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Copyright Legislation

Just What Is the Case with the CASE Act? A Brief Overview

The following post comes from Ryan Reynolds, a 3L at Scalia Law and Research Assistant at CPIP.

chrome copyright symbolBy Ryan Reynolds

The phrase “creators have rights, but no remedies” is likely familiar to those aware of the current landscape of copyright protection for individual creators and small businesses (“Creators”). While the Copyright Act of 1976 grants a bundle of rights to Creators for the protection of their works, for years Creators have faced an uphill battle enforcing those rights against infringers. There are many who are optimistic, however, that things might soon change with the passage of “The Copyright Alternative in Small-Claims Enforcement Act of 2020” (CASE Act).

Signed into law as part of H.R. 133, the Consolidated Appropriations Act, [for Fiscal Year] 2021 (“CAA”), the CASE Act creates a Copyright Claims Board (“CCB”) within the Copyright Office to handle small copyright claims (small only in the sense of their relatively modest economic value). As there is some time before the CCB comes into operation, the earliest being December 21, 2021, and the latest June 2022, now is a good time to provide an overview of just what the CASE Act does. Before venturing fully into the mechanics of the CASE Act, however, it is important to first highlight why its supporters felt it was needed.

Why Is It Needed?

Copyright cases are almost exclusively an area of federal jurisdiction, meaning that copyright infringement cases must be brought in a federal rather than state court; however, litigating a copyright infringement case in federal court is anything but easy. First, the average cost of litigating a copyright infringement claim has been estimated at $397,000—a cost that often greatly outweighs any potential recovery for Creators’ works. It is for this reason that many attorneys are simply unwilling to take Creators’ copyright infringement cases, leaving many Creators feeling disenfranchised.

Second, the complexity of the federal court system is often overwhelming for Creators. As stated in the Copyright Office’s 2013 Copyright Small Claims report, “Small copyright owners, who frequently lack experience with federal courts, often find federal litigation too difficult . . . and may be unable to navigate ‘the often complex procedural rules that govern federal litigation . . . .’” As highlighted in the report, even the Copyright Act’s registration requirement—the gateway requirement to launch a copyright infringement claim—can be problematic for Creators. It requires that a copyright owner successfully register, or receive a rejection of registration, from the Copyright Office before launching an infringement claim. Moreover, for a Creator to qualify for statutory damages and attorney’s fees, the Copyright Act requires the registration of the work within three months of its publication, or if unpublished, before the act of infringement. The failure to register within the required time is critical, as without the potential recovery of statutory damages (which can range up to $150,000 per work infringed), a Creator’s recovery would not likely overcome the legal fees incurred litigating the case.

As stated in the report, the result of this cost and complexity is that “federal court is effectively inaccessible to copyright owners seeking redress for claims of relatively low economic value, especially individual creators who are of limited resources.” Enter the CASE Act, which aims to create a less expensive and less procedurally complex alternative to the current system by creating the CCB within the Copyright Office. But how will the CCB operate?

How Will It Operate?

When the CCB becomes operational, a party will have the choice of commencing a copyright infringement proceeding in either federal court or the CCB. In contrast to federal court, and as will be discussed in more detail later, proceedings in the CCB are completely voluntary. Another way in which the CCB differs from federal court is in its authority over copyright infringement claims only where the total damages sought do not exceed $30,000. As to the CCB’s structure, it will be composed of three full-time Copyright Claims Officers. Each of the Officers must have seven years of legal experience; two of them must also have extensive copyright adjudication experience, while one must have extensive alternative dispute resolution experience. The Librarian of Congress will appoint these Officers to staggered six-year terms, and they will be supported by at least two full-time Copyright Claims Attorneys with at least three years of experience.

To make the CCB more accessible to Creators, the CCB’s proceedings aim to be more streamlined and user friendly than federal courts. A proceeding before the CCB begins when the claimant files a claim to the CCB that includes the proper filing fee and a statement of the material facts. In contrast to federal court, the CASE Act only requires a completed application for registration of the claimant’s work(s), rather than a certificate of registration or refusal of registration by the Copyright Office to commence the claim. After the claim is approved for compliance with the law and applicable regulations by a Copyright Claims Attorney, the claimant has 90 days to complete service. After receiving service, the respondent then has 60 days to opt out of the proceeding before it becomes “active”; however, in the “interests of justice,” the CCB can extend this window another 60 days.

