Expect Legal Challenges Against Recently Passed Copyright Tribunal Bill

Expect legal and constitutional challenges against the Case Act (see 1910250047), experts told us. Congress passed the Copyright Alternative in Small-Claims Enforcement (Case) Act (HR-2426/S-1273) last week, which would create a voluntary small claims board within the Copyright Office, as part of the COVID-19 relief package.

The question is when, not if, there will be a constitutional challenge, emailed Re:Create Executive Director Joshua Lamel. Another question is whether a decision will have to wait for standing first, since a court could decide the potential injury is “so great” that implementation must be delayed to work out the constitutional issues, he added. Public Knowledge, the Center for Democracy and Technology and American Civil Liberties Union objected to the bill.

A legal challenge is “100%” certain, said University of Kentucky law professor Brian Frye, who believes the law should take effect before there’s a constitutional challenge: “You have to have a defendant before you can challenge the law. That’s the way it’s been with any other law like this that creates potential constitutional issues. You’ve got to have someone who’s got an actual, tangible injury.”

If it’s challenged, it will be a “shame,” because the opposition “must know that the parties who will be relying on it will not have the pocketbooks to defend it in federal court, given the purpose of the act,” emailed George Mason University law professor Sandra Aistars.

Frye raised a concern from opponents that the new tribunal could “make it easier for copyright trolls to do what they’re already doing now,” which is “scare people into paying out settlements.”

There “obviously" will be legal challenges, said Southern Illinois University assistant law professor Zvi Rosen, who’s not concerned about mass infringement suits where the goal is a quick settlement. “If I wanted to copyright troll, I wouldn’t need this,” he said. “It’s much less attractive” than federal court due to the maximum damages associated with the Case Act. “That’s the whole point of these" lawsuits, he said. “They’re effectively nuisance damages most of the time, where it’s just cheaper to settle than to fight it out.”

It’s not “realistic” that the small claims process will be attractive to copyright trolls, said Turkewitz Consulting Group CEO Neil Turkewitz, former RIAA executive vice president-international. Turkewitz cited low damages, limits on cases brought each year and an inability to add on claims as disincentives for trolls. If the tribunal is overrun with trolls, creators will have a “complete community coming together for changes,” he said. Creators don’t want to see the tribunal overrun any more than Case Act opponents, he added.

The tribunal will give creators a currently unavailable remedy for protecting rights, said Turkewitz. Costs are too high for most independent creators to bring action now, he said: “You could sue in federal court, but you simply lack the means.”

Lamel questioned the constitutionality based on separation of powers and 7th Amendment concerns, saying many constitutional scholars believe the CO doesn’t “have the authority to do this as a Legislative branch office with a non-presidentially appointed register.” If the opt-out process isn’t voluntary, there’s “no chance for this to survive constitutional scrutiny under” the Seventh Amendment, he said: That’s why “supporters of the bill and even the bill text itself always modify the opt-out as voluntary.”

The CO’s rulemaking to implement the law “will be important” for what notices and opt-out provisions look like, he added. There also are questions about fair use, he said, calling the legislative drafting process “sloppy.”

The omission of ministerial details for notices probably wasn't a result of sloppy legislative drafting but “rather judicious legislating which aims not to lard up an already unwieldy Copyright Act,” said Aistars. That leaves the issues open to a rulemaking process in which the public can comment, she said.

Aistars disagreed with Lamel about CO authority, though she supports modernizing the office and establishing a presidential appointee at the head. In Intercollegiate Broadcasting System Inc. v. Copyright Royalty Board, the D.C. Circuit “made clear that for purposes of the Appointments Clause, the [CO] Librarian is the head of an executive department because the Librarian” is a president-appointed, Senate-confirmed position. Aistars noted the D.C. Circuit doesn’t have “exclusive jurisdiction over such questions,” so another circuit could take up the issue.

Aistars said the small-claims proposal passes constitutional muster because it's “entirely” voluntary to both parties. On separation of powers, she said: “Rather than emasculating the judiciary, the impact on Article III courts is at most de minimis as the proposal addresses a class of cases that the federal judiciary is not hearing -- indeed will never hear -- because of the very challenges the CASE Act was enacted to address.”

The Computer & Communications Industry Association raised concerns before passage. “A proposal making it easier to sue internet users and small businesses and another proposal amending the Lanham Act, which rarely garners legislative attention, warrants hearings for stakeholders and thorough consideration by members of Congress,” said Vice President-Public Policy Arthur Sidney.