Statement of Marybeth Peters
The Register of Copyrights
Committee on the Judiciary
United States Senate
107th Congress, 1st Session
February 27, 2002
Intellectual Property Protection Restoration Act (S. 1611)
Mr. Chairman, Senator Hatch, Members of the Committee, good
morning. It is always a pleasure to appear before this Committee and I thank
you for inviting the Copyright Office to present its views today on this very
I would like to begin by thanking you, Mr. Chairman, for your leadership in
this area. You began working on legislation to rectify
the imbalance created by the Supreme Court's June, 1999 rulings almost immediately
after the decisions were announced. You consulted extensively with my office,
other agencies, the intellectual property community, legal scholars, and other
interested parties. In that process, you kept an open mind to all views and
went to great lengths to accommodate all concerns that were raised. The product
of your efforts, S. 1611, the Intellectual Property Protection Restoration Act,
is a carefully balanced bill. It provides copyright owners with effective tools
to restore their ability to obtain appropriate remedies for infringement by
States while remaining, I believe, within Congress' constitutional authority.
The Copyright Office supports enactment of S. 1611.
The broadened interpretation
of state sovereign immunity and its resulting application to remedies available
under the Copyright Act is a relatively recent phenomenon. The United States
enacted the first Copyright Act in 1790. There is no judicial decision in the
ensuing 172 years that failed to subject States to the full range of remedies
available under the Copyright Act on the grounds of sovereign immunity.
Then, in 1962, the United States Court of Appeals for the Eighth Circuit dismissed
a copyright infringement suit against a state agency on sovereign immunity grounds.(1)
However, that case did not usher in a new era for state sovereign immunity.
Just two years later, the Supreme Court issued its ruling in Parden v. Terminal
Railway of Alabama (Parden) in which it held that "when a State leaves
the sphere that is exclusively its own and enters into activities subject to
congressional regulation, it subjects itself to that regulation as fully as
if it were a private person or corporation."(2)
Over time, the decision in Parden was gradually eroded. More than
twenty years after Parden, in Atascadero State Hospital v. Scanlon
(Atascadero),(3) the Court reversed
itself on the legislative requirements necessary to find congressional intent
to abrogate state sovereign immunity. The Court held that in the instant case,
the Eleventh Amendment barred recovery from the States because a "general authorization
for suit in federal court is not the kind of unequivocal language sufficient
to abrogate the Eleventh Amendment."(4) Rather,
what is required for congressional abrogation of state sovereign immunity is
that the federal statute be "unmistakably clear" that States are included in
the defendant class.(5)
The decision in Atascadero created great uncertainty as to which federal
laws were unmistakably clear in their intent to subject States to liability
and which were not. Applying this standard to the Copyright Act, some courts
held in favor of the States' immunity,(6) to
the great distress of copyright owners.
In 1987, Congress requested that the Copyright Office produce a report on
the current state of the law in the area of the enforcement of copyright against
state governments. On June 27, 1988, the Copyright Office submitted its report,
Copyright Liability of States and the Eleventh Amendment. That report
noted that copyright owners "caution that injunctive relief is inadequate -
damages are needed. And if states are not responsible for remunerating copyright
owners, as are all other users subject to limited statutory exceptions, proprietors
warn that: marketing to states will be restricted or even terminated; prices
to other users will increase; and the economic incentives, even ability, to
create works will be diminished." Given these concerns and the analysis of the
case law as it stood at that time, the report concluded that "copyright proprietors
clearly demonstrate the potential for immediate harm to them."
In 1990, Congress responded to the situation created by the ruling in Atascadero
by enacting the descriptively-named Copyright Remedy Clarification Act (CRCA).(7)
That law added provisions to Title 17 which clearly provide that States "shall
not be immune, under the Eleventh Amendment of the Constitution . . . or any
other doctrine of sovereign immunity, from suit in Federal Court . . . for a
violation of the exclusive rights of a copyright owner . . . ."(8)
This clear statement left little doubt that Congress intended to make States
liable for infringement and to abrogate their sovereign immunity. Thus, once
again, the apparent uncertainty about the immunity of States from suits for
damages for copyright infringement was removed. A similar law for patents and
one for trademarks were enacted two years later.
That brings us to the Supreme Court's triad of opinions on June 23, 1999.(9)
It is worth noting that all three of these cases were decided by the same 5-4
vote and all three engendered strong dissenting views.
