Samuelson: patent cases have much more extensive discovery than the average copyright case, and trials tend to be longer/more complicated. Case management isn’t a serious issue for most copyright cases.
Besek: Courts/public think patents are different; harder to
sell courts on the idea that copyrights are different. Possible reaction: Why shouldn’t this be
about all small claims?
David Carson, US Copyright Office: Small claims of all kinds
are problems in federal court; one argument that might be helpful is that, at
the moment, you have no choice but federal court for copyright claims; often
people have state court as an alternative, which may depending on the state be
more efficient/faster/cheaper. But other
exclusive jurisdiction claims have the same issues.
Grecco: we already have an incredibly complex system.
Anything nonuniform will increase complexity.
Nimmer/Grecco proposal within the existing system. Nimmer:
It’s astonishing that a jury is told to figure out fair use,
originality, substantial similarity given the complexities, but we take the 7th
Amendment as a given. We think we’ve
mostly avoided 7th Amendment problems. Basically, we propose a minimal amendment to
the copyright statute: define a small infringement claim, authorize the C.O. to
make regulations about that, and modify the provisions for award of attorneys’
fees. Give incentive to both sides to
call the claim small: under $20,000, or under $80,000 per the regulations, or
something else. Once a claim is small,
both parties are incentivized to go to a small claims tribunal and make offers
of settlement through attorneys’ fees.
If p recovers more than d’s offer, p gets all its attorneys’ fees; if d
loses less than p’s offer, d gets all its fees, and if it’s somewhere in the
middle the court gets discretion.
Current problem: d can’t get its fees even if the award is way less than
its settlement offer. (This is a result
of a common but not uniform misinterpretation of the offer of judgment rules
governing all claims; the 7th Circuit got it right.)
Brauneis: what if the d doesn’t want to do this?
Nimmer: d can’t be forced to waive right to jury trial. D won’t get its attorneys’ fees even if it
wins. Could be viewed as a hammer on
which to challenge constitutionality: there is a penalty for asserting right to
jury trial. (This seems like a really
bad idea for defendants with valid fair use defenses who want to fight. You’re taking away a major deterrent of
strike suits.)
Grecco: political issue: on its face, it looks like artists
are giving up protection if they lose, exposing them to legal fees. But in a
Rule 68 situation, you’re exposed to that anyway, especially if you add
non-copyright claims in the cause of action.
(Again, many
courts have refused to apply Rule 68 to copyright cases, if you’re not in the 7th
Circuit.)
I made my point about losing your right to claim fees by
standing on your rights, and Nimmer suggested that you could allow the
defendant to make a zero offer and if defendant wins it could still get its
fees.
Nimmer: copyright-plus claims would be out—copyright plus
Lanham Act claim. Not for preliminary
injunction; not against the US government.
Samuelson: cases involving close questions of substantial
similarity/derivative works or fair use, where there are fuzzy boundaries,
there’s a societal advantage to litigating it out. If I feel like I’m totally unable to get fees
if I don’t make an offer, that will discourage legitimate disputes.
Nimmer: photog. X puts out a photo, and Random House puts
out a book with the photo. Should that be in or out?
Samuelson: book isn’t a derivative work of the photo; a
reproduction case seems fine to her. But
compare ClearPlay case: useful to get court to interpret the boundaries of the
derivative work right. If ClearPlay has
to make a settlement offer to get fees, have to bet the fair use defense on p
not accepting. (Which makes the point
that if you also want to continue the activity going forward, making a low
offer is not helpful to you—if p accepts $5, you would be screwed, so you have to say “no” and thereby give up
your right to seek fees if you win.)
Nimmer: Yes, D who opts out won’t get fees even if it’s
prevailing party.
Perlman: Supposed to make it easier for small copyright
owners to litigate. This proposal is too
intricate to do that.
Grecco: can be implemented within present system, though,
and perhaps there should also be a more traditional small claims system.
Calzada: Risk of fees
is a primary deterrent of going to court.
Minimizing the risk is key to getting participation. If I know I could get stuck with $200,000 in
fees just from honestly being wrong about my rights, that’s a huge obstacle to
asserting rights. (And this is true of defendants and plaintiffs.)
Grecco: but Rule 68 exists now.
Calzada: but we’re trying to do better. If you perpetuate the risk of the current
system, you’re not helping.
