Yesterday, Congressman Jerrold Nadler (D-NY), Ranking Member of the House Judiciary Committee, delivered the following opening remarks during a Judiciary Committee hearing on H.R. 3945, the Copyright Alternative in Small-Claims Enforcement Act of 2017:
“Mr. Chairman, in 2013, you spearheaded a comprehensive bipartisan review of the copyright system that consisted of a careful, thoughtful analysis of various provisions of the copyright code, as well as how the copyright system is working for creators and users alike.
“At the culmination of that review, a few areas of consensus emerged, one of which was the need to reform the music licensing system. With legislation to address that issue unanimously sent off to the President’s desk earlier this week, we can move on to the next issue calling out for action, namely, the need to establish a small claims court to resolve small-dollar infringement claims.
“A fundamental principle of law is that there is no right without a remedy. But, unfortunately, many copyright holders today, particularly many visual artists, lack sufficient remedies to protect their rights. This is because the cost of pursuing an infringement claim in federal court, particularly for small creators, is far greater—as much as ten times or more—than the expected damages they would receive in a successful suit, making it virtually impossible for them to protect their works.
“While the damages at stake in these infringement claims may be small in terms of sheer dollar amount, even a few thousand dollars in uncollected royalties would represent a huge loss of income for someone like a photographer making just $35,000 a year. And, few attorneys would take a case where such limited damages are at stake because they would likely not recoup their costs. Even if a creator did successfully obtain judgement in his or her favor, the total cost of litigation would likely dwarf the damages awarded, making it a pyrrhic victory at best.
“The CASE Act seeks to address this important problem. This bipartisan legislation, introduced by our colleague, Representative Hakeem Jeffries, would establish a small claims court within the Copyright Office to hear copyright suits seeking $30,000 or less in total damages. As envisioned by the CASE Act, this court would be less expensive and much easier to navigate, even without an attorney, than federal court. Based, in large part, on recommendations from the Copyright Office, which conducted an exhaustive study of this issue, the bill would provide an affordable means for small creators to vindicate their rights.
“Although a small claims court would provide a more conducive forum for small creators to file suit, the court’s limited jurisdiction based on the bill’s fairly nominal damage limit as well as the reduced cost that would be incurred in defending against an infringement claim, or seeking a declaratory judgement that use of a copyrighted work constitutes fair use, should make it an appealing venue for copyright users as well.
“If, however, a defendant would prefer not to submit to the jurisdiction of the small claims court, the bill allows such defendant to opt out.
“In recognition of certain concerns expressed by some stakeholders, Representative Jeffries worked tirelessly to refine this legislation and, as a result, it now includes a number of revisions suggested by these stakeholders, including the organizations represented by two of our witnesses today. These revisions include various heightened due process protections and provisions intended to reduce potential abuse of the system.
“Nevertheless, some stakeholders still have certain concerns about the bill. That is why I am pleased that we are holding this hearing today, so that we can better understand these concerns and, hopefully, find solutions that may be acceptable to all stakeholders.
“I am a proud cosponsor of this legislation, and I thank Mr. Jeffries for his outstanding leadership on this issue. I also want to recognize the efforts of Representative Judy Chu, who introduced similar legislation in the last Congress, as well as the other cosponsors of this bill.
“I look forward to hearing from our witnesses, and I hope that today’s hearing will help us lay the foundation for further action on this important legislation. I yield back the balance of my time.”