How the Copyright Alternative in Small-Claims Enforcement Act Can Help Content Creators
Copyright law exists to protect original creative works from unauthorized use or copy. The general rule is that copyright holders can sue and obtain damages from someone who uses their work without permission. But bringing a lawsuit to court can be an expensive endeavor. As a result, small or self-published content creators often decide not to pursue copyright infringement claims because the expense tends to outweigh the likelihood and value of any financial recovery. The practical effect is that the infringer ends up profiting from his or her illegal actions. At the end of 2020, to address this problem, Congress established Copyright Alternative in Small-Claims Enforcement (CASE) Act.
Background
The internet has made copyright infringement pervasive. There is an ever-increasing number of content creators, as the barriers to publishing have virtually disappeared. Meanwhile, anyone can easily access and digitally share content created by somebody else. Unfortunately, copyright laws in the U.S. have not adequately kept up with the realities of copyright infringement. Such claims must be brought in federal court—a process that is notoriously costly and timely. Many small and self-published content creators have not been able to afford to litigate in federal court to stop infringers and obtain damages. But with the CASE Act, content creators now have a less expensive and more convenient way to enforce their copyrights.
The CASE Act Provisions
The CASE Act established the Copyright Claims Board (CCB) to act as a type of small claims court for copyright claims. The CCB is a tribunal consisting of three officers who are tasked with representing both copyright holders and copyright users. These officers are chosen by the Librarian of Congress for their extensive experience in copyright law.
The claims process is much simpler under the Act than its historical alternative.
The first stage of the process requires the aggrieved party to file their claim. This includes a statement of facts, a certification verifying the truth of the claim and a filing fee. Unlike previous avenues of redress, the CASE Act permits relevant documents to be submitted without the need to appear in court in person. Further, the discovery process, whereby evidence is uncovered and collected for both sides of a dispute, is very limited. This minimizes the time and cost of an action, which can be beneficial to both sides.
The CASE Act can be used by copyright holders seeking recovery for infringement and by copyright users looking for a declaration that they are not violating any copyright. Both parties can also request that the CCB resolve challenges to takedown notices under the Digital Millennium Copyright Act (DMCA).
It is important to note that this new process is voluntary and both parties must consent to it. Where a party opts out, a lawsuit can still be brought in federal court or both sides can agree to mediation or arbitration. Parties are not required to have attorneys present, but it is nonetheless highly recommended at this stage for those who wish to bring the strongest case possible.
Remedies Under the CASE Act
Monetary damages are available under the CASE Act. Parties may elect either actual damages and profits, or statutory damages. Actual damages are damages of lost profits that proximately result from the infringement. Statutory damages are damages that can be awarded by a judge or jury, usually without regard to the actual harm.
Yet—there is a cap on the amount that can be recovered. The limit is $15,000 for a single infringement and $30,000 for multiple infringements. This does not include attorney fees and costs, for which up to $5,000 may be awarded if a claim or counterclaim was brought in bad faith (i.e., where a party pursued a claim, counterclaim, or defense for an improper purpose or without a reasonable basis in law or fact). Notably, if a party acted in bad faith more than once in 12 months, the party will be barred for 12 months from initiating a claim before the CCB.
A party cannot obtain a court order to stop infringing activity under the CASE Act. At the same time, the parties can agree to cease infringing activity, which the CCB would ultimately consider in rendering its final decision. This does not have the same effect as a court order. Should the infringement continue, the copyright owner must go to federal court to obtain an injunction.
Disadvantages of the CASE Act
As noted above, the CASE Act provides a faster, simpler and less costly dispute resolution process in comparison to a lawsuit in federal court. Regardless, the cap on damage awards can be a significant deterrent to pursuing claims under the Act. In federal court, damage awards can be significantly higher. Statutory damages are between $750 to $30,000 per infringed upon work and up to $150,000 per work if the infringement was committed willfully. Actual damages may be even higher.
A party can also obtain an injunction in federal court, which prohibits another party from engaging, or to the contrary compels that party to engage, in a particular act. Failure to comply with an injunction is punishable by law.
Another potential downside of the Act is that once a decision is rendered, the methods by which to contest that determination are limited. For instance, a party may request that the CCB reconsider a decision. If denied, the party may request review by the register of copyrights to determine whether the board abused its discretion in denying reconsideration. Moreover, a party is afforded the right to pursue its challenge in federal court only in a few instances. Such instances include challenges on the grounds of fraud, corruption, misrepresentation, or other misconduct, or if the CCB exceeded its authority or failed to render a final determination.
Conclusion
The CASE Act has the potential to provide copyright owners and copyright users with the relief they undeniably deserve, but have been unable to afford due to the expenses that accompany the copyright infringement litigation process. Nonetheless, it is of utmost importance that you review your circumstances carefully and determine whether the CASE Act provides the best path for your case. Consult experienced counsel for advice before filing or agreeing to pursue dispute resolution in any forum.
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