March 31, 2021 PERSPECTIVE

Getting CASE in Place

June M. Besek

©2021. Published in Landslide, Vol. 13, No. 4, March/April 2021, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.

Copyright owners have long sought a new forum in which to resolve small copyright claims. In the 116th Congress, they finally achieved that goal. The House of Representatives passed the Copyright Alternative in Small-Claims Enforcement Act (CASE Act) in 2019,1 and although the bill was stalled in the Senate throughout 2020,2 it was finally enacted at the end of 2020.

The internet poses particular problems for copyright owners, especially those who sell or license their copyrighted works at a relatively low cost and rely on the volume of sales to earn a living. In the case of infringement, these copyright owners have little recourse, since the cost of bringing a lawsuit to get paid far outstrips their potential recovery.3 In some cases, the filing fee alone would exceed the potential damages. Right holders cannot seek adjudication of their claims in another forum (possibly one less costly), because federal courts have exclusive jurisdiction over copyright infringement cases. Right holders have no realistic means to recover for uses of their works, and infringement increases when internet users are aware that infringing uses have no negative consequences. In short, these copyright owners have a right without a remedy.

The CASE Act grew out of the recommendation of a 2013 Copyright Office report.4 The CASE Act as passed is similar in many respects to the Copyright Office’s recommendation. The CASE Act creates a Copyright Claims Board (CCB) within the Copyright Office to hear and decide disputes. The CCB will have three copyright claims officers, two with substantial experience in resolution of copyright infringement, and the third with knowledge of copyright law and experience in alternative dispute resolution.5 Participation in the CCB forum is entirely voluntary on both sides. Only certain types of claims can be heard, such as claims for copyright infringement or for a declaration of noninfringement, or for a misrepresentation in connection with 17 U.S.C. § 512(f). There is a maximum recovery of $15,000 per claim, and $30,000 in a proceeding. The proceedings are designed to be more streamlined than in federal court—for example, discovery will be limited, and cases will be heard remotely, so no party need go to Washington, D.C.

The American Bar Association (ABA) publicly supported legislation to provide a small claims enforcement forum. On October 22, 2019, the House of Representatives passed the CASE Act.

The differences among the stakeholders delayed progress in the Senate. Opponents of the legislation there raised several arguments against its passage, including, for example: (1) notices to defendants would be insufficient to apprise them of the voluntary nature of the proceeding and their opportunity to opt out; (2) the new forum would provide a new opportunity for trolls; and (3) there should be a blanket opt-out for certain defendants, like libraries.

The argument that notice provisions were inadequate ultimately failed. A claimant must serve notice of the claim on the respondent under the terms of the statute, and the CCB also notifies the respondent of the claim. Those who favored the CASE Act believed that copyright trolls would be unlikely to flood the CCB with their claims, since a defendant can always opt out; the cap on damages would make the small claims venue less attractive to trolls; and the CASE Act would authorize a limit on the number of cases that a single party could bring in a year if the party pursued cases for harassment or other improper purposes. The principal change to the CASE Act in the Senate was to give libraries and archives a “blanket opt-out” that would relieve them of the obligation to opt out on a case-by-case basis.

To increase the chances that the CASE Act would pass, the Senate attached it to the 5,000+ page consolidated appropriations bill. As a political matter, they were confident that the appropriations bill would pass before the end of the 116th Congress.6 Ultimately, the president signed the Consolidated Appropriations Act on December 27, 2020, and with it, the CASE Act became law.7

Passage of the CASE Act was a signal achievement of its supporters, including the ABA.

Endnotes

1. H.R. 2426, 116th Cong. (2019).

2. S. 1273, 116th Cong. (2019).

3. If copyright owners could register their works in a timely manner, they would be eligible for statutory damages and attorney fees, but registration by those who create numerous works is often unrealistic.

4. U.S. Copyright Office, Copyright Small Claims: A Report of the Register of Copyrights (2013), https://www.copyright.gov/docs/smallclaims/usco-smallcopyrightclaims.pdf.

5. H.R. 2426, § 2 (proposed 17 U.S.C. § 1502). The discussion of the terms of the CASE Act, and the issues raised in opposition, are necessarily abbreviated in this article.

6. Two other pieces of intellectual property legislation were added to the appropriations bill for the same reason: (1) a bill to make willful digital streaming a felony, and (2) a Trademark Modernization Act making several changes to the Lanham Act.

7. Consolidated Appropriations Act, 2021, Pub. L. No. 116-260, § 212, 134 Stat. 1182 (2020).

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June M. Besek is chair of the ABA Section of Intellectual Property Law. She is the executive director of the Kernochan Center for Law, Media and the Arts and a lecturer in law at Columbia Law School. Her research and teaching focus on copyright and related rights, particularly as they relate to new technologies.