The user-friendly goal of the CCB is best exhibited by the Act’s requirement that the proceedings take place solely “by means of written submissions, hearings, and conferences carried out through internet-based applications.” The only exception to this convenience is when there is “material” “physical or other nontestimonial evidence” that otherwise the CCB cannot review. Further, proceedings before the CCB will be more informal than in federal court. There is no requirement for representation by an attorney, there is limited discovery, and the formal rules of evidence do not apply. If the parties do not settle, at the close of the proceeding the CCB must make factual findings based on the preponderance of the evidence and issue a publicly available written determination.

With regard to remedies, the CCB has the authority to award either actual damages, and the respondent’s profits, or statutory damages. If the CCB awards statutory damages, it “may not make any finding that, or consider whether, the infringement was committed willfully,” and if timely registration has been made with the Copyright Office, the CCB can award up to $15,000 for each work infringed, though this is subject to a $30,000 maximum. In an important shift from existing law, however, even if the work was not timely registered, the CCB may still award up to $7,500 for each work infringed to a maximum total of $15,000 in a single proceeding.

Within 30 days of the issuance of the final determination of the CCB, a party can request reconsideration by the CCB. After giving the other parties an opportunity to respond, the CCB may either deny the request or amend the determination. If the CCB denies the request for reconsideration, a party then has 30 days to request the Register of Copyrights to review the CCB’s determination. After giving the other parties time to respond, the Register may deny or remand the proceeding to the CCB for reconsideration. Finally, within 90 days of the final determination, or the post-determination reconsideration, a party can appeal to a U.S. District Court. It is also in federal district court where a party can seek enforcement of the CCB’s determination if the other parties to the matter refuse to abide by its determination. For a visual representation of this process, the Copyright Alliance has put together an informative flowchart.

The CASE Act requires that three years after the CCB becomes operational the Register of Copyrights make assessment of its effectiveness. While whether the CASE Act will create the change hoped for by its supporters is yet to be seen, in my view, the attention given to address the challenges to Creators is critically important.

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Copyright

The CASE Act: Why Creators Need a Small Claims Tribunal


The Center for the Protection of Intellectual Property (CPIP) and the Intellectual Property Law Society (IPLS) at Antonin Scalia Law School, George Mason University, invite you to a panel discussion on the CASE Act.

2019 CASE Act panel flyer
Click on image for full-size PDF flyer.

The CASE Act: Why Creators Need a Small Claims Tribunal

Thursday
November 14, 2019
4:45 – 6:00 PM

Antonin Scalia Law School
George Mason University
3301 Fairfax Drive
Hazel Hall, Room 221
Arlington, Virginia

The event is free and open to the public. Please register in advance by emailing Kristina Pietro at kpietro@gmu.edu by 5:00 PM on Monday, November 11. Food will be provided.


EVENT DESCRIPTION

The Copyright Alternative Small-Claims Enforcement Act (CASE Act) would create a tribunal within the U.S. Copyright Office to hear small copyright claims. The federal courts have exclusive jurisdiction over copyright cases, and the cost of bringing a federal lawsuit makes it difficult for many individuals or small businesses to sue for copyright infringement. The CASE Act would provide a cheaper and simpler alternative to resolve such claims, allowing copyright owners to sue without the need to hire an attorney. The bill would also create a cost-effective way for users of copyrighted works to fight back when challenged if they believe their use is noninfringing.

The CASE Act has broad bipartisan support, and it was passed by the House in a sweeping 410-6 vote on October 22, 2019. The bill heads next to the Senate, where two Senators have placed a hold on the bill that will make it more difficult to pass. While many artist advocacy groups, such as Copyright Alliance, American Society of Media Photographers, and Authors Guild, have applauded the CASE Act’s provision of remedies for disenfranchised copyright owners, other groups, such as Electronic Frontier Foundation, Re:Create Coalition, and Public Knowledge, have condemned the bill as an assault on civil liberties that will potentially bankrupt average Americans.

This panel features three leading experts who have each played an important role in advocating for the CASE Act. They will discuss the substance and history of the CASE Act, its prospect for being passed by the Senate, and what it means for individuals and small businesses who have welcomed the meaningful copyright protection that the bill would provide.


