Copyright Claims Board – A Story of Insufficient Pleadings and Voluntary Adjudication
The year-old Copyright Claims Board can only hear claims within a limited scope and allows respondents to opt-out of proceedings. Although the Board was established to provide an affordable venue for copyright owners to bring small claims, its narrow purview and voluntary nature have yielded only one decision on the merits since its founding in 2022.
After a substantially similar bill had been introduced three times, Congress finally passed the Copyright-Alternatives in Small-Claims Enforcement (CASE) Act of 2020 as a part of the Consolidated Appropriations Act. This Act was passed on December 27, 2020. In response to concerns that federal courts are too expensive to adequately accommodate certain copyright owners, the Act created the Copyright Claims Board (CCB).
In a federal court copyright action, any claimant can file a copyright claim against any domestic respondent. However, the CCB’s jurisdiction is limited to infringement claims, misrepresentation claims, and declarative orders that an activity does not infringe a copyright. Claimants may represent themselves or be represented by retained counsel, pro bono entities, or law students. Further, participation in the CCB is voluntary such that if a respondent “opts-out” of the CCB proceeding, the claim is dismissed without prejudice. This leaves the claimant filing their claim and seeking relief in a federal court. The CCB’s narrow jurisdiction and voluntary nature have inhibited its efficiency and efficacy.
As of October 23rd, 2023, claimants have filed 620 claims in the CCB. However, only seven Final Determinations have been issued by the three-Officer Board. Only one Final Determination reached the merits of the claim. The remaining six Final Determinations were default determinations, issued because the respondent “ha[d] not appeared or participated in [the] proceeding.”
Of the 614 remaining claims, 59 have been dismissed due to respondents opting-out of the CCB proceeding. The types of respondents who have opted-out of CCB proceedings include individuals, tech companies, clothing companies, real estate firms and more. From a respondent’s perspective, opting-out of the CCB proceeding can be advantageous.
On the other hand, federal courts are often cost-prohibitive to small claimants and can allow for more-robust discovery. Respondents’ only motivation to proceed in the CCB is that the Officers can award the claimant up to $30,000 in monetary damages per claim, unlike federal courts that can award up to $150,000 in damages per work. The CCB has received 39 opt-outs since January 2023, forcing dismissal of the claim and incursion of costly legal fees for claimants who hope to assert their copyrights.
In addition to respondent’s ability to opt-out of the proceedings, claimants struggle to proceed in the CCB due to the narrow legal causes of action that the Board can hear. As of October 23rd, 2023, the CCB has issued 469 Orders to Amend Noncompliant Claims. There are many reasons why a claim may be considered noncompliant. First, the claim may rest on actions that have fallen outside of the CASE Act’s three-year statute of limitations. Second, the claim may not include enough facts stating that the respondents engaged in infringing activities. Third, all works covered by the claim may not be registered with the Copyright Office, as required by the CASE Act. Fourth, the claim may ask for relief that the CCB cannot carry out, such as requesting criminal charges be brought against respondents. Just as complaints filed in judicial courts, claims filed in the CCB may be dismissed for a variety of reasons, even beyond those mentioned above. However, unlike plaintiffs in judicial courts, CCB claimants often do not have the advantage of legal representation and may find that the legal hurdles of pleading sufficient facts and understanding remedies available to the CCB prevent them from seeing their claim through.
The CASE Act was intended to provide a forum for copyright owners to bring small-claims that are not cost-prohibitive and open to all copyright owners. However, the slim advantages of CCB proceedings are insufficient to dissuade respondents from opting-out, re-introducing the high cost of litigation to claimants. While the forum may serve claimants who could not otherwise afford to hire legal counsel, its stringent legal standards may prove difficult to understand for a claimant who lacks legal training. To further the intended goal of the CASE Act, Congress should amend the Act to entice respondents to utilize the CCB, and the CCB should continue issuing documents to help prospective claimants understand what filing a claim requires.