On December 27, 2020, as part of the omnibus spending and COVID-19 relief bill (the Consolidated Appropriations Act, 2021), President Trump signed into law the Copyright Alternative in Small-Claims Enforcement Act of 2020 (the CASE Act of 2020), which establishes a small-claims tribunal within the U.S. Copyright Office to adjudicate infringement cases.

The New “Copyright Claims Board”

The new tribunal, called the “Copyright Claims Board,” will serve as an alternative forum in which parties may voluntarily seek to resolve low-dollar-value copyright infringement claims regarding any category of copyrighted work.  It will be staffed by three “Copyright Claims Officers,” who will be appointed by the Librarian of Congress upon the recommendation of, and in consultation with, the Register of Copyrights.  Damages will be capped at $15,000 for each work infringed, and $30,000 in total per proceeding.  Claims will generally be adjudicated by a panel, but claims seeking damages of $5,000 or less may be adjudicated by a single Copyright Claims Officer.

Participation in the new small-claims system will be voluntary.  However, to avoid the small-claims system once a proceeding has been initiated there, an accused infringer must opt out within 60 days of receiving notice of the proceeding.  A party that fails to properly opt out within the 60-day timeframe will lose the opportunity to have the dispute decided by a court and waive the right to a jury trial.

Pros & Cons

The CASE Act is the product of many years of advocacy by artists and other content creators, who long sought a streamlined and more affordable alternative to the expensive federal court system where copyright claims are otherwise litigated.[1]  Proponents of the Act contend that the small-claims tribunal within the Copyright Office will enable creators to protect their copyrighted material more efficiently.  However, critics such as the Electronic Frontier Foundation and Public Knowledge maintain that adjudication of infringement disputes within the Copyright Office is unconstitutional and will embolden copyright trolls, chill speech and lead to unfavorable outcomes for users of copyrighted works due to alleged bias within the Copyright Office in favor of copyright-holders.

Arguments questioning the new Board’s constitutionality are reminiscent of criticisms previously levied against the Copyright Royalty Board, another quasi-judicial body within the Copyright Office (which is part of the legislative branch).[2]  This time, Congress appears to have attempted to prospectively address the concerns that the Court of Appeals for the D.C. Circuit discussed in Intercollegiate II by making clear that the Library of Congress has the power to remove and supervise Copyright Claims Officers.  Nonetheless, we may see constitutional challenges to the Copyright Claims Board in the future.

The CASE Act also addresses concerns about copyright trolling, at least to some extent, by permitting the Register of Copyrights to establish regulations limiting the number of proceedings any single party can initiate within a specified time period.  However, critics argue that this does not go far enough to protect users of copyrighted works and ensure free speech.

And, although the Act requires that individuals appointed Copyright Claims Officers have represented or presided over a diversity of copyright interests, “including those of both owners and users of copyrighted works,” critics continue to express concern that the Copyright Claims Board, which will be physically housed within the Copyright Office, will nonetheless tend to favor industry players in light of persistent regulatory capture in the Copyright Office.[3]

So What Now?

Now that the President has signed the bill into law, we will likely see the Copyright Office begin to implement it over the coming months; we will closely monitor new regulations as they are proposed, enacted and applied.  Once the Copyright Claims Board is up and running, parties will need to carefully and strategically consider the advantages and disadvantages of the new system when determining how best to pursue or defend against infringement claims.

The full text of the CASE Act of 2020, as enacted, can be found here beginning on page 2,544 of the COVID-10 relief bill.

Postscript

The CASE Act was not the only piece of copyright legislation that made its way into the COVID-19 relief bill.  The new law also includes streaming legislation that establishes substantial criminal penalties for certain digital transmission services that make unauthorized uses of copyright-protected works for profit.  That aspect of the omnibus spending legislation can be found here beginning on page 2,539.

[1] See, e.g., Letter from Myra H. McCormack, President, American Intellectual Property Law Association, to Chairman Bob Goodlatte and Ranking Member Jerrold Nadler, House Judiciary Comm. (Sept. 24, 2018), https://www.aipla.org/docs/default-source/advocacy/aipla-letter-to-hjc-on-h-r-3945-sept2018.pdf?sfvrsn=89e3a63d_0; Support the CASE Act, COPYRIGHT ALLIANCE, https://copyrightalliance.org/news-events/copyright-news-newsletters/copyright-small-claims/.

[2] See, e.g., Intercollegiate Broad. Sys., Inc. v. Copyright Royalty Bd. (“Intercollegiate II”), 684 F.3d 1332 (D.C. Cir. 2012) (holding that the Copyright Royalty Board, as constituted at the time, violated the Appointments Clause of the U.S. Constitution as a result of the inability of the Librarian of Congress to remove Copyright Royalty Judges, coupled with the absence of a principal officer’s direction and supervision over their exercise of authority); see also SoundExchange, Inc. v. Librarian of Congress, 571 F.3d 1220, 1226–27 (D.C. Cir. 2009) (Kavanaugh, J., concurring); Intercollegiate Broadcast Sys., Inc. v. Copyright Royalty Bd., 574 F.3d 748, 755–56 (D.C. Cir. 2009) (per curiam).

[3] See, e.g., Letter from the ACLU to Chairman Jerrold Nadler and Ranking Member Doug Collins, House Judiciary Comm. (Sept. 10, 2019) Re: H.R. 2426, the Copyright Alternative in Small-Claims Enforcement (CASE Act) (commenting on an earlier but nearly identical version of the Act), available at https://musictechpolicy.files.wordpress.com/2019/09/2019-09-10-aclu-statement-re-case-act.pdf.