Copyright Claims Board: A Big Solution for Small Copyright Claims

Copyright Claims Board: A Big Solution for Small Copyright Claims

Copyright infringements are on the rise, as modern technology has made it increasingly easy and cheap for infringers to copy artists’ and authors’ original work and share these unauthorized copies widely without permission.^[1] Unfortunately, the prospect of bringing a copyright claim in federal court for an individual artist or author without great financial means, time, or a legal education can be daunting, especially when the potential damages for the infringement are often lower than the expected cost of attorney’s fees. Expense, time, and procedural hurdles prevent many copyright holders from protecting their rights in court.^[2]While Small Claims Courts exist at the state level,^[3] Federal courts have exclusive jurisdiction over copyright infringement claims, and so copyright holders cannot bring lower-value copyright claims in these state Small Claims Courts.^[4]. Copyright law does permit a federal court to award reasonable attorney’s fees to a successful plaintiff; however, if the rights holder loses or is not awarded attorney’s fees, they may be facing a massive bill.^[5]. After years of debate and research, Congress found that a copyright holder had no practical recourse to enforce their rights in court for a lower-value copyright claim.^[6] Consequently, in December 2020, Congress passed the Copyright Alternative in Small-Claims Enforcement Act (CASE ACT), which established the Copyright Claims Board (CCB), the nation’s first copyright small claims tribunal.^[7]

Congress conceived of CCB as a less expensive and faster way to resolve copyright disputes.^[8] Housed within the Copyright Office, CCB serves as an alternative venue to federal court for plaintiffs with certain copyright-related claims seeking damages up to $30,000.^[9] CCB will issue determinations on “claims of infringement of a copyright; claims seeking declarations that specific activities do not infringe copyright; and claims of “misrepresentation” in notices sent under the Digital Millennium Copyright Act.”^[10] The CASE ACT laid out and the Copyright Office has developed procedures and processes specifically geared towards resolving copyright disputes in an efficient and accessible way. ^[11] For example, the CCB has an electronic filing system, and all CCB proceedings are held online. ^[12] Additionally, CCB proceedings only require basic documents and information, discovery is extremely limited, and claimants can represent themselves or be represented by an attorney. Three officers chosen for their expertise in copyright law serve as judges.^[13] CCB Officers must follow federal judicial precedent in their decisions; CCB cannot create its own rules and interpretations of copyright law.^[14] However, a CCB determination is binding on the parties, and consequently, an aggrieved party cannot subsequently bring the same claim in federal court.^[15] Furthermore, a party who is unhappy with the result of a CCB proceeding has limited options for review or appeal and in only limited circumstances can ask a federal court to review the determination.^[16] Importantly, participation in CCB is voluntary, and both parties must agree to participate.^[17]

The CCB opened its proverbial doors to claimants on June 16, 2022, and now has been up and running for almost two years.^[18] Has the CCB been able to provide a cheaper, more efficient, and more accessible solution for copyright claimants? In its first year, 485 cases were filed with CCB.^[19] However, CBC dismissed 305 of those cases, for a variety of reasons including non-compliant claims, lack of service, opt-outs, and voluntary withdrawals.^[20] CCB issued its first final determination on the merits in Oppenheimer v. Prutto.^[21] In Oppenheimer, CCB awarded photographer Oppenheimer $1,000 in damages after Prutton, a lawyer, featured one of Oppenheimer’s photos on his website without Oppenheimer’s permission.^[22] While the photographer did get damages, he had originally asked for an award of $30,000, and the court determined $1,000 was appropriate given that Oppenheimer failed to provide any evidence of actual damages suffered by the infringement.^[23]

In its second year, the CCB has picked up speed. As of January 2024, the CCB had received 700 filings with many more complaints becoming contested cases.^[24] Most of these disputed cases have settled, and CCB has also issued many default judgements. ^[25] Importantly, CCB has issued four final determinations on the merits in its second year, deciding issues of fairly straightforward copyright infringement as well as more complicated questions of fair use in Shocked v. McInnes, with both parties representing themselves, and Comedy Spotlight Productions, Inc. v. Store on Sunset LLC.^[26]

Given the nascency of CCB, it is difficult to determine at this point whether CCB will be a worthwhile alternative for claimants with lower-value copyright claims. As claimants become more familiar with the process and its requirements, CCB will likely spend less time weeding through insufficient claims and more time resolving disputes. Seventy percent of the claimants in CCB’s first year represented themselves.^[27] Given the preference for proceeding pro se, CCB will need to make sure that claimants have proper instruction and education to prevent wasted time and confusion, as parties adapt to and learn about this new system. CCB has worked to provide claimants guidance by creating a detailed handbook with chapters that parties can reference throughout each part of the proceeding, available here: https://ccb.gov/handbook/ [https://perma.cc/K4YK-MNN8].^[28]

Unfortunately, a CCB complaint may not have any teeth or draw for an accused infringer. Given that participation in CCB is voluntary and CCB decisions have limited appealability, many defendants may simply opt out of this process. Notably, Apple has issued a statement on its website to make clear that Apple will not participate in CCB proceedings: “Apple is exercising its rights to opt-out of participation in all CCB proceedings…Apple chooses to retain the option to exercise its constitutional right to have copyright disputes heard in a federal court with the right to a trial by jury.” ^[29]

However, some defendants may be incentivized to agree to the CCB process to limit their potential financial liability. If a plaintiff brings the same copyright claim in federal court, the defendant may face much greater damages: a federal court can award a plaintiff ten times the damages per work infringed than CCB, and whereas federal courts have no damages cap for copyright suits, CCB limits total damages to $30,000.^[30] Additionally, participating in a CCB proceeding is also significantly less costly than participating in federal litigation for procedural and timing reasons. Interestingly, Games Workshop, a large corporation, filed a dozen different claims against a single infringer with the CCB. Games Workshop has the means to bring this claim in federal court, but conceivably, Games Workshop chose to bring these claims instead with CCB to cut down on litigation costs while still expecting to receive a significant award; Games Workshop could potentially receive the maximum award for each claim.^[31]

The decision to opt out of a CCB proceeding will likely depend on the relationship between the defendant and plaintiff and the nature of the claim. If the defendant knows that the plaintiff lacks the financial resources to litigate the claim in federal court or if the defendant knows that the damages will not cover the cost of federal litigation, the defendant will likely opt out, betting on the fact that the plaintiff will not then bring the claim in federal court when CCB is no longer an option. At that point, if the defendant’s analysis is correct, the copyright claimant would once again have no other feasible legal recourse. Essentially, a defendant may only be motivated to agree to CCB proceedings when they know a claimant has the means to also bring their claim in federal court. This strategic cost-benefit analysis is particularly troubling because it defeats Congress’ purpose of creating CCB to prevent infringers from dodging copyright claims when a plaintiff lacks the resources to bring the claim in federal court.

This alternative tribunal for copyright claims has the potential to make an important difference to creative individuals’ careers and livelihoods. Hopefully, legal procedure and opt-outs will not get in the way of CCB’s success. CCB’s second year of operation has demonstrated that CCB is moving in the right direction with pro se complainants bringing claims without issue and CCB issuing reasoned determinations and motivating parties to settle relatively quickly compared to federal litigation. As CCB decides more cases in the coming months and years, copyright holders will get a sense of whether this alternative venue is the solution they have been waiting for.