Making a Case for the CASE Act

March 1, 2021

By David Jenkins

On December 21, 2020, the U.S. Congress passed a COVID-19 relief bill unlocking stimulus checks, enhanced unemployment benefits, and education funding. It was almost too easy to miss a rather important addendum to that 2,124-page bill: the passage of the Copyright Alternative in Small-Claims Enforcement Act, abbreviated to the CASE Act, a legislative initiative under discussion since 2006.^[1]

The passage of the CASE Act has the potential of being an impactful moment in the fields of art and copyright law; perhaps evidenced by a number of professional arts organizations and outlets quickly putting out statements heralding the news.^[2] As a piece of legislation ostensibly aims at providing artists, particularly those most exposed to smaller copyright disputes such as photographers, and other copyright holders with limited means to pursue expensive litigation a powerful tool with which to protect their rights and combat infringement,^[3] it is prudent to ask what exactly the CASE Act does, how it came to be, and what effects it may have on the future of copyright disputes?

Background

Bringing copyright infringement cases in court is pricey, protracted and the amount sought might be less than the legal fees. Generally, copyright infringement claims are heard in federal district courts, making things even more costly for claimants. While there are circumstances in which copyright cases may be heard in state courts, such as copyright-related breaches of contract or counterclaims, the end result is the same: prohibitive litigation.^[4] This legal reality has often posed a problem for artists and other copyright holders working as independents, small businesses, or otherwise having relatively smaller claims to which must often be added the cost of hiring an attorney. The typically expensive and time-consuming nature of litigation has posed a powerful practical barrier against such copyright holders enforcing their exclusive rights to protect their creative works and economic rights.^[5]

In 2006, Congress began to take steps toward addressing this problem. The U.S. Copyright Office was charged with producing a report on the challenges faced by smaller copyright holders, compounded by the rising ease of copyright infringement in the digital age. The report was published in 2013, with the Copyright Office concluding that “It appears beyond dispute that under the current federal system small copyright claimants face formidable challenges in seeking to enforce the exclusive rights to which they are entitled” and setting forth a proposal for establishing “an alternative forum that will enable copyright owners to pursue small infringement matters and related claims arising under the Copyright Act.”^[6]

The 2013 Report would become the foundation of the CASE Act, first put forward as a Bill in 2016, which would create the “Copyright Claims Board” (“the Board”) within the U.S. Copyright Office to hear copyright disputes within a certain threshold for monetary relief.^[7] The Bill passed the House on October 22nd, 2019, but did not finish making its way through Congress until December 21st, 2020, included under the umbrella of the Consolidated Appropriations Act of 2021.^[8] Now, the Copyright Office has one year to establish the Board.^[9]

Actual Effects of the Bill

The Bill obligates the Register of Copyrights, the head of the U.S. Copyright Office, to establish the Copyright Claims Board, which must be operational no later than December 27, 2021.^[10]

(i) Prerequisites to File with the Copyright Claims Board

Under the CASE Act, in order to bring a copyright dispute before the Board, there are a few prerequisites a copyright holder and their claim must meet.

1. Amount: the Board sets the threshold for the “small claims” it may hear at claims of up to $15,000 per work infringed and up to $30,000 for aggregate claims.^[11]
2. Registration: the copyright holder must then ensure that the copyright at the heart of the claim has been properly registered with the U.S. Copyright Office before the claim is submitted to the Board.^[12]
3. Time: the claim can only be brought before the Board within 3 years of the alleged incident behind the claim.^[13]

(ii) Commencing the Proceedings

To file a qualifying claim with the Board, a copyright holder will be required to submit their claim with a statement of supporting material facts and pay a filing fee (the actual procedure for submitting the claim and the amount of the fee have not yet been determined).^[14] The Board will then notify the copyright holder (claimant) and give them 90 days to notify alleged infringers (respondent) of a claim being filed against them.^[15]

Once the respondent has been notified, they will have 60 days to op-out of having the dispute resolved by the Board.^[16] If the respondent were to opt-out, the claim could not be taken to the Board. If the claimant still wanted to pursue the claim they would have to bring it to court.^[17] It would be entirely up to the respondent to take the initiative of opting-out, as if they fail to do so within the 60 days, they waive their right to have the case heard in front of a jury.^[18]

(iii) During the Proceedings

Proceedings may take place entirely remotely unless there is material evidence that must be provided in person.^[19] Determinations by the Board will not be made by judges, but by three Claims Board Officers.^[20] These officers must be attorneys with at least 7 years of work experience, however only at least 2 of them must have “substantial” experiences with copyright infringement.^[21]

The proceedings are expected to be less legally complicated and more informal than those in a court, although the ruling is binding on claimants and respondents.^[22] There is no formal practice for making motions, with a few exceptions, and discovery is limited to relevant information, documents, written interrogatories, and written requests for admissions.^[23] Parties to a proceeding before the board may also submit evidence without following formal evidence rules.^[24]

While the Board is not a court, the claimant and the respondent may both be represented by lawyers or by qualified law students, thereby offering an interesting kind of pro bono alternative.^[25] Whether or not a law student is qualified will be determined under applicable law concerning law student practice in the jurisdiction.^[26] The parties may reach a settlement at any time during the proceedings.

