For the most part, state institutions have procedures in place that ensure the legal and respectful use of copyrighted materials, including guidelines when questions arise, such as the limits of fair use or the conditions of the TEACH Act. However, an August 2021 report of the U.S. Copyright Office entitled Copyright and State Sovereign Immunity (the “2021 Report”) concludes that a significant problem of state copyright infringement exists. The 2021 Report was prepared at the request of Senators Patrick Leahy and Thom Tillis following the 2020 Supreme Court decision in Allen et al. v. Cooper, Governor of North Carolina, et al.,140 S.Ct. 994 (2020). As we reported at the time, in Allen the Supreme Court unanimously held that sovereign immunity insulates a state from suit for copyright infringement.

In order to understand the need for, and conclusions of, the 2021 Report, it is necessary to delve into the complicated analysis in Allen, legislative history and another Copyright Office Report dating back to 1988.

The basic principle: Under the Eleventh Amendment, states are entitled to sovereign immunity from suits in federal court unless (i) the state has waived its immunity (for example in a contract) or (ii) Congress has validly abrogated its immunity.

The factual background: In Allen, a videographer spent two decades documenting the salvaged remains of the pirate Blackbeard’s ship in photographs and videos and registered his copyright in all the works. After resolving an initial dispute over the State of North Carolina’s publication of his works without permission, the state continued to display his work online. Finally, the videographer brought suit in federal court for copyright infringement. The district court ruled in favor of the videographer, but the Fourth Circuit Court of Appeals reversed, and the case ended up before the Supreme Court, which held that sovereign immunity barred the lawsuit.

The legal analysis: The Supreme Court rejected the videographer’s argument that sovereign immunity as to copyright suits had been abrogated by the Copyright Remedy Clarification Act of 1990 (“CRCA”). Although the Court agreed that Congress used clear language in the CRCA to abrogate state immunity from copyright infringement suits, it held that there was no valid constitutional basis for the abrogation, either in the Intellectual Property Clause of Article I, which empowers Congress to protect copyrights, nor in Section 5 (the Due Process Clause) of the Fourteenth Amendment, which authorizes Congress to enact “reasonably prophylactic legislation” aimed at preventing states from violating the Fourteenth Amendment.

With respect to the Intellectual Property Clause, which covers patents as well as copyrights, the Supreme Court relied on Fla. Prepaid Postsecondary Educ. Expense Bd. v. Coll. Savings Bank, 119 S. Ct. 2199 (1999). It determined that the Patent Remedy Act, which, like the CRCA, attempted to abrogate state immunity from patent infringement lawsuits, was unconstitutional.

In order for Congress to appropriately exercise its authority under the Due Process Clause of the Fourteenth Amendment, “…[t]here must be a congruence and proportionality between the injury to be prevented or remedied and the means adopted to that end…This test requires courts to consider the nature and extent of state conduct violating the Fourteenth Amendment and to examine the scope of Congress’s response to that injury.” Allen at 998, quoting City of Boerne v. Flores, 117 S. Ct. 2157 (1997). Relying on Florida Prepaid’s definition of unconstitutional patent infringement as “intentional conduct for which there is no adequate state remedy” (Allen at 1005), the Court proceeded to examine whether there was evidence of unconstitutional infringement of copyrights. In other words, it looked at the extent of the harm and the available remedies to address it.

In Florida Prepaid, the Supreme Court found only “thin evidence” of infringement of patents by states, let alone evidence of infringement that rose to the level of a violation of the Due Process Clause. Thus, the Patent Remedy Act’s abrogation of immunity for all patent infringements by states swept too broadly and was therefore invalid.

To determine whether the copyright situation was different, the Supreme Court in Allen examined the 1988 Copyright Office report that Congress relied on in enacting the CRCA (the “Oman Report”) and also found “exceedingly slight” evidence of willful copyright infringement by states:

Neither the Oman Report nor any other part of the legislative record shows concern with whether the States’ copyright infringements (however few and far between) violated the Due Process Clause. Of the 12 infringements listed in the report, only two appear intentional, as they must be to raise a constitutional issue… the far greater problem was the frequency of “honest mistakes” or “innocent” misunderstandings; the benefit of the bill, he [Oman] therefore thought, would be to “guard against sloppiness.” … Likewise, the legislative record contains no information about the availability of state-law remedies for copyright infringement (such as contract or unjust enrichment suits)—even though they might themselves satisfy due process. Those deficiencies in the record match the ones Florida Prepaid emphasized…Here no less than there, they signal an absence of constitutional harm. Allen at 1006-1007.

The 2021 Report

That brings us back to the 2021 Report. Senators Leahy and Tillis asked the Copyright Office to determine the extent to which copyright owners are experiencing infringement by state entities without adequate state remedies and the extent to which such infringements appear to be based on intentional or reckless conduct.

