Copyright Small Claims Court: A New (Limited) Way to Enforce Copyrights

Good news for copyright holders – there is now a less costly alternative to enforcing certain ‎copyrights in the form of a copyright-only small claims court.‎

In December 2020, Congress passed the Copyright Alternative in Small-Claims Enforcement ‎Act of 2020 (CASE Act). This legislation established the Copyright Claims Board (CCB), a ‎three-member tribunal that provides an option to resolve certain copyright disputes with a ‎maximum of $30,000 in potential damages. ‎

The CCB only hears cases involving claims of infringement, declaratory judgments of non-‎infringement, and claims of misrepresentation in notices sent under the Digital Millennium ‎Copyright Act. Counterclaims are limited to only those that are in response to the claims within ‎the CCB’s jurisdiction and contract claims related to copyrighted works arising out of the same ‎transaction or occurrence.‎

The CCB’s largest advantages for plaintiffs are the reduced timeline and costs of bringing a ‎claim. Parties need only provide limited, basic documents and information, and there are no ‎formal motions, which reduces a case timeline significantly. It costs a total of $106 to file a ‎claim and designate an agent for service. The cost of a final determination is an additional ‎‎$300. With payment of an additional $50 fee, a case can be expedited. After an Expedition ‎Request is made and a case is marked active (meaning the defendant has been served and has ‎not opted out), cases are reviewed within 10 days. Additionally, all proceedings before the ‎CCB are virtual.‎

It is important to note certain limits of the CCB. Participation in the CCB process is voluntary; ‎each party has the opportunity to opt-out in favor of suing in court. A defendant has sixty days, ‎typically, to opt-out of CCB participation once a complaint is filed. A plaintiff can also ‎withdraw a claim. If a withdrawal occurs before the defendant files a response, the dismissal ‎does not prejudice the claim from being brought again. After the defendant files a response, the ‎CCB must make a final determination on the matter and dismiss a claim with prejudice, unless ‎the CCB decides otherwise, in the interest of justice. ‎

In any 12-month period, a pro se plaintiff cannot bring more than 30 proceedings, while a law ‎firm cannot file more than 80 proceedings on behalf of clients, and a sole practitioner cannot ‎bring more than 40 proceedings on behalf of clients. ‎

The monetary damages are either statutory damages (in specific dollar ranges set by the law) ‎capped at $15,000 per work, or actual damages and the infringer’s profits based on the ‎factual evidence. Federal courts in contrast do not cap actual damages and statutory damages ‎can be up to $150,000 per work. Additionally, CCB decisions in one case do not bind the CCB ‎in later cases involving the same or different parties. CCB decisions also are not precedential ‎for federal court decisions. Finally, if a party receives a decision it is not happy with, the ‎CCB’s decision can be reviewed by three different entities. First, the CCB can review their own ‎decision for clear errors of law or technical mistakes. Second, a request can be made to the ‎Register of Copyrights to review a denial of reconsideration by the CCB. Third, a party can ‎seek review in federal court of the CCB’s decision.‎

Currently, over 100 cases have been filed with the CCB with a range of visual and auditory ‎works at issue. None of the filed cases have yet proceeded beyond the issuance of a Scheduling ‎Order. A great number of cases have received notices to amend noncompliant complaints, ‎which is not surprising given the presumption that many litigants taking advantage of this ‎process are not using lawyers. A plaintiff is then allowed 30 days to amend the complaint and ‎bring it into compliance with the standards set forth in the CASE Act. ‎

The current members of the CCB tribunal are David Carson, Monica McCabe and Brad ‎Newberg, who each bring a wealth of experience and expertise in copyright law and dispute ‎resolution. Mr. Carson has practiced copyright law his entire legal career, both in private ‎practice and most recently as the head of the Copyright Policy Team in the Office of Policy and ‎International Affairs at the USPTO. Ms. McCable was the head of the intellectual property ‎department at her prior private practice firm and acted as a mediator for intellectual property ‎matters for the International Trademark Association, the Southern District of New York, and ‎the New York State Supreme Court Commercial Division. Finally, Mr. Newberg was in private ‎practice as a copyright and trademark litigator for over 20 years. ‎

While the CCB is designed to fast-track and streamline copyright enforcement, and provide ‎copyright holders with easier and more affordable options to enforce and protect their works, ‎it remains to be seen whether it gains traction as a viable and effective alternative.‎