On December 21, 2020, Congress passed the long-awaited Copyright Alternative in Small-Claims Enforcement Act of 2019 (the “CASE Act”), as part of its omnibus spending and COVID-19 relief bill, H.R. 133. The law was enacted on December 27, 2020 and is poised to reform copyright litigation in the United States in the coming year, creating a centralized, voluntary, and affordable venue to bring claims of lesser value, without the need for attorneys or personal appearances. The Copyright Office has one year to implement the CASE Act, with an ability to extend the enactment for up to 180 days, if necessary.
The CASE Act has been many years in the making, and is largely the result of prior recommendations by the Copyright Office, particularly its 2013 Copyright Small Claims Report, and the support of many creator groups. Recognizing the significant barriers of entry creators faced when attempting to bring small-value copyright claims in the federal court system—considering the substantial costs and time associated with litigation—the Office recommended establishing and housing an alternative, voluntary adjudicatory system. Honing and, now, codifying this recommendation with the CASE Act, Congress provides a solution for the many individual creators who wish to assert their rights but lack the financial wherewithal or high-value claim to make pursuing a federal case worthwhile.
Copyright Claims Board
Central to the Act is the creation of a centralized tribunal within the Copyright Office called the Copyright Claims Board (“CCB”). Presided over by qualified copyright attorneys, it will serve as a venue for claimants to bring copyright claims of lesser value, expanding upon the federal court systems’ otherwise exclusive jurisdiction for copyright infringement claims. Claimants may use the CCB to seek rulings on infringement, declarations of noninfringement, and to bring certain DMCA claims, such as claims that a party knowingly sent false takedown notices.
A. Process & Procedures
The copyright attorneys heading the CCB, called “Copyright Claims Officers,” will be experienced in copyright infringement, litigation, and alternative dispute resolution, and appointed by the Librarian of Congress for renewable terms. As copyright claims come in—brought by claimants who file a certified statement of material facts and submit the requisite filing fee—the Officers will review them for compliance with the Act. The filing fee is still unknown, but it will be at least $100 and no more than $400. Claims must be served upon the opposing party in accordance with the Act. Since the tribunal is voluntary, parties against whom an action is brought before the CCB will also have a 60-day “opt out” period after receiving notice of the claim, requiring the claimant to bring its claim in federal court (or abandon it). Libraries and archives who qualify under Section 108 of the Copyright Act will also have the opportunity to preemptively opt out, by filing a notice with the Copyright Office.
During the hearing, the Officers will consider the evidence and arguments both parties present. The CCB will make certain formalities optional, such as representation by counsel and personal appearances; likewise, the CCB will provide a process for only limited discovery. Law students will be permitted to represent parties.
Creators must register their work with the Copyright Office before the CCB will hear the infringement claim. To facilitate the process, the Register of Copyrights shall establish regulations allowing the Copyright Office to make expedited registration decisions for any unregistered works appearing before the CCB. As in the federal courts, when a rightsholder has registered will also affect how much he or she can recover, although unlike claims brought in federal courts, owners of unregistered works at the time of the infringement can still obtain half the level of the capped statutory damages provided for by the CASE Act.
Where the CCB rules in favor of the copyright holder, a defendant may be required to remove infringing content and/or pay statutory or actual damages. Parties that wish to challenge a CCB decision will have the opportunity, though, first by seeking CCB reconsideration, and, if denied, by requesting the Register of Copyrights to review the ruling for abuse of discretion. If, in turn, the Register does not provide the requested relief, a party may seek an order from a federal court vacating or modifying the CCB’s decision where the CCB ruling was fraudulent, or where the CCB engaged in misconduct, exceeded its authority, failed to render a final determination, or made a default determination or determination based on a failure to prosecute due to excusable neglect.
True to the Act’s name, eligible claims that go before the CCB should be small, with damage awards capped at $15,000 per claim, with a case maximum of $30,000 (with claims for untimely registered works capped at $7,500). The Act envisions an even more streamlined process for claims seeking damages of $5,000 or less. As in federal court, the CCB will consider various factors in determining damages, such as the length of time the work was infringed, profits, lost income, and any steps the infringer or claimant may have taken to mitigate the infringement.
