Author: David Newhoff

“Congress, however, barely considered the availability of state remedies for patent infringement and hence whether the States’ conduct might have amounted to a constitutional violation under the Fourteenth Amendment. It did hear a limited amount of testimony to the effect that the remedies available in some States were uncertain.

The primary point made by these witnesses, however, was not that state remedies were constitutionally inadequate, but rather that they were less convenient than federal remedies and might undermine the uniformity of patent law.”

– Opinion of the Court, Florida Prepaid v. College Savings Bank, Rehnquist J., June 23, 1999. –

Twenty-two years, almost to the day, after the opinion cited above was delivered by the U.S. Supreme Court, professional photographer Jim Olive was assured by the Texas Supreme Court that state remedies for intellectual property infringement are not merely “less convenient than federal remedies,” they are non-existent. Knowing that the University of Houston was immune to a claim of copyright infringement, Olive filed suit in state court arguing that the college’s unlicensed use of his aerial skyline photograph in 2012 was an illegal taking under both the U.S. and Texas State Constitutions.

As explained in detail in my Allen v. Cooper Revisited series of posts, the status quo holds that any state actor may infringe intellectual property with impunity due to the Supreme Court’s findings that the Eleventh Amendment bars suit of state entities in federal court. In the early 1990s, Congress passed three laws explicitly stating its intent to abrogate Eleventh Amendment immunity in suits for infringements of trademark, patent, and copyright; but by the end of that decade, those laws were gutted by the Supreme Court asserting the primacy of sovereign immunity. Coincidentally, the University of Houston happened to be the defendant in the 2000 case (Chavez) that finally affirmed the death of the copyright bill in that trio, the Copyright Remedy Clarification Act (CRCA).

What the Rehnquist quote cited above refers to is the fact that when Congress held hearings in the drafting of those IP remedy laws, the question was raised as to whether claimants might have adequate recourse under state law to remedy IP infringements. If so, it was argued by some parties that the grounds for abrogation of Eleventh Amendment immunity could be questionable as a constitutional matter. Among the remedies contemplated were takings claims, exactly as Olive has pursued under Section 5 of the Fourteenth Amendment, which bars both state and federal taking or destruction of property without due process. Further, the Texas State constitution contains an even more explicit takings clause.

The Problem with the Outcome in Olive’s Case

In a nutshell, the Texas Supreme Court decided that copyrights are not property—at least not in the sense that they can be subject to a takings claim the way real property or personal property can be. To consider IP theft a taking, as the court stated, relies upon holistically depriving the owner of his rights in the property at issue. Simply put, if the state appropriates your house without due process, it has taken both your physical property and all your rights associated with that property and has entirely deprived you of your ownership under the doctrine of takings.

But because the infringement of Olive’s photograph does not exhaustively deprive him of his copyrights in the image (e. g. the right to license to other parties), the Texas court held that copyrights are not properly a subject of his claim. As Kevin Madigan wrote in his excellent breakdown of this case for Copyright Alliance, “Unfortunately, the Texas Supreme Court confirmed that takings claims are bound to fail if a copyright owner retains any portion, no matter how small, of their bundle of rights. It’s difficult to imagine a scenario in which an instance of infringement would strip a copyright owner of all conceivable rights in a work, and therefore it would be impossible for a takings claim to succeed.”

The Rehnquist opinion in 1999 was naïve in kicking the questions of state remedies and due process down the road to see what happens. Moreover, as Justice Stevens articulated in his detailed dissent in the catalytic case (Seminole Tribe v. Florida) in this narrative, the Supreme Court probably got the Eleventh Amendment wrong. Stevens wrote, “There is a special irony in the fact that the error committed in the Chisolm majority [the case that precipitated the Eleventh Amendment] was its decision that this Court, rather than Congress, should define the scope of the sovereign immunity defense. That, of course, is precisely the same error the Court commits today.”

Certainly, it is hard to imagine that Congress’s intent in 1795 was to pass an amendment that would so thoroughly curtail its own power to write enforceable laws under Article I. Meanwhile, the Texas Supreme Court decision makes sense inasmuch as the existence of the IP clause in Article I implies that Section 5 of the Fourteenth Amendment refers to other forms of property.

Just as it is clearly a dubious venture to assert a copyright complaint in the form of a takings claim, it is a dubious proposal to assume that either the Framers or any Congress close to the founding imagined that it would be necessary to appeal to a future amendment in order to enforce a right explicitly established in Article I. To say nothing of the fact that the IP clause contains the only explicit declaration of a citizen’s right in the main body of the Constitution.

As Madigan argues in his post, the one silver lining in Jim Olive’s defeat in the Texas court is that it clearly proves that state remedies for IP infringement by state actors do not exist. Congress must, therefore, once again seek to abrogate immunity in these instances. No argument of justice can reasonably be made to the contrary.

Photo by: C5Media