed to request the blanket opt-out on behalf 
of the [library or archives].'' \39\ They reasoned that ``[b]ecause the 
blanket opt-out could have major implications on an entity's exposure 
to liability, only the larger entity should be allowed to make that 
decision.'' \40\
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    \39\ Copyright Alliance et al. NOI Initial Comments at 20.
    \40\ Id. at 20-21.
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    The Office generally agrees with LCA's suggestion that the 
authority to exercise the preemptive opt-out option should belong to 
any person with the authority to take legally binding actions

[[Page 49276]]

on behalf of the library or archives in connection with litigation. The 
proposed rule incorporates this approach. Further, the Office does not 
see a reason to restrict the ability of an institution to submit a 
preemptive opt-out election for multiple libraries or archives that are 
the part of the same institution in a ``blanket'' fashion, as the use 
of separate submissions would be inefficient. Any preemptive opt-out 
election involving multiple libraries or archives, however, should 
separately identify the individual libraries or archives to be covered 
by the submission, as opposed to providing a collective description 
such as ``all university libraries.''
3. Transparency and Functionality Considerations
    The NOI also asked for input ``related to transparency and 
functionality considerations with respect to its publication of the 
list of libraries and archives that have opted out.'' \41\ Commenters 
generally agreed that the list of libraries and archives that have 
preemptively opted out of participating in CCB proceedings should be 
made publicly available online.\42\ The Office agrees, and accordingly 
the list will be maintained on the Board's website.
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    \41\ 86 FR at 16161.
    \42\ AIPLA NOI Initial Comments at 5; Copyright Alliance et al. 
NOI Initial Comments at 21; LCA NOI Initial Comments at 2.
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4. Application of the Opt-Out Provision to Persons in the Course of 
Their Employment
    Finally, the NOI asked parties to comment on whether the Office 
``should include a regulatory provision that specifies that this opt 
out extends to employees operating in the course of their employment.'' 
\43\ Commenters representing libraries and archives supported such a 
rule, while others, including AIPLA and the Copyright Alliance et al., 
were opposed.
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    \43\ 86 FR at 16161.
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    Several library representatives, including AALL, LCA, the 
University of Illinois Library, and the University of Michigan Library, 
advocated for regulatory language specifying that the preemptive opt-
out extends to employees operating in the course of their 
employment.\44\ As the University of Illinois Library argued, ``[t]o 
provide a blanket opt out provision to libraries yet potentially hold 
employees liable when working within the scope of their employment 
would be to eviscerate the opt out provision as the work of libraries 
is conducted by its employees, not by the entity itself.'' \45\ AALL 
and the University of Illinois Library also argued that such a rule 
would be consistent with section 108,\46\ which extends the statutory 
exemption for libraries and archives to ``any of [the library or 
archives'] employees acting within the scope of their employment.'' 
\47\
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    \44\ LCA NOI Reply Comments at 3; Univ. Information Policy 
Officers NOI Reply Comments at 1; AALL NOI Initial Comments at 2; 
Anonymous II NOI Initial Comments at 1; Anthony Davis Jr. & 
Katherine Luce NOI Initial Comments at 2; LCA NOI Initial Comments 
at 3; Univ. of Ill. Library NOI Initial Comments at 2; Univ. of 
Mich. Library NOI Initial Comments at 5; see also Science Fiction 
and Fantasy Writers of Am. NOI Reply Comments at 2 (noting ``no 
major objection to such a provision, so long as care is taken to 
