How Would the Creation of a Special Copyright Small Claims Court Affect Designers?

When designers are confronted with the unauthorized use of their work, one of the biggest issues they face is the complexity and cost of going to court to enforce their rights under United States copyright law. Earlier this year, Congress requested that the U.S. Copyright Office conduct a study, with input from potentially interested parties, on the following:

• The economic difficulties copyright owners experience when seeking to recover damages for small value infringements of their works
• Whether the creation of a special copyright small claims court to address such cases is a feasible solution

The second proposition, if enacted, would change the tools that designers and artists have used to protect their rights since the founding of this country.

Small claims courts are quite common, but they are typically used to provide a cheap and accessible process for dispute resolution within a court that is specifically designed for hearing civil cases in which the economic damages are small—generally less than $10,000. At this time, there are no small claims courts in the federal judicial system, and the creation of such a court for copyright disputes would represent a significant change to the federal court system.

It is important to note that, as a constitutional matter, the creation of a federal small claims judiciary creates new considerations regarding two important constitutional questions. First, the rights of designers, artists and authors are constitutionally protected under Article I, Section 8, Clause 8 of the Constitution, wherein Congress shall have the power “[t]o promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” Second, in Article III of the Constitution “[t]he judicial power of the United States, shall be vested in one Supreme Court, and in such inferior courts as the Congress may from time to time ordain and establish.” The creation of such courts would be within the power of Congress if the Congress—the body governing copyright matters as well as the copyright office—determines that such a court is necessary.

Stated simply, designers and artists have a constitutional basis for their rights, but the high-wire act that Congress is contemplating—how to fairly protect copyrights while providing an efficient court system that attempts to balance the competing interests of creators and commercial users of creativity—is perilous. It raises significant questions, such as: What are the implications for designers if such courts are established? Will copyright small claims courts actually reduce the complexity and cost of recovering damages, lost sales or reducing the complexity and cost of recovering reasonable licensing fees? Or is this merely another attempt by big media to reduce the rights of the creative class by forcing them to accept the limited damages ceiling typically associated with a small claims court system?

Under such a small claims framework, the creative class could benefit if the proposed court permitted relaxed rules for an artist and reduced the ability of a party to harass an artist via the litigation tactics associated with a high stakes copyright lawsuit, relaxed the formalities associated with the discovery of evidence, and, most importantly, reduced the expedited registration fees (currently $790; normally $35 for regular filings) that most artists are required to secure before they can bring a copyright infringement action in federal district court. In addition, if a small claims court reduced the need for attorneys’ fees it would be a significant factor in reducing the burden an artist or designer faces in securing compensation for unauthorized uses of their works.

If the proposed new court places a designer or artist on the same footing as a well-funded defendant, reducing the options for expensive legal maneuvering, or even eliminating the need and cost associated with a lawyer, a copyright small claims court could be a welcome revolution for designers. However, those in Congress who proposed such a solution did not consider that most copyright claims are for large sums—otherwise, they would not have been raised. Copyright owners generally decline to engage in disruptive litigation when the damages are minor. The proposed small claims court undermines the fundamental principles forming the basis for redress under the copyright statute. Specifically, the damages provisions of copyright law were constructed so as to promote the registration of copyrights by creators and to raise the specter of large penalties for those who infringe. In sum, the framers of copyright law used free-market principles to promote registration and to put a chill on the urge to infringe. Small claims courts only address one side of this equation and, as with most changes to long-standing law, the unintended consequences are bound to be unpleasant.

Currently, the U.S. Copyright Office is accepting statements from parties who have an interest in the proposed small claims court. At this time, parties as diverse as Microsoft, Graphic Artists Guild, Google and the Authors Guild, in addition to numerous individuals and law firms, have commented on the proposal. If you wish to comment, you must submit your letter no later than October 19, 2012.

For further information, visit: http://www.copyright.gov/docs/smallclaims/.

For instructions on submitting a comment, see: http://www.copyright.gov/fedreg/2012/77fr56874.pdf