The Copyright Small Claims bill passed Congress on December 21, 2020.[ref]Omnibus Bill Passes Congress, Anti-Copyright Crowd Turns Shrill[/ref]  It was passed as part of a huge omnibus spending bill that ran for more than 5,500 pages.[ref]Rules Committee Print 116-68 Text of the House Amendment to the Senate Amendment to H.R. 133[/ref] If you wish to read the text of the bill, the CASE act starts on page 77 (or page 2544 of the entire document). This set off more than a little complaining from the anti-copyright crowd. It's true that sticking a bill regarding copyright into a huge spending bill is not really the best way to do things. But neither was the "perpetual hold" that Senator Ron Wyden put on the bill[ref]Wyden Attempts to Stall CASE Act: Senate Holds Are Not Supposed to Be Dead Ends[/ref] after it had passed the House of Representatives by a vote of 410-6.[ref]Omnibus Bill Passes Congress, Anti-Copyright Crowd Turns Shrill[/ref] The short-cut many people take is to call this a "copyright small claims court," but it's not really a Court at all. What it most resembles is parties agreeing to binding arbitration. What follows is a broad overview of the act. For those desiring an in depth or nuts and bolts analysis, I highly recommend Professor Tyler Ochoa's article "CASE-ing the Joint: The Copyright Alternative in Small-Claims Enforcement Act."[ref]CASE-ing the Joint: The Copyright Alternative in Small-Claims Enforcement Act (Guest Blog Post)[/ref] So why isn't it a "small claims court"?

The Proceedings Are Voluntary

After the claim is filed, there is an initial review by the Copyright Claims Board (CCB) to determine if the claim qualifies to be heard. If it qualifies, the Plaintiff serves the claim on the Defendant as with a normal lawsuit. The notice accompanying the claim must state that the Defendant has the right to opt out of the proceedings within 60 days of service. If the Defendant opts out, the claim is dismissed without prejudice. The Plaintiff's only recourse at this point is to file a Federal Copyright lawsuit. This will prove an important point later on. This provision really undercuts the main complaint of the anti-copyright crowd, namely that the "small claims court" will encourage massive copyright trolling. I fail to see how this happens if the Defendant has the ability to simply say "no thanks." Note that for some reason libraries and archives will be allowed to "pre-emptively opt out" of all proceedings before the CCB.

The Claims Are Limited

The maximum that can be awarded in any proceedings is $30,000. Note that this is per proceeding, not per claim in the proceeding. Further undercutting the CCB's status as a Court is that it cannot hear:
  • Claims against the Federal or State Governments
  • Claims against persons living outside the Unites States (except for a counterclaim)
  • Claims arising under section 106(a), the Visual Artists Rights Act
One of the more interesting provisions is that regarding statutory damages. The CCB can award $15,000 per work up to $30,000 in statutory damages if registration has occurred before the infringement. This takes out of play (and the statute explicitly states this), that the CCB may "not make any finding or consider whether the infringement was committed willfully." Yet, in a huge departure from existing copyright law, the CCB can award statutory damages, even if the work was not registered prior to the infringement. Then, the CCB can award $7,500 per work infringed, up to a maximum of $15,000, in any individual proceeding. This is where some sharp lawyering may come into play. If it is apparent that the claim is based upon a copyright that was not registered until after the alleged infringement, then the strategy may be to simply opt out of the claim, forcing the Plaintiff into Federal Court, where statutory damages will not be available. Since the claim was initially filed before the CCB, chances are that the amount of actual damages, if there are any at all, are too small to sustain a full-blown Federal lawsuit.

Procedure and Discovery Are Limited

One major provision to keep costs down is that all evidence is to be submitted by written submissions, and hearings are held either telephonically or by internet conferences. It does not appear that depositions will be allowed, unless approved by the CCB. The formal rules of evidence will not apply.

Determinations of the CCB Are Not Generally Appealable to Federal Court

If you disagree with the final determination of the CCB, your only recourse is to request "reconsideration" from the same Board. If this is denied, the party can (for an additional fee) request review by the Register of Copyrights. This review is limited to "abuse of discretion" by the Board in denying the previous request for reconsideration. Only on the grounds of extraordinary misconduct by the CCB, such as fraud, that the CCB exceeded it's authority, or that a default or failure to prosecute by the participants was due to excusable neglect, can a party make application to a U.S. District Court to modify or vacate the determination of the CCB. This must happen within 90 of the determination or denial of reconsideration.

The CCB Does Not Have Contempt Powers or Other Enforcement Ability

The CCB cannot issue injunctions. It can only provide that parties cease from doing certain activities if the party agrees to it as part of the final determination. So, if the party refuses to abide by the determination or, more probably, refuses to pay the damages, then the only recourse is to then file a proceeding in U.S. District Court for a judgement and order confirming the relief award. If the determination is upheld, the non-complying party is liable for all reasonable expenses incurred in bringing the proceeding, including attorney fees.

Will the CCB Be an Effective Alternative?

At this point, I can't hazard to guess. The CCB will have as an advantage arbiters who have actual experience in copyright law, whereas a Federal Judge has to contend with the entire scope of the Federal law. This will perhaps reduce some of the truly oddball declarations we have seen in the past several years. Streamlining the discovery process will keep some costs down. But as complex as the system is, and as complicated as some copyright concepts are, such as "substantial similarity" and (egad!) "fair use," it seems doubtful that the average artist could navigate this without hiring an attorney. But considering how hard Big Tech fought to keep this law off the books, it's probably a good idea.