The Copyright Claims Board Decides its First Case
The Copyright Claims Board (CCB), opened its doors in June 2022, with the goal of providing an alternative small claims environment for resolving copyright disputes that were impractical or unreasonable to bring to a full court.
Since then, over 375 cases have been filed with the court and, as I discussed in November 2022, many of those cases have been dismissed due to non-compliant claims, lack of service, opt-outs and voluntary withdrawals.
However, a relatively small number of the cases have continued and have been steaming toward a full decision. In February, we looked at the first contested case before the CCB.
That case has now reached its final decision. In a judgment dated February 28, 2023, the CCB ruled in favor of the plaintiff, awarding him a $1,000 in statutory damages.
The decision is likely to leave neither side completely satisfied, as no one received what they wanted. However, it is an excellent illustration of what the CCB is meant to be used for and the likely direction it will head in future judgments.
To understand why, we first have to look at the case itself and the ruling.
Background on the Case
I discussed the background of the case much more thoroughly in February. However, the quick synopsis of the case is as follows.
David Oppenheimer is a photographer who discovered that one of his images was being used without his permission on the website of a lawyer named Douglas Prutton.
According to Prutton, Oppenheimer wrote him a demand letter for $30,000. Prutton tried to offer $500 as a counteroffer. In February 2021, Oppenheimer filed a lawsuit in federal court, but, after both parties agreed, the case was moved to the CCB months in April 2022, months before the court opened.
Prutton, for his part, never denied the use of the image. He said that his adult daughter built the site for him and used the image, and accused Oppenheimer of negotiating in bad faith and being a serial litigant. He asserted both an unclean hands defense and a fair use defense to his infringement.
Those, by in large, were the facts and allegations presented before the CCB in this case. And the three-judge panel has now handed down its verdict, favoring Oppenheimer.
The Fair Use Arguments
The final determination reads much like any other court decision. It first looks at the procedural history of the case, the factual history, and then looks at the defenses that Prutton put forth.
On the fair use defense, the CCB found strongly against Prutton. The panel noted that there are four fair use factors, but Prutton, in his arguments, only addressed the fourth: The effect of the use on the potential market.
However, the CCB went ahead and analyzed all four factors, finding that Prutton was unlikely to be favored by any of the first three. The purpose and the character of the use was on a commercial website, the photograph was creative, favoring Oppenheimer on the nature of the work and Prutton used the entire work, favoring Oppenheimer again on the amount and substantiality used.
With regards to the effect on the potential market, Prutton had argued that Oppenheimer had never successfully licensed the image and made the vast majority of his income through targeting alleged infringers.
Oppenheimer, for his part, was unable to provide any proof that he’d ever successfully licensed the image.
Despite that, the CCB found in favor of Oppenheimer on the fourth factor. According to the determination, there is still a potential market for that work, which would be true even if Oppenheimer chose not to license it, and Prutton failed to prove that he did not harm that potential market.
The CCB further noted that Prutton had evaded that marketplace through his use of the image.
As such, the CCB ruled strongly against Prutton on the argument of fair use, moving on to the argument of unclean hands.
The Unclean Hands Argument
In addition to fair use, Prutton also argued that Oppenheimer had unclean hands in the case, saying that he was both unreasonable in his negotiations and a frequent litigant.
However, the CCB ruled that the standard for an unclean hands defense is very high and that such claims are very rare. Citing previous case law, the CCB found that simply being a frequent litigator is not cause for an unclean hands defense. They added that such a ruling would bar similar rightsholders from protecting their work.
Simply put, the CCB did not find that Oppenheimer’s actions rose to the very high level of unclean hands, dismissing that defense.
With both of Prutton’s defenses dismissed, the board then found him liable for the infringement and set about the issue of determining damages.
Here is where the case is actually decided. Oppenheimer wanted significant statutory damages, originally seeking more than the CCB could ever award, while Prutton wanted as low as $200, claiming to be an innocent infringer.
However, the board ruled that there was no evidence to claim that he was an innocent infringer. Oppenheimer had provided proof that at least one of the places the work was posted had a copyright notice, and that Prutton “had access” to copies where the notice was available.
As such, the innocent infringer damages were unavailable. Furthermore, Prutton could not provide evidence that he was unaware of the infringement, which is a requirement of that defense.
This set the minimum statutory damages to $750.
From there, the board ruled that the norm of the court is to establish some relationship between actual damages and statutory damages. However, Oppenheimer had not provided any evidence of actual damages.
With that in mind, the board opted to keep the damages to the lower end of the spectrum, which at the CCB is anywhere between $750 and $15,000. Two of the three judges opted for $1,000 in damages, while the third wanted the minimum, $750.
As a result, the board, already having found Prutton liable, awarded Oppenheimer $1,000 in damages.
Analyzing the Decision
The award is unlikely to make either party fully happy. Oppenheimer had originally asked for $30,000 and Prutton wanted the case to be tossed or have the damages reduced to $200.
However, even though the decision found Prutton liable, it’s arguable that it still strongly favors him.
The reason is simple: There wasn’t much doubt that he had infringed Oppenheimer’s image. The fair use defense and the unclean hands defense were long shots at best.
The simple truth is that his site used Oppenheimer’s image without a license. From a purely factual standpoint, it was a very simple case.
What made the case controversial was Oppenheimer’s history of litigation and allegations that he is a “copyright troll”. This dovetailed with fears opponents of the CCB had where they were worried it could become a tool for “troll” operations.
For those worried about that, the results are mixed.
On one hand, the CCB set aside arguments about serial litigation and aggressive negotiation tactics. The board declined to dismiss the case on the grounds that Oppenheimer had unclean hands. On the other, the board established a relationship between actual damages and statutory damages, that kept the damages to the lower end of the scale.
We’ve seen this practice in regular federal courts too. In fact, at least two of Oppenheimer’s own cases ended with an award of just $750, the minimum statutory damages.
However, in a federal court, it’s likely that a plaintiff would lose money without a judgment for attorney’s fees and costs. Even small cases can run into the tens of thousands of dollars easily.
With the CCB, it’s possible to file a case for around $200 in total costs. However, that assumes that there are no lawyer fees and no need for an expedited copyright registration. Still, even with an expedited registration and some legal help, albeit not much, it’s still possible to come in under either the $1,000 ruling here or the $750 minimum.
And that is what the CCB is about, making cases like this one practical to be heard. There’s almost no way a $1,000 award can justify a regular lawsuit, but it may still be worthwhile with the CCB.
What I noticed when reading the final determination was how similar it was to every other legal ruling I’ve ever read. Though it was formatted slightly differently, all the analysis I would expect in a decision from a regular court was contained in this one.
In short, the CCB is following all the rigor I would expect from a regular court, even though it is working from less formal pleadings and statements. This includes the board paying careful attention to the circuit the respondent is based in, to ensure that their decisions don’t run counter to what federal courts near them have ruled.
As for this particular case, the judgment of the CCB seems reasonable. Though not eye-popping in terms of damages, $1,000 is a fair deterrent for infringing an image, which can usually be correctly licensed for many times less, It leaves enough incentive for rightsholders to use the CCB, while also providing a motivation for respondents to agree to the process.
However, if you’re looking to file with the CCB I would highly recommend finding evidence of actual damages. The board has made it clear that, without proof of actual damages, the statutory damages will be low.
But, for many, low statutory damages may still be significant. It’s all a matter of perspective, and there are many rightsholders who would love the prospect of receiving that amount per infringement.