The COVID-19 Relief Bill includes changes to both federal trademark law and federal copyright law, as covered by the Trademark Modernization Act (TMA) and the Copyright Alternative in Small-Claims Enforcement Act (CASE Act). Both Acts should be fully implemented and effective by December 27, 2021.
We previously discussed tools provided by the TMA to help trademark owners enforce their rights in federal courts and before the USPTO. In parallel with the TMA, the CASE Act provides a tool that helps copyright owners enforce their rights that otherwise would have been inconceivable for those with fewer resources.
Currently, there are several options copyright owners may consider when their work is infringed. One option may be first approaching the infringer to solve the matter civilly. That may or may not stop infringement. If that does not work, retaining an attorney to send a cease-and-desist letter forewarning litigation may stop infringement. Filing a claim in a local small claims court is also another option for copyright owners. However, as a small claims court cannot adjudicate copyright infringement claims, a copyright owner would need to settle for related civil claims, such as a claim of breach of contract. When none of these options is satisfactory, filing a claim in a federal court is the remaining option.
Federal courts have exclusive jurisdiction over copyright. Bringing copyright infringement claims in federal courts can be so costly that it is an unattainable option for some copyright owners, such as independent artists. When they are unable to afford the costs of litigation and yet none of the other options is viable, copyright owners can feel defenseless even in the world’s strongest copyright system.
The United States Congress has long recognized issues faced by small copyright owners and instructed the United States Copyright Office (“Copyright Office”) to study potential solutions. After an extensive review, in a September 2013 report, the Copyright Office recommended an establishment of a small claims tribunal system for copyright owners seeking damages up to $30,000. This small claims tribunal system would be run by the Copyright Office.
Based on the Copyright Office’s recommendation, the CASE Act provides an alternative venue aimed at mitigating costs associated with federal litigation of copyright infringement, such as attorney fees since legal representation is not required, as further discussed below. The CASE Act directs the Copyright Office to establish a Copyright Claims Board (Board) within the Copyright Office. While the exact cost of filing a claim with the Board is to be determined, it will be no more than the cost of filing a claim in federal court.
The Board would be made up of a panel of three “Copyright Claims Officers,” who will conduct proceedings to resolve copyright claims relating to infringement under 17 U.S. Code § 106 or relating to Digital Millennium Copyright Act (DMCA) protocol under 17 U.S. Code § 512(f). The Copyright Claims Officers are licensed attorneys, with two of the attorneys having “substantial experience in the evaluation, litigation, or adjudication of copyright infringement claims.” The claims that can be heard by the Board fall into the following categories: (1) a claim for infringement, (2) a claim for a non-infringement declaration, and (3) a claim for misrepresentation in a DMCA takedown notice or a counternotice. Claims against federal entities, state entities, and foreign entities are not permitted before the Board. In addition, claims previously adjudicated or currently pending in court are also not permitted before the Board.
Unlike copyright infringement suits brought in federal courts, a claim before the Board does not need to wait until the copyright is successfully registered by the Copyright Office, as long as an application for registration has been filed with the Copyright Office and a registration certification has not yet been refused. However, the Board will hold the proceeding in abeyance pending a successful registration before dismissing the proceeding after one year. If the registration is obtained in time, theoretically, an earlier filing date could lead to an earlier hearing date before the Board. As a claim before a federal court, a claim before the Copyright Office must be brought within three years after the claim accrued (e.g., a three-year statute of limitation).
Proceedings before the Board are voluntary as any party can opt out within sixty days of a respondent (defendant) being served with notice by a claimant (plaintiff). For example, the respondent may choose to resolve the dispute in federal courts instead. If any party opts out, the Board will dismiss the proceeding without prejudice, allowing the claimant to pursue the matter in federal courts. If the respondent does not opt out, then the Board will move forward with the proceeding.
Parties to the proceedings can represent themselves without the need of legal counsels to understand the proceedings. Parties waive their right to formal motions and a jury trial. The proceeding includes limited discovery and virtual hearings conducted over the Internet (rather than in-person appearances). All these practices result in simpler and speedier proceedings associated with lower costs without significantly sacrificing the fairness of the outcomes.
The Board makes a final determination (reached by a majority of the Board) and assesses damages. For copyrighted works that was timely registered under 17 U.S. Code § 412, the maximum statutory damage would be $15,000 per work and $30,000 per proceeding. For copyrighted works that was not timely registered under 17 U.S. Code § 412, the maximum statutory damage would be $7,500 per work and $15,000 per proceeding. The final determination made by the Board will be made available to the public.
While a proceeding before the Board has various benefits, as discussed above, the Board’s decision has a different legal impact from a judge’s ruling. The Board is bound by judicial precedent in deciding a matter. However, board decisions may not be relied upon as legal precent, even in subsequent proceedings before the Board. Board decisions are not appealable to a higher court, although limited judicial review is available on the basis of misconduct, such as fraud and misrepresentation. In addition, district courts may review default judgments and may vacate them upon a showing of excusable neglect. A claim brought before the Board precludes a party from litigating that claim in federal courts.
The CASE Act provides an affordable and accessible process for those copyright owners seeking to resolve minor disputes, as well as safeguards to deter abuse of this new process. The Board may bar any party who pursues a claim or defense in bad faith from initiating a proceeding before the Board for 12 months and may dismiss all pending cases filed by that party.
On March 26, 2021, the Copyright Office issued a notification of inquiry seeking public comments regarding regulations to establish the Board. Instructions on how to submit can be found on the Copyright Office’s website. Initial comments must be received no later than April 26, 2021, at 11:59 p.m. eastern time. Reply comments must be received no later than May 10, 2021, at 11:59 p.m. eastern time.
We will continue to follow legal developments surrounding the CASE Act as the Copyright Office prepares to establish the Board. We are ready to help you consider whether a CASE Act proceeding, once implemented, is suitable for you. If you have additional questions or require assistance with your intellectual property matters, please do not hesitate to contact our office.
 See Fourth Estate Public Benefit Corp. v. Wall-Street.com, 139 S. Ct. 881 (2019).
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