Should the Copyright Office Have a Claims Board to Settle Copyright Disputes? (H.R. 2426)

What is H.R. 2426?

(Updated October 9, 2020)

This bill — the CASE Act of 2019 — would create the Copyright Claims Board within the U.S. Copyright Office, to decide copyright disputes. The board would be authorized to hear copyright infringement claims, actions for a declaration of noninfringement, claims that a party knowingly sent false takedown notices, and related counterclaims. 

The board may issue monetary awards based on actual or statutory damages. Damages awarded by the board would be capped at $30,000. The parties would bear their own attorneys' fees and costs except where there is bad faith misconduct, and such awards would be limited to $5,000. 

A board's final determination precludes relitigating the claims in court or at the board, but parties may apply to a federal district court for review of the decision. The bill provides for various procedures, requests for information from the other party and requests for the board to reconsider a decision.

Participation in board proceedings is voluntary, and parties may choose instead to have a claim or defense heard in court. If the parties agree to have their dispute heard by the board, they shall forego the right to be heard before a court and the right to a jury trial. Neither party should be coerced into participating. Consequently, no party may, by contract or agreement, relinquish or abridge their right to pursue or not to pursue a claim, counterclaim, or defense before the Copyright Claims Board or their right to opt out of a proceeding before the Copyright Claims Board.

This bill’s full title is the Copyright Alternative in Small-Claims Enforcement Act of 2019.

Argument in favor

Copyright disputes are currently too expensive and time-consuming for individual creators and small businesses to engage in. This means such entities can’t defend their intellectual property against infringement, which costs these people and businesses valuable profits.

Argument opposed

This bill would likely exacerbate, not resolve, existing problems in copyright law. It could also be used to empower copyright trolls and transform a Digital Millennium Copyright Act (DMCA) Notice into a long-term censorship tool — neither of which is a desirable outcome.

Impact

Creators; Small- and medium-sized copyright holders; legal proceedings to defend copyright holders’ intellectual property; and the U.S. Copyright Office.

Cost of H.R. 2426

The CBO estimates that this bill would cost $10 million over the 2019-2024 period.

Additional Info

In-Depth: Rep. Hakeem Jeffries (D-NY) reintroduced this bill from the 115th Congress to establish a Copyright Claims Board at the Copyright Office and thereby make it easier and less expensive for independent creators (such as photographers, songwriters, and graphic artists) to defend their intellectual property from theft and copyright infringement: 

“The establishment of the Copyright Claims Board is critical for the creative middle class who deserve to benefit from the fruits of their labor. Copyright enforcement is essential to ensure that these artists, writers, musicians and other creators are able to commercialize their creative work in order to earn a livelihood. The CASE Act will enable creators to enforce copyright protected content in a fair, timely and affordable manner. This legislation is a strong step in the right direction.”

Original cosponsor Rep. Doug Collins (R-GA) adds: 

“The U.S. economy depends on our ability to ensure intellectual property, including copyrights, is protected. The CASE Act would establish a copyright small claims court to give creators the ability to protect their livelihoods and fight back against infringement of their works. Protecting intellectual property is critical to continue growing our economy, maintaining our position as a world leader and ensuring the creative spark remains alive with current and future generations.”

Sen. John Kennedy (R-LA), who is sponsoring this bill’s Senate companion, says: 

“Creative ideas are your property, whether you’re a photographer or an independent movie director. It shouldn’t cost you a fortune to protect your creativity from copyright infringement.  This bill creates a legal avenue for artists to pursue copyright violations more quickly and less expensively. Louisiana’s rich culture and history are rooted in the successes of talented artists, musicians and authors.  We need to make sure that Americans’ creative spirit is preserved and protected.”

The Copyright Alliance argues this bill is needed to protect creators and small businesses: 

“Because federal courts have exclusive jurisdiction over copyright, and federal litigation is so expensive, many professional creators and small businesses simply cannot afford to defend their rights when someone infringes their copyrighted works. Visual artists, authors and songwriters are hurt the most by the high cost of federal litigation because the individual value of their works or transactions is often too low to warrant the expense of litigation and most attorneys won’t even consider taking these small cases. As a result, these infringements regularly go unchallenged, leading many creators to feel disenfranchised by the copyright system. In effect, these creators have rights but no remedies.”

American Bar Association (ABA) president Judy Perry Martinez expressed support for this bill in an October 21, 2019 op-ed in : 

“Congress has an opportunity to join together and pass legislation that will provide authors, artists and other creators with a meaningful way to protect their work. Both houses of Congress will soon be voting on the Copyright Alternative in Small-Claims Enforcement Act of 2019 (the ‘CASE Act’), which creates an alternative forum to pursue low value claims of copyright infringement. Under the current system, authors whose work has been copied or infringed upon have no cost-effective way to get compensated. The high cost of legal action they need to take (sometimes tens of thousands of dollars) could significantly outweigh the damages they might be awarded. They also can’t bring a claim in a state court because the law requires copyright cases to be heard in federal court. Copyright owners with small infringement claims essentially have a right without a remedy. When the cost of bringing a federal lawsuit significantly outstrips the value of their claims, this hinders copyright law from fulfilling its central function of incentivizing the creation of new expressive works. If enacted, the CASE Act will avoid costly copyright lawsuits by establishing a Copyright Claims Board within the United States Copyright Office to resolve claims up to $15,000 for a single work and up to $30,000 in one proceeding in which two or more claims are asserted. While the CASE Act will provide more cost-effective protection for plaintiffs, copyright defendants will also benefit from the proposed legislation. Currently, defendants can be burdened with significant legal costs and drawn out suits, even where their use is a fair use or otherwise lawful. Participation in a small claims proceeding would cap their damages and likely provide a faster resolution of the dispute… The CASE Act would bring positive change to the copyright system by providing copyright holders with a realistic means to protect their works.”

