Startups this week - 7/30/19

What the Copyright Office hearing means for startups. This afternoon, the Senate Judiciary Committee will hold an oversight hearing of the U.S. Copyright Office. Karyn Temple, the Register of Copyrights and Director of the U.S. Copyright Office, will testify about operations and policy activities at the Copyright Office. Two policy issues that could impact startups will almost certainly be discussed during the hearing:

  • CASE Act. A recently-introduced bill, known as the CASE Act (S.1273), would create an extra-judicial board within the U.S. Copyright Office to adjudicate copyright infringement and award substantial financial damages without the traditional safeguards of federal court. As we previously discussed, the CASE Act would allow statutory damages of up to $30,000 per case. A startup or one of its customers could, for example, be on the hook for a significant damages award if it unknowingly shared a few copyright-protected photos on a website or social media feed. And because the CASE Act moves infringement litigation outside the court system, accused infringers would lack the protections available in court, such as judicial oversight and rights to appeal.

    To date, the CASE Act has progressed quickly through the Senate Judiciary Committee, and without the opportunity for meaningful vetting. It was introduced for the first time in the Senate in May 2019, and moved out of Committee without any hearings. Tuesday’s hearing with the Register of Copyrights could be the only hearing where the CASE Act is discussed, but other stakeholder perspectives—including the startup and user perspectives—will be missing.

  • Section 512 Study. In 2015, the Copyright Office embarked on a study to assess the impact and effectiveness of Section 512 of the Digital Millennium Copyright Act (DMCA). The DMCA passed in 1998, and established systems for dealing with allegations of online copyright infringement. Section 512, in particular, articulates notice-and-takedown and safe harbor provisions. This section strikes an important balance for startups who create innovative new ways to host, share, or store content, because it lowers the risk that a startup will face expensive copyright litigation over allegations its users infringe. Instead, Section 512 allows startups to expeditiously remove any infringing content without being held liable.

    The question, or premise, of the Copyright Office’s 512 study is to consider how well this framework operates given the growth of the Internet since 1998. The Copyright Office has not completed its Section 512 study, but expects to publish results later this year. In February 2019, Engine participated in a series of roundtables convened as part of that study. We discussed how Section 512 works for startups, and how any changes to the existing framework should be closely examined to understand the impact on the startup ecosystem. 

On the Horizon.

  • The Senate Banking Committee is holding a hearing this morning at 10 a.m. with blockchain and cryptocurrency experts to discuss regulatory frameworks for digital currencies and blockchain technology.

  • Engine is pleased to partner with congressional offices and non-profit organizations to celebrate Congressional Startup Day on Wednesday, August 21. This nationwide celebration connects startups with their congressional representatives to discuss ways that government can work with startups to support innovation and entrepreneurship. Congressional Startup Day events will also be held throughout the week of August 19-23. If you're a startup interested in participating, please reach out to us here. If you're a congressional office interested in participating in Congressional Startup Day, please reach out to Graham Klemme at to learn more.