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Big News for Small Copyright Claims?

Posted: Monday, October 29, 2012 | Posted by Lizbeth Hasse, Esq. | Labels: , , 0 comments

Copyright Office considers new proposals for a copyright small claims court, but specifics are still lacking.

The story is familiar to many artists.  A freelance photographer is surprised to find that an online service has reproduced a number of copyrighted images from her website.  She reaches out to the organization with phone calls, offers to license her work for what she considers a reasonable fee, and drafts her own “cease and desist” letter.  These all go unanswered.  Realizing that her only remedy may be to sue, she seeks out an attorney who will file her case in federal court.  But the case is too small; attorneys’ fees are high; it would take at least a year to litigate; and the recovery, if she wins, is uncertain.  In the end, she simply gives up.

In 2006, the United States Copyright Office brought stories like these to the attention of Congress.  In a statement before the subcommittee on intellectual property, the Office noted the costs associated with the federal court system, which has exclusive jurisdiction over copyright cases, and concluded that “[it] is reasonable to ask whether federal courts are hospitable to most small claims.”  Two years later, Congress directed the Office to study the creation of a special network of courts that would hear low-value copyright claims.  As part of its research, the Copyright Office asked for input from interested parties in the creative community.  That commenting period just ended on October 19, and the opinions of artists’ rights organizations, corporations, and intellectual property scholars are ready for review.

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Copyright owners, such as the photographer in our example, would generally like to see an inexpensive, easily accessible forum with robust powers to grant and enforce judgments.  Reduced cost and ease of access, they argue, will lead to meaningful enforcement of intellectual property rights.  On the other hand, some worry about the potential danger to small-scale defendants who often settle rather than engage in expensive, lengthy litigation, even if they have valid defenses.  They suggest that a copyright small claims court may end up a mechanism for powerful interests to extract settlements from unsophisticated defendants.

Proposals submitted thus far address these concerns and others.  Foremost among them are the questions of how independent a court of small claims would be, whether it would limit the role of attorneys and the discovery process, whether it would be a voluntary option or mandatory, and where the cap on monetary damages would be placed.

Although the debate continues, a consensus has emerged with respect to at least some of these issues.  For example, a majority of commentators agree that such a court should be instituted outside the federal court system, either at the Copyright Office, or as an independent administrative agency.  State courts do not present a viable alternative since their dockets are already crowded and state court judges have relatively little experience with copyright law.  However, the field is far less unified when it comes to the questions of attorneys, attorneys’ fees, the permissible amount of claims, and the right of appeal.

Recently, the United Kingdom instituted its own “small claims track” in the Patents County Court, which may offer some insight.  The “small claims track” provides a venue for suits under £5,000 where neither lawyers nor experts are required and the rules of evidence are less strict.  Further, judges may grant either monetary damages or permanent injunctions, but are prohibited from entering preliminary injunctions or awarding attorneys’ fees in excess of £200.

While copyright holders laud the UK’s new “small claims track,” it is unlikely that a comparable court will be established in the United States any time soon.  As a next step, panels in New York and Los Angeles will meet next month to consider specific aspects of the many proposals offered.  As the discussion progresses, the many questions raised are sure to receive a hard look from interested parties, and the debate is bound to intensify.

Update: the Copyright Office is extending the time to submit requests to participate in the public meeting to consider remedies for small copyright claims in Los Angeles on November 26 and 27, 2012. Requests to participate are now due by November 9, 2012.

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