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Rule2024-00596

Copyright Claims Board: Active Proceedings and Evidence-Smaller Claims Procedures

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Published

January 16, 2024

Effective

February 15, 2024

Issuing agencies

Library of CongressCopyright Office, Library of Congress

Abstract

Pursuant to the Copyright Alternative in Small-Claims Enforcement Act, the U.S. Copyright Office is adopting a final rule amending the procedures for "smaller claims" proceedings before the Copyright Claims Board.

Full Text

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<title>Federal Register, Volume 89 Issue 10 (Tuesday, January 16, 2024)</title>
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[Federal Register Volume 89, Number 10 (Tuesday, January 16, 2024)]
[Rules and Regulations]
[Pages 2489-2493]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-00596]

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LIBRARY OF CONGRESS

37 CFR Parts 220, 222, and 226

[Docket No. 2021-8]

AGENCY: U.S. Copyright Office, Library of Congress.

ACTION: Final rule.

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SUMMARY: Pursuant to the Copyright Alternative in Small-Claims
Enforcement Act, the U.S. Copyright Office is adopting a final rule
amending the procedures for ``smaller claims'' proceedings before the
Copyright Claims Board.

DATES: Effective February 15, 2024.

FOR FURTHER INFORMATION CONTACT: Rhea Efthimiadis, Assistant to the
General Counsel, by email at <a href="/cdn-cgi/l/email-protection#9ff2faf9ebdffcf0efe6edf6f8f7ebb1f8f0e9"><span class="__cf_email__" data-cfemail="f69b939082b69599868f849f919e82d8919980">[email&#160;protected]</span></a> or telephone at (202)
707-8350.

SUPPLEMENTARY INFORMATION: Pursuant to the Copyright Alternative in
Small-Claims Enforcement Act of 2020 (the ``CASE Act''), the Copyright
Office created the Copyright Claims Board (the ``CCB''), an alternative
and voluntary forum for parties seeking to resolve certain copyright-
related disputes.\1\ The CASE Act directed the Register of Copyrights
to ``establish regulations to provide for the consideration and
determination, by not fewer than 1

[[Page 2490]]

Copyright Claims Officer, of any claim under this chapter in which
total damages sought do not exceed $5,000 (exclusive of attorneys' fees
and costs).'' \2\ The Office has engaged in several rulemakings to
establish the procedures necessary to implement the CASE Act.
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\1\ Sec. 212, Public Law 116-260, 134 Stat. 1182, 2176 (2020).
\2\ 17 U.S.C. 1506(z).
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On December 8, 2021, the Office published a notice of proposed
rulemaking (``NPRM'') that, among other topics, addressed procedures
for ``smaller claims'' proceedings.\3\ Under the proposed rule, smaller
claims proceedings would be heard by one Copyright Claims Officer and
discovery would be limited to that available in standard CCB
proceedings.\4\ Additional discovery, including requests for expert
testimony, would be prohibited, and the Officer would issue a
determination based solely on the parties' written testimony without
holding a hearing.\5\ In response to public comments, the Office
decided to implement a ``more expedited and less formal process'' for
smaller claims than the NPRM proposed.\6\ On May 17, 2022, the Office
published a final rule (the ``May 2022 Rule'') that reflected those
changes.\7\
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\3\ 86 FR 69890 (Dec. 8, 2021).
\4\ Id. at 69912-13.
\5\ Id.
\6\ 87 FR 30060, 30074 (May 17, 2023) (``May 2022 Rule'').
\7\ Id.
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The May 2022 Rule provided that the smaller claims process would
rely on ``written submissions and informal conferences to minimize
party burdens'' and ``allow[ ] the presiding Officer to take a more
active role in case management.'' \8\ Smaller claims proceedings would
no longer use the same discovery rules as standard CCB proceedings.
Instead, discovery would be ``significantly limited, if allowed at
all,'' and the scope of any permitted discovery would be discussed
during an initial conference.\9\ The May 2022 Rule ``allow[ed] for a
party position statement, a merits conference to discuss the evidence
and the issues presented, a tentative finding of facts by the presiding
Officer, the opportunity for parties to respond to those findings, and
a final determination.'' \10\ The May 2022 Rule also included several
clarifications, including specifying when claimants must choose whether
they want smaller claims proceedings, how counterclaims impact this
choice, and the content of initial and second notices for smaller
claims proceedings.\11\ The Office explained that this ``updated,
streamlined procedure for smaller claims substantially addresses
commenters' concerns, will provide a clear alternative to both the
CCB's standard proceeding and to Federal litigation, and will
ultimately incentivize claimants to use the CCB's smaller claims
procedures where appropriate.'' \12\
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\8\ Id.
\9\ Id.
\10\ Id.
\11\ Id. at 30074-75.
\12\ Id. at 30075.
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Concurrent with the publication of the May 2022 Rule, the Office
sought further comment regarding the smaller claims process.\13\ This
second opportunity to comment was intended to help determine whether
the updated regulations struck ``the proper balance between
streamlining the smaller claims process and providing sufficient
procedural protections to all parties.'' \14\
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\13\ Id.
\14\ Id. On June 15, 2022, the Office published a correction to
the May 2022 Rule, which included one technical correction related
to the smaller claims provision. 87 FR 36060 (June 15, 2022).
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The Office received two further comments, from the Copyright
Alliance and the New York Intellectual Property Law Association
(``NYIPLA'').\15\ These comments are addressed in detail below.
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\15\ Comments received in response to this rulemaking are
available at <a href="https://www.regulations.gov/docket/COLC-2021-0007/comments">https://www.regulations.gov/docket/COLC-2021-0007/comments</a>. References to public comments responding to the Office's
May 2022 Rule are by party name (abbreviated where appropriate),
followed by ``Final Rule Comments.''
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The Copyright Alliance's Comment

