A Short Summary of the CASE Act (Guest Blog Post)
by guest blogger Tyler Ochoa
[Eric’s intro: The following is an excerpt from Joyce, Ochoa and Carroll, Copyright Law (2021 Supplement). In a future post, Prof. Ochoa will do a deep dive on the CASE Act for the geeks.]
[C] Small Claims Enforcement
The cost of litigation in federal court is high: Discovery and pre-trial preparation can easily cost upward of $10,000 per month. Unless a plaintiff has registered its copyrights and is eligible to recovery attorneys’ fees, most attorneys are unwilling to file an infringement claim on a contingent fee basis. And even when a lawyer is available, it rarely makes economic sense to file an infringement claim if the expected recovery is only a few thousand dollars.
Consequently, in 2020 Congress enacted the Copyright Alternative in Small-Claims Enforcement Act, or CASE Act, codified in Chapter 15 of Title 17. The CASE Act created the Copyright Claims Board, “an alternative forum in which parties may voluntarily seek to resolve certain copyright claims,” § 1502(a), namely, those in which the claimant seeks $30,000 or less in damages. § 1502(c). The Board consists of three full-time Copyright Claims Officers, appointed by the Librarian of Congress for staggered six-year terms. § 1502(b). The Officers are assisted by at least two full-time Copyright Claims Attorneys, hired by the Register. Id.
Participation in a proceeding before the Board is “voluntary,” in the sense that a person claiming copyright infringement (or non-infringement) may choose to commence a proceeding with the Board instead of filing a lawsuit in federal court. § 1504(a). The respondent against whom a claim is made has a 60-day period after service of notice within which to “opt out” of the Board proceeding in writing, in which case the proceeding is dismissed without prejudice. § 1506(i). If the respondent fails to “opt out” in writing, however, then it is legally bound by the Board’s determination. Id. The Register must allow libraries and archives to prospectively and preemptively opt out of all Board proceedings, without paying any fee to do so. § 1506(aa).
A copyright owner may file a claim with the Board without having registered first; but the case may not proceed until an application to register (with the required fee and deposit) has been made, and the Board cannot render a determination until the registration certificate issues. Board proceedings take place solely “by means of written submissions, hearings, and conferences carried out through internet-based applications,” “without the requirement of in-person appearances by parties or others.” § 1506(c)(1)-(2). Discovery is limited to written interrogatories, requests for admission, and production of documents; there are no depositions as a matter of course, and the Board may not issue any subpoenas to non-parties. §1506(n). A party may be, but is not required to be, represented by an attorney (or a law student acting pro bono who is otherwise qualified to represent parties). § 1506(d). The formal rules of evidence do not apply; the Board may consider written testimony and documents, and it may hold hearings by electronic means. § 1506(o),(p). Unless the parties settle, the Board must make factual findings and issue a written determination, which “shall be made available on a publicly accessible website.” § 1506(t)(3).
The Board may award either actual damages and the defendant’s profits under § 504(b) or statutory damages under § 504(c), except that the Board “may not make any finding that, or consider whether, the infringement was committed willfully.” §1504(e)(1). If the copyright was timely registered under § 412, the Board may award statutory damages of up to $15,000 for each work infringed, subject to the maximum total award of $30,000. If the copyright was not timely registered under § 412, the Board may still award statutory damages of up to $7500 for each work infringed, subject to a maximum total award of $15,000. Id. (This is a big change from existing law, under which a plaintiff may not recover statutory damages at all unless the work was timely registered under § 412.) The Board cannot issue an injunction, but the Board’s determination “shall include” a requirement to cease the infringing conduct if a party agrees to do so and the agreement is reflected in the record. § 1504(e)(2).
Post-determination procedure is also limited. Within 30 days, a party may request reconsideration for a clear error of law or fact or a technical mistake. § 1506(w). If that is denied, the party may pay an additional fee and request review by the Register of Copyrights, who can remand the claim to the Board if she finds an abuse of discretion. § 1506(x). The losing party may challenge the determination in federal District Court only for fraud, corruption, misrepresentation, or excusable neglect, § 1508(c); and if the losing party does not comply, the winning party may seek an order and judgment in federal District Court confirming the Board’s determination. §1508(a). A final determination precludes litigation of all claims asserted and determined by the Board, but otherwise it does not have any preclusive effect. § 1507.
The Copyright Claims Board must begin operation by December 27, 2021, except that the Register may extend the deadline by 180 days for good cause. Because participation is voluntary, the key question is whether litigants will find proceedings before the Board to be a preferable alternative to litigation in federal District Court. Within three years after the Board begins operations, the Register must file a report with Congress assessing the use and efficacy of this experimental procedure.