Why Is Congress Moving Forward With Its Plan To Encourage Copyright Trolling?

Copyright

from the shameful dept

You would be hard pressed to think what the world needs is more copyright lawsuits. As we’ve discussed for years now, the US is already inundated with copyright lawsuits, many (perhaps most) of them filed by so-called “copyright trolls” who are seeking to shakedown recipients with “settlement” demands. A competent Congress would respond by looking at this abuse of the court system for extortionate purposes and maybe make it less inclined to abuse.

But not this Congress.

Instead, it has decided to bring back a truly awful idea: a special copyright trolling court, which it likes to say is the equivalent of a “small claims court” for copyright. The latest version of the CASE (Copyright Alternative in Small-Claims Act of 2019) in the House and the Senate was introduced recently, and is getting lots of love from all the usual sources.

We should note, that the House bill is sponsored by Rep. Hakeem Jeffries, along with Jerry Nadler. You may recall that those two Congressman were recently seen hosting a giant $5k per ticket fundraiser at the Recording Industry’s biggest party of the year, the Grammys. And, right afterwards, they suddenly introduce a bill that will help enable more copyright trolling? Welcome to the world of soft corruption.

As we explained last year when this monstrosity was introduced as well, the bill is written in a manner totally disconnected from reality. Supporters insist it is “too difficult” to sue over copyright, yet provide no evidence that this is true. But, more importantly, the entire framing of the bill is based on the idea that those who sue for copyright infringement only do so when they have valid claims. Indeed, anyone paying even the slightest bit of attention to copyright lawsuits over the last decade would know this is laughable.

The entire bill is disconnected from reality and would only serve to make copyright trolling become an even bigger problem, and would enable an even more significant level of the copyright shakedown game, in which dubious claims of infringement are tossed around in hopes of extracting settlement fees. At a time when we should be looking to stop such extortionate acts, these bills move in the other direction. It’s a joke.

Filed Under: case act, copyright, copyright trolling, hakeem jeffries, jerry nadler, small claims

The Demise Of Copyright Toleration

Copyright

from the permissionland dept

In the Supreme Court oral argument (p. 12) of MGM Studios, Inc. v. Grokster, Ltd, Don Verrilli, attorney for the Recording Industry Association and other content owners, raised eyebrows:

“The record companies, my clients, have said, for some time now … that it’s perfectly lawful to take a CD that you’ve purchased, upload it onto your computer, put it onto your iPod.”

Counsel for these content owners seemed to be acknowledging, before our highest court, that if you copy a prerecorded song into a more convenient format strictly for your own use it is a fair use under Section 107 of the Copyright Act. But less than a year later they explained away the statement that the Court transcript had “attributed” to their attorney. In a filing with the Copyright Office in the 2006 round of use exemptions under the Digital Millennium Copyright Act, counsel for a group of content owners, including the RIAA, said (n.46, emphasis added):

“Nor does the fact that permission to make a copy in particular circumstances is often or even routinely granted, necessarily establish that the copying is a fair use when the copyright owner withholds that authorization. In this regard, the statement attributed to counsel for copyright owners in the MGM v. Grokster case is simply a statement about authorization, not about fair use.”

Although denying fair use, these content owners were acknowledging a larger truth about copyright, the Internet, and even the law in general: It works largely due to toleration. Not every case is clear; not every outcome can be enforced; and not every potential legal outcome can be endured. Instead, “grey area” conduct must be impliedly licensed, or at least tolerated.

Counsel then or now could not have cited a single court holding on whether the private, noncommercial recording of a song is a lawful fair use. Long before the Supreme Court in Sony Corp. of America v. Universal City Studios, Inc. said that video home recording from broadcasts as a fair use, the music industry could have pursued consumers for home audio recording from vinyl records. But the risk of losing and establishing a bad precedent was too great.