The May 2022 Rule provided that a claimant may request that the
smaller claims procedures apply when filing its claim, and also that
``[t]he claimant may change its choice as to whether to have its claim
considered under the smaller claim[s] procedures at any time before
service of the initial notice.'' \16\ The Copyright Alliance noted that
this language ``seems to suggest that a claimant who initially chooses
to have the proceeding considered under the smaller claims procedures
may be able to change their choice and have the proceeding considered
under standard small claims procedures, but that a claimant who
initially opts to have the proceeding considered under the standard
small claims procedures may not have that same opportunity.'' \17\ The
Copyright Alliance recommended that the Office clarify this provision
and ``also include reference to the opportunity for claimants to change
their choice in another section of the regulations.'' \18\
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\16\ 37 CFR 226.2 (emphasis omitted).
\17\ Copyright Alliance Final Rule Comments at 2.
\18\ Id.
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The Office intended for the current regulations to allow a claimant
to change its election of which procedures to use before service of the
initial notice, regardless of its original election. Considering the
Copyright Alliance's comments, however, the Office has modified the
regulatory language to clarify that rule.\19\ The Office declines to
take the Copyright Alliance's suggestion to duplicate this language in
other sections of the regulations. The Office notes that several
chapters of the CCB Handbook, a plain language resource for CCB
parties, also reference claimants' ability to change their election of
small or smaller claims procedures.\20\
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\19\ The Office is also revising its regulations to reflect that
a claimant's request to change their election should be submitted as
a ``tier one'' request, e.g., a request found in 37 CFR 220.5(a)(1)
that is filed through a fillable form on the CCB's electronic filing
and case management system and is limited to 4,000 characters.
\20\ See 37 CFR 226.2; U.S. Copyright Office, CCB Handbook at
ch. 4, Smaller Claims (2022) <a href="https://ccb.gov/handbook/">https://ccb.gov/handbook/</a>; id. at ch.
3(a), Starting an Infringement Claim; id. at ch. 3(b), Starting a
Noninfringement Claim; id. at ch. 3(c), Starting a Misrepresentation
Claim.
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The regulations also allow a claimant to change its election after
service, so long as the other parties and the CCB consent.\21\ The
Copyright Alliance suggested there should be no opportunity for a
claimant to change its election after service of the initial notice,
even if the respondent agrees to the change. The Copyright Alliance
argued for this restriction on the grounds that a claimant who wishes
to change their choice after service ``has the ability to withdraw
their claim and file it again to reflect the new choice.'' \22\
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\21\ 37 CFR 226.2.
\22\ Copyright Alliance Final Rule Comments at 2-3. Although it
acknowledged that the CCB Handbook is not binding authority, the
Copyright Alliance also pointed to language in the CCB Handbook that
suggests that a claimant may not be able to change their selection
after service.
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The Office disagrees that a strict deadline is advisable and
believes that a more flexible approach is preferable in a forum that is
intended to be accessible to pro se parties. Requiring consent from the
other parties and the CCB should be sufficient to protect against abuse
of the election process.
In its comment, the Copyright Alliance also noted that the
regulations give the Officer presiding over a smaller claims proceeding
the authority to ``issue additional scheduling orders or amend the
scheduling order,'' indicating that there may be a difference between
an additional scheduling order and an amended scheduling order.\23\ The