The 2021 Report concluded that the evidence shows that, despite the fact that many state institutions have taken significant steps to respect copyright, there are a substantially greater number of allegations of state infringement than when Congress enacted its prior abrogation legislation and that, therefore, “the evidence indicates that state infringement represents a legitimate concern for copyright owners.” Shira Perlmutter, U.S. Copyright Office, Copyright and State Sovereign Immunity: A Report of the Register of Copyrights, Transmittal Letter at 2 (2021). However, in the absence of clear judicial guidance, the Copyright Office could not conclude with certainty that the record would be sufficient to meet the constitutional test for abrogation. The transmittal letter concludes:

The Office nevertheless continues to believe that infringement by state entities is an issue worthy of congressional action…There would seem to be little justification for immunizing these types of entities from damages if they intentionally engage in the same conduct for which a private party could be held liable. Therefore, if Congress decides not to proceed with abrogation legislation, the Office would support consideration of alternative approaches to address this issue.

The 2021 Report identifies a possible alternative in the form of a waiver approach considered by previous Congresses and says the Copyright Office would be willing to support further consideration of this approach if Congress does not proceed with new abrogation legislation. In this model, a state’s ability to recover money damages for infringement of its IP rights would be conditioned on its waiving sovereign immunity for infringement suits against it. It would retain the right to sue for injunctive relief. One version of previously proposed legislation would also have limited state ownership of IP without such a waiver. It should be noted that, unlike works of the U.S. government, which are generally not entitled to copyright protection, there is no uniformity as to the copyright status of works of state governments. Moreover, the U. S. Copyright Office’s policy is that it will not register a government edict that has been issued by any state, local or territorial government, including legislative enactments, judicial decision, administrative rulings, public ordinances or similar types of official legal materials. As a result, the practical impact of such waivers is uncertain.

The Canada Hockey case

As we have recently reported, the U.S. Court of Appeals for the Fifth Circuit dismissed a copyright infringement lawsuit against Texas A&M by an author and publisher, relying on Allen and similarly holding that the state was immune from suit. Can. Hockey, L.L.C. v. Tex. A&M Univ. Ath. Dep’t, 2021 U.S. App. LEXIS 27012, No. 20-20503 (5th Cir. Sept. 8, 2021).

The factual background: Author Michael Bynum and his publisher sued Texas A&M and its Athletic Communications Director, Brad Marquardt, alleging that Marquardt illegally posted an article that contained portions of a book written by Bynum.

The legal analysis: The plaintiffs argued that Allen did not foreclose a copyright infringement suit because there were actual violations of the 14^th Amendment; i.e., constitutional injuries– deprivation of due process and violation of the federal Takings Clause (prohibiting taking of private property without just compensation). The Court rejected the argument, finding that meaningful post-deprivation state remedies were available. The author and publisher have asked the Fifth Circuit for a rehearing.

The Ex parte Young doctrine

Even where sovereign immunity bars a suit against a state, a copyright owner is not entirely without remedies for infringement. An exception to Eleventh Amendment sovereign immunity exists in the form of the Ex parte Young doctrine, which allows federal courts to grant “prospective injunctive relief to prevent a continuing violation of federal law.” Nat’l Ass’n of Bds. Of Pharm. v. Bd. Of Regents of the Univ. Sys. Of Ga., 633 F.3d 1297, 1308 (11^th Cir. 2011) (internal citations omitted). This is a suit against the executing official, not the state. To analyze an Ex parte Young claim, courts must only conduct a “straightforward inquiry into whether [the] complaint alleges an ongoing violation of federal law and seeks relief properly characterized as prospective.” Pennington Seed, Inc. v. Produce Exch. No. 299, 457 F.3d 1334, 1341 (Fed. Cir. 2006) (internal citations omitted). The inquiry does not involve an analysis of the merits of the claim, but the defendant must be causally connected to the infringement, not merely peripherally involved in the action. Even where the requirements of the doctrine are satisfied, only prospective injunctive relief is available, not money damages.

Qualified Immunity

It is also possible under certain limited circumstances to recover damages from a state official in his or her personal capacity if the individual knew or reasonably should have known that his or her action would violate constitutional rights of the plaintiff, or if the action were taken with the malicious intent to deprive the plaintiff of constitutional rights. Harlow v. Fitzgerald, 102 S. Ct. 2727, 2737 (1982) (internal citations omitted). Continuing an infringing activity after being put on notice that it is illegal can void the qualified immunity defense. However, even if the defense is voided, a plaintiff may not have a practical remedy if the official doesn’t have the capability to pay a money judgment.

We will continue to follow legislative and other developments in this evolving area. In the interim, Lutzker & Lutzker attorneys are available to respond to questions about the liability of state entities and officials for copyright infringement and about copyright matters in general.