Grecco: need to incentivize taking the fast track. Have to have a reason to opt in.
Calzada: yes, but this incentive won’t provide that.
Aistars: How do you deal with the risk of nuisance
claims? You don’t want to incentivize
people to opt into a small claims process because it’s cheaper to deal with it
than to fight.
Nimmer: then the defendant opts in and offers $5, and will
get its fees at the end of the day when the court rules in its favor. ((a) Unless the p accepts the offer. (b) Which should have happened under the
current system, right?)
Calzada’s concern is potent; if a rightsholder can vindicate
rights with no risk, then this would be a step back, but right now your only
hope is to go to court and spend $ on fees.
(But you could get fees if you win now; also it’s not like small
defendants have the $ to pay big fees!)
Aistars: seems more like a contract negotiation than an
assertion of defenses. Trying to incentivize making offers.
Nimmer: yes, not a lot at stake, and proposal tries to get
both to compromise. Problem: sometimes
there’s a principle.
Aistars: raises again frivolous claims problem.
Nimmer: we view this as a step forward for avoiding the Rule
68 circuit split.
Average © trial is $300,000.
Purpose is to short-circuit trials and incentivize early
settlement. Would think about carveouts
for defenses, complexity, or something else.
Pallante: what other incentives did you think about?
Nimmer: it’s the only one that occurred to us. If d should have paid $10,000, then making it
pay $10,000 after a drawn out suit isn’t much of a deterrent. (Why not treble damages?)
Grecco: if there’s multiple infringements, we reduced the
available recovery.
Michael Shapiro, PTO: if copyright-plus claims are out,
would that mean reputational harms aren’t covered?
Nimmer: note also only covering post-1978 federal rights,
including VARA and 1201/1202 but excluding pre-1972 sound recordings and
foreign rights violation claims. Forego
right to preliminary injunction.
Brauneis: turn to new tribunal, giving us more freedom but
more danger.
Kim Tommaselli, Ind. Film & TV Alliance: proposed
specialized court similar to immigration courts. $50,000 limit. With the complaint, p should attach
documentary evidence incl. certificate of registration. Should be able to choose whether they want
representation by counsel. Minimal
filing fee. Trade association could act
as a channeling group and file on behalf of a group; amount should be
calculated per infringement and not per action.
Qualifications in copyright law should be required. Should be set timeframe after filing for
hearing on merits. Film rights are inherently
time sensitive. Damages awarded should
include monetary relief, including statutory damages, as well as equitable
relief; limited discovery but permitted in the interest of justice if not to
delay the proceeding. Appeal: for very
limited reasons similar to appealing arbitration award.
Brauneis: shows all the choices that need to be made!
RT: I want to offer a suggestion that I think may help
rights owners who would like to use streamlined procedures like these,
especially if the idea is for there to be an aggregate plaintiff. I also teach property, and I’ve been
following the robosigning problems with mortgages, as well as with credit card
debt. It is increasingly the case that
judges at pretty much every level have lost the presumption of good faith and
proper recordkeeping they traditionally accorded to large, economically
significant institutions, because those institutions didn’t invest in keeping
records that actually tracked who owned what, and then faked a bunch of
documents to cover up that fact. Across
the country, judges are—sometimes on their own initiative, when a defendant doesn’t—requiring
plaintiffs to prove a real ownership interest.
Courts and legislatures around the country are rejecting streamlined
procedures in foreclosures because they’ve simply seen too many abuses.
In copyright, we see a bit of an analogy in some judges’
unwillingness to entertain mass copyright joinders when defendants weren’t
really acting together, or unwillingness to connect people to IP addresses without
more evidence. If we move further in the
direction of small claims, with proceedings that are supposed to be decided on
the papers, IP owners should be very aware of the need to invest in a system
that keeps proper records from day one.
The equivalent of a “lost note affidavit” is not very credible after all
the revelations of malfeasance, and a shift to small claims is unlikely to
change that. Especially if IP owners
outsource enforcement, a “business record” with only a person’s name (or an IP address) and an
allegedly infringed work on it is increasingly unlikely to hold up in court,
just as an alleged debt that just has a name and amount on it is increasingly
unlikely to be deemed collectable.
Document the claim in its entirety!
Pierce: zero chance of constitutional survival. Immigration court: the government is a party
to the action, and makes it completely different. Either have to make it subject to plenary
review or “voluntary” inducements to choose it.
