Report to the Honorable

Orrin G. Hatch, Ranking Minority

Member, Committee on the Judiciary,

U.S. Senate

United States General Accounting Office

GAO

September 2001 INTELLECTUAL

PROPERTY

State Immunity in

Infringement Actions

GAO-01-811
Page i GAO-01-811 State Immunity in Infringement Actions

Letter 1

Results in Brief 2

Background 4

Infringement Accusations Against States Have Been Few 7

Intellectual Property Owners Have Few Alternatives or Remedies

Against State Infringement 13

The Intellectual Property Community Is Divided on What Should

and Could be Done to Protect Against State Infringement 24

Conclusions 31

Agency Comments and Our Evaluation 32

Appendix I Scope and Methodology 36

Appendix II Intellectual Property Owned by State Institutions of

Higher Education 42

Appendix III Responses to Selected Questions From GAO Surveys

Sent to State Attorneys General, State Institutions

of Higher Education, and Intellectual Property Law

Sections of State Bar Associations 47

Appendix IV Intellectual Property Lawsuits Involving States and

Active at Any Time Since January 1985 66

Appendix V Federal District Court Cases Involving Intellectual

Property 68

Appendix VI Comments From the United States Patent and

Trademark Office 69

Contents
Page ii GAO-01-811 State Immunity in Infringement Actions

Appendix VII Comments From the United States Copyright Office 72

Appendix VIII GAO Contacts and Staff Acknowledgments 74
Page 1 GAO-01-811 State Immunity in Infringement Actions

September 25, 2001

The Honorable Orrin G. Hatch

Ranking Minority Member

Committee on the Judiciary

United States Senate

Dear Senator Hatch:

Intellectual property—which includes federally granted patents,

trademarks, and copyrights—is often owned or used by state

governmental entities, such as public institutions of higher education.

Until recently, state entities that made unauthorized use of, or “infringed,”

the intellectual property of others were subject to lawsuits in federal

court. In June 1999, however, the U.S. Supreme Court held that states were

not subject to such suits, striking down a federal law that would have

taken away a state’s right to claim immunity under the Eleventh

Amendment of the U.S. Constitution when sued in federal court for patent

infringement. In Florida Prepaid Postsecondary Education Expense

Board v. College Savings Bank, 527 U.S. 627 (1999), the Court said that the

Congress had not shown a pattern of state infringement or an absence of

state remedies that would have justified the need for such a law. Since the

Florida Prepaid decision—which applies to trademarks and copyrights as

well as patents—some intellectual property owners have voiced concerns

that they no longer have adequate remedies if a state commits

infringement.

You requested that we conduct a study of state immunity in intellectual

property infringement actions, focusing on issues raised in the Florida

Prepaid decision as well as the current concerns of the intellectual

property community. Specifically, you asked us to (1) determine the

extent to which states have been accused of intellectual property

infringement, (2) identify the alternatives or remedies available to protect

intellectual property owners against state infringement after the Florida

Prepaid ruling, and (3) obtain the views of the intellectual property

United States General Accounting Office

Washington, DC 20548
Page 2 GAO-01-811 State Immunity in Infringement Actions

community1 on what states should and could do, if anything, to protect the

rights of intellectual property owners against infringement. As agreed with

your office, we reviewed infringement accusations—through both lawsuits

and matters dealt with out of court—that had been made against the states

since January 1985. In looking at potential remedies, we focused on

current state law. Among other steps, we reviewed legal databases and

sent survey questionnaires to the 50 state attorneys general, the 37 state

bar associations with intellectual property sections, and 140 state

institutions of higher education. Appendix I provides more details on our

scope and methodology.

While the precise number is difficult to determine, few accusations of

intellectual property infringement appear to have been made against the

states either through the courts or administratively. Through an analysis of

the published case law and a survey of the states, we identified 58 lawsuits

that had been active since January 1985 in either a state or federal court in

which a state was a defendant in an action involving the unauthorized use

of intellectual property. The federal courts—which have exclusive

jurisdiction over patent and copyright infringement cases—heard 47 of

these cases in which the state was a defendant, or less than 0.05 percent of

the nearly 105,000 intellectual property cases filed in federal district courts

during this period. Additional accusations have been dealt with out of

court, but these also appear to be few in number. Of the 99 state

institutions of higher education that responded to our surveys, for

example, 35 said they had not dealt with any accusations at all since

January 1985 and 42 said that they had dealt with 5 or fewer.

Intellectual property owners appear to have few proven alternatives or

remedies against state infringement available if they cannot sue the states

for damages in federal court, based on information provided to us by the

intellectual property community and our own analysis. States are not seen

as likely to waive their immunity voluntarily and, in some cases, their own

laws may prohibit them from doing so. An intellectual property owner

 1

 In a broad sense, the term “intellectual property community” encompasses entities or

individuals from the governmental, nonprofit, and private sectors that are involved in the

ownership, use, or administration of patents, trademarks, copyrights, and trade secrets. For

purposes of this report, we focused on the United States Patent and Trademark Office and

Copyright Office; attorneys general, institutions of higher education, and other entities

within the states that own or use intellectual property; associations that represent

intellectual property owners or interests; intellectual property attorneys; and legal scholars.

Results in Brief
Page 3 GAO-01-811 State Immunity in Infringement Actions

might be able to obtain an injunction against a state official in federal

court to stop the ongoing infringement, but the state would not have to

pay damages. It is too early to tell whether actions for damages can be

brought in state court. However, such actions face problems because (1)

federal law provides that patent and copyright infringement cases can be

heard only in federal court, (2) a lawsuit might have to be brought under

some state-recognized cause of action—such as a taking of property

without just compensation—that has yet to be subjected to judicial review

and is thus unproven in the context of intellectual property infringement,

or (3) a state may be immune from suit in its own courts.

The intellectual property community is divided on what, if anything, states

should and could do to protect the rights of intellectual property owners

against state infringement. Some believe that nothing more needs to be

done, saying states seldom infringe and, when they do, take remedial

action such as obtaining a license or reaching a monetary settlement. They

also believe that an intellectual property owner still has the ability to

obtain an injunction in federal court against an infringing state employee

and can attempt a suit for damages in state court under some alternative

legal theory. They also say that, if suits in state court prove not to be

possible, the fault lies with the federal government and its preemption

statute, not the states. Others in the intellectual property community,

believing that the available remedies are too uncertain in view of the risks,

disagree and say that the Congress should enact new legislation. The

proposals for such new legislation include new attempts to abrogate

Eleventh Amendment immunity or requiring the states to waive their

immunity in return for participating in and receiving certain rights under

the federal intellectual property system.

We provided the Copyright Office and the United States Patent and

Trademark Office (USPTO) with a draft of our report for review and

comment. Both agencies expressed their continuing concerns over the

state immunity issue. They see the current situation as inequitable and

believe legislative action is warranted. The USPTO also said that (1) 58

lawsuits “seems like a substantial number” and does not mean “a pattern

of infringement does not exist” and (2) the report’s conclusions rely on

anecdotal information from state officials who “may have an incentive to

under-report accusations made against state entities.” Moreover, the

USPTO said there is no division within the intellectual property

community about what needs to be done and that a federal legislative

solution “seems especially appropriate given the absence of any viable

alternative remedy against state infringement.” Regarding the USPTO’s

comments about the number of accusations identified, our report makes
Page 4 GAO-01-811 State Immunity in Infringement Actions

no conclusions about whether the 58 lawsuits and the matters dealt with

out of court that we identified would constitute a pattern of infringement.

Our report does not rely solely on information provided by state officials.

It also draws from our analysis of the available case law, information

provided by state bar associations that had intellectual property sections,

and discussions with the intellectual property community as a whole. We

do not offer any views on whether the positions taken by others are

accurate. We also note, in the conclusions section of our report, that it is

too early to determine what impact the Florida Prepaid decision will have

on the federal intellectual property system. Regarding the comments about

what needs to be done to address the state immunity issue, our report

makes clear that the intellectual property community is divided in its

opinions, with the states generally believing nothing needs to be done and

others believing legislative action is needed to correct an inequitable

situation.

Historically, state governments have sued and been sued by others in

federal court for intellectual property infringement just like any other

owner or user of intellectual property. The landscape changed

dramatically in June 1999, however, when the Supreme Court ruled in

Florida Prepaid Postsecondary Education Expense Board v. College

Savings Bank that states could claim immunity under the Eleventh

Amendment to the U.S. Constitution when sued in federal court for

infringement.

The term “intellectual property” is commonly used to refer to four types of

intangible property—patents, trademarks, copyrights, and trade secrets.

Patents are granted and trademarks are registered by the USPTO within

the Department of Commerce, while copyrights are registered by the

Copyright Office within the Library of Congress. Only the federal

government issues patents and registers copyrights, while trademarks may

also be registered by states that have their own registration laws. Trade

secrets—which are not addressed in this report—are governed by state

law.

Anyone who uses the intellectual property of another without proper

authorization is said to have “infringed” the property. Traditionally, an

intellectual property owner’s remedy for such unauthorized use would be

a lawsuit for injunctive and monetary relief. Federal law provides that

lawsuits for patent and copyright infringements must be brought in federal

court. Trademark suits for federally registered trademarks may be brought

in either federal or state court.

