The History of the Copyright Small Claims Court (aka the Copyright Claims Board)
The Copyright Alternative created the Copyright Small Claims Court, also known as the Copyright Claims Board (the “CCB”) in the Small-Claims Enforcement Act of 2020 (the “CASE Act”). The Copyright Alternative created the CCB in response to a longstanding suggestion from the United States Copyright Office. Back in 2013, the Copyright Office recommended that Congress create a small claims tribunal under their auspices to hear copyright claims.
This would allow owners of copyrights to enforce those rights without bringing an action in federal court, the legally-mandated forum for all copyright claims. A copyright holder bringing suit in federal court is expensive and time-consuming. Further, many rightsholders do not have the resources or time to sue in federal court. Therefore, these rightsholders often did not have accessible means to enforce their rights under the law.
Congress passed the CASE Act as part of the COVID-19 Economic Relief Bill on December 21, 2020. It was signed into law by then-President Trump on December 27, 2020.
What Will the CCB Entail?
The CCB will hear Small Claims, which are copyright infringement claims in which the total amount in controversy is less than $30,000.
The Copyright Small Claims Court will consist of three Officers, two of which will have “substantial experience in evaluation, litigation, and adjudication of copyright infringement claims,” and a third, which will “have substantial familiarity with copyright law and experience in the field of alternative dispute resolution.”
In addition, the CCB will have a staff of copyright attorneys, an assistant, and a paralegal to assist the Officers. The Librarian of Congress appoints the Officers on the Recommendation of the Register for Copyrights.
It is also important to note that participation in the Copyright Small Claims Court is voluntary. This is because the Copyright Office, which the CCB operates under, is a part of Congress. Under the Constitution, Congress cannot hear cases and controversies; Article III assigns that role to the judiciary. Thus, to avoid a potential constitutional issue, both parties must agree to have their claims heard in the CCB. If not, the claim must be heard in federal court.
An Overview of the Copyright Claims Board’s Claims Process
While it is always advisable to find competent counsel before commencing any legal proceeding, the CCB gives less sophisticated rights holders a forum to enforce their rights. As a result, there is an expectation that many parties will proceed pro se.
If they do, the Copyright Small Claims Court will liberally construe the claims and assertions they make. So, while finding an attorney is advisable, it is not strictly necessary.
A rightsholder must ensure they have submitted their work for registration with the Copyright Office to commence an action in the Copyright Small Claims Court. Unlike federal court, where a rightsholder cannot sue until their works have been registered, a rightsholder can bring a claim to the Copyright Small Claims Court after submitting a work for registration. However, the work must be registered before the CCB issues a decision. After submitting the work for registration, the rightsholder may file a claim with the Copyright Small Claims Court.
Important Terminology and Expected Fees
Under the CCB’s terminology, a rightsholder that files a claim is a claimant. If the claim complies with the CASE Act, the CCB will notify the claimant to adjudicate it. To comply, a claim must contain:
- A statement identifying the parties
- The claim the rightsholder is asserting
- The alleged injury
- The relevant facts, and
- A certification that the statements are accurate and truthful to the best of the claimant’s knowledge.
In line with the Copyright Small Claims Court’s mission of offering cost-effective and streamlined procedures, the filing fee is expected to be $100 per claim.
Upon receiving confirmation, the claimant will have 90 days to file proof of service on the alleged infringer, referred to as the respondent, with the CCB. The claimant must serve the respondent with a copy of the filed complaint and notice of the proceedings to obtain proof of service.
What it means that the Respondent can Opt-Out
As mentioned above, CCB proceedings are voluntary. This means that upon receiving notice, the respondent can opt-out of the proceedings if they choose. The respondent must file an opt-out notice with the CCB within 60 days to opt-out.
Upon receiving the respondent’s opt-out notice, the CCB will dismiss the action without prejudice. This essentially leaves the parties in the same legal position before the claim was filed. However, if the respondent does not opt-out within 60 days, the copyright small claims court will consider the respondent to have consented to the proceeding. Thus, the respondent will lose their right to a jury trial.
What Happens if the Respondent Does Not Opt-Out
If the respondent consents to the proceeding or fails to file an opt-out notice, the Copyright Small Claims Court will issue a scheduling order with a 30-day deadline. The respondent may file a response to the claim within this period. The response must contain a short statement disputing the facts, explain why the claim is meritless, and raise all relevant defenses.