Toleration endured because fair use, and the practicalities of enforcement, had to be endured by content owners. They recognized that their own creative members also relied on fair use in adapting and building on the works of contemporaries as well as earlier generations. They also realized that offending consumers by suing them might not be a good idea – a reason (in addition to the possibility of losing) why the Sony plaintiffs dropped the individual consumer defendants they had originally named.

But one of the virtues of fair use is that it often points to directions that authorized users had failed to notice. And once “the street” has shown the way, the content owners cite the new genre as a form of “derivative work” – and seek to monetize it. The Supreme Court, in the course of protecting a parody of Pretty Woman in Campbell v. Acuff-Rose Music, Inc., left the door to this grey area wide open:

“The market for potential derivative uses includes only those that creators of original works would in general develop or license others to develop.”

Those with a stake in precedents still approach this door with caution. But the emergence of Internet search and tagging, social media, and troll lawyers has meant that the climate of toleration may be ending, as the door to grey areas is being forced closed.

• First came the patent trolls – plaintiffs who essentially buy the right to sue, with little to lose from any adverse precedent. They find, sue, and harass entrepreneurs, retailers and consumers, as leverage for settlements.

• Then came the copyright trolls – rights aggregators and their lawyers who find web and social media postings and links that were posted under assumptions of fair use, rights holder marketing encouragement, or toleration. Consumer defendants are accustomed to seeing such posts by rights holders themselves; they assume that any complaint about their own use must be spam.

• Classic copyright “troll” clients have been pornographers. But rights aggregators and their attorneys have now branched out to, and beyond, making deals with individual photographers and cartoonists who seek to further monetize their work. At least one has signed up major music publishers as clients and moved from harassing school and college marching bands and choirs to threatening symphony orchestras. They threaten to sue over commissioned or in-house arrangements as derivative works, in need of an additional license beyond blanket performance rights – a grey area long respected and tolerated by the music industry. (A strict interpretation of such a “right” would mean the end of academic and group member jazz arranging of copyrighted works.)

Now to apply the coup de grace to implied license and toleration comes the CASE Act – “Copyright Alternative in Small-Claims Enforcement Act of 2017 – H.R. 3945, before the House Judiciary Committee. It disregards grey areas and would destroy the toleration that has made copyright viable in the face of swiftly changing times and technologies. It would set up “commissioners” within the Copyright Office to rule on “small claims” cases without precedent or appeal on the merits to any court. Yet “statutory damages,” pursued at the discretion of the plaintiff, could still reach $30,000.

Techdirt recently reviewed here what a bad idea this bill is. It is also probably unconstitutional. But a larger issue is what such a law would say about copyright, and about grey areas and tolerance. It denies the existence and necessity of each. This may be the biggest reason why this bill should never become law.

Guest contributor Robert S. Schwartz practices law at Constantine Cannon LLP. The views expressed are his own.

Filed Under: case act, copyright, copyright toleration, fair use, permission, small claims

Congress And The CASE Of The Proposed Bill That Helps Copyright Trolls

Copyright

from the start-of-stopping-trolls dept

One of the recurrent themes on Techdirt is that law itself should not become a tool for unlawful abuse. No matter how well-intentioned, if a law provides bad actors with the ability and opportunity to easily chill others’ speech or otherwise lawful activity, then it is not a good law.

The CASE Act is an example of a bad law. On the surface it may seem like a good one: one of the reasons people are able to abuse the legal system to shut down those they want to silence is because getting sucked into a lawsuit, even one you might win, can be so ruinously expensive. The CASE Act is intended to provide a more economical way to resolve certain types of copyright infringement disputes, particularly those involving lower monetary value.

But one of the reasons litigation is expensive is because there are number of checks built into it to make sure that before anyone can be forced to pay damages, or be stopped from saying or doing what they were saying or doing, that the party making this demand is actually entitled to. A big problem with the CASE Act is that in exchange for the cost-savings it may offer, it gives up many of those critical checks.

In recognition of the harm removal of these checks would invite, EFF has authored a letter to the House Judiciary Committee raising the alarm on how the CASE Act would only aggravate, rather than remediate, the significant troll problem.

