Allen v. Cooper: Suing States for IP Infringement

by Dennis Crouch

Allen v. Cooper (Supreme Court 2019)

In this copyright case, the Supreme Court is wrestling with the question of sovereign immunity.  Does the 11th Amendment shelter States (North Carolina in this case) from copyright infringement lawsuits.  The plaintiff  — Frederick Allen — documented the 1998 salvage of the Pirate Blackbeard’s ship Queen Anne’s Revenge that sank near the North Carolina coast in 1718.  North Carolina wanted to use Allen’s copyrighted material, but didn’t want to pay.  The state legislature stepped in with “Blackbeard’s Law” — designating all photos, videos, and other documentary materials of shipwrecks to be public records. Allen then sued N.C. for infringement (Cooper is N.C. Governor).

In the background is the Copyright Remedy Clarification Act (CRCA) of 1990 that expressly abrogates state immunity in the area of copyright law:

Any State … shall not be immune, under the Eleventh Amendment [or] any other doctrine of sovereign immunity, from suit in Federal Court … for a violation of any of the exclusive rights of a copyright owner….

17 USC 511(a).  The basic question in the case is whether CRCA is unconstitutional:

Whether Congress validly abrogated state sovereign immunity via the CRCA in providing remedies for authors of original expression whose federal copyrights are infringed by states.

In some ways this case can be seen as a follow-on to Florida Prepaid Postsecondary Education Expense Board v. College Savings Bank, 527 U.S. 627 (1999).  In that patent case, a 5-4 Supreme Court held that Congress had improperly authorized patent infringement lawsuits against States. The area of law has seen further development since 1999, including an important bankruptcy-related decision in Central Virginia Community College v. Katz, 546 U.S. 356 (2006).

= = =

The Supreme Court held oral arguments in the case on November 5, 2019.

Allen’s basic argument is that state immunity is inconsistent with constitutional power of “securing … exclusive rights.” Further, the 14th Amendment is seen as providing additional power to Congress to ensure that each state provides due process and equal protection. However, the Supreme Court requires actual constitutional violations before Congress can legislate in this area. [Oral Argument Transcript]

Arguing on behalf of the copyright holder, Derek Shaffer explains:

MR. SHAFFER: Exclusive against whom, Your Honors? Exclusive against all comers, exclusive against the world, including the government and including states.

The key problem with N.C.’s argument is that it goes against the Court’s reasoning in Florida Prepaid.

JUSTICE GINSBURG: All — all that is — would be highly persuasive if we didn’t have the patent decision, the Florida Prepaid decision. It is the very same clause. It’s the very same secure. It’s the very same exclusivity.

MR. SHAFFER: Correct, Justice Ginsburg. But the Court was not examining the text. The Court was not examining the clause. . . . That wasn’t before the Court. It wasn’t even raised before the Court.

JUSTICE KAGAN: If you are right, we would then have to go back to Florida Prepaid, right, and topple that rule?

MR. SHAFFER: It would be certainly open to folks in patent cases to make that argument, Justice Kagan.

JUSTICE ALITO: So, basically, you’re asking us to overrule Florida Prepaid?

MR. SHAFFER: I’m asking this Court to follow Katz, Justice Alito, where I think Florida Prepaid was [already] overruled. [See Central Virginia Community College v. Katz, 546 U.S. 356 (2006) (Does the Bankruptcy Clause of the U.S. Constitution (Article I Section 8), waive the states’ sovereign immunity?)]

Arguing on behalf of N.C., RYAN PARK added his thoughts:

JUSTICE ALITO: Mr. Park, can I take you back to the interesting suggestion that perhaps Congress could have justified what it did in this act by saying that we predict that a high percentage of copyright infringements are intentional and, therefore, violate due process. If we were to accept that, is there any reason why the same reasoning would not apply in patent litigation?

MR. PARK: No, I don’t believe there is any — any distinction there. [DC: note, this is wrong since patent law does not have a copying requirement.]

