The Copyright Alternatives in Small-Claims Enforcement ("CASE") Act of 2019 was passed in to law as a part of the Covid-19 stimulus bill in December 2020. This is the single biggest change to the Copyright Act since the Digital Millennium Copyright Act ("DMCA") was passed in 1998. I have read the entire law and am prepared to give my summary and opinion.
What does the CASE Act Do?
The CASE Act sets up an alternative forum - The Copyright Claims Board ("CCB") - that will hear and resolve copyright claims - sort of like mediation or arbitration. The CCB will be comprised of at least five attorneys (Claims Officers and Claims Attorneys) that will carry out the duties of the CCB. [1] The Board will hear claims related to copyright infringement, requests for a declaration of non-infringement and claims for any misrepresentations made under the DMCA during the takedown process. [2] The CCB can also award monetary damages - up to $30,000 in any once proceeding. [3]
What Would a CASE Act Claims Process Look Like?
Let's walk through a hypothetical to see how the CASE Act may work once everything is up and running.
Let's say you have a highly creative and original jewelry design that you have been selling on Etsy for a few years. You find someone who is copying your exact design and even using your photographs in their listing. You file a DMCA takedown notice with Etsy and the item is removed. But, the infringer files a counternotice falsely claiming they have a license to reproduce the work. The DMCA states that the next step would be filing a legal action within 10 business days and notifying Etsy of that action so it will not put the infringing item back online. If no legal action is filed within the timeframe, Etsy can out the item back up for sale.
Before the CASE Act, unless you had money to spend on an attorney, and/or your claim was high in value, this would have normally been the end of the road for you. Filing a lawsuit in federal court is not a step a lot of laypeople can take without significant preparation beforehand. Federal court is expensive, difficult to maneuver without an attorney and it may be impossible to attract an attorney to a low-value claim against an unknown defendant. So, even though your work may be original and creative, there was often no meaningful recourse if the DMCA takedown process resulted in an impasse. This is part of the problem the CASE Act intends to remedy. After receiving a counter-notice under the DMCA, filing a claim with the CCB within 10 business days would prevent the infringer from putting their work back up for sale. [4]
Pre-requisites to Filing with the CCB
So, if the CCB was up and running, you would have the option of filing a claim with them. But, much like filing in federal court, you will need to first register your work with the copyright office. [5] If the work was registered before the infringement, you can potentially receive statutory damages up to $15,000 per work infringed. If the work was not registered in a timely fashion, you can get up to $7,500 in statutory damages. [6] This is a CCB benefit. If you were filing in federal court and had not timely registered your copyright, you could not get statutory damages at all; you would have to prove actual damages which can be much harder to do.
Additionally, another benefit to filing with the CCB vs. federal court is that you do not have to wait to receive a certificate of registration before moving forward with your claim. [7] This was a significant impediment to federal court for those with unregistered works who were working within the 10 business day timeframe of the DMCA; obtaining a registration certificate and then filing a case in federal court all within ten business days is impossible to do without paying hefty expediting fees and, even then, the registration may not happen in time. But, under the CASE Act, you can file for copyright registration and immediately file your CCB claim without having to wait. The average wait time for registration approval is 3.2 months so, this is another CASE Act benefit.
Filing a Claim with the CCB
So, after dispensing with the pre-requisites, you go to file your claim with the CCB. You can file the claim under two theories: copyright infringement and violations of the DMCA (when the infringer filed a false counter-notice). [8] You can file the claim yourself or choose to be represented by an attorney or approved law student. [9] This appears to be a CASE Act benefit; generally law students are not allowed to represent clients in court cases but, once the Act is fleshed out, this may be a way to receive low or no-cost representation.
When preparing the claim, you have to prepare a statement of facts supporting your claim, certify that your claims are accurate and pay a filing fee. [10] At the time of this writing in January 2021, the fee is to be "not less than $100." [11] Next, you would need to figure out the laws related to personally serving a legal claim in whatever state the infringer is located and then pay to have the papers served pursuant to those laws. [12] You have 90 days to serve the claim. The CCB will also send a copy of the claim to the individual but that is in addition to, not in lieu of you serving them. [13]
The accused infringer would then have the option to opt out of the CCB process entirely. [14] If they do not do so, the claim would proceed to the prosecution stage. This stage is loosely modeled on the litigation process but appears to be significantly truncated and less formal. Yet, the CCB process could still require written submissions, responses to document requests, requests for admissions and other discovery related tasks. There could also be hearings with oral presentations and witness testimony. [15] Generally, however, there are no in-person appearances and all hearings would take place telephonically or via some other Internet based method. [16]
Remedies
If you were to prevail in your CCB claim, the Board could order that the infringer pay monetary damages. This could include actual damages, the amount you actually lost if that is quantifiable, or statutory damages. Statutory damages are set by law and act as a cap to the amount that can be awarded. In a CCB hearing, the cap will be $30,000 for works that were timely registered with the Copyright Office and $15,000 for works that were not timely registered. [17] Generally, each party pays for their own attorneys fees if applicable. [18]
The Board could also order the guilty party to refrain from doing the thing that got them into trouble but only if the person agrees to stop. If they do not agree to stop, the Board cannot order them to do so but may take this into consideration when deciding the amount of monetary damages to order. [19]
If the infringer fails to pay any monetary damages ordered by the CCB, you can take your order to any appropriate federal district court and apply to have it reduced to a judgment. [20] You would then need to go about collecting that judgment through whatever means are available for collecting any other civil judgment in your state.
