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The CASE Act is the Solution to the Alleged Copyright Troll Problem, Not the Cause.

The CASE Act is the Solution to the Alleged Copyright Troll Problem, Not the Cause. by Keith Kupferschmid

June 7, 2018

An updated version of the CASE Act, H.R. 3945 — a bill that was introduced by Rep. Jeffries last year and revised last month — is expected to be considered soon by the House Judiciary Committee. The bill is a priority for individual creators and small businesses who are often victimized by infringement but can’t afford to enforce their rights in federal court because federal litigation is too expensive and their claims are usually too small to justify the cost. And since the Copyright Act grants the federal courts exclusive jurisdiction of copyright infringement claims, these creators are left with no real option other than to continue to suffer the harms of infringement.

The CASE Act provides another option. It would help address this problem by creating a voluntary small claims system within the U.S. Copyright Office that could serve as an alternative to federal court litigation. It creates a streamlined process that would alleviate the need to hire an attorney (unless the party wants one) and would allow law students supervised by a licensed attorney (for instance, students in a law school clinic) to represent a party. The bill allows for recovery of a maximum of $15,000 in statutory damages per claim—one-tenth of what could potentially be recovered in federal court. Most significantly, participation is completely voluntary. If someone accused of infringement (called the respondent in the bill) does not want to participate in the process, they can simply opt out and it’s as if a claim was never brought against them.

The CASE Act enjoys tremendous support from small businesses and individual creators across the country as well as bipartisan support from members of Congress. Most, if not all, large businesses are indifferent because as copyright owners they have no problem bringing infringement cases in federal court and therefore don’t need the CASE Act. And if someone brings an infringement case against them, they are comfortable knowing they can opt out if they so choose.

Despite the tremendous support for this important legislation, there is a very small minority made up of the usual copyright naysayers, including the Electronic Frontier Foundation (EFF) and Public Knowledge (PK), that don’t support the bill because they believe there is a copyright “troll” problem that the CASE Act might exacerbate (and because they generally oppose anything that would benefit copyright owners).

For the sole purpose of showing just how completely misguided these allegations are, I will assume for the sake of argument, that EFF’s and PK’s underlying premise regarding a copyright troll problem is correct; I do so only to demonstrate that even if that were the case — a premise with which I wholeheartedly disagree — the CASE Act would not exacerbate that problem and would in fact actually alleviate it.

Specifically, the CASE Act includes numerous safeguards to prevent “trolling.” The most important of these safeguards is that participation in the small claims process is completely voluntary. If a person thinks the claimant (i.e., the copyright owner who is suing them) is a copyright troll, they (the respondent) can opt out of the case, resulting in the case and the alleged troll disappearing.

The voluntary nature of the process makes it impossible to “coerce” someone into court or to bring “frivolous claims,” as EFF and PK have argued. After all, how do you coerce someone when they can simply opt out to make the case disappear? Furthermore, no one would intentionally bring frivolous claims because they stand to lose the non-refundable filing fee when the respondent opts out. In short, there can be no trolling problem since the CASE Act gives the respondent leverage, not the claimant.

If the ability to opt out on a case-by-case basis were not enough, the revised bill goes a significant step further by allowing individuals and organizations to file a preemptive “blanket” opt-out that would exempt them from the entire small claims system for a set period of time, as opposed to on a case-by-case basis. Anyone on this blanket opt-out list would not even receive a complaint. If someone was really worried that the CASE Act would create or exacerbate a copyright troll problem, they could simply opt out of the system and make their concern evaporate.

EFF wrongly claims that the CASE Act “bypass[es] the safeguards against abuse” that exist in the federal court system. Nothing could be further from the truth. In fact, the CASE Act actually has MORE safeguards to prevent against abuse than presently exist under federal law.

For example, under the CASE Act, if a copyright owner is found to have brought claim(s) in bad faith, the Copyright Claims Board has the authority to:

  • award attorneys’ fees to the respondent of up to $5,000, and (under the revised bill) can exceed that amount in extraordinary circumstances;
  • dismiss a claim for good cause that it finds “unsuitable for determination;”
  • prohibit that claimant from filing a case with the Board for a period of one year; and
  • dismiss all pending cases filed by the claimant.

These are substantial penalties and only the first of them is available when a case in filed in federal court. The other three safeguards are unique to the CASE Act.

EFF also claims that the CASE Act will “coerc[e] Internet users to fork over cash ‘settlements’” and lead to “threats of massive, unpredictable copyright damages.” EFF is not only wrong, but once again relying on fear-mongering to prevent valid copyright enforcement.

Damages for copyright infringement under the CASE Act cannot be “massive” because the bill caps damages at a maximum of $15,000 in statutory damages per claim. This figure pales in comparison to the $150,000 in statutory damages per claim available in federal court for copyright infringement. EFF’s argument also fails to account for the $30,000 aggregate per case cap under the CASE Act because there is no cap under existing federal law. If someone wanted to make “threats of massive, unpredictable copyright damages” to extort cash settlements, as EFF has claimed, they would be foolish to try to use the small claims process established by the CASE Act for such purposes.

Damages will also not be “unpredictable” because not only are damages capped under the CASE Act, but the CASE Act also specifies that determinations of the Copyright Claims Board are required to be made in accordance with judicial precedent. (Where there is conflicting judicial precedent among the courts, the bill provides that the Board should follow the law of the federal jurisdiction where the case could have been brought.)

EFF further claims that the CASE Act empowers copyright “trolls” by allowing the issuing of “subpoenas for the identity of an Internet user, who can then be targeted for harassment and threats.” This statement is also false because the revised CASE Act no longer includes a subpoena provision. EFF’s claim that the CASE Act allows the “Copyright Office to issue a $5,000 ‘parking ticket’ through a truncated process” is also false because there is no provision in the bill as introduced or as revised that would do this. The process for deciding an infringement case under the bill is the same whether the damages are $15,000 or $150. The only difference is that a lower-amount claim that is less complex could be decided by one judge, as opposed to three judges, as a cost and resource savings measure.

It should also be noted that the revised CASE Act limits individuals to filing no more than ten cases over the course of a (calendar) year. To the extent that the opt-out provisions, bad faith penalties and damages cap do not prevent the filing of frivolous claims or trolling, this limitation certainly would, especially when one considers that there is no such restriction on the number of cases that can be filed in federal court.

I’m not so naïve to think that this blog will change the minds of EFF, PK or others like them who have never — and will never — support any copyright bill that helps creators. But those who are more open-minded and who take the time to review the provisions of the CASE Act and to understand the problem trying to be solve here, cannot escape the conclusion that even if we assume for argument’s sake that an alleged troll problem exists, the CASE Act is a solution to that problem, not the cause.

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