The CASE Act: Implications for Entrepreneurship, Economic Empowerment and Cultural Diversity
by Neil Turkewitz
On May 1, the Copyright Alternative in Small-Claims Enforcement Act of 2019 (CASE Act) was introduced in the House (H.R. 2426) by Representatives Hakeem Jeffries (D-NY) and Doug Collins (R-GA), and in the Senate (S. 1273) by Senators John Kennedy (R-LA), Thom Tillis (R-NC), Dick Durbin (D-IL), and Mazie Hirono (D-HI). Original House co-sponsors include: HJC Chairman Jerry Nadler (D-NY) and HJC IP Subcommittee Chairman Hank Johnson (D-GA), as well as Martha Roby (R-AL), Judy Chu (D-CA), Ben Cline (R-VA), Ted Lieu (D-CA), and Brian Fitzpatrick (R-PA). As reported earlier by the Copyright Alliance, “The legislation creates a voluntary small claims board within the Copyright Office that will provide copyright owners with an alternative to the expensive process of bringing copyright claims, including infringement and misrepresentation under 512(f), in federal court. This new board, called the Copyright Claims Board (CCB), would allow recovery in each case of up to $30,000 in damages total, with a cap of $15,000 in statutory damages per work infringed.”
Various members of Congress issued statements of support, including Congressman Jeffries, who highlighted that: “The establishment of the Copyright Claims Board is critical for the creative middle class who deserve to benefit from the fruits of their labor. Copyright enforcement is essential to ensure that these artists, writers, musicians and other creators are able to commercialize their creative work in order to earn a livelihood. The CASE Act will enable creators to enforce copyright protected content in a fair, timely and affordable manner. This legislation is a strong step in the right direction.”
By providing a mechanism for willing parties to resolve differences through what is essentially a form of voluntary alternative dispute resolution, the CASE Act is specifically designed to allow small, independent creators to address infringement — creators that may lack the means to initiate proceedings in traditional proceedings. In the absence of such a mechanism, property rights are largely unenforceable, undermining a core element of both fairness and economic empowerment. This has particular consequences for minority and female run small businesses which are powering the economy through their engagement in small and medium businesses (SMB’s). In an oft-overlooked development, minorities and women are at the center of new small business development in this country:
“The number of minority owned small businesses in the U.S. is growing much faster than overall small business growth rate. Between 2007 and 2017 the number of minority owned SMBs have grown by 79% reaching 11.1 million. This growth is about 10 times faster than the 7.6% overall growth rate for U.S. small businesses during this period.”
“Since 2007, the number of women-owned businesses has increased by 58 percent, which is better than businesses overall, which increased by only 12 percent. Last year, 1,821 net new women-owned businesses were launched every day. Women of color founded 64 percent of those new businesses. Women are slightly more likely to start a business than men.”
At the same time, we must recognize that small businesses owned by women or minorities tend to be in a financially precarious position and lack fair access to capital. As detailed here and in various reports: “If you’re a minority or woman business owner, however, your odds of getting a traditional bank loan are still pretty slim, because, as challenging as the financial environment has been for small businesses, those owned by women and people of color have faced additional funding obstacles created by conscious or unconscious (institutional) bias. Both women small business owners and small business owners of color are turned down for loans more often, and when they do get loans, those loans tend to be for less — sometimes significantly less — money, and come with a higher interest rate.”
It is fair to observe that minorities and women are the engine for free enterprise in this nation, and that they face unique challenges. This has particular implications in the cultural arena. As observed by the Supreme Court in Harper & Row v. Nation Enterprises: “it should not be forgotten that the Framers intended copyright itself to be the engine of free expression. By establishing a marketable right to the use of one’s expression, copyright supplies the economic incentive to create and disseminate ideas. This Court stated in Mazer v. Stein, 347 U.S. 201, 209 (1954): ‘The economic philosophy behind the clause empowering Congress to grant patents and copyrights is the conviction that encouragement of individual effort by personal gain is the best way to advance public welfare through the talents of authors and inventors in “science and useful Arts.”
And again in Twentieth Century Music Corp. v. Aiken:
“The immediate effect of our copyright law is to secure a fair return for an “author’s” creative labor. But the ultimate aim is, by this incentive, to stimulate [the creation of useful works] for the general public good.”
When we fail to power these engines of expression and entrepreneurship, we not only deny a path to economic development and justice, but we undermine the public interest in fueling creativity and cultural diversity. Small businesses are truly the heart of America, and businesses owned by women and minorities face particular challenges. We owe it to them, and to ourselves, to safeguard property interests that form the foundation of liberty and economic empowerment. Given the disproportionate impact on women and minorities working in the independent creative sector when we fail to secure the property interests in copyright, the effect is to silence essential and diverse putative voices in the cultural marketplace. The internet has created the potential of individual creators and small businesses to reach audiences directly outside of established channels, and to expand the diversity of our cultural output. But we fail to capture that opportunity when we fail to establish means to protect investment in cultural production. The CASE Act takes an important step in providing tools to individuals and small businesses to safeguard their interests and to thereby fuel new production.
Martin Luther King repeatedly underscored that civil rights were completely intertwined with the expansion of economic opportunity. That freedom of the spirit was incompatible with lack of economic opportunity. Less than a week before he was assassinated in Memphis, he gave a speech at the National Cathedral entitled “Remaining Awake Through a Great Revolution” in which he contrasted lack of economic opportunity with the founding principles of our Nation. He said:
“We read one day, “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain inalienable Rights, that among these are Life, Liberty, and the pursuit of Happiness.” But if a man doesn’t have a job or an income, he has neither life nor liberty nor the possibility for the pursuit of happiness. He merely exists.”
The CASE Act presents a unique opportunity to secure fundamental fairness and economic justice by providing a means for creators to prevent unfair competition. This has special meaning for women and minorities — to diversify the practical ability to share stories and shape the future narrative of this country. It is an opportunity that we should not fail to seize. Cultural production should be as diverse as we are as a nation. We can help to achieve that by expanding the means by which individual creators can survive from the telling of their stories.