SB332 - Prohibits the making of a bad-faith claim or assertion of copyright infringement. (BDR 52-699)

S.B. 332 - *SB332* SENATE BILL NO. 332–SENATOR NEAL MARCH 11, 2025 ____________ Referred to Committee on Commerce and Labor SUMMARY—Prohibits the making of a bad-faith claim or assertion of copyright infringement. (BDR 52-699) FISCAL NOTE: Effect on Local Government: Increases or Newly Provides for Term of Imprisonment in County or City Jail or Detention Facility. Effect on the State: Yes. ~ EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. AN ACT relating to deceptive trade practices; making it a deceptive trade practice for a person to make a bad-faith claim or assertion of copyright infringement; creating a civil cause of action for a person aggrieved by a bad-faith claim or assertion of copyright infringement; providing a penalty; and providing other matters properly relating thereto. Legislative Counsel’s Digest: Existing law defines activities that constitute deceptive trade practices and 1 provides for the imposition of civil and criminal penalties against persons who 2 engage in deceptive trade practices. (Chapter 598 of NRS) Section 1 of this bill 3 makes it a deceptive trade practice for a person to make a bad-faith claim or 4 assertion of copyright infringement and sets forth various factors that a trier of fact 5 may consider as evidence that a person has or has not made such a bad faith claim 6 or assertion. 7 Section 1 authorizes a person who is aggrieved by a violation of section 1 to 8 bring an action against the person who committed the violation seeking: (1) 9 equitable relief; (2) actual damages; (3) reasonable attorney’s fees and costs; and 10 (4) exemplary damages in an amount equal to $30,000 or three times the sum of the 11 actual damages and reasonable attorney’s fees and costs, whichever is greater. 12 Section 1 also authorizes a court to award to a prevailing defendant in such an 13 action reasonable attorney’s fees and costs, if the court finds that the action was not 14 well-grounded in fact and warranted by existing law or was interposed for an 15 improper purpose, such as to harass or cause unnecessary delay or needless increase 16 in the cost of litigation. 17 Section 2 of this bill sets forth certain legislative declarations and findings. 18 – 2 – - *SB332* THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section 1. Chapter 598 of NRS is hereby amended by adding 1 thereto a new section to read as follows: 2 1. A person shall not make a bad-faith claim or assertion of 3 copyright infringement. 4 2. The trier of fact may consider the following factors as 5 evidence that a person has made a bad-faith claim or assertion of 6 copyright infringement: 7 (a) The demand sent by the person does not contain all of the 8 following information: 9 (1) The copyright registration number assigned by the 10 United States Copyright Office, if any, or the number 11 accompanying an application made to the United States Copyright 12 Office, if any; 13 (2) The name and address of the copyright owner or owners 14 and assignee or assignees, if any; 15 (3) Factual allegations concerning the specific areas in 16 which the work of the person against whom the claim or assertion 17 is made infringes the copyright-protected work; and 18 (4) An explanation of why the person making the claim or 19 assertion has standing, if the United States Copyright Office does 20 not identify the person asserting the copyright as the owner. 21 (b) Before sending the demand, the person failed to conduct 22 an analysis comparing the copyright protected work to the asserted 23 infringing work, or the analysis was done but does not identify 24 specific areas in which the asserted infringing work infringes the 25 person’s copyright. 26 (c) The demand lacks the information described in this 27 subsection, the person against whom the claim or assertion is 28 made requests the information and the person fails to provide the 29 information within a reasonable period. 30 (d) The person demands payment of a license fee or a response 31 within an unreasonably short time. 32 (e) The person offers to settle the claim or assertion of 33 copyright infringement for an amount that is not based on a 34 reasonable estimate of the value of the copyright-protected work, 35 or the person offers to settle the claim or assertion for an amount 36 that is based on the cost of defending a potential or actual lawsuit. 37 (f) The claim or assertion of copyright is meritless and the 38 person knew or should have known that the claim or assertion is 39 meritless. 40 (g) The claim or assertion of copyright infringement is 41 deceptive. 42 – 3 – - *SB332* (h) The person or the subsidiaries or affiliates of the person 1 have previously or concurrently filed or threatened to file one or 2 more lawsuits based on the same or similar claim of copyright 3 infringement, and: 4 (1) Those threats or lawsuits lacked the information 5 described in this subsection; or 6 (2) The person attempted to enforce the claim of copyright 7 infringement in litigation and a court found the claim to be 8 meritless. 9 (i) The person sent the same demand or substantially the same 10 demand to multiple recipients and made assertions against a wide 11 variety of works without reflecting those differences in a 12 reasonable manner in the demands. 13 (j) The person is aware of, but does not disclose, any final, 14 nonfinal or preliminary finding of invalidity involving the 15 copyright. 