[Federal Register Volume 88, Number 85 (Wednesday, May 3, 2023)]
[Proposed Rules]
[Pages 27845-27848]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-09055]


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LIBRARY OF CONGRESS

U.S. Copyright Office

37 CFR Parts 222 and 235

[Docket No. 2023-4]


Copyright Claims Board: Agreement-Based Counterclaims

AGENCY: U.S. Copyright Office, Library of Congress.

ACTION: Notice of proposed rulemaking; request for comments.

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SUMMARY: The U.S. Copyright Office is amending its regulations 
governing

[[Page 27846]]

Copyright Claims Board proceedings to address the filing of agreement-
based counterclaims and related discovery requirements.

DATES: Written comments must be received no later than 11:59 p.m. 
Eastern Time on June 20, 2023.

ADDRESSES: For reasons of Government efficiency, the Copyright Office 
is using the regulations.gov system for the submission and posting of 
public comments in this proceeding. All comments are therefore to be 
submitted electronically through regulations.gov. Specific instructions 
for submitting comments are available on the Copyright Office's website 
at https://www.copyright.gov/rulemaking/agreement-based-counterclaims/. 
If electronic submission of comments is not feasible due to lack of 
access to a computer or the internet, please contact the Copyright 
Office using the contact information below for special instructions.

FOR FURTHER INFORMATION CONTACT: Rhea Efthimiadis, Assistant to the 
General Counsel, by email at [email protected] or telephone at 202-
707-8350.

SUPPLEMENTARY INFORMATION: 

I. Background

    The Copyright Alternative in Small-Claims Enforcement (``CASE'') 
Act of 2020 \1\ directed the Copyright Office to establish the 
Copyright Claims Board (``CCB''), a voluntary forum for parties seeking 
resolution of certain copyright disputes that have a total monetary 
value of $30,000 or less. As an alternative forum to Federal district 
court, the CCB is designed to be accessible to pro se individuals and 
individuals without much knowledge of copyright law.\2\ In early 2021, 
the Office published a notification of inquiry (``NOI'') asking for 
public comments on the CCB's operations and procedures.\3\
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    \1\ Public Law 116-260, sec. 212, 134 Stat. 1182, 2176 (2020).
    \2\ See, e.g., H.R. Rep. No. 116-252, at 18-20 (2019); S. Rep. 
No. 116-105, at 7-8 (2019).
    \3\ 86 FR 16156 (Mar. 26, 2021).
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    Following the NOI, the Office published multiple notices of 
proposed rulemaking governing the conduct of proceedings before the 
CCB, including filing claims and counterclaims, responses to claims and 
counterclaims, and discovery.\4\ After receiving and considering 
comments submitted by the public, the Office published corresponding 
final rules.\5\ On June 16, 2022, the CCB began receiving claims 
through its website dockets.ccb.gov.
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    \4\ 86 FR 69890 (Dec. 8, 2021); 86 FR 53897 (Sept. 29, 2021).
    \5\ 87 FR 12861 (Mar. 8, 2022) (initial proceedings partial 
final rule); 87 FR 16989 (Mar. 25, 2022) (initial proceedings final 
rule); 87 FR 24056 (Apr. 22, 2022) (initial proceedings correction); 
87 FR 30060 (May 17, 2022) (active proceedings final rule); 87 FR 
36060 (June 15, 2022) (active proceedings correction).
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    After reviewing its regulations, the Office is proposing to add 
rules specifically governing agreement-based counterclaims.

II. Proposed Rule and Request for Comments

    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.'' \6\ This last category of 
counterclaims are referred to here as ``agreement-based 
counterclaims.''
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    \6\ 17 U.S.C. 1504(c)(4)(B)(i)-(ii).
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Asserting and Responding to Agreement-Based Counterclaims

