When someone has their property stolen or is the victim of a contract gone awry, small claims court can provide real relief without exorbitant legal fees. Intellectual property (IP) claims have long been an unfortunate exception to that rule because small claims courts are at the state level while IP cases are almost exclusively federal. That sorry status quo changed when the federal Copyright Claims Board (CCB; aka copyright small claims court) opened its doors last month. Since June 16, copyright holders have been able to protect their works of art without breaking the bank. Policymakers should be lauded for their large leap forward in IP protection.
It is often costly and cumbersome to protect a copyright. Depending on the specific registrations and database permissions requested, simply getting federal recognition of a copyright can cost hundreds of dollars. Expedited services can total more than $700 while renewals can top $200.
And strangely, even though copyrights can arise organically when someone produces an original work, copyrights usually need to be registered before a holder can sue for infringement. Even if a copyright holder was able to pay all the required registration fees, shelling out $300 per hour for a lawyer can be an expensive and harrowing ordeal.
Thanks to the CCB, claimants do not need to have a copyright registration to bring legal action. Lawyers are permitted (if needed) but copyright claimants are free to argue cases on their own behalf. And, compared to other small claims courts, damages available are fairly high (capped at $30,000). This ensures that copyright holders don’t need to choose between obtaining affordable and streamlined legal resolution and collecting on full damages. The system, however, encourages copyright claimants to think long and hard about their choice of forum because CCB litigants are barred from later suits in federal court.
Early indications appear to be positive for IP holders looking for justice in federal small claims court. According to a July 6 analysis by the law firm White & Case, “The CCB is off to a fast start, with more than three dozen claims filed. A range of copyright owners – largely, photographers – see the CCB as a practical way to resolve copyright disputes occurring online.” The claimants tend to be small (mainly individuals) bringing companies to court. White & Case notes that, “[n]o one person or company is the target of multiple claims,” a good preliminary sign that the court isn’t being abused by serial litigators with nefarious motives. More time will be needed, though, to fully assess whether the court is working as intended.
If the CCB proves to be a viable concept, the “federal small claims court” idea can certainly be extended to other types of IP litigation. The Administrative Conference of the United States recently wrapped up a public solicitation period on the concept and design of a small claims patent court. The Department of Commerce previously considered this concept 10 years ago amid concerns that small businesses and individuals were deterred from the costly litigation required to protect their patents. While the issue should be studied further, creating a streamlined IP protection process across the board could be a boon to entrepreneurs looking for more affordable recourse. The U.S. must engage in innovation in order to protect innovation.
David Williams is the president of the Taxpayers Protection Alliance.