Reforming Little Copyright
It’s pretty clear that Big Copyright — famous authors, Hollywood and, well, Hollywood Hollywood and Hollywood — gets what it wants from both Congress and the courts in terms of copyright protection, and then some.
Apes, on the other hand, not so much.
But what about the rest of us? Okay, not so much the rest of us as what we can call Little Copyright: independent creators, mainly photographers and graphic artists whose visual works are protected by copyright but who are all the same routinely ripped off on the Internet.
For infringement by your everyday right-clicking infringer, the only choice for most such creators is infringement-trolling lawyers who work on a contingency. They operate by volume, sending demand letters to infringers such as bloggers, small businesses and other small fry who just take whatever finds its way to the Internet for their own use. The letters are bellicose fire-breathing missives of outrage that invoke the most extreme sanctions available under the Copyright Act, on the frequently justified assumption that a user will be happy to spared such an outcome in exchange for a few nickels on the supposed dollar.
The problem is these letters are almost always bluffs. Initiating a copyright infringement claim in federal court and prosecuting it through to judgment and an award of attorneys’ fees and costs rarely pays. A draconian award on behalf of an independent creator against what is usually a clueless infringer of a work with mainly speculative value is not particularly likely. Then there’s the even less likely prospect of collecting such an award. And, of course, this all pre-supposes that the work has been registered, without which no action can be brought — and registered within three months of first publication, without which no attorneys’ fees are available.
And don’t even talk about the other side of the coin: Pursuing a major corporation, whether one that itself lives off IP rights or not, for a “small infringement” claim.
Because of this problem, there has been a movement afoot for years to establish a small-claims process for, well, small copyright claims, which is now being described as the “Copyright Claims Board.” And because of this tweet, I learned today that the effort seems to be getting somewhere. It’s called the Copyright Alternative in Small Claims Enforcement (CASE) Act (H.R.3945) and the tweeter in question links to the Copyright Defense website, which explains:
The House Judiciary Committee is currently working to create a piece of legislation that will be a game changer for enforcing copyright infringement claims. It would create a small claims enforcement option administered by the United States Copyright Office through remote proceedings and teleconferencing. This would provide you with a remedy for enforcing your rights without filing a federal lawsuit. Everyone’s voice is needed to push this through!
American creators are among our nation’s greatest economic contributors. The harsh reality of copyright law in the United States, however, is that the one-size-fits-all system excludes most visual artists. The system currently works, at least to a certain extent, for low-volume, high-value creators (motion picture creators, recording artists, etc.), but it is largely ineffective for visual artists and other high-volume, relatively low-value creators.
Because many common copyright infringements, especially of images, are valued at a few thousand dollars or less and given that federal lawsuits can easily cost hundreds of thousands of dollars, seeking remedies in federal court is not a viable option. Consequently, many creators technically have copyright protection, but have no practical option for enforcing those rights.
A small claims enforcement option would correct this decades-long inequity, and would extend protection under the law to hundreds of thousands of small-business creators. Visual artists are entitled to an effective means of enforcing their intellectual property rights. The time has come to correct this injustice.
The seven visual art and image licensing associations listed below formally proposed the creation of a copyright small claims tribunal under the United States Copyright Office through the release of a white paper on February 22, 2016. Read the full proposal here.
That full proposal does not set forth a simple solution to a complicated problem. It’s complex as hell, actually, which is pretty much what you’d expect once you thought through the implications of this idea, as appealing as it sounds. Here are just the bullet points of the issues, addressed in mere summary fashion in the 2016 white paper submitted by the Visual Artists Group at that last link. It was submitted in response to this Copyright Office initiative, and the bullet points alone followed by a brief paragraph each topic was enough to bulk it up to 15 single-spaced pages:
- Creation of a small copyright claims tribunal for claims under $30,000
- Staffing the tribunal with three (three? for the whole of Creation?) “adjudicators”
- Managing the docket of the tribunal
- Establishing a “straightforward process” for summary adjudication
- Opt-out options for respondents and standards for service and entry of default
- Administrative criteria for initiation of proceedings
- Role of legal counsel
- Range of eligible claims related to infringement and enforcement of copyrighted works
- Eligible works
- Available defenses
- The tribunal’s power to dismiss matters sua sponte
- “Incentives” (it’s complicated)
- Structuring the project to avoid its getting bogged down in frivolous claims
- Reform of copyright registration procedures, especially “expanded group registration rules and [reconsideration of] the distinction between published and unpublished images at the registration stage — an incredibly burdensome and ineffective distinction that requires published and unpublished images to be registered on separate forms with separate fees”
- Expedited registration including another look at those ridiculous fees
- Exempting claims under $5000 from the registration requirement
- Claimants’ power of subpoena and proceedings against unknown infringers
- A schema of damages options
- The issue of attorneys’ fees, which is explained as being not so simple at all
- Reconsideration and review of rulings
- Challenges and appeals
- Precedential effect of rulings
- Enforcement of rulings
- Statutes of limitations and equitable tolling of the time bar for federal court actions
- Promulgation of educational material concerning the tribunal
- Oversight and review by the Copyright Office
Not simple at all, and certain to be the subject of litigation in a hundred different directions if and when it is implemented. Scott Alan Burroughs wrote, at Above the Law, about some of the problems in the legislation as it looked in late October of 2017:
Looking at the language of the proposed amendment, though, makes clear that the proposed legislation has a whole slew of potential problems. As is the deal with much well-meaning legislation, there are fundamental flaws in the current text that will remove the teeth from, if not disembowel entirely, the proposed low-cost tribunal for copyright claims.
