Texas Supreme Court Ruling is Further Proof that Congress Must Abrogate Sovereign Immunity

On June 18, the Texas Supreme Court held that a violation of copyright is not an unconstitutional taking of property. The decision stems from a years-long battle by Jim Olive to hold the University of Houston accountable for unauthorized use of one of his iconic photographs, and it is further proof that creators have no meaningful legal recourse when a state entity steals their work. The ruling comes at a time when the U.S. Copyright Office and Congress are studying whether there are adequate remedies for copyright infringement by state entities. Olive’s case unequivocally confirms that:

• Infringement by state entities is an ongoing problem;
• State law claims have failed to hold states accountable for theft of copyrighted works;
• Copyright owners have no meaningful recourse against state copyright violations;
• States now have even less of an incentive to comply with copyright law; and
• Congress must act to abrogate state sovereign immunity

A Photographer’s Fight for Justice

Jim Olive is a Houston-based photographer who has been involved in professional photography for over 50 years. Describing photography as both his “profession and passion,” Olive specializes in capturing breathtaking aerial images as he hangs outside of hovering helicopters. It’s a technique that requires nerves of steel and great photography skills—not to mention a considerable amount of money to rent the helicopter. Olive’s images of the Houston skyline are recognized for their unmatched perspective and beauty, and many organizations enter into licenses with Olive’s company for use of the photos online and in print materials.

In 2012, one of his most impressive and difficult-to-capture images of the Houston skyline was used without permission by the University of Houston on its website to promote the University’s College of Business. After discovering the unauthorized use, rather than sue the University for copyright infringement under federal copyright law, he sued the University of Houston system and claimed an unlawful taking under the Texas Constitution because he knew the University would invoke sovereign immunity and thus render any copyright infringement claims ineffective.

The University of Houston argued that Olive’s takings claims were unenforceable, and on appeal, the Court of Appeals for the First District of Texas held that although copyright is considered property, infringement by a state entity does not constitute a taking under either the U.S. or Texas constitution. The appeals court reasoned that the University’s use of the work was not a taking because it did not take away Olive’s right to use, license, or dispose of the underlying creative work. Not ready to let the fight end there, Olive sought review by the Texas Supreme Court.

Texas Supreme Court Leaves Olive Wronged and without a Remedy

Central to Olive’s petition for review was his argument that the court of appeals erred in failing to hold that the Takings Clause protects copyrights just as it does tangible forms of property. Addressing whether copyrights constitute property protected by the Fifth Amendment, the Texas Supreme Court cited Ruckelshaus v. Monsanto, a U.S. Supreme Court case that found trade secrets (and other forms of intellectual property) are protected. “Assuming for our purposes” that copyright is property protected by the Fifth Amendment, the Court then focused on whether a copyright infringement claim against a state entity also encompasses a “per se” takings claim under the federal and state constitutions.

Likening the University of Houston’s theft of Olive’s intellectual property to a “transitory common law trespass,” the court found that the infringement did not rise to a level of unconstitutional taking for which sovereign immunity would be waived. It reasoned that “[a] compensable taking does not arise whenever state action adversely affects private property interests.” Going on to distinguish between a “per se” taking that involves the government’s physical occupation of a property, the Court explained that infringement of intellectual property requires an ad hoc analysis to determine whether there was a taking.

The Court then found there was never any possession or control, physical occupation, or confiscation of Olive’s copyright, and that at no time did he lose his ability to exclude others from using his work or to commercialize it through licensing. Addressing Olive’s argument that the University’s unauthorized reproduction and display of his work deprived him of his exclusive right to control his work, the Court focused on the “nonrivalrous” nature of copyright and found that Olive could still exclude third parties from using the work. Because Olive retained some key legal rights in the bundle of rights granted by copyright protection, the Court concluded no taking had occurred.

Concurring with the majority opinion, a group of justices pointed out that the Texas constitution provides more expansive taking protections than its federal counterpart. Specifically, it provides that “[n]o person’s property shall be taken, damaged, or destroyed for or applied to public use without adequate compensation.” The concurrence explains that Olive failed to allege these violations via a regulatory takings claim and therefor his per se takings claim cannot succeed.

Going on to discuss the meanings of “damaged” and “destroyed,” the concurrence suggests that they can be applied to a broader range of harms to property, and that “it is possible that a government entity’s violation of a private author’s rights in a copyrighted work could in some circumstances require compensation” under the Texas constitution. But the significance of this distinction remains unclear, as a state’s infringement would presumably have to damage or destroy the underlying work beyond the copyright owner’s ability to salvage any exclusive rights in the copyright bundle. Moreover, the untested theory provides no help to the many creators and copyright owners encountering infringement in other states.

Copyright Office and Congress Must Recognize the Inadequacy of Alternative Claims

The Copyright Office’s Notice of Inquiry and Request for Public Comment for its Sovereign Immunity Study asked what remedies are available to copyright owners when states infringe their works and whether those remedies are adequate. In response to this and other questions, the Copyright Alliance submitted comments outlining the limited nature of state remedies, that while theoretically available, rarely make aggrieved parties whole from the damage done by infringement. In the comments, we noted that the experiences of creators such as Jim Olive has shown that state courts have been unwilling to find copyright infringement an unconstitutional taking of property because takings jurisprudence often only allow claims in instances in which an owner is deprived of virtually all of the property’s value.

Unfortunately, the Texas Supreme Court confirmed that takings claims are bound to fail if a copyright owner retains any portion, no matter how small, of their bundle of rights. It’s difficult to imagine a scenario in which an instance of infringement would strip a copyright owner of all conceivable rights in a work, and therefore it would be impossible for a takings claim to succeed.

In its decision, the Texas Supreme Court highlights that fact that Olive also retained the right to seek injunctive relief against a state official under the Ex parte Young doctrine. But while injunctions are available to copyright owners to stop specific instances of infringement, they represent a limited and incomplete remedy that, standing alone, is inadequate. As our comments to the Copyright Office explain in detail, getting an injunction is prohibitively time consuming and expensive, with court costs and attorney’s fees often outweighing the limited remedy. Further, injunctions provide no remuneration for lost market share or lost licensing opportunities, and they require ongoing monitoring to ensure compliance. Simply put, injunctions do not make copyright owners whole for the damage done by infringement. To provide true relief, injunctions must be coupled with all remedies otherwise provided for under the Copyright Act.

While the outcome of Olive’s case is tremendously disappointing for him and other creators, the silver lining here may be that this proves beyond a shadow of a doubt that state law remedies for state infringement are non-existent and that federal legislation that abrogates state sovereign immunity is necessary. By striking takings claims off the list of potential ways copyright owners could arrive at a remedy for infringement, it’s now clearer than ever that they have no meaningful recourse when faced with state copyright theft. The Texas Supreme Court’s decisions has strengthened states’ ability to avoid consequences for infringement, and they now have even less of an incentive to play by the rules. As the Copyright Office finalizes its sovereign immunity study in the coming months, we hope that the Office takes into account the Olive case and strongly recommend that Congress enact legislation that holds states accountable for infringement.