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Proposed tribunal would hear smaller copyright matters

Intellectual property attorneys practicing in the 1st Circuit say they have serious concerns about a proposed statute that would establish a new administrative panel to decide smaller copyright claims.

The U.S. Copyright Office recently released a 161-page report recommending the creation of a three-person panel in Washington, D.C., which would hear infringement cases with damages valued at no more than $30,000. (See sidebar.)

The panel, staffed by two copyright attorneys and an ADR specialist from the Copyright Office, would hear only matters in which all parties agreed to go before the board.

The panel would not require lawyers to appear in person and instead would decide cases on the basis of evidence presented during online teleconferences and written submissions.

Under the terms of the proposal, which is expected to be addressed by Congress, written discovery would be allowed, but there would be no formal discovery or deposition practice.

Burns & Levinson’s Jerry Cohen, who has practiced IP law for more than 40 years, said enforcing copyright claims is an expensive proposition that scares away many litigants. He noted that the legal fees and discovery costs in a typical copyright claim are high and can quickly eclipse a potential recovery.

Cohen, who practices in Massachusetts and Rhode Island, said he generally backs efforts that make it easier for people to move their cases forward. Nevertheless, he does not support the plan put forth by the Copyright Office.

“[U.S. District Court Judge William G.] Young always tells us that the death of the American jury trial dies by 1,000 cuts, and this may be among those cuts,” Cohen said. “If in the interest of efficiency we can’t have a jury trial, parties and their counsel should at least get a chance to go face-to-face with the decision-maker. The real criticism that I and many others have with this proposal is that there’s no opportunity for that to happen.”

In person

Cohen, who teaches an “Advanced Topics in Copyright” course at Suffolk University Law School in Boston, also questioned the wisdom of not resolving disputes locally, as per the proposed statute.

“People in Boston or Seattle or Miami shouldn’t be confined to what is basically an administrative agency panel sitting in Washington at the Copyright Office,” he said.

“Law evolves when you have an adversary system, and as someone who teaches and practices copyright law, my sense is that you run into big problems when you create a system that really doesn’t allow both sides to make their arguments in person.”

David A. Kluft of Foley Hoag in Boston, who has written about the proposal on his law firm’s website, said he, too, has concerns.

He said the tribunal would create a number of difficult legal questions that judges quickly would have to answer. For instance, Kluft said, courts would have to decide what to do in cases in which it is alleged that one party unfairly required the other to submit to arbitration before the panel.

“The minute this thing gets established, the issue will be whether a judge is going to enforce it,” he said. “If one of the parties tries to argue that they don’t want to present their matter to the tribunal and are being forced to do so under the terms of a contract, it’s going to be a tricky issue for the court.”

Kluft said it also remains unclear if the panel would create a new body of copyright law or instead follow the precedent of a particular circuit.

“This isn’t patent law where you have a clear authority and the Federal Circuit to follow,” he said. “You have lots of circuits out there that disagree on big copyright issues, and I’m not sure how this tribunal will deal with them. Are they going to follow the law in the jurisdiction of the plaintiff or the defendant, or are they just going to take whatever laws they like?”

A similar proposal recently went into effect in the United Kingdom, Kluft said, adding that one of the big questions in both the U.K. and the U.S. is whether the system will create a streamlined process that allows copyright trolls to more easily prosecute cases.

“This proposal is coming at a time when courts like the district of Massachusetts are cracking down on these cases and making it clear that you can’t file one filing fee and sue 200 or 300 people at once,” he said. “The worry is that this statute might allow those parties to do that in a different way.”

Cost cutter

Although officials from the Copyright Office declined to comment, a review of the public record reveals that the proposal was made in response to a 2011 request from Congress.

Citing a widespread belief that individual authors, photographers and other copyright owners could not realistically enforce their rights in federal court, the chairman of the House Judiciary Committee, Rep. Lamar Smith, R-Texas, ordered the Copyright Office to study the problem.

Jeffrey K. Techentin, chairman of Adler, Pollock & Sheehan’s IP practice group in Providence, said the Copyright Office’s proposal creates an opportunity for cases to be filed that otherwise might not be brought.

“A lot of my clients have concerns [about copyright violation] but can’t pursue them because the dollar value is too low,” he said. “All too often our justice system doesn’t quite accomplish what it wants to because it gets too expensive.”

Techentin also embraced the idea of using teleconferencing to present evidence.

“It provides you with a degree of interaction that you don’t get from the other side in U.S. Patent and Trademark Office proceedings, for example, where there is no interpersonal interaction,” he said. “It’s sort of a compromise in that respect.”

Gary E. Lambert of Boston, a registered attorney at the U.S. Patent and Trademark Office, represents small businesses and individuals in IP disputes. When he is contacted by people seeking to bring smaller claims in federal court, they often decide not to pursue a case even when the evidence strongly suggests that copyright infringement occurred, he said.

“I tell them it is probably going to cost them a minimum of 10,000 bucks to get in there, file a complaint and resolve something,” he said. “A lot of people decide that it’s just not worth it.”

While he acknowledged that Congress will need to address many of the IP bar’s concerns, Lambert said the tribunal’s plan to limit discovery is laudable.

“We’re a small firm, so our clients are small businesses and individuals who don’t necessarily have a lot of money to run to federal court every time someone infringes their copyright,” he said.

“The proof will obviously be in the pudding, but I think it’s a great idea to have a forum like this. And I’m happy to see the government working for the people, which a lot of times it does not.”

Julie McMahon co-wrote this story.

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