Why is Senator Wyden the Only Obstacle Standing Between America’s Creators and Justice?
America’s creators are frustrated. They’ve reached their boiling points. For years, they’ve pushed for a copyright small claims process that would grant them access to justice in a system that, today, is simply unaffordable and inaccessible. When we think of issues involving access to justice, in many cases copyright and intellectual property more broadly do not immediately come to mind. But there is a long and sordid history of creators and entertainers, particularly those from marginalized communities and challenging socioeconomic backgrounds, being taken advantage of and treated unjustly, with no way to seek justice. This is a context that cannot be dissociated from conversations about the importance of a copyright small claims process.
The Copyright Alternative in Small-Claims Enforcement Act (CASE Act) is a bill aimed at chipping away at this disparity for creators. It would create an affordable alternative to federal court that would allow creators to seek redress when their rights as copyright owners are infringed. There is only one person standing in the way of this important legislation becoming law: Senator Ron Wyden of Oregon. Creators who’ve reached out to Senator Wyden—who presents himself as an ally in defending marginalized communities against injustice—in support of the CASE Act have been disheartened to find out that his allegiance stops short of defending middle and working class creators for whom justice is, apparently, outside of their tax bracket.
Thousands of creators have reached out to Senator Wyden asking him to withdraw his hold on the CASE Act, and in return, they’ve received a form response riddled with incorrect, misleading, and frankly absurd statements about the bill:
Senator Wyden Says: “$30,000 is enough to bankrupt many Americans and their families, and it is a far greater amount than Americans can recover in most state small-claims court”
Why Senator Wyden is Wrong: As the lone holdout standing in the way of the CASE Act becoming law, Senator Wyden defends his position by expressing concern that hypothetical damages assessed against a hypothetical infringer could be enough to bankrupt them. Such a response is completely tone deaf in light of the reality that these creators—the very real creators that are reaching out to him directly—have absolutely no remedy under the law because the cost of federal court is enough to bankrupt them, and the losses due to infringement are driving creators out of business every day. Rather than supporting his constituents, Senator Wyden aligns himself with hypothetical infringers and hides behind hypothetical scenarios that have zero basis in reality. There is no support for the notion that maximum damages would be assessed well in excess of the harm suffered by creators.
In addition, it is misleading to compare the damages caps under the CASE Act to state small claims courts. Copyright law is exclusively under federal jurisdiction. Copyright claims are the subject of an extensive federal statute and cannot be litigated in state courts. The federal statute permits statutory damages of up to $150,000 per claim, with no limit of the amount of total damages that can be awarded in a case. By comparison, under the CASE Act, the highest amount of statutory damages that could be obtained for one copyright infringement claim is $15,000 (not $30,000)—10% of the maximum that can be obtained in federal court. Likewise, under the CASE Act there is a cap of $30,000 total per case, compared to federal court where there is no limit.
But even $15,000 is too much in Senator Wyden’s view. In fact, he’s proposed limiting statutory damages to $750 (no that is not a typo, I did not forget to include any 0s). For context, $750 represents a 95% reduction from bill’s current cap of $15,000 and a whopping 99.5% reduction compared to the $150,000 limit in federal court. An award of $750 (which remember, would be the maximum award allowed according to Wyden) would barely cover the fees and costs associated with bringing the case in the first place. And what’s more—Oregon’s small claims court permits damage awards of up to $10,000! It’s no wonder that the creative community in Oregon and throughout the country does not believe Senator Wyden is negotiating in good faith. That proposal is a slap in the face.
Senator Wyden Says: Damages could be assessed against a kid who posts memes on social media
Why Senator Wyden is Wrong: Nothing in the CASE Act expands (or limits) the scope of rights under copyright law. The bill only addresses remedies. Therefore, no one will be held liable under the CASE Act unless they have infringed a copyrighted work under existing law. If the use is a fair use (as is likely the case with many of the uses of memes) or de minimis, the poster or re-tweeter will not be liable. For other uses, if someone is indeed infringing, it is only fair that they should pay a compensation.
In these instances, it’s important to note that the small claims tribunal would not be untethered to reality. Under the CASE Act, the tribunal will only award damages commensurate with the harm to the copyright ownerÑgenerally measured in terms of lost sales or licensing fees. In reality, a copyright owner would need endless resources to even consider chasing retweets or everyone who posted a photo and thus few, if any, cases of such low dollar value will ever be brought before the small claims tribunal.
Although Wyden’s claims have no basis, both Wyden and the bill’s sponsors have agreed on changes to the bill to specifically address claims brought against minors in the event it ever happens. So this supposed concern should no longer even be an issue for him. Yet for some reason, he continues to bring it up in these form responses.