Public Knowledge opposes this bill, as it argues that it would worsen, not resolve, existing problems in copyright law. The organization’s Policy Counsel, Meredith Rose, says: 

“We acknowledge the very real problems faced by many artists trying to enforce their copyrights online, and are hopeful that collaboration among all stakeholders can create a meaningful solution. However, the current CASE Act is not it. The Act further entrenches an already-toxic culture of secrecy within major entertainment industries; undermines recent Supreme Court precedent on the importance of copyright registration; and creates a body that can grant un-appealable, enormous judgments that stretch the definitions of ‘small claims,’ while empowering the Copyright Office to further increase those judgment amounts in the future. This system, as drafted, is both flatly untenable, and unlikely to solve the problems it claims to address. We look forward to working with Rep. Collins and Rep. Jeffries to try and remedy these and other concerns with the bill, and to devise a solution that provides meaningful relief for artists without worsening existing problems in copyright law.”

The Electronic Frontier Foundation (EFF) opposes this bill on the grounds that it would “supercharge” the copyright troll industry. It argues that by removing the registration precondition on statutory damages — a vital rule that protects internet users — this bill would open every internet user up to the risk of “life-altering money judgments” through statutory damages. It also argues that this bill could be used to transform a Digital Millennium Copyright Act (DMCA) Notice into a long-term censorship tool, thereby censoring free speech.

This legislation passed the House Judiciary Committee by voice vote with the support of 151 bipartisan House cosponsors, including 106 Democrats and 45 Republicans. Its Senate companion, sponsored by Sen. John Kennedy (R-LA), passed the Senate Judiciary Committee by voice vote. 

A range of creatives’ and legal associations, including the American Association of Independent Music, Recording Industry Association of America (RIAA), and American Intellectual Property Law Association, support this legislation. Re:Create Coalition, the Electronic Frontier Foundation (EFF), and Public Knowledge oppose this bill.

Last Congress, this legislation had 16 bipartisan House cosponsors, including 10 Democrats and six Republicans. It didn’t have a Senate companion in the 115th Congress.

Of Note: Although there are existing remedies for copyright infringement and misrepresentation in conjunction with a Section 512 notice provided for in Title 17, there have been repeated complaints regarding these remedies’ effectiveness in deterring and penalizing such actions. In copyright infringement cases, copyright owners have argued that the existing remedies are only effective for larger copyright owners with higher-value claims and the financial resources for litigation expenses, including attorney fees. Small businesses and individual copyright owners with lower-value claims often can’t afford the prohibitive expenses associated with initiating and maintaining copyright claims in federal court. 

Moreover, even with small businesses and individual copyright owners go forward with copyright suits, there’s a risk of a Pyrrhic victory in court. Damages could be awarded to cover the lost licensing fee, but not the expenses, including attorney fees. Even a complete award of damages may not generate enough of a financial award to attract an attorney willing to work on a contingency fee basis.

In 2011, the U.S. Copyright Office studied concerns with the existing copyright enforcement system. After several public comment periods, hearings, and roundtables over a two-year period, the Copyright Office issued its report, “Copyright Small Claims: A Report of the Register of Copyrights,” in September 2013. The opening paragraph of the Executive Summary states:

“It appears beyond dispute that under the current federal system small copyright claimants face formidable challenges in seeking to enforce the exclusive rights to which they are entitled. The Copyright Office therefore recommends that Congress consider the creation of an alternative forum that will enable copyright owners to pursue small infringement matters and related claims arising under the Copyright Act.”

In his October 11, 2011 letter requesting that the U.S. Copyright Office study concerns with the copyright policy system, then-House Judiciary Committee Chairman Rep. Lamar Smith (R-TX) observed flaws in the existing system. He concluded that this negatively impacts creation, as, “On an individual level, the inability to enforce one's rights undermines the economic incentive to continue investing in the creation of new works. On a collective level, the inability to enforce rights corrodes respect for the rule of law and deprives society of the benefit of new and expressive works of authorship.” 

Media:

• Sponsoring Rep. Hakeem Jeffreies (D-NY) Press Release
  
• Sponsoring Sen. John Kennedy (R-LA) Press Release
  
• The Hill Op-Ed (In Favor)
  
• Copyright Alliance (In Favor)
  
• Public Knowledge (Opposed)
  
• Electronic Frontier Foundation (EFF) (Opposed)
  
• Morning Consult Op-Ed (Opposed)
  
• CBO Cost Estimate
  
• Senate Judiciary Committee Report
  
• U.S. Copyright Office Report (Context)