SCOTUS Redefines State “Piracy”
April 21, 2020 Leave a comment
Author: Alison Pringle
The Supreme Court recently ruled in favor of keeping state governments immune from copyright infringement lawsuits in Allen v. Cooper (Case No. 18-877). The decision affirmed the Fourth Circuit’s dismissal of a videographer’s infringement claim against the state of North Carolina.
The Shipwreck Footage in Dispute
The copyrighted material at issue involved footage of wreckage from the Queen Anne’s Revenge, famed pirate Blackbeard’s ship that ran aground off North Carolina’s coast in 1718. Videographer Frederick Allen spent over a decade creating videos and photos of the ship’s underwater excavation. Allen later registered copyrights in the works.
The dispute began when North Carolina used Allen’s footage as part of an online marketing campaign. The State hosts frequent Blackbeard-festivals and its Maritime Museum features artifacts from the Queen Anne’s wreckage. The State used Allen’s works to promote its Blackbeard-related tourism.
Lower Court Rulings
Allen sued for monetary damages after the State posted his photos of the shipwreck online allegedly without payment or permission.
North Carolina argued sovereign immunity precluded Allen’s suit against the State and moved to dismiss. The District Court for the Eastern District of North Carolina refused to dismiss Allen’s claims but the Fourth Circuit reversed, finding Congress had not abrogated the States’ immunity from copyright infringement suits.
The Supreme Court affirmed by ruling Congress lacked a valid constitutional basis to abrogate North Carolina’s sovereign immunity under existing legislation. The ruling required a deep dive into constitutional interpretation and congressional power.
Congressional Action and Constitutional Limitations
Generally, under Eleventh Amendment sovereign immunity, federal courts cannot hear lawsuits brought by individuals against a non-consenting state. However, a court may permit such suits if: (1) Congress has enacted “unequivocal statutory language” abrogating the States’ immunity from suit;1 and (2) a constitutional provision allows Congress to encroach on the States’ sovereignty.2
In the early 1990’s, Congress passed two acts abrogating the States’ sovereign immunity with respect to copyright and patent litigation via the Copyright Remedy Clarification Act (“CRCA”)3 and “Patent Remedy Act” (“PRA”)4—fulfilling the first prong for abrogation based on unequivocal statutory language.5 The remaining issue for the Allen Court was whether Congress had the power to abrogate the States’ immunity from copyright infringement suits via the CRCA.
The Court considered two constitutional provisions that would arguably allow Congress to pass such legislation: Article I, Section 8 and Section 5 of the Fourteenth Amendment.
Congress Lacked Authority to Abrogate State Immunity Under Article I, Section 8
Article I, Section 8, Clause 8, also known as the Constitution’s “Intellectual Property Clause,” gives Congress the power to grant copyrights and patents.6 Under this Clause, copyright holders are entitled to certain “exclusive” rights in their creations and generally have the right to exclude others from using their works without permission.
Allen argued the Intellectual Property Clause should be construed as granting Congress the power to pass legislation abrogating the States’ sovereign immunity as to copyright lawsuits. Allen contended the Intellectual Property Clause could not provide an “exclusive” right to copyright holders if government infringers could pillage their works with immunity. According to Allen, it was “antithetical” to allow any government to infringe the rights Congress has secured:
When states infringe the exclusive federal rights that Congress is charged with securing, Congress can make states pay for doing so.7
The Court rejected this argument under precedent from Florida Prepaid v. College Savings Bank, determining that Article I did not confer such power on Congress.8
In Florida Prepaid, the Court ruled Congress lacked the power to abrogate State immunity from patent litigation pursuant to the Intellectual Property Clause. Thus, the Intellectual Property Clause could not support the PRA. The Allen Court extended its Florida Prepaid ruling with respect to the CRCA: Congress could not use its Article I powers to circumvent the limits sovereign immunity places upon federal jurisdiction. In delivering the Allen opinion, Justice Elena Kagan stated:
[T]he power to ‘secur[e]’ an intellectual property owner’s ‘exclusive Right’ under Article I stops when it runs into sovereign immunity.
