Justice Breyer offered the upshot of the US Supreme Court’s recent Allen v. Cooper decision: If a state were to host an unlicensed screening of Pirates of the Caribbean, Disney could not recover damages for copyright infringement under federal law. Striking down the Copyright Infringement Clarification Act (CRCA), the Court concluded that neither Article I’s Intellectual Property Clause nor Section 5 of the 14th Amendment authorized Congress to make states pay for what they plunder. Although the Court left open the possibility that Congress could get it right if it were to pass a more “tailored statute,” for now, copyright owners with infringement claims against states are left with at best injunctive relief or perhaps some paltry state-law remedies.

                                                       The Allen Case

The Court’s decision stemmed from a lawsuit against North Carolina for copyright infringement. Frederick Allen and his company Nautilus Productions, LLC, sought damages against the state under the CRCA, a 1990 statute subjecting a state to damages for copyright infringement to the same extent as any nongovernmental entity. Concluding that precedent tied its hands, however, the Court invalidated the CRCA and effectively gave North Carolina a free license to use the plaintiffs’ photos and videos from the salvage of Blackbeard’s ship, the Queen Anne’s Revenge.

What precedent bound the Court? A 1999 case, Florida Prepaid Postsecondary Ed. Expense Bd. v. College Savings Bank, invalidated the Patent Remedy Act, a statute analogous to the CRCA that attempted to put states on equal footing with private parties in damages for patent infringement. The Florida Prepaid Court concluded that the Article I’s Intellectual Property Clause gave Congress no authority to circumvent state sovereign immunity. Also, the Florida Prepaid Court found that, although Section 5 of the 14th Amendment allows Congress to enforce the 14th Amendment’s prohibition against state deprivation of property without due process of law, the Patent Remedy Act was too broad and was based on insufficient evidence in the Congressional Record. Because the CRCA was almost identical in scope and based on a similar Congressional Record, the Allen Court concluded that Florida Prepaid “prewrote” its decision.

                                   Why Should “Disney” Care About Allen?

If copyright owners like Disney cannot sue infringing states for monetary damages in federal court, does it really matter? Thirteen amici curiae filed briefs in the case, many of whom represent a wide range of individual creators and small businesses that rely on the Copyright Act to protect their work from infringement. Infringement by anyone poses a threat to these enterprises as almost their entire value lies in their copyrights. However, enforcing those copyrights can prove expensive. The challenge becomes exponentially more difficult when the infringer is a state actor that raises the defense of sovereign immunity, a complete bar to suit.

For much of the last century, copyright holders understood they could obtain monetary as well as injunctive remedies against states for violation of their copyrights. But a series of court decisions in the late 1980s concluded that monetary relief was unavailable against state infringers under the Copyright Act of 1976. In response, Congress enacted the CRCA in 1990, abrogating state sovereign immunity and providing the same remedies against states as against private parties for copyright infringement. So for a time, copyright owners injured by state infringers could obtain a meaningful remedy in federal court. But after Florida Prepaid, court after court invalidated the CRCA.

State infringement of copyrights increased. Arguing that states are increasingly infringing, the Recording Industry Association of America, in its amicus brief, cited evidence of approximately 24 copyright infringement suits against states between 1985 and 2001 but over 150 copyright infringement suits filed against states between 2000 and 2017. Filed lawsuits tell only part of the story since they do not account for the copyright owners who decide not to file suit upon learning that state sovereign immunity will bar monetary recovery.

                                              So What Can “Disney” Do?

Given the statistics on this burgeoning problem, and in the wake of the Allen decision, Justice Breyer’s hypothetical unlicensed screening of Pirates of the Caribbean seems less far-fetched. Can Disney seek alternative remedies in federal court in Justice Breyer’s illustrative fact pattern?

The alternative remedies are mostly illusory. Disney could seek an injunction in federal court against an infringing state officer in his official capacity under the Young doctrine. Although sovereign immunity normally shields a state officer sued in his official capacity, the Young doctrine carves out an exception where the injured party seeks injunctive relief from a continuing violation of federal law. Although such a claim would circumvent sovereign immunity, it would offer prospective relief only. Screenings of the hit movie would cease, but Disney would receive no compensation for the infringing activity that had already taken place. Disney could recover damages from the state for copyright infringement if the state consented to being sued in federal court for damages for copyright infringement, but that is unlikely to happen.

In the face of significant obstacles in federal court, Disney could take its complaint to state court, but because federal courts have exclusive jurisdiction over copyright infringement cases under 28 U.S.C. § 1338(a), and Congress has preempted all equivalent state causes of action under 17 U.S.C. § 301, only a non-copyright infringement-type claim is likely to survive a motion to dismiss. In the Allen opinion, Justice Kagan hinted in a parenthetical that “contract or unjust enrichment” claims might be available under state law. But, where Disney has no contract with the state or where the state can raise sovereign immunity in state court, such remedies are illusory. Where available, claims under a state’s tort claims act could prove fruitful, but will likely bring Disney into uncharted waters.

                                                                Conclusion

The Allen case leaves Disney and every other copyright holder significantly disadvantaged when a state infringes. The decision sweeps away the even playing field put in place by the CRCA. Only a legislative response promises genuine relief. In the wake of Allen, while creative lawyers create workarounds to obtain relief for their clients, associations representing copyright owners, like amici curiae in this case, should begin working with Congress to build a robust Congressional record and tailor a statute sufficient to meet the requirements of Section 5 of the 14th Amendment.

Ann Potter Gleason, Esq., is an attorney with Summa PLLC, an intellectual property law firm in Charlotte, North Carolina. She earned a BS in Chemistry, graduated cum laude from Wake Forest University School of Law, and served as a law clerk to The Honorable Daniel A. Manion, United States Court of Appeals for the Seventh Circuit. Having spent the early part of her career in the courtroom as a state felony prosecutor, Ann now focuses her practice on patent, trademark and copyright matters.

 

 

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