[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 [www.gpo.gov]
[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 [email protected], 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 https://www.regulations.gov/document/COLC-2021-0001-0001/comment 
and https://www.regulations.gov/document/COLC-2021-0003-0001/comment, 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)).
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \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