At the end of February—about eight months after the Copyright Claims Board (CCB) opened its doors—the Board issued its very first final determination based on the merits, in the case of Oppenheimer v. Prutton. Though CCB decisions do not have precedential value (meaning that a case decided by the CCB cannot be relied on as legal authority in other CCB cases or legal proceedings), there are some interesting lessons and takeaways from the final determination that CCB parties can keep in mind when considering whether or how to file a CCB claim or defense.
The case involved a photographer-claimant, David Oppenheimer, who alleged that the respondent, Douglas Prutton, incorporated Oppenheimer’s photograph of a government building on Prutton’s website which advertised his law firm. The parties initially tried negotiating, with Oppenheimer sending a demand letter for $30,000 and Prutton countering with a $500 counteroffer. The parties did not reach an agreement and Oppenheimer subsequently filed a lawsuit in federal court.
Some Considerations When Using the CCB as an Alternative to Federal Court Lawsuits
This case is unique in that it was first filed in federal district court for the Northern District of California. But the parties agreed to have the case referred from federal district court to the CCB using a little-known provision in the Copyright Alternative in Small Claims Enforcement (CASE) Act that allows district courts to transfer copyright cases to the CCB. Based on the determination in this case, there are several lessons about using this referral mechanism that claimants and respondents who may be thinking about having a federal case referred to the CCB can learn from and consider.
- Some Claims May Have to Be Dismissed for the CCB to Hear the Case: In order to have the CCB hear the case, the claimant had to agree to dismiss one of the claims originally brought in the federal court case. The claimant brought two claims in the federal lawsuit: (1) copyright infringement and (2) violations under the Digital Millennium Copyright Act (DMCA) for removal of Copyright Management Information. But the CCB can only hear three kinds of claims—and removal of Copyright Management Information under the DMCA is not one of them. If the claimant didn’t agree to dismiss that claim, the CCB would not have been able to hear the case because it would have been ineligible for the CCB’s review. It’s something CCB parties should consider if they have a claim or counterclaim that is crucial to them but is one that the CCB would not be able to hear.
- The Parties Fast Tracked Their Case Because They Completed Discovery:A significant consideration here was that the parties had already gone through a fair bit of discovery when the matter was going through the federal court process—at least enough where parties agreed that in the CCB proceeding no additional discovery was needed. Because no additional discovery was necessary, the proceeding advanced directly to the written testimony stage, which was completed by the CCB at the end of January. In terms of the impact of skipping the discovery process on the case’s timeline, the CCB was able to issue its final determination one month after the written testimony stage. For parties who have already gone through that lengthy federal process, this means that they can find a quicker resolution to their dispute and have the CCB decide the case, since parties are likely satisfied with the extensive amount of discovery done at the federal level—enough to skip over the discovery process in the CCB. By way of comparison, a federal case could take many months to years to reach a final determination even after discovery is complete because there are additional timelines and motions parties can file before a court issues a final decision. Moreover, judges in federal court cases are often generalists who may not be well-versed in copyright matters and therefore may need additional time to understand and examine the copyright issues in a particular case. In contrast, CCB Officers are well-versed in copyright law and thus are more equipped to come to a final determination more quickly.
Parties Should Thoroughly Address All Elements of a Claim or Defense in Their Arguments
Another takeaway from the determination in this case is the importance for the CCB parties to fully address all aspects of the legal arguments made in a claim or defense. In this case, the respondent admitted to the copying and displaying the claimant’s photograph but argued that such use was allowed under the fair use exception.
The Board rejected respondent’s fair use argument, explaining that it was “fatal” that the respondent failed to address the first three of the four fair use factors. As a reminder, the party arguing that the use qualifies for the exception needs to address all four factors because the Board needs to balance all the factors in its fair use analysis. Even though the respondent failed to provide evidence or arguments relating to the first three fair use factors, the Board did its best to consider the available evidence to evaluate all three factors. After considering the available evidence, the Board concluded that all the evidence pointed to the use not being a fair use (which may have been why the respondent decided not to address the factors in the first place).
More specifically, the Board found that, under the first fair use factor, respondent’s use of the photograph on his website to promote his law firm was commercial and not transformative because the photograph was used to merely illustrate what the photograph depicted (a government building). In considering the second and third fair use factors, the Board found that the photograph was a creative work and that the entire photograph was used on the respondent’s website. With regard to the fourth fair use factor—which was the only factor respondent actually addressed—the Board found that respondent’s use harmed the potential licensing market for the photograph. As a result, the Board found that all four far use factors weighed against a finding of fair use.
CCB parties need to keep in mind, that even if a case is a “slam dunk” (or not) in their own minds, they should still fully address their arguments and defenses before the Board—especially when it comes to very case and fact-specific inquiries like fair use arguments. In this case, maybe the outcome would have been the same had respondent addressed the first three fair use factors. But maybe there was other evidence that the CCB Officers were never able to consider because the respondent failed to provide such evidence. We’ll never know because the respondent did not address each of the fair use factors.
Bringing Many Copyright Claims Doesn’t Make a Claimant a Copyright Troll
The respondent’s other defense was that the claimant had “unclean hands”, i.e., that the claimant acted so unfairly or fraudulently related to the matter in controversy. The Board also rejected this defense, noting that the respondent provided very little evidence on a defense that courts traditionally “rarely recognized.” The only argument the respondent made to support this defense was that the claimant brought a lot of copyright infringement lawsuits in the past. The Board rejected this argument, stating:
“To find that an infringement lawsuit brought by a copyright owner amounts to unclean hands simply due to the volume of other lawsuits by the same owner would take away the rights of copyright owners to sue for actual infringements like the one that clearly occurred here.”
