Possible new path for combating copyright infringement. CASE Act

A copyright grants its owner the exclusive right to reproduce, distribute, display, perform, transmit and make derivative copies based on the original copyrighted work. If someone other than the copyright owner attempts to exercise one of these exclusive rights that can be considered copyright infringement. A copyright owner can file a lawsuit to recover damages for copyright infringement which has occurred. For copyrighted works that are unregistered, the plaintiff must prove actual damages. For registered copyrighted works, statutory damages are available. Statutory damages for copyright infringement can range from $750 to $30,000, however, if the plaintiff proves that the defendant committed willful infringement statutory damages can increase to $150,000 per infringement. 17 U.S. Code § 504(c)

Presently, United States Copyright Law is exclusively a question of federal law. This means a case related to copyright infringement must be brought in one of the many Federal District Courts. State Court cannot hear a copyright infringement lawsuit except in extremely limited circumstances. Litigation in Federal Courts is considered more complex and expensive than litigation in state courts. This presents copyright owners with limited financial resources with a problem. Copyright is intended to allow artist an other creative professionals to profit from their hard work, however the cost of enforcing a copyright can be too financially daunting for independent artists. Small independent artists are forced to watch their copyrights be infringed because they are not financially capable of protecting their copyright.

The Copyright Alternative in Small-Claims Enforcement Act, or the CASE Act for short, is intended to address this problem. The House recently approved a version of the bill in a 410-6 vote. The Senate Judiciary Committee has already voted the bill out of committee. It currently awaits a vote on the Senate floor.

The CASE Act would essentially create a small-claims court within the Copyright Office. This bill creates the Copyright Claims Board, a body within the U.S. Copyright Office, to decide copyright disputes. Damages awarded by the board are capped at $30,000. The bill would authorize board to hear copyright infringement claims, actions for a declaration of non-infringement, claims that a party knowingly sent false DMCA takedown notices, and related counterclaims. A final determination by the board would preclude relitigating the claims in court or at the board. Parties may challenge a board decision in federal district court only if (1) the decision was a result of fraud, corruption, or other misconduct; (2) the board exceeded its authority or failed to render a final determination; or (3) in a default ruling or failure to prosecute, the default or failure was excusable. Parties to a hearing before the board would bear their own attorney’s fees, unless bad faith misconduct was demonstrated.

Participation in board proceedings would be voluntary with an opt-out procedure for defendants, and parties may choose instead to have a dispute heard in court. If the parties agree to have their dispute heard by the board, they would forego the right to be heard before a court and the right to a jury trial.

Critics of the CASE Act agree that something must be done to address the fairness of copyright litigation. However they fear the unintended consequences of new legislation. The Digital Millennium Copyright Act is given as an example of a law that was intended to solve problems, but ended up creating more litigation because it was abused.

Given the overwhelming approval of the bill in the House, it is likely that this bill will become law. The CASE Act mirrors the logic that lead to the creation of the Patent Trial and Appeal Board within the United States Patent and Trademark Office. Namely that litigation in a Federal Court is expensive, time consuming and that a Board made up of experts on a specific area of law is better equipped to arbitrate disputes. Whether the CASE Act becomes law depends on how much support it gets in the Senate.

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