Background

Intellectual Property and

Infringement
Page 5 GAO-01-811 State Immunity in Infringement Actions

In the 1980s, the Congress grew concerned that some states were claiming

that the Eleventh Amendment to the U.S. Constitution2

 provided them

immunity when sued for intellectual property infringement in federal

court. Moreover, the Supreme Court ruled in 1985 that, to abrogate such

immunity, Congress must “mak(e) its intention unmistakably clear in the

language of the statute.”3

 In response to these concerns, the Congress in

the early 1990s passed “clarification” laws for patents,4

 trademarks,5 and

copyrights6

 to provide that states (1) could commit infringement and (2)

could be sued for infringement in federal court. The reasoning behind

these laws was that the states should be subject to the same rules as other

users of intellectual property if they desired to be protected by those rules.

In 1994, College Savings Bank, a New Jersey corporation, brought a

federal suit against the Florida Prepaid Postsecondary Education Expense

Board, a state agency, for infringing College Savings’ patent for certain

certificates of deposit/annuity contracts. When Florida Prepaid asserted

that it was immune to the suit under the Eleventh Amendment, College

Savings Bank argued that such a defense was no longer valid because the

state’s immunity had been abrogated by the Patent and Plant Variety

Remedy Clarification Act. The federal district court and court of appeals

agreed with College Savings Bank and held the act to be valid. However,

the U.S. Supreme Court disagreed with the lower courts and struck down

the act in June 1999 in its Florida Prepaid decision.

Following a line of cases begun in 1996,7

 the Supreme Court reiterated that

the Congress did not have the authority to abrogate a state’s Eleventh

Amendment immunity under the powers given the legislative branch under

Article I of the U.S. Constitution. The Court said that the Congress did

 2

 The Eleventh Amendment of the U.S. Constitution states that “The Judicial power of the

United States shall not be construed to extend to any suit in law or equity, commenced or

prosecuted against one of the United States by Citizens of another State, or by Citizens or

Subjects of any Foreign State.”

3 Atascadero State Hosp. v. Scanlon, 473 U.S. 234, 242 (1985).

4

 Patent and Plant Variety Protection Remedy Clarification Act (P.L. 102-560, enacted Oct.

28, 1992).

5

 Trademark Remedy Clarification Act (P.L. 102-542, enacted Oct. 27, 1992).

6

 Copyright Remedy Clarification Act (P.L. 101-553, enacted Nov. 15, 1990).

7 Seminole Tribe of Fla v. Florida, 517 U.S. 44 (1996).

Eleventh Amendment

Immunity and Florida

Prepaid
Page 6 GAO-01-811 State Immunity in Infringement Actions

have authority under the due process clause of the Fourteenth

Amendment to abrogate state immunity, but in this instance it did not

show that the states (1) had engaged in a pattern of infringement or (2) did

not have suitable remedies of their own. Finding that the legislative history

contained no such evidence, the Court ruled that the Congress’ attempt to

abrogate Eleventh Amendment immunity in patent infringement cases did

not meet the requirements of the Fourteenth Amendment and that,

consequently, the patent clarification act was invalid.

The Supreme Court’s decision in Florida Prepaid dealt with patent

infringement. However, based on a companion case involving unfair

competition8

 decided by the Supreme Court on the same day as Florida

Prepaid and its action in a copyright infringement case remanded and

later decided by the Fifth Circuit Court of Appeals in February 2000,9

 it is

generally believed that the Florida Prepaid decision applies to all forms of

federally protected intellectual property.

Some members of the intellectual property community have raised

concerns over the ramifications of Florida Prepaid. Specifically, they find

the current situation to be unfair, because states—which themselves are

owners of intellectual property—benefit from the protection of the federal

intellectual property laws but do not have to be bound by them.

Furthermore, these members say there is no effective remedy for state

infringement of patents and copyrights if the states cannot be sued in

federal court. These concerns were the topic of a discussion group

convened by the USPTO on March 31, 2000, that included the USPTO, the

Copyright Office, attorneys and associations representing various interests

within the intellectual property community, legal scholars, and state

officials. They also were the subject of a hearing on June 27, 2000, by the

Subcommittee on Courts and Intellectual Property, House Committee on

the Judiciary, that included the USPTO, the Copyright Office, and two

legal scholars.

An analysis of state ownership of intellectual property was beyond the

scope of this report. However, appendix II provides a summary of patents,

trademarks, and copyrights owned by state institutions of higher

 8 College Savings Bank v. Florida Prepaid Postsecondary Education Expense Board, 527

U.S. 666 (1999).

9 University of Houston v. Chavez, 517 U.S. 1184 (1996), remanded in light of Seminole

Tribe, and rev’d. en banc, Chavez v. Arte Publico Press, 204 F.3d 601 (5th Cir, 2000).
Page 7 GAO-01-811 State Immunity in Infringement Actions

education, based on the information available from the USPTO and the

Copyright Office.

Based on the best data available, accusations against the states for

intellectual property infringement appear to be few. The precise number

cannot be determined because not all accusations result in lawsuits; those

that do will not always be in a published decision; and those that do result

in a published decision are not always identifiable as involving accusations

of intellectual property infringement or state defendants.

Our analysis of published case law and surveys of the states identified 58

lawsuits since January 1985 alleging infringement or unauthorized use of

intellectual property by state entities. Forty-seven of these lawsuits against

states were brought in federal court, accounting for less than 0.05 percent

of all federal intellectual property lawsuits filed during the period

reviewed, while 11 had been brought in state court. Twenty-seven of the 58

infringement lawsuits—23 federal and 4 state—had been decided in favor

of the state defendants or dismissed.

The states appear to resolve more accusations of infringement out of court

than through lawsuits. However, these instances also appear to be few in

number. Of the 99 state institutions of higher education that returned our

surveys, for example, 35 said they had not dealt with any accusations at

all since January 1985 and 42 said they had dealt with 5 or fewer.

Identifying all past accusations of intellectual property infringement

against the states over any period is difficult, if not impossible, because

there are no summary databases providing such information. The

published case law is an incomplete record, because (1) both the federal

and state courts report only those cases in which decisions were rendered

and (2) state courts usually report only appellate decisions. Thus, lawsuits

that were dropped or settled by any court prior to a decision as well as

those decided by state trial courts might not appear in the published case

law.10 Furthermore, accusations that are made through such mechanisms

 10 Two exceptions would be (1) cases where some matter (e.g., a motion to dismiss on

Eleventh Amendment grounds) was appealed to and decided by an appellate court and (2)

separate actions (e.g., a request for a declaratory judgment on the validity of a patent)

conducted in federal court during the course of the underlying lawsuit that made reference

to that lawsuit. Even in these cases, however, there may be little information on the

particulars of the referenced lawsuit.

Infringement

Accusations Against

States Have Been Few

Infringement Accusations

Against States Can Be

Difficult to Identify
Page 8 GAO-01-811 State Immunity in Infringement Actions

as cease-and-desist letters that were resolved administratively without a

lawsuit being filed would not appear in the published case law.

It is also difficult to identify lawsuits for which the underlying accusations

appear to be claims of infringement, but the lawsuits themselves were

brought under some other cause of action.11 For example, a lawsuit that

involves a contract dispute might also include an accusation of

unauthorized use of intellectual property. Similarly, a lawsuit in state court

over what appears to be an accusation of patent or copyright infringement

might have been brought under some state-recognized cause of action.

Even where infringement lawsuits can be identified, it is not always

possible to determine whether one of the parties was a state entity that

could claim immunity. For example, some organizations that have the

name of the state in their own title (e.g., California Institute of

Technology) are not state entities while other organizations not carrying

the state name (e.g., Auburn University) are nevertheless entities of the

state. Moreover, not all state entities qualify for Eleventh Amendment

immunity. For example, some Pennsylvania universities generally

considered to be public institutions are only quasi-state entities for

litigation purposes and do not have immunity in federal courts. Similarly,

the community colleges in some states could have Eleventh Amendment

immunity while those in other states might not. In still other cases, a

particular entity’s ability to claim immunity may be unknown.

Because of the difficulties in identifying accusations of infringement

against the states through the case law, we supplemented our search with

surveys to state attorneys general and state institutions of higher

education.12 Attorneys general were selected because they are the primary

legal authorities in the executive branches of their respective states. State

institutions of higher education were selected because they are among the

most significant state entities in terms of ownership and use of patents,

trademarks, and copyrights. Our surveys asked for information on both

lawsuits and matters resolved out of court since January 1985. Thirty-six

of the 50 attorneys general (about 72 percent) and 99 of the 140

 11 The term “cause of action” refers to the basis (e.g., breach of contract, trespass, etc.)

under which a plaintiff seeks relief.

12 For purposes of this report, the term “state institutions of higher education” includes

colleges, universities, and affiliated associations. Appendix I provides additional details on

how the institutions of higher education were identified for participation in our surveys.
Page 9 GAO-01-811 State Immunity in Infringement Actions

institutions of higher education (about 71 percent) responded to our

survey.13

The survey responses offered no assurance that we had identified all the

accusations of infringement or unauthorized use of intellectual property

made against the states, as the respondents themselves did not always

have such information. The state attorneys general are not necessarily

informed of accusations of infringement against other state entities (see

app. III, tables 9, 25, and 28). Similarly, legal representatives from some

state institutions of higher education we contacted told us that, while they

generally could identify the few lawsuits to which they had been parties,

they did not always have formal mechanisms for identifying actions dealt

with administratively. In order to respond to our requests, some attorneys

general and state institutions of higher education told us that they had had

to research detailed case files or rely on the collective memory of staff.

Even these were a problem in researching accusations beyond recent

years, as the files were not organized for such a search and the current

staff may not have been in place since January 1985.

