[Federal Register Volume 76, Number 208 (Thursday, October 27, 2011)]
[Notices]
[Pages 66758-66761]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-27824]
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LIBRARY OF CONGRESS
Copyright Office
[Docket No. 2011-10]
Remedies for Small Copyright Claims
AGENCY: Copyright Office, Library of Congress.
ACTION: Notice of inquiry.
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SUMMARY: The U.S. Copyright Office is undertaking a study at the
request of Congress to assess whether and, if so, how the current legal
system hinders or prevents copyright owners from pursuing copyright
infringement claims that have a relatively small economic value
(``small copyright claims''); and recommend potential changes in
administrative, regulatory, and statutory authority to improve the
adjudication of these small copyright claims. The Office
[[Page 66759]]
thus seeks comment on how copyright owners have handled small copyright
claims and the obstacles they have encountered, as well as potential
alternatives to the current legal system that could better accommodate
such claims. This is a general inquiry and the Office will publish
additional notices on this topic.
DATES: Comments are due January 16, 2012.
ADDRESSES: All comments and reply comments shall be submitted
electronically. A comment page containing a comment form is posted on
the Office Web site at http://www.copyright.gov/docs/smallclaims. The
Web site interface requires submitters to complete a form specifying
name and organization, as applicable, and to upload comments as an
attachment via a browser button. To meet accessibility standards,
submitters must upload comments in a single file not to exceed six
megabytes (MB) in one of the following formats: the Adobe Portable
Document File (PDF) format that contains searchable, accessible text
(not an image); Microsoft Word; WordPerfect; Rich Text Format (RTF); or
ASCII text file format (not a scanned document). The form and face of
the comments must include both the name of the submitter and
organization. The Office will post all comments publicly on the
Office's Web site exactly as they are received, along with names and
organizations. If electronic submission of comments is not feasible,
please contact the Office at 202-707-8380 for special instructions.
FOR FURTHER INFORMATION CONTACT: Catherine Rowland, Counsel, Office of
Policy and International Affairs, by telephone at 202-707-8350 or by
electronic mail at [email protected].
SUPPLEMENTARY INFORMATION:
I. Background
The Copyright Act (the ``Act''), 17 U.S.C. 101 et seq., protects a
wide variety of works of authorship, ranging from individual articles
or photographs that may not have a high commercial value to motion
pictures worth hundreds of millions of dollars in the marketplace.
Copyright owners of all of these works may seek remedies under the
federal Copyright Act in the event of infringement. Not all of these
copyright owners, however, have the same resources to bring a federal
lawsuit, which can require substantial time, money, and effort. To the
extent an infringement results in a relatively small amount of economic
damage, the copyright owner may be dissuaded from filing a lawsuit
because the potential award may not justify the expense of litigation.
Even where statutory damages and attorney fees are possible, they are
not available until the conclusion of the litigation. Moreover, awards
of statutory damages may be as low as $750 (or, in cases of innocent
infringement, $200), and may not always make the copyright owner whole.
In light of these challenges, the House of Representatives'
Subcommittee on Courts, the Internet, and Intellectual Property held a
hearing in March 2006 to learn more about the problems faced by small
copyright claimants (the ``Small Claims Hearing'').\1\ The hearing
focused on possible alternative dispute resolution systems such as a
copyright ``small claims court'' or other mechanism. The testimony also
addressed some of the problems that small copyright claim owners have
with the current system, as well as concerns about defendants' rights
in an alternative system. The Copyright Office submitted a statement to
the Subcommittee regarding the small copyright claims issue, noting
these difficulties, proposing to review potential alternatives, and
welcoming the possibility of further study.\2\ The Copyright Office
also identified some of these ``small claims'' challenges in its 2006
Report on Orphan Works,\3\ and proposed legislation in 2006 and 2008
addressing orphan works included provisions that specifically directed
the Copyright Office to conduct a study addressing remedies for small
claims, but the legislation ultimately did not become law.\4\
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\1\ Remedies for Small Copyright Claims, Before the Subcomm. on
Courts, the Internet, and Intellectual Property of the H. Comm. on
the Judiciary, 109th Cong. (2006), available at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=109_house_hearings&docid=f:26767.pdf.
