Respondents’ Decision to Opt Out or Participate￼
What does it mean for a respondent to opt out?
Respondents who have been served with a claim before the CCB have the choice to participate or “opt out” of the CCB proceeding. If the respondent opts out, the proceeding before the CCB ends. If the respondent does not opt out, the proceeding will continue before the CCB.
Why is the respondent given an opportunity to opt out of a CCB proceeding?
The opt-out provision was included in the CASE Act—which is the legislation that established the Copyright Claims Board—to ensure that participation is voluntary and the CCB does not run afoul of constitutional rights. The Constitution guarantees a person’s right to have a case heard by an Article III court—which is a traditional federal circuit or district court that includes the right to a jury trial—rather than what’s known as an Article I court, which is an administrative court like bankruptcy court, the court of federal claims, and the CCB—none of which involve a jury.
Even though a person has the right to a jury trial, they can voluntarily waive it. This waiver is accomplished in the CASE Act by giving respondents the opportunity to opt out of a CCB proceeding if they wish not to waive those rights.
What are some of the factors a respondent should consider when making its decision whether to opt out or not?
There are many reasons that a respondent may want to participate in a CCB proceeding.
- One significant factor a respondent should consider are the damage caps that apply to all CCB cases. In a CCB proceeding, a claimant cannot seek a total award of more than $30,000, no matter how many claims it asserts. In federal court, there is no limit to the damages a plaintiff can seek, and so by not opting out, a respondent may be dramatically limiting their exposure to higher damages. While federal court is too expensive for many copyright owners, there will be many that can afford federal court but choose to bring their case to the CCB first because of cost savings and efficiency. And so, by opting out, a respondent is putting themselves at risk of potentially much higher damages.
- Another significant factor is the reduced expense of litigating a case at the CCB. The CCB process is simplified and therefor there is no need to hire an attorney—this is true for both claimants and respondents. When a case is litigated in federal court, the largest cost associated with bringing or defending a copyright case is the cost of hiring an attorney. In fact, legal fees can often exceed the actual damages awarded in a copyright infringement case. So, giving parties the practical ability to defend themselves without paying an attorney encourages parties to participate. In addition, because all CCB hearings and conferences are virtual, there are no travel expenses.
- Another factor to consider is the expertise of the CCB Officers. The CCB is a copyright-specific tribunal that only hears claims related to copyright, so it has expertise in handling these disputes. In federal court, cases would be decided by a judge who hears all sorts of cases and may have handled few, if any, copyright cases or by a jury that is not familiar with copyright issues. The CCB officers and attorneys are copyright experts who have substantial experience in the evaluation, litigation, or adjudication of copyright claims—representing both copyright owners and users of copyright protected works. So, a party who believes that they have a meritorious defense against a copyright infringement claim or a viable counterclaim may choose to participate in a CCB case because of the benefit of having copyright experts decide the case.
- One other important factor a respondent should consider is the speed of the proceeding. CCB cases are streamlined and will take much less time to resolve than federal court case. Where the outcome of litigation plays a significant role in a company’s business operations—for example, where resolving an infringement dispute is necessary before a product launch—a party may prefer the streamlined process afforded by the CCB so the business deal is not delayed.
A few other factors a respondent should also consider include:
- The fact that discovery in federal court case can be very costly, time-consuming, and intrusive. On the other hand, discovery in a CCB case is extremely limited and none of those concerns exist.
- The fact that CCB hearings are all virtual, and so parties will never be inconvenienced by having to travel or appear in person.
- The fact that a respondent may have insurance policy that applies and if so, the insurance company may require the respondent to participate in the CCB proceeding as opposed to taking the risk being sued in federal court and being liable for more money.
How much time does a respondent have to decide whether to opt out? Can the CCB grant an extension?
When a respondent is served, they receive what’s called an “initial notice,” a copy of the claim, and the opt-out form. After a respondent is successfully notified about the CCB claims against them, they have 60 days to decide whether to participate in or to opt out of the proceeding. This is called the “opt-out period.” The CCB may, in exceptional circumstances, extend the opt-out period if it believes it would be fair and in the interests of the parties to do so.
During the opt-out period, respondents will also receive a second notice reminding them that they were served with a claim. This second notice is sent by the CCB, not the claimant, and has no bearing on the 60 day opt-out period. It is the service of the initial notice sent by the claimant that starts the 60-day opt-out period.
What should the respondent do during the opt out period. Are there resources available to a respondent who wants to find out more information about the CCB?
A respondent should take the time to understand the CCB and the claims being brought against them. The first step in doing this is to review the three materials the respondent received when they were served process. Those materials are:
- the initial notice,
- the approved claim (along with any supplemental documents submitted with the claim), and
- an opt-out notification form.
To learn more about these three documents, see our video on Notifying a Respondent.
If the respondent wants more information about the CCB they can review comprehensive handbook available on ccb.gov that details each step of the CCB process, including a chapter on opting out. Additional information and resources can be found on the Copyright Alliance’s CCB Explained webpage, which is under the Education tab on copyrightalliance.org.
If a respondent opts out of the CCB, what happens to the claimant’s claim against the respondent?
If the respondent opts out, the case before the CCB ends. But opting out does not necessarily make the dispute disappear—the claimant may still bring the same claims in federal court—which could expose a respondent to much higher damages.
If a respondent decides to opt out, how do they do that?
Respondents can opt out online through a form available on eCCB—the CCB’s electronic filing and case management system. Respondents can also use a paper form, but the CCB strongly recommends that respondents use the eCCB to expedite the process. One benefit of opting out using the online form is that it guarantees a respondent immediate email confirmation.
The CCB handbook provides simple instructions for opting out online. On the eCCB homepage, there are buttons displayed under the “Welcome to eCCB” header. If respondents click on the “Opt out of proceedings” button, the “Opt out of proceedings” form page will appear. Respondents can also reach the form from the homepage by selecting “Opt out of proceedings” from a set of buttons near the bottom.
The opt-out form will ask respondents for some standard information, such as their email address and mailing address. For security, there is some specialized information required that is unique to a CCB proceeding, including the docket number, opt-out keycode, and respondent’s name. Respondents must also check a box stating that the respondent opting out will not appear in the proceeding and certifying that they are authorized to submit the opt-out form.
Respondents can opt out themselves, or they can authorize a lawyer or another representative to submit it for them. For example, if the respondent is a business, the opt-out form can be submitted by a lawyer, an owner, partner, officer, a member of the business, or an employee who is directed to file the form. A law student supervised by a law school clinic or a pro bono legal services organization can also be an authorized representative.
What should a respondent do if they want to participate in the case (i.e., not opt out)?
If a respondent wants to participate in the CCB proceeding, no further action is needed during the opt-out period. The proceeding will become “active” and move forward after the 60-day period expires. After the 60-day period the respondent will be notified by the CCB that the case is now active and will provide instructions for next steps.
What happens if a respondent does not opt out?
If a respondent does not opt out during the 60-day opt out period, the case will automatically become active and move forward. The CCB will issue a scheduling order and the respondent will file a response (and any counterclaims they might have).