The decision in Alden undergirded the other two decisions. In that
case, John Alden and other employees of the State of Maine filed suit in state
court in Maine against that state for violation of the overtime provisions of
the Fair Labor Standards Act, a federal law. The U.S. Supreme Court affirmed
the decision of the Maine Supreme Judicial Court that the State's sovereign
immunity barred the suit, holding that:
the States' immunity from suit [in the State's own courts and
in federal courts] is a fundamental aspect of the sovereignty which the States
enjoyed before the ratification of the Constitution, and which they retain today
. . . except as altered by the plan of the Convention or certain constitutional
In the second of the June 23 cases, College Savings, the Court considered
whether Congress had the authority to abrogate state sovereign immunity from
lawsuits under section 43(a) of the Lanham Act. Under the Court's earlier holding
in Seminole Tribe of Florida v. Florida,(11)
there is only one source of constitutional authority from which Congress may
abrogate state immunity: the enforcement power in Section 5 of the Fourteenth
The Fourteenth Amendment instructs in relevant part that "No State shall .
. . deprive any person of . . . property, without due process of law."(13)
Because the Court held that College Savings did not allege deprivation of a
property right within the meaning of the Fourteenth Amendment, the avenue of
congressional abrogation of state immunity was closed.(14)
Next, the Court turned to the question of implied state waiver of immunity.
Invoking the precedent of Parden, Petitioner College Savings sought
to show that Florida had impliedly waived its immunity by participating in a
scheme that is enforceable in federal court.(15)
Not only did the Court reject this argument, but it overruled Parden
and renounced the doctrine of implied waiver of state immunity.(16)
The Court's holding requires that a state's waiver be explicit and voluntary
in order to be effective. However, Congress may provide incentives to the State
by conditioning use of its discretionary authority such as that found in the
Spending Clause and the Compact Clause on state waiver.(17)
In the third of the three opinions issued on June 23, Florida Prepaid,
the Court considered whether Congress had the authority to abrogate state sovereign
immunity from lawsuits under the Patent Act. The Court acknowledged that patents
are property within the meaning of the Fourteenth Amendment.(18)
However, the Court held that the legislative enactment at issue in this case
did not fall within Congress' Fourteenth Amendment power for three reasons.
First, Congress "must identify conduct transgressing the Fourteenth Amendment's
substantive provisions, and must tailor its legislative scheme to remedying
or preventing such conduct."(19) The Court found
that Congress failed to meet this burden because it did not identify a pattern
of patent infringement by states.(20)
Second, the Court recognized that patent infringement by a state is not a
violation of the Fourteenth Amendment if the state provides a remedy, that is,
due process.(21) Because the statute was drafted
to apply to all States, without regard to state-provided remedies, the Court
held that it went beyond the power conveyed by the Fourteenth Amendment.(22)
Third, the Court noted that "a state actor's negligent act that causes unintended
injury to a person's property does not 'deprive' that person of property within
the meaning of the Due Process Clause."(23)
Because a claim for patent infringement requires no showing of intent in order
for the plaintiff to prevail, the Court held that the legislative enactment
at issue in this case was again overbroad.
Although the Supreme Court has not ruled directly on the constitutionality
of the CRCA, the Fifth Circuit applied the Supreme Court's recent rulings in
Chavez v. Arte Publico Press (Chavez).(24)
That case involved a suit by an author claiming copyright infringement of her
book by the University of Houston, a state university.
The court followed the analysis in Florida Prepaid, first inquiring
whether Congress identified a pattern of infringement by States. While noting
that the legislative history in support of the CRCA, which included the 1988
report of the Copyright Office, was somewhat more substantial than that of the
PRCA, the court found that the record was still inadequate to support the legislative
enactment. Second, the court noted that in adopting the CRCA, Congress "barely
considered the availability of state remedies for infringement."(25)
That the legislative history did not meet requirements the Court articulated
a decade after the law was enacted is not surprising. Thus, the Fifth Circuit
refused to enforce the CRCA.
The same result was reached in another Fifth Circuit case, Rodriguez v.
Texas Comm'n on the Arts,(26) in a brief
opinion that presumably is based upon the same rationale as that circuit's decision
in Chavez. Given the current Supreme Court precedent, it is difficult
to find fault with the ruling in Chavez, and we believe that the CRCA
would most likely be held unconstitutional by the current Supreme Court.
Thus, like the recent, brief periods in the early 1960's and the late 1980's,
we are again faced with the issue of state sovereign immunity being interpreted
and applied in a manner which inhibits the proper functioning of the Copyright
The most recent development has been a report issued by the General Accounting
Office, at the request of Senator Hatch, which surveyed the recent legal landscape
for the number of infringement actions against states and the availability of
remedies for infringements by States.(27) That
report reached the conclusions that there are relatively few infringements of
intellectual property rights by States and that there are few if any remedies
available to rightholders whose rights are infringed.