\2\ Remedies for Small Copyright Claims, Before the Subcomm. on
Courts, the Internet, and Intellectual Property of the H. Comm. on
the Judiciary, 109th Cong. (2006) (statement of the United States
Copyright Office), available at http://www.copyright.gov/docs/regstat032906.html.
\3\ United States Copyright Office, Report on Orphan Works 1
(2006), available at http://www.copyright.gov/orphan/orphan-report-full.pdf.
\4\ Proposed bills include the Shawn Bentley Orphan Works Act of
2008, S. 2913, 110th Cong. (2008), which was passed by the Senate;
the Orphan Works Act of 2008, H.R. 5889, 110th Cong. (2008); and the
Orphan Works Act of 2006, H.R. 5439, 109th Cong. (2006).
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The Chairman of the House Judiciary Committee has recently asked
the U.S. Copyright Office to study the obstacles facing small copyright
claims disputes, as well as possible alternatives. In a letter dated
October 11, 2011, Chairman Lamar Smith requested that the Office
``undertake a study to assess: (1) The extent to which authors and
other copyright owners are effectively prevented from seeking relief
from infringements due to constraints in the current system; and (2)
furnish specific recommendations, as appropriate, for changes in
administrative, regulatory and statutory authority that will improve
the adjudication of small copyright claims and thereby enable all
copyright owners to more fully realize the promise of exclusive rights
enshrined in our Constitution.''
The Office therefore seeks comments on how parties--both copyright
owners and those alleged to have infringed--view the current system,
what their experiences with the current system have been, and what
types of alternatives would be helpful and viable.
A. Challenges of the Current Legal System
Currently, copyright owners interested in bringing a lawsuit to
enforce their copyrights must do so in federal district courts, which
have exclusive jurisdiction over copyright claims. 28 U.S.C. 1338. This
is true regardless of the monetary value of the copyright claim.
Vesting exclusive jurisdiction in federal courts is generally
beneficial because copyright law is federal law, and federal courts
have become familiar with copyright analysis and thus should bring a
level of consistency to copyright cases. Additionally, the Act aids
some copyright claimants by permitting awards of reasonable attorney's
fees and statutory damages to the prevailing party, but a plaintiff may
recover statutory damages and attorney's fees only if the work was
timely registered. 17 U.S.C. 412, 504, 505.
Despite the benefits of the current system, there are some
drawbacks to requiring copyright owners and defendants to engage in
potentially extensive federal litigation for all copyright disputes.
One of the major impediments to federal lawsuits is the cost of
litigation. Although copyright owners could proceed pro se in federal
court, they often need the assistance of a lawyer to understand and
handle federal procedures and substantive law. This is especially true
because, unlike in the state court system, there is no streamlined
``small claims'' process for claims with a lower monetary value. If a
copyright owner hires a lawyer, the expenses can add up quickly.
Contingency fee arrangements are relatively rare in copyright lawsuits;
thus most copyright owners will have to pay an hourly fee for
representation. Lawyers charge hundreds of dollars per hour, which
could reach a total of tens
[[Page 66760]]
or hundreds of thousands of dollars when a case does not immediately
settle and instead requires discovery, motion practice, and trial. In
fact, one recent survey found that, as of 2011, the median cost for
litigating a copyright infringement lawsuit with less than $1 million
at risk was $350,000. Am. Intellectual Prop. Law Ass'n (``AIPLA''),
Report of the Economic Survey 2011 35 (2011). Even if a copyright owner
proceeds pro se, litigation itself includes court costs and fees, which
can add up to a not insignificant sum. Many individual copyright owners
simply do not have the resources to fund expensive litigation.
