Last week, Rep. Hakeem Jeffries (D-NY) and Rep. Tom Marino (R-PA) introduced the Copyright Alternative in Small-Claims Enforcement Act of 2016 (the “CASE Act”), which would create what amounts to a small claims court within the Copyright Office. The bill comes on the heels of a big push by advocacy organizations representing the interests of individual creators such as the American Society of Media Photographers and the Professional Photographers of America, to develop such legislation to give independent rights owners a meaningful opportunity to enforce their copyright interests.
As Nicole Martinez recently wrote in her article on Winning Attorney’s Fees last week, bringing litigation against an infringer is a costly undertaking, and in many cases, the likely recovery pales in comparison to the cost of bringing suit. Moreover, litigation is painfully slow, and it can often take years before cases are finally resolved. The result is that many independent rights holders effectively have no mechanism to enforce their rights. Takedown notices under the Digital Millennium Copyright Act (DMCA) are of limited effectiveness, and since infringers know that the likelihood of being taken to court is slim, they’ll continue to infringe with impunity, even in the face of a cease-and-desist letter. To help ease the pain, creatives have been clamoring for an alternative dispute resolution mechanism – something that would let them have their day in court, but would be faster and cheaper for both sides.
A Copyright Small Claims Court is Not a New Idea
In 2006 Rep. Lamar Smith (R-TX) held a hearing on the need for new remedies to address small claims which resulted in a 2011 request (nothing moves quickly in Congress) that the Copyright Office undertake a comprehensive study on the issue and report back to Congress. In 2013 the Copyright Office submitted its aptly-titled Copyright Small Claims report in which it evaluated a number of possible options for handling small claims. The report concluded that the most effective approach would be to set up a tribunal within the Copyright Office to hear such claims, and it offered Congress a roadmap for possible legislation.
Most recently, a coalition of visual arts advocacy groups issued a white paper calling for the creation of a small claims tribunal. At long last, Congress listened.
How Would a Copyright Small Claims Court work?
The CASE Act more or less tracks the proposal set forth by the Copyright Office, creating a Copyright Claims Board within the Copyright Office staffed by three full-time claims officers to serve as “judges,” each of whom would be required to have substantial experience in copyright matters. Participation in the small claims system would be voluntary, meaning that if a defendant received a claim through the Copyright Claims Board, he or she could opt out, essentially forcing the copyright owner to bring suit in federal court to enforce his or her rights. The reason the system can’t be mandatory is a bit complicated, but it comes from the Constitution. If you’re interested in learning more on that point, the Copyright Office study on small claims solutions, mentioned above, discusses these issues at length.
So let’s pause here for a moment. Many independent rights owners start to question the efficacy of a small claims solution if it’s voluntary. Wouldn’t every would-be defendant just opt out, forcing the rights owner to bring full-fledged litigation (which, for reasons discussed previously, is usually untenable)?
It’s certainly possible, but unlikely. The bill includes some incentives for defendants, too. As in traditional federal court copyright litigation, the Copyright Claims Board would have the authority to grant actual damages and lost profits associated with an infringement, as well as statutory damages in certain circumstances. Except unlike federal court, where statutory damage awards can reach up to $150,000 per work infringed, the Copyright Claims Board’s damages awards would be limited to $15,000 per work infringed for works registered before infringement or within three months of publication and $7,500 per work for those that were not timely registered. The total recovery in any one proceeding would be limited to $30,000.
While some defendants may still decline to participate, it’s likely that many, especially those with weak defenses, will welcome the opportunity to avoid the high costs and significant risk associated with federal litigation.
There are some other significant limitations which may influence the parties’ willingness to participate. In addition to money damages, federal courts are empowered to issue injunctions – court orders that require an infringer to stop the infringing behavior, destroy infringing copies, and similar remedies. The Copyright Claims Board would not be able to issue that kind of order, but it could issue orders that reflect a defendant’s voluntary agreement to cease the infringing conduct, and take that agreement into account when the Board determines the money damages award.
Another limitation relates to attorneys’ fees. As Nicole Martinez discusses in her recent Art Law Journal article, the Copyright Act allows judges to compel the losing side to pay some or all of the prevailing party’s legal fees, which further enhances the risk associated with federal litigation. The CASE Act expressly provides that in the context of a Copyright Claims Board proceeding, the parties bear their own costs.
At first glance, having to bear your own costs seems like it might make the prospect of litigation more expensive, rather than cheaper, but because the copyright small claims process doesn’t require a lawyer, the costs associated with a proceeding will almost certainly be lower. Strictly speaking, you could represent yourself in federal court as well, but the procedural aspects of federal litigation are so complex that it would be ill-advised. The procedures of the Copyright Claims Board have been developed so that while you can have a lawyer represent you, you don’t need one. Interestingly, the bill also includes a provision that would expressly permit qualified law students to represent clients before the Board – this type of framework is common in many state court systems but is rarely seen in federal agencies.
Copyright Small Claims Should Be Faster and Easier
Copyright Claims Board proceedings are intended to be similar to, but much more efficient than, federal court litigation. While there are the same basic steps involved – filing a complaint, serving notice on the defendant, possible counterclaims, scheduling, discovery (the process by which each side learns more about the other’s case and associated evidence), hearings, and the rendering of a decision by the Board – the entire process would take place without the need for in-person appearances. Everything would be handled “by means of written submissions and hearings and conferences accomplished via internet-based applications or other telecommunications facilities,” which is an oh-so-congressional way of saying “by phone or on the Internet.”
Beyond lowering the cost of pursuing enforcement actions, one of the primary benefits of the small claims procedure is speed. Because the system doesn’t exist yet, it’s impossible to say how quickly the Copyright Claims Board would be able to move through its docket, since it will necessarily depend on the volume of cases, and the nature of the work before it which is difficult to predict in the abstract. But it seems reasonable to assume that while federal court litigation typically requires something on the order of years, the Copyright Claims Board would be able to close cases on the order of months.
The CASE Act represents an important step forward for independent rights owners, and while the proposal is not without its critics, the bill has garnered widespread support among major copyright stakeholders. Rep. Judy Chu (D-CA) is rumored to be working on her version of a small claims bill which we may see some time after the August recess.
To be sure, there is a long, windy road ahead for the CASE Act or whatever other legislation may emerge on this issue in the months and years ahead. Still, the small claims issue has received more attention – and developed more concrete results in Congress – during the past several months than it has in the past several decades, giving hope that help for small, independent rights owners is on the way.