Nexus: CASE Act

US House Judiciary Committee votes to amend small-claims copyright bill (CASE Act) as Senate Judiciary issues favorable report on the bill

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Nearly two months ago, this Kat excitedly reported that the US Senate Judiciary Committee had voted to report a small-claims copyright bill (the CASE Act) to the Senate without amendment. The bill stems from an extensive report by the US Copyright Office considering the establishment of a copyright small-claims as a possible remedy to the deficiencies of enforcement in federal district courts, particularly as it affects individual copyright owners.

Last month, the Judiciary Committee delivered its report to the Senate; only two days prior, the House of Representatives Committee on the Judiciary had voted to report the bill with amendments to the legislature. While we await proposed amendments in the House, let's explore the Senate report, which addresses a variety of advantages and remedies to potential drawbacks of the bill.

The Bill

The Copyright Alternative in Small-Claims Enforcement (CASE) Act of 2019 provides for the establishment of a Copyright Claims Board to render decisions in copyright cases in which the damage award sought is less than $30,000 (before costs and attorney's fees). The Board will consist of three officers that preside jointly over all cases, excluding claims of less than $5,000 in damages.

The bill is intended to remedy the lack of access to enforcement of rights caused by the high cost of litigation in federal district court. This lack of access is compounded by the lengthy process involved in federal litigation, both of which act as barriers to entry for authors with smaller damage awards. Without remedy, continued lack of access to enforcement of rights can act as a form of death by a thousand cuts, reducing the creation and proliferation of the useful arts and sciences that copyright is intended to promote.

The bill would have the further effect of reducing the workload on the district court system, by shifting some cases to the new Copyright Claims Board.

Advantages

This bill has some teeth on it!

The Senate report identifies a variety advantageous features of the CASE Act; some of these features are simply the way that the new system would relate to the current court system, and how this relation will maintain constitutional protections. In particular, the report lauds the maintenance of judicial independence through the nomination of officers to fixed terms and limited allowance of review. Aside from a 30-day period for reconsideration from the Board, any appeal must be made to the district court under an abuse of discretion standard.

Another feature lauded by Senate Judiciary is the voluntary nature of participation in proceedings under the CASE Act. Claimants must choose the procedure, recognizing that it balances minimal litigation costs with limited damage awards. The choice to file is voluntary, but the respondent also has the right to opt-out of the proceeding. The right of opt-out presents interesting strategic opportunities for claimants:

The claimant or counterclaimant will elect whether to recover damages or not. A claimant or counterclaimant may choose not to pursue damages as a way to encourage the other party to not opt-out or to agree to cease certain activity if the claimant or counterclaimant prevails.

The strategic opportunities presented are further augmented by the encouragement of pro-se litigation; attorneys are not required, and attorney fees and costs will not be awarded except in cases of bad-faith prosecution. Further, attorney fees are capped at $5,000 with costs limited to $2,500 for pro-se litigants. In place of attorneys, the Senate sees the demand for legal assistance in small-claim copyright matters as an opportunity to employ volunteer law students through legal aid clinics. This would provide students with much-needed opportunities and experiences in copyright litigation.

Potential Issues

Much like echo, this bill is not
quite ready to move forward.

Noting the goal of reducing the delays that "have become all too common in Article III courts" there is valid concern that the Copyright Claims Board itself would quickly be overloaded with cases, producing delays similar to federal courts. This concern was raised by Professors Helmers, Lefouili, Love, and McDonagh in an article comparing this proposal to the Small Claims Track of the Intellectual Property Enterprise Court of England and Wales. These researchers recommend lowering the damage award, arguing that the cap of $30,000, in tandem with the presence of statutory damages will lead to an unmanageable caseload. The concern of overload is further driven by the Copyright Office's goal of deciding cases within six months of filing.

The Senate report addresses the concern of overload by promoting use of the "micro-claims" provision, by which a single Board officer may issue rulings on cases in which the damage alleged (not including attorney fees and costs) is under $5,000. This will reduce the workload on the Board as a whole while maintaining an avenue for the enforcement of copyrights concerning very small damage awards.