First, the proposed amendment has one major, glaring hitch that will render the proposed small-claims court a near nullity before the would-be litigants even darken its doors. Actually, it is the ability to compel that door-darkening that is the issue, as the current text does not include any obligation or requirement that one or all of the participants in a copyright dispute take part in the CCB proceedings. The proposed statute notes that participation in a CCB proceeding is entirely voluntary and nothing in the new law would preclude any of the interested parties from heading straight to the federal courts.
To wit, the language has an express “opt-out” provision for infringement defendants: if they provide notice to the copyright holder that they are opting out within 30 days of small-claims court service, the parties will be forced to litigate in federal court. The most likely effect of this opt-out is that in any case where the defendant is a corporation with ample resources and the plaintiff is an artist lacking in resources (which will often be the case given that the matter was filed with the CCB in the first place), the defendant will most likely opt out and force the artist to spend the time and money to litigate in federal court.
Ironically . . . the very cases that the CCB was intended to make easier, quicker, and more cost-effective to resolve will instead take longer and cost more in many instances.
It’s almost axiomatic that independent artists face unique difficulties in the digital environment. Unlicensed commercial use of creative works is not uncommon, and the money that those uses theoretically represent in unpaid licensing fees can be substantial. So it’s understandable that artists would push for a system that makes it cheaper and easier for them to recover royalties for infringements of their copyrights.
But tweaking the legal system to produce better results in such a narrow set of cases is like playing high-stakes Jenga. One wrong move, and the whole incentive system of copyright litigation can topple. The latest attempt to streamline — the CASE Act — takes the table and threatens to flip it right over.
Jenga? Whatever. Meredith focuses on three problems in her piece:
1. The CCB is not meaningfully answerable to traditional federal courts
It would be an administrative unit within the Copyright Office, and listen to this about that:
While the Act’s drafters advertise this as a provision to guarantee independence, it calls into question whether the Librarian could fire a judge who routinely exhibited bias toward one class of parties, even in the face of opposing law. Given the systemic bias issue at the Office, this hypothetical doesn’t seem so remote.
2. The CCB can assign 5x the national average for small claims damages . . .
The CCB can assign up to $15,000 in damages per infringement, with up to $30,000 in damages total. For comparison, that’s higher than any small claims court in the nation, and more than double the small claims limit in 49 states.
As the CCB illustrates, statutory damages in general are dangerous (and contentious) in copyright cases. The general principle behind them is to deter defendants by allowing plaintiffs to recover large sums even when it would be difficult to prove actual damages under traditional proof standards. In copyright cases, however, statutory damages are set at an eye-popping $150,000 per file. These inflated claims have no connection to financial reality — such as a (theoretical) $8 billion iPod.
Her third point, which is very insightful, is this:
3. The opt-out system could create a default-judgment mill for copyright trolls
The CCB operates on an “opt-out” system. What this means, in practice, is that if individuals are accused of infringing a creative work, they will (in theory) receive a notice, and unless they respond that they want to use federal court as a venue, they are sucked into the CCB’s jurisdiction. The CCB becomes the default venue unless the defendant — who may not have an understanding of what is happening or what to do — chooses otherwise. Failing to respond means that the defendant is subject to the CCB’s jurisdiction, its process, and its statutory limits. (It also means that they’re required to fly to Washington, D.C., since the CCB will only sit in one place.)
So what happens when you have a court that is (a) not answerable to the judiciary, (b) capable of assigning steep damages, and (c) capable of subjecting people to its jurisdiction by default? If you guessed “litigation mill,” you’d be right.
Although much of the pushback can be chalked up to certain groups who seemingly resist any effort to hold infringers accountable for misappropriation, it’s worth addressing some of the criticisms to show that they’re largely baseless.