A few weeks ago, we took a look at the first 100 cases filed with the Copyright Claims Board (CCB), the recently launched copyright small claims court in the United States.
There, we noticed several patterns. The majority of cases were self-represented, a plurality of them involved photographic/visual works, and most dealt with infringements that were ongoing.
However, one pattern stood out from the rest. Though several cases featured large companies as prospective respondents, all the claimants were either small-to-medium sized companies or individuals.
So while names like, including Disney, Turner Broadcasting and Warner Chappell Music, etc. appeared in the respondent column, none appeared as a claimant.
That is, until August 24. That was the date that Paramount Pictures became the first large media company to file a claim with the CCB. However, their target wasn’t a suspected pirate of their movies, but an organization that specializes in pop up restaurants.
It’s an interesting case and one that highlights the potential ways the CCB can be used by not just smaller organizations, but the bigger ones as well.
Understanding the Case
Paramount filed the case against a company named JMC Pop Ups LLC (JMC). According to the claim, JMC infringed on two of their films, the 1988 film Coming to America and its 2021 sequel Coming 2 America.
Both films feature a restaurant named McDowell’s, a knock-off of McDonald’s that the film’s protagonists get a job at in order to be closer to the film’s romantic interest.
According to the filing, in February 2021, as the second film was preparing to be released, JMC announced that it would host a “McDowell’s” themed pop up in April. However, before the event happened, Paramount learned of the event and sent a cease and desist letter to JMC requesting that they cease the event.
Initially, JMC responded saying that they were within their rights to host the event, but later said that they were seeking to accommodate Paramount’s requests. The two sides went back and forth, but Paramount said that there was no legitimate way for the event to go on.
Nonetheless, JMC hosted their event between April 16-25, 2021. The restaurant not only featured the McDowell’s name but, according to Paramount, featured other elements such as identical product names, similar menus and even promised to bring to life both characters and sets from the first film.
However, no action was taken after the first pop-up and, in February 2022, JMC began promoting a second event, starting with a series of Facebook posts. Paramount says that they became aware of this event in April 2022 and a similar exchange took place, with Paramount once again saying that they were not interested in the event moving forward.
That second event was held May 20 – June 5, 2022, in Virginia and featured many of the same issues as the first one.
This resulted in Paramount filling the case with the CCB, where they are seeking damages, either statutory or actual damages up to $30,000, as well as attorneys’ fees.
(Note: Attorneys’ fees can only be claimed in CCB cases where one side acted in bad faith)
But, while the facts of the case may not be particularly interesting, this has the potential to be one of the most important copyright cases in some time, in particular one of the most important for the CCB.
Why This Case is Important
The case is important for one simple reason: It easily could have been a “normal” copyright infringement case.
Paramount has no issues with filing a full copyright infringement lawsuit. They do so semi-regularly. When you factor in that the damages are capped at $30,000 and there are issues involved in this case that the CCB can’t even hear, in particular potential questions of trademark, the decision to file with the CCB is an interesting one.
To make matters worse for Paramount, the CCB is almost completely untested. The board has handed down no verdicts yet as none of the cases have been completed. Also, respondents have the option of opting out, which would force Paramount to file with a federal court if they wanted to continue pursuing this case.
Right now, no one knows why Paramount made this choice. However, there are several possible reasons.
First, they might not feel that there’s a reasonable chance of collecting damages beyond the $30,000 cap. This could be because the damages themselves may not be higher than that, or they don’t think JMC is capable of paying more than that. Either way, $30,000 is likely not enough to justify a copyright infringement case in federal court.
If that’s the case, then it makes sense to roll the dice on a much less expensive and more streamlined system, even if the damages are capped.
Second, they may be concerned that their case isn’t as strong as it seems at first blush. Heather Antoine analyzed the case for Forbes, and she described the claims as “shaky.”
The reason for that is McDowell’s was, itself, a parody of McDonald’s, and she argues that the JMC pop-ups are much in the same spirit of parody. She hypothesized that McDonald’s may actually have the stronger claim in this case.
This, in turn, raises questions of fair use and those types of cases are often long, drawn out, expensive and difficult to predict. In short, fair use is largely subjective and there is a great deal of uncertainty when heading into such a case.
If Paramount does see the case as risky, once again, it makes sense to go the CCB. Even if damages are limited, you avoid a long and expensive legal battle with an uncertain outcome.
Admittedly, this is all pure speculation. No one outside of Paramount and their lawyers know why they chose this route. However, it could still be an indicator of what is to come.
The CCB was designed to give small creators and rightsholders a new tool to protect their copyright. Everything about the system, from the low costs, the lack of a need for lawyers and the streamlined presentation of evidence, was designed to make it more accessible to individuals and small businesses.
However, even large companies face situations where filing a full lawsuit doesn’t make sense. Paramount clearly feels that this is one of those cases.
However, as of right now, the CCB is still very untested. We don’t know how many respondents are going to opt out, we have no indication on how the board itself will rule, what kinds of damages it will award and so forth.
These things will become clear over time, but we are still very early in the CCB process, and the claimants in all the 138 cases that have been filed are taking a risk.
Luckily, the CCB makes it so that risk level is fairly low. But until we hear more from both the respondents and the board itself, no one really knows what is likely to happen with these cases.