EVENT AGENDA

4:45 – 5:00 PM Welcome Reception

5:00 – 6:00 PM Panel Discussion

  • Prof. Sandra Aistars, Antonin Scalia Law School, George Mason University, Director of Copyright Research and Policy & Senior Scholar, Center for the Protection of Intellectual Property
  • Terrica Carrington, Copyright Counsel, Copyright Alliance
  • Tom Kennedy, Executive Director, American Society of Media Photographers
  • Moderator: Prof. Devlin Hartline, Antonin Scalia Law School, George Mason University, Director of Communications, Center for the Protection of Intellectual Property

Categories
Copyright History of Intellectual Property Innovation Inventors Trade Secrets Trademarks Uncategorized

Strong IP Protection Provides Inventors and Creators the Economic Freedom to Create

Here’s a brief excerpt of a post by Terrica Carrington that was published on IPWatchdog.

CPIP went against the grain with this conference, and showed us, bit by bit, what our world might look like today without intellectual property rights. Music wouldn’t sound the same. Movies wouldn’t look the same. You wouldn’t be reading this on your smartphone or have access to the cutting-edge biopharma and healthcare products that you rely on. And some of our greatest artists and inventors might be so busy trying to make ends meet that they would never create the amazing artistic works and inventions that we all enjoy. In short, CPIP explored how intellectual property rights work together as a platform that enables us to innovate, share, and collaborate across industries to develop incredible new products and services at an astounding rate.

To read the rest of this post, please visit IPWatchdog.

Categories
Commercialization Copyright Copyright Licensing Copyright Theory History of Intellectual Property Innovation Intellectual Property Theory Internet Law and Economics Uncategorized

Copyright’s Republic: Promoting an Independent and Professional Class of Creators and Creative Businesses

By Mark Schultz and Devlin Hartline

The following essay is the first in a series of CPIP essays celebrating the 225th anniversary of the Copyright Act by recognizing the rich purposes, benefits, and contributions of copyright. This series of essays will be published together in a forthcoming collection entitled “Copyright’s Republic: Copyright for the Last and the Next 225 Years.”

The current academic and policy discussion of copyright focuses on balancing the gross economic benefits and harms of copyright. A more complete understanding of copyright can account for both the needs and rights of individuals and the public good. Copyright is important because it helps creators make an independent living and allows them to pursue and perfect their craft. In short, it enables a professional class of creators.

The creative industries benefit from this independence too. They must find a market, but they are not beholden to anybody but their customers and shareholders in choosing what creative works to promote. This enables a richly diverse cultural landscape, with movie studios, television channels, record labels, radio stations, and publishers specializing in vastly different types of material.

To understand the importance of a professional class of creators, it’s helpful to understand the paradoxical role of money in creativity. While some are quick to say, “It’s not about the money,” in some essential ways, it really is about the money. Certainly, for some creators, the proposition is straightforward. As the eighteenth-century poet Samuel Johnson famously and cynically proclaimed: “No man but a blockhead ever wrote, except for money.” For countless others, however, creative endeavors hardly bring riches. And even commercial creators frequently leave money on the table rather than do something they find distasteful. Nevertheless, money is important.

This seeming paradox can be resolved by considering the role of money overall in creative work. We can take creators at their word: There are many nonmonetary factors that influence and incentivize creativity, such as love, independence, curiosity, and passion. In fact, thinking about the money can hurt the creative process. But while creators may not “do it for the money,” the money is what makes it possible for them to spend their time honing skills and creating high-quality works. The money endows a professional class of creators and the various creative industries and channel partners that support them. This vibrant ecosystem – empowered by copyright – generates a rich diversity of cultural works.

Creative individuals, like every other human being, need to eat, and, like most of us, they need to work to eat. The real question is, what kind of work are they able to do? Some notable creators have worked in their spare time, but many of the greats thrive most when they can merge their avocation with their vocation. They get better at creating when their work is creation.

There is, of course, more than one way to fund professional creation – patronage, tenured university teaching, and commercial markets founded on copyright are notable ways to do it. One of the virtues of a commercial property rights system is that it fosters creative independence.

The independence afforded by a commercial system based on property rights is highlighted by contrasting it with the greater constraints under other systems. Before the first modern copyright statute passed nearly three centuries ago, many creators depended heavily on the patronage system. Wealthy patrons funded creative efforts by either commissioning works directly or employing creators to staff positions where they were given time to develop new works. To be sure, many great works were produced under this system – the musical compositions of Johann Sebastian Bach and Joseph Haydn stand testimony to this fact.

