Cheated Artists Get New Forum: Copyright Claims Board Explained

Jan. 28, 2021, 10:56 AM

Congress designed the Copyright Claims Board—signed into law in December—to be an affordable, streamlined alternative for infringed rightsowners such as photographers. The law requires the Copyright Office to set up the tribunal within 12 months, with an option to request a 180-day extension.

Opponents call the tribunal unconstitutional and say it will attract abuse from “copyright trolls,” or parties that make money more from aggressive litigation than through licensing works.

Proponents say plenty of safeguards underpin this boost for rightsholders, who complain their work is infringed with impunity online because high costs often make litigation impractical.

1. What’s the CCB’s core framework?

The board can hear claims for infringement, declarations of non-infringement, and bad-faith Digital Millennium Copyright Act takedown notices and counter-notices. It will feature three copyright claims officers and two copyright claims attorneys to assist with administration.

The filing fee to be set by the Copyright Office is expected to be significantly lower than the $400 to file a federal lawsuit, though the law only stipulates a fee between $100 and the district court filing fee. Once a claim is filed, a copyright claims attorney can reject it for deficiencies or complexity beyond the court’s simplified design, or to maintain a reasonable caseload.

If the board accepts a case, the defendant will receive a notice describing the CCB’s nature and the defendant’s right to opt out of the tribunal’s authority within 60 days. A defendant who doesn’t act will be bound by the board’s conclusion, which can only be appealed to court in limited circumstances.

2. What will proceedings look like?

The law grants the Copyright Office leeway to set up the tribunal but provides guardrails.

The Copyright Office can’t require in-person appearances or counsel. To keep thing streamlined, proceedings can’t “include any formal motion practice.” Parties can ask the board to address discovery and case management issues, and the board can ask parties to address specific questions about their case.

Discovery and evidence will be limited, and the CCB “may” conduct hearings, according to the law. Majority decisions will be based on a preponderance of the evidence, under the law and precedent of the most relevant U.S. district court. The board’s decisions won’t be precedent-setting for itself or any court. Settlements can be reached at any time before or during a proceeding.

Parties can ask the board for consideration within 30 days, and then ask the copyright register to review the case for abuse of discretion. Federal courts can review decisions for corruption, fraud, or misconduct, or for allegations that the CCB exceeded its authority.

3. What are the award guidelines?

Under the Copyright Act, infringed rightsholders can seek actual damages or—if the work was registered pre-infringement—statutory damages. Statutory damages, which don’t rely on a showing of specific harm, can range from $750 to $30,000 per work, up to $150,000 for willful infringement. Plaintiffs with registered works can also potentially recover attorneys’ fees.

The board adopts that framework but caps liability at $10,000 per registered work, and $30,000 per case. It also bars attorneys’ fees except in cases of bad faith.

The tribunal could, theoretically, produce higher awards than courts for works not registered before infringement. It allows for statutory damages up to $7,500, whereas courts can only award actual damages.

The law also calls for creation of separate regulations for a smaller-claims process for cases seeking total damages of $5,000 or less.

4. What about safeguards?

The law includes safeguards beyond respondents being able to opt out and the board’s ability to turn down cases. For example, the Copyright Office can cap the number of claims a party can bring before the CCB per year to hinder serial abuse.

Parties that demonstrate bad-faith on the part of an adversary or their counsel can get up to $5,000 in attorneys’ fees. Parties who represent themselves can still win bad-faith fee awards of up to $2,500.

Those limits can be exceeded in extraordinary cases, or if there’s a pattern of bad behavior. Multiple incidents of bad behavior by a claimant or attorney can result in a one-year ban on bringing claims to the CCB.

Even so, opponents say such provisions aren’t enough to prevent abuse of regular internet users by litigants seeking outsized paydays. For example, threats of five-figure penalties could be used to pressure unsophisticated users into smaller-but-substantial settlements, they say.

5. Will the board work?

Whether the board can remedy infringement efficiently without catching ordinary internet users in the crossfire probably won’t be known until 2022. Constitutional challenges require someone with standing to sue—likely after an adverse CCB ruling. Some tribunal opponents have called that a certainty, and academics say the board’s constitutionality is, at best, unclear.

In the meantime, the Copyright Office will signal how the board will function as it writes regulations. Stakeholders should have a chance to weigh in as the agency designs the tribunal.

Once the board is up and running, early rulings will give a sense of its appeal. Harsh infringement awards could push defendants toward opting out. But awards hewing closer to licensing fees than statutory maximums could make the tribunal—and its limitations on liability exposure and legal costs—appealing for defendants.

To Learn More:

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To contact the reporter on this story: Kyle Jahner in Washington at kjahner@bloomberglaw.com

To contact the editors responsible for this story: Melissa B. Robinson at mrobinson@bloomberglaw.com, Keith Perine at kperine@bloomberglaw.com; Jo-el J. Meyer at jmeyer@bloombergindustry.com

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