Per the letter, federal courts have been increasingly “reining in [trolling behavior] by demanding specific and reliable evidence of infringement?more than boilerplate allegations?before issuing subpoenas for the identity of an alleged infringer. Some federal courts have also undertaken reviews of copyright troll plaintiffs? communications with their targets with an eye to preventing coercion and intimidation. These reforms have reduced the financial incentive for the abusive business model of copyright trolling.”

But under the CASE Act, these provisions would not apply. Instead

[L]egally unsophisticated defendants?the kind most often targeted by copyright trolls?are likely to find themselves bound by the judgments of a non-judicial body in faraway Washington, D.C., with few if any avenues for appeal. The statutory damages of up to $30,000 proposed in the CASE Act, while less than the $150,000 maximum in federal court, are still a daunting amount for many people in the U.S., more than high enough to coerce Internet users into paying settlements of $2,000?$8,000. Under the Act, a plaintiff engaged in copyright trolling would not need to show any evidence of actual harm in order to recover statutory damages. And unlike in the federal courts, statutory damages could be awarded under the CASE Act even for copyrights that are not registered with the Copyright Office before the alleged infringement began. This means that copyright trolls will be able to threaten home Internet users with life-altering damages?and profit from those threats?based on works with no commercial or artistic value.

And that’s not all:

Another troubling provision of the CASE Act would permit the Copyright Office to dispense with even the minimal procedural protections established in the bill for claims of $5,000 or less. These ?smaller claims??which are still at or above the largest allowed in small claims court in 21 states?could be decided by a single ?Claims Officer? in a summary procedure on the slimmest of evidence, yet still produce judgments enforceable in federal court with no meaningful right of appeal.

Also:

[T] he federal courts are extremely cautious when granting default judgments, and regularly set them aside to avoid injustice to unsophisticated defendants. Nothing in the CASE Act requires the Copyright Office to show the same concern for the rights of defendants. At minimum, a requirement that small claims procedures cannot commence unless defendants affirmatively opt in to those procedures would give the Copyright Office an incentive to ensure that defendants? procedural and substantive rights are upheld. A truly fair process will be attractive to both copyright holders and those accused of infringement.

The CASE Act appears to reflect an idealized view that the only people who sue other people for copyright infringement are those who have valid claims. But that is not the world we live in. Trolls abound, parasites eager to use the threat of litigation as a club to extract money from innocent victims. And the CASE Act, if passed, would give them a bigger weapon.

It also gives would-be censors additional tools to chill their critics through the use of a new subpoena power administered through the Copyright Office, without sufficient due process built into the system to ensure that these subpoenas are not being used as a means of unjustly stripping speakers of their right to anonymous speech.

The CASE Act also gives the Copyright Office the authority to issue subpoenas for information about Internet subscribers. The safeguards for Internet users? privacy established in the federal courts will not apply. In fact, the bill doesn?t even require that a copyright holder state a plausible claim of copyright infringement before requesting a subpoena?a basic requirement in federal court.

EFF was joined on this letter by many other lawyers (including me) and experts who have worked to defend innocent people from unjust threats of litigation, in the hope that it can help pressure Congress not to give the green light to more of it.

Filed Under: case act, congress, copyright, copyright office, copyright trolls, due process, small claims

Bill Introduced To Create Copyright Small Claims Court… Which Copyright Trolls Are Going To Love

Copyright

from the flooding-the-system dept

For a while now, some in the copyright community have been pushing for a copyright “small claims court” as an alternative to filing a federal lawsuit over copyright law. It’s true that, especially for small copyright holders, the cost of filing a lawsuit may appear to be rather prohibitive. But it’s not clear that a small claims court is the answer. A few years ago, we wrote about some potential concerns with such an approach, but have also admitted that if set up right, it could have some advantages. But that requires it be set up right.