With the Intellectual Property Clause negated as a potential source of Congressional authority for the CRCA, the Court next turned to the Fourteenth Amendment.
The CRCA Exceeded Congress’s Authority to Abrogate State Immunity Under the Fourteenth Amendment
The Fourteenth Amendment’s Due Process Clause provides that no State shall deprive any person of life, liberty, or property without due process of law.9 As the Court acknowledged in Allen, copyrights are a form of property.
Section Five of the Fourteenth Amendment authorizes Congress to enforce the commands of the Due Process Clause by creating legislation limiting the States’ authority. Thus, Congress can abrogate the States’ sovereign immunity under this clause. However, this abrogation must be “congruent and proportional” to the Fourteenth Amendment injury.10 In other words, Congress must only create remedies that are a proportionate response to the constitutional rights at issue.
The Allen Court ruled the CRCA exceeded Congress’s Section Five authority because it went too far in abrogating sovereign immunity for any and every infringement suit.
The Court looked to the nature and extent of State copyright infringement at the time of the CRCA’s passing in relation to the scope of Congress’s response. The Court found the CRCA’s broad abrogation of immunity was disproportionate where Congress identified only twelve instances of State-instigated copyright infringement. Further, of those twelve instances, only two constituted willful infringement (i.e. sufficient to raise a constitutional issue.).11 In the Court’s view, these examples did not identify a serious constitutional problem justifying complete abrogation of States’ sovereign immunity against infringement claims.
The Court emphasized that, like the PRA, the CRCA was overly broad where it did not set any limits on abrogation. For example, neither statute confined abrogation to suits alleging willful infringement or infringement authorized by state policy. Rather, both the PRA and CRCA impermissibly “exposed all States to the hilt—on a record that failed to show they had caused any discernible constitutional harm (or, indeed, much harm at all).”
Consequently, the Court ruled the CRCA failed the “congruence and proportionality” test. Evidence of Fourteenth Amendment injury supporting the CRCA was “exceedingly” slight and the CRCA’s “indiscriminate scope” was too out of proportion to any due process problem.
Can States Now Use Copyrighted Material Without Permission and With Impunity?
The Allen ruling presents uncertainty for copyright holders who fear States can now use their works without permission and consequence. For example, as the ruling stands, States can theoretically upload and use copyrighted movies and music onto government websites. As Justice Breyer posited to North Carolina’s counsel during oral argument:
What the state decides to do with its own website, charging $5 or something, is to run Rocky, Marvel, whatever, Spider-Man, and perhaps Groundhog Day, all right? Now, great idea. Several billion dollars flows into the treasury. Okay? Now, if you win, why won’t that happen?12
The future of copyright law as it pertains to States is indeed unclear. However, as the Court noted in its opinion, States generally respect copyright law and intentional infringement is uncommon.13 Additionally, while States are currently immune from infringement suits for monetary damages, copyright holders may still seek an injunction against an individual state employee responsible for the infringement under Ex Parte Young, 209 U.S. 123 (1908). Further, any third parties who facilitate or participate in state-sponsored infringement cannot expect immunity.
The Court also suggested States might be subject to private infringement suits in the future. Justice Kagan invited Congress to create new legislation addressing State copyright infringement that, unlike the CRCA, is narrowly tailored and designed to redress or prevent unconstitutional conduct, stating:
That kind of tailored statute can effectively stop States from behaving as copyright pirates. Even while respecting constitutional limits, it can bring digital Blackbeards to justice.
Read the Court’s opinion in its entirety here.
Alison Pringle is an associate in Gordon Rees Scully Mansukhani’s Intellectual Property Practice Group. Her practice focuses on intellectual property and commercial litigation, with an emphasis on trademark, copyright, contract, technology, and privacy disputes. She also counsels clients on transactional intellectual property issues. Ms. Pringle’s biography can be found here.
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