CCB Bars Claimant, Attorney from Filing Cases for One Year

The Copyright Claims Board (CCB) has had a very busy week, with two more default judgements (that we will look at later) and multiple other cases heading toward a decision of one kind or another.

However, by far the biggest news is a first for the board, the CCB has barred both a claimant and their attorney from filing new cases with the board for one year. 

The lawyer is Mackenzie Paladino, who is based in New York, and the client is Floatsup, LLC, a company that sells a floating drink holder that affixes to a paddleboard.

Floatsup, through Paladino, filed a series of five cases with the CCB back-to-back. The cases all dealt with allegedly infringing Amazon listings in which Floatsup had filed a takedown notice, but the targeted seller filed a counternotice resulting in the listings being restored.

In all five cases, the company targeted both Amazon and the reseller with allegations of misrepresentation. However, in all five cases, the CCB quickly rejected the claim and ordered them to be amended.

The CCB noted two key issues. First, Amazon was not a proper respondent, as they cannot be held liable for misrepresentation in a counternotice they received. Second, the CCB suspected that the sellers in question were not US citizens, and thus they could not be listed as respondents in a CCB case.

According to the CCB, Paladino filed an amended claim in all five cases, naming different respondents, but deliberately targeted non US residents and continued to list Amazon as the agent for the service. The CCB’s order says that this was in violation of the board’s previous order and ignored clear guidance in the filing system.

The CCB also claims that Paladino circumvented “technological barriers to entering a foreign address” in the CCB filing system. As such, the board rejected the new claims as noncompliant and ordered the claimant to show cause and attend a conference regarding the allegations of bad-faith conduct. 

That conference took place on October 30, 2023, after Paladino filed to dismiss the cases at issue. Paladino did not apologize for the alleged violations of CCB rules, and said that she had “no reason to believe” that the respondents were not based in the United States.

However, the CCB said that the facts in the case “could not be squared” with that assertion, noting multiple areas that should have alerted Paladino that the respondents were not based in the US.

As such, the board decided that it was appropriate to bar both Paladino and Floatsup from filing any new cases with the CCB until October 30, 2024, one year after the order was issued.

The CCB also dismissed all five cases without prejudice.

This marks the first time that the CCB has barred either a claimant or a lawyer from filing cases. However, it’s not the first time the CCB has found that a party acted in bad faith.

A First of Its Kind

To be clear, the CCB has found, in at least 5 other cases, that one or more parties have acted in bad faith. In three of those cases, claimants were accused of improperly filing cases against foreign respondents, similar to these cases. 

In another case, the claimant was accused of improperly filing a patent case and, in the last, the claimant was not actually an authorized representative of the rightsholder.

However, in none of those cases did the CCB take the extra step of barring the claimant nor their attorney (if they had one) from filing cases. 

The main issue here seems to be the repeated nature of the alleged bad faith actions. Floatsup filed five separate cases in rapid succession and made similar or identical missteps in all of them. This pushed the CCB not only to act, but to do so very quickly.

That, in turn, is what is perhaps what is most surprising about this: How fast the process went.

The original claims were filed on September 15, 2023. They were rejected within one week, with Paladino filing the amended claims less than an hour later. The “Finding of Bad Faith and Order Barring Party and Attorney and Dismissing Claims” was handed down on October 31, 2023.

This means that the entire process, from original claim to final order, took only 46 days. 

This is representative of how the CCB has been changing, working hard to more quickly parse claims and speed up their end of the process. Now, claims are routinely accepted or rejected within a week, something took months shortly after the CCB’s launch.

But while the CCB’s response was both swift and strong, it also shines a light on a very real frustration that rightsholders have when it comes to Amazon.

Real Frustration, Real Confusion

Though it’s impossible to know if the listings were/are actually infringing, I suspect that many people will understand the frustration that led to the filing of these cases.

Many creators have complained that marketplaces like Amazon, Wish, Temu and so forth have become havens for infringement. When rightsholders file takedown notices, they are increasingly greeted with counternotices.

The only counter for a counternotice is to file a lawsuit against the seller or file a claim with the CCB. The first is, generally, too expensive and time-consuming to be worthwhile, especially since most sellers are relatively small operations. The CCB, however, cannot hear cases against foreign respondents, meaning that it’s only viable if the alleged infringer is based in the United States.

However, as the Floatsup claims highlight, a large percentage of such sellers are international. This means that, even with the CCB, there still is no viable way to keep infringing listings down once a counternotice has been filed.

Reading the CCB’s order, I also get the feeling that Paladino had some genuine confusion with how the CCB works. For example, Paladino cited the Federal Rules of Civil Procedure, which don’t apply to the CCB.

For a lawyer, the CCB can be somewhat uncanny valley in nature. It looks and behaves very similarly to a federal court, but uses different terminology and different rules. The differences are often very subtle, but are extremely important.

The big mistake that I see was moving so quickly with the cases. Filing five cases back to back, and then filing amended claims so quickly, meant that there was no real opportunity to correct the mistakes that were made. Other repeat filers, such as Joe Hand Promotions, have spread their cases out over weeks and months, learning and adapting as they go.

To be clear, this was never the correct venue for these cases. However, it didn’t need to reach the point where both a claimant and a lawyer were barred from filing future claims for a year.

That’s something we’ve seen in the other cases.

Bottom Line

In the end, the CCB has to strike a delicate balance. As a new system and one catering to laypeople, it has to know that people are going to make honest mistakes. However, it also knows that it can’t become a tool for misuse.

In many cases, the CCB has shown great patience and leniency. Tolerating mistakes, allowing people to file multiple amended claims and, in nearly all cases, the worst it has done is dismiss the case involved.

What made this case stand out was the repeated nature of the issues. Five similar claims with five similar amended claims. The CCB clearly felt that was too much to ignore.

While this is only the first time the CCB has taken this step, in nearly 18 months of operation, it probably won’t be the last. However, it should be comforting to both legitimate users of the CCB and to potential respondents that the CCB is taking these issues seriously.

Hopefully, this can serve as a lesson to future filers to take things slowly, carefully read everything the CCB provides and, most importantly, understand the boundaries of what the CCB can and cannot do. 

It’s a situation where a little bit of time on the front end can save a great deal of headache on the back end.