We identified a total of 58 lawsuits involving accusations of the

unauthorized use of intellectual property that were active at some time

since January 1985, and where state entities were the defendants (see

table 1 and app. IV, table 47). These included (1) lawsuits where the stated

cause of action was infringement of a patent, trademark, or copyright, (2)

requests for declaratory judgments,14 and (3) lawsuits brought under some

cause of action other than infringement but where the state nevertheless

appears to have been accused of the unauthorized use of intellectual

property.

 13 Some of the survey responses covered more than one institution; thus, the 99 responses

provided information on 113 separate institutions surveyed, or about 81 percent of the 140

institutions.

14 A declaratory judgment declares the rights of the parties or expresses the opinion of the

court on a question of law, without ordering anything to be done. For example, a party who

wishes to use a product or process patented by another can ask a federal court for a

declaratory judgment that the patent is invalid.

Few Infringement

Lawsuits Have Been

Brought Against States
Page 10 GAO-01-811 State Immunity in Infringement Actions

Table 1: Intellectual Property Lawsuits Active in Federal or State Court Since January 1985 Where the Defendants Were State

Entities

Number of lawsuitsa

Status

 Jurisdiction Resolved by court

Dropped

or settled

by parties

Still

active

Type of intellectual property Total Federal State Decided Dismissedb

Patent 21 17 4 3 4 10 4

Trademark 11 8 3 2 3 4 2

Copyright 19 16 3 5 6 7 1

Trademark and copyright 5 4 1 1 1 2 1

Patent and trademark 1 1 0 0 1 0 0

Patent and copyright 1 1 0 1 0 0 0

Total 58 47 11 12 15 23 8

a

We did not consider separate actions—such as appellate court decisions on rulings made by the trial

court—arising out of the same matter as separate cases except in those instances where lawsuits

were filed in both federal and state court. For example, Florida Prepaid and College Savings Bank

were Supreme Court decisions based on separate appeals out of the same lawsuit in federal district

court. We treated these as one lawsuit. In four other cases, however, the same basic accusations

resulted in separate lawsuits in both state and federal court. We treated these as eight separate

lawsuits—four federal and four state.

b

The cases dismissed were those against the state. The lawsuit may have proceeded against any

codefendant(s).

Source: GAO analysis of case law and survey responses by state attorneys general and state

institutions of higher education.

Forty-seven of the 58 lawsuits that we identified were brought in federal

court. In analyzing these cases, we noted the following:

• Twenty states were involved in one or more lawsuits each. One state was a

defendant in 10 suits, 2 were defendants in 5 each, 3 were defendants in 3

each, 4 were defendants in 2 each, and 10 were defendants in 1 each.

• Thirty-two of the lawsuits involved state institutions of higher education;

the remaining 15 involved other entities of the states.

• Thirty-five of the lawsuits involved infringement actions, while the

remaining 12 involved requests for declaratory judgments only.

• The defendant states were the prevailing party in all 23 lawsuits resolved

by the courts. Ten lawsuits were decided, and 13 lawsuits were dismissed.

• Of the 13 lawsuits dismissed, 10 were dismissed because the state

defendant was found to have Eleventh Amendment immunity. Of these, 6

were dismissed prior to and 4 were dismissed as part of or after the June

1999 Florida Prepaid and College Savings Bank decisions. The Eleventh

Amendment was also raised in some other cases that were settled or still

active. For example, the Court of Appeals for the Fifth Circuit found the
Page 11 GAO-01-811 State Immunity in Infringement Actions

state to have immunity in Chavez v. Arte Publico Press.

15 The parties

settled the case prior to a final decision by the district court to which the

case had been remanded.

Of the 11 lawsuits heard in state court, we noted the following:

• Two states were defendants in three lawsuits each, and five states were

defendants in one lawsuit each.

• Five of the lawsuits involved state institutions of higher education; the

remaining six involved other entities of the states.

• Four of the lawsuits brought in federal court were also brought in state

court. In three cases, the state actions were introduced after the federal

court decided or dismissed the federal lawsuits against the states. In the

fourth case, the federal action was introduced after the state court

dismissed the state lawsuit against the state.

• The state was the prevailing party in the four cases resolved by state

courts—two by rendering a decision and two by dismissing the action.16

• Of the two lawsuits dismissed, one was because the court said it lacked

jurisdiction on what was essentially a copyright infringement claim, and

one was because the court determined the state was not a party to the

unauthorized use of intellectual property.

We identified an additional 42 lawsuits—36 federal and 6 state—active in

federal or state court since January 1985 where the state was a plaintiff17

(see app. IV, table 48). While a complete analysis of such cases was

beyond the scope of our review, we include them to provide additional

information on the extent to which states are involved in litigating

intellectual property infringement suits.

The lawsuits against states also appear to be few in number when

compared to the number of infringement lawsuits against all defendants.

Statistics accumulated by the Administrative Office of the U.S. Courts

show 104,898 district court cases were filed from fiscal year 1985 through

 15 See footnote 9.

16 As discussed later in this report, there is one active state case where the state supreme

court said that the case can proceed under the state-recognized cause of action—a taking

without just compensation—pursued by the plaintiff.

17 We identified one lawsuit in which the defendant had filed a counterclaim for

infringement against the state. Upon the state’s motion, the court found that the state did

not give up its Eleventh Amendment immunity in filing its own lawsuit.
Page 12 GAO-01-811 State Immunity in Infringement Actions

fiscal year 2000 that involved protected property rights for patents,

trademarks, and copyrights (see app. V, table 49). Thus, the 47 federal

cases we identified accounted for 0.045 percent of all the federal lawsuits

filed over this period that involved possible intellectual property

infringements. We did not identify state court statistics that could be used

for comparison.

During our visits to three states, state officials acknowledged that they

were more likely to handle an accusation of intellectual property

infringement administratively than to be the defendant in a lawsuit. They

said the reason was that they do not intentionally infringe or misuse the

property of others and, when confronted with an infringement accusation,

they investigate the matter thoroughly. If they find no infringement, they

say they advise the complaining party and provide their rationale. If they

do find a potentially infringing use, they say they attempt to make amends

by ceasing such use, obtaining a license, or reaching some type of

monetary settlement.

The state officials noted that it was very difficult for them to identify

matters they had resolved administratively, as these matters can arise and

be dealt with in different ways. One way they are accused of infringement

is through a cease-and-desist letter, where the complainant advises the

state entity of its ownership of a particular property, the nature of the

state’s unauthorized use, the actions required of the state entity, and the

consequences if such actions are not taken. Not all notifications to the

state are this formal, however, nor are they necessarily written. Similarly,

the state’s response may vary depending on the circumstances. In some

cases, the state provides a rationale for the use of the property, does not

receive a response from the complainant, and eventually considers the

matter dropped. In other cases, the state may take some remedial action,

although not necessarily the action requested.

We asked the state attorneys general and state institutions of higher

education that we surveyed to estimate the number, within specific ranges,

of infringement accusations made against the states since January 1985

that had been dealt administratively without a lawsuit being filed. Six of

the 36 attorneys general responding to our request said they had identified

no such matters handled by their states while another 12 said that they did

not know if their states had dealt with any accusations at all. Of the 18

attorneys general that did identify such matters, 11 identified between 1

and 5 matters each, 4 identified between 6 and 10, 1 identified between 11

and 15, and 2 identified between 16 and 30 (see app. III, table 11).

States Handle Most

Accusations Without a

Lawsuit Being Filed
Page 13 GAO-01-811 State Immunity in Infringement Actions

Thirty-five of the 99 state institutions of higher education that responded

to our request said that they identified no accusations of intellectual

property infringement dealt with out of court, while 10 said that they did

not know if they had dealt with any. Of the 54 that did identify such

matters, 42 said they had dealt with between 1 and 5 each, 4 said that they

had dealt with between 6 and 10, 7 said that they had dealt with between

11 and 15, and 1 said that it had dealt with between 16 and 30 (see app. III,

table 29).

Others we contacted within the intellectual property community agreed

that most infringement accusations are resolved out of court. For example,

the Software & Information Industry Association (SIIA)—an association of

software companies that, among other things, works to protect the

intellectual property of its members—said in June 2001 that it had

surveyed its records and identified 77 matters involving state entities over

the past 6 years. They noted the following:

“We refer to these events as ‘matters’ because in the overwhelming majority of cases, no

litigation actually results. Instead, after the SIIA learns of a possible infringement, it

contacts the infringing entity to request an audit of its existing software, and attempts to

bring that entity into compliance with the law. Normally, the entity will then pay a penalty

and a license fee for the number of unauthorized copies it is using...”

Representatives from the SIIA told us that, while they agree that state

institutions of higher education are significant users of intellectual

property, there are many other users in the state also, particularly in

regard to software. The association noted that, of the 77 infringement

matters it identified, about 50 percent involved state institutions of higher

education while the rest involved state hospitals, bureaus, public service

commissions, and other instrumentalities.

According to the state officials, legal scholars, and other members of the

intellectual property community we contacted, few alternatives or

remedies appear to remain after Florida Prepaid for intellectual property

owners who believe that a state has infringed their property. A state

cannot be sued in federal court for damages except in the unlikely event

the state waives its Eleventh Amendment immunity. If the state cannot be

sued for damages, the only other alternative in federal court would be to

obtain an injunction against the infringing state official. This is seen as an

incomplete remedy because, while it might stop the person enjoined from

continuing the infringement, the state would not be liable for monetary

damages.