However, the economic benefits of patronage often came at the expense of the personal autonomy and integrity of these creators. As the old adage goes, “he who pays the piper calls the tune.” Sometimes these constraints were quite direct. When Johann Sebastian Bach attempted to leave the service of one of his patrons to go work for another, the former patron refused to accept his resignation and briefly had him arrested.

More important, patrons had tremendous say in the work of composers. They could decide what and when the composers wrote. They might not appreciate the value of the works created for them. For example, Bach’s Brandenburg Concertos are now recognized as works of genius. Unfortunately, the noble to whom they were dedicated, Christian Ludwig, the Margrave of Brandenburg, was apparently indifferent. The score sat on his shelf, unperformed and unappreciated, for decades. The concertos were not published until nearly 150 years later, after being rediscovered in an archive.

For these reasons, many composers dreamed of financial independence. For example, the composer Joseph Haydn once celebrated leaving behind the patronage of the Esterhazys, which was rather secure and relatively undemanding. Haydn moved to London, where he became the eighteenth-century equivalent of a successful rock star – in demand for his services and making lots of money. London had a private market – not yet so much supported by copyright and publishing as by private commissions and paid performances. In any event, Haydn prospered. In fact, at one point he wrote letters urging his friend Mozart to join him in London as soon as possible, unabashedly rhapsodizing over the money to be made there.

Still, he was now on his own, earning his own pay rather than being kept by a patron. For Haydn, artistic independence trumped economic security:

How sweet this bit of freedom really is! I had a kind Prince, but sometimes I was forced to be dependent on base souls. I often sighed for release, and now I have it in some measure. I appreciate the good sides of all this, too, though my mind is burdened with far more work. The realization that I am no bondservant makes ample amend for all my toils.

Haydn, Letter to Maria Anna von Genzinger, September 17, 1791

The modern copyright system, beginning with the English Statute of Anne in the early eighteenth century, freed creators from the restrictive patronage system. Like patronage, copyright offered creators the financial support they needed so that they could devote themselves to their craft. Unlike patronage, however, it gave them much-needed personal autonomy and artistic independence.

Beethoven, a young contemporary and student of Haydn working at the end of the patronage era, was able to support himself. His facility at performing his own difficult work helped him make a living. But he also used and supported copyright. He would often publish his works first in England to ensure that they received copyright there. He also lobbied the German states for a copyright law.

For Beethoven, too, money was important for the artistic independence it provided:

I do not aim at being a musical usurer, as you think, who composes only in order to get rich, by no means, but I love a life of independence and cannot achieve this without a little fortune, and then the honorarium must, like everything else that he undertakes, bring some honor to the artist.

Ludwig van Beethoven, Letter to publisher, August 21, 1810

The era of patronage was long ago, but human nature has not changed in the decades and centuries since. Creators still face the dilemma of trying to support themselves while maintaining independence. Every economic arrangement imposes some constraints, but some impose more than others.

A good example of how modern copyright enables individual creators to enjoy independence while supporting themselves is provided by the career of photographer Michael Stern. Stern is a hard-working creative entrepreneur – one 30-minute video he made required 103,937 photographs and 900 hours to produce. Stern doesn’t depend on subsidies or grants; rather, he values the independence he gets from being self-employed. He explains:

“The real benefit of being a self-employed photographer,” he says, “is that I can move through life on my terms and do what I want in the way I want to do it. That freedom drives me.” But, it’s not for everybody, he warns. “Nobody loves you like your mother, and even sometimes not even her. So ya gotta do it for yourself. If you don’t, you won’t have the drive needed to reach your goals.”

Instead of creating works that conform to the limited demands of their patrons, creators supply their works to the marketplace, where the demands of consumers are far more diverse. This proves beneficial to creators and society alike. Creators from all walks of life and with all sorts of interests can find the market that will support them, and this fosters a rich cultural landscape encompassing multiple political and social views.

Copyright fulfills its constitutional purpose of promoting progress by incentivizing creators through the grant of marketable rights to their works, but these rights do more than simply lure creators with the hope of economic benefits. Just as crucially, these rights endow creators with substantial personal autonomy while respecting their individuality and dignity. This fosters a creative environment conducive to the creation of high-quality works with enduring social value.

Copyright is a market-based system that supports a professional class of creators who rely on the value of their rights in order to make a living. These marketable rights have also given rise to entire creative industries that lend critical support to professional creators, and through the division of labor these industries enable professional creators to accomplish great feats that would be impossible if they worked alone.