Unfortunately, a new bill has been introduced, by Rep. Hakeem Jeffries, along with Rep. Tom Marino, to officially set up such a system — and it’s done in a way that looks like it will not be well-designed, and instead will lead to a massive rush of small claims, especially by copyright trolls. The bill is called the Copyright Alternative in Small-Claims Enforcement Act of 2016, or CASE Act, and… it’s got problems.

The “good” news, if you can call it that, is that claims that would go before this appointed tribunal, made up of copyright lawyers recommended by the Register of Copyrights and appointed by the Librarian of Congress, would have much lower statutory damages availability than the federal courts. A copyright claim in a federal court has statutory damages up to $150k, for willful infringement. In the small claims system, the maximum statutory damages would be $15k. But, really, that’s just half of today’s official statutory damages — because if there’s no willful infringement, the Copyright Act puts a cap at $30k. In the small claims world, there’s no option to claim willful infringement.

Another potentially good feature is that this small claims setup would be able to hear two kinds of claims: the standard ones involving claims of someone violating one of the established rights under copyright law… but then also to hear cases about abusive DMCA notifications, under Section 512(f) of the DMCA. Of course, as we’ve noted in the past, the federal courts have effectively written 512(f) out of the law and refuse to punish those who file bogus DMCA notices. It’s not at all clear how things would change here. The bill explicitly notes that the remedies for a 512(f) bogus DMCA notice claim would be limited “to those available under this chapter.” But it’s unclear if that really means that you could get $15k for a bogus DMCA filing. And that’s because the section on statutory damages is clearly written only with people suing for copyright infringement in mind, and not people suing over bogus DMCA takedowns.

For example, it notes that in order to qualify for the $15k maximum statutory damages, it only applies to “works timely registered.” But… how does that make sense for 512(f) claims? In those cases, the question of whether or not the defendant timely registered a copyright makes no sense at all. If someone sends a bogus DMCA takedown over a copyright that doesn’t exist or that they don’t hold, why should its registration status matter? It’s almost as if Rep. Jeffries (or the lobbyists who wrote this bill) only tossed in the part about 512(f) claims to appease people concerned about abusive DMCA takedowns, and then completely forgot about it after they included that.

But the really big problem in my mind is that this seems likely to just be swamped by copyright trolls. We already see that they’re flooding the federal court system, where multiple rulings against joinder (i.e., the ridiculous bundling of thousands of possible file sharers together) has meant that when trolls do sue, they’re generally limited in how many people they can sue. Making the process cheaper, but still offering statutory damages amounts that can be quite scary to the average American, and that can still get the job done of scaring threatened users into paying up fines that are much smaller than the $15,000.

And, yes, this small claims system will allow for discovery, which is the key feature that trolls want. They want to sue, and then get discovery where they can send demands to ISPs for names of subscribers based on IP addresses, and there doesn’t appear to be anything in the bill to stop that. It does note that parties seeking discovery need to show “good cause” to enable discovery, but that may be a fairly low bar. It also notes that responding to discovery requests to non-parties in the dispute will be “voluntary” so perhaps ISPs will resist, but that’s not certain. And thus, this three-panel board may find itself on the receiving end of a ton of ridiculous claims from trolls who have no intention of following through with the case. One would hope, with the federal court system’s copyright docket currently overrun with trolling cases, that whoever drafted this law would have thought through a better plan to stop that from happening here.

Another potential issue: the bill would let individuals go after not just actual infringers, but also service providers if they fail to follow through on a DMCA takedown notice. Basically, it exports the DMCA safe harbors to this small claims process as well, but that may mean that internet platforms are going to get dragged through this process that was meant to focus on small claims that could be easily adjudicated.

There’s also this oddity. After laying out the specific responsibilities of the three individuals who will handle all of these small claims cases, the bill notes:

When not engaged in performing their duties as prescribed in this chapter, to perform such other duties as may be assigned by the Register of Copyrights.

What, exactly, is that going to entail?