Intellectual Property

Owners Have Few

Alternatives or

Remedies Against

State Infringement
Page 14 GAO-01-811 State Immunity in Infringement Actions

It is too early to tell whether the state courts provide adequate alternatives

or remedies for state infringement after Florida Prepaid, as there have

been so few lawsuits attempted in state court to date. However, many of

the representatives of the intellectual property community whom we

contacted did not see the state courts as a viable alternative. They said

that a state court probably would not hear a patent or copyright

infringement lawsuit because federal law requires such suits to be brought

in federal court. Thus, for a patent or copyright lawsuit against any party

to succeed in state court, the intellectual property owner would have to

convince the court that damages were recoverable under some staterecognized cause of action—such as a taking of private property under a

reverse eminent domain theory—which has yet to be tested in an

intellectual property context and subjected to appellate court review. The

representatives of the intellectual property community noted that, even if

such causes of action were accepted in state court, they might not be of

any value against a state infringer because the state may have immunity in

its own courts under state law.

As in attempting to enumerate past accusations of infringement against the

states, identifying the alternatives and remedies available to an intellectual

property owner who believes a state has committed infringement after

Florida Prepaid is difficult, if not impossible, because (1) there are no

databases showing this information, (2) the alternatives and remedies may

vary by state and type of intellectual property, and (3) any alternatives or

remedies that might be available are largely untested. To identify potential

alternatives and remedies, we elicited the views of state officials, legal

scholars, and other members of the intellectual property community. We

also included questions on this subject in the surveys we sent to state

attorneys general and state institutions of higher education as well as in

separate questionnaires to the 37 state bar associations that we identified

as having intellectual property sections.18

Many of the officials we contacted reiterated the general view that Florida

Prepaid severely limits a plaintiff’s ability to bring a lawsuit against a state

for intellectual property infringement in federal court. Lawsuits seeking

damages in federal court were seen as impossible unless the defendant

states waived their immunity—an action they were not seen as likely to

 18 Twenty-one of the 37 bar associations actually responded to our surveys, a response rate

of 57 percent.

Damages Are Not Available

in Federal Court
Page 15 GAO-01-811 State Immunity in Infringement Actions

take. The remaining alternative in federal court would be to obtain an

injunction against the infringing state official, an action that might stop the

continuing infringement but would not result in the state’s reimbursing the

intellectual property owner for past harm.

We did not identify any infringement lawsuits in which state defendants

had voluntarily waived their immunity in federal court. In the surveys we

sent to state attorneys general, state institutions of higher education, and

bar associations, we asked the respondents whether state entities had the

right to waive immunity in federal court. The majority of respondents said

that either the state entities did not have the authority to waive or these

respondents did not know whether waiver was possible. Specifically, they

noted the following:

• Four of the 36 attorneys general responding said that their states had the

right to waive immunity, while 22 said there was no such right and 10 said

they did not know if the state could waive immunity. Of the 22

respondents that said the state did not have the right to waive, 6 cited their

state constitutions as the prohibiting authority while 5 cited state statutes,

7 cited case law, 3 cited some other authority, and 1 did not provide an

authority (see app. III, tables 13 and 15),

• Twelve of the 99 state institutions of higher education responding said that

they had the right to waive immunity, whereas 58 said there was no such

right, 20 did not know, and 9 did not answer the question. Twenty of the 58

respondents that said they could not waive immunity cited their state

constitutions as the prohibiting authority while 2 cited state statutes, 9

cited case law, 14 cited some other authority, and 3 did not respond (see

app. III, tables 31 and 33).

• Five of the 21 bar associations responding said that their states had the

right to waive immunity, while 6 said there was no such right and 10 said

they did not know. Three of the 6 respondents that said their states could

not waive immunity cited their state constitutions as the prohibiting

authority, 1 cited state statutes, and 2 cited case law (see app. III, tables 36

and 38).

Members of the intellectual property community have noted that states

have no incentive to waive Eleventh Amendment immunity in federal

court. In the three states we visited, state officials said they would not

waive immunity. They noted that, as discussed above, they do not infringe

knowingly and make every effort to resolve any infringement that does

occur. They said that, if subjected to a lawsuit, they thus would disagree

with the accusation and would not give up any possible defense—

including Eleventh Amendment immunity—that would allow them to

Waiver of Eleventh Amendment

Immunity
Page 16 GAO-01-811 State Immunity in Infringement Actions

avoid expensive and unnecessary litigation. Similarly, we discussed this

issue with private attorneys who noted that an attorney representing the

state would have to raise the immunity defense and that not doing so

might present a question of malpractice.

We did identify two lawsuits decided since the Florida Prepaid decision in

which the federal district courts found a “constructive waiver” on the part

of the state defendants.19

Many of the state officials and other members of the intellectual property

community we contacted believed that, even after the Florida Prepaid

decision, it was possible to get an injunction in federal court to prevent an

ongoing infringement by a state entity. The federal injunction theory is

based on the premise that, although the state itself cannot be sued for

infringement in federal court, an intellectual property owner can get an

injunction against the infringing state official.20

The federal court injunction remedy may have its own limitations.

Generally, the plaintiff would not be entitled to any monetary damage for

past harm from the state itself. Another problem, according to one

attorney we contacted, is that an injunction in the past normally would be

granted in the course of a federal infringement suit for damages. Because

there would be no separate federal action for damages if the state had

immunity, the plaintiff might still have to go through an expensive and

protracted lawsuit to obtain the injunction without any expectation that

damages would be paid.

The respondents to our surveys had mixed or no opinions on the value of

the federal injunction as an alternative or remedy. When asked if they

agreed that an intellectual property owner could get an injunction against

 19 The two cases we identified were New Star Lasers, Inc. v. Regents of the University of

California , 63 F.Supp.2d 1240 (E.D. Cal., 1999), a patent case decided in August 1999, and

T. Michael McGuire v. Regents of the University of Michigan, No. 2: 99CV1231, Sept. 21,

2000, 2000 WL 1459435 (S.D., Ohio), a trademark case decided in September 2000. The

district courts found that the university defendants waived their right to immunity when

they applied for and received the patent and the trademark that were the source of the

controversy.

20 This premise is based on the decision in Ex Parte Young, 209 U.S. 123 (1908), in which

the Supreme Court followed what it said was the established doctrine that “a suit against

individuals for the purpose of preventing them as officers of a State from enforcing an

unconstitutional enactment to the injury of the rights of the plaintiff, is not a suit against

the State within the meaning of that [the Eleventh] Amendment.”

Injunctions Against State

Officials
Page 17 GAO-01-811 State Immunity in Infringement Actions

a state employee for infringement in federal court, 5 of the 36 attorneys

general responding to our surveys said they “strongly agree,” while 7 said

they “somewhat agree,” 4 were neutral on the subject, 1 would “somewhat

disagree,” 4 said they “strongly disagree,” and 15 had no opinion (see app.

III, table 16). We also queried the bar associations on this issue. Among the

21 responding, 3 said they “strongly agree,” 5 said they “somewhat agree,”

1 was neutral on the subject, 5 would “somewhat disagree,” 3 said they

“strongly disagree,” and 4 had no opinion (see app. III, table 39).

When asked for their opinions on whether alternatives or remedies were

available in federal court other than an infringement suit where a state had

waived its immunity or an injunction against a state official, most survey

respondents either said there were no other options or had no opinion.

Among the 36 attorneys general that responded, 1 said that any other

alternatives or remedies were available in federal court, while 11 said

there were none and 24 said they had no opinion (see app. III, table 17).

Seven of the 21 bar associations responding said there may be some other

alternative or remedy in federal court, while 7 said there were not and 7

said they had no opinion (see app. III, table 40).

If the federal courts are unavailable, the other potential forum for pursuing

a lawsuit against a state for damages would be the state courts. While this

is an option for trademarks, many of those we contacted saw little chance

of success with infringement-type actions in state court for patents and

copyrights because of federal judicial preemption and an absence of staterecognized causes of action. Furthermore, even if infringement suits can

be brought in state court, it may not be possible to bring them against

states that have governmental immunity shielding them from suit in their

own courts.

We asked both the attorneys general and the intellectual property sections

of state bar associations about the possibility of bringing infringement

suits in state court. Ten of the 36 attorneys general that responded said

that infringement lawsuits could be brought in their state courts, while 5

said they could not and 21 had no opinion (see app. III, table 18). Seven of

the 21 bar associations that responded said such suits could be brought in

their state courts, while 7 said they could not, 6 had no opinion, and 1 did

not respond to the question (see app. III, table 41).

The first hurdle to bringing an intellectual property infringement action

against a state in state court is federal judicial preemption in patent and

copyright cases. Section 1338 of Title 28 of the U.S. Code gives the federal

Other Options

Alternatives and Remedies

in State Court Are

Unproven and Speculative

Federal Judicial Preemption for

Patents and Copyrights
Page 18 GAO-01-811 State Immunity in Infringement Actions

district courts “original jurisdiction of any civil action arising under any

Act of Congress relating to patents, plant variety protection, copyrights

and trademarks.” Section 1338 further provides that “Such jurisdiction

shall be exclusive of the courts of the states in patent, plant variety

protection and copyright cases.”

The exclusive jurisdiction of the federal courts may be an insurmountable

bar to a plaintiff who would seek a remedy for patent and copyright

infringement in state court, regardless of whether the defendant was a

state or a private party. Representatives from the intellectual property

community that we contacted repeatedly brought up this problem as a

reason why these cases would not be heard in state court. Seven of the 36

attorneys generals and 16 of the 21 bar associations that responded to our

surveys saw federal judicial preemption as such an impediment (see app.

III, tables 20 and 43).