The numbers testify to copyright’s success in helping to create a professional class of creators in the United States. As a recent report on the creative industries enabled by copyright found, there are 2.9 million people employed by over 700,000 businesses in the United States involved in the creation or distribution of the arts. They accounted for 3.9 percent of all businesses and 1.9 percent of all employees.

This creative ecosystem enables professional creators to produce the sorts of high-quality works that society values most. The popularity of these works in the marketplace makes them commercially valuable, and this in turn compensates professional creators and the creative industries that support them for creating the works that society finds so valuable.

This virtuous circle benefits creators and the public alike – just as the Framers had envisioned it. Copyright is not only doing its job, it is doing it well. The number of works available in the market is incredible – certainly more than anyone could ever possibly consume. And the diversity of voices able to connect with audiences in the marketplace makes our cultural lives all the more fulfilling.

Categories
Commercialization Copyright Copyright Licensing Copyright Theory History of Intellectual Property Innovation Intellectual Property Theory Internet Law and Economics Uncategorized

Copyright’s Republic: Copyright for the Last and the Next 225 Years

By Mark Schultz and Devlin Hartline

This past Sunday marked the 225th anniversary of the first U.S. Copyright Act. As we move well into the twenty-first century, a claim that copyright no longer “works” in the “digital age” has become commonplace – so commonplace, in fact, that it’s arguably the dominant cliché in modern copyright discussions. Like many clichés, it contains a tiny grain of truth wrapped in a huge ball of glib, unhelpful, and even harmful generalizations.

Before one can understand what the future of copyright and the creative industries could and should look like, one should first appreciate what the first 225 years of copyright has given to the United States. Copyright laid the foundation for, and continues to support, the largest, most enduring, and most influential commercial culture in human history. That commercial culture is uniquely democratic, progressive, and accessible to both creators and audiences.

Could the Copyright Act profitably be revised? In theory, perhaps, and thus there is a grain of truth in the clichés about modernizing copyright. The 1976 Copyright Act and many of its subsequent amendments are overburdened with detailed regulatory provisions contingent on outdated assumptions about technology and business. They also sometimes embody political compromises that reflect circumstances that have long since passed. However, we should pause before hastening to replace yesterday’s contingencies with those of today. And we should also pause – indefinitely – before overturning the entire enterprise on the grandiose assumption that the Internet has changed everything.

Before we can understand what the future of the creative industries could and should look like, we need to appreciate what we have achieved and how we achieved it. The American creative industries are everything the Founding generation that drafted the 1790 Copyright Act could have dreamed – and so much more. Through its press, news media, and publishing industries, the U.S. has perpetuated the spirit of the Enlightenment’s Republic of Letters, with lively, reasoned, and sustained public discussions and debates about values, science, and politics.

The U.S. has produced a creative industry that enlightens and edifies while also diverting and distracting billions of people with its cultural products. This vast commercial creative marketplace allows professional writers, artists, musicians, actors, filmmakers, game designers, and others to make a living doing something that fulfills them and their audience. The U.S. has achieved much based on the twin foundations of free expression and copyright, securing the right to express oneself freely while securing the fruits of the labors of those who craft expressions.

The past thus has much to teach the future, while inevitably yielding to change and progress. Copyright should continue to secure the many values it supports, while being flexible enough to support innovation in creativity and business models.

On this occasion of the 225th anniversary of the first U.S. Copyright Act, the Center for the Protection of Intellectual Property (CPIP) is recognizing the essential contribution of copyright and commercial culture to the United States. To that end, CPIP will be publishing a series of essays highlighting the fact that, contrary to the facile narratives about copyright that dominate modern discussions, copyright isn’t simply a law designed to incentivize the creation of more creative stuff. It has much richer purposes and benefits. Copyright:

  • Supports a professional class of creators.
  • Enables a commercial culture that contributes to human flourishing.
  • Serves as a platform for innovation in both the arts and sciences.
  • Promotes a free republic.

U.S. copyright law has achieved these lofty goals for the last 225 years, and it will continue to do so—but only if we let it and help it do so. In many important ways, U.S. culture and politics has been so shaped by the commercial culture created by copyright that it rightly can be called Copyright’s Republic.

Part I: Copyright Promotes an Independent and Professional Class of Creators and Creative Businesses