Due Process and Takings are not expressly raised in this case are interesting.  Even without CRCA, a copyright holder may be able to bring a Federal Due Process or Takings case against a state who infringes the copyright.  A major difference here is that copyright damage and injunction statutes go far beyond what is required for a due process violation or taking. Mr. Park explained for the State how the copyright-owner friendly damage regime is one reason to protect sovereign immunity (and taxpayer money).

MR. PARK: My friend has failed to identify any historical evidence that anyone at the founding remotely contemplated that the intellectual property clause would allow for damages lawsuits against states. . . . Congress could not commandeer state legislatures and force them to pass copyright protective laws, nor could they, under separation of powers principles, vest judicial review of copyright claims in the Senate Judiciary Committee. And, likewise, state sovereign immunity limits Congress’s authority to expose state treasuries to the Copyright Act’s exorbitant financial remedies. . . . And liability under the Act is expansive. It’s vastly greater than anything required by the Due Process Clause. It includes statutory damages of up to $150,000 per infringement, even if the plaintiff cannot prove she suffered any actual harm. . . .

JUSTICE BREYER: [For N.C. to win] we’ve got to decide how copyright, copying, and the due process clause fit together, which, to my knowledge, this Court hasn’t really gone into. And it sounds like a pretty good mare’s nest.

From the copyright holder’s perspective, the damage award is inherent to the copyright clause:

MR. SHAFFER: Clearly the framers’ contemplation is these are exclusive rights that anyone who may infringe has to pay for.

JUSTICE SOTOMAYOR: — the latter part you’re assuming. It says securing the copyright, but it doesn’t say making sure that the copyright owners are paid.

MR. SHAFFER: To promote progress. To promote progress, Justice Sotomayor. It is a preamble that is not echoed anywhere else in Article I.

JUSTICE SOTOMAYOR: Some would say that injunctive relief promotes progress.

MR. SHAFFER: James Madison’s conception reflected in the text of what the monopoly would achieve is that the authors and inventors would get paid for their inventions. They would get paid for their creations. And as the Court, as I indicated, back in 1888 recognized, it is antithetical to that to say that government of any kind, certainly the federal government, can infringe those exclusive rights that — that Congress is to be securing.

Justices Kavanaugh and Breyer finally focused on potential realistic outcomes of the case — rampant state infringement?

JUSTICE KAVANAUGH: Justice Breyer’s point is that it could be rampant, states ripping off copyright holders. And how can that be squared with the exclusive right, if states can do this, which presumably a ruling in [N.C’s] favor will do nothing but encourage them to do?

I’m looking for a decision in the case in early 2020.

37 thoughts on “Allen v. Cooper: Suing States for IP Infringement

  1. 8

    I must be missing something here.

    Sovereign Immunity under the 11th Amendment means that a state cannot be sued in federal court absent waiver of immunity. It does not mean that it has not violated a federal right. The state could, for example, agree to be sued in its own courts.

    More to the point, under Ex Parte Young, federal courts do have authority, notwithstanding the 11th Amendment, to issue injunctive relief against state actors.

    So what is stopping the copyright owner (or for that matter, a patent owner), for suing and demanding injunctive relief? In fact, if the State is insisting on sovereign immunity, then you are much close to showing that there is no adequate remedy at law. The State refuses to pay damages for its infringement. So what else can a federal court do but issue an injunction?

    1. 8.1

      Any responses to this?

  2. 7

    Off topic, but Judges Dyk & Newman team up this morning to say that the Arthrex panel got the constitutional question right, but the remedy wrong. Further evidence for Night Writer’s prediction (with which I agree) that Arthrex is going up for en banc reconsideration.

    1. 7.1

      Before NEWMAN, DYK, and STOLL, Circuit Judges.
      Opinion for the court filed PER CURIAM.

      Opinion concurring in the judgment filed by Circuit Judge DYK, in which Circuit Judge NEWMAN joins.

      That’s one of the more odd captions that I have seen. How is two opinions of a three judge panel merely an opinion concurring in the judgment?

    2. 7.2

      Perhaps a good thing – as Newman was asleep in joining this writing of Dyk.

      Dyk confuses and conflates a judicial decision (about an item) that indicates a “proper” view of that item from its very beginning, with an ACTION that changes the law – and thus cannot be said to be “interpreting that law” ‘correctly” as that law should have been correctly interpreted all along.

