Origami Legal
2021 Vol # 2

This volume discusses what artists and creative professionals, as well as the small businesses and nonprofits that work with them, need to know about The CASE Act, a new law that from 2020 creating a small claims court for copyright matters. The sections below are divided into a brief overview of the law, and then split into two sections, with one dedicated to the law from the perspective of artists and creators, and the other to the law from the perspective of small businesses and nonprofits.

Vol 3, coming in early February, will discuss how the TM Act of 2020 will impact your brand strategy.

The CASE Act creates a new federal “small claims court” system for copyright infringement cases in which the damages are less than $30,000. The court system is designed to be cheaper than normal federal litigation, and parties can choose not to be represented by an attorney. There are many details that will be relevant for legal professionals, but this is probably all you’ll need to know about the law itself. The following section includes highlights for artists and creative professionals, while a final section provides highlights for small business owners and nonprofits who work with artists and creative professionals or who otherwise use copyrighted works.

A Brief for Artists and Creative Professionals

The new court system will make it easier to sue defendants who have abused your copyrights. Typically, this means a member of the public, or a business that has appropriated your work without your permission or without paying you as agreed. In the past, the only recourse in most cases was to send a demand letter and then sue the offender in federal court if the demand letter was unsuccessful. In practice, federal litigation is usually so expensive that unanswered demand letters were not pursued in court. In theory, the new copyright small claims court system will make it cheaper to pursue these suits when your work is infringed and demand letters are unsuccessful.

Action Items

If your creative practice involves making works for others (graphic designers, videographers, web designers, branding agencies, etc.), this is an excellent time to review your standard contracts and determine who owns the copyrights in the work you create and when. Origami Legal recommends, whenever possible, maintaining copyright in the work you create for clients until payment is made in full (you can read more about our recommendation here). We expect the copyright small claims court will strengthen this strategy by making demands for payment more effective. If you need to have your contracts reviewed, consider signing up for the Zen Legal Subscription, which includes free contract review for subscribers.

Caution Warranted Before Suing

One thing to keep in mind is that the copyright small claims court is optional – if you sue a defendant in small claims court, the defendant can move the litigation to a federal court, which will be substantially more expensive. This is most likely to happen when the defendant is a larger business or a wealthy individual, so the new law is most likely to be useful if your defendant doesn’t have deep pockets to crush you with legal fees. As always, it is vital you talk to an attorney before you sue someone to help you think through issues like these – even if the suit is in small claims court, and even if you ultimately handle the court work on your own.

A Brief for Businesses and Nonprofits

A new court system will make it easier for copyright owners to sue you if you’ve infringed their copyrights. If you’re reading this and thinking it doesn’t matter because you’d never infringe someone’s copyrights, check out the action items below to make sure you aren’t infringing without realizing it (ignorant infringement, incidentally, is not really a defense).

Action Items

To reduce the risk of lawsuits, consider taking these proactive steps:

  1. Spend a Few Minutes Learning to Avoid Copyright Traps: There are a lot of misconceptions about what is considered copyright infringement. For instance, you aren’t avoiding copyright infringement by crediting an image’s photographer or artist, and things aren’t free just because they’re on Google. Taking a few minutes to develop a very basic understanding of copyright law in commercial use is something that every small business owner and nonprofit leader should do, and we recommend you start here.
  2. Contract Review: If you have standard contracts that you require vendors to sign, or if you are presented with contracts from service providers, review them to see whether they contain intellectual property compliance and indemnification provisions. As an example for why this matters, consider a common scenario: you hire someone to design your business’s website, and the website designer uses unlicensed images throughout your website, leaving you open to a lawsuit. A good contract will include language to help ensure the service provider only uses properly licensed copyrighted materials and that they are financially responsible if they don’t and you are sued. If you need to have your contracts reviewed, consider signing up for the Zen Legal Subscription, which includes free contract review for subscribers.
  3. Copyright Audit: If you have existing intellectual property assets and you aren’t sure whether they include copyright infringing materials, you should consider having them reviewed by an attorney to help you understand whether they are infringing. Alternatively, if you’re in doubt, you can replace the materials with new materials that you are sure have the proper licenses.