    In an earlier rulemaking, ``the Office propose[d] that the 
information required to assert a counterclaim should closely mirror the 
information required to assert a claim'' for counterclaims that arise 
under section 106 or section 512(f).\7\ After reviewing the public 
comments, the Office promulgated final 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.'' \8\ At that time, the Office did not propose 
separate rules to address agreement-based counterclaims.
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    \7\ 86 FR 53897, 53903.
    \8\ 87 FR 16989, 16999-17000, 17005; see also 37 CFR 
222.9(c)(3)(iii)(D).
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    After reviewing its regulations, the Office has concluded that such 
counterclaims should have their own content requirements. Specifically, 
the Office proposes that 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.
    The Office also believes that regulations are necessary to specify 
the required contents of a counterclaim respondent's \9\ response to an 
agreement-based counterclaim. A counterclaim respondent should describe 
in detail its 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.
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    \9\ The term ``counterclaim respondent'' refers to a claimant 
that has received a counterclaim.
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Standard Interrogatories for Agreement-Based Counterclaims

    The proposed rule also addresses standard interrogatories for 
agreement-based counterclaims that supplement 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.
    In turn, the additional standard interrogatories that an agreement-
based counterclaim respondent must answer will address the following: 
all applicable defenses to the counterclaim and the facts supporting 
those defenses; any other reasons the counterclaim respondent believes 
that it did not violate the agreement or that the agreement was not 
valid; the basis for any belief by the counterclaim respondent that the 
agreement does not affect the relief that might be awarded; a 
description of the counterclaim respondent's performance under the 
agreement, as relevant to the counterclaim; and any inadequacies in 
performance under the agreement by the counterclaimant.

Standard Requests for the Production of Documents for Agreement-Based 
Counterclaims

    In addition to the standard document requests that all parties must 
satisfy, the Office proposes that both agreement-

[[Page 27847]]

based counterclaimants and counterclaim respondents should be subject 
to several additional requests. These 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 Office 
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. In turn, 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.
    The Office remains committed to ensuring that ``the discovery 
regulations strike the right balance between allowing necessary access 
to information and being too burdensome.'' \10\ It previously adjusted 
the language for infringement-related standard discovery requests after 
hearing from the public that the initially proposed language may have 
been unnecessarily burdensome.\11\ With respect to the proposed rules 
for document requests for parties to agreement-based counterclaims, the 
Office is interested in hearing whether the proposed ``relevant to'' 
language for damages document requests strikes the right balance. The 
Office notes that the ``relevant to'' language is not included in 
damages-related document requests for infringement, declaration of 
noninfringement, or misrepresentation claims or counterclaims, which 
are all limited to documents ``sufficient to show'' damages.\12\
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    \10\ 87 FR 30060, 30060.
    \11\ See id. at 30070-71.
    \12\ 37 CFR 225.3(b)(6), (c)(4), (d)(4).
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List of Subjects in 37 CFR Parts 222 and 225

    Claims, Copyright.

Proposed Regulations

    For the reasons stated in the preamble, the U.S. Copyright Office 
amends 37 CFR parts 222 and 225 as follows:

PART 222--PROCEEDINGS

0
1. The authority citation for part 222 continues to read as follows:

    Authority: 17 U.S.C. 702, 1510.

0
2. Amend Sec.  222.9 by redesignating paragraphs (c)(6) through (c)(8) 
as paragraphs (c)(7) through (c)(9) and adding paragraph (c)(6) to read 
as follows.


Sec.  222.9  Counterclaim.

* * * * *
    (c) * * *
    (6) For a counterclaim arising under an agreement asserted under 
paragraph (c)(2)(iv) of this section--
    (i) A description of the agreement that the counterclaim is based 
upon;
    (ii) 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
    (iii) A brief statement describing how the agreement could affect 
the relief awarded to the claimant;
* * * * *
0
3. Amend Sec.  222.10 by redesignating paragraph (b)(6) as paragraph 
(b)(7) and adding paragraph (b)(6) to read as follows:


Sec.  222.10  Response to counterclaim.

* * * * *
    (b) * * *
    (6) For counterclaims arising under an agreement, as set forth in 
37 CFR 222.9(c)(2)(iv), a statement describing in detail the dispute 
regarding the contractual counterclaim, including any defenses as well 
as an explanation of why the counterclaim respondent believes the 
counterclaimant's position regarding the agreement lacks merit; and
* * * * *

PART 225--DISCOVERY

0
4. The authority citation for part 225 continues to read as follows:

    Authority: 17 U.S.C. 702, 1510.

