On December 27th, 2020, the Copyright Alternative Small-Claims Enforcement Act of 2019 (“CASE Act”) was signed into law. The Act established the Copyright Claims Board (“CCB”), which will listen to small copyright claims beginning December 27, 2021. However, in CCB cases, actual damages awards are capped at $30,000 total, and parties seeking statutory damages can only receive up to $15,000 for infringement of a work that was timely registered. The goal of the CASE Act is to make the copyright claims process more time and cost-efficient; however, it remains to be seen how useful these changes really will be for independent creators.
WHAT IS THE COPYRIGHT CLAIMS BOARD?
The CCB is a board of three experienced copyright claims attorneys who will serve six-year terms and who are appointed by the Library of Congress who consults with the Register of Copyrights. Two of the members need seven or more years of experience with copyright infringement claims, and the other board member needs experience with alternative dispute resolution as well as copyright law.
WHAT IS THE SMALL CLAIMS PROCESS?
Within three years of a claim arising, petitioners can voluntarily file for claims of infringement, claims for declaration of non-infringement, and claims concerning a violation of section 512 of the Copyright Act. Parties can seek no more than $30,000 in total relief and no less than $5,000 in relief. This board is an alternative to pursuing a claim in federal court, so a claim must not also be filed in that venue.
However, the main hurdle to this process is that the proceedings are entirely voluntary, and it is up to the parties whether they would like to pursue or defend a claim in the CCB. If either party objects, the case will not be heard by the CCB, meaning that an accused infringer can simply opt-out of the process in order to drive up a copyright holder’s costs in pursuing its claim.
To bring a claim, the party seeking relief will need to either have a registered work at issue or have a filed application at the Copyright Office. The CASE Act only requires an initial $100 filing fee to begin a claim. Also, parties do not need to have their own attorney and are welcome to represent themselves to minimize costs. If a petitioner chooses to have an attorney, they will be responsible for their own attorney fees unless there is a bad faith claim.
Parties are also able to request the Copyright Office or a federal court to review a CCB decision if there is a mistake or error, abuse of discretion, or misconduct. Additionally, if a party does not comply with a CCB order to pay damages, the winning party is permitted to have a federal district court confirm the award.
WHAT EFFECT WILL IT HAVE?
A $15,000 cap for statutory damages, which is ten times less than the federal statutory damages cap, will likely lead to a significant increase in the number of claims brought because minor claims will not be deterred by the burden of large legal fees and complicated proceedings. Traditionally, pursuing a copyright infringement case can cost hundreds of thousands of dollars, but the Act wants to make this process more accessible. Also, small claims can rely on a pending application filed with the Copyright Office, which is different from federal courts, which require an actual registration, which can further expedite proceedings. Also, the proceedings will all be available virtually, which will streamline the process and create an efficient system.
Critics of previous versions of the CASE Act were concerned about the potential for bad faith claims and respondents unknowingly not responding to notices of proceedings and falling into default judgments. However, the 2019 version of the Act implemented safeguards against these concerns. These include a penalty for filing frivolous claims such as paying attorney fees, being prohibited from filing a case for one year, and dismissing all pending cases filed by the abuser. There can also be a limit to the number of claims brought per year, which will limit the number of frivolous claims. The Act also makes it easier to receive notice of a proceeding to prevent the likelihood of an unintentional default judgment. Critics have also noted that the opt-in nature of the proceedings might render the CCB largely useless in many cases because defendants will simply opt-out to drive up the opposing party’s costs and legal fees, given the 60-day period to opt-out of a proceeding.
While many in the content creation community have applauded Congress’s efforts in getting a bill passed that seeks to increase the ability of smaller content creators to access justice and pursue their claims more efficiently, it remains to be seen how effective the CASE Act will end up being, in light of some of the challenges discussed above.