That report also contains the text of a letter that the Copyright Office sent
to the GAO regarding the study and report. In that letter we expressed no surprise
at the relatively low number of infringements found. We were not surprised because
we recognized the difficulties in obtaining accurate and complete records of
claims against states and the relatively recent phenomenon of state sovereign
immunity trumping copyright liability. We believe, however, that even a few
acts of infringement by States, if unremedied, should be sufficient to justify
congressional abrogation of state sovereign immunity. Moreover, the Congress
is entirely within its authority to condition the exercise of its discretionary
authority to provide a State what amounts to a federal gratuity on a waiver
of sovereign immunity by that State regardless of the extent of a record of
II. The Current Imbalance
At the outset, we acknowledge that the problems addressed
by S. 1611 apply to all forms of intellectual property. However, as Register
of Copyrights, my remarks will be confined to intellectual property covered
by Title 17 of the U.S. Code. The effect of the Court's 1999 decisions is that
copyright owners are unable to obtain monetary relief(28)
under the Copyright Act against a State, state entity, or state employee unless
the State waives its immunity. The availability of monetary awards through lawsuits
filed in state courts is highly doubtful.(29)
Actions such as takings claims and tort are not designed to apply to intellectual
property and courts may not be willing to expand those areas of law. Further,
the States have immunity in their own courts as well as in Federal court,(30)
so the State would have to waive its immunity in any event.
The ability of copyright owners to protect their property and to obtain complete
relief when their rights are violated is central to the balance of interests
in the Copyright Act. By denying that opportunity to copyright owners in cases
where the infringers are under the umbrella of a State's sovereign immunity,
the Supreme Court's decisions dilute the incentive for authors, performers,
and producers to create. If the diminution of incentives to create results in
a diminution of creative output, as may reasonably be assumed, the American
economy and culture will be poorer for it.
We would like to think that States and State employees will respect the copyright
laws despite the unavailability of any monetary remedy when they infringe, but
we are concerned that in light of the Supreme Court's 1999 rulings the available
legal remedies will be insufficient to ensure that result.
We do not mean to suggest by this that States and their employees are any
less willing to abide by the law than the American public as a whole. However,
recent experiences in the internet environment suggest that some segments of
the public do not view copyright as sacrosanct. Further, logic dictates that
if a segment of people will not be held fully accountable for certain actions,
they may be less likely to restrict themselves in those actions. As it was stated
in Federalist No. 51, albeit in a different context, "[i]t may be a reflection
on human nature, that such devices should be necessary to control the abuses
of government....If men were angels, no government would be necessary. If angels
were to govern men, neither external nor internal controls on government would
In sum, we do not accept the proposition that copyright owners must or should
endure future infringements without an adequate and just remedy. If the Supreme
Court's decisions have effectively blocked Congress from directly abrogating
the State's immunity, then it is appropriate for Congress to consider other
legislative responses, such as those in this bill - providing incentives to
States to waive their immunity voluntarily by conditioning the receipt of a
gratuity from the Federal Government on such waiver. Only in this way can the
proper balance, and basic fairness, be restored.
III. Elements of S. 1611
The Copyright Office is gratified that you have undertaken
to remedy this situation, Mr. Chairman. S. 1611, is a layered approach, designed
to provide copyright owners with the best chance of getting their day in court.
It is also a balanced approach, respectful of States and carefully crafted to
comply with the most recent Court rulings.
S. 1611 contains three main components: a system designed to encourage States
to waive their immunity from federal court suits seeking monetary relief for
infringement of intellectual property by granting the benefit of fully enforceable
intellectual property only to those States that do so, a carefully circumscribed
abrogation of State sovereign immunity in the intellectual property field to
provide a remedy against States that choose not to waive their immunity, and
a codification of the judicially-made rule that notwithstanding a State's sovereign
immunity, the employees of a State may be enjoined by a Federal court from engaging
in illegal action.
A. Incentive to Waive
The bill provides significant incentives for a State to waive
its immunity, but does so in a way that is inherently proportional and fair
to the States and copyright owners. The bill is designed so that a State which
chooses not to waive its immunity from monetary damages in intellectual property
infringement cases is unable to obtain damage awards when it seeks to enforce
its own intellectual property rights. If a State does waive its immunity, then
it obtains the benefit of being able to seek monetary relief. This approach
is reasonable, proportionate, and appropriate.
