Protecting creative works from copyright infringers can be an expensive, time consuming and expensive endeavor. Right now, copyright infringement lawsuits must be filed in federal court. Discovery can take years, involve multiple court appearances, depositions, expert witnesses, and hours of document review and motion practice by attorneys. Specifically for copyright cases, damages are hard to predict – if a claimant has a registration certificate, the court can award between $750 and $30,000 in statutory damages (more if a claimant can prove willful infringement, less if the defendant proves innocent infringement). A claimant who does not have a registration at the time of infringement must prove actual damages, which might not always be high, and are difficult to prove and quantify. As a result, in many cases, the attorneys’ fees and costs required to litigate greatly outweigh the potential damage award.
This all means that many copyright owners are left without a realistic remedy when their works get infringed. Creators have been discouraged from enforcing their rights, and copyright infringement is rampant.
Help may be on the horizon!
The Copyright Alternative in Small Claims Enforcement (CASE) Act was signed into law on December 27, 2020, and directed the Copyright Office to establish a tribunal to resolve small copyright claims. As a result, starting in the spring of 2022 (unless the Copyright Office seeks a further extension) the Copyright Claims Board (CCB) will start hearing copyright disputes with damages capped at $30,000.
The CCB is intended to be a cost-effective and efficient alternative to litigation in federal court. There are several key distinctions between the CCB and federal district court:
First, the CCB will only handle certain types of claims. It will operate as a three-judge panel and will only handle claims of infringement under 17 U.S.C. §106, declarations of non-infringement, claims of misrepresentation related to take-down notices and counter notices under the Digital Millennium Copyright Act (DMCA), and related counterclaims and defenses. It will refuse to hear claims brought against a state or government entity, claims brought against a person or entity residing outside of the United States, or claims involving subject matter that the CCB deems to be too complex.
Second, the requirements for bringing a claim in front of the CCB will be less stringent. A copyright owner bringing a claim in front of the CCB will need to either have (i) a copyright registration for the work(s) at issue, OR (ii) a pending application to register the work. The copyright application can be filed either before or simultaneously with filing the claim with the CCB. By contrast, in order to file a lawsuit in federal court, a copyright owner is required to have a registration (or refusal to register) from the Copyright Office – a lawsuit cannot be brought based upon an application.
Third, the relief available to copyright owners through the CCB will be different. The CCB will only be able to award up to $30,000 in total damages per proceeding. Unlike in federal court, where statutory damages are only available to a claimant who registered its work prior to the infringement, the CCB can award statutory damages of $7,500 per work, even if the work at issue was not registered prior to the infringement ($15,000 max per proceeding). If the work at issue was registered prior to the infringement, the CCB can award up to $15,000 in statutory damages (max $30,000 per proceeding). The CCB cannot issue injunctions and cannot enforce its final decisions, meaning that if a losing party fails to pay damages, the copyright owner will have to ask a federal court to enter judgment enforcing the CCB order.
Fourth, proceedings in front of the CCB will be much less burdensome than proceedings in federal court. There will not be motion practice for proceedings in the CCB. Further, discovery will be limited, and all CCB hearings will be conducted remotely. A party who disagrees with a CCB decision will have the ability to (i) file a request for reconsideration, (ii) a request for the Register of Copyrights to review for an abuse of discretion, and (iii) ask a federal district court to vacate, modify or correct a CCB decision. Federal review of CCB will be extremely limited (limited to things like fraud, corruption, and abuse of authority).
Fifth, participation in the CCB is completely voluntary – a respondent will have 60 days from being notified of the proceeding to opt out. A respondent who opts out of the proceeding can still be sued in federal court but the CCB is hoping respondents will be deterred by (i) the cost of defending a litigation in federal court, and (ii) the potential for much higher damages in a federal lawsuit (there is no $30,000 cap in federal court). A respondent who does not opt out of the proceeding within those 60 days will be bound by the decision of the CCB.
We hope that the CASE Act and the newly established CCB will encourage copyright owners, who were previously deterred by the expense and burden of federal litigation, to protect and enforce their creative works. We will continue to monitor developments as the CCB prepares to launch.
If you have questions about enforcing your copyrights, please reach out.