[Federal Register Volume 78, Number 38 (Tuesday, February 26, 2013)]
[Pages 13094-13097]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-04466]



United States Copyright Office

[Docket No. 2011-10]

Remedies for Small Copyright Claims: Third Request for Comments

AGENCY: U.S. Copyright Office, Library of Congress.

ACTION: Notice of inquiry.


SUMMARY: The United States Copyright Office is requesting public 
comment for the third time on the topic of adjudicating small copyright 
claims. The Office is studying whether and, if so, how the current 
legal system hinders or prevents copyright owners from pursuing 
copyright claims that have a relatively small economic value and will 
discuss, with appropriate recommendations, potential changes in 
administrative, regulatory, and statutory authority. At this time, the 
Office seeks additional comments on possible alternatives to the 
current system to improve the adjudication of such claims.

DATES: Comments are due April 12, 2013.

ADDRESSES: All comments are to 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 commenting parties 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, commenting 
parties 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 the comments publicly on the 
Office's Web site exactly as they

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are received, along with names and organizations. If electronic 
submission of comments is not feasible, please contact the Office at 
202-707-8350 for special instructions.

FOR FURTHER INFORMATION CONTACT: Jacqueline Charlesworth, Senior 
Counsel, Office of the Register, by email at jcharlesworth@loc.gov or 
by telephone at 202-707-8350; or Catherine Rowland, Senior Counsel, 
Office of Policy and International Affairs, by email at 
crowland@loc.gov or by telephone at 202-707-8350.


I. Background

    At the request of Congress, the Copyright Office is conducting a 
study 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'' or ``small claims''), and to recommend 
potential changes in administrative, regulatory, and statutory 
authority to improve the adjudication of such claims. To aid with this 
study, the Office has published two prior Notices of Inquiry seeking 
public comment, and the Office also has held public hearings on small 
copyright claims issues. The Office's first general Notice of Inquiry, 
published in the fall of 2011, generated numerous comments regarding 
the current environment in which small copyright claims are (or are 
not) pursued, and possible alternatives to address concerns about the 
current system. See the original Notice of Inquiry, 76 FR 66758 (Oct. 
27, 2011), and comments received in response thereto, which are posted 
on the Copyright Office Web site, at http://www.copyright.gov/docs/smallclaims/comments/. The Copyright Office published a second Notice 
of Inquiry in the summer of 2012 that announced public hearings and set 
forth a list of specific topics relating to the small copyright claims 
process, which resulted in additional public comments. See the second 
Notice of Inquiry, 77 FR 51068 (Aug. 23, 2012), and comments received 
in response thereto, posted on the Copyright Office Web site, at http://www.copyright.gov/docs/smallclaims/comments/noi_10112012/index.html. 
Finally, in November 2012, the Office held two two-day public hearings 
on small copyright claims in New York City and Los Angeles, during 
which participants provided their views on the adjudication of small 
copyright claims.
    At this time, the Copyright Office seeks additional comments 
regarding how a small copyright claims system might be structured and 
function, including from parties who have not previously addressed 
these issues, or those who wish to amplify or clarify their earlier 
comments, or respond to the comments of others. The Office is 
interested in additional comments about the potential benefits and 
risks of creating a new procedure for adjudicating small copyright 
claims, as well as how such a system might be implemented--for example, 
as a new adjudicative body, as part of the existing federal court 
system, by extending the jurisdiction of state courts, or as some form 
of arbitration or mediation system. Based on its review of previously 
submitted comments and statements at the public hearings, the Office in 
particular seeks further commentary on the specific subjects set forth 
below, as the Office believes they warrant further analysis.
    While commenting parties may address any matter pertinent to the 
adjudication of small copyright claims, they should be aware that the 
Office has studied and will take into consideration the comments 
already received, so there is no need to restate previously submitted 
material. A party choosing to respond to this Notice of Inquiry need 
not address every topic below, but the Office requests that responding 
parties clearly identify and separately address those subjects for 
which a response is submitted.

