Let’s pretend for a little bit. C’mon, bear with me here. Imagine that you — yes, you! — are an aspiring artist. Maybe you craft in wood. Maybe you write novels or poems. Perhaps you take stunning photographs. If you want to spice things up, imagine that you are a high-energy drummer in an up and coming rock band. One day, as you walk down the street, you see your photos or an excerpt from your book, or hear your latest single — whatever — in a storefront. It could be exciting, right? “Hey! I’m finally making it!” But what if you never sold your work to that store owner, or anybody else, in the first place? If you’re not making money off your art… who is?

In theory, hypothetical-you could sue the store owner for copyright infringement. And yet… if independent creators are, as the stereotype goes, truly “starving artists,” then the soaring costs of litigation will almost certainly act as a nuclear-level deterrent, ensuring that independent artists and creators who victims of piracy remain victims of piracy. This has the consequence of making it effectively impossible for authors, writers, and artists to protect their livelihoods. In turn, this may dissuade the most creative among us from pursuing their vision.

In a 2015 survey, The American Intellectual Property Association found that, on average, the cost of a single copyright litigation case with less than one million dollars in damages was $270,000. It’s hard to imagine any but the most successful artists having the kind of financing available for even small-claims copyright infringement litigation.

Congress, in a surprising move, has decided to take note and actually do something about it. House Resolution 3945 — the Copyright Alternative in Small-Claims Enforcement Act of 2017 (CASE Act, for short) — seeks to provide a cost-efficient avenue for independent and up-and-coming artists to protect their creations from infringement.

The CASE Act, if made into law, would establish a series of tribunals — called the Copyright Claims Board or “CCB” for short — made up of experts in copyright law. These expert judges would review infringement claims without incurring the astronomical costs of full-on copyright litigation.

There are three major aspect of note with regard to the CCB: (1) issues of jurisdiction and due process; (2) the limitation of damages; and, (3) the existence of an opt-out system.

Jurisdiction and Due Process

Critics of the bill complain that the CCB circumvents due process by allowing an alternative to the federal courts — which currently have exclusive jurisdiction over copyright infringement claims. Indeed, the CCB would be a subsidiary of the Copyright Office, completely independent from the judiciary. Further, the judges would be appointed by the Librarian of Congress, and could not be removed based on the “substantive result of any individual determined reached by the” CCB. Federal courts would still not have jurisdiction on appeal, either; instead, decisions of the CCB could only be appealed to the Register of Copyrights. Only in instances of “fraud, corruption, misrepresentation, or other misconduct”, or when a party failed to appear with an excusable reason, or when the CCB has “exceeded its authority” could the decision of the tribunal be removed to federal court. Importantly, removal to federal court is not available when the CCB errs in interpreting the law.

However, the CASE Act seeks to remedy this, built-in, by requiring both the plaintiff and the defendants to consent to the CCB’s jurisdiction. Thus, if one is a defendant in a copyright infringement case they must agree to the tribunal system for it to have jurisdiction; if the defendant does not consent to its jurisdiction, then federal district courts retain their jurisdiction over the claim. It should also be taken into account, however, that, from a practical standpoint, the astronomical expenses of copyright litigation act as a sort of de facto hurdle in preventing due process.

Limitation of Damages

Under the CASE Act, the CCB’s jurisdiction is limited to cases in which damages up to $30,000 are in play. In other words, the CCB could only award a copyright holder up to $30,000.00 — any claim for a larger amount would still be within the federal circuit’s sole jurisdiction. Small claims courts are not a new idea; indeed, small claims divisions exist in the judicial branch of all 50 states. On average, these small claims divisions have a limitation of damages of approximately $6,000.

The CCB, on the other hand, could levy damages five times more than the average small claims court. This is, in part, because the CCB would not be limited to providing so-called “actual damages,” but could also assign statutory damages under 17 U.S.C. § 504. Statutory damages are available in certain circumstances to punish infringers even when the copyright in question is not wildly profitable.

Thus, the CCB is ultimately limited to awarding $15,00 in damages per infringement, with up to $30,000 in damages total. The bill’s critics take issue with the fact that the CCB’s damage limitation is more than double of the damages available in the small claims courts of 49 states. However, these critics seemingly ignore the reality that copyright infringement may not result in much actual damage, especially for smaller artists, and that statutory damages are available in copyright cases for the deterrence effect. Further, critics seemingly ignore that the $30,000.00 limit on damages — even statutory damages — is far less than the $150,000.00 in statutory damages available under Title 17 of the United States code for willful infringement.

The Opt-Out System

As mentioned above, the CCB would be an “opt-out” tribunal. This means that, upon being served a notice of the suit, a Defendant will have the opportunity to deny the CCB’s jurisdiction, instead having the federal circuit determine the case. However, a defendant who fails to respond will automatically be subjected to the CCB’s jurisdiction. This could pose problems by creating what could be a “default judgement farm system,” so to speak. If copyright holders know that defendants are not likely to appear, they may be inclined to “farm” complaints against defendants in front of the CCB and then achieve a default judgment — all outside of the scope of the judicial process and, indeed, circumventing the judicial process as we have known it.

Conclusion

It may be that the CASE Act is fundamentally flawed and not the proper answer to the very real issues of a de facto lack of availability for independent copyright holders to enforce their copyrights. However, it is interesting legislation which highlights areas in which enforcing one’s copyright is fundamentally broken in 2018. Clearly, something — whether it be the CASE Act or a derivative of the CASE Act — should change to provide for easier access to small claims copyright enforcement legislation.

If you are an author or artist in need of help obtaining a federal copyright registration or enforcing your copyrights, you can contact the professional attorneys at Law Offices of John D. Gugliotta, P.E., Esq., LPA. Our registered attorneys can help you secure federal copyright registration! Contact us today here, or call us at (888) 298-8580.

The Law Offices of John D. Gugliotta, P.E., Esq., LPA publishes this blog for educational purposes only, not to provide specific legal advice. By using this blog site you indicate that you understand there is no attorney-client relationship between you and the Law Offices of John D. Gugliotta, P.E., Esq., LPA. This blog should not be used as a substitute for obtaining legal advice from a licensed attorney. In addition, statements made on this blog represent the viewpoints of the individual authors, and do not necessarily reflect the views of Law Offices of John D. Gugliotta, P.E., Esq., LPA or any of our clients.