Brauneis: arguably people wouldn’t go through plenary rule
that often: the dynamics of initial decisionmaking are very important even if
we’ve insulated it from constitutional challenge.
Shapiro: who are the defendants that we expect to have in
this process? We haven’t been talking
about joint authors fighting over percentages.
We are talking about defendants whose websites are hosting copies
without paying. Are we trying to address
that narrow group? Or are we trying to
replace the federal courts as the go-to forum for ajudicating copyright issues?
Grecco: need all of it.
Music: biggest issue might be injunction. You’re not going to find deep
pockets; mostly you want to stop them from dumping music. Photography isn’t
traded as a commodity like that; it’s a large corp/publisher: I’ve had Dow
Jones take my photos from Conde Nast.
You know it’s willful, because they embed a credit into the jpeg so it’s
non text searchable. So whatever makes it easier is the winner. Doesn’t think it should be that narrow;
should be doable now.
Joseph DiMona, BMI: suppose there was a court subject to
plenary review, which had a cap; if you wanted to appeal its decision, you had
to waive right to fees. So you wouldn’t
have to make an offer to get your fees, but if you appealed a loss you would. How many people really appeal? Make it available to satisfy the
Constitution, but most people would live with the initial ruling. EFF would only get involved in an issue of
broad application.
Mosenkis: some of the most important copyright cases are
about small amounts.
DiMona: many of those involved secondary liability; not
clear that we want those cases in small claims.
Jay Rosenthal: Proving up copyright is an issue (I don’t
think ownership is the real issue; I’m more analogizing the chain of title
issues to the question of identifying who actually did the infringing); having
to identify the specific infringement/infringer would defeat plaintiffs even in
small claims. (But when you’re talking
streamlined provisions, you traditionally want extra safeguards to make sure
you’ve got the right guy, especially in the context of debt collection errors
that are increasingly salient and well-recognized. How to do that?)
Brauneis: how does Nimmer/Grecco proposal deal with “it
wasn’t me” defense?
Nimmer: D should offer one dollar to get rid of it. (Though then that could count as a strike
with your ISP: Nimmer is assuming P will reject low offers, but I’m not sure
why that would occur or how an ordinary unrepresented citizen would figure out
their optimal game theoretic move here.
Reflecting on this further: purely rational offer might be $1, but most
people won’t do that because that is only intelligible in human terms as an
insult. Compare dictator games,
etc. Thus, we should expect higher
offers even from ds who legitimately believe they have valid defenses if they
fear huge downside risks from refusing.)
Trolls won’t make $ if ds only offer $1. (Though trolls may make $ if ds offer $100 or
$500, and their threat letter is likely to say they’ll accept that: this is
already the business model, and if max damages are $20,000 that could sound
pretty good; for most people receiving these letters, there is no functional
difference between $20,000 and $120,000.)
Samuelson: judges often assume that an offer is an
admission.
Maria Mathews, Professional Photographers of Am.: ADR
mechanisms. Rightsholders with claims
under a certain dollar amount—perhaps $15,000—would have admin tribunal,
limited to actual damages/reasonable compensation, not statutory damages. Living under jurisdiction of Copyright
Office. Registration should be required.
Eugene Mopsik, Am. Soc. Media Photog.: likes simple
solutions, allowing photographers to bring a claim themselves and get
reasonable compensation quickly. Doesn’t
like absence of punitive damages.
Everyone’s figured out how to make $ out of photos but photographers, so
impatient with scholarly/theoretical discussions.
Mosenkis: what are the cases you see?
Mopsik: phone calls every day about publishers exceeding
licenses; images lifted from photographers’ sites with watermarks, used in
commercial sites. Nine times out of ten
they tell the photographer to pound said, or the image has been used for a year
and the site says “okay, I’ll take it down.”
Not good enough.
Grecco: Internet uses: exceeding licenses, and every
permutation imaginable. Stock agencies
steal press kits from movie studios and syndicate it. It’s the Wild West.
Mosenkis: ASCAP/BMI strategize as an industry; bring suits
in members’ names. We try to license everything
we can, but there are 1000s that hang up the phone/say come & get me. We
have to pick and choose.
DiMona: photographers have an economic problem as well as a
legal problem: individuals don’t have the time to monitor even if there is a
simple procedure. BMI/ASCAP were created for songwriters in a similar boat.