[[Page 2491]]

Copyright Alliance sought clarification on this point.\24\
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\23\ Id. at 3.
\24\ Id.
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Under the regulations, the initial scheduling order in a smaller
claims proceeding includes ``the dates or deadlines for filing of a
response to the claim and any counterclaims by the respondent and an
initial conference with the Officer presiding over the proceeding.''
\25\ That Officer may issue an additional scheduling order that
includes dates or deadlines beyond those in the initial scheduling
order, such as dates of other conferences or deadlines for discovery.
An amended scheduling order is used to change the dates in a
preexisting scheduling order, such as rescheduling the deadline for
filing a response set forth in the initial scheduling order. In light
of this explanation, the Office does not believe a regulatory change is
necessary.
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\25\ 37 CFR 226.4(b).
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The Copyright Alliance also sought clarification on regulatory
language that provides that ``[i]f a party fails to submit evidence in
accordance with the presiding Officer's request, or submits evidence
that was not served on the other parties or provided by the other side,
the presiding Officer may discuss such failure with the parties during
the merits conference.'' \26\ The Copyright Alliance observed that
``the phrase `such failure' can only be read to refer back to the first
clause (referencing the party's failure to submit evidence) and not the
second clause (referencing a party's submission of evidence that was
not served on the other parties) since the latter is not phrased as a
`failure.' '' \27\ The Copyright Alliance further noted that the
regulations permit the Officer to draw an adverse inference as a remedy
for the failure to submit evidence but does not mention remedies for
the submission of evidence that was not served on or provided by other
parties.\28\
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\26\ Copyright Alliance Final Rule Comments at 3 (quoting 37 CFR
226.4(d)(3)).
\27\ Id.
\28\ Id. at 4.
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The Copyright Alliance is correct that the Office's intent was that
both issues--the failure to submit evidence and the submission of
evidence that was not served on or provided by the other parties--could
be addressed during conferences and that the presiding Officer was
empowered to impose remedies for either issue. The Office has revised
the corresponding regulatory text to make clear that the Officer may
discuss with the parties and impose appropriate remedies to address
either issue. The Office notes, and the regulatory text provides, that
although imposition of an adverse inference is one remedy that is
available to an Officer, there may be other appropriate remedies, such
as excluding evidence that was not properly served or providing the
other parties an opportunity to respond to such evidence.\29\
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\29\ The Copyright Alliance also identified a nonsubstantive
typographical error in the regulatory text, id. at 3 n.3, which has
been corrected. The Office has made several additional
nonsubstantive corrections.
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The NYIPLA's Comment

