House of Representatives Passes Small Claims Copyright Bill for Infringements Under $30,000

There’s big news on the copyright front — for small infractions.

Small claims court systems exist throughout the world and are a fixture in every U.S. state and county. The processes are streamlined and quick, with judges typically reviewing dozens of rapid-fire cases for claimed damages that are often lower than $10,000.

But does U.S. copyright law need a small claims tribunal of its own?

Now, a bill that would create a small claims division within the U.S. Copyright Office is inching closer to law.

Late yesterday (October 22nd), Rep. Jerrold Nadler (D-NY), who is the chairman of the U.S. House Judiciary Committee, strongly came out in support of the Copyright Alternative in Small-Claims Enforcement Act (CASE Act). The bill currently has bipartisan support in Congress, and just passed the House of Representatives this morning.

The controversial bill, which has raised the wrath of the Electronic Frontier Foundation and the broader tech industry, would allow copyright holders to sue violators in a special and voluntary small claims court when damages sought are less than $30,000.

Nadler says that he supports the bill because he believes that many content creators cannot afford to protect their copyrights.  For starters, the costs of filing a suit in federal court are high.  He is now a co-sponsor of the legislation.

“Today, many small creators, especially visual artists, are unable to protect their rights because the cost of pursuing an infringement claim in federal court is far greater—as much as ten times or more—than the damages they could ever hope to receive,” Nadler stated.  “And, few attorneys would take a case where such limited damages are at stake because they would not likely recoup their costs.”

“It is a fundamental principle of the American legal system that a right must have a remedy. But if it costs $250,000 to recover a few thousand dollars from someone who has infringed your copyright, then what remedy do you really have?”

The bill would create a small claims board that would operate within the U.S. Copyright Office.

This board, which would be appointed by the Librarian of Congress, would resolve infringement claims with proceedings that would be less expensive than court cases and far simpler. Litigants would not even need lawyers (though they could receive free assistance from law students), and they would not have to travel, as the proceedings would take place over the internet and by telephone.

Infringement penalties would be capped at $30,000, but $15,000 per work infringed.

Nadler stressed the voluntary nature of the proceedings. Not only could plaintiffs decide whether to use the board but defendants, too, could decide to opt out of the proceedings if they would rather have the case heard in federal court.

“Importantly, the proceedings would be voluntary. Plaintiffs can decide whether this is the proper forum to file their claim and defendants may opt out of the process if they prefer to have their case heard by a federal judge,” Nadler said.

Nadler also thanked Rep. Hakeem Jeffries (D-NY), who is the sponsor of the bill, and Rep. Doug Collins (R-GA), who is the ranking Republican member of the Judiciary Committee.

The House passage is receiving wide approbation from the music industry.

In response to the passage in the House, the Association of Independent Music Publishers (AIMP) offered the following statement.

“The AIMP is glad to see the CASE Act moving toward passage thanks to the U.S. House of Representatives’ overwhelming vote in its favor. For too long, independent publishers and songwriters have languished under outdated laws that allowed their works to be exploited without proper compensation. Coupled with the recently passed Music Modernization Act, the CASE Act gives these rights-holders the tools they need to stand up for their rights. We encourage the Senate to pass this legislation as soon as possible.”

Daryl Friedman, Chief Industry, Government, & Member Relations Officer for the Recording Academy, also offered a thumbs up. “The Recording Academy applauds the House for passing the CASE Act today, another victory for music creators almost exactly a year after the Music Modernization Act was signed into law,” Friedman relayed.

The Recording Academy oversees the Grammys and advocates for the broader recording industry.