Nirvana wouldn’t be to litigate with anyone, but to get a $200 fee in most
cases (except when there’s an exclusive license or very valuable photo). First someone has to find you. Have an organization with watermarked,
searchable photos and easy cheap licenses.
CCC = solved similar problem.
Before CCC, photocopying cases came out differently, but court said it
wasn’t fair use once the CCC was around.
Harder to say pound sand to ASCAP than to an individual, b/c ASCAP will
go after you.
Grecco: but you have a compulsory licensing system. CCC is one of the biggest offenders. We lost a ruling where we couldn’t find a
specific infringement even though they’re offering to license our stuff.
Mopsik: CCC pays only publishers, who’ve affirmed they own
the rights to the collective work. Ask
photographers if they ever got a check for that—no one does.
Grecco: every other company in the world divides licensing
fee between publisher, writer, and photographer. We get checks as organizations and don’t have
a distribution method. In this country we don’t have a system. Google, Facebook—the revenue streams could be
significant but we don’t have the statutory backing.
Mopsik: extended compulsory licensing might make this
possible.
Brauneis: maybe combined with small claims.
Mosenkis: need coordinated efforts by photographers.
Mopsik: we lack means to coordinate. Moving photographers in
the same direction is very difficult.
Mathews: Our clients, portrait/wedding folks, are different
from media photographers; most of our infringers are our clients: you aren’t
going to sue your bride for going to Kinko’s and running off five copies of her
wedding portrait, because then she won’t refer you.
Mopsik: no photog will get rich, but at least could monetize
smaller uses. Wouldn’t want this for
negotiated/ad uses, but collective licensing might be good for the current
thefts.
Grecco: could break this out into primary sale v. reprint of
magazine/secondary usage.
Brauneis: nobody seemed to be in favor of state court
jurisdiction. Any opening for that?
David Carson: horrible solution, but maybe the only way.
Either as a practical matter, Congress won’t set up what you want, and there
are constitutional hurdles for almost anything. In many states, you do have
courts that can quickly and efficiently deal with small claims. They’re not
specialists in copyright/IP. If you say
“fair use,” they won’t understand. Thus
decisionmaking quality won’t be great, but at least you’ll get a decision. May
be the only thing that works. Worth
holding states in reserve in case everything else doesn’t work out.
Nimmer: suing states in state court to solve 11th
Amendment problems?
Carson: sure.
Michele Woods, Copyright Office: in state courts, active and
maybe overactive systems to push people into mediation; in DC there are too
many small claims for the court to hear, so mediation is highly touted. Experienced mediators could help resolve at
least licensing fee type cases. In some
systems, you can’t have the attorney as the principal spokesperson in the
mediation.
Carson: some states have a jury trial right, and others
don’t. Pick a maximum amount in
controversy—say $20,000—and allow state jurisdiction.
Besek: one concern: many states don’t have small claims
jurisdictions to that amount, so you’re talking about main state court
systems. 11th Amendment
issues will not go unnoticed by state university systems etc.; will be
political opponents.
Rick Carnes, Songwriters Guild: hodgepodge of state laws
confer immunity on states, so it’s not a complete answer.
Grecco: bigger issue is jurisdictional, with the
internet.
Brauneis: but personal jurisdiction issues are the same in
federal court.
Grecco: would need to enable service for small claims.
Nimmer: offender might try to abuse the system: ex-employee
of company claims ownership, sues for infringement. We booted that out of our system. Shouldn’t allow that person to file in
Oklahoma court for $10,000 to defeat vindication of federal claim. Should we allow removal?
Carson: Don’t know how you deal with that as a blanket
matter. Can do that under current
system. If counterclaim is beyond state
jurisdiction, does that move them both out?
Nimmer: states used to be able to retain jurisdiction over
counterclaims, but AIA removed that; need to figure that out.
Brauneis: conclusions and next steps?
Pallante: Copyright Office will have more studies over the
next year, and meetings on both coasts.
Besek: more study on how many people do seek plenary review
across different types of cases.
Perlman: should also separate out statistics for individual
defendants v. corporate defendants. His constituency: more likely claims are
against corporate entities.
Mosenkis: are those more expensive? Are corporate defendants
more likely to run up the bill? Also,
how often are attorneys’ fees actually granted?
Pallante: Congress will need the views of constitutional
scholars.
No comments:
Post a Comment