Who knows how this will actually play out. A few years back, the UK introduced its own small claims copyright system. But I have no idea how it’s doing. I haven’t seen any numbers or indication of how widely it’s used. Perhaps it works great and is a useful tool for dealing with small scale infringement issues. But I do worry about the way the bill is currently written and how it can be abused, especially by trolls who just want to pressure people into settling, and where the threat of a $15k award might be plenty.

Filed Under: copyright, copyright office, copyright trolls, discovery, hakeem jeffries, small claims, tom marino

Former Head Of Australian Music Industry's Anti-Piracy Efforts Calls For An Infringement Small Claims Court

Copyright

from the ask-yourself-who-benefits-most...-and-who's-pushing-for-it dept

An interesting but mostly bad idea has reared its head again: a small claims court for copyright infringement. This time, it’s an anti-piracy investigator (and former policeman) pushing the idea, springboarding off the ridiculous 33-month sentence meted out to Phillip Danks. (h/t to Techdirt reader jtomic)

Michael Speck, an independent Australian anti-piracy investigator and former policeman, said the sentence was fair but added the case showed that Australia needed a separate, specialised court that would make it less costly to prosecute those who downloaded or distributed copyright infringing material.

“It’s high time that a specialist small claims tribunal be established to deal with low-level criminal and civil [copyright] infringements [in Australia],” Mr Speck, who was once the head of ARIA’s music industry piracy investigations unit, said.

“The vast majority of victims of copyright infringement can’t afford to go before a court in this country. It’s incredibly expensive to prosecute a case and it’s very easy to stifle a civil or criminal prosecution,” he added.

It’s always suspect when someone who makes their money fighting infringement calls for a small claims court to handle infringement. (You know, rather than the artists themselves…) While some creators would welcome the idea and find the lower barrier to entry (so to speak) better than the current system, the real reason for Speck to be pushing this is the increased number of infringement cases that could be processed. Win-win for those in the anti-piracy business, but of little real use to anyone else.

For one thing, the notion of a small claims court undermines the argument that statutory damages are necessary to deter infringement. By definition, a small claims court wouldn’t (or shouldn’t) take on cases where these damages are being pursued. If faster, smaller cases can take a bite out infringement, then it’s clear statutory damages vastly overvalue the copyrighted creations.

Second, proving infringement isn’t nearly as simple as pursuing debt or making your neighbor pay for damage done to your vehicle when the tree he tried to cut down fell in your driveway. (Actually, the latter case is probably extremely complicated.) What it would encourage, however, is the filing of multiple suits in hopes of obtaining easy default judgements. There’s also the question of how small, independent rights holders are going to determine guilty parties, something even well-heeled studios and labels have trouble doing.

This idea is seductive because it appears to offer quick, cheap resolutions in copyright owners’ favor. But the reality will be far different. Because of what’s required to unmask infringers, this system will end up being just another tool for major players to sue minor infringers. The artists at the bottom — those who might see this as a panacea — will still face an uphill battle when attempting to target infringers.

Speck points out that it’s very easy to “stifle a civil or criminal prosecution.” What makes him think that this will be less likely in small claims court? The only reason he would see this as a solution is if he feels it will be easier to push dubious cases past judges in these courts. If so, then small claims court will become a copyright troll haven, something that does very little to deter infringement and contributes greatly to the public’s disenchantment with IP enforcement. If Speck is looking to see more grandmothers and 14-year-olds paying out for alleged infringement, small claims court is the way to go.

There are positives to this approach, but they hinge on the limitation (or removal) of statutory damages and built-in safeguards for the accused. Otherwise, this system will simply steamroll the unsuspecting along with the truly guilty.

