Thoughts on the Proposed Small Claims Court for Copyright Infringement

Earlier this month, the Copyright Alternative in Small-Claims Enforcement (CASE) Act was introduced in the House of Representatives and an identical bill was introduced in the Senate. The Act would, if enacted, establish a type of “small claims” court (formally called the Copyright Claims Board) for copyright disputes. The purpose of the Act is to make it easier (and less expensive) for independent creators (e.g., photographers, songwriters, graphic artists) to able to defend their intellectual property rights. And I think as a general matter, a type of small claims court for copyright infringement could very well achieve that goal. However, there are a number of aspects of the Act that will be subject to further discussion and that in some instances have attracted some criticism.

One of the most important features of the proposed Act is that participation would be voluntary. Anyone who is served with a notice and claim would thereafter have sixty (60) days during which to opt-out, which they would do by providing written notice to the Copyright Claims Board (CCB) in accordance with rules established by the Register of Copyrights. If a defendant opts out, the claimant would, if they wanted to pursue their claim, have to then bring the claim in federal court, as is currently the process for filing a lawsuit for copyright infringement. Some have argued that the voluntary nature of participation will lead to sophisticated defendants (with the pockets to litigate in federal court) opting out, at which point the claimant would be in the same position they would have been in but for the Act, except the claimant would also be out of pocket for the additional time and expense incurred up to that point. However, the opt-out provisions may give comfort to some who may believe that a small claims-type copyright court could encourage the proliferation of claims filed by copyright trolls.

Recovery in an action brought before the CCB is also limited. There is an overall damages cap of $30,000 (exclusive of any attorney fees and costs permitted by the Act) for any single proceeding before the CCB. In addition, while statutory damages (which are an alternative measure of damages from actual damages) are authorized under the Act, they are more limited than would be the case in an action in federal court. In proceedings before the CCB, statutory damages would be limited to $15,000 per work (though note that for works that were not timely registered, the limit is even lower).

There are a number of other interesting provisions to note as well. For example, the CCB will not be comprised of federally appointed (in the traditional sense) judges, but instead by a panel of three lawyers, who would be appointed by the Librarian of Congress. Another aspect of the Act worth noting is that the grounds for appeal are limited. Specifically, after a final determination by the CCB, a party could seek reconsideration by the CCB under certain grounds (e.g., clear error of law). If such reconsideration is denied, a party would be allowed to seek review by the Register of Copyrights. However, this review would be limited to whether there was an abuse of discretion (which is a high bar) by the CCB. A party who is subject to a final CCB determination could also seek relief in court, but the Act by its terms limits such review to instances of (a) determinations issued as a result of fraud, corruption, misrepresentation or other misconduct; (b) the CCB exceeding its authority or failing to render a final determination; and (c) in cases of default determinations or determinations based on failure to prosecute, where the default or failure was due to excusable neglect.

The Act appears to be supported by a number of organizations, though some criticism has been leveled at it as well. In any event, however, the idea of making it easier for independent creatives to enjoy protections the law affords them for their art is a worthy one, so putting something like this on the table, is probably a step in the right direction.