WASHINGTON, D.C. – When Representatives Hakeem Jeffries (D-NY) and Doug Collins (R-GA) introduced the “Copyright Alternative in Small-Claims Enforcement (CASE) Act” back in May, the Congessmen presented it as a way to make it “easier and less expensive for independent creators, such as photographers, songwriters and graphic artists, to better defend their intellectual property from theft.”
As you can see on the list of organizations that support the CASE Act published by its Congressional co-sponsors, the CASE Act also enjoys a great deal of backing from industry associations representing photographers, musicians, authors and other creators of expressive works.
On its face, it’s easy to see why the CASE Act appeals to people who feel that copyright infringement is running amok in the Internet Age. The Act would create an “alternative dispute resolution for copyright small claims” through a “Copyright Claims Board,” enabling rightsholders to seek compensation for infringements on their work without facing the expense and complication of ‘traditional’ copyright litigation.
Under the Act, statutory damage awards would be limited to $15,000 per work infringed with respect to works that have been “timely registered” with the Copyright Office and capped at $7500 for unregistered works — both of which are far less than the $150,000 maximum statutory damages available per infringement on a duly registered work in a federal copyright lawsuit. (Claimants can also seek actual damages in addition to the statutory damages.) The total damages available in any single proceeding before the Copyright Claims Board would be capped at $30,000.
In general, these do not sound like terrible ideas – if one is looking for, for example, a means for an adult entertainment videographer of limited means to seek compensation when her work is infringed upon by a tube site with much deeper pockets, which would enable them to greatly outspend the plaintiff in court. Where the CASE Act goes wrong, as many intellectual property attorneys who have commented on the Act see it, is in the details.
To start with, participating in a proceeding before the Copyright Claims Board would be voluntary under the CASE Act – so the hypothetical, deep-pocketed tube referenced in the paragraph above would be able to simply opt-out of the proceeding brought by the lowly videographer, then hit her with that cliché old line: “See you in court.”
That’s just the beginning of the problems with the CASE Act, which “suffers from some fundamental flaws,” attorney Larry Walters told YNOT.
“It does not specify how defendants will be notified of the proceeding, and failure to opt out could lead to a judgment for damages up to $30,000 without any judicial review,” Walters noted. “Aside from the potential due process concerns, such a system could be easily abused by copyright trolls. Under current law, copyright owners must prove actual damages for infringement of unregistered works. If the CASE Act passes, defendants face large statutory damages for sharing a single, unregistered image.”
As it is currently written, the CASE Act “also does not specify how a defendant must opt out,” Walters added.
“Some individuals may not have the sophistication to opt out of a proceeding based on a notice from some board they never heard of,” Walters said. “$30K is a lot of money for most people, and there is a risk that the contemplated Copyright Claims Board could turn into a default judgment mill with no ability to challenge the judgments.”
The Act also doesn’t say much about how fair use defenses will (or won’t) be considered – another major weakness in the legislation. As Walters points out, there is “concern with how fundamental fair use rights will be treated by these board members who are not judges.”
Another, less obvious problem with the CASE Act and the Copyright Claims Board it would create is that it is that “the privacy protections that have developed in federal court regarding subpoenas to internet service providers for customer information would not apply with this system,” Walters said.
“This can lead to abusive subpoenas and shakedowns,” Walters added – the very sort of behavior which the courts have decried in cases filed by copyright trolls.
And, of course, there’s the voluntary nature of the proceeding, something you can bet any defendant with some facts in his favor to put to immediate good use, Walters noted.
“There is little incentive for any viable defendant to use the system and forego the protections of federal court and established copyright law,” Walters said. “While federal court litigation is expensive and not practical for many individual copyright holders, any alternative dispute resolution system like this should allow for ‘opt in’ not ‘opt out.’”
While the CASE Act has passed in the House, it remains to be seen if the Senate will follow suit. And as Walters’ analysis makes obvious — bipartisan support or not – it’s also unclear whether the Act will solve more problems than it creates with respect to copyright disputes, should it become law.