Current CCB regulations allow parties in a smaller claim proceeding
to submit a written statement setting forth their positions on the
issues prior to the merits conference, but do not permit any written
responses to these statements.\30\ The NYIPLA recommended that parties
be allowed to submit written responses, arguing that ``it is important
that parties before the CCB be afforded the right to respond to the
statements and evidence initially submitted by their opponents'' and
``to permit some form of rebuttal submission in advance of the merits
conference.'' \31\ The NYIPLA argued that written responses would also
``provide the other side with fuller notice of what its opponent's
rebuttal case will consist of at the merit conference'' and ``are
generally an effective means of responding to another party's
argument.'' \32\
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\30\ 37 CFR 226.4(d)(2)(ii).
\31\ NYIPLA Final Rule Comments at 1-2.
\32\ Id.
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The Office declines to make the requested changes at this time. The
smaller claims procedures are intended to provide a streamlined and
less formal process than standard CCB procedures. Consequently, the
Office's regulations sought to minimize the filings in smaller claims
proceedings to reduce the burdens on the parties, ensure that the
timeline is not protracted, and distinguish the smaller claims
procedures from standard CCB procedures. The Office believes that
providing parties with a single opportunity to submit an optional
written statement ensures fairness, especially with respect to both
parties represented by counsel and those appearing pro se, while
recognizing that some parties will be more comfortable communicating
their positions in writing than orally. As the NYIPLA recognizes,
parties will have an opportunity to respond to any written statements
during the merits conference.\33\ At the merits conference, the
presiding Officer will be able to ask questions and develop the
parties' positions further.
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\33\ Id. at 2.
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Under the CCB's current regulations, if a claimant has selected a
smaller claims proceeding, a respondent may bring a counterclaim that
seeks only $5,000 or less in damages, exclusive of attorneys' fees and
costs.\34\ As the May 2022 Rule explains, ``[a] respondent who is not
content with a counterclaim limited to $5,000 may decline to use the
smaller claims track and either use the standard proceeding by bringing
a separate claim against the original claimant or bring the claim to
Federal court.'' \35\ The NYIPLA disagreed with this approach and
recommended that the regulations ``provide for reassignment from the
smaller claim track for any proceeding in which a respondent wishes to
assert within the CCB a counterclaim that would be eligible only for
the non-smaller claim track.'' \36\ The NYIPLA argued that the benefits
of the smaller claims proceeding ``are lost, and the complexity
compounded, if two concurrent proceedings are running simultaneously,
under different procedures, particularly where both may, in some cases,
involve similar questions of fact and law.'' \37\ The NYIPLA expressed
concern about the logistics of consolidating a smaller claims
proceeding with a standard CCB proceeding and the possibility of
inconsistent determinations in the event that they are not
consolidated.\38\
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\34\ 37 CFR 226.3.
\35\ 87 FR 30060, 30074.
\36\ NYIPLA Final Rule Comments at 3.
\37\ Id.
\38\ Id.
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The Office declines to implement this proposed change. One of the
key features of the CCB is its voluntary nature--including the parties'
ability to choose whether to participate, given the matters at issue
and the scope of the proceeding. This feature could be frustrated were
a respondent able to unilaterally move a claim from the relatively
streamlined smaller claims process the claimant had selected to the
standard CCB process.
The Office appreciates the NYIPLA's concerns regarding the current
process for consolidating proceedings before the CCB and the
possibility of inconsistent determinations if two claims addressing
similar facts are not heard together. To address these concerns, the
Office is revising its regulations pertaining to consolidation. The
revised rule addresses circumstances in which two proceedings--a
smaller claims proceeding and a standard CCB

[[Page 2492]]