The Board will review each case on its own merits regardless of any past determinations by the Board as precedent.^[27] The Board will use past court decisions and the relevant law when making its determination.^[28] If any of the relevant past decisions or law come into conflict, the Board will follow the precedent set by the jurisdiction in which the claim would have been brought if it had gone to court.^[29]

(iv) After the Proceedings

The determination on the claim will have to be provided in writing to the parties, including an explanation for why the officers decided as they did.^[30] When the Board decides a claim, that claim cannot later be brought to a court or any other tribunal, including back to the Board.^[31]

Takeaways: How Easy is it Really?

The Copyright Claims Board is yet to be established; however, much can be interpreted simply from the rules and procedures outlined within the CASE Act.

(i) An Alleged Infringer has the Power to Prevent a Copyright Holder from Using the Claims Board

It is important to remember that participation in proceedings by the Copyright Claims Board are completely voluntary, meaning a claimant can generally only use it if the respondent cooperates. If the respondent opt-outs, the claimant is left having to take their case to court for recourse. An alleged infringer who already knows their opposing party cannot afford expensive litigation may still exploit that knowledge. The determinations made by the Board will also only be binding upon the parties to that specific claim, stopping short of preventing further legal action on the same copyright issue if a new claim or counterclaim can be made.^[32]

Despite this, the structure of the opt-out system may still favor claimants. Requiring the respondent to actively opt-out makes it possible that a respondent simply fails to take action and suddenly finds they no longer have a right to take the case to court. If the respondent just fails or refuses to participate in the proceedings, the Board would be permitted to make a default determination against them.^[33]

(ii) The Copyright Claims Board Focuses on Accessibility, Cost, and Ease

The main differences between proceedings before the Board and a trial in court seem to genuinely make pursuing infringement claims easier for copyright holders. The fact that all proceedings can be handled remotely removes barriers like the expense and difficulty of traveling to court, and more lenient rules on discovery and evidence than a formal tribunal have the potential to make proceedings less complicated for those not practiced in the law. The possibility of pro bono representation by a law student will also potentially save claimants steep legal fees if they are willing to be represented for a smaller claim by someone with less experience in practice.

With estimates of the typical cost of pursuing a copyright claim in court from start to finish at $278,000, it is clear that reductions to the cost of pursuing a claim make the enforcement of an artists rights significantly more accessible.^[34] Taking a claim to the Board is certainly not free, requiring copyright registration fees and a filing fee, but it is still expected to provide a more cost effective alternative for claimants.

Conclusion

In anticipation of the Copyright Claims Board opening for business, many artists and creative organizations, such as the Author’s Guild, The Songwriter’s Guild of America, and Copyright Alliance, have welcomed the Bill’s passage as a victory for independent artists and professionals in a myriad of mediums. The National Press Photographers Association cheered the Act as “the culmination of years of hard work by our advocacy team and the NPPA members who took time to champion the issue,” while the Graphic Artists Guild National President Lara Kisielewska said “it’s a solution that is long overdue for individual creators and small copyright holders, for whom copyright has too often been a right without a remedy.”^[35] Overall, the CASE Act looks like it will provide some genuine and much needed accessibility and agency for artists and other copyright owners seeking to resolve their minor copyright disputes. Despite this, the act has some weaknesses, including the voluntary nature of a respondent’s participation and very limited scope of where the Board’s determinations will be binding.

Copyright law is meant to provide individual creators like photographers and graphic designers with limited but protected exclusive rights. Yet, it has often been criticized as outdated and failing to truly provide those rights. As Keith Kupferschmid, the Copyright Alliance CEO, stated that artists and creators “have rights but no means to enforce them” and that “Copyright law should protect all of America’s creators. However, today it only protects those who can afford the high costs.”^[36] The CASE act, specifically created to address these failings, represents a potentially powerful expansion of copyright law, allowing for more meaningful enforcement and monetization of the exclusive rights of all artists.

