[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 [www.gpo.gov]
[FR Doc No: 2024-00596]


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LIBRARY OF CONGRESS

Copyright Office

37 CFR Parts 220, 222, and 226

[Docket No. 2021-8]


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

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 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 https://www.regulations.gov/docket/COLC-2021-0007/comments. 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) https://ccb.gov/handbook/; 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.''), https://www.copyright.gov/docs/smallclaims/usco-smallcopyrightclaims.pdf.
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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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