Moreover, even though the Act allows some awards of attorney's fees,
other costs, and statutory damages, these awards are not guaranteed--
and may not be available at all depending on the timeliness of
copyright registration--and are only awarded at the end of litigation,
likely after a copyright owner has made significant out of pocket
payment to cover legal fees and court costs. Additionally, an award of
attorney's fees--assuming that it is collectible--will not necessarily
reimburse the copyright owner for all fees expended in prosecuting a
claim.
In federal litigation, the period of time between the filing of a
case and the final determination can be lengthy. The Federal Rules of
Civil Procedure allow parties to engage in extensive discovery and
motion practice, which often take far more than a year to complete. In
fact, the median time for all cases that went to trial--not just
copyright suits--was twenty-three months in 2009-2010.\5\ This lengthy
time frame requires litigants to expend energy and effort throughout a
relatively long period of time. This investment of time, not to mention
the associated expenses, may not be feasible for individual authors,
who may not be able to dedicate sufficient time to handle all of the
litigation burdens.
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\5\ Federal Judicial Caseload Statistics, March 31, 2010, Office
of Judges Programs, Statistics Division, Administrative Office of
the United States Courts, Table C-5, available at http://www.uscourts.gov/Viewer.aspx?doc=/uscourts/Statistics/FederalJudicialCaseloadStatistics/2010/tables/C05Mar10.pdf. The time
frame differs significantly between districts--from 11.1 months in
the U.S. District Court for the Eastern District of Virginia to 41.2
months in the U.S. District Court for the District of Columbia.
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B. Potential Alternatives for Small Copyright Claims
The Office is interested in learning about alternatives to the
current legal system that might help alleviate some of the burdens
associated with pursuing small copyright claims. Some alternatives were
identified at the Small Claims Hearing, including: (1) Using the
current Copyright Royalty Board (a panel of administrative law judges
established under Chapter 8 of Title 17 that sets rates and terms for
statutory licenses and decides how to distribute certain statutory
license royalties); (2) creating a federal ``small claims court'' or
otherwise streamlining federal procedures; (3) developing a staff of
dedicated administrative law judges to specialize in small copyright
claims; (4) amending the Act to allow state courts (including small
claims courts) to hear small copyright claims; and (5) allowing trade
associations or other group representatives to bring a single, large
filing on behalf of a sizeable group of small copyright owners. While
these alternatives deserve balanced discussion, there may be other
potentially suitable options that were not discussed at the Small
Claims Hearing.
There are, of course, a variety of issues that require further
consideration. These include:
Degree of Difficulty Litigating Small Copyright Claims in the
Current System: Before analyzing various alternatives to the current
system, it is important to further explore the obstacles that the
district court process presents in small copyright claim cases. This
would help focus future analysis and any potential alternative legal
processes.
State Court Involvement: State courts do not have expertise in
copyright jurisprudence. As noted above, Section 1338 of Title 28 of
the U.S. Code vests federal courts with exclusive jurisdiction over
copyright claims. Moreover, Section 301 of the Act explicitly preempts
state claims ``that are equivalent to any of the exclusive rights
within the general scope of copyright as specified by section 106 in
works of authorship that are fixed in a tangible medium of expression
and come within the subject matter of copyright as specified by
sections 102 and 103.'' Thus, state courts are not experienced in the
nuances of copyright law and may not have sufficient resources to
devote to a claim's intricacies, especially when limited in a small
claims court context. Nevertheless, state courts commonly handle small
disputes, and thus they likely have the structure to handle the
logistics of such claims. State court involvement, however, is only one
possible avenue to explore and there are also several federal options
that should be considered in the discussion.