Federal judicial preemption is a problem only for patents and copyrights,

as state courts are able to hear trademark cases. However, the federal

courts traditionally have served as the preferred forum. An attorney who

specializes in trademark cases noted that trademark actions generally

have been brought in federal court in the past because (1) most

trademarks are federally registered; (2) suits on federally registered

trademarks can address interstate infringements; (3) infringement suits

are easier to bring in federal court because the burden of proof shifts to

the other party if the trademark owner can prove that the mark is

registered with the USPTO; and (4) federal courts are seen as more

convenient because the federal judges are experienced in these types of

actions and the law is uniform nationwide.

Eight attorneys general said that trademark infringement suits were

possible in their state courts and 7 bar associations believed the state

could be sued for trademark infringement in state court (see app. III,

tables 18, 19, 41, and 42).

Because patent and copyright infringement suits must be brought in

federal court, an intellectual property owner wishing to bring a suit in

state court for the unauthorized use of intellectual property—regardless of

whether the defendant is a state—would have to bring the case under

some cause of action other than infringement. This second hurdle to

bringing an intellectual property infringement action against a state

creates two problems for the property owner. First, he or she must pursue

a cause of action that the court will recognize as appropriate and that is

capable of providing the relief the property owner is seeking. Second, the

No Proven State Cause of

Action for Patents and

Copyrights
Page 19 GAO-01-811 State Immunity in Infringement Actions

claim must not be such that the court will find the suit is, in effect, an

infringement action and dismiss it for lack of jurisdiction.

Many of the state officials and representatives of the intellectual property

community we contacted provided a number of possible causes of action

that intellectual property owners might pursue in state court. One option

that was posited, for example, was a “taking” under a reverse eminent

domain, or “inverse condemnation” theory. Under this cause of action, the

intellectual property owner would claim that the state had “taken” the

property—much as it takes real property for road right-of-way or

construction projects—and that the property owner is entitled to just

compensation as provided by the Fifth Amendment to the U.S.

Constitution. One of the potential problems with this cause of action is

that it generally has been applied in the context of real estate or other

tangible property rather than to intangible property such as patents and

copyrights.

Another suggested cause of action was breach of contract. Under this

theory, the intellectual property owner would argue that the state was not

abiding by the terms of an agreement between the state and the property

owner. A potential problem with this cause of action is that it requires the

court to find that a contract existed between the parties. Also, any

damages awarded may be limited to those provided by the contract.

A third cause of action noted as possible was some type of tort action

against the state for injury or damages caused by the state’s unauthorized

use of the intellectual property.21 One of the problems seen with pursuing a

tort cause of action is the property owner would in essence be bringing the

same type of case that would be brought in an infringement action. Thus,

even though the legal theory might be one that was appropriate and could

result in compensation for damages, a state court might dismiss it for lack

of jurisdiction because of federal judicial preemption.

In the surveys we sent to state attorneys general and bar associations, we

asked for opinions on alternative legal theories that might be pursued in

state court. Three of the 36 attorneys general that returned our surveys

said there was no theory under which a property owner could obtain

damages and 20 had no opinion. Of the 13 that advanced one or more

 21 A tort is a private or civil wrong based on a personal duty owed to the defendant other

than a duty created by contract.
Page 20 GAO-01-811 State Immunity in Infringement Actions

theories, the most common were a taking, such as reverse eminent

domain, tort, and contract. Other theories included an action before a

state claims commission or board, unfair competition, conversion,22 and

trespass to chattel (see app. III, table 21).

Seventeen of the 21 bar associations that returned our surveys advanced at

least one theory for a state cause of action for state infringement of

intellectual property, while 2 said no theory was applicable and 2 had no

opinion. As with the attorneys general, the most common causes of action

suggested were a taking, such as reverse eminent domain, tort, or

contract. Other suggestions included criminal law, trade secret

misappropriation, and unfair competition (see app. III, table 44).

We also asked the state attorneys general and bar associations whether

they believed damages could be recovered against their states if a property

owner could obtain a judgment against the state in state court for

unauthorized use of intellectual property. Of the 36 attorneys general that

returned our surveys, 5 said damages definitely would be allowed, 6 said

they probably would be allowed, 1 said recovery was as likely as not, 3

said damages probably would not be allowed, 1 said that they definitely

would not be allowed, 17 had no opinion, and 3 did not respond to the

question (see app. III, table 22). Of the 21 bar associations that returned

our surveys, 1 believed damages definitely would be allowed, 8 said they

probably would be allowed, 1 said recovery was as likely as not, 2 said

damages probably would not be allowed, and 9 had no opinion (see app.

III, table 45).

Many of the state officials and representatives of the intellectual property

community we contacted noted that the use of state-recognized causes of

action in patent and copyright cases was unproven and speculative. They

said that (1) there is little or no experience with pursuing these causes of

action in intellectual property cases, (2) the appropriateness and

applicability of such causes of action might vary state-by-state, and (3) the

likelihood of success of such causes of action can not be known until

decisions involving their use in intellectual property cases have been

reviewed by the appellate courts.

 22 Conversion is the wrongful appropriation of another’s property to one’s own use,

enjoyment, or purpose.
Page 21 GAO-01-811 State Immunity in Infringement Actions

Some members of the intellectual property community also noted that,

even if these causes of action were successful, they would not necessarily

allow recoveries similar to those in federal court. They pointed out, for

example, that federal copyright law provides for statutory damages for

infringement. In state court, the property owner might have to prove

actual damages. Also, states would differ in how infringement cases would

be brought in state court, requiring the intellectual property owners and

attorneys to be familiar with multiple jurisdictions.

Few lawsuits accusing the states of the unauthorized use of intellectual

property appear to have been brought in state court. To determine the

legal theories that have been used in the past in such cases, however, we

analyzed each of the 11 intellectual property cases we identified above as

having been brought in state court since January 1985. Table 2 shows the

causes of action pursued and the results achieved in each of these cases.
Page 22 GAO-01-811 State Immunity in Infringement Actions

Table 2: Causes of Action Pursued and Results in Intellectual Property Lawsuits Brought in State Court Since January 1985

Cause of action

Case

number Type of property Taking Contract Other Result

1 Patent

X

Summary judgment to state. State was not involved in

taking.

2 Patent

X

Settled after decision that case was filed in wrong state

court.

3 Patent

X

Active. Federal circuit court of appeals and state supreme

court said case could continue under taking theory.

4 Patent X Active, awaiting appeal of a related case in federal court.

5 Trademark

X

Decision for state because (1) state had not waived

immunity and (2) trademark did not qualify for taking under

state law.

6 Trademark Xa Settled prior to decision.

7 Trademark Xb Dismissed. State was not a contributory infringer.

8 Copyright X Settled prior to decision.

9 Copyright

Xc

Dismissed. Court lacked jurisdiction because of federal

preemption.

10 Copyright

X

Active, awaiting decision on motion that case should have

been filed in federal court.

11dCopyright,

trademark Xe

Settled prior to decision.

a

Causes of action included common law trademark infringement, improper use of a trade name, and

dilution of a trade name.

b

Cause of action was trademark infringement.

c

Also cited as causes of action were unfair competition and conversion (appropriating the property on

another for one’s own beneficial use).

d

Case originally was brought in federal court, but was dismissed because state had Eleventh

Amendment immunity. It was then filed in state court.

e

Also cited as causes of action were misappropriation of literary property and violation of state

consumer protection act. The plaintiff also sought an injunction and a declaratory judgment on the

issue of ownership of the intellectual property.

Source: GAO analysis of cases identified through (1) case law analysis and (2) surveys completed by

state attorneys general and state institutions of higher education.

Overall, these cases appear to do little to determine the availability of state

causes of action for unauthorized use of intellectual property by states. We

identified 11 cases in total, and these involved only 7 different states. Of

the 11 cases, 4 were decided by the courts, while 4 were settled by the

parties. Another three cases remain active, but in only one of these has a

state appellate court ruled that the case can proceed under the state-
Page 23 GAO-01-811 State Immunity in Infringement Actions

recognized cause of action—a taking without just compensation—pursued

by the plaintiff.23

A third hurdle to bringing an infringement action in state court against a

state is the state’s governmental immunity in its own courts. This type of

immunity differs from Eleventh Amendment immunity in that, within state

law, the state is sovereign and usually cannot be sued unless it has given

its permission to be sued. State law varies from state to state on the issue

of governmental immunity depending on each state’s constitution, specific

statutes, or judicial interpretation.

Eight of the 36 attorneys general who responded to the surveys said that

state governmental immunity would be an impediment to state court

infringement actions. Three others saw state law as an impediment, and

one said the case law was not developed in this area. Two attorneys

general saw no impediments. Not all of the attorneys general responded to

the question on impediments (see app. III, table 20).

The state bar representatives also saw state governmental immunity as a

problem in suing a state for infringement in its own courts. Thirteen of the

21 bar associations that responded to our surveys said state governmental

immunity would be an impediment to suing their states for infringement in

state court. In addition, two bar associations saw state law and one saw

federal case law as impediments to bringing such suits. Only one bar

association said there were no impediments, while two said they did not

know. Like the attorneys general, not all bar associations responded to the

question on impediments (see app. III, table 43).

The ability to sue a state in its own courts varies among the states. A

Washington official, for example, said the state allows suits for contracts,

takings, and torts against the state in its own courts. In Texas, on the other

hand, officials said that, in most cases, a plaintiff would have to obtain

approval from the state legislature in order to sue the state and be paid

damages.

 23 In his dissent to the decision in Florida Prepaid, Justice Stevens cited this state case

(Jacobs Wind Electric Co. v. Florida Dept. of Trans., 626 So. 2d 1333 (1993)) and

questioned whether a state lawsuit pursued under a takings remedy could overcome

federal judicial preemption. He noted that there was “good reason to believe a wellmotivated court may have misinterpreted federal law.”

