Wednesday, November 27, 2019

What is the CASE Act?


The CASE Act is the short name for the Copyright Alternative in Small-Claims Enforcement Act. If passed into law, it would add a new section to the Copyright Act, and it would establish a Copyright Claims Board within the Copyright Office that would be able to hear and resolve copyright disputes outside of court. The current version of the Act passed in the House of Representatives on October 22, and it is now waiting to be heard before the Senate.
Currently, if copyright owners need to enforce their rights, they must litigate their claims in federal court. This can be time-consuming and expensive. The CASE Act was introduced in an effort to make it easier and more affordable for copyright owners to enforce copyright infringement claims, especially those with cases where the damages would be small.
Copyright owners who would like to pursue a claim under the CASE Act can file a claim with the Board and pay the prescribed fee, which is yet to be determined but in no event less than $100 or more than filing in a federal district court. The Board’s attorneys will review the claim. If the attorneys determine the claim meets at least the minimum standards for filling, then the claimant must serve notice on the opposing party. After being served, the defendant has the opportunity to opt-out of the Board proceeding. If the defendant opts-out, then the plaintiff would have to file a claim in federal court to continue pursuing the matter. If the defendant does not affirmatively opt-out of the Board proceeding, then it will continue.
There is no requirement that either party be represented by an attorney in a proceeding before the Board, and the proceeding is supposed to be primarily conducted via written statements or remote conferencing. A decision issued by the Board has limited ability to be appealed to a court. It can only be appealed “[i]f the determination was issued as a result of fraud, corruption, misrepresentation, or other misconduct[,] [i]f the Copyright Claims Board exceeded its authority or failed to render a final determination concerning the subject matter at issue[, or] [i]n the case of a default determination or determination based on a failure to prosecute, if it is established that the default or failure was due to excusable neglect.” The Board can award damages of up to $15,000 per infringed work. However, the maximum amount recoverable by one party in a proceeding under before the Board is $30,000, not counting awards of attorneys’ fees or costs.
I agree with most of the CASE Act supporters that copyright litigation is too expensive for many copyright owners to pursue, and as a result, some of these copyright owners are unable to enforce their rights. The CASE Act is a step in the right direction. However, there are three issues that I find troubling, at least at this stage of my review of the Act.
The first is the opt-out nature of the proceedings. Even though there are provisions in the Act to provide for proper service upon a defendant, it is still very likely the opt-out nature of the proceeding will be overlooked and people will not receive the documents or understand their importance and will have a judgment issued against them without their knowledge. Making it opt-in would be truly voluntary, and would alleviate many of the issues of notice.  
The second issue, and most troubling for me, is the limited review by courts. While I understand that the goal is to make the process cheaper and easier than pursuing a claim in a district court, I also understand that copyright cases are often complicated. Having seen the number of decisions overturned at the appellate levels due to an incorrect application of law, I am concerned about the Board’s decision being final, especially since a decision can still be as high as $30,000. If Board decisions could be appealed to the Court of Appeals, it would make the Board review process more enticing.
The final issue involves the benefits of a Board proceeding. The benefits of the Board proceeding are relatively apparent for the plaintiff: low cost, faster, and, it will likely be easier to obtain damages than it court. The benefits for the defending are lacking. As mentioned, the lack of appellate review is a turn off. Additionally, there is some language in the CASE Act that appears to allow the plaintiff to claim statutory damages they would be otherwise unable to claim in court. The only benefit is the cap on awards. As of today, I don’t think I would advise a client to participate in a Board proceeding as a defendant unless their infringement was so blatant and excessive that the maximum award benefit worked in their favor.
The CASE Act is still not law, but it is getting close. The current version has made it farther than previous attempts, and at some point, I expect we will have an alternative means of copyright enforcement. The question will be whether the process will be an attractive enough alternative to litigation for defendants that they will want to participate.