“The notion that respondents, whether big companies or not, would be more likely to consent to the small claims process when they perceive a benefit in doing so—e.g, to take advantage of the cap on damages when they are ‘clearly or probably’ liable—is not a ‘hole,’ but instead a welcomed improvement over the status quo.”
While there are a number of falsehoods being spread about the CASE Act by those who philosophically oppose any legislation that will help the creative community, there are a few honest critiques that are based on simple misunderstandings about the bill rather than malice. Take, for instance, an article published earlier this week on this blog which characterizes the CASE Act’s intentions as noble, but argues that there are “three gaping holes” that make for bad policy.
An Improvement Over the Status Quo
The first supposed “hole” that the article addresses deals with the voluntary nature of the CASE Act. The author posits that, because the process is voluntary, big companies will opt out when it suits their interests, and choose to participate only in instances where they are “clearly or probably liable” in order to benefit from the $30,000 cap on damages. According to the article, this gives big companies an advantage because, in either event, they get their preferred choice of forum. The author’s analysis is flawed, however, because he fails to consider the status quo. Under the status quo, most creators cannot afford the cost of litigating in federal court, so infringements regularly go unchallenged and unmitigated. Under the status quo, neither party gets a preferred choice of forum simply because there is no choice—effectively, federal court is the only true avenue for justice and it is cost-prohibitive for individual creators and small businesses. The CASE Act would create an alternative forum that will be streamlined, simplified, and affordable, for both claimants and respondents. In fact, because the process is simplified—so much so that attorneys are not necessary—and low-cost, the advantage that a big company might have over an individual creator or small business in federal court would be negligible at best in the small claims system. As the author states, the process is voluntary for both the claimant and the respondent, which means that each party has the ability to decide whether the small claims process is their preferred forum. The notion that respondents, whether big companies or not, would be more likely to consent to the small claims process when they perceive a benefit in doing so—e.g, to take advantage of the cap on damages when they are “clearly or probably” liable—is not a “hole,” but instead a welcomed improvement over the status quo.
An Alternative to Trolling
The second supposed “hole” that the article mentions deals with: (1) the fee-shifting provision in Section 505 of the Copyright Act, which permits a court, in its discretion, to allow a prevailing party to recover its costs and attorney’s fees, and (2) the cap on damages in the CASE Act. Under the CASE Act, parties may only recover costs and attorney’s fees in instances where the opposing party has acted in bad faith, and statutory damages are limited to $15,000 per claim, and no more than $30,000 in total damages per case. According to the author, “fee-shifting and statutory damages ha[ve] contributed to the rise in recent years of “copyright troll” law firms, whose business model involves representing as many photographers and artists as they can find, then threatening to file infringement lawsuits and trying to obtain quick settlements under the threat that a prolonged suit will end up costing the defendant the plaintiff’s attorney’s fees and/or statutory damages.” He explains that because fee-shifting is limited to instances of bad faith, and statutory damages are limited to $15,000 per claim as opposed to $150,000 in federal court, “the CASE Act has little to no appeal” to copyright trolls. Again, what the author characterizes as a “hole” is the bill doing precisely what it is designed to do. The CASE Act is not a tool for threatening or coercing someone into participation. It is a voluntary process that is intended for parties who want an affordable and accessible forum to litigate their copyright disputes, whether those claims are brought by copyright owners or users of a copyrighted work.
The author alludes to the fact that the increase in recent years of “copyright troll” law firms is tied directly to the expense of litigating in federal court. Since individual creators and small businesses cannot afford to pay law firms’ hourly rates for the normal course of copyright litigation, trolling is a method employed by law firms to quickly and easily settle copyright disputes in exchange for a portion of their client’s recovery. Trolling is an offshoot of the fact that there is currently only one avenue for justice, and that avenue is cost-prohibitive. It exists because there is a demand that is otherwise being unmet. The CASE Act would provide an alternative method for meeting those needs, one that does not require threats or coercion.
Not a Silver Bullet, But a Step Forward
The third “hole” that the author suggests involves ownership disputes. He states that “[f]or this subset of copyright disputes, CASE Act proceedings will not provide a satisfactory outcome.” Once again, what the author perceives as a “hole” is an intentional feature of the CASE Act. The kinds of claims that can be decided under the CASE Act are limited to infringement claims, declarations of non-infringement, claims of misrepresentation under Section 512(f) of the Digital Millennium Copyright Act (DMCA), and related counterclaims and defenses. Disputes premised on ownership are not permitted under the CASE Act due to the complexity and extensive discovery that litigating and deciding those cases often involve. The CASE Act is not designed for complex or novel issues. It is simply intended as a streamlined, simplified, and affordable alternative for litigating appropriate copyright disputes.
The CASE Act will not bring an end to copyright infringement, nor is it intended to. Subversive parties that intend to infringe and skirt the law are unlikely to be brought to justice under the CASE Act. But the CASE Act is good policy for achieving what it is intended to do: provide an alternative to federal court where consenting parties who presently cannot afford to, might finally get their day in court.
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