Copyright Office “Small Claims Court” to Provide Low-Cost Alternative to Federal Court
By: Rita Kline
Partner
The Copyright Alternative in Small-Claims Enforcement Act of 2020 (CASE Act), signed into law in December 2020, is currently planned to take effect on December 27, 2021. The purpose of the CASE Act is to provide a low-cost alternative to the current legal avenue copyright holders have to enforce their rights – the federal court system.
Federal court proceedings entail hiring legal representation and can be complex, costly, and protracted. This avenue can be unattractive for individual creators that have valuable copyrighted works but lack the funds to enforce their rights. Consequently, infringement of their works often goes unchecked and without any deterrent penalties. The Case Act aims to address this by requiring the U.S. Copyright Office to implement a new Copyright Claims Board (CCB).
The CCB is designed as an affordable alternative to the federal court system. Proceedings can take place remotely and no legal representative is required. Consisting of three copyright claims officers, the CCB acts as an administrative “court” that will decide issues of small claims copyright infringement. The officers must have at least seven years of legal experience, and at least two of the officers will be required to have substantial experience in the copyright industry, making them well-suited to decide these disputes.
If the copyright is registered at the time of infringement, claims of damages in cases brought before the CCB are capped at $30,000 in total and up to $15,000 per work. It will be half of those values if the work is unregistered at the time of infringement. No cases can be brought against any federal or state governments, or foreign entities. In addition, claims cannot be based on copyright applications that are pending registration. Decisions made by the CCB are reviewable, but not precedential. Some of the proceeding records will also be made publicly available.
A notable downside of the CCB is that participation in the proceeding is entirely voluntary. Accused infringers have 60 days from when they receive notice of a claim to either opt-in to the proceedings or to opt-out. If an alleged infringer decides to opt-out, then the case is dismissed without prejudice. Any further proceedings after that would need to be brought in federal court.
As of the date of this article, the Copyright Office has not yet issued any regulations concerning the operation of the CCB, including fees, filing claims, setting standards for limited motions practice and discovery, and reviewing decisions. An extension of time of up to 180 days is available to issue regulations. Once the U.S. Copyright Office regulations become fully fleshed out and made available, perhaps they will explicate some potential concerns that have already arisen.
One concern is that the voluntary nature of this proceeding removes tangible incentive on the side of the accused infringer to resolve the dispute in this venue. Perhaps unintendingly, it may even sometimes have the opposite effect. Large entities holding many copyrights may be encouraged to pursue claims in bulk against innocent infringers as a method to easily obtain statutory damages. Though there will be safeguards against abusive practice, specifics remain unknown at this point.
At the same time, some accused infringers are likely to opt-out because they have greater financial resources to fight such claims in federal court than their accusers do. These entities would rather assume the risk that an individual inventor wouldn’t bring the claim in federal court, reasoning that if their accuser had the resources in the first place, they would have already done so. However, willful infringers would be wise to consider opting in. If the infringement is something that could be easily proven in federal court, infringers could avoid the risk of incurring hefty punitive damages and attorneys’ fees by participating in CCB proceedings.
Lawyer Contact
Rita E. Kline
216-736-3144
The information provided in this publication is for informational purposes only and should not be considered as legal advice on any specific facts or circumstances. The mailing of this publication is not intended to create, and receipt of it does not constitute, an attorney-client relationship. The views set forth herein are the personal views of the author(s) and do not necessarily reflect those of Renner Otto.