A bill to restore Federal remedies for infringements of intellectual property by States, and for other purposes.

SECTION 1. SHORT TITLE; REFERENCES.

    (a) Short Title.--This Act may be cited as the ``Intellectual 
Property Protection Restoration Act of 2001''.
    (b) References.--Any reference in this Act to the Trademark Act of 
1946 shall be a reference to the Act entitled ``An Act to provide for 
the registration and protection of trade-marks used in commerce, to 
carry out the provisions of certain international conventions, and for 
other purposes'', approved July 5, 1946 (15 U.S.C. 1051 et seq.).

SEC. 2. PURPOSES.

    The purposes of this Act are to--
            (1) help eliminate the unfair commercial advantage that 
        States and their instrumentalities now hold in the Federal 
        intellectual property system because of their ability to obtain 
        protection under the United States patent, copyright, and 
        trademark laws while remaining exempt from liability for 
        infringing the rights of others;
            (2) promote technological innovation and artistic creation 
        in furtherance of the policies underlying Federal laws and 
        international treaties relating to intellectual property;
            (3) reaffirm the availability of prospective relief against 
        State officials who are violating or who threaten to violate 
        Federal intellectual property laws; and
            (4) abrogate State sovereign immunity in cases where States 
        or their instrumentalities, officers, or employees violate the 
        United States Constitution by infringing Federal intellectual 
        property.

SEC. 3. INTELLECTUAL PROPERTY REMEDIES EQUALIZATION.