Another concern, raised by groups such as the Electronic Frontier Foundation, is that this program is subject to abuse, the effect of which would be a chilling of free expression and emboldened copyright trolls. The Senate report addresses the effect on expression, noting that the small-claims Board would provide a remedy for misrepresentation in DMCA notices, a chilling force on expression that often does not prompt sufficient damages to pursue litigation. Further, the Senate report recommends that the Copyright Office fully utilize its authority to penalize abusers with dismissals and financial sanctions.

Eyes wide open

Conclusions

On a positive note, the CASE Act appears to be advancing far more smoothly through the 116th Congress than the 115th, where it died in committee. This Senate report shows bipartisan favor for the bill and addresses many of the concerns that could otherwise hinder its legislative progress.

On a precursory note, the House Judiciary Committee will recommend amendments to the bill in its report to the legislature; it remains to be seen whether or not these amendments will substantially alter the bill. Both forms of the bill will be voted upon by their respective houses of legislature and then enter a process of reconciliation. If the bills are successfully reconciled, the resulting bill is presented to the President for signature. That future remains in sight for the CASE Act; this Kat will keep watch as legislative deliberation and voting approaches.

US Senate Judiciary Committee approves small-claims copyright bill (CASE Act) and reports its to legislature without amendment

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US Senate Judiciary Committee
Hearing Room

This (newly minted) GuestKat has been keeping an eye on a possible amendment to the US Copyright Act proposed by the Copyright Office in a 2013 report. Recently, this small-claims amendment proposal received a big boost from the Senate Judiciary Committee; on July 18, Senate Judiciary reported the bill without amendment to both the Senate and House of Representatives for full consideration. Although the bill must still receive a majority of votes in both chambers, last week’s measure provides hope to “hundreds of thousands of U.S. photographers, illustrators, graphic artists, songwriters, and authors, as well as a new generation of creators including bloggers and YouTubers.”

Let’s explore the Copyright Alternative in Small-Claims Enforcement (CASE) Act of 2019.

The Copyright Claims Board

Rather than bringing claims in Federal District Court, the CASE Act provides for a Copyright Claims Board to render decisions in small-claims copyright cases; the Board would consist of three officers appointed by the Librarian of Congress. These officers would have the authority to render decisions in copyright claims and award monetary relief. However, they may only hear claims of infringement, misrepresentation, declarations of non-infringement, and counterclaims. Claims are reviewed by Copyright Office attorneys assigned to the Copyright Claims Board for approval before being served upon defendants.

Proceedings

Participation in Copyright Claims Board proceedings will be voluntary, as defendants may opt-out. If defendants fail to opt-out within 60 days, however, the Copyright Claims Board proceeding will commence. Plaintiffs must register their works with the Copyright Office before initiating a Copyright Claims Board proceeding.

Remedies are capped at $30,000 before costs and attorneys’ fees; the Board may adjust this figure after the statute is enacted. Statutory damages are available at a $15,000 per work maximum, but the Board will not consider willful infringement in determining damages.

Copyright Claims Board proceedings are subject to limited review. District court review may be available in the following cases:

“(A) If the determination was issued as a result of fraud, corruption, misrepresentation, or other misconduct.

(B) If the Copyright Claims Board exceeded its authority or failed to render a final determination concerning the subject matter at issue [or]

(C) In the case of a default determination or determination based on a failure to prosecute, if it is established that the default or failure was due to excusable neglect.”

Parties may also seek review of the Copyright Claims Board decision from the Register of Copyrights; this review is limited to an abuse of discretion standard, however.

F5 Kat

Implications

In the intention of the proponents, the CASE Act will favour access to copyright enforcement across a variety of artists and creators to whom the costs and time of federal litigation may be prohibitive.

Although the opt-out option may limit the effectiveness of the Copyright Claims Board, it also reduces risks for possible unwitting infringers; the CASE Act may prove an effective means of addressing inequities in US copyright enforcement without disrupting US copyright law too severely. This Kat will keep his paw on F5 as we wait for the US Senate and House of Representatives to consider the bill.

Nexus

US House Judiciary Committee votes to amend small-claims copyright bill (CASE Act) as Senate Judiciary issues favorable report on the bill

US Senate Judiciary Committee approves small-claims copyright bill (CASE Act) and reports its to legislature without amendment

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