Final Rule Released for Copyright Claims Board Proceedings

Establishment of the Copyright Claims Board

The Copyright Office (the “Office”) has released the final rule[1] for procedures to initiate proceedings before the Copyright Claims Board (CCB), and this final rule went into effect on April 25, 2022. The CCB is set to be operational by spring 2022, but this date can be extended to June 25, 2022.

The CCB is a voluntary forum for parties to resolve copyright disputes of $30,000 or less, exclusive of any attorneys’ fees and costs that may be awarded.[2] Proceedings before the CCB are intended to be lower cost than federal court proceedings and accessible to pro se and other individuals without much exposure to copyright law. A party may file a claim with the CCB within three years after the claim has accrued.[3]

Initiating a CCB Claim

Fees for proceedings will be paid under a two-tiered fee arrangement providing for a first payment of $40 due at filing and a second payment of $60 when the proceeding is “active”. A proceeding is “active” when all respondents have been served and the 60-day opt-out period for each respondent has expired without all of them opting out. Proper service for a CCB proceeding generally follows the guidelines under the Federal Rules of Civil Procedure.

After a claim is filed, it will be reviewed by a CCB attorney or officer for statutory compliance. If the CCB finds a claim does not meet the regulatory and statutory requirements, an opportunity will be given to amend the claim prior to its dismissal. After confirmation of compliance, the claimant may proceed with service.

Once a proceeding becomes active, the CCB will issue an order to all parties requiring that the claimant pay the second filing fee within 14 days and that any parties who have not yet registered for the electronic filing system, the “eCCB,” do so within 14 days, though pro se individuals may be exempt from using eCCB under exceptional circumstances. After the claimant pays the second filing fee and the 14-day period elapses, the CCB will issue a scheduling order.

The CCB may sua sponte raise the issue of a claim’s unsuitability. If the CCB finds a claim is unsuitable, the opposite party will have the opportunity to respond. Grounds for unsuitability may include failure to join a necessary party; lack of an essential witness, evidence, or expert testimony; or the case requiring determination of an issue of law or fact that exceeds CCB capabilities or subject matter competence.[4] A party whose claim is found unsuitable by the CCB may ask the Board to reconsider such a finding.

Types of Claims for a CCB Proceeding

An issued copyright registration of the work at issue is not required for bringing a claim before the CCB; a claimant need only file an application with the Office to register the work(s) at issue either before or simultaneously with filing a claim at the CCB. This is different than the standard at federal courts, which require a federal registration to bring a copyright claim. Moreover, a case may be brought before a federal court based on an application’s refusal by the Office, but the CCB will dismiss a case if the application at issue is refused.

The types of claims and counterclaims that may be considered by the CCB include the following:

• copyright infringement;
• a declaration of non-infringement;
• claims for misrepresentation during the notice and counter-notice process under 17 U.S.C. § 512;
• counterclaims related to the same transaction or occurrence that is the subject of the original claim;
• legal or equitable defenses under copyright law or that are otherwise available;
• counterclaims arising from an agreement pertaining to the same transaction or occurrence that is the subject of an infringement claim if the agreement could affect the relief awarded to the claimant.

A claimant may not opt out of a counterclaim, and there is no fee for filing counterclaims. Counterclaims must be asserted when the response is filed unless there is good cause to allow a later counterclaim. The pleading standards for claimants and counterclaimants are the same. A party may choose whether to file a claim in the CCB or in federal court, however, a claim and/or counterclaim may not be filed in both venues.

Opting Out of a CCB Proceeding

To ensure the constitutional rights of due process and a jury trial, participation in CCB proceedings is voluntary, therefore, any respondent has the ability to opt out of participating in CCB proceedings. If a party does not opt out of the CCB proceeding, they are electing to waive the opportunity to have the dispute decided by a federal court and a jury trial. Should a respondent elect to opt out of a CCB proceeding, it will be dismissed with prejudice, and the fact that a party opts out of a proceeding may not be used against it in a subsequent federal court proceeding regarding the same copyright claims at issue.[5]

Other Considerations

At any time, any party may file a request to dismiss a claim or counterclaim due to unsuitability. An opposing party may file a response within 14 days of the date of service of the request. No reply papers are permitted unless ordered by the Board.

Discovery in CCB proceedings is generally limited to requests for production, requests for admission, and written interrogatories.

A party may also request the CCB to reconsider a decision that includes a technical, factual, or legal error that is material to the decision. If a party does not comply with a CCB order to pay damages, the party that received the award may ask a federal court to confirm the award and enter judgment against the delinquent party.

The CCB is able to require payment of a party’s costs and attorneys’ fees based on bad faith by an opposing party, but such costs and fees will be capped at $5,000 unless the party is acting pro se, in which case the limit of such recoverable costs and fees will be $2,500. Parties that continuously act in bad faith may be banned from the CCB for a year.

If you have any questions about the information in this alert, please contact Jennifer Fraser, Ryan Borelo, or your Dykema relationship attorney.

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[1] 37 CFR §§ 201.3, 220.1, 222.2-222.5, 222.7-222.10, 223.1, 224.1-224.2

[2] See 17 U.S.C.S. §§ 1501 et seq., which provides the statutory basis for establishment of the CCB and guidelines for CCB proceedings.

[3] See 17 U.S.C. § 507(b). See also Petrella v. MGM, 572 U.S. 663, 671, 134 S. Ct. 1962, 1969 (2014) (under the separate-accrual rule, when a defendant commits successive violations, the statute of limitations runs separately from each violation).

[4] See 17 USC 1506 (f)(3).

[5] See https://copyright.gov/about/small-claims/quick-facts.pdf. "The CCB is not mandatory so that it is consistent with the Constitution, including regarding the role of federal courts, the right to a jury trial, and to ensure proper due process."