    (a) Amendment to Patent Law.--Section 287 of title 35, United 
States Code, is amended by adding at the end the following:
    ``(d)(1) No remedies under section 284 or 289 shall be awarded in 
any civil action brought under this title for infringement of a patent 
issued on or after January 1, 2002, if a State or State instrumentality 
is or was at any time the legal or beneficial owner of such patent, 
except upon proof that--
            ``(A) on or before the date the infringement commenced or 
        January 1, 2004, whichever is later, the State has waived its 
        immunity, under the eleventh amendment of the United States 
        Constitution and under any other doctrine of sovereign 
        immunity, from suit in Federal court brought against the State 
        or any of its instrumentalities, for any infringement of 
        intellectual property protected under Federal law; and
            ``(B) such waiver was made in accordance with the 
        constitution and laws of the State, and remains effective.
    ``(2) The limitation on remedies under paragraph (1) shall not 
apply with respect to a patent if--
            ``(A) the limitation would materially and adversely affect 
        a legitimate contract-based expectation in existence before 
        January 1, 2002; or
            ``(B) the party seeking remedies was a bona fide purchaser 
        for value of the patent, and, at the time of the purchase, did 
        not know and was reasonably without cause to believe that a 
        State or State instrumentality was once the legal or beneficial 
        owner of the patent.
    ``(3) The limitation on remedies under paragraph (1) may be raised 
at any point in a proceeding, through the conclusion of the action. If 
raised before January 1, 2004, the court may stay the proceeding for a 
reasonable time, but not later than January 1, 2004, to afford the 
State an opportunity to waive its immunity as provided in paragraph 
(1).''.
    (b) Amendment to Copyright Law.--Section 504 of title 17, United 
States Code, is amended by adding at the end the following:
    ``(e) Limitation on Remedies in Certain Cases.--
            ``(1) No remedies under this section shall be awarded in 
        any civil action brought under this title for infringement of 
        an exclusive right in a work created on or after January 1, 
        2002, if a State or State instrumentality is or was at any time 
        the legal or beneficial owner of such right, except upon proof 
        that--
                    ``(A) on or before the date the infringement 
                commenced or January 1, 2004, whichever is later, the 
                State has waived its immunity, under the eleventh 
                amendment of the United States Constitution and under 
                any other doctrine of sovereign immunity, from suit in 
                Federal court brought against the State or any of its 
                instrumentalities, for any infringement of intellectual 
                property protected under Federal law; and
                    ``(B) such waiver was made in accordance with the 
                constitution and laws of the State, and remains 
                effective.
            ``(2) The limitation on remedies under paragraph (1) shall 
        not apply with respect to an exclusive right if--
                    ``(A) the limitation would materially and adversely 
                affect a legitimate contract-based expectation in 
                existence before January 1, 2002; or
                    ``(B) the party seeking remedies was a bona fide 
                purchaser for value of the exclusive right, and, at the 
time of the purchase, did not know and was reasonably without cause to 
believe that a State or State instrumentality was once the legal or 
beneficial owner of the right.
            ``(3) The limitation on remedies under paragraph (1) may be 
        raised at any point in a proceeding, through the conclusion of 
        the action. If raised before January 1, 2004, the court may 
        stay the proceeding for a reasonable time, but not later than 
        January 1, 2004, to afford the State an opportunity to waive 
        its immunity as provided in paragraph (1).''.
    (c) Amendment to Trademark Law.--Section 35 of the Trademark Act of 
1946 (15 U.S.C. 1117) is amended by adding at the end the following:
    ``(e) Limitation on Remedies in Certain Cases.--
            ``(1) No remedies under this section shall be awarded in 
        any civil action arising under this Act for a violation of any 
        right of the registrant of a mark registered in the Patent and 
        Trademark Office on or after January 1, 2002, or any right of 
        the owner of a mark first used in commerce on or after January 
        1, 2002, if a State or State instrumentality is or was at any 
        time the legal or beneficial owner of such right, except upon 
        proof that--
                    ``(A) on or before the date the violation commenced 
                or January 1, 2004, whichever is later, the State has 
                waived its immunity, under the eleventh amendment of 
                the United States Constitution and under any other 
                doctrine of sovereign immunity, from suit in Federal 
                court brought against the State or any of its 
                instrumentalities, for any infringement of intellectual 
                property protected under Federal law; and
                    ``(B) such waiver was made in accordance with the 
                constitution and laws of the State, and remains 
                effective.
            ``(2) The limitation on remedies under paragraph (1) shall 
        not apply with respect to a right of the registrant or owner of 
        a mark if--
                    ``(A) the limitation would materially and adversely 
                affect a legitimate contract-based expectation in 
                existence before January 1, 2002; or
                    ``(B) the party seeking remedies was a bona fide 
                purchaser for value of the right, and, at the time of 
                the purchase, did not know and was reasonably without 
                cause to believe that a State or State instrumentality 
                was once the legal or beneficial owner of the right.
            ``(3) The limitation on remedies under paragraph (1) may be 
        raised at any point in a proceeding, through the conclusion of 
        the action. If raised before January 1, 2004, the court may 
        stay the proceeding for a reasonable time, but not later than 
        January 1, 2004, to afford the State an opportunity to waive 
        its immunity as provided in paragraph (1).''.
    (d) Technical and Conforming Amendments.--
            (1) Amendments to patent law.--
                    (A) In general.--Section 296 of title 35, United 
                States Code, is repealed.
                    (B) Table of sections.--The table of sections for 
                chapter 29 of title 35, United States Code, is amended 
                by striking the item relating to section 296.
            (2) Amendments to copyright law.--
                    (A) In general.--Section 511 of title 17, United 
                States Code, is repealed.
                    (B) Table of sections.--The table of sections for 
                chapter 5 of title 17, United States Code, is amended 
                by striking the item relating to section 511.
            (3) Amendments to trademark law.--Section 40 of the 
        Trademark Act of 1946 (15 U.S.C. 1122) is amended--
                    (A) by striking subsection (b);
                    (B) in subsection (c), by striking ``or (b)'' after 
                ``subsection (a)''; and
                    (C) by redesignating subsection (c) as subsection 
                (b).

SEC. 4. CLARIFICATION OF REMEDIES AVAILABLE FOR STATUTORY VIOLATIONS BY 
              STATE OFFICERS AND EMPLOYEES.

    In any action against an officer or employee of a State or State 
instrumentality for any violation of any of the provisions of title 17 
or 35, United States Code, the Trademark Act of 1946, or the Plant 
Variety Protection Act (7 U.S.C. 2321 et seq.), remedies shall be 
available against the officer or employee in the same manner and to the 
same extent as such remedies are available in an action against a 
private individual under like circumstances. Such remedies may include 
monetary damages assessed against the officer or employee, declaratory 
and injunctive relief, costs, attorney fees, and destruction of 
infringing articles, as provided under the applicable Federal statute.

SEC. 5. LIABILITY OF STATES FOR CONSTITUTIONAL VIOLATIONS INVOLVING 
              INTELLECTUAL PROPERTY.