My Thoughts on the CASE Act
Is This Just Another Toothless Copyright Law?
Overall, I think the CASE Act gets a few points for the effort because the endeavor of it means that lawmakers recognize that there is an entire population of copyright owners that have no meaningful remedy under the current laws. But, that's about as far as my praises go. In my opinion as both a crafter and an attorney, the CCB will end up being fairly useless for the subset of creators that need something like this the most - small makers with small value claims. Why? Because this entire process is VOLUNTARY. You could pay your $100+ filing fee, pay to have a process server serve your claim and then have the person just say "no, thanks" and opt out and you'll be back at square one with no viable remedy.
The minds behind this law know that so many creators are shut out of federal court because of the cost and complexity of litigating there. But, these same minds act as if the threat of a case being filed in federal court is a viable deterrent to people who will choose to opt out of the CCB as a venue. No. Something that was never a viable option in the first place does not magically become a viable deterrent by adding this additional layer.
To me, this will end up being similar to the DMCA. The Claim - Counter-Claim - Lawsuit pattern of the DMCA takedown process short circuits when no one can actually file lawsuits due to cost and complexity. Among small creators with small claims, people have gotten wise to the fact that you can file a DMCA counterclaim and, for all intents and purposes, that is the end of the issue. With the addition of the CASE Act, you just add more complexity to the pile but, sooner or later, people will learn that all you have to do is opt out and the threat disappears because...same issue...this subset of copyright owners is not filing federal lawsuits due to cost and complexity.
Potential for Trolling
I think another soft spot in this law is the potential for claim trolling. As it stands, there is nothing (short of a toothless penalty of perjury provision) that prevents people from filing frivolous DMCA claims against other business owners and getting their products removed from the Internet for at least a few weeks. This may be at the height of the holiday shopping season or the summer bridal season, etc. Getting a profitable item removed by a troll can be devastating for a small business.
Now think about the fact that, for $100, the trolls can go even further. If they file a frivolous claim with the CCB, that operates to keep the disputed item offline for much longer than a few weeks. The filer of the CCB claim has 90 days to serve the papers. If they go the entire 90 days and do not serve the papers, the case is simply dismissed but, the product will have been offline that entire time. Imagine the power an unscrupulous competitor can wield in that situation. Sure, $100 is not an insignificant amount of money but I can certainly imagine a scenario where being able to knock out a chief competitor for 3+ months would be well worth the money spent on filing fees.
Hopefully, unlike the DMCA, the CASE Act's bad faith provisions will actually have some teeth in order to deter people from filing claims for the specific purpose of removing products from the marketplace for a period of time.
All in all
It would be wonderful if the CASE Act functioned well and is not abused but I am not hopeful. There are other issues with this law that I have not even touched on (default judgments leap to mind). What is truly needed is a real small claims tribunal that is not optional.
Note: My citations below are to the Senate version of this bill which can be found here. The Covid stimulus bill version can be found here. The CASE Act provisions start on page 996 of the Covid bill.
[1] S. 1273 § 1502.
[2] Id. § 1504(c).
[3] Id. § 1504(e)(2).
[4] Id. § 1507(d).
[5] Id. § 1505(a).
[6] Id. § 1504(e).
[7] Id. § 1505(a)(1)-(2).
[8] Id. § 1504(c).
[9] Id. § 1506(d).
[10] Id. § 1506(e).
[11] Id. § 1510(c).
[12] Id. § 1506(g).
[13] Id. § 1506(g)-(h).
[14] Id. § 1504(a).
[15] Id. § 1506(m)-(p).
[16] Id. § 1506(c).
[17] Id. § 1504(e)(1).
[18] Id. § 1504(e)(3).
[19] Id. § 1504(e)(2).
[20] Id. § 1508(a).
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