Immunity in State Court
Page 24 GAO-01-811 State Immunity in Infringement Actions

In still other cases, the states have given approval to being sued by

establishing special courts that will hear actions against the state. New

York, for example, has established a Court of Claims that can hear claims

against the state. New York law limits such actions, however, to those

cases where the state was performing a ministerial, as opposed to a

protected discretionary, function.

The intellectual property community is divided on what states should and

could do, if anything, to protect the rights of intellectual property owners

against state infringement after Florida Prepaid. Some state officials say

that nothing more needs to be done because there is no demonstrated

problem, as evidenced by the small number of infringement accusations

made against them in the past and their willingness to investigate and take

corrective action when they are made aware of a potentially infringing use.

They also note that, if intellectual property owners are not satisfied with

the states’ response to accusations of infringement, they can still obtain a

federal injunction or pursue a lawsuit for damages in state court under

some state-recognized cause of action. They say that, if the state remedies

are considered inadequate, the blame lies not with the states but with the

federal government, which preempts state courts from hearing patent and

copyright infringement cases. They see no reason for new federal

legislation—except possibly for the removal of federal judicial

preemption—saying that state immunity is an inherent right of the states

that provides an important defense against groundless lawsuits.

Others in the intellectual property community we contacted say that, while

it is true there has not been a substantial number of cases of infringement

by the states, this is because the states previously were of the opinion they

could be sued for damages in federal court—a situation that no longer

exists. They point to what they see as the essential unfairness of a state’s

being able to sue others but not being subject to suits themselves. An

injunction in federal court is not an answer, they say, because it would not

result in an award of damages and the litigation necessary to obtain the

injunction could itself be expensive and protracted. They do not see the

state courts as a viable alternative because of federal preemption and the

lack of proven state causes of action.

Some members of the intellectual property community believe additional

federal legislation is needed. The proposals range from again attempting to

take away a state’s right to Eleventh Amendment immunity in intellectual

property suits—seen as unlikely in view of the Florida Prepaid decision—

to requiring a state to waive immunity in return for the right to own

The Intellectual

Property Community

Is Divided on What

Should and Could be

Done to Protect

Against State

Infringement
Page 25 GAO-01-811 State Immunity in Infringement Actions

intellectual property, protect those rights in federal court, or receive

certain federal funds or benefits.

Some of the state officials we contacted said there was no reason for

intellectual property owners to be overly concerned about the Florida

Prepaid decision. They said that states had not engaged in a pattern of

infringement in the past—as evidenced by the small number of lawsuits

that had been brought against the states and the even smaller number that

had been successful—and that states were not likely to commit more

infringements now just because they knew they could not be sued for

damages in federal court.

Some state officials we contacted noted that the states have strong policy

motivations not to commit intellectual property infringement, as they are

governmental authorities committed to protecting and preserving the

rights of their citizens. In this regard, some officials from state institutions

of higher education pointed to internal and state policies that prohibit

employees and students from making unauthorized use of privately held

property. They said that, as both major users and owners of intellectual

property, the institutions are familiar with the laws governing the use of

intellectual property and spend considerable effort ensuring that

employees and students are aware of the allowable uses, obtain necessary

approval and licenses, etc. Moreover, because the institutions are in the

position of having to defend their own properties against infringement, the

officials said they are closely attuned to the need to avoid the additional

time and resources necessary to litigate or otherwise resolve potential

cases of infringement.

One example of how states say they have reacted to the Florida Prepaid

decision was provided by an attorney from a state attorney general’s

office. This attorney said that his office had received inquiries concerning

whether the state still needed to obtain licenses to use the intellectual

property of others. He said that his office responded that nothing had

changed, that the state intended to abide by the intellectual property laws,

and that state entities would need to continue doing what was necessary

to ensure that they do not commit infringement. This attorney, who had

successfully argued an Eleventh Amendment defense in a federal suit

against a state institution of higher education, said that he believed the

states actually have an even higher interest in not infringing after Florida

Prepaid. He noted that the Supreme Court had based its decision largely

on the states’ not having committed a substantial number of infringements

in the past and that, if they now began to commit such infringements, the

Some State Officials

Believe That Nothing

Needs to be Done
Page 26 GAO-01-811 State Immunity in Infringement Actions

Congress would have a basis for pursuing new legislation to abrogate

Eleventh Amendment immunity.

The state officials also noted that the scope of the Eleventh Amendment is

relatively narrow. As discussed above, for example, certain state

institutions of higher education may not qualify for Eleventh Amendment

immunity because of the way they are funded or organized within the

state. Also, many of the attorneys general, state institutions of higher

education, and bar associations that responded to our surveys pointed out

that immunity under the Eleventh Amendment was not available to such

state-related entities and instrumentalities as counties and municipalities,

associations and foundations affiliated with state universities, certain state

employees, and others within their states (see app. III, tables 12, 30, and

35). Similarly, the state officials noted that the state’s business often was

carried out through contractors and licensees and that these entities could

be sued in federal court if they committed infringement.

Some state officials also said Florida Prepaid did not present a problem

because proper safeguards are in place to protect intellectual property

owners even in those cases where the state may have infringed. For

example, officials from the state institutions of higher education pointed

to their procedures, as discussed above, for investigating any accusation

made against the institutions. They said these procedures were intended to

ensure that the institutions abide by the law, fulfill their contractual

obligations, and take corrective actions—such as ceasing the infringing

use, obtaining a license or other permission, or reaching some type of

monetary settlement—whenever potentially infringing uses are identified.

If the property owner was not satisfied with the state’s response, he or she

could still (1) seek an injunction against an infringing state official in

federal court or (2) attempt a lawsuit in state court.

Some state officials also said that any inability to bring an infringement

action in state court is the fault of the federal government, not the states,

and should not be used as a reason for abrogating the states’ rights to

Eleventh Amendment immunity from lawsuits in federal court. They said

that, if the federal government wants to consider new legislation

concerning Eleventh Amendment immunity, it may wish to consider

revoking the federal judicial preemption law and allowing the state courts

and legislatures to develop remedies of their own.

Some members of the intellectual property community agree with the

states that there may be no heightened risks of state infringement after

Florida Prepaid. Their primary argument is that the number of past cases
Page 27 GAO-01-811 State Immunity in Infringement Actions

of state infringement has been so few. However, they also point to policy

reasons. An article published in June 2000 by Peter S. Menell, Professor of

Law at the University of California at Berkeley and Director of the

Berkeley Center for Law and Technology, discussed some of the policy

and practical reasons that state infringements may not increase.24

Professor Menell noted that the states were subject to social, bureaucratic,

and economic constraints that would discourage them from infringing.

Furthermore, Professor Menell said that property owners might be able to

take certain actions on their own—such as establishing formal contractual

relationships with state entities or choosing to limit access through trade

secrecy or encryption.

When asked why they need Eleventh Amendment immunity from

intellectual property lawsuits in federal court if they do not infringe, some

state officials said that immunity can act as a hedge against frivolous or

meritless lawsuits. Moreover, they said that, if the states had already

investigated the complaints and taken the necessary action, there was no

need to be drawn into expensive and time-consuming lawsuits with

persons who did not understand the intellectual property laws or refused

to believe the states had not infringed.

Other members of the intellectual property community believe that the

Florida Prepaid decision does create problems, pointing to what they say

is the unfairness of the current situation and the significant risks that

intellectual property owners face. They consider the situation to be unfair

because states can own federally protected intellectual property and sue

infringers in federal court but cannot be sued for infringement themselves.

They believe the risks are significant because the state can infringe the

intellectual property of others with impunity.

The positions of those who are dissatisfied with the Supreme Court’s

decision in Florida Prepaid have been addressed in both the discussion

group convened by the USPTO in March 2000 and the hearing in July 2000

before the Subcommittee on Courts and Intellectual Property, House

Committee on the Judiciary. In the House hearing, the Under Secretary for

 24 Economic Implications of State Sovereign Immunity from Infringement of Federal

Intellectual Property Rights, Loyola of Los Angeles Law Review, Number 4, Volume 33

(June 2000); pp.1399-1466.

Others in the Intellectual

Property Community See

Potential Problems
Page 28 GAO-01-811 State Immunity in Infringement Actions

Intellectual Property and Director of the USPTO summarized the basic

concerns for patent and trademark owners as follows:

“We view the present, post-Florida Prepaid situation as very inequitable. States and state

institutions are active participants in the federal intellectual property system, with

extensive patent and trademark holdings. Yet, while they enjoy all the rights of an

intellectual property plaintiff, they are shielded from significant financial liability as

intellectual property defendants.”

At the same hearing, the Register of Copyrights noted that the states are

among the most significant holders and users of copyrights. She referred

to the current state of affairs as “unjust and unacceptable.” She also said

that “It is only logical that in the current legal environment, without an

alteration to the status quo, infringements by States are likely to increase.”

Many of the intellectual property community representatives we contacted

agreed with these views. While they acknowledged that there had been

few infringement lawsuits against states in the past, they also believed that

the small number of such lawsuits in the record before the Supreme Court

did not accurately portray the actual number or significance of

accusations that had been made against the states. In this regard, they

noted that (1) the record before the Supreme Court was not a complete

analysis of the lawsuits that had been filed against the states; (2) the

record also did not consider matters dealt with out of court, which are

believed to be more numerous than those resolved through lawsuits;

(3) even if accusations of infringement are few in number, they can be

quite significant to the intellectual property owners involved; and

(4) infringement lawsuits may be few, but they are complicated and can be

quite expensive to both plaintiffs and defendants.

