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Understanding the CASE Act

Last summer, a major artist sampled one of our artist’s songs, even after the artist rejected the original sample request. The major artist sampled the song anyway and over 100,000 physical copies of the record containing the sample were sold. Our artist wanted to file a lawsuit, but couldn’t because he didn’t register the song with the U.S. Copyright Office first, a recent Supreme Court ruling he wasn’t aware of.

After paying $800 for an expedited registration for one song, he started to gather insanely high quotes from litigation attorneys. This seemed like a dead end in his pursuit of a claim. If this were to happen now, since the passing of the CASE Act, his next steps would look radically different—and far more reasonable.

He had never heard of the CASE Act, and he’s not alone. If you weren’t aware of these changes before reading this, don’t worry. Most people aren’t – yet. Grab a latte, post up in your comfy spot, and let’s connect the dots to get you up to speed in plain English about these critical changes.

The Gist of the CASE Act

When your content is stolen or misused, your first thought may be to file a lawsuit. However, most creators and businesses cannot afford to fight copyright infringement in court. The average lawsuit costs approximately six figures.

Passed in 2020, The Copyright Alternative in Small–Claims Enforcement Act (the CASE Act) now creates a voluntary small claims court, making lawsuits a quick and affordable process for all copyright owners. Whether you are filing normally or via CASE, the U.S. Supreme Court ruled that you must register your copyrights and have the official registration (or a denial) from the U.S. Copyright Office beforehand. If an application was only filed, but is still pending, a lawsuit cannot be filed. Waiting to register until an infringement occurs is not ideal, as the entire process can take 3-9 months to complete. You can start taking advantage of the small claims court by the end of 2021 and it will be accessible and affordable for all – you won’t need to hire an attorney, you won’t need to appear in person, and you won’t have to pay an absurd amount of money to participate.

The CASE Act addressed what creators know all too well – creators have rights, but can’t afford to enforce them

Historically, there was only one place where you could file and endure a copyright infringement lawsuit – in federal court, in person.

The foundation of the CASE Act was built upon a study conducted by the Copyright Office that found that the average cost of litigating an infringement case in federal court was upwards of $200,000 in legal fees. The small percentage of creators that can afford to try (and win) their cases could earn $200-$150,000 per infringement. However, most of their earnings would go directly towards covering their legal expenses. Creators that do not have open-and-shut cases may have a hard time finding an attorney that is willing to take on their case because they may not receive adequate payment for their time. Ironically, it is nearly impossible for creators to use the very system that is meant to help them.

The small-claims court is designed to reduce expenses for copyright owners by streamlining how the court system will work.

The small claims court is scheduled to launch on December 27th, 2021 and will oversee cases involving:

  • Infringement (copyright owners alleging that a certain activity infringes upon their rights).
  • Declarations of non-infringement (copyright users seeking a declaration that their activity does not infringe on a copyright owner’s rights).
  • DMCA takedown notice and counter-notice challenges.

If this is something you’re considering, here’s what you can expect

If you plan to take advantage of the small claims court, your case will be heard by a Copyright Claims Board (CCB) that will be comprised of three judges. Appointed by the Librarian of Congress, these judges are unbiased copyright experts that have represented copyright owners or have presided over a variety of copyright related cases. By comparison, in federal court, a single judge would be assigned to your case and he or she may not have as much experience presiding over copyright cases.

Participation in a small claims proceeding is entirely digital, so you won’t have to appear in person in court. As well, creators can represent themselves and are not required to hire an attorney, which removes the financial burden that creators face when trying to file a lawsuit in federal court.

While the fee to file a lawsuit via small claims court has not yet been decided, we do know that it will be at least $100 and significantly less than the fee to file in federal court.

The key component to the new small claims court is that it is entirely voluntary. Although an individual or organization being sued in small claims court can simply opt out, they may be incentivized not to.

Accused infringers will be served by both the copyright owner and the Copyright Claims Board. They will have 60 days to opt out of the proceedings and simply not take part. At that point, the proceeding would stop. However, alleged infringers that opt out would still have to face the possibility of a federal lawsuit instead. 

In federal court, infringers could be forced to pay up to $150,000 per work infringed (with no cap) plus attorney fees for both sides. In small claims court, that figure is $15,000 per work infringed with a cap of $30,000 per case. After weighing the enormous potential of uncapped damages plus legal fees and the uncertainty of whether or not the copyright owner has the means to go the distance in federal court, there is a good argument for an alleged infringer to participate in the small claims court for a faster and cost-effective judgement.

The CASE Act also prevents “copyright trolls” from abusing the small claims court with frivolous lawsuits by allowing the Copyright Claims Board to:

  • Dismiss frivolous claims and counterclaims.
  • Limit the number of cases an individual can file in 1 year.
  • Dismiss all cases filed by a copyright troll.
  • Award up to $5000 for attorneys’ fees to victims of copyright trolls.
  • Allow frequently targeted individuals to pre-emptively opt out of. proceedings and not refunding filing fees to suspected copyright trolls.

But remember, you can’t take advantage of this unless you have registered with the U.S. Copyright Office first

If you want to file a lawsuit in small claims court or federal court, you will need to register with the U.S. Copyright Office. Early registration can grant you a large payout in federal court – up to $150,000 plus your legal fees, but only if you register before your copyrights are stolen or misused.

Creators relying on “poor man’s copyright” or the basic rights granted at the time of creation are not entitled to the same protection as creators that have registered, such as the right to file a lawsuit. In March 2019, the U.S. Supreme Court ruled that copyright owners must register their copyrights with the U.S. Copyright Office before a lawsuit can be filed. Registration will be required for creators who wish to take full advantage of the small claims court created by the CASE Act, too.

To be clear, “registration” means that a copyright application was submitted to the U.S. Copyright Office and an official decision was made about the application – either the registration was approved, or some other decision occurred. Usually, this takes months. If an application was only filed, but is still pending, a lawsuit cannot be filed.

Registering your copyrights can sound like a complicated process, but it doesn’t have to be

CD Baby is thrilled to partner with Cosynd to provide a quick, easy, and affordable way for musicians and collaborators to register their copyrights with the U.S. Copyright Office.

Cosynd streamlines the process, handles any correspondence with the Copyright Office and error-proofs your applications so you can avoid extra costs in the long run. CD Baby partnered with Cosynd over other companies who offer similar services because their interface is easy to navigate, their process is quick, and they’re efficient and professional every step of the way. Compared to other services, Cosynd lets you register multiple songs on one application – some services only let you register one at a time. Most important of all, Cosynd is 80% less expensive compared to similar services.