    (a) Due Process Violations.--Any State or State instrumentality 
that violates any of the exclusive rights of a patent owner under title 
35, United States Code, of a copyright owner, author, or owner of a 
mask work or original design under title 17, United States Code, of an 
owner or registrant of a mark used in commerce or registered in the 
Patent and Trademark Office under the Trademark Act of 1946, or of an 
owner of a protected plant variety under the Plant Variety Protection 
Act (7 U.S.C. 2321 et seq.), in a manner that deprives any person of 
property in violation of the fourteenth amendment of the United States 
Constitution, shall be liable to the party injured in a civil action in 
Federal court for compensation for the harm caused by such violation.
    (b) Takings Violations.--
            (1) In general.--Any State or State instrumentality that 
        violates any of the exclusive rights of a patent owner under 
        title 35, United States Code, of a copyright owner, author, or 
        owner of a mask work or original design under title 17, United 
        States Code, of an owner or registrant of a mark used in 
        commerce or registered in the Patent and Trademark Office under 
        the Trademark Act of 1946, or of an owner of a protected plant 
        variety under the Plant Variety Protection Act (7 U.S.C. 2321 
        et seq.), in a manner that takes property in violation of the 
        fifth and fourteenth amendments of the United States 
        Constitution, shall be liable to the party injured in a civil 
        action in Federal court for compensation for the harm caused by 
        such violation.
            (2) Effect on other relief.--Nothing in this subsection 
        shall prevent or affect the ability of a party to obtain 
        declaratory or injunctive relief under section 4 of this Act or 
        otherwise.
    (c) Compensation.--Compensation under subsection (a) or (b)--
            (1) may include actual damages, profits, statutory damages, 
        interest, costs, expert witness fees, and attorney fees, as set 
        forth in the appropriate provisions of title 17 or 35, United 
        States Code, the Trademark Act of 1946, and the Plant Variety 
        Protection Act; and
            (2) may not include an award of treble or enhanced damages 
        under section 284 of title 35, United States Code, section 
        504(d) of title 17, United States Code, section 35(b) of the 
        Trademark Act of 1946 (15 U.S.C. 1117 (b)), and section 124(b) 
        of the Plant Variety Protection Act (7 U.S.C. 2564(b)).
    (d) Burden of Proof.--In any action under subsection (a) or (b)--
            (1) with respect to any matter that would have to be proved 
        if the action were an action for infringement brought under the 
        applicable Federal statute, the burden of proof shall be the 
        same as if the action were brought under such statute; and
            (2) with respect to all other matters, including whether 
        the State provides an adequate remedy for any deprivation of 
        property proved by the injured party under subsection (a), the 
        burden of proof shall be upon the State or State 
        instrumentality.
    (e) Effective Date.--This section shall apply to violations that 
occur on or after the date of enactment of this Act.

SEC. 6. RULES OF CONSTRUCTION.

    (a) Jurisdiction.--The district courts shall have original 
jurisdiction of any action arising under this Act under section 1338 of 
title 28, United States Code.
    (b) Broad Construction.--This Act shall be construed in favor of a 
broad protection of intellectual property, to the maximum extent 
permitted by the United States Constitution.
    (c) Severability.--If any provision of this Act or any application 
of such provision to any person or circumstance is held to be 
unconstitutional, the remainder of this Act and the application of the 
provision to any other person or circumstance shall not be affected.

Summary: Intellectual Property Protection Restoration Act of 2001 - Amends Federal patent law to prohibit the award of remedies in civil actions brought for infringement of a patent issued on or after January 1, 2002, if a State or State instrumentality is or was at any time the legal or beneficial owner of such patent, except upon proof that by the date the infringement commenced the State has waived its immunity from suit in Federal court for any infringement of intellectual property protected under Federal law. Exempts patents from such limitation if it would materially and adversely affect a legitimate contract-based expectation in existence before January 1, 2002, or the party seeking remedies was a bona fide purchaser for value of the patent, and, at the time of the purchase, did not know and was reasonably without cause to believe that a State or State instrumentality was once the legal or beneficial owner of the patent. Amends Federal copyright law and the Trademark Act of 1946 to apply the same condition of State waiver of immunity to suit under Federal law to the award of remedies in any civil action brought under such laws where a State or State instrumentality is or was at any time the legal or beneficial owner of the copyright or trademark involved. Provides that in actions against an officer or employee of a State or its instrumentality for violations of provisions of Federal copyright or patent laws, the US Code, the Trademark Act of 1946, or the Plant Variety Protection Act, remedies shall be available against such individual in the same manner and to the same extent as they available in an action against a private individual under like circumstances. Imposes liability on States for violations of the fifth or fourteenth amendment of the US Constitution involving intellectual property under such Federal laws.