Proposed Legislation Would Create a Small Claims Court for Copyright Disputes

The U.S. House of Representatives passed legislation that would create a small claims court for copyright disputes.  If enacted into law, the Case Act would create a dispute resolution system known as the Copyright Claims Board. The Copyright Claims Board would be housed within the U.S. Copyright Office and would be an alternate forum to resolve copyright disputes when the amount in controversy is less than $30,000. Under the legislation as currently worded, the Copyright Office would be responsible for setting up a filing system, enacting rules to govern proceedings, and appointing panels of copyright experts, called Copyright Claims Officers, to decide disputes.  Many details still need to be worked out, but all disputes would be decided based upon written submissions and Internet-based communications with no in-person appearances in court. Intellectual property practitioners are likely familiar with the Trademark Trial and Appeal Board (TTAB), which decides federal trademark registration disputes.  Trials before the Copyright Claims Board could share similarities with the TTAB.

The purpose of the Copyright Claims Board is to make it easier and less expensive for copyright owners to stop infringements of their work and collect damages for copyright infringement. Currently, the only legal recourse for copyright owners is to file a federal lawsuit for copyright infringement. Litigating in federal court is a complicated and expensive process that can last for years. For many copyright owners, it is not realistic to pursue federal litigation for small copyright infringement claims. Presumably, the Copyright Claims Board would follow streamlined procedures that would speed up resolution of claims.  The rules would be less complicated than the Federal Rules of Civil Procedure followed in federal court and would involve no formal motion practice. This legislation specifically allows law students, as authorized by state law, to represent copyright owners pro bono in proceedings before the Copyright Claims Board.

An apparent shortcoming in the pending legislation is that it requires each party to consent to resolving the claim before the Copyright Claims Board. This means that if a copyright owner files a claim with the Board, the defendant could “opt out” of the proceeding and require the Board to dismiss the claim. Defendants could drive up the cost of litigating by opting out of Board proceedings and requiring copyright owners to litigate in federal court, thus defeating the purpose of the Copyright Claims Board.

We will continue to monitor this new legislation for any changes to its wording or subsequent steps to enact it into law. We plan to write about any significant changes to the legislation here.

This article is provided for general information and should not be relied upon as legal advice for a specific situation. If you are in need of specific advice or legal representation, please do not hesitate to contact us.

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