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$30,000 For a Meme?: Implications of the CASE Act

Copyright Reports

Copyright Alternative in Small-Claims Enforcement Act of 2019, H.R. 2426, 116th Cong. (as passed by House, Oct. 22, 2019).

On October 22, 2019, the House passed the Copyright Alternative in Small-Claims Enforcement (“CASE”) Act of 2019 by an overwhelming 410-6 vote. The CASE Act, which was introduced in the House last May by Rep. Hakeem Jeffries (D-NY), would establish a Copyright Claims Board, a body within the U.S. Copyright Office, to decide copyright disputes. The Copyright Claims Board will receive copyright complaints, notify the person being sued, and then act as the court to decide if and how much money is owed. The Board will have the power to issue fines to individuals of amounts up to $30,000, with damages for each infringed work capped at $15,000.

Supporters for the bill say it will provide independent creators a cheaper, more streamlined process to defend their intellectual property than going to federal court. Under the current system, individuals face the high cost of legal action associated with going to federal court and are barred from litigating in state court because of the federal nature of copyright law. According to The Hill, the CASE Act will also benefit copyright defendants as “[p]articipation in a small claims proceeding would cap their damages and likely provide a faster resolution of the dispute.” Moreover, advocates stress that participation in the program would be entirely voluntary and that both parties need to agree for the claim to go to the Copyright Claims Board. Parties also have the option of proceeding with or without attorneys.

However, Senator Wyden fears that the bill would invest too much power in a single office, arguing that “an extrajudicial, virtually unappealable tribunal . . . could impose statutory damages of $30,000 on an individual who posts a couple of memes on social media, even if the claimant sustained little or no economic harm.” Internet advocacy and civil rights groups such as the Electronic Frontier Foundation and the American Civil Liberties Union (“ACLU”) also warn that “a system like the one proposed by the CASE Act could cost the average internet user thousands for simply sharing a meme or lead to encroachments on their First Amendment rights.” The ACLU’s senior legislative counsel Kate Ruane warns that “[w]ith no court to correct the board’s mistakes, the First Amendment will suffer.” In addition, the ACLU argues that previous changes like the Digital Millennium Copyright Act (“DMCA”) have “been wrought with abuse” and that oftentimes the DMCA induces individuals to “take down perfectly legal content protected under ‘fair use’ entirely out of caution to avoid legal action.” Closely associated with First Amendment rights are concerns that the procedural process of bringing claims would weigh disproportionately on certain individuals. According to Engadget, the penalty cap of $30,000 “could bankrupt many Americans” and “[a]nyone accused of copyright would have sixty days to opt-out of the Copyright Claims Board process, in which case the plaintiff would have to seek legal action in court.”