Copyright protection may not be an everyday topic for construction and design companies, but it certainly should be considered as part of a comprehensive business plan.
Any person or company that owns copyrightable material, whether a construction company, architecture or design firm or marketing firm, may enjoy the copyright protections afforded under U.S. copyright law. Protectable material can include architectural works and designs, construction contracts, progress photos and videos, proprietary documents, and marketing materials, to name a few.
Under the typical copyright enforcement system, an owner of copyrighted material that wants to pursue an action for infringement is limited to federal court as the venue for those claims. The process can be not only lengthy but also burdened with significant attorneys’ fees and costs. For many creators of content that is otherwise properly protected under copyright law, the prospective costs of litigation are prohibitive. Effectively, some copyright owners are left without an affordable remedy to enforce their rights.
Starting in 2016, legislators started exploring a way to provide copyright owners with an affordable remedy for small copyright-infringement and misrepresentation claims. The first attempt was the CASE Act of 2016, which was never passed. On May 1, 2019, two companion bills were introduced in the House of Representatives and Senate, known collectively as the Copyright Alternative in Small-Claims Enforcement Act of 2019, or the CASE Act of 2019 for short. The act sat idle for the rest of 2019 and most of 2020, without good prospects. Then, in an interesting turn, the act was added to Congress’s omnibus spending and COVID-19 relief bill, which was passed on December 21, 2020, and signed into law on December 27, 2020.
Still very much in its infancy and without having been tested, the CASE Act could provide copyright owners with an affordable remedy to enforce their rights.
Copyright claims board and scope
The CASE Act sets up a voluntary small-claims board within the copyright office to give copyright owners an alternative method to resolve claims for all categories of copyrighted work. Under the act, three full-time copyright claims officers will serve on the copyright claims board and not fewer than two full-time copyright claims attorneys will assist in the administration of the board. The copyright claims officers must have substantial experience in the evaluation, litigation or adjudication of copyright-infringement claims and have represented or presided over a diversity of copyright interests, including those of both owners and users of copyrighted works.
The board will make rulings with respect to claims, counterclaims, and defenses of copyright infringement under the copyright law as well as claims for misrepresentation.
Damages
Allowable damages before the board would be up to $30,000, with a subcap of $15,000 in statutory damages per work infringed, if the work was registered in a timely manner pursuant to copyright law. If the work was not registered in a timely manner, statutory damages would not exceed $7,500 per work infringed, or a total of $15,000 in any one proceeding. The board would also be able to award actual damages and lost profits for infringement in accordance and may consider, as an additional factor in assessing damages, whether the infringer has agreed to cease or mitigate the infringing activity. Also, the board would be able to further order that an infringing party ceases its infringing conduct.
Except in cases of bad faith, the parties would bear their own attorneys’ fees and costs. Should it be found that a party acted in bad faith by pursuing a claim, counterclaim, or defense for a harassing or other improper purpose, then the board could award reasonable attorneys’ fees and costs to any adversely affected party in an amount of not more than $5,000.
Statute of limitations and registration requirements
Claims will need to be commenced within three years after they accrue. There will be two conditions required before filing a case: a) the owner of the copyrighted work at issue must first deliver a completed application, deposit, and fee for registration to the copyright office, and b) the registration must have either been issued or not refused. The board may not issue a determination until a) a registration certificate has been issued by the copyright office, submitted to the board, and put on offer to the other parties to the proceeding, and b) the other parties have been provided an opportunity to deal with the registration certificate. If the registration certificate for the work is pending, the proceeding will be stayed until the certificate can be submitted to the copyright claims board.
Administration
Proceedings before the board will be conducted at the offices of the board without requiring in-person appearances by parties or witnesses. Instead, proceedings will take place by means of written submissions, hearings, and conferences carried out through Internet-based applications or other telecommunications. By the time of this writing, the practical mechanics for such hearings have not yet been fully developed.
Opt-out feature
A special feature of the CASE Act is its opt-out feature, under which a respondent has sixty days from the date of service of a complaint to provide written notice that it opts out of the process. If the respondent opts out in a timely manner, the proceedings will be dismissed without prejudice.
Smaller claims
Consideration has also been given to very modest claims having total damages not exceeding $5,000, exclusive of attorneys’ fees and costs. In those cases, the CASE Act instructs the register of copyrights to establish regulations to provide for review by at least one copyright claims officer, rather than the entire board.
Failure to pay damages and appeals
If a party fails to pay damages or otherwise comply with the relief granted by the board, the prevailing party has one year after the date of final determination to apply to the United States District Court for the District of Columbia, or any other appropriate federal U.S. district court, for an order confirming the relief awarded.
In practice
Although the CASE Act may be appealing in theory, it remains to be seen how the administration of cases will proceed in practice. There may still be some administrative hurdles.
At first glance, a process relying heavily on written submittals may not be attractive to people – unrepresented litigants, for instance – who are not used to standard court proceedings.
The opt-out feature could also be problematic. If a respondent simply opts out, the copyright owner’s sole avenue for relief becomes the federal district court they sought to avoid in the first place.
As the age of COVID has taught us, there remain technological impediments to remote hearings. These include dropped calls, distorted video and audio, and delayed signals that can make electronic communications difficult or impossible. A court hearing plagued with technical defects could unduly result in prejudice toward whichever party is having the issues.
Additionally, file-transfer protocols and file-size limits could cause trouble with exhibit uploads, storage, and presentations. For example, architectural drawings tend to be very large not only when they’re in a physical format but also when they’re submitted as electronic files. Compression into another file type could affect a critical component of the work at issue or even be presented as tampering or spoliation of evidence.
Another concern may be board capacity and backlogs. Depending on popularity, a single three-person Copyright Claims Board and two-attorney support staff may not be enough to handle a multitude of small cases in a timely fashion.
Despite some process concerns, the CASE Act deals with a great many procedural issues and, in a year when it seemed like no issue could bring political parties together, has garnered bipartisan support to reform a copyright enforcement system that was not practical for the very people who need most to benefit from its protections. The CASE Act, therefore, could be a much-needed resource for content creators and small businesses alike, giving them affordable and attainable protection of their copyrighted works.
For more information about the CASE Act, or copyright protections presently available, reach out to Bryan Kroes at Hurtado Zimmerman SC or call 414-727-6250.
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