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On December 27, the Protecting Lawful Streaming Act (PLSA) was signed into law, marking a significant milestone in closing a loophole in the law that has frustrated creators, copyright owners, and law enforcement agencies for over a decade. To help better understand what the law will do—and just as importantly, what it will not—we’re here to answer your questions and provide background on the long-overdue modernization of criminal penalties for copyright infringement.
What is the PLSA?
The Protecting Lawful Streaming Act is one of three intellectual property bills signed into law in December 2020 as part of the Consolidated Appropriations Act 2021. The PLSA was enacted with widespread bipartisan, bicameral support and is the result of over a decade of efforts by Congress, the Copyright Office, law enforcement and regulatory agencies, and various stakeholder communities to close an unintended gap in copyright law that allowed large-scale commercial enterprises to avoid serious consequences for their illegal streaming of copyrighted works. By harmonizing criminal penalties for violations of the public performance rights associated with digital streaming with those that have long existed for violations of reproduction and distribution rights, the PLSA will provide prosecutors with an effective tool to deter harmful criminal activity and protect the rights of creators and copyright owners.
Why is closing the streaming loophole important?
Streaming is now the preferred avenue for illegal piracy of movies, television shows, music, sporting events, and many other types of copyrighted works, yet for many years outdated language in the law resulted in significant differences in the criminal penalties available for copyright piracy depending on the how the pirated works were being made available. A criminal enterprise making such works available for download was subject to felony charges, but the same criminal enterprise making those works available for streaming was subject only to misdemeanor penalties.
This discrepancy in available criminal penalties hampered law enforcement’s efforts to deter widespread, commercial-scale streaming infringement through criminal prosecution. As a result, rogue organizations were able to build lucrative businesses around streaming pirated movies, music, video games, books and other copyright works and escape any meaningful prosecution.
How Harmful is Streaming Piracy?
- Streaming is now the preferred avenue for illegal piracy of all types of audio and video content, accounting for 80% of all U.S. piracy
- Streaming piracy costs the U.S. economy more than $29 billion a year
- 9 million broadband users in the U.S. subscribe to illegal “on demand” streaming services
- Streaming piracy threatens creative and technology industries that employ 2.6 million Americans and provide $229 billion in annual economic benefits
How long have policymakers and stakeholders been discussing a solution to the streaming loophole?
The harmful effects of streaming piracy and the lack of appropriate criminal penalties have long been recognized by a variety of government agencies and stakeholders in the copyright community. Measures in support of and leading up to the PLSA over the past decade include:
- Law enforcement agencies’ repeated encouragement of Congress, over the course of many years, to plug the streaming loophole
- Longstanding Copyright Office support for closing the streaming loophole
- Endorsement by the Department of Justice, the Intellectual Property Enforcement Coordinator (IPEC), and the Department of Commerce Internet Policy Task Force over the course of the Obama and Trump administrations
- A report from the Federal Trade Commission warning of the harms associated with illegal streaming
- A bill in the 112th Congress proposed in response to unauthorized streaming
- At least three hearings before the House Judiciary Committee and House Subcommittee on IP, Competition, and the Internet highlighting the harms of streaming piracy, the need to protect online commerce by combating illegal streaming, and the lack of sufficient streaming penalties
How did policymakers and stakeholders come to agree on the approach and language that resulted in enactment of the PLSA?
In early 2020, Senator Thom Tillis (R-NC) brought together a diverse group of stakeholders to work towards meaningful changes to the outdated criminal laws surrounding streaming piracy. Representatives of various communities, including copyright owners, platforms, online service providers (OSPs), legitimate licensees, and users negotiated over the course of more than ten meetings spanning about six months, carefully contemplating a number of proposals and working in good faith to arrive at a compromise.
The result of these negotiations was an agreement reached in July 2020 that was supported by content creators and copyright owners (including the Motion Picture Association and the International Alliance of Theatrical Stage Employees), legitimate content distributors (including the National Association of Broadcasters and NCTA – The Internet & Television Association), and major sports leagues (including Ultimate Fighting Championship and the National Basketball Association). Importantly, groups that often express concern around copyright legislation (including those representing internet service providers, internet platforms and edge providers, and user groups) were not opposed to the legislation. Representatives of these groups even went on record at a House Judiciary Committee hearing confirming that they were either supportive of the bill or neutral.
What does the PLSA do?
The PLSA modernizes criminal copyright law by ensuring the availability of felony penalties for illegal streaming, consistent with those that have long existed for illegal downloading and distribution. The bill amends title 18, United States Code, by inserting a new section 2319C titled “Illicit digital transmission services,” which lists the prohibited acts that will now be subject to heightened penalties.
The statute requires that a person must act (1) willfully, (2) for purposes of commercial advantage or private financial gain and (3) offer or provide to the public a digital transmission service. A digital transmission service is defined in the statute as “a service that has the primary purpose of publicly performing works by digital transmission.” It’s also important to understand that the requirements that a person must act “willfully” and “for purposes of commercial advantage or private financial gain” are standards taken directly from existing criminal copyright law.
If all three of these initial requirements are met, a person must then satisfy one of the following three factors by providing a digital transmission service that:
(1) is primarily designed or provided for the purpose of publicly performing copyright-protected works by digital transmission without the authority of the copyright owner or the law;
(2) has no commercially significant purpose or use other than to publicly perform copyright-protected works by means of digital transmission without the authority of the copyright owner or the law; or
(3) is intentionally marketed by or at the direction of that person to promote its use in publicly performing copyright-protected works by means of digital transmission without the authority of the copyright owner or the law.
The statute adopts penalties for these prohibited acts which are generally consistent with those that exist for similar violations of reproduction and distribution rights. For example, the penalty for a base first offense is a fine or imprisonment of not more than 3 years, or both. The statute also includes enhanced penalties for infringement of “works being prepared for commercial public performance,” which means things like pre-release and newly released movies and live streaming sporting events. Because piracy of this type of content can be extremely harmful to the copyright owner, the penalties are heightened to a fine or imprisonment of not more than 5 years, or both. Finally, repeat offenders may be subject to the most serious penalties which include a fine or imprisonment of not more than 10 years, or both, if the offense is a second or subsequent offense.
Who will be subject to the criminal penalties established by the PLSA?
The provisions of the PLSA were carefully drafted with input from stakeholders from the service provider, platform, and user communities so that the law ensures felony penalties are available only against the most egregious offenders: Those who operate commercial streaming services that are primarily designed, marketed, or have no significant use other than for illegal streaming of copyrighted content. These services would include subscription pirate Internet Protocol Television (IPTV) services that mimic legitimate streaming services by offering vast amounts of movies and television programs as well as other illicit “tube” channels that allow users to stream unauthorized content.
Who will not be subject to the criminal penalties established by the PLSA?
The law will not affect the activities of ordinary internet users. Nor would it criminalize good faith business/licensing disputes or noncommercial activities. This means that individual internet streamers cannot be subject to felony prosecution under the PLSA, for example by incorporating unauthorized content in a YouTube or Twitch stream. The normal practices of internet service providers (ISPs) would also not be subject to penalties under the PLSA, even when ISP users/subscribers misuse their services for purposes of infringement.
The provisions of the PLSA are immediately applicable and can be used by law enforcement to bring charges against large-scale criminal enterprises engaged in illicit streaming. As evidenced by more than a decade of efforts to close the streaming loophole, the need for the PLSA is long overdue, and we look forward to a more modern copyright system that will protect our vibrant creative ecosystem and provide a powerful deterrent to would-be criminals.