16 (k) The person seeks an injunction that is objectively 17 unreasonable under the law. 18 (l) Any other relevant factor. 19 3. The trier of fact may consider the following factors as 20 evidence that a person has not made a bad-faith assertion of 21 copyright infringement: 22 (a) The demand sent by the person contains the information 23 described in subsection 1. 24 (b) If the demand lacks the information described in 25 subsection 1 and the person against whom the claim or assertion 26 is made requests the information, the person provides the 27 information within a reasonable period. 28 (c) The person engages in a good-faith effort to establish that 29 the person against whom the claim or assertion is made has 30 infringed the copyright and to negotiate an appropriate and 31 reasonable remedy. 32 (d) The person makes a substantial investment in the use or 33 exploitation of the copyright. 34 (e) The person is: 35 (1) The author or joint author of the copyright-protected 36 work; 37 (2) The original assignee, in the case of a copyright- 38 protected work filed by and awarded to an assignee or claimant of 39 the original author or joint author; or 40 (3) An institution of higher education or a fine arts 41 organization owned or affiliated with an institution of higher 42 education. 43 – 4 – - *SB332* (f) The person has demonstrated good-faith business practices 1 in previous efforts to enforce the copyright-protected work, or a 2 substantially similar copyright-protected work, through litigation. 3 (g) Any other factor the court finds relevant. 4 4. A person aggrieved by a violation of subsection 1 may 5 bring an action against the person who committed the violation to 6 seek any or all of the following relief: 7 (a) Equitable relief. 8 (b) Actual damages. 9 (c) Reasonable attorney’s fees and costs. 10 (d) Exemplary damages in an amount that is equal to the 11 greater of: 12 (1) Thirty thousand dollars; or 13 (2) Three times the sum of: 14 (I) Actual damages; and 15 (II) Reasonable attorney’s fees and costs. 16 5. A court may award to a defendant who prevails in an 17 action brought pursuant to subsection 4 reasonable attorney’s fees 18 and costs if the court finds that the action was not well-grounded 19 in fact and warranted by existing law or was interposed for any 20 improper purpose, such as to harass or to cause an unnecessary 21 delay or a needless increase in the cost of litigation. 22 6. A violation of subsection 1 constitutes a deceptive trade 23 practice for the purposes of NRS 598.0903 to 598.0999, inclusive. 24 7. The provisions of this section: 25 (a) Apply to a claim or assertion of copyright infringement 26 arising under 17 U.S.C. § 106 or 17 U.S.C. § 512. 27 (b) Do not apply to a claim or assertion of copyright 28 infringement: 29 (1) Arising under 17 U.S.C. § 106A; or 30 (2) By or on behalf of a person that is recognized as exempt 31 pursuant to section 501(c)(3) of the Internal Revenue Code, 26 32 U.S.C. § 501(c)(3). 33 (c) Do not apply to a claim or assertion of a violation of NRS 34 597.720 to 597.760, inclusive. 35 8. Subject to the provisions of subsections 1, 2 and 3, and so 36 long as the activities are not carried out in bad faith, nothing in 37 this section shall be construed to prohibit any person who owns or 38 has the right to license or enforce a copyright or copyright- 39 protected work to do any of the following: 40 (a) Advise others of that ownership or right of license or 41 enforcement; 42 (b) Communicate to others that the copyright is available for 43 license or sale; 44 – 5 – - *SB332* (c) Notify another person of the infringement of the copyright; 1 or 2 (d) Seek compensation for a past or present infringement or 3 for a license to the copyright. 4 9. As used in this section: 5 (a) “Affiliate” means a business establishment, business or 6 other legal entity that wholly or substantially owns, is wholly or 7 substantially owned by or is under common ownership with 8 another entity. 9 (b) “Demand” means a letter, electronic mail message or other 10 communication asserting or claiming that a person has engaged 11 in copyright infringement. 12 (c) “Institution of higher education” has the meaning ascribed 13 to it in 20 U.S.C. § 1001(a). 14 (d) “Person” includes a governmental entity. 15 Sec. 2. The Legislature hereby finds and declares that: 16 1. Copyright encourages creativity and innovation by 17 protecting original works. Copyright holders have legitimate rights 18 to enforce their copyrights. 19 2. The Legislature does not wish to interfere with good-faith 20 copyright litigation or the good-faith enforcement of copyrights. The 21 Legislature recognizes that Nevada is preempted from passing any 22 law that conflicts with federal copyright law. 23 3. Copyright litigation can be complex and expensive. The 24 expense of copyright litigation can be a significant burden on 25 Nevadans, Nevada businesses and the State of Nevada. The 26 Legislature wishes to help avoid these costs by encouraging the 27 most efficient resolution of copyright infringement claims without 28 conflicting with federal law. 29 4. The Legislature seeks, by this narrowly tailored act, to strike 30 a balance between the interests of efficient and prompt resolution of 31 copyright infringement claims, protection of Nevadans, Nevada 32 businesses and the State of Nevada from bad-faith assertions of 33 copyright infringement and the intentions to respect federal law and 34 be careful not to interfere with legitimate copyright enforcement 35 actions. 36 H