Senator Wyden Says: The small claims process would stifle legitimate fair use of content
Why Senator Wyden is Wrong: As explained above, the CASE Act does not expand or limit the scope of rights under copyright law, and if a use is fair use under existing law the CASE Act does nothing to change that. What the CASE Act does do, however, is allow users of copyrighted works who believe they have a legitimate fair use claim to bring an action for declaration of noninfringementÑsomething that many of them presently cannot afford to do, as federal court is equally expensive for defendants. Likewise, whereas some defendants might presently choose to settle cases where they believe they have a legitimate fair use claim simply due to their inability to afford litigation, the CASE Act would allow them to have their day in court to make their case, or opt out entirely if they believe the claims against them are frivolous.
What Senator Wyden really wants is to make substantive changes to existing copyright law so that fair use is no longer an affirmative defense. Not only has he proposed that claims be evaluated preemptively for fair use, before proceedings even begin and without anyone having to plead facts to support it, but he has also proposed requiring plaintiffs (or “claimants” as they’re called in the bill) to have to disprove fair use when they file a claim of infringement with the small claims tribunal. That is not how copyright law works. Fair use is an affirmative defense that must be raised by the defendant. The reason for this is because weighing fair use is a highly fact specific inquiry, and the defendant must provide the relevant facts to support such a defense.
Senator Wyden Says: He is concerned that the tribunal is “virtually unappealable”
Why Senator Wyden is Wrong: Senator Wyden’s true intentions toward the CASE Act are particularly evident when he argues that decisions from the small claims process should be appealable to federal court. It doesn’t take a rocket scientist to see how this would gut the entire bill. The premise for the need for a small claims process is that these parties cannot afford federal court. Opening them up to the risk of having to bear the expense of federal court—and hiring an attorney to help them navigate federal court—through an appeals process would be a death knell to the small claims bill. Senator Wyden is too intelligent not to understand that. This is one important reason why the process is optional. Every defendant (or “respondent” as they’re called in the bill) would have the right to decide whether they prefer the risk of unlimited potential liability, greater expense, and the lengthy process of litigation in exchange for broader judicial review (i.e. federal court), or a streamlined and inexpensive process with limited potential liability and limited judicial review (i.e. the small claims process).
Another glaring problem here is that in small claims courts in Oregon—the state that Senator Wyden represents—judgments are final and not subject to appeal. In comparison, the CASE Act tracks the judicial review provisions of the Federal Arbitration Act (FAA) and permits a party to challenge a CCB decision on the basis of fraud, corruption, misrepresentation, or other misconduct. It also goes beyond the FAA by allowing those subject to a default judgment to seek review by the district court to have the judgment vacated upon a showing of excusable neglect.So although state small claims courts are quite different than the federal copyright small claims court created by the CASE Act, it is worth noting that as far as due process is concerned, the CASE Act provides a right to appeal that exceeds that of Senator Wyden’s own state.
Senator Wyden Says: The CASE Act would “lead to abuse of the system by bad actors who harass and threaten innocent internet users to win settlements”
Why Senator Wyden is Wrong: Unlike in federal court, a defendant who believes they are the target of a frivolous copyright claim can simply opt out of the process. They are not being forced or coerced to participate. The process is completely optional. This means that trolls who try to abuse the CASE Act would actually lose money. When the defendant opts out, the plaintiff loses the non-refundable filing fee. This gives the defendant leverage, not the plaintiff, because if the plaintiff is a troll, they stand to lose money every time a defendant opts out.
Additionally, under the CASE Act, if a party is found to have brought claim(s) in bad faith, the Copyright Claims Board has the authority to not only dismiss the claim but also to: (i) award attorneys’ fees to the defendant of up to $5,000, or more in extraordinary circumstances; (ii) ban the plaintiff from filing a case for one year; and (iii) dismiss ALL pending cases filed by the plaintiff. These are substantial penalties, only the first of which is available when a case in filed in federal court.
The CASE Act also allows the Copyright Office to issue regulations limiting the number of cases any one person or entity can file in a year. Therefore, even if a troll could somehow abuse the system, the Copyright Office has the ability to limit or prevent that abuse. There is no such ability to restrict the number of cases that can be filed in federal court.
Senator Wyden has told creators on numerous occasions that he is “closer than ever” to reaching a deal with the bill’s sponsors and lifting his hold. But in reality, he seems to be giving creators the runaround, telling them what they want to hear just to placate them, while having no real desire to see the CASE Act pass. In reality, we are no closer to a resolution than we were months ago when the discussions first began. That is most evident by the latest proposal from Senator Wyden that would reduce the damage cap from $15,000 to $750. The bill’s sponsors have proposed a number of creative ideas to reach a compromise with Senator Wyden, and despite their good faith efforts, Senator Wyden comes back with a proposal that is nothing short of a poison pill.
The arguments that the Senator has put forth are quite simply red herrings, meant to detract from the real issue: Senator Wyden does not want creators to have meaningful access to justice. He wants to take a bill that creates a process that is voluntary and already more than fair, a bill that passed overwhelming in the House by a vote of 410-6, and disembowel it. That is his idea of “reaching a compromise.” He is perfectly fine with the status quo in which creators and entertainers without the financial means to afford a lawyer and to afford federal court continue to be taken advantage of and treated unjustly.