II. Subjects of Inquiry

    1. Voluntary versus mandatory participation. Stakeholders voiced 
opinions in their comments and at the Office's two public hearings 
regarding the benefits and risks of voluntary versus mandatory small 
copyright claim resolution systems. Specifically, members of the public 
expressed conflicting views concerning the efficacy of incentives for 
participation in a voluntary system and the constitutional implications 
of a mandatory system. The Office is interested in learning more about 
the feasibility and constraints of voluntary and mandatory systems, and 
how these alternatives might be implemented. Among other questions, the 
Office is interested in whether a voluntary system could be implemented 
on an ``opt out'' basis--that is, whether a properly served defendant 
might be deemed to consent to participate in the voluntary process 
unless he or she affirmatively opts out within a certain time frame. 
Some stakeholders suggested that such a framework might be helpful to 
address the problem of alleged infringers who fail to respond to 
notices of infringement and thus might also be unlikely to respond to 
notice of a lawsuit.
    2. Eligible works. The previous round of comments and public 
hearings explored the issue of what types of works should be covered by 
a small copyright claims process; that is, whether the procedure should 
cover only certain types of copyrighted works, such as photographs, 
illustrations, and textual works, or should cover all types of works. 
For example, certain music organizations proposed that musical works 
and sound recordings be excluded from the process (at least for the 
time being) as, in their view, music publishers, performing rights 
societies, and record companies already adequately address small 
copyright claims on behalf of the songwriters and recording artists 
they represent. At the same time, others pointed out that some 
songwriters and recording artists--for example, those who are self-
represented--may not have access to such resources and, even if they 
are represented through a larger organization, may not be successful in 
convincing that organization to take legal action. The Office invites 
further comment on whether musical works, sound recordings, or any 
other type of copyrighted work should be excluded from the small claims 
process and, if so, how it might impact individual and small copyright 
owners of that type of work.
    3. Permissible claims. Some of the comments and public hearing 
participants analyzed what types of claims should be eligible for the 
small copyright claims process. These comments and discussions raised 
questions regarding how to define what claims might or might not be 
amenable to the small copyright claims procedure. While it seems clear 
that a copyright small claims tribunal would address infringement 
matters, some infringement claims are intertwined with other issues, 
such as contractual or ownership disputes, thus suggesting a need for 
any such tribunal to address these additional types of claims and 
defenses as well. Some commenters indicated that plaintiffs should be 
limited to asserting infringement claims, with contractual or ownership 
issues to be adjudicated only when raised as defenses. Others suggested 
that certain types of issues, such as ownership disputes, should be 
excluded from the small claims process altogether. The Office is 
interested in further thoughts on the types of claims that should be 
included in a small copyright claims process and how the system might 
address situations where an allegedly