0
5. Amend Sec.  225.2 by redesignating paragraph (f) as paragraph (h) 
and adding paragraphs (f) and (g) to read as follows:


Sec.  225.2  Standard interrogatories.

* * * * *
    (f) For a counterclaimant asserting a counterclaim arising under an 
agreement. In addition to the information in paragraph (a) of this 
section, the standard interrogatories for a counterclaimant asserting a 
counterclaim arising under an agreement shall consist of information 
pertaining to:
    (1) Identification and a description of the specific terms or 
provisions of the agreement the counterclaim respondent is alleged to 
have violated;
    (2) The basis for the counterclaimant's belief that the agreement 
was valid;
    (3) The basis for the counterclaimant's belief that the agreement 
was violated;
    (4) The basis for the counterclaimant's belief that the agreement 
could affect the relief that might be awarded to the claimant;
    (5) A description of the counterclaimant's performance under the 
agreement, as relevant to the counterclaim;
    (6) Identification and a description of any inadequacies in 
performance under the agreement by the counterclaim respondent; and
    (7) If the agreement at issue in the counterclaim is oral, a 
description of the terms and provisions of the agreement.
    (g) For a counterclaim respondent responding to a counterclaim 
arising under an agreement. In addition to the information in paragraph 
(a) of this section, the standard interrogatories for a counterclaim 
respondent responding to a counterclaim arising under an agreement 
shall consist of information pertaining to:
    (1) All defenses asserted to the counterclaim arising under an 
agreement and the basis for those assertions. Defenses listed in timely 
answers and timely updated answers to the standard interrogatories 
shall be considered by the Board and will not require an amendment of 
the counterclaim response;
    (2) The basis for any other reasons the counterclaim respondent 
believes that it did not violate the agreement or that the agreement 
was not valid;
    (3) The basis for any belief by the counterclaim respondent that 
the agreement does not affect the relief that might be awarded to the 
claimant;
    (4) A description of the counterclaim respondent's performance 
under the agreement, as relevant to the counterclaim; and
    (5) Identification and a description of any inadequacies in 
performance under the agreement by the counterclaimant.
* * * * *
0
6. Amend Sec.  225.3 by redesignating paragraphs (f) and (g) as 
paragraphs (h) and (i) and adding paragraphs (f) and (g) to read as 
follows:


Sec.  225.3  Standard requests for the production of documents.

* * * * *
    (f) For a counterclaimant asserting a counterclaim arising under an 
agreement. In addition to the information in paragraph (a) of this

[[Page 27848]]

section, the standard requests for the production of documents for a 
party asserting a counterclaim arising under an agreement shall include 
copies of:
    (1) The agreement at issue in the counterclaim arising under an 
agreement, including any amendments or revisions;
    (2) Documents related to the agreement at issue, including any 
amendments or revisions and documents related to the validity of and 
the parties' performance under the agreement; and
    (3) Documents relevant to damages arising out of the counterclaim, 
including documents sufficient to show the damages suffered by the 
counterclaimant related to violation of the agreement in question.
    (g) For a counterclaim respondent responding to a counterclaim 
arising under an agreement. In addition to the information in paragraph 
(a) of this section, the standard requests for the production of 
documents for a counterclaim respondent responding to a counterclaim 
arising under an agreement shall include copies of:
    (1) The agreement at issue in the counterclaim arising under an 
agreement, including any amendments or revisions;
    (2) Documents related to the agreement at issue, including any 
amendments or revisions and documents related to the validity of and 
the parties' performance under the agreement; and
    (3) Documents relevant to damages, including documents sufficient 
to show the lack of damages suffered by the counterclaimant related to 
the counterclaim respondent's alleged violation of the agreement in 
question.
* * * * *

    Dated: April 25, 2023.
Suzanne V. Wilson,
General Counsel and Associate Register of Copyrights.
[FR Doc. 2023-09055 Filed 5-2-23; 8:45 am]
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