H 3326 — Bad faith copyright infringement

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06, 2024) - South Carolina Legislature Online South Carolina General Assembly126th Session, 2025-2026Bill 3326Indicates Matter StrickenIndicates New Matter(Text matches printed bills.

Document has been reformatted to meet World Wide Web specifications.)                 A bill   TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY ADDING SECTION 39-5-190 SO AS TO PROVIDE THAT IT IS AN UNLAWFUL TRADE PRACTICE FOR A PERSON OR ENTITY TO MAKE A BAD FAITH ASSERTION OF COPYRIGHT INFRINGEMENT, TO PROVIDE EVIDENTIARY CONSIDERATIONS, AND TO PROVIDE REMEDIES.

  Be it enacted by the General Assembly of the State of South Carolina:

  SECTION 1.  Article 1, Chapter 5, Title 39 of the S.C.

Code is amended by adding:

      Section 39-5-190.  (A) For purposes of this section:

       (1) "Demand letter" means a letter, email, or other communication regardless of the media or platform used asserting or claiming that the Target has engaged in copyright infringement.

       (2) "Target" means a South Carolina person or entity doing business in South Carolina:

           (a) who has received a demand letter or against whom an assertion or allegation of copyright infringement has been made;

           (b) who has been threatened with litigation or against whom a lawsuit has been filed alleging copyright infringement;

or            (c) whose customers have received a demand letter asserting that the Target's work, product, service, or technology has infringed a copyright.

    (B) It is an unlawful trade practice for a person or entity to make a bad faith assertion of copyright infringement.  This offense is a violation of Section 39-5-20.

    (C) A court may consider the following factors as evidence that a person has made a bad faith assertion of copyright infringement:

       (1) the demand letter does not contain the following information:

           (a) the copyright registration number and a copy of the copyright Certification of Registration;

           (b) the name and address of the copyright owner and assignee, if any;

and            (c) factual allegations concerning the specific instances in which the Target has reproduced, distributed, performed, publicly displayed, or made into a derivative work that infringes the copyright, or is otherwise alleged to be covered by the copyright claim;

       (2) prior to sending the demand letter, the person fails to conduct an analysis comparing the copyright claim to the Target's alleged infringing materials, or the analysis was done but does not identify specific areas in which the alleged infringing materials are covered by the copyright claim and provides a copy of the analysis as part of the demand;

       (3) the demand letter lacks the information described in item (1), the Target requests the information, and the person fails to provide the information within fifteen days of the request;

       (4) the demand letter demands payment of a license fee or response within fifteen days of the request;

       (5) the person offers to license the copyright for an amount that is not based on a reasonable value of the copyright protected material to be licensed;

       (6) the claim or assertion of copyright infringement is meritless, and the person knew, or should have known, that the claim or assertion is meritless;

       (7) the claim or assertion of copyright infringement is deceptive;

       (8) the person or its subsidiaries or affiliates have previously filed or threatened to file one or more lawsuits based on the same or similar claim of copyright infringement and:

           (a) those threats or lawsuits lacked the information described in item (1);

or            (b) the person attempted to enforce the claim of copyright infringement in litigation and a court found the claim to be meritless;

and        (9) any other factor the court finds relevant.

    (D) A court may consider the following factors as evidence that a person has not made a bad faith assertion of copyright infringement:

       (1) the demand letter contains the information described in subsection (C)(1);

       (2) where the demand letter lacks the information described in subsection (C)(1) and the Target requests the information, the person provides the information within fifteen days of the request;

       (3) the person engages in a good faith effort to establish that the Target has infringed the copyright and to negotiate an appropriate remedy;

       (4) the person has made a substantial investment in the use of the copyright or in the production or sale of a product, item, or work incorporating the copyright work that is the subject to the demand;

       (5) the person is an institution of higher education or a technology transfer organization owned or affiliated with an institution of higher education;

       (6) the person has:

           (a) demonstrated good faith business practices in previous efforts to enforce the copyright, or a substantially similar copyright;

or            (b) successfully enforced the copyright, or a substantially similar copyright, through litigation;

       (7) any other factor the court finds relevant.

    (E) Upon motion by a Target and a finding by the court that a Target has established a reasonable likelihood that a person has made a bad faith assertion of copyright infringement in violation of this section, the court shall require the person to post a bond in an amount equal to amounts reasonably likely to be recovered pursuant to Section 39-5-140, conditioned upon payment of any amounts finally determined to be due to the Target.

A hearing shall be held if either party so requests.