proceeding--involve the same or substantially similar parties and arise
out of the same facts and circumstances. This includes instances in
which a claimant selects the smaller claims procedures, and the
respondent files a separate claim, rather than asserting a counterclaim
subject to the $5,000 cap on damages. The amended regulations state
that, in such a situation, the Officers may hold a conference to
determine whether the parties would be willing to consolidate their
dispute into a single proceeding using either the standard CCB or
smaller claims procedures. If the parties do not agree to consolidate
their claims, the proceedings will continue on separate tracks.
The Office does not intend to add additional rules governing the
possibility of inconsistent determinations related to smaller claims
proceedings, as it concludes that the risk of inconsistent
determinations is low and the CCB's regulations should be as
straightforward and streamlined as possible. Moreover, while the
Officers make smaller claims determinations independently, they are
aware of all determinations issued by the CCB, and the Officer
presiding over a smaller claims proceeding and any standard proceeding
that involves similar parties or issues would be able to identify and
avoid any potential inconsistency in the separate determinations.
The NYIPLA also commented on witness appearances in smaller claims
proceedings.\39\ The regulations permit a party to request that a
witness appear at the merits conference for questioning if an opposing
party has submitted that witness's statement beforehand.\40\ Under the
regulations, if the witness does not appear, the presiding Officer may
still accept the witness's statement, but they may consider the
inability to question when determining how much weight to give the
witness's testimony.\41\ The NYIPLA suggested that ``the rule should
more clearly set forth the Officer's discretion to exclude altogether
the statement of a witness who fails to appear following an opponent's
request,'' arguing that this change may encourage parties to make their
witnesses available for cross-examination at the merits conference.\42\
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\39\ Id. at 3-4.
\40\ 37 CFR 226.4(d)(2)(iii).
\41\ Id.
\42\ NYIPLA Final Rule Comments at 3.
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The Office finds this recommendation is unnecessary, and not
sufficiently responsive to the practical challenges related to
witnesses' appearances. The CCB is already empowered to determine what
weight, if any, should be given to the evidence.\43\ Since it does not
have the authority to subpoena witnesses, witnesses appear at merits
conferences on a voluntary basis. The regulations are drafted with the
understanding that a witness may agree to submit a statement but may
not wish to appear at the merits conference for any reason, including
reasons that have nothing to do with the value of the statement. For
example, a witness may not be able to take time off from work or have a
personal conflict making an appearance burdensome. Even if potential
evidentiary consequences might influence the behavior of the parties,
they are unlikely to affect the witness' decision to give live
testimony. The current regulations, which give the presiding Officer
the authority to give any (or no) weight to witnesses' testimony,
better reflect the balance of interests at stake in CCB proceedings.
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\43\ See 17 U.S.C. 1503(a)(1)(C)-(D); see also U.S. Copyright
Office, Copyright Small Claims 126 (2013) (The Officers ``should
have the discretion to consider evidentiary submissions according to
their worth.''), <a href="https://www.copyright.gov/docs/smallclaims/usco-smallcopyrightclaims.pdf">https://www.copyright.gov/docs/smallclaims/usco-smallcopyrightclaims.pdf</a>.
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Conclusion

The Office appreciates these comments and will be monitoring how
the regulations are functioning to determine if any future changes are
needed. Apart from the modifications described above, the smaller
claims regulations remain unchanged from the May 2022 Rule.

List of Subjects in 37 CFR Parts 220, 222, and 226

Claims, copyright.

Final Regulations

For the reasons stated in the preamble, the U.S. Copyright Office
amends 37 CFR parts 220, 222, and 226 as follows:

PART 220--GENERAL PROVISIONS

0
1. The authority citation for part 220 continues to read as follows:

Authority: 17 U.S.C. 702, 1510.

0
2. Section 220.5 is amended by revising paragraphs (a)(1)(xix) and
(a)(1)(xx) and adding paragraph (a)(1)(xxi) to read as follows:

Sec. 220.5 Requests, responses, and written submissions.

(a) * * *
(1) * * *
(xix) Requests to withdraw representation under Sec. 232.5 of this
subchapter;
(xx) Requests by a claimant under Sec. 226.2 of this subchapter to
change its choice as to whether to have its claim considered under the
smaller claims procedures or the standard Board procedures; and
(xxi) Requests not otherwise covered under Sec. 220.5(d).
* * * * *

PART 222--PROCEEDINGS

0
3. The authority citation for part 222 continues to read as follows:

Authority: 17 U.S.C. 702, 1510.

0
4. Section 222.13 is amended by revising paragraph (a) and adding
paragraph (e) to read as follows:

Sec. 222.13 Consolidation.

