Remedies for Copyright Small Claims

The Copyright Act protects a wide range of works of authorship, from articles or photographs that may not have a high commercial value individually, to motion pictures worth hundreds of millions of dollars in the marketplace. The copyright owners of any of these works can pursue infringers by filing lawsuits in federal district courts. Not all copyright owners, however, have the resources to bring a federal lawsuit, which can require substantial time, money, and effort. Moreover, while a copyright owner may want to stop an infringement, he or she may be dissuaded from filing a lawsuit if the prospect of a modest recovery is outweighed by the potentially large expense of litigation. While the Copyright Act also offers the possibility of obtaining statutory damages and attorneys’ fees, these benefits are not always available and may not be recovered until after a long court battle that can entail significant up-front costs.

In 2011, Congress asked the Copyright Office to study the current system for resolving copyright claim disputes with a relatively small economic value, as well as possible alternative systems. The Office examined the issues for two years, soliciting public comments and holding four days of hearings. The result was the Office’s 2013 report, Copyright Small Claims, which provided recommendations and proposed legislative language. It recommended that Congress create a streamlined, voluntary adjudication process in the Office to resolve copyright infringement claims that do not exceed $30,000. The entity created would: (1) administer proceedings through online and teleconferencing facilities without the requirement of personal appearances; (2) streamline proceedings, with limited discovery and no formal motion practice; (3) be staffed by three adjudicators, two of whom would have significant experience in copyright law, together having represented or presided over the interests of both owners and users of copyrighted works, with the third having a background in alternative dispute resolution; (4) be a voluntary alternative for both parties; (5) allow respondents to assert all relevant defenses, including fair use, as well as limited counterclaims arising from the infringing conduct; (6) allow parties threatened with an infringement action to seek a declaration of noninfringement; and (7) issue decisions that would be binding only with respect to the parties and claims at issue and have no precedential effect, subject to limited administrative review for error as well as challenge in federal district court for fraud, misconduct, or other improprieties.

Since 2013, legislation embodying a small claims solution has been introduced in Congress multiple times. On December 27, 2020, the Copyright Alternative in Small-Claims Enforcement Act of 2020 (the CASE Act) was enacted as part of the Consolidated Appropriations Act, 2021. The CASE Act includes a number of the Office’s earlier recommendations. It establishes a Copyright Claims Board (CCB) in the Copyright Office to hear copyright infringement matters and (1) caps damages at $30,000 total (including statutory damages of $15,000 per work, and $7,500 per work for which an application was not filed in accordance with section 412 timelines); (2) provides an opt-out option for the respondent; (3) includes streamlined procedures that limit discovery and rely mostly on written materials; (4) allows claims by both copyright owners and users for infringement and exceptions and limitations, respectively; and (5) includes additional fees for bad faith claimants and bars those who repeatedly abuse the system.

The Office must establish the CCB by within one year of enactment, unless the Register of Copyrights, for good cause, extends the time period for no more than 180 additional days. The Office will soon begin implementation activities. Proposed regulations will be published in the Federal Register and the Office will provide updates through its NewsNet service.