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Higher Costs for Creators to Protect Their Rights

It seems like individual creators just can’t catch a break. As of yesterday, it became much more expensive for the majority of creative artists, particularly songwriters, recording artists and multi-media artists, to protect their works by registering them with the U.S. Copyright Office. While one does not need to register to obtain copyright protection, there are a couple of key incentives in the copyright law that make registration strongly advisable. First, registration is a prerequisite to filing a lawsuit for copyright infringement. Second, you can only obtain statutory damages and attorney’s fees if the work was registered prior to the infringement taking place. How do you know when you’ll be infringed? You don’t, hence the incentive to register as copyright lawsuits are very expensive and statutory damages are often preferable to actual damages which may be either too modest to make a lawsuit practical or too difficult to measure.

The Copyright Office published a new schedule of fees that went into effect as of May 1, 2014. A basic online registration still costs $35.00. So far, so good, right? Unfortunately, that $35.00 fee applies only to: “single author, same claimant, one work, not for hire.” What if you’re a songwriter who wants to register a whole bunch of works? Or what if you’re a lyricist who collaborates with a composer? Or what if you create mixed media works or remix works? You used to be able to register most of these for that same $35.00 fee.  Now, unless you are the sole creator and copyright owner of a single work that online registration is now going to run you $55.00. That’s a pretty big jump.

The Copyright Office certainly has the right to raise fees from time to time and these increases are supposedly to account for the cost of providing the various services, such as registrations, recording transfers, searches, etc., that the office provides.  Fair enough, but I wonder if the Copyright Office simply applied these increases across the board. Or, did they consider keeping fees for registrations lower to help individuals and small businesses while more substantially raising other costs that typically apply only to litigants and big businesses, such as those listed under “Optional Services Related to Registration”? Just a thought…

Anyway, it’s now much more costly for creators to protect their rights.

 

 

A Small Claims Court for Copyright Claims?

Although the shutdown of the federal government has justifiably grabbed most of the headlines, and despite this week [October 3] being labeled “Hell Week” for classical music, something potentially good for composers, self-produced recording artists, visual artists and other artistic creators was announced: On September 30, just before the government shut-down, the Copyright Office released a 155-page report – plus appendices – outlining recommendations for the equivalent of a voluntary small claims court for copyright claims, primarily infringement.

The full report is available here. The majority of the report deals with legal niceties such as constitutional authority for a copyright small claims tribunal, subject matter and personal jurisdiction issues, analogues to other specialized tribunals and the scope of clams this copyright tribunal would handle.

However, the Copyright Office summarized its recommendations as follows:

  • Congress should create a centralized tribunal within the Copyright Office, which would administer proceedings through online and teleconferencing facilities without the requirement of personal appearances. The tribunal would be staffed by three adjudicators, two of whom would have significant experience in copyright law – together having represented or presided over the interests of both owners and users of copyrighted works – with the third having a background in alternative dispute resolution.
  • The tribunal would be a voluntary alternative to federal court. Its focus would be on small infringement cases valued at no more than $30,000 in damages. Copyright owners would be required to have registered their works or filed an application before bringing an action. They would be eligible to recover either actual or statutory damages up to the $30,000 cap, but statutory damages would be limited to $15,000 per work (or $7,500 for a work not registered by the normally applicable deadline for statutory damages).
  • Claimants who initiated a proceeding would provide notice of the claim to responding parties, who would need to agree to the process, either through an opt-out mechanism or by affirmative written consent. Respondents would be permitted to assert all relevant defenses, including fair use, as well as limited counterclaims arising from the infringing conduct at issue. Certain DMCA-related matters relating to takedown notices, including claims of misrepresentation, could also be considered, and parties threatened with an infringement action could seek a declaration of noninfringement.
  • Parties would provide written submissions and hearings would be conducted through telecommunications facilities. Proceedings would be streamlined, with limited discovery and no formal motion practice. A responding party’s agreement to cease infringing activity could be considered by the tribunal and reflected in its determination. The tribunal would retain the discretion to dismiss without prejudice any claim that it did not believe could fairly be adjudicated through the small claims process.
  • Determinations of the small claims tribunal would be binding only with respect to the parties and claims at issue and would have no precedential effect. They would be subject to limited administrative review for error and could be challenged in federal district court for fraud, misconduct, or other improprieties. Final determinations could be filed in federal court, if necessary, to ensure their enforceability.

Addressing the extremely burdensome time and expense for creators to pursue a copyright claim is a good thing and this report is definitely a step in the right direction. For example, the report states that for a copyright case that’s worth less than $1 million, it typically costs over $350,000 to litigate it and around $200,000 of that is spent on “discovery”, i.e., document requests, depositions and interrogatories. Most artists, including composers, don’t have the resources to pursue a copyright infringement claim – or defend one — unless they qualify for representation by VLA or a similar organization.

Wearing my various hats as creator, copyright lawyer and administrator of other’s creative works, I do have some concerns about the report’s recommendations. For example, centralizing the small claims tribunal within the copyright office, even with most matters handled by written submissions and video-conferencing seems impractical. While there is reluctance among the federal judiciary (and copyright claims are exclusive to the federal courts) to create specialized tribunals, it would make more sense, both for the convenience of the parties and to distribute the administrative burden, to have these streamlined procedures available in each federal district.

Alternatively, one might consider the approach for the “circuit rate court proceeding” under Section 513 of the Copyright Act to have the small claims tribunal available in the district court that is the “seat” of each of the 12 Circuit Courts of Appeals (e.g., New York, Chicago, Denver, San Francisco). This did not seem to be addressed in the Copyright Office report.

Another concern is that with a voluntary proceeding, a well-funded party, such as a major corporation, may simply opt out of these proceedings and force a plaintiff to spend resources he or she doesn’t have. On the other hand, there should also be provisions to ensure that frivolous claims are swiftly dismissed and that creators don’t use these procedures to attempt to try to get a windfall in unwarranted copyright damages where the “notice and takedown” procedures under the DMCA would be sufficient.

The recommendation for some form of small claims proceeding is a welcome one, albeit one that should be subject to further refinements. However, given the current Congressional climate, it’s also unlikely to be acted upon anytime soon.

This article was originally published on the ScoreStreet Web Site on October 3, 2013.