CASE Act Would Create a Drive-Through Window for Copyright Trolling

The House Judiciary Committee recently voted to pass the Copyright Alternative in Small-Claims Enforcement (CASE) Act. The intent of the bill is to create a streamlined, low-cost alternative to traditional copyright infringement claims in the form of a small claims court. Though it is tempting to streamline the process for compensating creators’ whose work has been infringed, this legislation would make it far easier to abuse a copyright system designed to “promote the progress of science and useful arts.”

First introduced in the last Congress, not even one hearing has been held on the bill. After extensive debate on numerous other pieces of high profile legislation, members of the Judiciary Committee dedicated little time for substantive debate on CASE – despite concerns raised by critics of the bill. To their credit, Reps. Zoe Lofgren (D-Calif.) and Ken Buck (R-Colo.) also identified serious issues with the legislation, but their concerns were dismissed by Chairman Jerry Nadler (D-N.Y.) and ranking member Doug Collins (R-Ga.).

This is why it’s critical that we hit the brakes and subject the CASE Act to some much-needed scrutiny. While the bill is touted as necessary to protect photographers – the primary interest group promoting the CASE Act – it’s not at all clear they need the help. Further, the CASE Act would make it easier than ever to go after innocent infringers of copyrighted materials, even if the infringement does no real harm to rightsholders.

A small claims court makes sense for legal proceedings where the law is straightforward and parties involved could adequately represent themselves (such as minor property damage or a late rent check). This is emphatically not the case for copyright law.

It is unreasonable to expect someone who unknowingly posts a copyrighted photo on their blog, for example, to be familiar with the nuances of fair use. What seems like a user-friendly remedy process will turn into a lion’s den for infringers going up against seasoned rightsholders and their lawyers. It’s also important to keep in mind that it is almost comically easy to infringe on copyright. Post someone else’s picture – or even forward an email without permission – and you are automatically a copyright infringer.

The bill will make innocent internet users especially vulnerable to legal harassment. As confirmed by a recent Supreme Court decision, a rights holder normally cannot sue for infringement until a work has been registered by the Copyright Office. Under the CASE Act, however, someone may be found guilty of infringement for a work not yet registered, and find themselves on the hook for $7,500. It would be virtually impossible for someone to know if they are infringing a work, with one estimate finding that upwards of 80 percent of infringers of copyrighted photos did so unknowingly. Another study found that many infringers will either pay for the rights to a photo or not use it, after a simple notification from the rights holders.

What’s more, the CASE Act would also make it possible for scammers and other two-bit con artists to take advantage of innocent internet users.

Take the case of Prenda Law. From 2010 to 2013, the firm produced pornography and uploaded it online for the purpose of suing downloaders. They squeezed their victims for a few thousand dollars each to the tune of $6 million in total, using the potential public embarrassment of the infringers to their advantage. Attorneys John Steele and Paul Hansmeier were both sentenced to prison for establishing phony shell companies, hiding their financial interests in the decisions, and other fraudulent behavior – but not for copyright trolling.

Another recent notorious abuser of copyright laws is Richard Leibowitz – aptly dubbed a “copyright enforcer” and “walking lawsuit factory.” From January 2016 to mid-2018 Leibowitz filed over 600 copyright infringement suits on behalf of photographers. His strategy was to go after larger media companies by negotiating a settlement deliberately designed to be cheaper than the cost of litigation. In 2018, he was officially named a “copyright troll” by Judge Denise Cote, and was subsequently fined and ordered to take ethics classes.

The CASE Act won’t eliminate these trolls – but it will embolden them, and make their business models more lucrative. It is a solution in search of a problem, that would only make an existing problem even worse. This is why it is crucial that the law and its consequences be more closely scrutinized, before even more innocent individuals fall into the snares of walking lawsuit factories.

Daniel Takash is a regulatory policy fellow at the Niskanen Center.

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