What the Copyright Alternative in Small-Claims Enforcement Act Means for Small Businesses

What the Copyright Alternative in Small-Claims Enforcement Act Means for Small Businesses

by Crystal Everson, J.D., February 2020

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Small businesses now have a new tool to help protect their copyrights with the Small-Claims Enforcement Act of 2019 (CASE Act).

Litigation is expensive, and because of this, many copyright owners cannot afford to file claims in court to enforce and protect their rights. This is especially the case for small business creators who have experienced copyright infringement.

The CASE Act seeks to remedy this by creating an affordable and accessible way for copyright owners, with low-dollar copyright infringement claims, to still be able to file a claim, even if federal court is not feasible for them.

Read on to learn how the CASE Act could positively impact you as a small business owner when it comes to your intellectual property.

The CASE Act Explained

The Copyright Alternative in Small-Claims Enforcement Act of 2019 is legislation that would provide copyright owners who have low-value claims of copyright infringement with the ability to file infringement claims in an alternative forum. The alternative forum would come in the form of a Copyright Claims Board, which would decide disputes within the U.S. Copyright Office. This would provide small business creators with access to an affordable way to fight copyright infringement.

Participation in the Copyright Claims Board proceedings would be voluntary. Defendants would have an opt-out process, and could instead choose to have the dispute heard in court. However, if both parties agree to have their dispute heard by the Board, they would be giving up their right to go to court and the right to a jury trial.

The Board would have the authority to issue monetary awards based on actual or statutory damages. The CASE Act limits damages to $15,000 per registered work, with a maximum amount of $30,000 per claim. If the work(s) were not registered, the statutory damages awarded could not exceed $7,500 per work infringed, or a maximum amount of $15,000 per claim.

In addition, here are some points worth noting:

  • The process is 100% voluntary with an opt-out process
  • Board determinations would be final with no future court or jury trial remedy
  • Total damages are capped at $30,000
  • Statutory damages are capped at $15,000 per work ($7,500 if the copyright is not registered)
  • The process would not require attorney representation
  • Parties pay their own fees and costs

Why the CASE Act Was Created and How It Could Impact Small Businesses

Under the current intellectual property laws, most small business creators who have encountered copyright infringement can't afford to enforce their rights. The reason for this is that federal courts have exclusive jurisdiction over copyright (and all intellectual property) claims and federal litigation is so expensive and complicated. The cost of litigation puts copyright protection out of reach for many small businesses—with the average cost of a case, including appeals, running over $300,000. This cost could significantly outweigh the damages awarded, especially when small business owners report that most copyright infringements are valued at $3,000 or less.

With no cost-effective way to get compensated, copyright owners with small infringement claims have rights but without an available remedy. The CASE Act seeks to remedy this problem by creating a forum where small claims could be heard—even those that would otherwise not be considered practical to be heard in federal court.

Small business creators are often precluded from taking their low-dollar, but still valuable, copyright infringement claims to court because of the high cost of federal litigation. While the claims of a small business may seem modest compared with those of enterprise businesses, the impact of the loss of income can be significant for the small creator or business.

By providing a cost-effective and accessible option, the Copyright Claims Board would give small business creators the ability to enforce their rights and receive damages when those rights are violated.