The Benefits of Electing to Bring A Claim Under the CASE Act
First and foremost, the Act will afford those in the creative community with more channels to protect their works and assert their rights, by allowing photographers, songwriters, authors, and other rightsholders to pursue infringers outside of the bureaucratic, often complicated, and expensive federal court system. Considering that lawsuits often last years and incur costs that soar into the six-figures, many creators would otherwise abandon valid small claims, risk their livelihoods to pursue them, or rely on questionable contingency fee lawyers, labeled “copyright trolls” by the federal courts, for their practice of aggregating unsustainable numbers of low-value claims—often related to single unlicensed uses of photography—for which they seek unrealistic maximum statutory damages. The Act will allow creators to bypass this melee by bringing their small-value claims in a straightforward manner directly before the CCB. This low-cost, streamlined tribunal could be an attractive forum for publishers and other businesses to efficiently resolve lower value claims, where the cost of defense can far exceed the value of the claim. The opportunity to resolve a claim, without the necessity of lawyers, can also benefit all parties by encouraging reasonable settlements. While this forum may not attract those that have turned to litigation as a business model to leverage the high costs of federal litigation, creators that are simply looking for fair compensation may welcome the opportunity to resolve disputes without the need to engage a lawyer and pay hefty contingency fees.
Overall, the Act presents an opportunity to rebalance a copyright regime that has, in recent years, provided insufficient redress for individual creators with legitimate, but small, claims, and which has, in the process, disincentivized them from putting forth new works of art that they believe they cannot protect. Instead, the Act levels the playing field, making valid copyright protection available to all strata of creators, and reinstituting confidence in copyright. The Act will also likely foster more robust licensing, decreasing the threat of rampant and unchecked small-value infringement that discourages this type of investment.
In an effort to ward off misuse and address concerns over the new system, the Act includes numerous safeguards. With damages capped at $30,000, creators cannot bring claims for large groups of infringements. Further, CCB officers may dismiss claims without prejudice that are not suited for this forum and may even dismiss claims filed for a “harassing or improper purpose.” Generally, damages do not include attorney’s fees and costs, except that in the event of cases brought for harassing purposes, the CCB may award up to $5,000 for respondents’ attorney’s fees and costs, and in the case of “extraordinary circumstances” of bad faith conduct, the CCB may increase this amount. Sanctions are also available against a party who uses the CCB to bring a frivolous or abusive claim. Further, repeat offenders may be barred from bringing claims before the CCB for up to a year. Copyright Claims Officers are themselves subject to sanction or removal by the Librarian of Congress for misconduct.
One of the primary concerns amongst critics is that providing an avenue for small copyright claims will actually drive up the overall number of claims, harming online creators behind generally insignificant content that has become a staple of Internet culture, such as memes, videos, etc. This outcome is unlikely, however, considering that CCB officers are tasked with evaluating claims for validity and must consider standard procedural defenses, affirmative defenses such as fair use, and other considerations like platform-type, audience size, and the purpose of the use. As in federal court, statutory damages are within the CCB’s discretion and the $7,500 or $15,000 maximum fee is an outer limit, meaning that awards could be less. What’s more, this amount is still far less than the $150,000 maximum statutory damages per infringed work for willful infringements often invoked in federal court—even where completely unrealistic and only meant to drive defendants to a higher negotiated settlement. As a model, the United Kingdom has had a similar copyright small claims court since 2012, which has often worked to curb the bringing of claims, as would-be infringers are aware that creators have a real recourse to pursuing a small-value payment that may be higher than a mere license fee, and so pay for the work they use at the outset.
Finally, it is worth noting that the Act is one of the rare pieces of litigation with bipartisan support among Congress, as well as many leading institutions, including the Authors Guild, Songwriters Guild of America, the Copyright Alliance, and many visual arts associations, who have supported it in order to give creators a streamlined, cost-effective way to enforce their rights.
Over the next year, the Copyright Office will be setting up procedures to implement the Act. We will continue to update you on further CASE Act developments, and we also recommend the Copyright Office’s NewsNet bulletin updates for further updates. Once implemented, we will know how well this voluntary tribunal is embraced by both the creative and media community.