The parties will then move onto Discovery. The Discovery process with the Copyright Small Claims Court is less extensive compared to its federal counterpart. Parties utilizing the CCB will be allowed to request the production of documents, written interrogatories, and written requests for admission. Still, they will not be allowed to make routine use of expert witnesses, depositions, and third-party subpoenas.
Who Decides the Outcome of Claims
A panel of three judges will decide claims before the Copyright Small Claims Court. These judges must base all factual findings on the preponderance of the evidence standard. At least two judges must agree before they issue a decision. The judges must write a decision and contain an explanation of the factual and legal basis for their decision. These CCB decisions are not precedential in any sense; the Copyright Small Claims Court must follow existing case law and statutes for every decision it makes.
Damages
The judges cannot issue damages in Copyright Small Claims Court proceedings for more than $30,000. Further, the judges cannot consider the willfulness of the respondent’s conduct. So, while a claimant may bring multiple claims and select between actual damages and profits or statutory damages, the total amount awarded cannot exceed $30,000. The copyright small claims court does not include attorney’s fees in the damages cap. If a party pursues a claim, counterclaim, or defense with no reasonable basis in the law for an improper purpose, the CCB may award attorney’s fees up to $5,000.
The parties will have 30 days from the decision to request reconsideration from the CCB. If the copyright small claims court rejects the request, they will have another 30 days to request a review from the Register of Copyrights. Federal courts will be unable to review most CCB claims. A federal court can only review CCB claims alleging the CCB issued its decision because of:
- Fraud,
- Corruption,
- Misrepresentation, or
- Other misconduct.
Claims the Copyright Claims Board Can Hear
The jurisdiction of the Copyright Small Claims Court is limited to a few copyright claims, specifically claims for infringement under 17 USC 106, declarations of non-infringement, and claims for misrepresentation under the Digital Millennium Copyright Act made in connection with a takedown notice.
A rightsholder can bring any of these claims or a combination of these claims before the CCB. However, they must seek less than $30,000 in total damages. Further, they must have submitted an application for registration of the underlying work with the Copyright Office.
Pros and Cons of Using the Copyright Claims Board
Pros
One notable pro of the CCB is that it will be more egalitarian than the federal court. For example, the claimant will only have to pay $100 to file their claim in the CCB, unlike the $400 filing fee in federal court.
Similarly, since the Copyright Small Claims Court was created to give less sophisticated parties a forum to bring their claims, the CCB streamlines many procedural rules and processes. This saves both time and money for litigants. These streamlined procedures will likely make it easier for pro se litigants can navigate the claims process. It should also reduce the number of hours attorneys can bill, reducing costs for claimants who choose to hire counsel. Finally, since all proceedings are to be remote, there should be no travel costs associated with using in the CCB.
Cons
While the Copyright Small Claims Court may appear like a better forum than the federal court, there are some disadvantages. The first is that participation in the CCB is voluntary. There are legitimate constitutional considerations that influenced the decision to make participation in the CCB voluntary. However, many have noted that this could effectively take the sting out of the CCB’s enforcement capabilities.
The Copyright Small Claims Court is mainly a forum for less sophisticated parties who don’t have the time or money to litigate in federal court. On top of that, the CCB must dismiss an action upon receiving a respondent’s opt-out notice. Therefore, many claimants will find themselves unable to utilize the CCB. With these claimants unable to afford to bring suit in federal court, they are often in the same position they were in before the CASE Act.
Limitations for Damages
However, the downside to any of the pros is that the CCB caps damages to $30,000. A rightsholder may have numerous claims against an infringer. Yet, if they bring those claims in the CCB, they may only receive $30,000 total for all claims.
By comparison, in federal court, no cap exists on actual damages. Statutory damages can vary from $750 to $30,000 per work. Similarly, in the CCB, the court caps attorney’s fees at $5,000. Further the court only awards attorneys’ fees if the opposing party filed a frivolous claim for an improper purpose. By comparison, Section 505 of the Copyright Act gives federal courts discretion to award reasonable attorney’s fees to the prevailing party as part of the costs. A cap does not limit these, and to award them, the court has wide latitude to consider various factors.
However, the CCB has great potential to give copyright holders access to justice the current legal system denies them.
Questions?
If you are interested in learning more about the CCB, contact us today so that we can answer any questions you might have.