We are optimistic that this incentive will be successful in encouraging States
to level the playing field by waiving their immunity. States derive significant
revenue from the commercial exploitation of their intellectual property. The
price of being unable to obtain monetary relief for the infringement of future
intellectual property should give States good cause to consider accepting the
bargain that Congress offers with this legislation. Of course, States would
have even greater incentive to waive their immunity if their ability to obtain
injunctive relief was also conditioned on such waiver. But out of concern for
not crossing the line between encouragement to the States and coercion of the
States, Mr. Chairman, you elected to follow a symmetrical approach - to deny
a State exactly what is denied to other right holders if the State refuses to
waive its immunity. We respect that choice, and I believe that the bill can
effectively accomplish its goals as written.
We feel confident that the bill is within Congress' constitutional authority.
The Supreme Court has made clear that the sovereign immunity of a State is "a
personal privilege which it may waive at its pleasure."(31)
Further, the Court wrote that Congress may properly seek to induce States to
waive their immunity by conditioning "the denial of a gift or gratuity...",(32)
such as approval of an interstate compact(33)
or its grant of funds to a State,(34) on such
waiver. That is precisely what this bill does.
The Constitution grants to Congress the authority "To promote the Progress
of Science and useful Arts, by securing for limited Times to Authors and Inventors
the exclusive Right to their respective Writings and Discoveries...."(35)
Of course, we recognize this as the authority by which Congress may provide
copyright protection for qualifying works. This authority is entirely permissive.
Congress may choose not to extend copyright protection at all, it may extend
that protection subject to certain conditions, or it may extend that protection
only to certain classes of authors. A particularly relevant example is the choice
that Congress has made to withhold copyright protection from "any work of the
United States Government...."(36) Similarly,
Congress may withhold copyright protection from any work of any state government.
That it has chosen not to do so to date represents a gift from the Congress
to the States. And, as the Supreme Court has opined, Congress may condition
the grant of such a gratuity upon a State's waiver of its sovereign immunity
in the directly related field of suits for monetary relief under the Federal
intellectual property laws.(37)
The fact that Congress has allowed States to enjoy copyright protection for
their works for so long in no way alters the fact that such protection remains
a gift from the Federal Government or diminishes its constitutionally granted
discretion to change that policy. S. 1611 would effectuate a change in that
policy, offering States an opportunity to receive full copyright protection
for their works in the future in exchange for waiver of sovereign immunity to
This system is closely analogous to the changes made by the Telecommunications
Act of 1996. That Act altered the long-standing regime of federal acquiescence
to state regulation of local telephone service. The Act provided that a State
could continue to play a role in such regulation, but conditioned that gratuity
on a waiver by the State of its immunity to suits arising under the procedures
set forth in the Act. This condition has been challenged in federal court and
upheld by four of the five appeals courts to hear such cases.(38)
While we are optimistic that most States will waive their
immunity under the system this bill provides, there is a distinct possibility
that some States, perhaps more than a few, will not. In that case, it is necessary
to provide copyright owners with at least a chance to have their day in court.
You were therefore wise, Mr. Chairman, to have included the second element of
the bill; a provision for the abrogation of state sovereign immunity, pursuant
to Congress' authority under the Fourteenth Amendment.
The Supreme Court's decision in Florida Prepaid leaves Congress almost
no leeway to accomplish an abrogation of State sovereign immunity that will
place copyright owners on the same footing they were prior to the Court's ruling.
Not only must Congress have an extensive record of infringements, but the record
must also include proof that adequate remedies in state court are not available,
and possibly also that the infringements were willful.(39)
This standard appears nearly impossible to reach. We are baffled at the Court's
apparent decision that the Fourteenth Amendment requires the denial of copyright
owners' constitutional rights at epidemic proportions before it allows Congress
to fully restore those rights.
Nonetheless, Mr. Chairman, you made full use of the few tools left to you
in this area. The result is an abrogation provision that traces the outlines
of the Fourteenth Amendment precisely. The Court has held that such narrowly-tailored
abrogations do not require the support of the factual record that broader abrogations
would.(40) Unfortunately, the burden of establishing
a constitutional violation merely shifts to the individual right holder/plaintiff.
Thus, the abrogation provision in this bill is helpful only to those who can
meet these additional burdens of proof beyond what is normally necessary to
establish a prima facia case of infringement. In the final analysis, given the
restrictions the Court has placed on Congress' exercise of its Fourteenth Amendment
authority, we believe that this is the best abrogation provision that courts
will sustain under the precedent of Florida Prepaid.
