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Federal Register / Vol. 86, No. 233 / Wednesday, December 8, 2021 / Proposed Rules
14. Part 232 is added to read as follows:

PART 232CONDUCT OF PARTIES
Sec.
232.1
232.2
232.3
232.4
232.5

General.
Representations to the Board.
Bad-faith conduct.
Bar on initiating claims.
Attorney and representative conduct.

Authority: 17 U.S.C. 702, 1510.
232.1

General.

All parties and any attorneys or other representatives shall act with the utmost respect for others and shall behave ethically and truthfully in connection with all submissions and appearances before the Copyright Claims Board Board.
232.2

Representations to the Board.

By submitting materials or advocating positions before the Board, a party, including any attorneys representing a party, certifies that to the best of the partys knowledge, information, and belief, formed after a reasonable inquiry under the circumstances:
a It is not being presented for any improper purpose;
b Any legal contentions are made in good faith based on the partys reasonable understanding of existing law;
c Any factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery;
and d Any denials of factual contentions have evidentiary support or, if specifically so identified, are reasonably based on belief or a lack of information.

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232.3

Bad-faith conduct.

a General. The Board shall award costs and attorneys fees as part of a determination where it is established that a party or its representative engaged in bad-faith conduct, unless such an award would be inconsistent with the interests of justice.
b Allegations of bad-faith conduct 1 On the Boards initiative. On its own, and prior to a final determination, the Board may order a party or its representative to show cause why certain conduct does not constitute badfaith conduct. Within seven days, the party or representative accused of badfaith conduct shall file a letter response to this order, which shall be not more than three pages.
2 On a partys initiative. A party that in good faith believes that another party or its representative has engaged in badfaith conduct, may file a letter
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describing the alleged bad-faith conduct, attaching any relevant exhibits, and requesting a conference with the Board. Within seven days of the date of service of the letter, the accused party or representative may file a response to this letter. Any letters described within this paragraph b2 shall be no longer than three pages. No reply letters shall be permitted, unless the Board grants leave for a reply.
c Establishing bad-faith conduct.
After an accused partys or representatives response letter has been filed under paragraph b of this section, or the time to file such a letter has passed, the Board shall either make a determination that no bad-faith conduct occurred or schedule a conference concerning the allegations.
d Determining the award. In determining whether to award attorneys fees and costs due to bad-faith conduct, and the amount of any such award, the Board shall consider the letters submitted by the parties, any arguments on the issue, and the accused partys or representatives behavior in other proceedings. Any award of attorneys fees or costs shall be included in the final determination. Such an award shall be limited to an amount of not more than $5,000, unless 1 The adversely affected party appeared pro se in the proceeding, in which case the award shall be limited to costs in an amount of not more than $2,500; or 2 Extraordinary circumstances are present, such as a demonstrated pattern or practice of bad-faith conduct, in which case the Board may award costs and attorneys fees in excess of the limitations in this section.
232.4

Bar on initiating claims.

a General. A party or a party representative that has been found to have engaged in bad-faith conduct on more than one occasion within a 12month period shall be subject to the penalties set forth in paragraph d of this section.
b Allegations of multiple instances of bad-faith conduct1 On the Boards initiative. On its own, and at any point during a proceeding, the Board may order a party or its representative to show cause why certain conduct engaged in on more than one occasion within a 12-month period does not constitute bad-faith conduct. Within seven days, such accused party or representative shall file a letter response to this order, which shall be not more than three pages in length.
2 On a partys initiative. A party that in good faith believes that another party
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or its representative to the proceeding has engaged in bad-faith conduct before the Board on more than one occasion within a 12-month period, may file a letter with the Board at any point after a proceeding has been initiated. Such letter shall describe the alleged instances of bad-faith conduct, include the case numbers for any other instances of bad-faith conduct if known, attach any relevant exhibits, and request a conference with the Board. Such a letter filed by a respondent before the time to opt out of the proceeding has expired shall not operate as a waiver of that respondents right to opt out of the proceeding. Within seven days of the date of service of the letter, the accused party or representative may file a response to this letter. Any letters described within this section shall be not more than three pages in length. No reply letters shall be permitted unless the Board grants leave.
c Establishing bad-faith conduct.
After an accused partys or representatives response letter has been filed under paragraph b of this section, the Board shall either make a determination that the party or representative has not engaged in badfaith conduct before the Board on more than one occasion within a 12-month period, or shall schedule a conference concerning the allegations. An award of attorneys fees or costs against the accused party or its representative, pursuant to 232.3, within the prior 12
months shall establish an instance of bad-faith conduct within the requisite time period. The Board may consider other evidence of bad-faith conduct by the accused party or representative that did not result in an award of attorneys fees or costs pursuant to 232.3, including but not limited to claims that were reviewed by a Copyright Claims Attorney and found to be noncompliant or where proceedings were initiated but the respondent opted out.
d Penalties. In determining whether to bar a party from initiating claims or a representative from initiating claims on a partys behalf, the Board shall consider the letters submitted by the parties, any arguments on the issue, and the accused partys or representatives behavior in other proceedings. The Board shall issue its determination in writing. If the Board determines that the accused party or representative has engaged in bad-faith conduct on more than one occasion within a 12-month period, such determination shall include:
1 A provision that the accused party be barred from initiating a claim, or in the case of a representative, barred from initiating claims for parties, before the
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