The CASE Act: Now What?

While you may not have heard, the controversial Copyright Alternative in Small-Claims Enforcement Act (CASE Act) was passed and signed into law just days before Christmas as Hollywood’s version of coal in the stocking for millions of vulnerable Americans. If you are wondering how you missed such an important change to our nation’s copyright laws, go easy on yourself. It passed as part of a massive, year-end Covid relief bill with almost no public debate, and will still expose ordinary Americans to tens of thousands of dollars in damages, pose significant challenges to our Constitution, and be used to target schools, libraries and religious institutions. 

Though it is now signed into law, the lack of details and constitutionality questions could lead to the undoing of this well-intentioned, but poorly crafted bill.  

As things stand now, we know that the CASE Act:

1) Will make internet users and small businesses vulnerable 

Any American organization or individual—from small businesses to religious institutions to nonprofits—is subject to up to $30,000 in statutory damages per case for merely sharing a meme or posting a photo. These excessive penalties are the largest for any small claims proceeding in the U.S. and are 5 times the national average of other small claims courts and the equivalent to more than half the annual take-home pay for many Americans.

2) Will make it even easier than ever for copyright trolls to abuse the system and scare people into paying settlements they can’t afford

It will open up a path for copyright trolls to send threatening letters to extort settlements from individuals, small businesses, nonprofits, religious institutions and more who do not understand the Copyright Claims Board or the complexities of copyright law. Ordinary Americans will be intimidated by copyright trolls into settling without ever even going to the Copyright Claims Board.

3) Is unconstitutional and does not allow for the right of appeal

The bill creates a “small claims” judicial proceeding in the Copyright Office, waiving the Supreme Court upheld Seventh Amendment right to jury trials in copyright cases, and creates an unprecedented judicial function within the legislative branch that erodes over two centuries of separation of powers.

4) Is still widely misunderstood

American consumers, small businesses, nonprofits and religious institutions will be targeted for their lack of copyright law knowledge. Even if someone is acting in good faith and attempting to obtain permission before using a work, they may not be able to do so leaving them exposed to claims. Meanwhile, large companies and mass infringers will opt out because they understand copyright law, employ copyright attorneys and can act quickly and decisively.

5) Is confusing and fails to prescribe key details of the notification process 

For the overwhelming majority of Americans, it will take much longer than 60 days to understand the meaning of a CASE Act notice, figure out the merits and law around the alleged infringement and make a fair assessment of potential damages. In addition to being at risk for up to $30,000 in statutory damages, most defendants will need to hire an attorney at significant cost to determine their options, spending even more money.

Stay tuned for more from Re:Create as the implementation process moves forward under the looming and likely threat of a constitutional challenge. The question is not if, but when.