Statement of Marybeth Peters
The Register of Copyrights
Subcommittee on Courts, the Internet, and Intellectual Property
Committee on the Judiciary
United States House of Representatives
108th Congress, 1st Session
June 17, 2003
Intellectual Property Restoration Act of 2003 (H.R. 2344)
Mr. Chairman, Congressman Berman, Members of the Subcommittee,
thank you for inviting me to appear before the Subcommittee today to discuss
H.R. 2344, the "Intellectual Property Restoration Act," which is intended to
rectify the imbalance created by the Supreme Court's rulings in 1999, that broadened
the applicability of States' Eleventh Amendment immunity to claims for intellectual
property infringement, including copyright. H.R. 2344 is a carefully balanced
bill that provides copyright owners with effective tools to restore their ability
to obtain appropriate remedies for infringement by States while remaining, we
believe, within Congress' constitutional authority. The Copyright Office supports
enactment of H.R. 2344.
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 173 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.
These Acts stood until 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.
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 Amendments. (10)
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.
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.
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.
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
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.
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 had 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.
In 2001, the General Accounting Office issued a report that 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 right holders 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. I understand that one of my fellow witnesses
at today's hearing will present examples of States refusing to pay any amount
of damages for past infringements of copyrights, citing their Eleventh Amendment
The Supreme Court's latest decision on sovereign immunity, issued just last
month, gives us some small cause for hope that the Court's approach may develop
some flexibility. In Nevada Department of Human Resources v. Hibbs,
(28) the Court did find that Congress successfully abrogated States'
sovereign immunity in the Family Medical Leave Act ("FMLA"), which permitted
the petitioner to sue the State of Nevada for wrongful discharge based on his
taking leave to care for an ailing spouse. In doing so, the Court reaffirmed
the analytical framework in its recent cases, finding an extensive record of
the States "unconstitutional participation in, and fostering of, gender-based
discrimination in the administration of leave benefits, [which was] weighty
enough to justify the enactment of prophylactic [Fourteenth Amendment] legislation."
(29) The Court gave at least some weight to the fact that "Congress
reasoned [that some Fourteenth Amendment violations may] be difficult to detect
on a case-by-case basis." (30)
We hope that this signals some willingness on the Court's part to allow Congress
to invoke its Section 5 authority under the Fourteenth Amendment where the violations
at issue are hard to detect, as is the case with copyright infringement. As
the GAO wrote in its report, "[I]dentifying all past accusations of intellectual
property infringement against states over any period is difficult, if not impossible...."
In the end, however, we believe, however, that even a few acts of infringement
by States, if unremedied, ought to 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 known infringements.
Thus, like the recent, brief period 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
II. The Current Imbalance
At the outset, we acknowledge that the problems addressed by H.R. 2344 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 (32) 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. (33)
Actions such as takings claims and tort are not well suited to protect the interests
essential 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, (34) 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 where some individuals
are given the ability to copy and enjoy creative works without paying for them,
they will do so without regard to the harm it causes. 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 H.R. 2344
The Copyright Office is gratified that you have undertaken to remedy this
situation. H.R. 2344, 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
H.R. 2344 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,
We are optimistic that this incentive will be successful in encouraging States
to level the playing field by waiving their immunity. States freely acknowledge
that they 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, H.R. 2344 elects 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 we 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."
(35) 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...",
(36) such as approval of an interstate compact
(37) or its grant of funds to a State, (38)
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...."
(39) 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...." (40)
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. (41)
The fact that Congress has allowed States to enjoy copyright protection for
their works for so long in no way alters the fact that providing such protection
to future state works remains a gift from the Federal Government or diminishes
its constitutionally granted discretion to change that policy. H.R. 2344 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 infringement claims.
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. To that
end, H.R. 2344 includes a second element of the bill: a provision for the abrogation
of state sovereign immunity, pursuant to Congress' authority under the Fourteenth
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.
(42) 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, H.R. 2344 makes full use of the few tools left to Congress in
this area. The result is an abrogation provision that applies only when it can
be demonstrated on a case-by-case basis that the State has violated the Fourteenth
Amendment. The Court has held that such narrowly-tailored abrogations do not
require the support of the factual record that broader abrogations would.
(43) The burden, therefore, of proving the necessary elements in order
to overcome the State's immunity, merely shifts from Congress to the individual
right holder/plaintiff, who, in accordance with the ruling in Florida Prepaid,
must demonstrate that there are no adequate state remedies and that the infringement
was non-negligent. 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. (44) 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. (45)
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.
IV. Recent Legislative Efforts
Last year, at the request of the Senate
Judiciary Committee, the Copyright office mediated negotiations among interested
parties. The negotiating sessions were intense but in the end, they did not
bear fruit. It is our sincere hope that progress can be made in correcting the
imbalance in intellectual property protection that has existed since the Supreme
Court's decisions, and the Copyright Office stands ready to assist you in any
way we can.
The current state of affairs is unjust and unacceptable. 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 it is appropriate for Congress
to use its authority to prevent state sovereign immunity from becoming a tool
of injustice. H.R. 2344 achieves the necessary goals within the constitutional
limits and I look forward to its enactment.
1. Wihtol v. Crow, 309 F.2d 777
(8th Cir. 1962).
2. 377 U.S. 184, 196 (1964).
3. 473 U.S. 234
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 (1999)(Alden).
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.
25. Id. at 606.
26. 199 F.3d 279 (5th Cir.
27. Intellectual Property: State
Immunity in Infringement Actions, GAO-01-811 (Sept. 2001).
28. 123 S. Ct. 1972, 2003 U.S. LEXIS
29. Id. at *24.
30. Id. at *27.
31. GAO at 7.
32. 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.
33. Id. at 13-24.
34. Id. at 23-24; Alden
35. College Savings, at 675
(quoting Clark v. Barnard, 108 U.S. 436, 447 (1883)).
36. College Savings at 687.
37. Petty v. Tennessee-Missouri Bridge
Comm'n, 359 U.S. 275 (1959).
38. South Dakota v. Dole, 483
U.S. 203 (1987).
39. U.S. Const. Art. I, sec. 8.
40. 17 U.S.C. § 105.
41. See supra, note 17.
42. See supra, notes 19-23.
43. Kimel v. Florida Board of Regents,
528 U.S. 62, 81 (2000).
44. 209 U.S. 123 (1908).
45. Id. at 159-60.