On October 22, 2019, the U.S. House of Representatives passed the Copyright Alternative in Small-Claims Enforcement Act, which would provide an alternative dispute resolution program for lower-value copyright infringement claims.
Currently, rightsholders to copyrighted materials must litigate their claims in federal court, which can be protracted and costly. The purpose of the Act is to provide a "forum for lower-value copyright disputes in which participation is voluntary for both claimants and respondents." In addition, the law is "intended to be accessible especially for pro se parties and those with little prior formal exposure to copyright laws who cannot otherwise afford to have their claims and defenses heard in federal court." Parties may appear pro se or be represented by an attorney or a law student on a pro bono basis.
The Act establishes a Copyright Claims Board, composed of three Copyright Claims Officers recommended by the Register of Copyrights and appointed by the Librarian of Congress. Each officer must have at least seven years of legal experience. Additionally, there must be at least two full-time Copyright Claims Attorneys with at least three years of "substantial experience" in copyright law to help with the administration of the Board. The Board may hear claims for copyright infringement, declarations of non-infringement, misrepresentation under section 512(f) of the Digital Millennium Copyright Act, related counterclaims and any legal or equitable defenses, such as the fair use doctrine. Once a proceeding is initiated, defendants have the choice of opting out, and the parties may choose instead to bring their case to court. If the defendant does not opt out—including by failing to appear—the Board's decision is binding and may be subject only to a request for reconsideration or review by the Register of Copyrights.
Proceedings under the Act differ from actions brought under the DMCA in several notable ways. Unlike the DMCA, which does not cap awards for actual damages and profits, and does not otherwise cap the total amount of recovery, total damages under the Act are capped at $30,000 per proceeding or $15,000 in statutory damages per work. Moreover, the Board is required to consider whether an infringing party has agreed to stop or mitigate their infringing activity. And, unlike federal court actions where registration of a work is a prerequisite to filing a claim, the Act allows claimants to bring a claim or counterclaim for infringement if the owner has applied to register the work and that application has not been denied. However, the Board may not render a decision in a proceeding until a registration has been issued by the Copyright Office.
One potential benefit of the Act is that there will be a lower barrier to entry for rightsholders with more limited resources to adjudicate their claims without the burden of litigation in federal court. For the very same reason, however, it will become much easier for anyone—rightsholders with legitimate claims or otherwise—to pursue a claim for infringement, with the potential threat of up to $30,000 in liability—modest by federal litigation standards, but crippling for individuals or small businesses. This is of particular concern given that claimants may bring claims for unregistered works, which could encompass any of the vast array of online content users share on a regular basis, ranging from articles and photos to memes and videos. To protect against this possibility, potential defendants will need to remain vigilant about their deadline to opt out of a proceeding, as well as the procedure for providing the Copyright Claims Board with the requisite written opt-out notice.
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