As the Board rightly points out, the Copyright Act allows copyright owners to enforce their copyright whenever their works are infringed. The fact that a copyright owner may be infringed frequently and therefore is forced to bring numerous actions to enforce their exclusive rights under the Copyright Act does not in any way negate or dilute those rights. Moreover, as we’ll see in a moment, the Board’s analysis on damages shows why the possibility of unscrupulous or predatory behavior by a copyright owner is even less of a concern for cases filed with the CCB.
Proof of Actual Damages is Helpful Even When Statutory Damages Are Requested
The Board’s analysis of damages in the case demonstrates that the Board will consider all evidence and arguments on the record to determine an appropriate damage award. The claimant requested the maximum amount of statutory damages (mistakenly at $30,000, which the Board could not grant here because the CCB maximum for statutory damages is $15,000 per infringed work, and there was only one work at issue in the case), which would have been $15,000 here, while the respondent argued the “innocent infringer” defense, asking the Board to only award $200.
The Board first established that the typical minimum statutory damage award is $750. From there, the Board considered whether that minimum should be decreased to $200 under the respondent’s “innocent infringer” defense. It did not decrease the statutory damages because it found that respondent did not provide evidence as to why he or his website developer was unaware and had no reason to believe that taking the photograph and putting it on the website would be copyright infringement. Though the Board noted that the claimant had put a copyright notice on the photograph, which might have defeated the “innocent infringer” defense, it put that fact aside because the respondent had simply not met its burden of proving the “innocent infringer” defense.
Also, after noting that it cannot consider “willfulness” of the respondent to increase the statutory damages amount above the CCB maximum of $15,000 per infringed work (which is timely registered), the Board then applied Ninth Circuit law and noted that proof of actual damages can still have some relationship to how much a court awards in statutory damages. Some factors considered by the Board included:
- The expenses saved and the profits reaped;
- The revenues lost by the copyright owner;
- The value of the copyright;
- Deterrent effect on others beside the infringer;
- Whether the infringer has cooperated in providing records to determine the value of the infringing material produced;
- The potential for discouraging the infringer.
Using applicable factors, the Board looked at the “slim record” of evidence to justify why it eventually awarded statutory damages of $1,000—closer to the typical minimum for statutory damages of $750 per infringed work:
- Respondent offered no evidence as to why he or his website developer was unaware and had no reason to believe that taking the photograph and putting it on the website would be copyright infringement;
- The respondent’s use of the photograph was for the commercial purposes of promoting his law firm;
- The infringing activity lasted for about a year;
- Claimant did not provide any evidence of damages or that the respondent reaped gains from the infringing activity;
- The photograph was a valuable aerial photograph;
- The photograph wasn’t used as a prominent image on the website, but the size of the photograph on the website wasn’t insignificant either.
So, while statutory damages are generally prescribed by the Copyright Act, CCB parties can keep in mind that some proof of actual damages may still help in making a case to the Board that it ought to award statutory damages on either the lower or higher end of the range.
The Board’s application of the relationship of actual damages and statutory damages demonstrates that statutory damages will not be completely untethered, where copyright owners are awarded the maximum amount in every case—addressing a concern that CCB naysayers had when the CASE Act was being considered.
The CASE Act squarely makes so-called “trolling” behavior a non-issue through several features in the CCB, primarily the respondent’s ability to opt out (you can read more in this blog post about why the fear of “trolling” in the CCB is unfounded). And the Board’s award and careful damages analysis further proves that the CASE Act adequately addresses the (non) issue and demonstrates the paucity of this overplayed point coming from the tired anti-copyright playbooks. The combination of features established by the CASE Act— the respondent’s ability to opt-out, damages cap— combined with the Board’s expert and balanced award analyses and faithful execution of the statute—significantly diminish the potential for systematic abuse the CCB.
At least in this first final determination, the CCB Officers showed a careful and thoughtful analysis which resulted in a fairly decided case and outcome. The respondent may have lost the case on the merits but will not have to pay more than what a reasonable licensing fee may have cost if he had properly licensed the photograph from the outset. The claimant won the case, but did not reap an exorbitant windfall, and instead was awarded enough to cover some or all costs associated with bringing the CCB case in addition to a presumably reasonable licensing fee for the photograph. For creators who dealt with mountains of infringing uses in the past with little to no tools for recourse, recovering a lost licensing fee is a huge win at the end of the day.
If anything, this final determination shows that this new small copyright claims court isn’t a wild west that those who opposed the CASE Act claimed it would be. Instead, in this first case the Board sent a clear message that the CCB is a forum where both claimants and respondents get a chance to have their day in court— and a fair and balanced day in court, at that.
It will also be interesting in the coming months to see what other takeaways CCB parties can glean from future final determinations. It only took the Board about a month to make this decision from the written testimony stage, and so CCB parties ought to take full advantage of this streamlined proceeding and the expertise of the tribunal by learning how to present an effective case for themselves as possible. This means gaining an understanding and learning about rights, remedies, and defenses under the Copyright Act and about the CCB process. The Copyright Alliance provides lots of educational resources where creators can do just that, through our Educational Resource Page and our CCB Explained page and videos.
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