“What’s Mine Is Not Yours to Give Me”—Nor to Take Without Just Compensation: A New Jersey Reaction to Sovereign Immunity, Intellectual Property & Takings

I have to give it to creative, resilient lawyers (and in fact, I have lauded them in the past here and there).  When the United States Supreme Court issued its decision in Allen v. Cooper, 140 S.Ct. 994 (2020), a decision holding that the sovereign immunity of individual states prevented a copyright holder from recovering damages for infringement, I was a bit disheartened.  Seeing no immediate litigation alternative, I called for “common sense Congressional legislation to make States directly liable for damages for copyright infringement,” because I felt it unfair that, after Allen, copyright owners “would find themselves defenseless from state-sponsored copyright piracy.”  Flynn, Queen Anne’s Revenge, Indeed!: Copyright Conundrums, Sovereign States, and IP Piracy (2020).  Then some creative, resilient lawyers said, “Not so fast,” arguing that the 11^th Amendment’s bar on infringement damages actions does nothing to lessen a copyright holder’s claim for just compensation for the taking of property under the 5^th and 14^th Amendments, and that unlicensed use of another’s intellectual property is a form a taking from the owner a defining strand of the bundle of rights that define copyrights as “property.”

That is the central premise of the Petition For Writ Of Certiorari filed November 15, 2021, in Jim Olive Photography, d/b/a Photolive, Inc., v. University Of Houston System,  No. 21-735 (2021).  In this case, the Supreme Court of Texas held that a government entity may reproduce, display, and utilize a copyrighted work for its own benefit without paying any compensation to the copyright owner.  Because the federal copyright law fully occupies the field and pre-empts state law claims sounding in copyright, a copyright owner faced with such state action would have to bring any damages action in federal court.  But the 11^th Amendment provides the state actor with sovereign immunity.  So, believing that the state’s usurpation of his right to control use of the copyrighted work essentially took from the photographer a valuable property right, the photographer made a takings claim, seeking just compensation for the state’s alleged taking, essentially an assertion of eminent domain over the intellectual property. But the Texas courts found no taking, reasoning that nothing was taken from the photographer as he still had the right to use, and license others to use, his photographs. SeeJim Olive Photography, d/b/a Photolive, Inc., v. University Of Houston System, 624 SW 3d 764, 769 (Texas 2021)(“the University’s single act of copyright infringement was not a taking because it did not take away Olive’s right to use, license, or dispose of the underlying creative work.”), affirming 580 SW3d 360, 376, fn. 26 (Tx. Ct. App. 2019). Indeed, the intermediate Texas appellate court, at Jim Olive Photography, 580 SW3d at 376, fn. 26, rejected the claim that taking away, or ignoring, the ability-to-control indicia of ownership amounts to a taking: