How federal courts have interpreted “willfully and for commercial advantage or private financial gain"

Issue:

Have the federal courts interpreted the phrase “willfully and for commercial advantage or private financial gain" in the Protecting Lawful Streaming Act of 2020 to apply to private non-commercial viewing of pirated content?

Conclusion:

The Protecting Lawful Streaming Act of 2020 added 18 U.S.C. § 2319C to the United States Code.

18 U.S.C. § 2319C(b) sets out that it shall be unlawful for a person to willfully, and for purposes of commercial advantage or private financial gain, offer or provide to the public a digital transmission service that: is primarily designed or provided for the purpose of publicly performing works protected under Title 17 by means of a digital transmission without the authority of the copyright owner or the law; has no commercially significant purpose or use other than to publicly perform works protected under Title 17 by means of a digital transmission without the authority of the copyright owner or the law; or, is intentionally marketed by or at the direction of that person to promote its use in publicly performing works protected under Title 17 by means of a digital transmission without the authority of the copyright owner or the law. (18 U.S.C. § 2319C)

No decisions were identified that referenced 18 U.S.C. § 2319C or interpreted the phrase "willfully, and for commercial advantage or private financial gain" as it appears in that statute; however, other authorities may be instructive on the issue of whether the Protecting Lawful Streaming Act of 2020 prohibits private non-commercial viewing of streaming content. 

The phrase "willfully, and for purposes of commercial advantage or private financial gain" is not defined in 18 U.S.C. § 2319C.

However, 18 U.S.C. § 2319C(a)(1) sets out that the term "financial gain" has the same meaning given to that term in 17 U.S.C. § 101. (18 U.S.C. § 2319C)

17 U.S.C. § 101 defines the term "financial gain" as the receipt, or expectation of receipt, of anything of value, including the receipt of other copyrighted works. (17 U.S.C. § 101)

17 U.S.C. § 101 defines "financial gain" broadly and thus does not meaningfully winnow down the population of copyright defendants potentially liable to incarceration. (United States v. Liu, 731 F.3d 982 (9th Cir. 2013))

“Willfully,” as used in 17 U.S.C. § 506(a) (the Copyright Act), connotes a voluntary, intentional violation of a known legal duty. (United States v. Liu, 731 F.3d 982 (9th Cir. 2013))

When faced with a criminal statute containing an ambiguous “willfulness” element, courts normally resolve any doubt in favor of the defendant. (United States v. Liu, 731 F.3d 982 (9th Cir. 2013))

On the United States Patent and Trademark Office website, there is a page entitled, Protecting Lawful Streaming Act of 2020. This page states that the new law significantly increases criminal penalties for those who, willfully and for commercial advantage or private financial gain, illegally stream copyrighted material. Furthermore, the page states that under the new law, the Department of Justice can bring felony charges against providers (as opposed to users) of such illegal services. 

Research Description:

Congress passed the Consolidated Appropriations Act of 2021 in December. This law, known as the "Protecting Lawful Streaming Act of 2020" (or "PLSA") increases criminal penalties for illegally streaming protected content “willfully and for commercial advantage or private financial gain." Does this law prohibit private non-commercial viewing of streaming content such as when a viewer watches pirated movies in their own house?

Law:

The Protecting Lawful Streaming Act of 2020 added 18 U.S.C. § 2319C to the United States Code. 

The activity prohibited by 18 U.S.C. § 2319C is the offering or providing to the public a digital transmission service that is designed for the listed purposes. 18 U.S.C. § 2319C(b) sets out that it shall be unlawful for a person to willfully, and for purposes of commercial advantage or private financial gain, offer or provide to the public a digital transmission service that: is primarily designed or provided for the purpose of publicly performing works protected under Title 17 by means of a digital transmission without the authority of the copyright owner or the law; has no commercially significant purpose or use other than to publicly perform works protected under Title 17 by means of a digital transmission without the authority of the copyright owner or the law; or, is intentionally marketed by or at the direction of that person to promote its use in publicly performing works protected under Title 17 by means of a digital transmission without the authority of the copyright owner or the law: 

(a) DEFINITIONS.-In this section-

(1) the terms "audiovisual work", "computer program", "copies", "copyright owner", "digital transmission", "financial gain", "motion picture", "motion picture exhibition facility", "perform", "phonorecords", "publicly" (with respect to performing a work), "sound recording", and "transmit" have the meanings given those terms in section 101 of title 17;

(2) the term "digital transmission service" means a service that has the primary purpose of publicly performing works by digital transmission;

(3) the terms "publicly perform" and "public performance" refer to the exclusive rights of a copyright owner under paragraphs (4) and (6) of section 106 (relating to exclusive rights in copyrighted works) of title 17, as limited by sections 107 through 122 of title 17; and

(4) the term "work being prepared for commercial public performance" means-

(A) a computer program, a musical work, a motion picture or other audiovisual work, or a sound recording, if, at the time of unauthorized public performance-

(i) the copyright owner has a reasonable expectation of commercial public performance; and

(ii) the copies or phonorecords of the work have not been commercially publicly performed in the United States by or with the authorization of the copyright owner; or

(B) a motion picture, if, at the time of unauthorized public performance, the motion picture-

(i)

(I) has been made available for viewing in a motion picture exhibition facility; and

(II) has not been made available in copies for sale to the general public in the United States by or with the authorization of the copyright owner in a format intended to permit viewing outside a motion picture exhibition facility; or

(ii) had not been commercially publicly performed in the United States by or with the authorization of the copyright owner more than 24 hours before the unauthorized public performance.