      This is beyond sloppy.

    3. 7.3

      “got the constitutional question right” ; which sounds a lot to me like they’d support throwing out the entire PTAB / APJ construct.

      Which would be great news for American — and indeed world over — innovators.

      1. 7.3.1

        [S]ounds a lot to me like they’d support throwing out the entire PTAB / APJ construct.

        Which would be great news for American — and indeed world over — innovators.

        Sorry, not quite following you. Even before there was a PTAB, there was a BPAI, and before that there was a Board of Examiners in Chief. The U.S. patent office has had an appeals board for over a century now. What is the argument that the innovation system would work better without such a board?

  3. 6

    JUSTICE SOTOMAYOR: Some would say that injunctive relief promotes progress.

    Wow, is that disingenuous (but well worth remembering).

    1. 6.1

      The justices have become legislators. Their arrogance is just stunning. What bothers me most about them is that they write these ridiculous opinions that are transparently legislation and stick it in our face as if it is a judicial opinion.

      Just so offensive.

      1. 6.1.1

        “The justices have become legislators.”

        Actually they’re just filling the gaps left by do-nothing legislators that won’t take action. Welcome to the corporatocracy.

        1. 6.1.1.1

          Those are not “gaps” being filled in, but instead are the re-writing of statutory law in order to obtain the Ends that the Court wants.

          Most definitely NOT the proper application of Common Law law writing.

    2. 6.2

      What’s “disingenuous” about Sotomayer’s comment? Seems more like a wry comment. But someone had to say it, right?

      1. 6.2.1

        It would be “wry” if she did not believe that injunctions are “the worst thing ever” when it comes to patents — when in truth, injunctions are the best approximation if the right being transgressed (and would make the transgressed most whole – as equity would provide).

        1. 6.2.1.1

          When did she say that injunctions are “the worst thing ever”?

  4. 5

    The funny thing about this is that it goes to the wide-spread corruption in the USA and complete lack of ethics and morals.

    Probably could rely on states not to take advantage of sovereign immunity 50 years ago as it would shock the conscious to take from a private person for a local official’s benefit. Now, of course, we can all imagine a state hijacking all the content of Amazon, Netflix, HBO, etc., and setting up their streaming and site and using the money to increase their own salaries.

    Same with patents and infrastructure. Used to be that you could count on elected officials to suborn their personal desires for wealth for the greater good on issues like patents and infrastructure. But now, it is all about how much money they can get in some deal from large corporations.

    1. 5.1

      Notice how rich many members of Congress become while in office and immediately after leaving office. (Do your own research.)

      1. 5.1.1

        I am more than certain that the likes of Citizens United has aided and abetted this rather unfortunate capture of (at least) the Legislative Branch by the Corporatocracy (i.e., the Efficient Infringers).

    2. 5.2

      You forgot to blame Obama, Night Wiper.

      But we truly appreciate your super serious and sincere concern here.

      [go e-f-f yourself, tr-0ll]

      1. 5.2.1

        Your posts just keep declining in quality.

        1. 5.2.1.1

          Is that even possible?

    3. 5.3

      “and complete lack of ethics and morals.”

      I’m always just glad and thank go d the ebil of the white cis hetero christian capitalist democratic republic’s ethics and morals were wiped away back around the 60’s.

  5. 4

    If there is no infringement or no damages, what would prevent states from freely copying textbooks or any other book, taking movies or television shows and playing them on some state network, taking software and giving it away, etc.? A ruling in favor of NC has the potential of decimating copyright protection for anything in which a state actor is interested.

    1. 4.1

      Logically this seems correct. Nevertheless, as an empirical matter, the Court said that states can assert sovereign immunity against patent suits, and this has not given rise to a rash of states ripping off patentees.

      1. 4.1.1

        Court said that states can assert sovereign immunity against patent suits,

        Cite please – and please account for the recent Wisconsin decision (based on the Indian Tribe case).

      2. 4.1.2

        Greg, state copyright infringement such as KC listed is far more likely that states building factories and stores to infringe patents.