Filed Under: anti-piracy, australia, copyright, michael speck, small claims

Teri Buhl Threatens To Sue Us And Others; Still Seems Confused About The Law

Legal Issues

from the some-free-advice dept

I had kind of thought that after we posted our response to Teri Buhl, who got upset about our original article about her whacko claims that her publicly posted tweets could not be quoted, that the story would hopefully fade away. However, this morning, Jim Romenesko, who allowed Buhl to “respond” to us via his blog, has published another story noting that the thanks he received from Buhl is that she is threatening to sue him. Lovely. Oh yeah, and in her communication with Romenesko, she apparently told him she’s planning to sue us at Techdirt, too (which, by the way, is the first we’ve heard of this):

Today, Buhl is threatening to sue me for using the photo from her Twitter page. She says she owns the image and never gave me or others permission to publish it. She adds that she’s going to file a small claims suit against Mark Bennett and Techdirt for keeping the photo on their sites after being told to take it down.

“I don’t want add you the same list [sic],” she writes. “I’m asking Poynter and Knight to do the same thing today before I file.”

My response to her: “Really, Teri?”

She replied:

yes really Jim – I am going to push it. It’s a matter a principle I am sick of other publications lifting other jurnos ideas, photos, words etc… and printing them on their publications with out permission or proper credit with links etcc. I think it’s an issue that should have been challenged a long time ago. I took the photo I own it etc…

Of course, in our last post on the subject, we suggested that Buhl acquaint herself with fair use rules. It would appear that she has chosen not to do that. We did not “lift” her “ideas, photos, words.” We reported on her actions and statements.

It also appears that she has not familiarized herself with the nature of copyright law, and the fact that small claims courts have no jurisdiction over copyright issues. Not that I should be doing the legal work the lawyer she claims to have contacted failed to do, but 28 USC 1338 notes:

The district courts shall have original jurisdiction of any civil action arising under any Act of Congress relating to patents, plant variety protection, copyrights and trademarks. No State court shall have jurisdiction over any claim for relief arising under any Act of Congress relating to patents, plant variety protection, or copyrights.

This is kind of basic stuff.

Amusingly, just a few weeks ago, we wrote about the Copyright Office exploring the idea of setting up a small claims court for copyright. But, as of right now, it does not exist.

And, even if we ignored that pesky bit of information, we’ve still got the fair use hurdle, which she can’t get past. She claims “I took the photo I own it etc.” Except, it’s not that simple. If she took the photo, she might hold the copyright on certain elements of the photo — but that is not the same as “owning” the entire photo and being able to block any and all uses of it. This is another thing any lawyer would hopefully explain to her. Our use of the photo, to show the key point of contention that led to the story (her claiming via her Twitter profile, incorrectly, that no one could quote her Twitter feed), was clearly for the purpose of reporting on her claims. Suing us, Bennett (a lawyer) or Romenesko would not likely go well for Buhl who seems very focused on bluster, with little legal basis to back it up. We could go through a very, very, very long list of case law and the actual text of copyright law that shows that what we did is absolutely reasonable and protected action, but I guess we’ll save it for this “lawsuit” should it ever actually be filed.

Oh, and one more thing. In the comments on the Romenesko post, she makes this rather incredible statement:

how about this – no one who wrote about this little debate has bothered to call an experienced copyright lawyer and get a comment. I did before I wrote Jim.

This is actually wrong on so many levels. The initial story, involving her original claims, included “experienced copyright lawyer” Marc Randazza noting that her claims were “moronic.” However, for her edification, this morning I reached out to three more “experienced copyright lawyers” who agreed that she doesn’t seem to understand the law, on a whole variety of levels, as we discussed in our response to her many attempts to contact us, and as explained above.

In the meantime, Mark Bennett, who wrote the original post that kicked this whole thing off, has been doing a nice job cataloging the ever-changing legal theories that Buhl keeps tossing out there — none of which have much basis in reality:

1. That republishing tweets designated “not for publication” can be the basis for a lawsuit.
2. That she hadn’t written the tweets I republished (“Mark did you fact check my twitter feed to make sure I tweeted what you published?”).
3. That I libeled her.
4. That retweeting “protected” tweets can be the basis for a lawsuit (“I think the question is if tweets are protected are they public”).
5. That republishing her tweets violates her copyright.
6. That republishing her background photo violates her copyright.

