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Why are copyright lawsuits ridiculously big?

The views expressed are those of the author and are not necessarily those of Scientific American.


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The answer can be found in this recent report from the U.S. copyright office:

…federal court is effectively inaccessible to copyright owners seeking redress for claims of relatively low economic value, especially individual creators who are of limited resources. It has been estimated that the median cost for a party to litigate a copyright infringement lawsuit with less than $1 million at stake through appeal is $350,000. Such costs, of course, are not only completely disproportionate to what most individuals could invest in a lawsuit, but also to what a copyright claimant could ever hope to recover in a relatively modest infringement case.

If the Acme Corporation uses $250 worth of my photographs without paying for them, and subsequently wastes an additional $500 worth of my time as I track down the problem and assemble a response, I ought reasonably demand $250 + $500 = $750.

And then, should Acme blow me off, I must tack on an unreal $350,000 to ensure I break even.

All the hiring of lawyers, the paying of court fees, the travelling to the appropriate jurisdiction, and the diversion of time away from productive work, is a deeply inefficient way to enforce a relatively mundane issue like copyright. Yet if I am to not lose money I must ask an exorbitant award, even though I was the one wronged. What’s worse, as a victim I can end up losing even when I win. Meanwhile, the infringer pays damages bizarrely out of proportion to the nature of the incident, and the only people who come out ahead are the lawyers.

A central part of the problem is that copyright law is federal, not local. That means copyright has to be enforced in a federal court. My piddly $750 in actual damages should be small claims but isn’t. Consequently, most infringements are never pursued, and the few that are necessitate ridiculous sums. Copyright enforcement through official channels is either nothing or full nuclear.

Change may be coming, though. In 2011, in an inexplicable fit of deeply uncharacteristic Congressional usefulness, the U.S. Congress had the copyright office look into addressing this problem of nuclear-or-nothing enforcement, and in September the office produced the following recommendations:

  • Congress should create a centralized tribunal within the Copyright Office, which would administer proceedings through online and teleconferencing facilities without the requirement of personal appearances. The tribunal would be staffed by three adjudicators, two of whom would have significant experience in copyright law – together having represented or presided over the interests of both owners and users of copyrighted works – with the third to have a background in alternative dispute resolution.
  • The tribunal would be a voluntary alternative to federal court. Its focus would be on small infringement cases valued at no more than $30,000 in damages. Copyright owners would be required to have registered their works or filed an application before bringing an action. They would be eligible to recover either actual or statutory damages up to the$30,000 cap, but statutory damages would be limited to $15,000 per work (or $7,500 for a work not registered by the normally applicable deadline for statutory damages).
  • Claimants who initiated a proceeding would provide notice of the claim to responding parties, who would need to agree to the process, either through an opt-out mechanism or  by affirmative written consent. Respondents would be permitted to assert all relevant defenses, including fair use, as well as limited counterclaims arising from the infringing conduct at issue. Certain DMCA-related matters relating to takedown notices, including claims of misrepresentation, could also be considered, and parties threatened with an infringement action could seek a declaration of noninfringement.
  • Parties would provide written submissions and hearings would be conducted through telecommunications facilities. Proceedings would be streamlined, with limited discovery and no formal motion practice. A responding party’s agreement to cease infringing activity could be considered by the tribunal and reflected in its determination. The tribunal would retain the discretion to dismiss without prejudice any claim that it did not believe could fairly be adjudicated through the small claims process.
  • Determinations of the small claims tribunal would be binding only with respect to the parties and claims at issue and would have no precedential effect. They would be subject to limited administrative review for error and could be challenged in federal district court for fraud, misconduct, or other improprieties. Final determinations could be filed in federal court, if necessary, to ensure their enforceability.

In short: no lawyers. Fewer fees. No cross-country travel. Rewards capped at reasonable levels. Fair Use defenses for infringers encouraged. It’s all so… reasonable.

With excessive costs and excessive risk removed, It’s a win for everyone. Except the lawyers.

 

Alex Wild About the Author: Alex Wild is an Illinois-based entomologist who studies the evolutionary history of ants. In 2003 he founded a photography business as an aesthetic complement to his scientific work, and his natural history photographs appear in numerous museums, books, and media outlets. Follow on Twitter @myrmecos.

The views expressed are those of the author and are not necessarily those of Scientific American.

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  1. 1. z34aa 12:02 am 11/6/2013

    Sounds great! Don’t see it happening though. Like you said everyone wins except lawyers, and what is 43% of Congress made up of? Don’t worry though, they will seriously consider the idea before they decide to table it, should only take them a few decades.

    Link to this
  2. 2. OgreMk5 11:45 am 11/6/2013

    One thing about arbitration (which is what this sounds like), is that the fines are basically unenforcable. Usually it’s called non-binding arbitration.

    If I read that right (and feel free to correct me), it sounds like both parties must agree to the process. So, this process is utterly useless. Why would an offending party volunteer for any arbitration at all, if they know by opting out, then they are effectively safe.

    The other point, would that this team would be flooded with requests from certain groups… for example, I’ve been threatened with copyright lawsuits from creationists and ID proponents for years. In one case, I was threatened with a lawsuit for mentioning the real name of a person whose website I was quoting from… and he had his name displayed on the website.

    It’s a step in the right direction, though.

    Link to this
  3. 3. gmartfin 1:53 pm 11/6/2013

    Agreed: if the respondent has to agree it is useless. With the alternative bar set so high why would I let them use a lesser method to pursue me.

    It won’t work which is typical of bureaucracy plans.

    Link to this
  4. 4. gmperkins 11:39 pm 11/6/2013

    Good points but I think your initial example is incorrect. You can do a small claims court for such amounts, in which case a company will bend over backwards to settle out of court because it costs time but costs them thousands to send a lawyer to the court (most big companies have to show up locally).

    The case is more the middle one, where they infringe for say 20-100 thousand and it will get fought in court very hard.

    And it won’t happen because our government wants lawyers to be paid a lot for anything and everything. Because most of them are lawyers, they believe in their own self-importance. This is a problem across much more than copyright cases.

    Link to this
  5. 5. Adam_Smith 9:34 am 11/8/2013

    I wonder if that “deeply uncharacteristic Congressional usefulness” included indexing the dollar amounts for inflation.

    Really the ultimate in usefulness would be to reconsider the whole idea of copyright from the ground up. It is unnatural and inherently problematic and not of demonstrable benefit to society as a whole.

    Link to this

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