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Big Change for Small Claims

By John-Charles Ward
Washington University Law School
Juris Doctor Candidate 2023

On December 21, 2020, Congress passed the Copyright Alternative in Small-Claims Enforcement Act, or the CASE Act, as part of the Omnibus COVID-19 Relief bill. This was an event 10 years in the making. The CASE Act was a legislative priority for many small creators such as Instagram influencers, small-time photographers, illustrators, children’s book authors, bloggers and other independent creators. Due to the inherent expense of bringing a copyright claim through the federal court system, many independent creators have been unable to enforce their own intellectual property rights against those who infringe them.

The CASE Act created a board within the Copyright Office called the Copyright Claims Board (CCB) that is capable of hearing and rendering judgment on small copyright claims. By creating this Board with procedures designed to hear and expedite copyright claims and make the process of filing and prosecuting a claim less complicated, the Act provides a forum that is a streamlined and less expensive alternative to pursuing a legal claim in federal court. The Board will be made up of three Copyright Claims Officers (CCOs), all of whom must have at least seven years of experience in dealing with copyright litigation. The Board will hear claims that are for damages of $15,000 or less. For claims over $5,000, three of these officers will rule on the outcome of the claim. For claims under $5,000, the claim will be decided by a single CCO.

There are several cost-saving measures encompassed in the Act. Importantly, unlike realistically in federal court, claimants can represent themselves. If they choose to have someone represent them, their representative can either be a lawyer or a law student under proper supervision. Additionally, the conduct of proceedings under the Act is designed to take place remotely, utilizing video conference software and electronic mail. In furtherance of this ideal of simplification, discovery motions, and in fact all other motions, have been limited to special circumstances. This has the dual effect of streamlining the process as well as lowering its expense.

The CASE Act gave the Copyright Office one year to establish the Copyright Claims Board. Many expect that the Board will not accept its first claim until at least December 21, 2021. The details of how the Board will look in operation have not yet been established. As will be discussed later, the CASE Act leaves a great deal of freedom to the Copyright Claims Officers to determine what claims are proper for their consideration and for them to develop the procedures with the aim of simplifying the copyright claims process and of reducing the cost of the process as a whole.

While the details have not yet been ironed out, the purpose of the law is to reduce cost and to democratize the copyright claims process, allowing for independent creators to protect their intellectual property. There are several structural parts of the bill that should help realize this goal, such as the ability of law students to represent clients at the CCB. This will lead to law schools and even members of some organizations like this one, the VLAA, to potentially represent claimants at the CBB, help protect copyright rights and secure recovery for financial damages caused by the infringement.

So how will this look? If you discover that someone is infringing upon your copyright rights, registered or not, you or your representative can file a claim with the CCB. If your copyright was not registered prior to filing the claim, the damages that you can be awarded are limited to $15,000 per proceeding and $7,500 per claim. There is no limit at this time on the number of claims you can bring in a proceeding. If you haven’t already registered the pertinent copyright, you must file an application for it with the Copyright Office concurrently with the filing of your CCB claim. If your copyright is already registered, and this was done so no later than five years after the work was first published, then the CCB can award damages up to $30,000 per proceeding and $15,000 per claim.

The CCB process is kicked off with a written claim that includes a statement of the material facts, a certificate of notice, and a filing fee. The amount of the fee has not yet been determined. After this, a member of the administrative staff of the CCB reviews the claim to make sure that it is compliant with requirements. If it is, the claimant will be notified of said compliance and instructed to proceed with service of the infringement claim. If it is not compliant, there will be a 30-day period in which to file an amended complaint. After you have filed your claim properly and have served notice on the copyright infringer, the alleged infringer will have the opportunity to file any counterclaims it may have. The purported infringer additionally has 60 days to opt out of the proceeding. If the alleged infringer opts out, the claimant would need to go to federal court to seek justice. The CCB maintains the right to dismiss any proceeding if it determines it to be unsuitable due to 1) failure to join a necessary party, 2) lack of essential evidence, or 3) subject matter that exceeds the competence of the CCB. After the preliminary matters are concluded, the CCB will issue a schedule determining the future conduct of the proceedings and requirements for both parties. This schedule can be amended by a Copyright Claims Officer at any point. Although there are no formal motions, parties can request a Copyright Claims Officer to order specific relevant documents be entered into the record. Additionally, the CCB may ask parties to provide certain materials or evidence as it sees fit. However, all such discovery is limited, and requests for additional evidence are limited to exceptional circumstances. If a party fails to provide requested documents, CCOs may assume that the requested evidence favors the other party. In summary, CCOs are limited to considering the following evidence in their determination of a copyright claim: documents and other written evidence, testimony either in written form or not and limited to parties except in exceptional cases. No expert witnesses will be allowed to testify.

The infringement determination will be made by a majority of the Copyright Claims Board panel or single Officer if pertinent. It will be issued in writing and will lay out the explanation of the legal basis for the decision. A party to the decision can request a reconsideration of the within thirty days if there was a clear error of law or fact which was material to the outcome of the decision. In exceptional cases, such as a determination that was the result of fraud, a party to the decision has ninety days to challenge the determination in federal court.

The process laid out above should be much cheaper and more efficient than going through the federal court system. In fact, it is this ease that has led to the main critique of the law: that copyright trolls will take advantage of it to harass big corporations or independent creators. There are several mechanisms that prevent this, however. First, the person the copyright is being enforced against has to agree to being held accountable by the CBB. If the claim is frivolous, one could simply opt-out prior to the start of the proceedings. Second, there are penalties levied against those who use the CCB in bad faith. Currently these are limited to the cost of attorney fees up to $5,000 per claim but this may be increased in the future. Additionally, if persons are found to have filed bad faith claims two or more times in a 12-month period they are prohibited from using the CCB to file claims for 12 months.

In conclusion, passage of the CASE Act may be one of the few good things that have happened during the pandemic. While there is certainly the potential for the new system to be abused, there are also many built-in safeguards to prevent this. The act was a bipartisan attempt to open adjudication to those who cannot afford to bring their claims through the complex and expensive federal court system.

While the CCB is still young it has a lot of potential. In order to make sure that it reaches its potential, people must be sure to make their voices heard. Making use of the Board will create the opportunity to influence its development.  Even if one is not able to bring claims under it, influence can be exerted by carefully watching its development and making sure that it stays true to its goals. I will be watching with you.

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