(b) PROHIBITED ACT.-It shall be unlawful for a person to willfully, and for purposes of commercial advantage or private financial gain, offer or provide to the public a digital transmission service that-

(1) is primarily designed or provided for the purpose of publicly performing works protected under title 17 by means of a 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 works protected under title 17 by means of a 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 works protected under title 17 by means of a digital transmission without the authority of the copyright owner or the law.

(c) PENALTIES.-Any person who violates subsection (b) shall be, in addition to any penalties provided for under title 17 or any other law-

(1) fined under this title, imprisoned not more than 3 years, or both;

(2) fined under this title, imprisoned not more than 5 years, or both, if-

(A) the offense was committed in connection with 1 or more works being prepared for commercial public performance; and

(B) the person knew or should have known that the work was being prepared for commercial public performance; and

(3) fined under this title, imprisoned not more than 10 years, or both, if the offense is a second or subsequent offense under this section or section 2319(a).

(d) RULE OF CONSTRUCTION.-Nothing in this section shall be construed to-

(1) affect the interpretation of any other provision of civil copyright law, including the limitations of liability set forth in section 512 of title 17, or principles of secondary liability; or

(2) prevent any Federal or State authority from enforcing cable theft or theft of service laws that are not subject to preemption under section 301 of title 17.

No decisions were identified that referenced 18 U.S.C. § 2319C or interpreted the phrase "willfully, and for commercial advantage or private financial gain" as it appears in that statute; however, other authorities were identified that may be instructive on the issue of whether the Protecting Lawful Streaming Act of 2020 prohibits private non-commercial viewing of streaming content.

On the United States Patent and Trademark Office website, there is page entitled, Protecting Lawful Streaming Act of 2020. This page states that the new law significantly increases criminal penalties for those who, willfully and for commercial advantage or private financial gain, illegally stream copyrighted material. Furthermore, the page states that under the new law, the Department of Justice can bring felony charges against providers (as opposed to users) of such illegal services: 

The Protecting Lawful Streaming Act of 2020, part of the Consolidated Appropriations Act of 2021 (Public Law No: 116-260), was signed into law on December 27, 2020. It significantly increases criminal penalties for those who, willfully and for commercial advantage or private financial gain, illegally stream copyrighted material. Previously, illegal streaming was treated as a misdemeanor. Under the new law, the Department of Justice can bring felony charges against providers (as opposed to users) of such illegal services.

Streaming of live audio and video has in recent years become the primary way that consumers enjoy online content. However, the growth of the legitimate streaming market has been accompanied by growth in unlawful streaming of copyrighted works. The classification of unlawful streaming as a misdemeanor in the United States has long been identified by rights holders as an intellectual property (IP) enforcement inadequacy. And the issue has arisen in negotiations with some U.S. trading partners, who often have higher penalties for this illicit activity.

The inadequacy of classifying unlawful streaming as a misdemeanor was an issue also identified by the Internet Policy Task Force (IPTF), which the USPTO co-leads with the Department of Commerce’s National Telecommunications and Information Administration. A green paper published by the IPTF in 2013 called on Congress to adopt the same range of penalties for criminal streaming of copyrighted works to the public as those that already existed for criminal reproduction and distribution. The IPTF stated that the discrepancy in penalties was “an increasingly significant impediment to the effective deterrence and criminal prosecution of unauthorized streaming.”

The phrase "willfully, and for purposes of commercial advantage or private financial gain" is not defined in 18 U.S.C. § 2319C. However, 18 U.S.C. § 2319C(a)(1) sets out that the term "financial gain" has the same meaning given to that term in 17 U.S.C. § 101:

(a) DEFINITIONS.-In this section-

(1) the terms "audiovisual work", "computer program", "copies", "copyright owner", "digital transmission", "financial gain", "motion picture", "motion picture exhibition facility", "perform", "phonorecords", "publicly" (with respect to performing a work), "sound recording", and "transmit" have the meanings given those terms in section 101 of title 17;

[...]

17 U.S.C. § 101 defines the term "financial gain" as: 

[...]

The term "financial gain" includes receipt, or expectation of receipt, of anything of value, including the receipt of other copyrighted works.

[...]

