Supreme Court Rules States are Immune from Copyright Suits 

Timothy J. Lockhart

On March 23, 2020, the U.S. Supreme Court ruled that states of the United States are immune from copyright-infringement suits. Allen v. Cooper, 589 U. S. ___, 2020 WL 1325815 (2020). In a decision with no dissents, Justice Elena Kagan wrote that because the record before the court did not support Congress’s decision in the Copyright Remedy Clarification Act of 1990 (CRCA) to remove the states’ sovereign immunity in copyright infringement cases, the CRCA fails the “congruence and proportionality” test set forth in City of Boerne v. Flores, 521 U. S. 507, 520 (1997).

The background of the case stretches back to 1717, when the pirate Edward Teach, better known as Blackbeard, captured a French slave ship in the West Indies, renamed her Queen Anne’s Revenge, and made the vessel his flagship. Carrying some 40 cannons and 300 pirates, Queen Anne’s Revenge took many prizes as she sailed around the Caribbean and up the North American coast. In 1718 the ship ran aground on a sandbar off Beaufort, North Carolina. Blackbeard and most of his crew escaped without harm, but Queen Anne’s Revenge sank.

In 1996 the marine salvage company Intersal, Inc. discovered the shipwreck, which, under both federal and state law, belongs to the State of North Carolina. The state contracted with Intersal to handle the shipwreck recovery, and Intersal engaged Frederick Allen, a local videographer, to document the operation.  For over a decade Allen created videos and photos of divers’ efforts to salvage the guns, anchors, and other remains of Queen Anne’s Revenge.

North Carolina published some of Allen’s videos and photos without his permission, and in 2013 he protested. The parties reached a settlement agreement under which North Carolina paid Allen $15,000, but Allen subsequently complained that the state had also posted five of his videos online and used one of his photos in a newsletter. When North Carolina declined to admit wrongdoing, Allen sued the state, in federal court as required by U.S. copyright law, for copyright infringement.

North Carolina moved to dismiss the suit on the basis of sovereign immunity, the doctrine that means federal courts generally cannot hear suits brought by individuals against nonconsenting states. But Allen noted that under the CRCA a state “shall not be immune, under the Eleventh Amendment [or] any other doctrine of sovereign immunity, from suit in Federal court” for copyright infringement. 17 U. S. C. § 511(a). The CRCA specifies that in such a suit a state will be liable, and subject to remedies, “in the same manner and to the same extent as” a private party.  Id. at § 501(a). Thus, Allen contended that his suit could go forward, and the district court agreed.

But the U.S. Court of Appeals for the Fourth Circuit overruled the district court. The appellate court held that the Supreme Court’s decision in Florida Prepaid Postsecondary Education Expense Board v. College Savings Bank, 527 U.S. 627 (1999), invalidating a patent statute similar to the CRCA, meant that the CRCA was likewise invalid. On further appeal, the Supreme Court upheld the ruling of the appellate court.

The Supreme Court said that it has permitted federal courts to entertain suits against nonconsenting states on two conditions. “First, Congress must have enacted ‘unequivocal statutory language’ abrogating the States’ immunity from the suit.  And second, some constitutional provision must allow Congress to have thus encroached on the States’ sovereignty.” (Citations omitted.)

The court noted that the relevant language of the CRCA is unequivocal but said that the CRCA did not meet the second prong of the test. Allen argued that Congress had the requisite constitutional authority under either the Intellectual Property Clause of Article I, which empowers Congress to provide for copyright and patent protection, or Section 5 of the Fourteenth Amendment, which authorizes Congress to “enforce” the commands of the Due Process Clause. The court rejected the Article I argument, noting that, as “Florida Prepaid explained, the Intellectual Property Clause could not support the Patent Remedy Act,” and “[h]ere too, the power to ‘secur[e]’ an intellectual property owner’s ‘exclusive Right’ under Article I stops when it runs into sovereign immunity” (citations omitted).

The court acknowledged that “Section 5 of the Fourteenth Amendment, unlike almost all of Article I, can authorize Congress to strip the States of immunity.” But the court said that “[f]or an abrogation statute to be ‘appropriate’ under Section 5, it must be tailored to ‘remedy or prevent’ conduct infringing the Fourteenth Amendment’s substantive prohibitions” (citing Flores, 521 U.S. at 519). To determine whether such a statute is constitutional, the court has developed a means-end test, which requires, for Congress’s action to fall within its Section 5 authority, “a congruence and proportionality between the injury to be prevented or remedied and the means adopted to that end” (citing id. at 520).

Having found insufficient evidence in Florida Prepaid that states “were more than sporadically (if that) ‘depriving patent owners of property without due process of law’” (527 U.S. at 646), the court said that there was likewise insufficient evidence of state-caused copyright infringement in Allen v. Cooper. Thus, the court said, the CRCA “must fail our ‘congruence and proportionality’ test” (citing Flores, 521 U. S. at 520). The court added that nothing precludes Congress from writing a “valid copyright abrogation law in the future,” one that does meet the congruence and proportionality test. But in this instance, the court said, “Florida Prepaid all but prewrote our decision” to affirm that the CRCA is invalid.