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infringing act implicates an additional cause of action or defense, 
such as breach of contract, an ownership issue, a trademark violation, 
or some other claim.
    4. Injunctive relief. In the comments and during the public 
hearings, some stakeholders argued strongly that any small claims 
system should include the possibility of injunctive relief to end 
infringing behavior, including in situations where the infringing 
conduct exploits the work in a manner that the copyright owner would 
not license, or violates an exclusive arrangement between the copyright 
owner and a third party. However, others noted that injunctive relief 
could be a complicated undertaking in a small claims context, partly if 
the unauthorized use is but one part of a larger work such as a film, 
book, or sound recording. It was suggested that in such a case, a 
plaintiff's monetary damages might be small but the economic 
consequences of an injunction may be considerably larger, perhaps 
exceeding in value any damages cap adopted for the small claims 
process. Stakeholders expressed differing views as to whether 
injunctive relief should be available through a small claims system 
and, if so, how the nature or scope of such relief might be tailored to 
the small claims context. Particular concerns raised in the comments 
and at the hearings included: whether preliminary injunctive relief is 
compatible with a small claims process; the procedural safeguards that 
would adequately protect parties against whom injunctive relief was 
sought; whether injunctive relief awarded through the small claims 
process should be reviewable by an Article III court; and whether 
Article III review would be a practical alternative for parties of 
limited means. A related consideration is how the question of 
injunctive relief might be affected by whether the small claims process 
is voluntary or mandatory. The Office welcomes additional thoughts on 
these issues.
    5. Secondary liability. Although much of the public commentary and 
discussion of small copyright claims has focused on direct 
infringement, it has also touched upon issues of secondary liability, 
including the relationship of a small claims procedure to the notice 
and takedown requirements of Section 512 of the Copyright Act, 17 
U.S.C. 512. The Office is interested in further views concerning the 
intersection of a small claims process with Section 512 and, more 
generally, any recommended approaches to claims of contributory and 
vicarious infringement within the small claims context.
    6. Role of attorneys. Written comments and discussion at the two 
hearings revealed a range of opinions as to the role of attorneys in a 
small copyright claims system. Some believe attorneys should be 
excluded from the proceedings as the ability to retain counsel would 
tend to favor defendants with greater resources over small copyright 
owner plaintiffs who are compelled to proceed pro se. Other commenters 
believe that access to legal representation would be important to both 
sides--especially in cases with a degree of legal complexity--and the 
system should be designed to encourage attorneys to take lower-value 
cases by offering fee awards. It was further suggested that such fee 
awards might be capped to reflect the streamlined procedures and lower 
recoveries of a small claims process. The Office welcomes further 
consideration of these issues.
    7. Guiding law. If the small claims tribunal was to be centrally 
located (or even if it were in multiple locations), what decisional law 
should it follow? In addition to the United States Supreme Court, 
should it look primarily to copyright decisions of any particular 
circuit--for example, based upon its location, the location of the 
infringing conduct, or the location of the parties? Should its own 
decisions have any precedential effect, at least with respect to future 
decisions of the small claims tribunal? In this regard, some expressed 
the concern that if small claims decisions had effect beyond the 
immediate dispute, defendants might be inclined to opt out of a 
voluntary system. The Office invites further thoughts on the decisional 
law that should guide the small claims tribunal.
    8. Willful and innocent infringement. At the hearings, it was 
suggested by some that a small claims process should not include a 
potential finding of willfulness, in part because it could be more 
difficult to establish the appropriate evidentiary record to support 
such a finding under a streamlined procedure. In addition, a damages 
cap for small copyright claims appreciably below the existing $150,000 
maximum in statutory damages for willful infringement--for example, a 
ceiling of $30,000, as has been suggested by some--would limit the 
economic significance of a willfulness finding. See 17 U.S.C. 
504(c)(2). If the willfulness element were to be eliminated in the 
small claims context, a question also arises as to whether the 
``innocent infringer'' distinction--which permits a court to reduce 
statutory damages to as low as $200 for a defendant who was not aware 
and had no reason to believe his or her actions were infringing--should 
remain. See id. Should the small claims procedure eliminate 
distinctions as to the nature of the infringement, along with their 
potential impact on damages awards?
    9. Service of process. At the hearings, participants shared views 
on how potential small claims defendants might be notified of the 
action. A particular concern is that copyright owners of limited means 
may have difficulty effectuating traditional service on distant or 
elusive defendants. It was suggested that Federal Rule of Civil 
Procedure 4, including the provision that permits a defendant to be 
notified of an action by mail or other means via a waiver of formal 
service of process, could be appropriate for the small claims system. 
See Fed. R. Civ. P. 4. It was also suggested that a Web site might 
properly be served by sending electronic notice to an agent designated 
to receive notifications of infringement pursuant to Section 512 of the 
Copyright Act. See 17 U.S.C. 512(c)(2). In addition, it was observed 
that the small claims tribunal might handle service of defendants, as 
is sometimes the case in other contexts (including in some state 
courts). The Office seeks further comments on potential procedures to 
notify defendants that an action has been filed.
    10. Offers of judgment. Some commenters have suggested that a 
process such as that contemplated by Federal Rule of Civil Procedure 
68--which allows a defendant to make an offer of judgment and recover 
certain costs if the plaintiff rejects the offer and fails to obtain a 
more favorable outcome--could play a useful role in the small claims 
setting. See Fed. R. Civ. P. 68. Others feel that once a plaintiff has 
filed an action, pretrial settlement procedures would merely delay the 
process in most cases. The Office is interested in additional comments 
as to whether and how a mechanism akin to Rule 68 might be useful in 
the small claims context.
    11. Default judgments. Current federal district court procedures 
allow a plaintiff to seek default judgments if a lawfully served 
defendant fails to appear. The Office is interested in whether such a 
procedure should be available in a small copyright claim proceeding. If 
plaintiffs are able to seek default judgments, what are the procedural 
safeguards that should apply, what type of remedies should be 
available, and what type of showing should be required to justify 
    12. Enforceability of judgments. A primary concern of commenters 
and participants at the small claims hearings is that a small claims 