(a) Consolidation. Except as provided in paragraph (e) of this
section, if a claimant has multiple active proceedings against the same
respondent or multiple active proceedings that arise out of the same
facts and circumstances, the Board may consolidate the proceedings for
purposes of conducting discovery, submitting evidence to the Board, or
holding hearings. Consolidated proceedings shall remain separate for
purposes of Board determinations and any damages awards.
* * * * *
(e) Smaller claims proceedings. Where the Board becomes aware that
a standard proceeding and a smaller claims proceeding involve the same
or substantially similar parties and arise out of the same transaction
or occurrence, one or more Officers may hold a conference to determine
whether the parties are willing to voluntarily consolidate the separate
proceedings into a single proceeding using either the smaller claims
procedures or the standard Board procedures. The Board will consolidate
proceedings only where the parties agree, doing so would be in the
interests of justice, and the proceedings involve the same or
substantially similar parties and arise out of the same transaction or
occurrence. If the proceedings involve the same or substantially
similar parties and arise out of the same transaction or occurrence,
but the parties do not agree to voluntarily consolidate the separate
proceedings into a single proceeding, then each proceeding shall be
considered separately.

PART 226--SMALLER CLAIMS

0
5. The authority citation for part 226 continues to read as follows:

Authority: 17 U.S.C. 702, 1510.

0
6. Section 226.2 is amended to read as follows:

[[Page 2493]]

Sec. 226.2 Requesting a smaller claims proceeding.

A claimant may request consideration of a claim under the smaller
claims procedures in this part at the time of filing a claim. The
claimant may change its choice as to whether to have its claim
considered under the smaller claims procedures or the standard Board
procedures at any time before service of the initial notice. If the
claimant changes its choice, but the initial notice has already been
issued, the claimant shall request reissuance of the initial notice
indicating the updated choice. Once the claimant has served the initial
notice on any respondent, the claimant may not amend its choice without
consent of the other parties and leave of the Board. A claimant's
request to change its choice as to whether to have its claim considered
under the smaller claims procedures or the standard Board procedures
shall follow the procedures set forth in Sec. 220.5(a)(1) of this
subchapter. If the request is made following service of the initial
notice on any respondent, the claimant's request shall indicate whether
the other parties consent to the request.

0
7. Section 226.4 is amended by revising paragraphs (a), (d)(2)(iii),
and (d)(3) to read as follows:

Sec. 226.4 Nature of a smaller claims proceeding.

(a) Proceeding before a Copyright Claims Officer. Except as
provided in Sec. 222.13(e), a smaller claims proceeding shall be heard
by not fewer than one Copyright Claims Officer (Officer). The Officers
shall hear smaller claims proceedings on a rotating basis at the
Board's discretion.
* * * * *
(d) * * *
(2) * * *
(iii) May submit witness statements that comply with Sec.
222.15(b)(2) of this subchapter. No later than seven days before the
merits conference, an opposing party may request that the witness whose
statement was submitted appear at the merits conference so that the
party may ask the witness questions relating to the witness's
testimony. The failure of a witness to appear in response to such a
request shall not preclude the presiding Officer from accepting the
statement, but the presiding Officer may take the inability to question
the witness into account when considering the weight of the witness's
testimony.
(3) Failure to submit evidence. If a party fails to submit evidence
in accordance with the presiding Officer's request or submits evidence
that was not served on the other parties or provided by the other side,
the presiding Officer may discuss this with the parties during the
merits conference or may schedule a separate conference to discuss the
missing evidence with the parties. The presiding Officer shall
determine an appropriate remedy, if any, including but not limited to
drawing an adverse inference with respect to disputed facts, pursuant
to 17 U.S.C. 1506(n)(3), if it would be in the interests of justice.
* * * * *

Dated: January 2, 2024.
Shira Perlmutter,
Register of Copyrights and Director of the U.S. Copyright Office.

Approved by:

Carla D. Hayden,
Librarian of Congress.
[FR Doc. 2024-00596 Filed 1-12-24; 8:45 am]
BILLING CODE 1410-30-P

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