As he notes: “Changing theories is always a good indication that the person threatening a lawsuit has no good reason to sue: if you have a reason to file suit, you know it.”

So, once again, Ms. Buhl might want to think carefully before proceeding with any planned legal action against us or others. Contrary to her stated opinion, these are not unsettled matters, nor is the law in her favor. Similarly, she might want to recognize that, once proven wrong, digging in and making further claims is not a productive course of action. Sometimes it’s okay to admit that you were wrong, and to let it go.

Filed Under: copyright, fair use, jim romenesko, mark bennett, reporting, small claims, small claims court, teri buhl, threats

Proposed Copyright Small Claims Court May Have A Bigger Impact Than The DMCA

Copyright

from the watch-out-for-it dept

It’s not surprising that a year-old proceeding launched by the U.S. Copyright Office, toying with the idea of creating a copyright-focused small claims court, has gone largely unnoticed. Private meetings in Dubai about the future of the internet, and copyright proposals in Germany that could change the way search engines work have been vying for people’s attention around the same time.

However, about a week ago, a small number of rights holders organizations, attorneys, and artists were invited by the Copyright Office for panels at Columbia & UCLA’s law schools to debate the details of what a copyright small claims court should look like.

Here’s some context about why these details are so important: if some of the more short-sighted special interests monopolize how these proceedings go, it could lead to a situation worse than bogus DMCA takedowns. Right now, internet users have to worry about abuses of the DMCA that lead to content takedowns; imagine adding to that a situation where it’s even easier to have them bullied and brought into a real courtroom.

If this court is shaped without your input, we could be faced with a situation where it makes economic sense for media companies to sue many more average internet users over the photos they post on Facebook and Tumblr. The tens of thousands of Bittorrent filesharing lawsuits over the last two years might pale in comparison.

Even though it’s a ways off from completion, a small claims system for copyright would have a bigger impact on the day-to-day of copyright law than any “reform” to copyright since the DMCA in the late 1990’s, so we should pay attention.

Who wants a small claims copyright system, and why?

Some rightsholders say formal copyright lawsuits in the current system are too expensive. Evidence from the ABA IP law section shows that federal copyright trials are expensive (pdf), with cases where less than $1 million is at issue costing an average of over $200,000 in legal fees before trial, and nearly $350,000 once they’ve gone through to an appeal.

So the argument from some rightsholders is that it simply isn’t practical to bring legitimate smaller disputes. This argument says that while attorneys fees and costs are available if you’ve registered your work, many smaller disputes involve unregistered works and fees and costs are unavailable..

The ABA’s comments tried to give a sense of where the line is for attorneys to actually bring a federal lawsuit.

Approximately one-third of the respondents would turn away a copyright case where the likely recovery would be less than $60,000. But about two-thirds of the respondents would accept an uncomplicated case with a likely recovery of less than $60,000. Only about one-third of respondents would accept an uncomplicated case with a likely recovery of less than $30,000.

In short, some rightsholders want a new forum to bring suits against small-scale defendants.

What is the practical impact of a small claims copyright court?

The organization I direct, New Media Rights, provides one-to-one legal services to all kinds of folks who would end up being both defendants and plaintiffs in the new system. Why we’re participating so extensively is because we’re in a unique position: we’re (1) a user-oriented organization (for example, defending innocent internet-users who are wrongly implicated in filesharing cases). BUT we’re also an organization for (2) independent creators: the type of people who make their livelihood by sharing their creativity online.

We see a lot of the bullying and trolling that takes place in the informal copyright system, where overreaching DMCA takedown notices and cease and desist letters are common. As many people reading this may know, bogus copyright claims are regularly misused to takedown otherwise legal content.

So we have to balance the need of independent creative people to get “justice” for their works being wholly misappropriated by bad actors, while keeping life sane for average internet users. These are some of the details that I shared with the Copyright Office to balance those interests…

How to keep a new small claims system fair?