ensure that employees are in fact acting within the proper scope of 
their employment and within the limits of 17 U.S.C. 108'').
    \45\ Univ. of Ill. Library NOI Initial Comments at 2.
    \46\ AALL NOI Initial Comments at 2 (citing 17 U.S.C. 108); 
Univ. of Ill. Library NOI Initial Comments at 2 (citing 17 U.S.C. 
108(a)).
    \47\ 17 U.S.C. 108(a).
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    In further support of this approach, LCA argued that Copyright 
Claims Attorneys, who are required to review new claims to ensure that 
they comply with the statute and regulations, would be able ``to 
determine from the claim's statement of material facts whether the 
respondent is a library employee acting with the scope of her 
employment.'' \48\ It argued that such a determination would be no less 
burdensome ``than to determine whether the respondent is a library that 
has preemptively opted-out of CCB proceedings, a Federal or State 
governmental entity,'' or ``a person or entity residing outside of the 
United States''--all of which have to be determined by the CCB before a 
claimant is allowed to proceed with a claim.\49\ LCA also contended 
that ``[a]n employee's failure to opt out inevitably would result in 
the library becoming enmeshed in the CCB proceeding on behalf of the 
employee, contrary to Congressional intent.'' \50\
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    \48\ LCA NOI Reply Comments at 3.
    \49\ Id. (citing 17 U.S.C. 1504(d)(3)-(4)).
    \50\ Id.
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    The Copyright Alliance et al. opposed extending the libraries and 
archives opt-out provision to employees acting within the scope of 
their employment, arguing that ``[w]hether an employee is operating 
within the course/scope of their employment is a question of fact that 
would need to be determined by the CCB.'' \51\ In their view, ``[i]f a 
claim is brought against an individual, and it is determined that the 
claim should have been brought against a [library or archive] that has 
elected to blanket opt-out, the claim should be dismissed.'' \52\ AIPLA 
added that ``[d]eciding whether to extend a blanket opt out to 
employees would require the CCB to determine ex parte whether employees 
were operating in the course of their employment,'' which would 
``undermine the adversarial process and increase the burden on the 
CCB.'' \53\ Both AIPLA and the Copyright Alliance et al. noted that 
individuals who are potentially acting within the scope of their 
employment have the option to opt out of any CCB proceeding 
themselves.\54\ AMI similarly stated that it did not support 
regulations that would ``shield [a library or archive] employee from 
liability for actions taken in the course of employment, but not 
authorized or otherwise sanctioned by the employer [who opted out of 
the CCB process].'' \55\
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    \51\ Copyright Alliance et al. NOI Initial Comments at 21.
    \52\ Id.
    \53\ AIPLA NOI Initial Comments at 5.
    \54\ Id. at 5; Copyright Alliance et al. NOI Reply Comments at 
14.
    \55\ AMI NOI Initial Comments at 2.
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    The Office appreciates libraries' and archives' concerns that 
excluding individual employees from the blanket opt-out could hamper 
the effectiveness of that option by allowing parties to assert claims 
against such individuals when claims against the institution are 
unavailable. Such a rule, however, seemingly appears inconsistent with 
principles of agency law and would require a broad interpretation of 
the statutory text. While it is generally true that an employer may be 
liable for the actions of employees taken within the scope of their 
employment,\56\ the Office does not understand that principle to mean 
that suits against the employee individually are precluded in such 
circumstances. Rather, as a general rule, ``[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.'' \57\ Moreover, 
the CASE Act expressly offers the preemptive opt-out option to ``a 
library or archives,'' but does not mention employees.\58\ The