The intellectual property community representatives said that, in the past,

the states considered themselves to be subject to infringement suits in

federal court and had an incentive not to infringe the intellectual

properties of others. They questioned whether the states would be as

cautious now, knowing that they cannot be sued for damages. The

representatives said that of particular concern were matters such as those

the states might have resolved administratively in the past. If the state so

chooses, the state can refuse to do anything, with the only threat being

that the property owner might wage an expensive and protracted trial in

federal court to obtain an injunction or in state court with the hope that

the court would award damages under some as-yet-unproven state law

theory.
Page 29 GAO-01-811 State Immunity in Infringement Actions

The intellectual property community also is concerned with the effect of

the Florida Prepaid decision on international relations in the area of

intellectual property. In his July 2000 testimony before the House

Subcommittee on Courts and Intellectual Property, the Director of the

USPTO noted that it would be difficult for the United States to promote

the enforcement of intellectual property rights worldwide if states could

not be sued in federal court for infringement. The Director said that “When

we criticize another country for having financial penalties against patent,

trademark, and copyright infringers that are too low, that country may

point out that we have no financial penalties at all when the infringer is a

state university, hospital, prison, or government office.”

Some representatives of the intellectual property community believe that

federal legislation is required to resolve the problems they say have been

created by the Florida Prepaid decision. Generally, they would prefer

legislation similar to the law abrogating Eleventh Amendment immunity in

patent cases that was struck down by the decision. They anticipated,

however, that any such legislation would have problems surviving

Supreme Court review unless the Congress can create a record showing a

pattern of infringement accusations against the state and an absence of

state remedies.

Members of the intellectual property community offered other legislative

alternatives. One noted, for example, that state immunity could be

abrogated through an amendment to the U.S. Constitution. However, he

also believed that this was unlikely to happen because, even if the

members of Congress could agree on such an amendment, the states

would have no incentive to ratify it.

Other members of the intellectual property community believed that

federal legislation offering or requiring some type of waiver of immunity

by the states might resolve the issue. Since states would not have an

incentive to waive immunity on their own, federal law would have to

provide the incentive. Some of the options presented were as follows:

• The waiver could be tied to the federal grant of intellectual property rights.

Under this scenario, the state would have to agree to waive its right to

claim Eleventh Amendment immunity if sued for infringement in order for

the state to be granted or otherwise own federal patents, trademarks, or

copyrights.

• The waiver could be tied to the right to sue in federal court. Under this

scenario, the state would not have the right to sue a party for infringement

Some in the Intellectual

Property Community

Believe Federal Legislation

Is Needed
Page 30 GAO-01-811 State Immunity in Infringement Actions

of its own intellectual property in federal court unless the state had

previously waived its Eleventh Amendment right not to be sued in federal

court by others.

• The waiver could be tied to the receipt of federal funds. Under this

scenario, a state would waive its right to claim Eleventh Amendment

immunity if sued in federal court as a condition for receiving certain

federal funds. One such conditional waiver, for example, might be under

the Patent and Trademark Laws Amendments of 1980, as amended

(commonly known as the Bayh-Dole Act), where certain federal

contractors and grantees are allowed to retain ownership of and profit

from inventions created through federally funded research projects.

Another suggestion was made that would tie waivers in copyright suits to

federal library grants.

In the July 2000 hearing before the House Subcommittee on Courts and

Intellectual Property, the Director of the USPTO and the Register of

Copyrights discussed potential legislation to require state waiver of

immunity under the Eleventh Amendment in exchange for some federal

grant of right or funding. Two other options discussed in the hearing were

(1) giving the government the right to sue the infringer on behalf of the

property owner and (2) providing statutory authority to sue an infringing

state official. The legislation allowing the government to sue on behalf of

the property owner would prevent the state from claiming immunity under

the Eleventh Amendment, since the federal government is not a “person”

within the meaning of the Amendment. Legislation setting out the right to

obtain a federal injunction against an infringing state official was seen as

adding credibility to the injunction’s being a viable alternative in federal

court for a property owner seeking a remedy against a state.

If the Congress decides that legislation is needed to allow states to be sued

for intellectual property infringement, the Congress may also want to

make clear that states are treated as being capable of committing

infringement of federally protected intellectual property. The Florida

Prepaid decision has left this unclear. As discussed above, the Congress

amended the patent, copyright, and trademark laws in the early 1990s after

some states began seeking Eleventh Amendment immunity from

infringement lawsuits and the Supreme Court ruled in 1985 that an

unequivocal expression of congressional intent was required to abrogate

state immunity. 25 In the clarification acts that followed, the Congress

 25 Atascadero State Hosp. v. Scanlon, supra.
Page 31 GAO-01-811 State Immunity in Infringement Actions

added (1) language that made it clear that states are among those that are

capable of committing patent, trademark, and copyright infringement and

(2) provisions that stated an explicit intent to eliminate states’ immunity

from suit in federal court for such infringement.

In Florida Prepaid, the court held that the Patent and Plant Variety

Protection Remedy Clarification Act could not be sustained. The act did

not contain a saving clause.26 Thus, all clarifying provisions—including

those expressing the Congress’ intent that states are subject to being

infringers of federally protected intellectual property—may have been lost.

Although the state officials and representatives of the intellectual property

community did not raise this issue, allowing infringement lawsuits against

states would seem to be of little value if the states are not capable of

committing infringement.

It is too early to determine what impact the Florida Prepaid decision will

have on the federal intellectual property system. Relatively few

accusations of infringement against states appear to have been made in

the past, and there is no way to ascertain whether the states will be less

diligent now that they know they cannot be sued for damages in federal

court. At the same time, however, the incidence of overall infringements

has little meaning to an intellectual property owner concerned that his or

her individual property is at risk. Moreover, few proven alternatives or

remedies appear to be available to a property owner when a state does

commit infringement—particularly if patent and copyright infringement

suits cannot be brought in state court—and any compensation for

damages may fall short of what the property owner might have achieved

previously.

The intellectual property community, which includes states, is divided on

what, if anything, needs to be done to resolve the issues raised by the

Florida Prepaid decision. Generally, the states see no reason to do

anything, since there has been no pattern of infringement in the past.

Others in the intellectual property community disagree and would like the

Congress to pass legislation similar to that in effect prior to the Florida

Prepaid decision. Some have proposed requiring the states to waive their

Eleventh Amendment immunity in exchange for rights received under the

 26 As used here, a saving clause allows for the preservation of portions of an act if other

portions are held to be unconstitutional.

Conclusions
Page 32 GAO-01-811 State Immunity in Infringement Actions

federal intellectual property system or to receive certain federal funds. If

the Congress does consider legislation, it may want to clarify that states

are subject to federal intellectual property law and, as such, are still

capable of committing infringement.

We provided the Copyright Office and the USPTO with a draft of this

report for their review and comment. Both the Copyright Office and the

USPTO agree that it is too early to determine the impact of the Florida

Prepaid decision. The Copyright Office concurred with our findings that

there were few examples of states being accused of intellectual property

infringement, noting that until recently states “had good reason to believe

they were subject to the full range of remedies if they infringed a

copyright.” The Copyright Office also noted, however, that the states may

no longer feel so constrained and that the “behavior of [S]tate employees

with regard to the use of intellectual property is only just beginning to

evolve.” In addition, the Copyright Office said that, while the states and

their employees generally are law-abiding, it nevertheless was concerned

that the legal remedies available after Florida Prepaid were insufficient to

ensure that the states would respect the copyright laws. Thus, the

Copyright Office believed that Congress should “consider other legislative

responses, such as providing incentives to [S]tates to waive their immunity

voluntarily by conditioning the receipt of a gratuity from the Federal

Government on such waiver.”

The USPTO commented that our report is accurate in stating that the

intellectual property community is concerned over the decision in Florida

Prepaid and what it sees as an inequitable situation. The USPTO said the

inequity “skews our system of intellectual property protection, because the

penalties in place to discourage infringement do not apply to state

entities.” However, the USPTO said that our finding that “infringement

accusations against states have been few” does not mean “a pattern of

infringement does not exist.” The USPTO noted that (1) 58 lawsuits

“seems like a substantial number” given that “state entities constitute only

a tiny fraction of the total number of parties using intellectual property”

and (2) many more accusations against states are handled through

administrative processes and never reach court. The USPTO also

expressed a concern that we based many of our conclusions on “anecdotal

evidence” provided by state attorneys general and institutions of higher

education that “may have an incentive to under-report accusations made

against state entities.”

Agency Comments

and Our Evaluation
Page 33 GAO-01-811 State Immunity in Infringement Actions

In addition, the USPTO said that there was no division within the

intellectual property community about what should and could be done to

protect the rights of intellectual property owners except for a

disagreement between the states, which it refers to as “a small

subsection,” and the rest of the community. The USPTO said the report

placed “disproportionate emphasis” on the views of state attorneys general

and state institutions of higher education but gave “short shrift to

responses from the intellectual property community.” The USPTO noted

that it would be “more accurate to characterize the intellectual property

community as strongly desiring a legislative solution to the perceived

problem...but differing as to what statutory approach to take.” The USPTO

also said that a legislative solution “seems especially appropriate given the

absence of any viable alternative remedy against state infringement.”

Regarding the USPTO’s comments about a pattern of infringement, we

believe our characterization of the number of accusations identified as

“few” is accurate. To put the 58 lawsuits in context, we show in the report

that there were nearly 105,000 district court cases filed from fiscal year

1985 through fiscal year 2000 that involved protected property rights for

patents, trademarks, and copyrights. We reach no conclusions as to

whether these 58 lawsuits would or would not constitute a pattern of

infringement. As to the USPTO’s point that many other accusations are

handled administratively, we make this same point in our report and

provide statistics from the states indicating that these are few in number

also.

