By Kevin Smith

In theory, the idea of a small claims board that could adjudicate copyrights claims where the monetary value is not too high seems sensible.  Federal litigation is very expensive and intimidating, so a small claims mechanism could make it easier for independent artists and small businesses to defend their rights.

Nevertheless, I have never been very enthusiastic about the idea, in large part because the devil is definitely in the details of any proposed scheme.  The fear is that a small claims board could become, in the words of this 2012 article about the topic from Techdirt, just “a new venue for porn companies to coerce settlements out of internet subscribers.”  If such a board appeared to be nothing other than a mechanism to make it easier not just for trolls but for Big Content in general to bully individual users and avoid the high costs of litigation, it would ultimately be harmful to the copyright balance that is already so out of whack in the U.S.

Unfortunately, when I look at the CASE Act (H.R. 5757) (it stands for “Copyright Alternative in Small Claims Enforcement Act) introduced last week to the House of Representatives, many of these fears seem realized.  Based on the actual text of the proposed legislation, I am afraid this specific bill would have two negative impacts.  First, I fear it would greatly increase the power of the Copyright Office in shaping copyright enforcement, which is not something I can contemplate with anything other than foreboding.  Second, I think that the proposed legislation would make it easier for Big Content, and especially for the copyright trolls who are often their vanguard, to bully ordinary individuals and increase the phenomena of copyright enforcement by fear, rather than through the law.

The proposal is not without its good points, however, and perhaps it is a good idea to start with those:

  • One thing that may seem obvious, but needs to be said in the legislation, is that all parties to an action before the board would have the right to legal representation.  The CASE Act does include such a provision.
  • There is also a specific allowance for actions that assert copyright misuse in regard to DMCA takedown notices.  Section 512(f) of the copyright law calls out knowing misrepresentations in a DMCA notice as a cause of action, but our courts have done little to penalize such false claims.  The CASE Act would allow an aggrieved party to bring such a claim, although it is not clear that the damages available would justify even the reduced costs of bringing such an action.
  • Most importantly, the bill would ensure that the parties to an action before the Copyright Claims Board would be able to assert all the defenses that are now available in the law or that courts recognize “in equity.”  So it would still be possible to raise a fair use defense; the question is whether it would be heard or analyzed in the same way as we have seen evolving over time in the federal courts.

Two other provisions of the CASE Act leave me with a good deal of uncertainty and disquiet.  One cause for this is the potential to bring an action before the small claims board claiming infringement even on an unregistered work.  Copyright registration is required prior to bringing a lawsuit in federal court, but this bill would allow such a claim before the small claims board, with a greatly reduced potential for recovery of damages.  So such a claim would cost less to bring, but also offer less reward for success  It is not clear to me if an author, acting on her own, would be well served by such an option, or if registration, which does not cost much and would allow greater damages even in a small claims action and also provide access to the federal courts, would still be more sensible.  Also, since it seems likely that copyright misuse claims under 512(f) would fall into this unregistered category, the reduced damages provision is also the reason why to allowance of such claims, while a positive step, probably would actually do little good.  Content companies would likely still feel free to send out massive numbers of automatically generated take down notices without much fear of these kinds of small claims.

Indeed, the whole area of damages in small claims is rather problematic.  On the one hand, statutory damages for copyright infringement are ridiculously high, and often are used to chill legitimate uses because the risk of making a mistake is so great.  So lowering damages in the small claims arena makes sense, and the CASE Act caps such damages at $15,000 for any one act of infringement and $30,000 in a single action.  Certainly small claims without reduced damages would be intolerable.  But these damages still strongly favor plaintiffs over defendants, since the costs of suing would be much lower, while the risk of being held liable would still be potentially devastating for individuals.  Add to this the fact that it would be impossible, before the small claims board, to be awarded attorney’s fees and court costs even if one won, and the odds are still strongly tipped in favor of the big content companies with in-house lawyers and against individual users — artists, authors and students, for example — who might find themselves on the wrong end of one of these claims.

Overall, I have to conclude that this bill is a power grab by the Copyright Office and would be a boon to the lobbyists for Big Content.  The makeup of the proposed small claims board would be recommended by the CO from the ranks of lawyers with substantial experience in copyright infringement actions, which means that those very lobbyists would probably become the judges (called “Copyright Claims Officers”).  And the work of the board would, according to section 1402(c) of the bill, “be generally directed… by the Registrar of Copyright.”  The provisions would give the Copyright Office tremendous influence on copyright enforcement, which would please the content companies a great deal, but would undoubtedly further detract from a balanced law that genuinely encourages new creativity, rather than merely protecting profits for legacy works.

Because the bill would make enforcement cheaper and easier, but still carries a large threat for smaller entities caught up in it (especially since they could not recover costs), I think that ultimately the bill would further empower the copyright trolls who have begun to plague our courts.  A mere threat to sue would still be amply frightening to coerce settlements from many people who might still be found innocent if they could risk the issue, and it would be less costly for the trolls in those rare instances where they did.

Finally, there is a provision (1404(f)1(c)) which seems to assume that the small claims procedure would be used against ISPs that did not respond adequately, in the judgment of plaintiffs, to content take down notices.  Big Content has been trying to chip away at the notice and take down safe harbor for ISP for a long time, because they want ISPs to act as enforcement agents for their rights.  Here, as in other ways, the small claims board would further advance that agenda, potentially further undermining free speech on the Internet by increasing the pressure for rapid take downs without providing enough protection against abuse.

At first glance, this bill looks like it is a move in favor of the little guy.  But, in fact, it offers a laundry list of goodies to trolls and to the large content companies.  It would, I am afraid, simply be one more tool to be used to intimidate legitimate users of content and tighten the grip of the legacy industries over innovation and creativity.


Kevin Smith

Kevin Smith is a librarian, a lawyer focusing on copyright issues, a scholarly communications advocate, and the Dean of Libraries at the University of Kansas.

Comments (2)

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