[[Page 49277]]

proposed rule accordingly does not include such a provision.
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    \56\ See, e.g., Alan Latman & William S. Tager, Study No. 25: 
Liability of Innocent Infringers of Copyrights 145 (1958) (``The 
normal agency rule that a[n] [employer] is liable for [the 
employee's] wrongful acts committed within the scope of employment 
has been considered applicable to copyright infringement.''), 
reprinted in Subcomm. on Patents, Trademarks, and Copyrights, S. 
Comm. on the Judiciary, 86th Cong., Copyright Law Revision: Studies 
22-25 135 (Comm. Print 1960); see also, e.g., Lowry's Reports, Inc. 
v. Legg Mason, Inc., 271 F. Supp. 2d 737, 746 (D. Md. 2003) (holding 
that employer was potentially liable for the infringing conduct of 
its employee-agent).
    \57\ Restatement (Third) of Agency sec. 7.01 (Am. Law. Inst. 
2006).
    \58\ 17 U.S.C. 1506(aa)(1).
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    Some commenters further requested that the Office promulgate a 
regulation expanding the statutory opt-out provision to a library's 
larger institution,\59\ such as a university, or to that larger 
institution's students, staff, adjunct, and faculty.\60\ For the same 
reasons just noted, however, such a rule is inconsistent with the 
statute's express limitation of this option to libraries and 
archives.\61\
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    \59\ LCA NOI Initial Comments at 3.
    \60\ Anonymous II NOI Initial Comments at 1.
    \61\ 17 U.S.C. 1506(aa)(1); see also 86 FR at 16161 (``Congress 
did not establish a blanket opt-out for any entities other than 
libraries and archives, and in that case, it did so expressly by 
statute. This suggests that the Office lacks authority to adopt 
other blanket opt-outs by regulation.'' (citing Antonin Scalia & 
Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 107 
(2012); Lindh v. Murphy, 521 U.S. 320, 330 (1997))).
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5. Other Proposals
    Commenters asked the Office to promulgate certain additional rules 
related to participation by libraries and archives. First, some 
commenters requested that the Office consider including regulations 
allowing a library or archives to revoke or rescind its preemptive opt-
out election.\62\ As LCA explained, ``[a] library should not forever be 
excluded from the CCB process because it exercises a preemptive opt-out 
at one point in time.'' \63\ The Copyright Alliance et al. opposed this 
proposal.\64\ As an alternative, they suggested that the Office could 
create a ``two-tiered system,'' with the first tier allowing for 
permanent opt outs and the second tier requiring recertification of the 
institution's opt-out decision ``on an annual basis.'' \65\ In their 
view, this approach ``would have the additional benefit of acting as a 
routine `audit' to ensure that [libraries or archives] taking advantage 
of the blanket opt-out continue to meet the qualifications for section 
108.'' \66\
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    \62\ Anthony Davis Jr. & Katherine Luce NOI Initial Comments at 
2; CCIA & IA NOI Initial Comments at 4; LCA NOI Initial Comments at 
3.
    \63\ LCA NOI Initial Comments at 3.
    \64\ Copyright Alliance et al. NOI Reply Comments at 12-13.
    \65\ Id. at 13.
    \66\ Id.
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    The Office generally agrees that a library's or archives' opt-out 
election should not be irreversible. Indeed, permitting such an 
institution to rescind an opt-out would help advance the statutory goal 
of encouraging participation in the CCB system. The proposed rule 
accordingly provides that a library or archives may rescind a 
preemptive opt-out election by providing written notification of such 
intent to the CCB. To avoid potential abuses and to limit the impact on 
CCB resources, the proposed rule provides that an institution may make 
no more than one such rescission per calendar year.
    In addition, two commenters proposed rules to address errors and 
abuses involving the opt-out process. LCA urged the Office to establish 
procedures to address circumstances where a Copyright Claims Attorney 
erroneously allows a claim to proceed against a library.\67\ Verizon 
proposed regulations to ``deter those who repeatedly abuse the opt-out 
process,'' including the ability ``to impose monetary fines on bad 
faith filers'' and ``the ability to ban such parties from future use of 
the CCB process.'' \68\ While these suggestions are related to the 
preemptive opt-out provisions for libraries and archives, they are more 
appropriately considered in future CASE Act rulemakings addressing 
errors in and abuses of CCB procedures generally.
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    \67\ LCA NOI Reply Comments at 4.
    \68\ Verizon NOI Initial Comments at 3-4.
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B. Class Actions

