Copyright Claims Board offers small-claims option to rights holders

BALTIMORE, MD — Most disputed cases of copyright infringement end up in a United States district court due to their exclusive jurisdiction over copyright infringement claims. Too often the would-be plaintiff walks away from the claim because the district court litigation is too expensive and the claim is too small. Copyright owners hate to hear that the cost of bringing the claim may exceed their recovery. 

This is especially true of the smaller cases where the damages are likely to be measured by the copyright claimant’s royalties, lost when someone uses its work without consent and does not pay for use. These small cases are very often not worth filing in the district court. But they are very meaningful to the copyright owner whose work was used without permission or payment. 

Even if the statutory requirements of registration before infringement are met, so as to allow a prevailing owner of a copyright a chance to recover attorneys’ fees and statutory damages, the suit may still not be worth filing because these awards are within the court’s discretion and there is absolutely no guarantee that attorneys’ fees will be awarded or that statutory damages awarded will be worth the effort. That is particularly so where the damages and the defendant’s profits attributable to the infringement are small. 

This is where the Copyright Claims Board can provide a very valuable service to a copyright owner with a small claim against a would-be infringer. The board is part of the United States Copyright Office and it has jurisdiction over small claims, up to $30,000, when proceeding before it is agreeable to both parties. Claims before this board are considered an official government legal proceeding. 

To get a matter before the board, instead of filing a suit in court the claimant files it’s claim with the board setting forth a narrative of its claim and alleged ownership of the work. It establishes that the claim is brought within the three-year statutory period of limitations and that the claimant has registered the work with the Copyright Office or has filed an application to do so. 

The board’s remedies are restricted; they are nowhere as broad as the remedies a court can impose. And, it is worth repeating that monetary awards for the infringement can only be made up to $30,000 and not beyond. 

If a party has been found by this three-person board to have acted in bad faith during the proceedings, the board can award attorneys’ fees of up to $5,000 and costs to the other party if it prevails. The board can award actual damages and profits attributable to the infringement. Or the claimant can ask for statutory damages, assuming it is eligible under the Copyright Act for that remedy. That would generally mean that a successful registration was filed before the infringement began. 

 However, the board does not have the equitable powers necessary to enjoin an infringement. It will consider favorably when assessing damages, an infringer’s agreement to cease its infringing activities. 

A benefit, or detriment, of proceeding before the board is that its three members are exceptionally well-versed in copyright law. Copyright was their background before joining the board and it’s all they do now. District court judges can be excellent, but the myriad of subjects they must deal with does not allow for this level of specialization. But that specialization can be a two edged sword that makes it hard for an infringer to hide behind a weak defense. 

The process before the board is voluntary. If served with notice of a claim, a respondent can choose to do nothing and accept the board‘s jurisdiction, or it can opt out within 60 days of service. If it opts out, the proceeding will be dismissed, and if the claimant still wants to proceed, it will need to file a complaint in a US district court. A wise respondent will carefully consider whether that is likely. And, a respondent can represent itself, even if it is an entity. 

To qualify to file a claim, the work must be registered with the Copyright Office or an application to register must have been submitted. To file in court the registration must have issued. If the work is later determined to be non-registerable, the claim will be dismissed. Counter claims are permitted and there is limited discovery available. The discovery period is also limited. The idea here is to be able to move the claim through quickly without much expense. 

Very limited appeals are available from a decision of the board. A dissatisfied claimant can ask the board to reconsider, and if it will not, it can ask the Register of Copyrights to review the decision. Finally, under very limited circumstances, such as the allegations of fraud, corruption, or other misconduct a claimant can appeal to a US district court. 

Filing with the board is a decent way to manage infringements of small matters where equitable relief is not required. Sometimes it may be the only way to manage a small infringement because of cost. This process allows a claimant access to justice when the small amount of a claim may have made court action prohibitory. Frankly, it’s worth a hard look. 

Jim Astrachan is a counsel to Corey Tepe LLC and has taught intellectual property law in the two Maryland law schools since 1999.