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particular one rendered through a voluntary system--should be 
enforceable. In addition to monetary damages, such a judgment might 
include some form of injunctive relief. Participants offered a range of 
suggestions on the matter of enforcement. Some indicated that the 
Federal Arbitration Act, 9 U.S.C. 1 et seq., might to some degree serve 
as a model for obtaining an enforceable federal court judgment 
following adjudication by the small claims tribunal. Participants also 
commented on the practical aspects of collecting on judgments. Noting 
that the challenges of enforcing a judgment, once obtained, are not 
unique to the copyright context, some suggested that successful small 
claims plaintiffs could avail themselves of existing federal and state 
court procedures. The Office welcomes further discussion of existing or 
potential mechanisms that successful plaintiffs might employ to enforce 
small claims judgments without incurring prohibitive costs.
    13. Unknown defendants. Some hearing participants observed that in 
many instances--especially in the case of internet-based infringement--
the infringer's identity may not be known and/or the infringer may be 
difficult to locate. Web sites may lack usable contact data and/or may 
be registered anonymously. Should the small claims procedure permit 
parties to pursue claims against ``John Doe'' defendants, including, 
when appropriate, the means to subpoena an internet service provider to 
learn the identity and location of such a defendant? The Office invites 
comments on how such a process might work, with reference to existing 
practices in other courts as appropriate.
    14. Multiple tracks or proceedings. During the hearings, some 
participants discussed the possibility of having more than one type of 
small copyright claims proceeding--a highly simplified process for 
straightforward claims with perhaps only a few hundred or few thousand 
dollars at stake, and a more robust process for matters of greater 
complexity or economic consequence that are still too small to be 
practically pursued in federal district court. Stakeholders considered 
whether, even within the small claims context, there should be a 
greater amount of discovery and procedure in certain types of cases, 
for example, when an injunction is sought. The Office seeks further 
comment on whether a tiered system would be desirable, or whether a 
single, unified approach to small claims is the better alternative, 
perhaps with the possibility of developing additional ``tracks'' over 
time if warranted.
    15. Constitutional issues. The Office continues to be interested in 
learning more about the constitutional impact of any small copyright 
claims procedure. Thus, the Office requests additional comments on 
whether a small copyright claims system might implicate any one or more 
of the following constitutional concerns--or any other constitutional 
issue--and, if so, how the particular concern might be addressed:
    a. Separation of powers questions arising from the creation of 
specialized tribunals outside of the Article III framework, including 
how a right of review by an Article III court might impact the 
    b. The Seventh Amendment right to have a copyright infringement 
case tried by a jury, as confirmed in Feltner v. Columbia Pictures 
Television, Inc., 523 U.S. 340 (1998);
    c. Constitutional requirements for a court's assertion of personal 
jurisdiction, in particular when adjudicating claims of a defendant 
located in another state; and/or
    d. Due process considerations arising from abbreviated procedures 
that impose limitations on briefing, discovery, testimony, evidence, 
appellate review, etc.
    16. International issues. At the public hearings, some participants 
sought to ensure that the small claims procedure would be available to 
foreign plaintiffs seeking redress for infringing activity in the 
United States, as well as to U.S. plaintiffs seeking to take action 
against foreign defendants, as is permitted under the existing federal 
system. The operation of a small copyright claims system could have 
implications for the United States' rights and responsibilities under 
the Berne Convention, the Agreement on Trade-Related Aspects of 
Intellectual Property Rights (TRIPS), and other instruments. The Office 
welcomes additional comments on the international implications of a 
small claims system, including how the voluntary or mandatory nature of 
such a system might affect the analysis.
    17. Empirical data. Previous comments provided helpful empirical 
data relevant to the adjudication of small copyright claims, including 
surveys by the American Bar Association Section on Intellectual 
Property Law and the Graphic Artists Guild. The Office welcomes 
additional surveys and empirical studies bearing upon:
    a. Whether copyright owners are or are not pursuing small 
infringement claims through the existing federal court process, and the 
factors that influence copyright owners' decisions in that regard, 
including the value of claims pursued or forgone;
    b. The overall cost to a plaintiff and/or a defendant to litigate a 
copyright infringement action to conclusion in federal court, including 
costs and attorneys' fees, discovery expenditures, expert witness fees 
and other expenses (with reference to the stage of proceedings at which 
the matter was concluded);
    c. The frequency with which courts award costs and/or attorneys' 
fees to prevailing parties pursuant to 17 U.S.C. 505, and the amount of 
such awards in relation to the underlying claim or recovery; and/or
    d. The frequency with which litigants decline to accept an outcome 
in state small copyright claims court and seek de novo review (with or 
without a jury trial) or file an appeal in a different court.

Parties considering the submission of additional survey or empirical 
data may wish to review the studies mentioned above, which are 
available at http://www.copyright.gov/docs/smallclaims/.
    18. Other issues. Please comment on any other issues the Copyright 
Office should consider in conducting its small copyright claims study.

    Dated: February 20, 2013.
Maria A. Pallante,
Register of Copyrights.
[FR Doc. 2013-04466 Filed 2-25-13; 8:45 am]