In addition to the trademark measures embedded in the “must pass” COVID-19 relief bill discussed in Laura Winston’s blog post from last week, the Consolidated Appropriations Act included a significant change to how certain copyright cases might be adjudicated. The relief bill incorporated and signed into law the Copyright Alternative in Small-Claims Enforcement Act of 2020 (the “CASE Act”), which sets up a Copyright Claims Board within the U.S. Copyright Office to adjudicate disputes valued at under $30,000.

The new Copyright Claims Board will be an alternative dispute resolution process for copyright owners to bring claims where the damages in connection with a work will not exceed $15,000 per work and damages for total dispute will not exceed $30,000 for timely registered works. Regulations will also be established to provide for consideration and determination of claims where total damages do not exceed $5,000, which may be decided by 1 or more Copyright Claims Officers. Unlike with federal litigation, a copyright registration will not be required to file an action with the Copyright Claims Board, but the case is not permitted to be decided until a registration certificate has been issued and the other parties have had an opportunity to address that certificate.

Proponents of the CASE Act argue that litigation in federal court is too expensive for many small copyright holders to pursue and that the Board will open easier and less expensive avenues for those copyright holders to enforce their copyright rights. Proceedings before the Board will be more streamlined than federal court, allowing for remote participation with or without an attorney and with more limited motions practice and discovery restricted to the production of relevant information and documents, written interrogatories, and written request for admission unless good cause is shown. Determinations made by the Board will be binding and participating in the proceeding will result in the participants’ waiver of the right to adjudicate their claims in federal court and by trial by jury.

It is important to note that participation in a proceeding before the Copyright Claims Board is voluntary. A potential defendant may opt-out within 60 days beginning on the date of service by providing the Board with written notice. Failing to provide this opt-out notice in a timely manner, and in accordance with the Register of Copyrights’ yet-to-be promulgated regulations will result in the proceeding being deemed active and the defendant will be bound by the Board’s determination, including any default determination.

While the Copyright Claims Board might allow some small copyright owners a more cost effective means of enforcing their copyrights, it also poses a risk that the new proceedings will be used to silence free speech and could be abused by copyright trolls who will no longer be forced to pursue their claims through federal court. There are also questions about whether the Copyright Claims Board will be useful for small copyright holders against the kinds of repeat infringers who may have more resources and experience with timely responding to and opting-out of these voluntary proceedings.

As with any other intellectual property infringement (or any other legal) claim, notices regarding these new proceedings should be taken seriously and addressed promptly to ensure that the recipient of such a notice does not inadvertently submit to this voluntary but binding proceeding.

The Copyright Claims Board is scheduled to begin operating within 1 year from the enactment of the CASE Act. We will continue to follow and will bring you updates as the CASE Act is implemented. In the meantime, if you have any questions or want to discuss copyright, trademark, or other IP matters, please contact me.