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Paying Less for Small Copyright Cases

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There’s good news both for copyright owners and for people accused of copyright infringement. The Copyright Office recently issued a long-awaited report and recommendation for a streamlined, low-cost procedure for resolving small copyright infringement claims.

Under current U.S. law, copyright owners have some very powerful advantages and remedies at their disposal when it comes to enforcing their copyrights.

With registration certificates secured in a timely manner, copyright owners create a presumption of validity for their copyrights and a presumption of truthfulness for the facts recited in the registration applications.

Plaintiffs in copyright infringement suits may recover their actual damages (sales they lost and profits infringers made), or they may avoid the need to prove their actual damages and elect instead to receive statutory damages of up to $30,000 per work infringed (or up to $150,000 if the infringement was willful).

They may secure an injunction prohibiting further infringement and seizing infringing copies and associated reproductive materials for destruction.

They may also recover their attorney’s fees and costs.

But it isn’t all good for copyright owners, because current U.S. law requires that even small copyright infringement cases be prosecuted in federal court, and that is clearly not a low-cost procedure. A 2011 survey of more than 14,000 lawyers across the country who handle these sorts of cases found that the average cost of taking a case with less than $1 million at stake through discovery ranged from $100,000 to more than $450,000, depending on what part of the country the case was tried in. And the average cost through appeal was from $250,000 to a staggering $720,000.

A plaintiff who wins might be awarded some or all of these costs. But of course some plaintiffs don’t win and, even if they do, being awarded costs and collecting the money are two different things. Moreover, if plaintiffs lose and the court decides that their claims were not objectively reasonable, they might end up paying for the defendant’s legal fees on top of their own.

A Better Option for Smaller Claims

In other words, copyright owners have some pretty good weapons at their disposal, but it is expensive, as well as sometimes a little bit risky, to launch them. The practical impact of this fact of copyright life is that smaller claims often go unaddressed. The independent book publisher whose book was being offered for free as a PDF file by a Web business was seldom able to effectively police that infringement. Likewise, the professional photographer whose photo was used on a commercial Website or in a local newspaper ad without consent and the composer whose composition was used in a television ad.

In its 2013 report, the Copyright Office proposes establishing a special copyright small-claims administrative tribunal operated under the supervision of the Copyright Office. Use of the tribunal would be voluntary. Like small claims courts in the state systems, it would let people seek resolution of monetary claims below a certain dollar threshold with streamlined and uncomplicated procedures, with simplified rules of evidence, and without the need to engage a lawyer.

Copyright owners could always pursue their claims in federal court as before, but the theory is that many would elect this streamlined process to sharply reduce costs and expedite decisions. And although accused infringers would have the right to remove the cases to federal district court, the theory is that they would not do that, partly for the same reasons and partly to reduce their exposure, since damage awards would be limited to $30,000 and injunctions would not be available.

The tribunal’s proceedings would be virtual—via documents submitted electronically, with no travel or personal appearance required. Registration requirements would be relaxed; the decisions would have very limited precedential impact; damages awards would be limited to $30,000, fee awards would be limited to less than $5,000; the parties would be permitted but not required to be represented by attorneys; and discovery (i.e., each party’s ability to compel the other side to produce documents or submit to questioning under oath) would be limited.

As I write, the Copyright Office proposal is just a recommendation and not yet a fait accompli. There will doubtless be some legislative sausage-making involved in the process of getting this small claims procedure from proposal to enacted legislation.

But to its credit, the proposal put forward by the Copyright Office is the product of a two-year effort involving several rounds of input from a wide range of stakeholders, and the resulting recommendations are already the product of compromise and consideration.

If the proposal sounds good to you, you may want to consider urging your representatives in Congress to turn it into law.

Steve Gillen is a lawyer and partner in the intellectual property firm of Wood Herron & Evans. A member of IBPA and a frequent contributor to the Independent, he has focused his practice on publishing and media matters for 30 years.

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