Sovereign Immunity – It’s Everybody’s Problem

by Robert W. Clarida

By the time you read this column, the U.S. Supreme Court will probably have decided two non-copyright cases which could have significant ramifications for copyright owners. These cases, Nos. 98-531 and 98-149, (collectively “College Savings Bank v. Florida“) raise the seldom-explored issue of sovereign immunity under the Eleventh Amendment, i.e., whether and how a state can be sued for a violation of federal law, such as the Copyright Act.  If the Court decides in favor of the states, the result could well be that any state instrumentality, such as a state university, hospital or tourism bureau, could infringe copyrighted works with impunity.

The current Copyright Act provides at § 511(a) that states “shall not be immune, under the Eleventh Amendment of the Constitution of the United States or under any other doctrine of sovereign immunity, from suit in Federal Court . . . for a violation of any of the exclusive rights of a copyright owner.”  This language, passed as part of the 1990 Copyright Remedy Clarification Act, was prompted by a recognition that copyright infringement by a state institution, such as UCLA, should not be treated any differently than infringement by a private institution such as USC.   A similar provision was written into the Lanham Act in 1992.  See 15 U.S.C. §§ 1122, 1125(a).

In recent years, however, this clear statutory language has effectively been voided by the Supreme Court.  In 1995, the Fifth Circuit in Chavez v. Arte Publico Press, 59 F.3d 539 (5th Cir. 1995) upheld § 511(a) and concluded that, notwithstanding the Eleventh Amendment, a district court had properly heard a copyright infringement action against the University of Houston.  Congress could require states to waive their Eleventh Amendment immunity, held the court, pursuant to a legitimate exercise of Article I power, as under the Copyright Act.  Because the University ran a publishing business, claiming the protections of the Copyright Act, it was held to have waived its sovereign immunity by implication.  The U.S. Supreme Court granted certiorari in the case and, in light of its decision in Seminole Tribe of Florida v. Florida, 116 S. Ct. 1114 (1996), remanded to the Fifth Circuit for further proceedings.  Briefly, Seminole Tribe held that the Indian Commerce Clause, another Article I power, did not authorize Congress to override a state’s Eleventh Amendment immunity. Only the Fourteenth Amendment, which prohibits the deprivation of “property” without due process of law, could serve as a valid basis for abrogating sovereign immunity.   When the Fifth Circuit revisited Chavez in April of last year, 139 F.3d 504, it therefore read Seminole Tribe as foreclosing the “implied waiver” theory and also refused to recognize copyrights as a form of “property” which could be protected under the Fourteenth Amendment.  With that decision, § 511(a) was essentially written out of the Copyright Act

Almost six months later, in October, a dissent was filed in the Chavez case, which led to a rehearing en banc scheduled for January 1999.  Before the argument on rehearing could be held, however,  the Supreme Court granted certiorari in the two College Savings Bank cases, causing the Fifth Circuit to hold its Chavez argument in abeyance until further guidance from the Supreme Court was forthcoming.  In one College Savings Bank case, the Court will decide the fate of a Federal Circuit decision subjecting states to liability for patent violations, with the bank arguing that patents are “property” eligible for Fourteenth Amendment protection.  In the other College Savings Bank case, the bank seeks to reverse a Third Circuit decision which exempts states from Lanham Act liability for misleading advertising.

The practical consequences of pro-state decisions by the Court could be significant. For example,  the people who brought us the “I Love New York” ad campaign may be able to get away with using your client’s song,  poem, or cartoon character gratis in their next effort; or a state hospital might blithely practice your client’s patented blood-analysis process without taking a license; or a state university might simply copy your client’s accounting software rather than buying legitimate copies.

Further, it is not clear that Congress could easily rectify such a situation.  If the College Savings Bank Court holds broadly that patents and trademarks cannot be considered “property” under the Fourteenth Amendment, it is difficult to imagine any remedial action by Congress which could pass Constitutional muster.  If, by the time you read this, the Supreme Court has decided College Savings Bank, but you thought it didn’t pertain to you, think again.

© 2000  Cowan, Liebowitz & Latman, P.C.

Disclaimer:

This the information provided in this article should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general information purposes only, and you are urged to consult with a lawyer concerning your own situation and any specific legal questions you may have.

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