    A CCB proceeding does not have any effect on a class action 
proceeding in federal district court.\69\ If, however, a party in an 
active CCB 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 provides that party with 
two choices.\70\ 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.\71\ In the NOI, the Office 
asked for public comment on ``any issues that should be considered 
relating to regulations governing dismissal or opt-outs related to 
class action proceedings, including specific proposed regulatory 
language.'' \72\
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    \69\ 17 U.S.C. 1507(b).
    \70\ Id. at 1506(q)(3).
    \71\ Id. at 1507(b)(2); 1506(q)(3).
    \72\ 86 FR at 16161.
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    Two parties provided comments on this issue. The Copyright Alliance 
et al. suggested that ``[i]f a party receives notice of a class action 
and wishes to dismiss the case before the CCB, the regulations should 
require that party to notify the CCB and the other parties to the case 
within 10 business days following receipt of the class action notice.'' 
\73\ The MPA, RIAA, and SIAA did not suggest a specific time period, 
but suggested that ``a party learning of a class action during the 
pendency of a proceeding and wishing to exercise a class-action opt-out 
should be required to do so promptly after learning of the class 
action.'' \74\ The MPA, RIAA, and SIIA also voiced concerns that a 
delayed opt out decision ``risks wasting effort and expense by the 
litigants and the CCB, and the amount of wasted effort and expense 
increases with the passage of time.'' \75\
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    \73\ Copyright Alliance et al. NOI Initial Comments at 21.
    \74\ MPA, RIAA & SIIA NOI Initial Comments at 9.
    \75\ Id.
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    The Office has proposed a fourteen-day period for a party to either 
opt out of the class action or to seek dismissal of the CCB proceeding. 
If a party chooses to opt out of the class action, he or she must file 
written notice of that intent with the CCB within fourteen days after 
filing such notice with the court. The proposed rule authorizes the 
Board to extend these time periods for good cause.

List of Subjects in 37 CFR Part 223

    Copyright, Claims.

Proposed Regulations

    For the reasons set forth in the preamble, the Copyright Office 
proposes to amend Chapter II, Subchapter B, of title 37 Code of Federal 
Regulations to read as follows:

SUBCHAPTER B--COPYRIGHT CLAIMS BOARD AND PROCEDURES

0
1. The heading of 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 
proceedings under 17 U.S.C. 1506(aa) may do so by submitting written 
notification to the Copyright Claims 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 section 108 of title 17.
    (2) The submission described in paragraph (a)(1) of this section 
shall list the name and physical address of each

[[Page 49278]]

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, and email address and shall notify the Copyright Claims Board 
if this information changes.
    (3) The Copyright Claims 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 Copyright Claims 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 section 108 of title 17, that entity must 
inform the Copyright Claims Board of that determination and submit a 
copy of the relevant order or opinion, if any, within fourteen days 
after the determination is issued.
    (5) A library or archives may rescind its preemptive opt-out 
election under this section, such that it may participate in Copyright 
Claims Board proceedings, by providing written notification to the 
Copyright Claims Board in accordance with such instructions as are 
provided on the Copyright Claims Board website. A library or archives 
may submit no more than one such rescission notification per calendar 
year.
    (6) The notification described in paragraph (a)(1) of this section 
shall be submitted to the Copyright Claims Board in accordance with 
such instructions as are provided on the Copyright Claims Board 
website.
    (b) Review of eligibility. (1) The Copyright Claims Board will 
maintain on its website a public list of libraries and archives that 
have preemptively opted out of Copyright Claims 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 thirty 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 be 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 
section 108 of title 17, 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.
    (2) A party seeking to assert a claim under this section against a 
library or archives that it believes is improperly included on the 
public list described in paragraph (b)(1) of this section may file the 
claim with the Copyright Claims 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 
Copyright Claims Board determines, 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 claim is otherwise 
complaint, the claimant will be instructed to proceed with service of 
the claim. The respondent may include in its response any factual 
statements in support of its eligibility.
    (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 who receives notice of a 
pending or putative class action, arising out of the same transaction 
or occurrence as the proceeding before the Copyright Claims 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 Copyright 
Claims Board within fourteen days of receiving notice of the pending 
class action. If a party seeks written dismissal of the proceeding 
before Copyright Claims Board, upon notice to all claimants and 
counterclaimants, the Copyright Claims 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 
Copyright Claims Board within fourteen 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 Copyright Claims Board for good 
cause shown.

    Dated: August 24, 2021.
Shira Perlmutter,
Register of Copyrights and Director of the U.S. Copyright Office.
[FR Doc. 2021-18567 Filed 9-1-21; 8:45 am]
BILLING CODE 1410-30-P