Location of Federal Court/Tribunal: Creating a federal ``small
claims court'' or administrative judge panel would create logistical
rather than jurisdictional challenges, including where the court(s) and
panel(s) would be located. If there are several courts or panels
located throughout the country, it may provide more convenience to the
parties, but it may also reduce consistency and add to administrative
costs. Alternatively, if there is only one court or panel, the guiding
rules could allow for liberal use of telephone conferences and
videoconferences, and the procedures could focus more on a paper
practice with fewer (if any) hearings. The court or tribunal could also
limit the types and amount of discovery in the interest of expediency.
Affiliation With the Copyright Office or Copyright Royalty Board:
The Copyright Office administers the Copyright Act, is a substantive
expert on provisions of copyright law, and has statutory
responsibilities in both litigation and administrative law. It may thus
be appropriate for the Office to be associated with a new process.
Similarly, the Copyright Royalty Board is already proficient in
handling administrative procedures under the Act, and it may have the
capability of expanding its scope to handle additional claims.
Determination of ``Small'' Copyright Claims: Although many
copyright owners are concerned about the cost of litigating ``small''
copyright claims in federal court, the definition of ``small'' is
unclear. Any changes in legal process must take a balanced approach to
determine which claims are deemed ``small'' enough to fit into the new
system.
Voluntary or Mandatory: A major question is whether a new small
copyright claim process would be voluntary or mandatory. Copyright
owners may want the option of choosing which type of court hears a
claim, and defendants might similarly wish to remove a claim filed in a
new court or panel to federal district court. Additionally, the
question arises about how to appeal an adverse decision--and to what
court or other body.
Fair Use: The affirmative defense of fair use defense is extremely
fact-specific and typically requires courts to examine decades of
judicial precedent. The ability to present and have heard a fair use
defense is therefore a concern.
Defendants' Appearance: It has been suggested that defendants
should not be required to appear at a small copyright claim proceeding
until the copyright owner provides a prima facie case of infringement.
This ostensibly would prevent a copyright owner from dragging a
defendant into a legal proceeding without cause. It is unclear
[[Page 66761]]
whether this would be necessary, or whether an alternative small
copyright claims proceeding might instead rely upon a rule akin to
Federal Rule of Civil Procedure 11, which requires plaintiffs to
certify the veracity of the claim.
Available Remedies: Because a small copyright claim process likely
would be limited to reduce costs and time, it is unclear what types of
remedies should be offered. The Act itself offers a number of
infringement remedies, including injunctions, monetary relief
(including statutory damages), impounding of infringing copies and of
the articles by means of which infringing copies may be reproduced,
costs and attorney's fees. Consideration should be given to whether an
alternative small claims process could or should provide this whole
panoply of remedies, and whether the new system would also allow
preliminary relief to prevent impending or continuing infringement,
similar to a temporary restraining order or preliminary injunction
under Federal Rule of Civil Procedure 65.
These are but a few of the factors to analyze before deciding
whether to move forward with a new small copyright claim system, and,
if so, what that new process might be.
II. Subjects of Inquiry
The Office seeks comment on how copyright owners and defendants use
the current legal system for small copyright claims, including
information on the obstacles and benefits of using federal district
courts. Additionally, the Office requests comment on potential
alternatives for handling copyright claims that have a relatively small
economic value. The Office is interested in comment on the logistics of
potential alternatives, as well as the benefits and risks presented by
different types of processes.
III. Conclusion
The Office hereby seeks comment from the public on factual and
policy matters related to the treatment of small copyright claims. If
there are any additional pertinent issues not discussed above, the
Office encourages interested parties to raise those matters in their
comments. In addition, the Office is considering having one or more
roundtables or formal hearings on the matters raised above in the
coming months. It is also likely that, following receipt of the
comments in response to this Notice, the Office will publish a further
Notice of Inquiry posing specific questions and possibly exploring
additional alternatives.
Dated: October 24, 2011.
Maria A. Pallante,
Register of Copyrights.
[FR Doc. 2011-27824 Filed 10-26-11; 8:45 am]
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