Additionally, the discussion of the terms "willfully" and "financial gain" in United States v. Liu, 731 F.3d 982 (9th Cir. 2013), a copyright infringement case, may be instructive. The United States Court of Appeals for the Ninth Circuit explained that 17 U.S.C. § 101 defines "financial gain" broadly and thus does not meaningfully winnow down the population of copyright defendants potentially liable to incarceration. Instead, the only bar against an overzealous prosecutor criminalizing nearly every copyright infringement case lies in the other prerequisite to criminal liability, willfulness. However, the term "willfully" is ambiguous. When faced with a criminal statute containing an ambiguous “willfulness” element, courts normally resolve any doubt in favor of the defendant. The Court held that “willfully” as used in 17 U.S.C. § 506(a) connotes a voluntary, intentional violation of a known legal duty (at 989-990): 

Of the two factors that distinguish criminal from noncriminal copyright violations, willfulness and commerciality, the latter is of little practical importance. The Copyright Act defines “financial gain” broadly to include “receipt, or expectation of receipt, of anything of value, including the receipt of other copyrighted works.” 17 U.S.C. § 101. The commerciality requirement thus “does not meaningfully winnow down the population of copyright defendants potentially liable to incarceration.... [T]he only bar against an overzealous prosecutor criminalizing nearly every copyright infringement case lies in the other prerequisite to criminal liability: willfulness.” 4 Nimmer, supra, § 15.01[A][2].

But the term “willfully” is ambiguous.2See Ratzlaf v. United States, 510 U.S. 135, 141, 114 S.Ct. 655, 126 L.Ed.2d 615 (1994) (“ ‘Willful’ ... is a ‘word of many meanings....' ” (quoting Spies v. United States, 317 U.S. 492, 497, 63 S.Ct. 364, 87 L.Ed. 418 (1943))). To infringe willfully could simply mean to intentionally commit the act that constitutes infringement. Alternatively, it could mean that the defendant must act with a “ ‘bad purpose’ or ‘evil motive’ in the sense that there was an ‘intentional violation of a known legal duty.’ ” United States v. Moran, 757 F.Supp. 1046, 1048 (D.Neb.1991) (quoting Cheek v. United States, 498 U.S. 192, 200, 111 S.Ct. 604, 112 L.Ed.2d 617 (1991)). The 1976 Copyright Act does not define “willfully,” and its legislative history offers little guidance. See id. at 1049 n. 2.

When faced with a criminal statute containing an ambiguous “willfulness” element, courts normally resolve any doubt in favor of the defendant. Ratzlaf, 510 U.S. at 148, 114 S.Ct. 655 (citing Hughey v. United States, 495 U.S. 411, 422, 110 S.Ct. 1979, 109 L.Ed.2d 408 (1990)). Although the general rule is that “ignorance of the law or a mistake of law is no defense to criminal prosecution,” the modern proliferation of statutes and regulations “sometimes ma[kes] it difficult for the average citizen to know and comprehend the extent of the duties and obligations imposed by the ... laws.” Cheek, 498 U.S. at 199–200, 111 S.Ct. 604. Thus, the government must prove that the defendant acted “willfully”—that is, with “specific intent to violate the law”—to be convicted of certain federal criminal offenses. Id. at 200, 111 S.Ct. 604 (citing United States v. Murdock, 290 U.S. 389, 54 S.Ct. 223, 78 L.Ed. 381 (1933)); see also Bryan v. United States, 524 U.S. 184, 191–92, 118 S.Ct. 1939, 141 L.Ed.2d 197 (1998) (“As a general matter, when used in the criminal context, a ‘willful’ act is one undertaken with a ‘bad purpose.’ In other words, in order to establish a ‘willful’ violation of a statute, ‘the Government must prove that the defendant acted with knowledge that his conduct was unlawful.’ ” (quoting Ratzlaf, 510 U.S. at 137, 114 S.Ct. 655) (footnote omitted)).

In reviewing a conviction for criminal copyright infringement, we, and numerous other circuits, have assumed that proof of the defendant's specific intent to violate

[731 F.3d 990]

someone's copyright is required. See United States v. Beltran, 503 F.3d 1, 2 (1st Cir.2007); United States v. Manzer, 69 F.3d 222, 227 (8th Cir.1995); United States v. Minor, 756 F.2d 731, 734 (9th Cir.1985); United States v. Gottesman, 724 F.2d 1517, 1522 (11th Cir.1984); United States v. Whetzel, 589 F.2d 707, 712 (D.C.Cir.1978); 3see also United States v. Heilman, 614 F.2d 1133, 1137 (7th Cir.1980) (holding so). But compare United States v. Backer, 134 F.2d 533, 535 (2d Cir.1943) (finding sufficient evidence that the defendant had willfully copied where he “deliberately had the copies made and deliberately sold them for profit”), with United States v. Rose, 149 U.S.P.Q. 820, 824 (S.D.N.Y.1966) (instructing, notwithstanding Backer, that the government must prove the defendant acted “voluntarily and purposely and with specific intent to do that which the law forbids—that is to say, with bad purpose either to disobey or disregard the law”). We now explicitly hold that “willfully” as used in 17 U.S.C. § 506(a) connotes a “voluntary, intentional violation of a known legal duty.” Cheek, 498 U.S. at 201, 111 S.Ct. 604 (internal quotation marks omitted).

Authorities:

Protecting Lawful Streaming Act of 2020
18 U.S.C. § 2319C
Protecting Lawful Streaming Act of 2020, United States Patent and Trademark Office (uspto.gov)
17 U.S.C. § 101
United States v. Liu, 731 F.3d 982 (9th Cir. 2013)