A Summary of the Copyright Claims Board (CCB) [Excerpt from my Internet Law casebook]

[The 2021 edition of my Internet Law casebook is coming soon. This excerpt is a new note on the CCB. TL;DR: I’m not a fan.]

Before mid-2022, the Copyright Office will deploy a new adjudicatory function called the Copyright Claims Board (CCB). The CCB will be dominated by claims over alleged online infringement, so it’s a major development for online copyright law.

Overview of the CCB

Currently, all federal copyright infringement claims must be filed in federal court. However, sometimes the likely damages award from a successful federal copyright lawsuit will be less than the attorneys’ fees and other costs to litigate it. To alleviate this burden, judges in copyright cases have the discretion to shift attorneys’ fees to a prevailing party (17 U.S.C. §505; Kirtsaeng v. John Wiley & Sons, Inc., 136 S. Ct. 1979 (2016)), but only if copyright owners register their copyrights before infringement occurred or within three months of first publication. As a result, copyright owners can face insurmountable financial and logistical barriers to enforce their copyrights.

In an effort to increase access-to-justice, Congress created the CCB in a bill called the CASE Act. It passed in December 2020, when the CASE Act was attached to an unrelated spending/COVID19 relief bill that politically Congress had to pass. The CCB is structured like a “small claims” court for low-value copyright infringement claims.

The CCB is part of the Copyright Office, reflecting the office’s existing expertise in copyright law. However, the Copyright Office is technically part of the Library of Congress, which itself is part of Congress. Due to Constitutional separation-of-powers principles, the legislative branch can’t operate a judicial function. To get around this, the CCB proceedings are nominally “voluntary” to the litigants. Copyright owners can choose federal court if they prefer, and defendants can “opt-out” of a CCB proceeding within 60 days, in which case the copyright owner must sue in federal court if it wants to proceed. Libraries and archives can categorically preemptively opt-out of CCB jurisdiction; all other defendants can opt-out only on a matter-by-matter basis. Defendants who don’t timely “opt-out” are deemed to have “voluntarily” consented to the CCB’s jurisdiction and will be bound by the outcomes accordingly. It remains to be seen if the courts agree that this opt-out approach solves the separation-of-powers problem.

CCB Procedures

(As of July 1, 2021, the Copyright Office is in the process of developing the CCB’s regulations).

The CCB can only hear cases over the infringement or noninfringement of works and 512(f) claims (discussed later). The Copyright Office may issue regulations to limit the number of CCB proceedings a copyright owner can bring in any year.

To keep costs down, CCB hearings will be done remotely. Discovery is typically limited to document production, interrogatories, and requests for admission.

Federal courts typically require the copyright owner to have a copyright registration in hand before suing (see 17 U.S.C. §411 and Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC, 139 S. Ct. 881 (2019)). In contrast, a copyright owner can initiate a CCB proceeding before obtaining a registration. However, the proceeding won’t go forward until the copyright owner applies for a registration; and the CCB will not issue its determination until the registration issues.

When a copyright owner initiates a proceeding, the CCB will do a preliminary screening to “ensure that the claim complies with this chapter and applicable regulations.” (Among other things, if the claim is against an entity protected by the Section 512 safe harbor, the copyright owner must affirm that the defendant failed to honor a takedown notice). If the claim passes the initial screening, the copyright owner will be authorized to serve process. The Copyright Office will issue regulations about an explanatory notice to defendants that must accompany service.

After the board issues a determination in a proceeding, a party may request a reconsideration “if the party identifies a clear error of law or fact material to the outcome, or a technical mistake.” If that doesn’t work, the party may appeal to the Register of Copyrights. The Register may reverse the CCB’s determination only when the CCB “abused its discretion in denying reconsideration of the determination.” Appeals of the Register’s decision can go to a federal district court, which may reverse the Register only if “the Copyright Claims Board exceeded its authority or failed to render a final determination concerning the subject matter at issue.” These high appellate review standards are intended to reduce the parties’ adjudication costs, but in practice they make it difficult or impossible to reverse an initial CCB determination on appeal.

Limits on Remedies

The CCB cannot issue injunctions. It can award a maximum of $30,000 in damages. For copyrighted works registered on a timely basis, the CCB can award statutory damages of up to $15,000 per work (max of $30,000 per proceeding). For other works, the CCB can award statutory damages of $7,500 per work (max of $15,000 per proceeding). Copyright owners will be drawn to the potential for statutory damages for works that do not qualify for statutory damages in federal court. Attorneys’ fee shifts can be awarded only for certain “bad faith conduct” in CCB proceedings. The Copyright Office has the power to create even more streamlined adjudicatory procedures when damages claims are less than $5,000.

Why Defendants Will Opt-Out

The CCB is supposed to benefit defendants by being cheaper than federal court and capping their potential damages. Nevertheless, defendants will routinely choose to opt-out of the CCB because:

  • Opting-out calls the copyright owner’s bluff. Will they be willing to spend extra money to take the case to federal court? If not, the matter will fade away quietly. One countervailing risk: if federal courts view a defendant’s opt-out as a factor to justify §505 fee-shifts to copyright owners (because the defendant could have saved everyone time and money by accepting the CCB’s jurisdiction), then the opt-out will become substantially riskier.
  • Defendants will fear that CCB’s decisions will tilt towards copyright owners, a common stereotype of the Copyright Office generally.
  • Defendants will worry that the CCB won’t consider all applicable defenses, or that key exculpatory evidence will be unavailable due to the limited discovery options.
  • The appeals mechanism is too limited to correct bad initial rulings.
  • If the copyright owner is seeking statutory damages for copyrights but didn’t make a timely registration to qualify for such damages in federal court, the defendant’s financial exposure in federal court could be less than in the CCB.
  • If the copyright owner initiated the CCB proceeding near its statute of limitations deadline but doesn’t have a copyright registration in hand, opting-out could cause the case to become time-barred.


How the CCB Will Foster Trolling

The CCB is a brand-new legal procedure. Most people have never heard of it. Furthermore, many defendants in CCB proceedings will be unsophisticated about legal matters. They will not have ready access to affordable legal counsel, they will be unsure of how to opt-out (or they will miss the deadline), and they will be scared that litigating in federal court will be more expensive and riskier.

Copyright owners can take advantage of defendants’ naiveté and unfamiliarity by making extortionate demands at several stages:

  • Before initiating a CCB proceeding.
  • After filing the CCB proceeding but before service. Most demand recipients will have no idea that the complaint will be reviewed by the CCB for proper form and that service hasn’t been authorized yet.
  • Along with service. At that point, the copyright owner will have to provide the Copyright Office’s official notice explaining the CCB, but there’s no guarantee that notice will appease the defendant’s fears.

Copyright owners can send demands at the first two stages even if they never apply for a copyright registration for the subject works.

Thus, the CCB gives copyright owners the grounds to assert credible and intimidating legal demands that will scare many recipients into paying up. Expect copyright owners, especially photographers upset about online republications of their photos, to send out a high volume of threats to bring CCB proceedings coupled with “modest” settlement offers that defendants may view as cheaper than gambling on potentially $30,000 in damages. Much of this activity will take place outside the CCB’s purview, so any restriction on the number of CCB proceedings per year won’t curb this trolling. It seems inevitable that the CCB issues will become a regular part of every Internet lawyer’s practice.