Copyright infringement can be extremely damaging to content owners, who have spent significant time, money, and effort to create content for others to enjoy. What recourse does a copyright owner have, when someone makes unauthorized copies of their work?
Previously, the most common option was to file a take-down notice and hope the infringement is removed as soon as possible, limiting the damage. In this situation, there is rarely any monetary compensation for the time and effort spent to remove the infringement or for the unauthorized use of the copyrighted materials. The copyright owner can file a lawsuit, but unless the other party made a significant amount of money by selling the copies, the costs of filing a lawsuit in federal court often outweigh any monetary damages that could be awarded.
What is the Copyright Small Claims Board or CCB?
The Copyright Small Claims Board may be a new solution to help copyright owners recover the costs of infringement. In December 2020, Congress passed the Copyright Alternative in Small-Claims Enforcement Act of 2019, also known as the “CASE Act”. The CASE Act’s crowning achievement is the establishment of the Copyright Claims Board (the “CCB”), a new administrative court, which should provide a faster and cheaper alternative for copyright owners to enforce their rights.
The CCB is not yet operational but intends to begin taking cases on or around December 27, 2021.
The CCB is a tribunal of three judges, two of whom will have experience in litigation and adjudication of copyright infringement claims. The third Officer will be familiar with alternative dispute resolutions of copyright claims.
What Kind of Claims Can be Brought Before the CCB?
Claimants can bring a few different claims before the CCB, however, the claimant must either have a copyright registration or have filed an application with the Copyright Office.
1. Claims of Copyright Infringement
If someone makes unauthorized copies of another entity’s work (whether the copyright was registered or unregistered at the time) the copyright owner can bring copyright infringement claims before the CCB.
2. Requests for Declaratory Judgment of Non-Infringement
If someone receives a takedown notice or any other enforcement letter claiming that they are infringing upon someone else’s copyright, they can ask the CCB to declare their use of the work “non-infringing.” These types of claims often result in the claimant receiving attorney’s fees and costs.
3. Misrepresentations in Connection with a DMCA Takedown Notice
If someone is the target of a fraudulent or false DMCA takedown notice, they can seek damages and attorney’s fees from the sender through the CCB.
What Kind of Damages Can be Awarded by the CCB?
A claimant can qualify for one or two different types of damages. Damages can also vary depending on the registration status of the copyright in question. Damages cannot exceed $30,000, regardless of if they are actual or statutory and no matter the number of works infringed upon. Both statutory and actual damages may be enforced through a federal court if the respondent refuses to pay.
Every claimant is eligible for actual damages, which is compensation for a loss suffered because of the infringer’s actions. Actual damages typically consist of the profits made by the infringer, but can also consist of other damages, as long as the claimant can prove that the damages occurred because of the bad action (either infringement or false claims.)
If the claimant wants to bring actual damages, the claimant can receive the opposing party’s profits of up to $30,000—excluding attorney’s fees and costs. In every case, where the opposing party has demonstrated bad faith, attorney’s fees and costs can be recovered up to $5,000.
Statutory damages are special monetary damages available to all registered copyright owners. Because an infringer’s actual damages can be minimal, statutory damages often allow for copyright owners to recover more than if they were to seek actual damages. Statutory damages can vary depending on if the copyright was “timely registered” with the Copyright Office. For a copyright to be “timely registered,” it means that the copyright was registered with the Copyright Office before the infringement took place (or within a three-month grace period).
If the work is not “timely registered,” the claimant can be awarded up to $7,500 per work infringed in statutory damages, with a maximum damage amount of $15,000 in any one proceeding.
If the work is “timely registered,” the claimant is eligible for up to $15,000 per work infringed. In cases with registered copyrights, the maximum total damages awarded is $30,000, excluding any attorney’s fees and costs.
Claimant owns "Timely Registered" Copyright
Claimant Registered After Infringement (No "Timely Registered" Copyright)
Statutory damages are available up to $15,000 per work for a maximum total of $30,000
Statutory damages are available up to $7,500 per work for a maximum total of $15,000
Actual damages are available up to $30,000
Total damages are available up to $30,000
Recoup attorney's fees and costs up to $5,000 (in cases where the opposing party demonstrates bad faith)
|Claimant owns "Timely Registered" Copyright||Claimant Registered After Infringement (No "Timely Registered" Copyright)|
|Statutory damages are available up to $15,000 per work for a maximum total of $30,000||Statutory damages are available up to $7,500 per work for a maximum total of $15,000|
|Actual damages are available up to $30,000|
|Total damages are available up to $30,000|
|Recoup attorney's fees and costs up to $5,000 (in cases where the opposing party demonstrates bad faith)|
What Happens After a Claim is Brought to the CCB?
