Copyright Office Issues Final Rule for Initiating Proceedings Before the Copyright Claims Board

Last week, the U.S. Copyright Office issued its final rule for establishing the procedures to initiate proceedings before the new Copyright Claims Board (the “CCB”). Congress established the CCB as part of the Copyright Alternative in Small-Claims Enforcement Act of 2020 (the CASE Act) to provide a low-cost alternative for both pro se claimants or those represented by lawyers but who want a quick small claims procedure to enforce their copyrights and obtain damages for infringement of their copyrighted works. To qualify for resolution before the CCB, the copyright dispute must not exceed a total value of $30,000. Counterclaims, if a respondent files on, must also not exceed $30,000.

Two-Tiered Fee System

One of the most notable parts of the final rule is a two-tiered fee system for filing new claims. Initially, the proposed rule contemplated an initial filing fee of $100—the statutory floor that Congress set. However, after an overwhelming response by commentators, the Copyright Office amended the proposed rule to reduce the cost burden on claimants. To ensure the Copyright Office meets the requisite $100 minimum, the Copyright Office instructs an initial $40 filing fee with a second fee of $60 due when the proceeding becomes active. By creating this two-tiered system, the Copyright Office aims to balance the initial cost barrier for claimants with protecting respondents against abusive practices.

Clients may have concerns that the CCB could be an easy way for copyright claimants using contingency fee plaintiffs’ attorneys to file for damages against non-willful copyright infringement, such as photographs inadvertently posted on websites without intent to infringe.  If the CCB becomes the first step for such claimants instead of a request for removal, or if CCB claims become common practice after monetary negotiations do not immediately resolve a claim, the $40 filing fee and $60 activation fee may not be the deterrent that the Copyright Office believes it will be. 

Respondent Opt-Out 

In addition to setting fees, the Copyright Office also set rules regarding opting out of a CCB proceeding. The CASE Act provides that a respondent to a CCB proceeding does not have to keep a case before the CCB, but instead can opt-out and have the claim determined in federal court. Last week’s final rulemaking holds that once a respondent in the CCB has opted out, the respondent is  not permitted to rescind the request unless the claimant consents. Further, if a respondent opts out of a CCB proceeding, claimants cannot refile claims in the CCB that cover the same claims and acts. Finally, the final rule provides that claimants may not opt-out of a counterclaim because it is reasonable to expect or anticipate that the respondent may file a counterclaim, and the claimant has already selected the CCB as the forum to determine the claims at issue. The Copyright Office’s final rule against opting out of counterclaims provides an innate level of fairness to the proceeding, as it would be inequitable to permit a claimant to bring a claim while at the same time simply opting out of the counterclaim lawfully asserted against the claimant.

Claimant's Contact Information

The Copyright Office decided that providing additional information beyond a name and email address would facilitate communication between the claimant and the respondent and ultimately determined that claimants must provide a phone number, email, and mailing address unless the claimant is represented by counsel in which counsel’s email and phone number will be provided instead. The same contact requirements are also required of respondents when filing a response.

Pleading Requirements 

The pleading requirements are an essential element of any claim before the CCB. The requirements contemplated in the final rule aim to balance the claimant’s and respondent’s needs. The balance permits the respondent to assess the claim and determine whether the respondent will ultimately opt-out of proceedings before the CCB. As part of this balance, claimants are required to provide a “fair amount of detail,” including the registration number of the copyrighted work if the work has already been registered.

A Copyright Claims Attorney at the CCB will conduct a compliance review to ensure claimants provide sufficient detail and may direct the claimant to provide additional detail. Moreover, the CCB can give the respondent extra time to reach out to the claimant to request more information about the claim. In addition, claimants must articulate the harm suffered and detail what relief the claimant seeks, including an estimate of the relief sought.

Service of Process 

If an entity, such as a corporation, partnership, or unincorporated association, has designated a service agent with the CCB’s designated service agent directory (the “DSAD”), the initial notice and claim must be served on that agent. According to the partial final rule published on March 8, 2022, the DSAD will permit entities to include up to 50 trade names or affiliated entities as part of a single designation submission as long as the affiliated entities are incorporated in or have their principal place of business in the same state. While the CCB acknowledged that large corporations will likely have extensive lists that change often, the CCB requires that the information in the DSAD be updated “promptly” when the information is out of date or incorrect. Importantly, the CCB notes that “an entity that has designated a service agent should be aware that if service is made upon the person who, at the time of service, appears in the directory as the respondent’s designated service agent, that service is likely to be deemed effective.” Thus, companies should be vigilant to ensure that the DSAD is updated “promptly” upon any changes to the companies designated service agent. 

When a proceeding becomes active, service can be completed via eCCB for all users linked to a particular filing on eCCB. Nevertheless, the CCB recognizes that in extraordinary circumstances claimants may have difficulty accessing eCCB. In such instances, the CCB will arrange for alternative service on a case-by-case basis. Lastly, unless otherwise agreed to by the parties, service of all discovery requests and responses will be via email and by mail if email is not feasible.

Please contact us for any questions regarding the new Copyright Claims Board or for your copyright needs.