Illustrations of Queen Anne’s Revenge and Blackbeard are below.


TRUMP-IT Applicant Fails to Trump Refusals to Register

Timothy J. Lockhart

As appeared in the April 15, 2020, issue of the INTA Bulletin

The Trademark Trial and Appeal Board (Board) upheld the refusal of the United States Patent and Trademark Office (USPTO) to register for “utility knives” the “TRUMP-IT” marks shown in the below illustrations. In re ADCO Industries - Technologies, L.P., 2020 USPQ2d 53786 (TTAB 2020) [precedential]. The examining attorney refused registration on three grounds: (1) the marks falsely suggest an association with U.S. President Donald Trump; (2) the marks identify Donald Trump, a living individual, whose written consent to register is not of record; and (3) the applicant failed to comply with a request for information as to whether the applicant has a connection with Donald Trump.

The Board began by noting that the applicant had failed to respond directly to the examining attorney’s request that the applicant specify whether Donald Trump had any connection with the applicant’s goods. Instead, the applicant claimed it was “not reasonable to assume” that consumers would mistakenly think that there was any such connection. Although the Board said that the “better practice” would have been for the applicant to state expressly that there was no connection, the Board reversed the refusal to register for failing to comply with a request for information.

Next, the Board considered the false association issue. Section 2(a) of the Trademark Act prohibits registration of “matter which may … falsely suggest a connection with persons, living or dead, institutions, beliefs or national symbols.” The Board said that the examining attorney had to prove that: (1) the applicant’s marks are, or are a close approximation of, Donald Trump’s name or identity; (2) the marks would be recognized as such by purchasers of the applicant’s goods; (3) Donald Trump is not connected with the goods that are sold or will be sold by the applicant under its marks; and (4) Donald Trump’s name or identity is of sufficient fame or reputation that when used by the applicant as a mark for its goods, a connection with Donald Trump would be presumed (citations omitted).

The Board found that the applicant’s marks call Donald Trump to mind. As the applicant itself stated, both feature his renowned hair wave, one contains a play on “Make America Great Again,” one features the colors red, white, and blue, and the other features the color gold. The examining attorney submitted numerous examples of Donald Trump’s licensing of the TRUMP mark for use with a wide variety of goods and services, and the Board found that such licensing further supports a finding that consumers would view the marks “as a close approximation of his name or identity” and would recognize the applicant’s marks as pointing to him.

Because the applicant had, in effect, admitted that Donald Trump had no connection to the applicant’s goods, the Board considered the final factor of the degree of fame of Donald Trump’s name or identity. The Board quickly concluded that his name and identity have the requisite degree of fame and that therefore the applicant’s marks falsely suggest a connection with Donald Trump and, under Section 2(a), cannot be registered.

Then the Board considered the “living individual” issue. Section 2(c) of the Trademark Act provides that “[n]o trademark by which the goods of the applicant may be distinguished from the goods of others shall be refused registration on the principal register on account of its nature unless it … (c) Consists of or comprises a name, portrait, or signature identifying a particular living individual except by his written consent.” The Board said that under this section, a “name” does not have to be the full name of an individual. Citing In re Hoefflin, 97 USPQ2d 1174, 1176 (TTAB 2010) (holding registration of the marks OBAMA PAJAMA, OBAMA BAHAMA PAJAMAS, and BARACK’S JOCKS DRESS TO THE LEFT barred under Section 2(c) in the absence of consent to register, because they create a direct association with President Barack Obama).

The Board noted that it had already found that the applicant’s marks identified Donald Trump, who is, “[b]y any measure, and as Applicant readily admits, … a well-known political figure and a celebrity.” Thus, the Board found that, as the applicant’s marks included Donald Trump’s name and likeness but the application did not include his written consent to the use and registration of his name and likeness, Section 2(c) prohibited registration of the marks.

Finally, the Board considered the applicant’s arguments that Sections 2(a) and 2(c) were unconstitutional because they violated the First Amendment of the U.S. Constitution. The Board said recent case law suggests that administrative agencies of the executive branch of the federal government can address constitutional questions. Citing In re DBC, 545 F.3d 1373, 1378 (Fed. Cir. 2008). The Board then discussed the cases of Iancu v. Brunetti, 139 S. Ct. 2294 (2019), and Matal v. Tam, 137 S. Ct. 1744 (2017), in which the U.S. Supreme Court declared certain provisions of the Trademark Act to be unconstitutional violations of the freedom of speech. But the Board concluded that Sections 2(a) and 2(c) are constitutional, both being viewpoint-neutral and intended not to restrict free speech but rather to help protect the public from being deceived. Accordingly, the Board affirmed the refusals to register.

Although every effort has been made to verify the accuracy of items in the INTA Bulletin, readers are urged to check independently on matters of specific concern or interest. Law & Practice updates are published without comment from INTA except where it has taken an official position.

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