Despite the current political landscape, on October 22, 2019, the United States House of Representatives passed H.R. 2426 by a vote of 410-6, otherwise known as the "Copyright Alternative in Small-Claims Enforcement Act of 2019" (hereinafter "CASE Act"). It is currently awaiting review and approval by the United States Senate (S. 1273).
The CASE Act would create a Copyright Claims Board (the "Board"), located in the U.S. Copyright Office, and it is intended to be a forum for lower-value copyright disputes. Its purpose is to provide a new judicial alternative for copyright holders to seek payment for infringed works. The copyright small claims process that the bill establishes is intended to be accessible especially for pro se parties and those with little prior formal exposure to copyright laws who cannot otherwise afford to have their claims and defenses heard in federal court.
The bill provides that participation in these proceedings is voluntary for both claimants and respondents, and a respondent may opt out within sixty (60) days of being served with a claim. The court would be presided by a board of three (3) judges within the U.S. Copyright Office to adjudicate these copyright infringement cases. For smaller claims of $5,000 or less, the CASE Act would require that the Register of Copyrights issue rules under which a single Copyright Claims Officer can hear claims. To ensure that the proceedings are streamlined and efficient, discovery is limited, but allows for additional discovery, protective orders and adverse inference, provided that good cause is shown.
Damages are limited to $15,000 for each infringed work, with a cap of $30,000 total per claim. The statutory damages cap is $7,500 for works that were not timely registered as provided by the Copyrights Act, but whose registration is a condition of the proceeding becoming final. The Board cannot issue injunctions, but if the parties agree to cease any infringing activity, including taking down a work from an online platform, the Board must include those terms in the determination. At any point before a final determination is issued, the claimant or counterclaimant can elect to receive statutory damages, actual damages plus profits, or no damages. Once a determination is issued, parties may seek a court order to enforce the Board's decisions. The Board may award up to $5,000 (or $2,500 if the party is pro se) in costs and attorneys' fees if a party is found to have acted in bad faith. In extraordinary circumstances, where a party demonstrates a pattern or practice of bad faith conduct, the Board may award attorneys' fees in excess of the above-mentioned limitations. The Board may also bar a party that has pursued frivolous or bad faith claims from appearing before it for a year and may dismiss that party's outstanding claims without prejudice.
Decisions of the Board are subject to a request for reconsideration, and a denial of such a request may be reviewed by the Register of Copyrights. Federal district courts may vacate, modify, or correct a Board determination where the determination was based on misconduct, exceedance of authority by the Board, failure to resolve a claim, or excusable neglect by a party resulting in a default determination or a dismissal for failure to prosecute.
