Copyright Office Recommends New Administrative Tribunal for Small Claims

Enforcing copyrights in the Federal Courts can be both expensive and complicated, so much so that many feel copyright law Is virtually unenforceable except by large corporations. Filing a copyright claim for anything under $30,000 is perceived as a lose-lose proposition because legal fees and discovery costs (even for pro se litigants) can quickly surpass any potential recovery. One study cited by the Copyright Office indicated that most copyright lawyers wouldn’t even accept such a small case in the first place.

In 2011, Congress ordered the Copyright Office to study what could be done to ensure that individual authors, photographers and other copyright owners have a realistic ability to enforce their rights even when they have comparatively small claims.

Last month, the Copyright Office finally issued its 161-page report, complete with a draft statute.  The report considered and rejected allowing state small claims courts to hear copyright cases (too logistically nightmarish), and tinkering with the Federal District Courts (too many tricky constitutional issues). Instead, the report recommended the creation of the “Copyright Claims Board,” a voluntary system of adjudication to be administered directly by the Copyright Office.

The Copyright Claims Board proposal includes the following elements:

• A panel of three adjudicators (two copyright experts and an alternative dispute resolution expert), based in the Copyright Office in D.C., would hear cases by internet teleconference and written submission. The tribunal would only hear cases valued at $30,000 and below.
• Both parties would have to agree to the jurisdiction of the tribunal.  The Copyright Office submitted both “opt in” and “opt out” proposals, the former requiring the defendant to affirmatively agree to jurisdiction, and the latter providing jurisdiction unless  the defendant affirmatively rejects it.
• In the ordinary course, written discovery would be permitted but not depositions. There would be no formal motion practice.
• Both actual damages and a limited form of statutory damages would be available. Attorneys’ fees would not be recoverable except in cases of bad faith and then only up to $5,000.  The tribunal would also be able to issue declaratory judgments of non-infringement.
• Review of decisions would be limited to motions for reconsideration followed by appeal to the Register of Copyrights.  Limited review by the District Courts would be available for fraud, misconduct or other grounds similar to that provided for arbitration awards under the Federal Arbitration Act.

The report acknolwedged that there are still a few problems that need to be solved.  Among them were how and whether the tribunal could provide a mechanism for the identification of anonymous online infringers, and the extent to which equitable relief other than declaratory judgment (injunctions, destruction of infringing goods) would be available.