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Congress Takes Another Step Toward Copyright Small Claims Court

John Gilberston \ August 05, 2019

A bill in Congress that would create a special tribunal for small copyright disputes has cleared a key procedural hurdle on its way to enactment.  The Copyright Alternative in Small-claims Enforcement Act, or “CASE” Act, made it out of the Senate Judiciary Committee last week and will soon head to the floor for a vote by the full Senate.  

If ultimately enacted into law, the CASE Act would create a small claims court for copyright disputes, offering a cheaper venue for artists and copyright holders who may lack the resources to litigate their claims in federal court.  Currently, start to finish, the average cost for litigating a copyright action in federal district court is well over $250,000. Sponsors of the CASE Act argue that while authors, songwriters, artists, and creators in the United States have substantial rights under the law, it is often cost-prohibitive for all but the wealthiest to actually enforce them.  The Beastie Boys, for example, recovered $1.7 million in 2014 in an infringement suit against Monster Energy for its unauthorized use of several Beastie Boys songs in a promo video.  It was a net loss for the band, however, who had to spend $2.4 million in costs and attorney fees to do it.  

The CASE Act caps damages at $15,000 for each infringed work, and caps total recovery at $30,000.  While this wouldn’t have helped Ad-Rock and Mike D, it would bring the legal system within reach for copyright owners whose claims for damages are relatively small.  

These scenarios arise frequently in the internet era, often in the context of short-lived social media posts which make unauthorized use of songs, images, and film clips.  The CASE Act offers a “quick resolution” before a three-judge panel with experience in both copyright law and alternative dispute resolution. Participation in the system would be voluntary, as parties would still have the right to take their disputes to federal court.

While the bill enjoys broad bipartisan support, opposition remains.  Critics of the bill point out that the three-judge panel has unfettered authority to award unappealable judgements of up to $30,000, enough to push the average American household to the brink of bankruptcy.   

Meredith Rose, policy counsel at the Washington, D.C.-based intellectual property think tank Public Knowledge, argues the bill in its current form lacks sufficient safeguards against potential abuse.  She said in a statement that “this lack of transparency is inexcusable.”

While the Senate prepares a full vote on the bill, an identical bill is making its way through the House.  

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