The CCB reviews the claim, and if it fits within the parameters of the CASE Act, the CCB will notify the claimant that the claim can proceed. After this notice, the claimant must provide or “serve” the infringer with a copy of the claims and notice. The final step is to provide proof of service to the CCB.
At this point, the respondent can opt-out of the CCB process and force the claimant to file in federal court. However, if the respondent does not opt-out, the claim proceeds quickly through limited discovery, no formal motions, and all virtual hearings.
Appealing a CCB decision
After the CCB reaches judgment, the losing party’s appeals are limited to the Copyright Office and federal court. The appeal process is structured with the following steps.
1. A request that the CCB reconsider a decision based on a technical mistake or a legal or factual error material to the decision.
2. If that request is denied, a request can be made to the Register of Copyrights to determine if the CCB abused its discretion.
3. Ask a federal court to vacate or modify the CCB judgment if the judgment was issued as fraud, corruption, or misconduct or if the CCB exceeded its authority, or if there was a default or failure to prosecute due to excusable neglect.
How Does a CCB Claim Differ from Previous Options for Copyright Enforcement?
The biggest benefit of these new proceedings is cost, as a federal lawsuit can cost hundreds of thousands of dollars. Even the beginning stages of a lawsuit in federal courts can cost $10,000-$15,000 and require extensive service requirements, motions, and more.
CCB proceedings will be conducted completely online, with minimum discovery and a streamlined procedure, making them much more cost-efficient.
Another important distinction between a CCB claim and a federal lawsuit is that a claimant does not need to have a federal registration at the time of the claim. A claimant can file an application for copyright registration, while simultaneously filing a complaint with the CCB. This allows claimants to still recover without having to wait for the lengthy process of a copyright application and registration. However, if the copyright was not “timely registered,” the statutory damages will be capped at $15,000.
The final distinction between the two options is that the respondent has an opportunity to opt-out of a CCB case. If the respondent opts-out, the claimant is forced to decide whether to proceed with a lengthy and costly federal lawsuit or to drop the case. The respondent must affirmatively opt-out of the proceeding within 60 days of being served, or they will lose the legal right to litigate the matter in federal court. After properly opting out, the CCB will dismiss the complaint, putting the parties back in the same position they were before the claimant filed.
Case Study: The designer whose artwork was infringed upon
A popular graphic designer creates artwork and posts it on their website and social media. Four months later, they notice that a shop in California has reproduced the design on t-shirts. They file a take-down notice with social media websites, but not before the design sells out with, from what the designer can tell, 200-300 sales.
The graphic designer did not register their copyrights with the Copyright Office before the infringement occurred (and is outside of the 3 month grace period.)
If they were to bring a lawsuit in federal court, they would be looking at $10,000-$15,000 to prepare, serve, and file the lawsuit. If the shop hires an attorney to respond, these costs could easily skyrocket, as the sides file motions and seek information from each other. Ultimately, any damages awarded would be minimal—if the infringer sold 300 shirts at a profit of $15 per shirt, the actual damages would likely be around $4,500, with little chance of recovering attorney’s fees.
However, if the designer were to file with the Copyright Claims Board, the cost to file would be much less, as the attorney would not need to show up in person for any hearings and motions practice is severely limited. The designer would be entitled to recover actual damages and the more limited statutory damages (because they didn’t register their copyright earlier). Suddenly, that $4,500 recovery (with the opportunity for attorney’s fees up to $5,000) makes much more financial sense, especially because the proceeding is streamlined, which limits the legal fees necessary to bring the claim.
Do I Need a Lawyer to File a Claim with the CCB?
While the CCB is designed to be streamlined and easier for claimants to proceed pro se (without a lawyer), it is still beneficial to hire an attorney. Once a claim has been brought to the CCB and the proceedings begin, there is no option to pursue the claim in federal court instead. Hiring an attorney to help you with this process can help you determine where to file—CCB or federal court—depending on the strength of your claim and possible damages. An experienced attorney can also help you file your copyright application (if you have not done so yet), advise you of what rights were violated, and can ensure that each part of the process is completed properly for your best chance at success. They can also help you develop a plan to protect your copyrighted work on a quarterly basis, which will ensure maximum protection, as all work will be “timely registered.”
Do you have work that is being infringed upon? Contact an experienced attorney at Gerben Perrott, PLLC for a consultation on copyright infringement and the possibility of a streamlined enforcement approach through the CCB.