1. Defendants need to have access to all defenses normally available to them including the fair use and DMCA safe harbor defenses. At least one misplaced comment suggested getting rid of the DMCA safe harbor all together and raising statutory damages to $650,000 (from $150,000).

2. Any small claims system will need to address current misuse of copyright law. Threats of lawsuits and settlement demands from copyright trolls are a big problem. Currently, because this abuse takes place outside the formal court system, there are few consequences for the troll. Our suggestions highlight the need to keep trolls out while allowing legitimate cases to go forward.

3. Defendants have to have adequate legal representation. Plaintiffs will have had months to prepare a complaint and consult attorneys. A small-scale defendant will have limited time and resources to figure out how to defend themselves. Small defendants without adequate representation shouldn’t simply get steamrolled or coerced into settlements by overreaching copyright owners (example: The mass filesharing lawsuits of the last two years).

Self-help systems like FLASH in Northern California, and legal assistance projects like New Media Rights in San Diego, provide help for these types of people. BUT as the Executive Director of New Media Rights, I can tell you that we don’t have even 1% of the capacity to deal with and correct all of the misuses of copyright law that we see.

4. Defendants need to have access to fees and costs. Under section 505 of the Copyright Act, a court is permitted to award fees and costs to the prevailing party. Despite the Supreme Court’s finding in the early 1990’s in the Fogerty case that the standard is the same for plaintiffs and defendants, plaintiffs regularly get fees simply by registering while defendants have to show the plaintiff’s lawsuit was in bad faith and frivolous. The result is a disincentive for defendants to challenge copyright holders, and an incentive for innocent defendants to settle. This is because even if a defendant wins in federal court, they will still likely have to pick up the tab for attorneys fees.

Why this is important and what you can do

Even though the small copyright claims discussion is speculative, making it difficult to simply be for or against it, it definitely isn’t a discussion that should be ignored.

Internet users need to stay involved with the proceeding and make sure the new system is something more than a new venue for porn companies to coerce settlements out of internet subscribers. For now, the best thing we can do as internet users is raise awareness and be involved, so that by the time a full proposal is on the table at the Copyright Office, it includes safeguards that will make sure the new court provides a fair playing field.

Filed Under: copyright, dmca, small claims

UK Kicks Off Small Claims Court For 'Small Scale' Copyright Claims

Copyright

from the would-that-help? dept

It’s no secret that one of the significant problems with copyright law today are the ridiculous statutory damages, set by Congress, which have absolutely no reasonable connection to the “harm” being done. The idea that you could owe $150,000 for sharing a single song should be horrific to just about everyone (though, of course, the maximalists always have crazy ways to justify such insane and punitive damages). However, over in the UK, one thing they’re trying to tackle is changing the equation for “small scale” copyright disputes. Specifically, they’ve set up the equivalent of a small claims court for copyright issues, which makes the process much cheaper and faster.

“Small firms, whose intellectual property has been infringed, will have today a simpler and easier way to take their cases forward, by writing direct to the judge and setting out the issues,” Business Minister Michael Fallon said in a statement. “Lower legal costs will make it easier for entrepreneurs to protect their creative ideas where they had previously struggled to access justice in what could often be an expensive progress. A smarter and cheaper process is good for business and helping businesses make the most of their intellectual property is good for the economy.”

I question how effective this will be, but at least it is a different approach. If nothing else, it will be worthwhile for the sake of seeing how well (if at all) it works. I don’t see how this really solves any of the big problems with massive damages. All it really does is make it easier for there to be more copyright lawsuits, though with limited benefits for those who file. It seems like the kind of system that’s going to see a lot of attempted abuse. We already see so much abuse of the existing copyright system, so are we sure it’s a good idea to make it even easier for some to file lawsuits — even with the limited punishment?

Filed Under: copyright, damages, small claims, statutory damages, uk