C. Codification of Injunctive Relief
The third and final element of the bill is a codification
of the< judicially-made rule that notwithstanding the State's immunity, state
employees may be enjoined by Federal courts from engaging in illegal
activity, such as infringement of copyrights. This doctrine was first articulated
by the Supreme Court in Ex Parte Young.(41)
The reasoning the Court followed was that state employees are covered by the
umbrella of the State's sovereign immunity only to the extent they are acting
within the scope of their official duties. Because a state employee may not
violate Federal law in carrying out his duties, if he does so, he is by definition
operating outside the scope of his official duties. And because he is acting
outside the scope of his official duties, he is no longer protected by the State's
sovereign immunity and the court may enjoin him from that activity.(42)
Despite the long-standing recognition of this doctrine, some fear that the
recent judicial supercharging of state sovereign immunity may be extended to
nullify this venerable rule. Thus, we believe that it is wise to codify this
doctrine in federal law.
It is only logical to expect that without an alteration of
the status quo, infringements by States are likely to increase. Only Congress
has the power to remedy the existing imbalance. The Supreme Court's rulings
and the rights of States must surely be respected, but the current state of
affairs is unjust and unacceptable. It is appropriate for Congress to use its
authority to prevent state sovereign immunity from becoming a tool of injustice.
S. 1611 achieves the necessary goals within the constitutional limits and I
look forward to its enactment.
1. Wihtol v. Crow, 309 F.2d 777 (8th
2. 377 U.S. 184, 196 (1964).
3. 473 U.S. 234 (1985).
4. Id. at 246.
5. Id. at 242.
6. See Woelffer v. Happy States of America, Inc.,
626 F. Supp. 499 (N.D. Ill. 1985); BV Engineering v. UCLA, 657 F. Supp.
1246 (C.D. Cal. 1987), aff'd, 858 F.2d 1394 (9th Cir. 1988),
cert. den., 109 S. Ct. 1557 (1989).
7. Pub. L. No. 101-553.
8. 17 U.S.C. § 511.
9. College Savings Bank v. Florida Prepaid Postsecondary
Educ. Expense Bd., 527 U.S. 666 (1999)(College Savings); Florida
Prepaid Postsecondary Educ. Expense Bd. v. College Savings Bank, 527 U.S.
627 (1999)(Florida Prepaid); Alden v. Maine, 527 U.S. 706
10. Id. at 713.
11. 517 U.S. 44 (1996).
12. College Savings at 670.
13. U.S. Const., amend. XIV.
14. College Savings at 673.
15. Id. at 676.
16. Id. at 680.
17. Id. at 686-87.
18. Florida Prepaid at 637.
19. Id. at 639.
21. Id. at 642-43.
22. Id. at 646-47.
23. Id. at 645 (citing Daniels v. Williams,
474 U.S. 327, 328 (1986)).
24. 204 F.3d 601 (5th Cir. 2000).
25. Id. at 606.
26. 199 F.3d 279 (5th Cir. 2000).
27. Intellectual Property: State Immunity in Infringement
Actions, GAO-01-811 (Sept. 2001).
28. Monetary relief for copyright infringement may consist
of some combination of actual damages, defendant's profits, statutory damages,
litigation costs, and attorney's fees. 17 U.S.C. §§504, 505.
29. Id. at 13-24.
30. Id. at 23-24; Alden at 712.
31. College Savings, at 675 (quoting Clark
v. Barnard, 108 U.S. 436, 447 (1883)).
32. College Savings at 687.
33. Petty v. Tennessee-Missouri Bridge Comm'n,
359 U.S. 275 (1959).
34. South Dakota v. Dole, 483 U.S. 203 (1987).
35. U.S. Const. Art. I, sec. 8.
36. 17 U.S.C. § 105.
37. See supra, note 17.
38. See MCI Telecomms. Corp. v. Illinois Bell Tel.
Co., 222 F.3d 323 (7th Cir. 2000); Southwestern Bell Tel.
Co. v. Brooks Fiber Communications of Okla., Inc., 235 F.3d 493 (10th
Cir. 2000); Southwestern Bell Tel. Co. v. Connect Communications Corp.,
225 F.3d 942 (8th Cir. 2000); Southwestern Bell Tel. Co. v. Public
Util. Comm'n, 208 F.3d 475 (5th Cir. 2000); but see Bell
Atlantic MD, Inc. v. MCI Worldcom, Inc., 240 F.3d 279 (4th Cir.
2001), cert. granted, 121 S. Ct. 2448 (2001).
39. See supra, notes 19-23.
40. Kimel v. Florida Board of Regents, 528 U.S.
62, 81 (2000).
41. 209 U.S. 123 (1908).
42. Id. at 159-60.