Breaking Down the Fairness for American Small Creators Act

It's not a small claims court, it's a small claims board!

United States CongressDecember 8th was a very busy day for copyright reform in the United States.

First, House Judiciary Committee Chairman Bob Goodlatte and ranking member John Conyers released their proposal for reforming the U.S. Copyright Office (USCO).  It included recommendations for modernizing the USCO, pulling it out from under the Library of Congress and the creation of a copyright small claims “system”.

That same day, Rep. Judy Chu and Rep. Lamar Smith, both members of the House Judiciary Committee, proposed the Fairness for American Small Creators Act, a bill that hopes to create a copyright small claims court, or rather board, one that’s similar to what Rep. Goodlatte and Rep. Conyers described.

But while Rep. Goodlatte and Rep. Conyer’s proposal is just a proposal, likely with more proposals to come, the Fairness for American Small Creators Act is an actual bill with details we can look at, analyze and make determinations on.

So, with that in mind, let’s dive into the bill and see what it might mean for creators if it becomes law.

The Broad Strokes

Breaking Down the Fairness for American Small Creators Act ImageCurrently, in the United States, copyright litigation is very expensive. To even get started with a lawsuit, it costs at least $10,000 and that’s if the case is quickly resolved. The Beastie Boys, for example, racked up over $2.4 million in legal fees in their case against Monster Energy, only some of which was awarded in attorneys fees.

What this means is that litigation is impractical in many cases of copyright infringement. Whether it’s because the plaintiff can’t afford it or the amount that can be reasonably recovered is not high enough, a large percentage of cases can’t be litigated effectively.

The Fairness for American Small Creators Act aims to fix that by creating a new tribunal within the USCO to hear cases of copyright infringement that involve a smaller value. That value is capped at $15,000 per work infringed and $30,000 in any single proceeding (plus attorneys fees). The Board can also require an infringing party cease the infringing activity.

However, the the costs of entry should be much lower. Since it won’t require filing in a federal court, the Copyright Claims Board should cost significantly less.

This is partly because the law mandates the board have lower filing fees than a federal court,  but also because the procedures should be much faster and simpler, reducing or even eliminating the need for attorneys. Furthermore, most of the board’s proceedings can be handled over the internet, eliminating the need for travel.

That being said, those seeking to use it can have an attorney represent them or use a law student who is legally eligible for pro bono work. Also, the board will require a copyright registration with the USCO before proceeding, the same as any federal court.

The board would consist of three Copyright Claims Officers. These would be full-time employees hired by and working out of the USCO. They would be supported by two attorneys, who would provide assistance to both the officers and the public seeking to go through the process.

The new board would be a completely voluntary process. Anyone who is sued under this system can opt out of the process within 60 days. However, failure to opt out would mean that they have agreed to the process and would be subject to any decision by the board.

The board will be able to hear three types of claims:

  1. Infringement: Cases where the plaintiff is accusing the defendant of copyright infringement.
  2. Declaration of Non-Infringement: Here, the plaintiff is saying that the defendant is falsely accusing them of copyright infringement and is seeking a judgment of non-infringement.
  3. False Takedown Notices: Here, the plaintiff is accusing the defendant of falsely filing a notice under the Digital Millennium Copyright Act (DMCA) and is seeking damage for wrongful removal of non-infringing material

The board can also hear counterclaims and multiple claims in the same case as appropriate.

Decisions are reached by a consensus of the three officers, though the dissenting officer, if he or she desires, can write a dissenting opinion.

The board’s decisions are final and there is no mention of appeal to an outside court. This is because both parties consented to this process, eliminating the right to appeal. The most that one can do under the law is request reconsideration and, failing that, request reconsideration from the Register of Copyrights. However, such reconsideration only sends it back to the board, not to an appeals court.

Both the request for reconsideration must be filed within 14 days of the decision and the request for review by the Register of Copyrights must be filed within 14 days of the request for reconsideration being denied.

In short, the board’s work is meant to be quick, cheap and final, eliminating much of the cost of suing over copyright infringement and creating a practical means by which smaller creators can sue for copyright infringement.

The Finer Details

While those broad strokes are the core of the act, there are several details that need to be considered because they could seriously impact either the act itself or copyright law at large.

First, the bill puts limits on when a claimant can make a claim against an online service provider. Under the DMCA, service providers are protected from liability so long as they work “expeditiously” to remove or disable access to alleged infringements after proper notification.

However, the law provides no clarification as to what “expeditiously” means in this context.

Yet, this bill does, barring claims against service providers unless it took them longer than 5 business days (basically one week) to remove or disable access to the allegedly infringing material.

While this may not have a drastic impact on the small claims board itself, it could alter safe harbor protections by setting a more firm deadline by which hosts and service providers need to comply with notices of infringement.

Second, the bill limits the types of evidence allowed without application of the formal rules of evidence.

For the most part, evidence presented should be either non-testimonial evidence, such as documents or correspondence, and testimonial evidence given under the penalty of perjury. The bill does allow for “special evidence”, which includes expert witness testimony, but in cases where good cause is shown.

Interestingly though, despite the ability to request review by the Register of Copyrights, the Register has little say in the decisions. Neither the Board nor the attorneys that support them can consult with the Register on a specific case (only on matters of law) and the Register can not, when evaluating their performance, judge the Board based upon its determinations.

In short, the Register of Copyrights will oversee the Board, but will have no say in its actual decisions, other than being able to force reconsideration of decisions appeal to him or her.

All in all, the bill is extremely complex and well worth a read, especially considering the impact it could have on creators.

What Does it Mean?

The Copyright Claims Board certainly could be a major game-changer for creators, especially smaller ones. However, there are several questions that aren’t answered in the bill and can’t really be until it comes to pass, if it does.

  1. How Voluntary Is It? First, the system is voluntary but how many potential defendants will agree to it. Sure, there are many advantages to participating including lower costs and damages, but refusing to participate forces the plaintiff to take the matter to a federal court. If no defendants agree to participate, then the court is almost useless.
  2. How Easy (and Cheap) Is It? The USCO has a lot of leeway in setting the rules of the court. It’s unclear just how approachable the process will be to pro se parties (parties representing themselves). One of the big hurdles currently to the court is attorneys fees and if an attorney is practically necessary for participation, the benefit is limited.
  3. How Does the Board Rule? Obviously we won’t know this one until some time after it begins but, if the Board is too favorable to rightsholders, defendants won’t participate but if it’s too favorable to defendants, plaintiffs won’t bother. Without knowing how balanced the court is, we can’t make a decision as to how likely it is parties will participate.

Basically, the Copyright Claims Board is a voluntary system and, if it becomes a reality, participation in the system is going to depend heavily upon the details about how easy, fair and effective it is.

The bill grants a lot of leeway to the U.S. Copyright Office in setting the details about how this board will work, meaning that, even with a bill in hand, there are still a lot of unanswered questions.

Bottom Line

Even at its potential worst, the Copyright Claims Board would certainly be a cost and time improvement over the federal courts. How much of an improvement though, will depend on the exact nature of the court.

Still, if you have ever wanted to use the courts but have been barred from it due to the high costs, this seems like a bill to support. While it isn’t perfect, largely because it leaves a lot to the imagination, there’s pretty much no way it can’t be an improvement.

Besides, in order to improve a small claims system, we must first have such a system in place. This gets the baseline done and lets us move forward with improving/fixing it later.

All in all, this board seems like it will be a cheaper, faster and easier way to handle copyright infringements. As long as potential defendants volunteer to participate and the board is reasonable with its verdicts, there’s not much reason to think it will be worse.

The law doesn’t leave much means for this law to be anything other than an improvement.

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