Will the Specter of Blackbeard Return as a Copyright Pirate?

Allen and his production company claimed ownership of the filmed media from the outset and, over 13 years of work, filed several yearly applications to register the copyrights. Nevertheless, the media ownership and usage provisions in the agreement between the three parties were, in a word, complicated: Allen owned the footage; Intersal owned the commercialization rights; North Carolina claimed rights to publish certain records; and, all three parties agreed to share documents and to cooperate on the production of an educational documentary. This complexity may have led to misunderstanding, because when North Carolina published some of Allen’s film footage on the state website, Allen claimed infringement. Without admitting any wrongdoing, the three parties entered into a settlement agreement, but, again, the rights allocations were complicated, and North Carolina breached the settlement agreement when it once more published some of Allen’s video footage without his permission. When North Carolina would not acknowledge the breach, Allen sued for copyright infringement. North Carolina tried to dismiss the lawsuit by invoking the doctrine of state sovereign immunity: states cannot be sued in federal court without their consent. Allen countered that argument by invoking the Copyright Remedy Clarification Act of 1990 (CRCA), in which Congress explicitly abolished state sovereign immunity for claims of copyright infringement against a state. The federal district court agreed with Allen and ruled in his favor.

North Carolina appealed, and the Fourth Circuit Court of Appeals reversed the district court’s ruling on the basis of a 1999 Supreme Court ruling in a case called Florida Prepaid Postsecondary Ed. Expense Bd. v. College Savings Bank, 527 U. S. 627 (1999). Based on this precedent, the Court of Appeals reasoned that Congress cannot use the patent and copyright clause in Article I of the Constitution (in which Congress has the right “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”) to strip states of their sovereign immunity. Further, Congress cannot use the Fourteenth Amendment (under section 5 of which Congress has the power to make states comply with the Fourteenth Amendment) to abrogate state sovereign immunity.

Allen petitioned the case to the U.S. Supreme Court, which agreed to hear it, but his arguments were unsuccessful because, as Justice Kagan wrote, “The problem for Allen is that this Court has already rejected his theory” in the Florida Prepaid case. Applying Florida Prepaid to Allen’s reading of the CRCA, the Court agreed with the Fourth Circuit that Congress could not use its Article I powers to abolish state sovereign immunity. The Court also agreed that Congress could not achieve such abrogation via section 5 of the Fourteenth Amendment because complete abolishment of state sovereign immunity from copyright infringement claims was too extreme a remedy: it was disproportionate and incongruent to the injury, because the states are “not involved in wholesale violation of the copyright laws.” In short, there was no evidence that states are going to embrace the spirit of Blackbeard and become copyright pirates. Accordingly, Allen’s petition met with a unanimous 9-0 ruling in favor of North Carolina.

Although the outcome was hard on Allen and left him without a remedy for a demonstrable infringement injury, the case is instructive to any future contractors who enter into agreements with states to produce copyrightable works. First, contractors should try to negotiate a consent-to-suit provision under which the state agrees in advance to allow itself to be sued for copyright infringement if infringement occurs: while that may be difficult to do, having such a provision will not only help the parties abide by the licensing provisions, but it will also encourage the parties to settle without litigation. Second, contractors should remember that while states have sovereign immunity, any private entity subcontractors engaged by the state would not enjoy such immunity if they made infringing use of the contractor’s copyrighted materials. And, third, it is always advantageous to prepare exceedingly clear ownership and usage rights provisions in an agreement regarding the licensing of media, because it may be that, in these specific circumstances, some of North Carolina’s missteps may have occurred because of the complicated rights-usage provisions in the original agreement and in the settlement agreement.