When in doubt, always opt-out.
Tucked into the December Stimulus Bill was a little-noticed provision known as the CASE Act, which created a copyright small claims court administered by the Copyright Office of the Library of Congress (making it an Article I court?).
Copyright law has always seemed like the wild west since de minimis infringement is commonplace but few people are ever hauled into court. Even with progressively more regulation such as the DMCA, few people have suffered little more than having infringing content removed or internet access terminated. This is largely because the main enforcement mechanism has been in the federal courts, and playing there is expensive.
However with the creation of this new venue (17 U.S.C. 1501-1511), it seems that anyone with a copyright grievance can, upon payment of a fee and presentation of a duly registered copyright, initiate an administrative law proceeding against any alleged infringer. An opt-out provision is included and determinations cannot be relitigated (claim preclusion basis).
Don’t let the “Small Claims” portion fool you. This might be administrative law, but it nonetheless can award damages up to $30k and injunctions if agreed to. A brief look at the law covers claims, counterclaims, service of process, discovery, witness testimony, and hearings. This isn’t your run-of-the-mill small claims where you take a day off work and go before Judge Judy. This is the real deal with procedures akin to federal court, and you’re going to most likely need a pot of gold and an attorney.
The most important safeguard seems to be an opt-out which allows anyone to refuse to participate as long as they provide “written notice” within 60 days of service. Whether this is going to be as simple as a check box on a webpage or a requirement to be sent in the form of a letter remains to be seen. Those of us familiar with privacy law knows that an opt-out is nowhere as powerful as an opt-in and that basic tort law requires duty and breach. But here, simply doing nothing is not an option.
The new reality is sobering. Thousands of summons will likely be thrown in the trash by people who think it’s junk mail, or from people who have moved away, or from incorrect address information likely traced to the owner of the internet connection rather than the actual infringer. The lawsuit then proceeds without the defendant and a default judgment is rendered. People will wake up, years later, to debt that was referred to collection and have to live with the consequences. More sophisticated infringers, familiar with the law, will always opt-out; it’s the inexperienced that will be ensnared.
The fact of the matter is that for all the trouble you can get into by infringing IP, they must either be serious enough for someone to haul you into federal court (expensive or criminal), or you must own some IP in the form of trademarks or patents. Even then, our administrative law system merely adjudicates the validity of those patents/trademarks so the worst that can happen is the loss of that IP. We have never had a system where people who know next to nothing about IP can be reached in admin law court and be subjected to damages. It’s like getting a parking ticket for infringement, but a lot more complicated and a lot more expensive.
Regardless, we’re going to be seeing a lot more copyright disputes because when you make suing easier you get more lawsuits. When the Trademark Trial and Appeal Board was created, it was seen as an easy way to make trademark enforcement easier with less costs. To an extent, that has certainly happened, but out of my clients far fewer have had legitimate claims properly adjudicated before the TTAB than those who were harassed by dubious claims that were brought simply because it costs less. When in doubt, always opt out.