IP Law Daily, COPYRIGHT NEWS: Copyright Claims Board rules amended to cover agreement-based counterclaims, (May 3, 2023)

By Donielle Tigay Stutland, J.D.

The U.S. Copyright Office published a proposed rulemaking addressing agreement-based counterclaims in Copyright Claims Board proceedings.

The United States Copyright Office has proposed amendments to its regulations governing Copyright Claims Board (CCB) proceedings in order to address the filing of agreement-based counterclaims and related discovery requirements. The proposed rule addresses the following items: asserting and responding to agreement-based counterclaims, standard interrogatories for agreement-based counterclaims and standard document production requests for agreement-based counterclaims.

The notice of proposed rulemaking and request for comments was published in the Federal Register on May 3, 2023 (88 Fed. Reg. 27845). The Copyright Office is requesting comments to the proposed rule be received by June 20, 2023.

Background. In December 2020, Congress directed the Copyright Office to establish the CCB through the enactment of the Copyright Alternative in Small-Claims Enforcement (CASE) Act of 2019. Eligible claims include those for copyright infringement, declarations of noninfringement, or misrepresentations in notices or counter-notices under the Digital Millennium Copyright Act. The CCB is intended to make it easier and less expensive for independent creators, such as photographers, songwriters, and graphic artists, to enforce their copyrights. Participation is voluntary, meaning that respondents can opt out. Damages are limited to a total of $30,000, and attorney fees are recoverable only in cases involving bad faith. On June 16, 2022, the CCB officially opened to hear copyright disputes.

In May 2022, the Office promulgated final rules establishing procedures governing proceedings before the Copyright Claims Board. The rules requiring that a counterclaim arising under section 106 or section 512(f) include a description of “[t]he facts leading the counterclaimant to believe the work has been infringed.” At that time, the Office did not propose separate rules to address agreement-based counterclaims. Information on CCB procedure is available on this Copyright Office webpage.

Proposed rule. The CASE Act provides that the CCB may hear only certain types of counterclaims: those that arise “under section 106 or section 512(f) and out of the same transaction or occurrence that is the subject of a claim of infringement[,] . . . a claim of noninfringement[,] . . . or a claim of misrepresentation” and those that “arise[ ] under an agreement pertaining to the same transaction or occurrence that is the subject of a claim of infringement . . . if the agreement could affect the relief awarded to the claimant.” The agency refers to the last category as “agreement-based counterclaims” and is proposing to add rules to specifically govern agreement-based counterclaims.

With respect to asserting and responding to agreement-based counterclaims, the proposed rule specifies the following content requirements: “agreement-based counterclaims should include the identification of the agreement that the agreement-based counterclaim is based upon, a brief statement describing how the agreement pertains to the same transaction or occurrence that is the subject of the infringement claim against the counterclaimant, and a brief statement describing how the agreement could affect the relief awarded to the claimant.”

Additionally, for a counterclaim respondent's  response to an agreement-based counterclaim, the response should detail the respondent’s disagreement with the facts in the counterclaim, including any description of defenses to the counterclaim, and an explanation of why the counterclaim respondent believes the counterclaimant's position regarding the agreement lacks merit.

The proposed rule also discusses standard interrogatories for agreement-based counterclaims in addition to the standard interrogatories common to all claim types. The additional standard interrogatories will include: identification and a description of the specific terms or provisions of the agreement, written or oral, that the counterclaimant alleges have been violated; the basis for the counterclaimant's belief that the agreement was both valid and violated; the reasons why the counterclaimant believes the agreement could affect the relief that might be awarded; a description of the counterclaimant's performance under the agreement, as relevant to the counterclaim; and identification of any alleged failure in the counterclaim respondent's performance under the agreement.

The proposed rule provides that standard document requests for agreement-based counterclaims should include: the agreement at issue and documents related to that agreement, including any amendments or revisions; documents related to the validity of the agreement; and documents related to the parties' performance under the agreement. In addition, with regard to a counterclaimant's damages claim, the rule proposes slightly different document requests for a counterclaimant and a counterclaim respondent. Agreement-based counterclaimants must produce documents relevant to damages arising out of the counterclaim, including documents sufficient to show the damages suffered due to the violation of the agreement in question. Counterclaim respondents must produce documents relevant to damages, including any documents sufficient to show the lack of damages suffered by the counterclaimant from the alleged violation of the agreement.

News: Copyright TechnologyInternet