How a Copyright Small Claims Court Could Impact You

US Copyright Office SealOn September 30th, the U.S. Copyright Office (USCO) released a report detailing it’s proposal for the implementation of a copyright small claims court in the United States (PDF).

The proposed system aims to address many of the concerns and problems copyright holders, in particular smaller ones, have with the current system. This includes the expense and time that is required to file a lawsuit in federal court, which can be a problem in cases where the amount of expected damages (or collectable damages) is seen to be very low.

While the proposal is and will be analyzed and picked apart, the question for content creators remains, how will things change for me if this system comes to pass?

With that in mind, we take a look at the basics of the proposal and analyze what changes they might bring about in the U.S. copyright landscape.

What the Report Says

According to a recent interview with Jacqueline Charlesworth, the General Counsel at the USCO, the report began as a request from the House Judiciary Committee.

During the debate and discussion around an earlier orphan works bill (works where the copyright holder is unknown), Congress had heard a great deal about the difficulties copyright holders have in filing copyright claims in federal court. This would have been a major issue for orphan works legislation as copyright holders might have been prevented from coming forward following their previously orphaned works being used.

This prompted the Committee to seek input from the USCO into the idea of creating a small claims court for copyright, one where rightsholders could more easily file suit and secure damages. The USCO then set about researching the problem and, after several rounds of public comment, released it’s report in September outlining it’s proposals.

Under the proposal, the copyright small claims court would be a voluntary alternative to the traditional court system and would have these traits:

  1. It would be a centralized tribunal with three adjudicators, two with a background in copyright law and one in alternative dispute resolution.
  2. The system is patterned largely after the Uniform Domain Name Dispute Resolution Policy (UDRP) in that most of the evidence and communication with the court would be done via documents and conference calls, with little need for travel.
  3. Damages would be capped at $30,000, this includes either statutory or actual damages. Statutory damages, however, will be capped at $15,000 per work.
  4. Copyright Registration would be required to file a lawsuit, but timely registration not required for statutory damages, unlike under the current system. However, without timely registration those damages would be limited to $7,500 per work with a maximum of $15,000 total.
  5. The court would dismiss cases that required high levels of expertise. However, expert witnesses could be called under the tribunal’s discretion.
  6. No claims for injunctive relief would be allowed in the court.

One question the USCO did not answer is whether the system would be opt-out or opt-in. Since the small claims court is a voluntary system, both parties have to agree to it. However, there is an open question as to whether the defendant should be required to opt in, meaning actively agree, or opt out, meaning a lack of a response would be taken as permission to move ahead with the small claims proceedings.

So how could this system impact you and other copyright holders? It depends on just how it is applied.

The Potential Impact

To be clear, this proposal is just that, a proposal. Congress still has final say as to what does or does not become law. They could change the proposal heavily, pass it as is or simply drop it altogether.

However, in the unlikely event that Congress were to pass this proposal as it is written, there are still some unanswered questions. The biggest of which is h widely will it be used. Given that both parties have to agree to use the tribunal, there seems to be little to stop plaintiffs who know their case isn’t worth a full lawsuit from simply declining to participate.

While making the system voluntary avoids constitutional issues, it may limit the number of cases that go through it. After all, if a copyright holder’s only viable option is to go through the small claims system, an infringer would be foolish to agree to it.

Still, assuming that problem isn’t severe, here are the basic changes that can be foreseen.

  1. Copyright Registration Becomes Less Important: The ability to collect statutory damages on works not timely registered could be huge. Since many, if not most, infringement cases deal with small damages, there would be much less importance in a copyright registration.
  2. Easier Enforcement of Copyright: The combination of lower costs and removing the timely registration requirement opens the door up for more copyright holders to protect their rights through the courts.
  3. A Changing Role for Attorneys: The the small claims court would allow the use of attorneys, it is more geared toward a pro se system, with attorney helping more with preparing filings than representing directly. This is especially true with the limited damages.
  4. Changes in Jurisdiction: Another reason for making the system voluntary is jurisdiction. Since both parties wave jurisdiction when agreeing to participate in the system, which is centralized. That has the potential to eliminate a lot of jurisdiction issues that have plagued Internet-related copyright cases.
  5. Not Completely Done with District Courts: One thing that the tribunal can not do is enforce its judgments. However, the USCO proposes that tribunal decisions be confirmed by a district court and then the victor could obtain a federal court judgment against for the amount.

All in all, the system has the potential to bring some major changes to copyright enforcement in the U.S., but only if the system is widely used.

Bottom Line

Right now, the only thing to do is sit and wait while we see what, if anything, Congress does with this proposal. Literally, anything can happen at this point as Congress is not bound by what the USCO said.

Still, the USCO does have a great deal of sway with Congress and that makes it likely that Congress will at least seriously consider this proposal, if not put it up for debate.

If it’s passed as is, it’s unclear if it would have a major impact. A voluntary system requires both parties to think it’s in their best interest to participate and that may not be the case with many defendants.

Still, if it does come to pass, it is widely used and becomes the norm, it is going to have a major impact on copyright enforcement, opening the doors to the courts for countless copyright holders who, previously, had no practical access at all.

In short, there’s a great deal of potential here, even if that potential is still a long, long ways off.