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Additional Reading:

• U.S. Copyright Office, Copyright Small Claims (Sept. 30, 2013).
• Claudia Rosenbaum, Congress Passes CASE Act as Part of COVID-19 Relief Bill, Billboard (Dec. 22, 2020).
• Congress Passes CASE Act, The Author’s Guild (Dec. 22, 2020).
• Rachel Fertig, John Polito &Morgan Lewis, Congress Enacts Controversial Copyright Alternative in Small-Claims Enforcement (CASE) Act, JDSUPRA (Jan. 4, 2021), https://www.jdsupra.com/legalnews/congress-enacts-controversial-copyright-3405183/
• Adelaide Dunn, The New Copyright Small Claims Bill: A Ray of Hope for Independent Photographers, The Center for Art Law (Oct. 17, 2016).
• Congressional Research Service, The Congressional Review Act (CRA): Frequently Asked Questions (Jan. 14, 2020).

Endnotes:

1. 17 U.S.C. § 1501-1511; Consolidated Appropriations Act, 2021, H.R. 133, 116th Congress (2019-2020); Congress Passes CASE Act of 2020 and Law Regarding Unauthorized Streaming Services, U.S. Copyright Office (Dec. 22, 2020); U.S. Copyright Office, Copyright Small Claims (Sep. 30, 2013). ↑
2. Statements of Support, Copyright Alliance (2020). ↑
3. Copyright Alliance Commends Congress for Passing the CASE Act and the Protecting Lawful Streaming Act as Part of the Consolidated Appropriations Act, 2021, Copyright Alliance (Dec. 22, 2020). ↑
4. See 28 USC § 1338; Green v. Hendrickson Publishers, Inc. 770 NE 2d 784 (Ind. 2002); Maria Luisa Palmese, Copyright Litigation in the United States: Overview, Practical Law Country Q&A, w-012-9369 (2018). ↑
5. U.S. Copyright Office, Copyright Small Claims: A Report of the Register of Copyrights (Sep. 30, 2013). ↑
6. Id. ↑
7. CASE Act of 2016, H.R. 5757, 114th Congress (2015-2016). ↑
8. CASE Act of 2019, H.R. 2426, 116th Congress (2019-2020); Consolidated Appropriations Act, 2021, H.R. 133, 116th Congress (2019-2020). ↑
9. CASE Act of 2019, H.R. 2426 , 116th Congress § 3 (2019-2020). ↑
10. The CASE Act was signed into law by President Trump; however, it does not appear to be in danger of nullification through review under the Biden Administration. The CASE Act was enacted legislatively, not via executive order or an internal agency rule change, and should remain unaffected by any reviews of Trump’s last minute actions. Brittany M. Pemberton, Christine G. Wyman & Ann D. Navaro, Will Congress Rollback Trump Regulatory Actions to Advance the Biden Policy Agenda?, The National Law Review (Jan. 20, 2021). ↑
11. 17 U.S.C. § 1504(b)(1); Congress Passes CASE Act of 2020 and Law Regarding Unauthorized Streaming Services, U.S. Copyright Office (Dec. 22, 2020). ↑
12. 17 U.S.C. § 1505. ↑
13. 17 U.S.C. § 1504(b)(1). ↑
14. 17 U.S.C. § 1506(e). ↑
15. 17 U.S.C. § 1506(g). ↑
16. 17 U.S.C. § 1506(g)(1). ↑
17. 17 U.S.C. § 1506(g)(1). ↑
18. 17 U.S.C. § 1506(g)(1). ↑
19. 17 U.S.C. § 1506(a). ↑
20. 17 U.S.C. § 1502(b). ↑
21. 17 U.S.C. § 1502(b). ↑
22. 17 U.S.C. § 1506(c)(2). ↑
23. 17 U.S.C. § 1506(n). ↑
24. 17 U.S.C. § 1506(o). ↑
25. 17 U.S.C. § 1506(d). ↑
26. 17 U.S.C. § 1506(d)(2). ↑
27. 17 U.S.C. § 1503(b). ↑
28. 17 U.S.C. § 1506(a). ↑
29. 17 U.S.C. § 1506(a). ↑
30. 17 U.S.C. § 1506(t). ↑
31. 17 U.S.C. § 1507. ↑
32. 17 U.S.C. § 1507(a). ↑
33. 17 U.S.C. § 1506(u). ↑
34. Terrica Carrington, A Small Claims Court is on the Horizon for Creators, Copyright Alliance (Oct. 4, 2017). ↑
35. Alicia Calzada & Mickey Osterreicher, CASE Act Passes! Congress enacts copyright small claims bill, National Press Photographers Association (Dec. 22, 2020); The Graphic Artists Guild Applauds the Passage of the CASE Act, Graphic Artists Guild (Dec. 22, 2020). ↑
36. Copyright Alliance Commends Congress for Passing the CASE Act and the Protecting Lawful Streaming Act as Part of the Consolidated Appropriations Act, 2021, Copyright Alliance (Dec. 22, 2020). ↑

About the Author: David Jenkins is a legal intern at the Center for Art Law and a second-year student at the University of Texas School of Law. David is currently the President of the Texas Law Art Association and a regular volunteer at art institutions in Austin, Texas.