The Uneasy Case for the CASE Act

The Uneasy Case for the CASE Act

The Copyright Alternatives in Small-Claims Enforcement Act (CASE Act) has cleared both the House and Senate Judiciary Committees, and it now heads to the floor of both chambers for a vote. In support of the bill, Robert VerBruggen of National Review addresses criticisms of the CASE Act that argue it will be an open invitation for copyright trolls:

Supporters say the bill protects against abuse while giving artists and accused infringers alike a more affordable venue in which to resolve their disputes. Opponents warn it would enable “copyright trolling” and result in $30,000 fines over Internet memes. The interest groups have lined up predictably, with the Chamber of Commerce and the Copyright Alliance in favor and the Electronic Frontier Foundation (EFF) against. So let’s take a look at the bill, which is fairly readable for something Congress came up with.

This article, though more substantive in its analysis than other CASE Act apologetics, decisively comes down on the wrong side of the issue. It is necessary to give his thorough treatment an equally thorough rebuttal.

He begins by arguing that the small claims court established by CASE, called the Copyright Claims Board (CCB), would be voluntary, making the limiting of rights that would ordinarily exist in a constitutional legal proceeding acceptable: 

The most important thing about the new Copyright Claims Board is that it would be completely voluntary: Anyone hit with a claim before the board could simply opt out, guaranteeing that the matter would be either dropped or pursued through the federal courts instead…

As with many cost-cutting forms of “alternative dispute resolution,” the board would provide only limited appeal options….A loser could ask for the case to be reconsidered; failing that, he could appeal to the register of copyrights to require the board to reconsider. Review by courts would be limited to a handful of extreme scenarios: those where “the determination was issued as a result of fraud, corruption, misrepresentation, or other misconduct,” etc.

Yes, the nature of the proceeding is opt-out: the defendant has 60 days to provide written notice of their choice to do so, in which case the complaint is dismissed without prejudice and the plaintiff would have to refile with a regular Article III court. But the effect here is to make defendants’ constitutional rights contingent upon an affirmative action on their part — i.e., opting out within 60 days. Normally such rights — e.g., the right to remain silent, the right to an attorney, the right to a jury trial — are protected unless affirmatively waived. CASE Act would flip the tables.

What constitutional rights are we talking about? First, proceedings before the CCB would not include juries. Yet in any civil proceeding over a matter greater than $20, the Seventh Amendment guarantees a right to a jury trial, and the Supreme Court has explicitly ruled this also applies to copyright infringement. Second, the ability to appeal decisions of the CCB to Article III courts is highly restricted under the bill as written, available only in cases where the CCB’s decision was “issued as a result of fraud, corruption, misrepresentation or other misconduct.” 

But statutory damages for infringement, both in traditional proceedings and the proposed CCB proceedings, also incorporate punitive damages–it’s not just about making someone whole, it’s about punishing someone who has done something wrong. And in Honda Motor Co. v. Oberg, the Supreme Court ruled that a provision of the Oregon Constitution restricting appellate review of punitive damages violated the 14th Amendment’s due process clause. 

Maybe the fact that defendants can, technically, opt-out would allow the bill to survive a constitutional challenge, maybe not. But these concerns could be easily resolved by making the proceedings opt-in: in other words, the defendant would have to affirmatively agree to CCB proceedings, and if they did not the case would be dismissed without prejudice. This is an easy fix that supporters of CASE have, for no clear reason, shown no interest in making.

Where VerBruggen’s argument goes off the rails is in his description of how copyright litigation should work: 

Frankly, [the CASE Act] sounds like how copyright claims generally should be handled. These are not typically matters that involve complicated factual disputes. The claims the board will handle will involve limited (though hardly trivial) amounts of money. And the basic issue in these claims is usually simple: Look at this copyright I own. Look at this thing on the Internet. Does the latter infringe the former, or not? [Emphasis in original]

Though VerBruggen does argue later that memes (the main concern he addresses) are usually fair use, copyright law is far more complicated than he makes it out to be. Many people don’t understand that innocent infringement isn’t a defense against infringement. The nuances of fair use are not well known to the average infringer (or person, for that matter), and the context-heavy nature of a fair use analysis makes litigation infinitely more complicated than his description even for those well-versed in copyright law.

His incorrect understanding of the nature of copyright litigation informs his lack of concern about a “$30,000 meme fine” and copyright trolling. He discusses the filing fees and discretionary caps on the number of cases that can be brought annually designed to limit trolling (he curiously excludes the bad faith conduct section of the bill), but his analysis ignores the dynamics of copyright trolling.

Quite often, a copyright troll has no intention of seeing the inside of a courtroom. In the infamous Prenda Law case, the plaintiff took advantage of the fact that their infringers were downloading pornography, and thus wanted as little publicity as possible, to strategically charge each infringer a few thousand dollars (well below the damages allowed under CASE). The infamous copyright troll Chris Brady (who was sued by YouTube for his extortive behavior) asked for a few hundred dollars, if that. 

There’s also the case of the troll Carl Crowel: in this profile of him, Wilamette Week’s Anthony Macuck begins with the story of one of his victims. The infringer:

Charles Castle’s first instinct was to ignore the letter when it arrived at his Eugene [Oregon] home. The two pages were mostly legalese and technical jargon, and said he was being sued for theft—specifically, for downloading a copy of an obscure American-Romanian drama called The Necessary Death of Charlie Countryman.

As of 2015, when the article was written, Crowel had never gone to trial. Instead, he settled out of court with his marks, for around $7,500 (coincidentally, the maximum damages allowed under CASE). And the fact that Castle initially ignored the notice (perhaps a poor decision when you’re on the receiving end of a legal document) throws cold water on VerBruggen’s dismissal of the notion that in the age of the scam, people won’t ignore such notices.

Of course, all of this happens in our CASE-less world. But the nature of these lawsuits demonstrates that copyright trolling is a serious problem, even if its prevalence is up for debate. Those targeted by these suits receive punishments that simply don’t fit the crime (see the figure below), and creating an institution that would make it cheaper and more efficient for trolls to go after ordinary internet users would only reward these nefarious business models.



If we are going to have a workable copyright system, making the resolution process for cases of infringement more efficient is appealing, and tough to argue with. But if it creates a world where it is more efficient to abuse copyright law to extract damages far above the actual cost of infringement, it is far from the common sense solution VerBruggen makes it out to be.

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By |2019-10-02T14:12:49-07:00October 2nd, 2019|Blog, Intellectual Property|