        1. 4.1.2.1

          Why would a State need to build factories and stores to infringe a patent?

          1. 4.1.2.1.1

            Because for patents other than those on software, that is how most patents get sufficiently infringed to be worth suing. In contrast, many if not most states already have their own state printing facilities.

            1. 4.1.2.1.1.1

              Because for patents other than those on software, that is how most patents get sufficiently infringed to be worth suing. In contrast, many if not most states already have their own state printing facilities.

              Sure, I grant that it takes more capital to rip off (e.g.) chemical patents than to rip off copyrights. It takes, however, even more capital to rip off copyrights than to rip off software patents. And yet, it is not as if one sees state governments recklessly ripping off software patents, but dutifully honoring chemical patents.

              As I said, I think that KC’s points makes intuitive sense in the abstract. Still and all, in the lived experience of real life, it does not seem to play out that way—who knows why.

            2. 4.1.2.1.1.2

              that is how most patents get sufficiently infringed to be worth suing.

              Not buying it.

              Perhaps you are confusing some type of correlation of going after “deep pockets,” with this notion of “cause” of what it takes (buildings and such) to “make it worthwhile.”

    2. 4.2

      KC, I think your suggestion on decimating copyright is definitely right. It’s especially true in NC. All school teachers are State employees and school districts are all part of the State government. When I taught in NC many (very many) years ago, my paycheck was from the State government, and my retirement pension was entirely through the State. Nothing has changed since that time. It would be extremely difficult to argue that teachers aren’t State employees under almost any test you can devise. If this case goes for NC, what would stop the State from buying one textbook from a supplier, copying it 1000s of times, and using it in all their classrooms Statewide? Same for videos, software, movies, etc.?

      On there other side of the coin, where does sovereign immunity end? It’s easy to see where it begins, but once you start getting into areas of the law and issues probably never contemplated by the drafters of the Constitution, it’s much less clear. The Texas patent case is already pushing those limits, so it’ll be interesting to note how this decision (regardless of which way it goes) affects that case. The courts have held that there are significant differences between patents and copyright in the past, so it’s possible they find a way to distinguish them here too.

      1. 4.2.1

        My post below emphasizes the similarities (rather than any differences) between patents and copyrights (same Constitutional clause — which is a heavy driver when the issue escalated to Sovereign Immunity).

        That being said, and to a certain extent contradicting my own post, this is not a blank slate being written on for this case.

        How much of that “prior writing” (scrivining of the Court included) needs to be erased is definitely a question here (and asked by Justices themselves).

        How the Court distinguishes copyright from patent will be scrutinized (for several different reasons).

  6. 3

    #teamstateimmunity

  7. 2

    Since both copyright and patent rights come from the same Constitutional clause, should not the view of one inform the view of the other?

    And given that recently States have been shown to have no special “Sovereignty” in view of challenges to patents, why then would States have any type of Sovereignty in regards to copyright?

    1. 2.1

      . . . meaning, basically, that what’s good for the goose is . . .

      1. 2.1.1

        …that would be where the breadcrumbs lead.

        But they may be a litmus type test of just how anti-patent the Court is (as if there were any doubt there).

  8. 1

    So, I know just barely enough law to be dangerous. Please bear with me if I’m misunderstanding the law here. Anyway, I’m confused that the court hasn’t addressed whether this was a taking or not.

    Isn’t standing a threshold requirement, and isn’t a requirement for standing that the plaintiff have an injury-in-fact to a legally protected interest? If the plaintiff here no longer has possession of the copyright – because it was taken by NC – then they would no longer have standing to sue for copyright infringement. And since it’s a threshold jurisdictional requirement, the court would have to satisfy itself that the plaintiff had standing before moving on to the merits, regardless of whether either party raised it as an issue. So it seems like the issue of sovereign immunity against copyright infringement should never have been reached in this case.

    I’m sure I’m getting something wrong here, so if someone can ‘splain it to me, I’d be grateful.

    1. 1.1

      The following is a misstatement:

      If the plaintiff here no longer has possession of the copyright – because it was taken by NC

      N.C. did not take the copyright. They just ignored the rights that the copyright provided.

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