The USPTO was concerned that we based many of our conclusions on

“anecdotal evidence” provided by the states themselves. While it is true we

obtained information from state attorneys general and state institutions of

higher education through surveys, we note in the report that we used these

as a “supplement” in identifying accusations of infringement. We also

conducted an extensive analysis of the case law. Moreover, we sent

surveys to each state bar association that had intellectual property

sections and conducted site work in three states with extensive

involvement in the intellectual property system. We also sought assistance

from national associations representing intellectual property attorneys and

attorneys general, as well as other attorneys and associations representing

intellectual property owners. In addition, we sought and obtained input

from both the USPTO and the Copyright Office. We do not offer any views

on whether the positions taken by others are accurate.

Regarding the USPTO’s comment that there is no division within the

intellectual property community about what needs to be done to protect
Page 34 GAO-01-811 State Immunity in Infringement Actions

against state infringement, we disagree. The intellectual property

community includes state officials, and we do not give a disproportionate

emphasis to the views of state officials. Rather, we present a balanced

discussion in our report by showing that (1) some state officials believe

that nothing needs to be done, (2) others in the intellectual property

community see potential problems, and (3) some in the intellectual

property community believe federal legislation is needed. Again, we

obtained views from all segments of the intellectual property community,

of which the states are an integral part.

Finally, we know of no statistics that would support the USPTO’s

contention that the states comprise a “tiny fraction” of those who use

intellectual property or “a small subsection of the community.” The

USPTO and the Copyright Office do have some statistics on the states'

ownership of intellectual property, and we include that information in

appendix II of our report.

The USPTO and Copyright Office comments are included in their entirety

in appendix VI and appendix VII, respectively.

We conducted our work from August 2000 through August 2001 in

accordance with generally accepted government auditing standards.

Appendix I contains the details of our scope and methodology.

As arranged with your office, unless you publicly announce its contents

earlier, we plan no further distribution of this report until 7 days after the

date of this letter. At that time, we will send copies to the Chairman,

Senate Committee on the Judiciary; the Chairman and Ranking Minority

Member, Subcommittee on Courts, the Internet, and Intellectual Property,

House Committee on the Judiciary; the Acting Under Secretary of

Commerce for Intellectual Property and Acting Director of the United

States Patent and Trademark Office; and the Register of Copyrights. The
Page 35 GAO-01-811 State Immunity in Infringement Actions

report is also available on GAO’s home page at http://www.gao.gov. If you

have any questions about this report, please call me at (202) 512-3841. Key

contributors to this report are listed in appendix VIII.

Jim Wells

Director, Natural Resources

 and Environment
Appendix I: Scope and Methodology

Page 36 GAO-01-811 State Immunity in Infringement Actions

As requested, we conducted a review of state Eleventh Amendment

immunity in intellectual property infringement actions, focusing on issues

raised by the U.S. Supreme Court’s June 1999 decision in Florida Prepaid

Postsecondary Education Expense Board v. College Savings Bank,

527 U.S. 627 (1999). Our objectives were to (1) determine the extent to

which states have been accused of intellectual property infringement,

(2) identify the alternatives or remedies available to protect intellectual

property owners against state infringement after the Florida Prepaid

ruling, and (3) obtain the views of the intellectual property community on

what states should and could do, if anything, to protect the rights of

intellectual property owners against infringement.

To identify past infringement accusations against the states, we searched

for lawsuits as well as matters dealt with out of court that had been active

since January 1, 1985. The year 1985 was chosen as a starting point

because this was the year the Supreme Court ruled that, to abrogate

Eleventh Amendment immunity, the Congress must make its intentions

unmistakably clear in the language of the statute. In identifying lawsuits,

we selected those for which there appeared to be some underlying

accusation of infringement or unauthorized use of intellectual property,

including declaratory judgment actions. In the case of multiple actions (an

infringement lawsuit, a declaratory judgment, a motion to dismiss, etc.) on

the same underlying dispute, we considered all such actions as part of the

same case except instances where (1) the state was both a plaintiff and

defendant in separate actions filed in one or more jurisdictions and

(2) separate cases were filed in both federal and state court. While we

focused primarily on lawsuits where the state was a defendant, we also

obtained data on those lawsuits where the state was a plaintiff as a means

to determine the extent to which they had taken advantage of the laws

protecting intellectual property owners against infringement.

In identifying matters dealt with out of court, we included any accusation

where the underlying issue was the potentially unauthorized use of

intellectual property. While we included formal accusations, such as those

made through cease-and-desist letters, we also included less formal

accusations, such as those made orally. Because we had to obtain all of

the information on matters dealt with out of court from the states

themselves, we did not ask for identification of individual accusations but

rather on the range of all such accusations since January 1985.

We used three methods to obtain information on lawsuits and matters

dealt with administratively. First, we analyzed the case law from each of

the 50 state court systems and the federal court system, using

Appendix I: Scope and Methodology
Appendix I: Scope and Methodology

Page 37 GAO-01-811 State Immunity in Infringement Actions

commercially-available legal databases. To do this, we searched for all

cases in which an issue of infringement appeared to have been raised and

one of the parties involved a state entity. We found that this method could

not identify all accusations because some (1) lawsuits were dropped

because they were abandoned or settled, (2) lawsuits were still active, (3)

lawsuits had been decided by state trial courts, and (4) matters had been

dealt with administratively, without a lawsuit being filed, are not included

in published case law. Moreover, in some cases it was difficult to

determine whether a party to a lawsuit was actually a state entity eligible

for Eleventh Amendment immunity or whether there was an accusation of

infringement in the underlying case.

We supplemented our work on identifying accusations of infringement by

sending surveys to state attorneys general and state institutions of higher

education. We chose attorneys general because, as the chief legal

representatives of the states, they would be in the best position to provide

information on state law and matters that affect state entities. We chose

state institutions of higher education because they tended to be the state

entities most likely to own and use intellectual property.

We sent surveys to the 50 state attorneys general and received responses

from 36, or 72 percent, of them. The 14 attorneys general who did not

respond to our surveys were from Alabama, California, Colorado, Idaho,

Illinois, Missouri, New Jersey, North Carolina, Ohio, Pennsylvania,

Tennessee, Utah, Virginia,1

 and West Virginia. In the case of California, we

did obtain information during a site visit that addressed some the issues

covered by the survey, even though the attorney general did not return the

survey.

In identifying state institutions of higher education for participation in our

survey, we concentrated on those that actually owned intellectual

 1

 The Virginia attorney general did not respond to the attorney general survey, but did send

a letter responding to the institutions of higher education survey.
Appendix I: Scope and Methodology

Page 38 GAO-01-811 State Immunity in Infringement Actions

property.2 In this regard, the U.S. Patent and Trademark Office (USPTO)

provided us with a listing of U.S. colleges, universities, and associations of

colleges and universities that had utility patents in force as of December

31, 1999.3

 “In force” patents are those for which the patent term has not

expired and required maintenance fees have been paid. For purposes of

our report, the term “state institutions of higher education” includes state

colleges and universities and associations affiliated with such state

colleges and universities. We reviewed the USPTO listing of 370

institutions and associations and, based on information available to us,

eliminated all duplicates, private institutions, consortia, and publicly

supported institutions where representatives told us that because of the

way they were funded or their relationship to the state they did not qualify

for Eleventh Amendment immunity. From the resulting universe of 150

institutions and associations, we mailed surveys to 140. We did not mail

surveys to 10 institutions and associations because we could not

determine whether or not they were publicly supported, and we did not

have sufficient information to contact them. We received 99 completed

surveys. These 99 completed surveys represented a total of 113 of the 140

institutions and associations since some of these entities pooled their

responses. Because those survey responses covering more than one

institution and/or association provided summary information for all

institutions and/or associations being reported on, the results in this report

are based on the 99 survey responses we received. We also received some

information in the survey responses for institutions that were not in our

universe. Our response rate was 81 percent of those who received our

survey in the mail or 75 percent of the universe.

We also gathered information on accusations of intellectual property

infringement against the states during site visits to three states—

California, Florida, and Texas. We judgmentally selected these states

 2

 There are numerous entities within a state government (such as an agency, board, bureau,

commission, department, hospital, or university) that could potentially own intellectual

property. We decided to focus on state institutions of higher education for several reasons:

(1) the USPTO maintained patent data that could be used to potentially identify such

institutions, (2) previous Copyright Office work examining state immunity issues had

focused on 4-year state colleges and universities, and (3) officials from the USPTO and the

Copyright Office cited state institutions of higher education when discussing the extent of

state holdings of intellectual property in July 27, 2000, testimony on the immunity issue

before the Subcommittee on Courts and Intellectual Property, House Committee on the

Judiciary.

3

 A utility patent is a patent of any new and useful process, machine, manufacture, or

composition of matter, or any new and useful improvement thereof.
Appendix I: Scope and Methodology

Page 39 GAO-01-811 State Immunity in Infringement Actions

because they are among the largest owners and users of intellectual

property, have significant case activity and legal precedents regarding

intellectual property infringement or Eleventh Amendment immunity, and

were known to have varying state laws on waiver of state governmental

immunity and access to state courts. We interviewed assistant attorneys

general and intellectual property attorneys, including members of the

intellectual property sections of the state bar associations in Texas and

California. The Florida Bar does not have a separate intellectual property

section. In addition, we interviewed general counsels at the University of

Texas, Texas A&M University, the University of Houston, the University of

Florida, Florida State University, the University of South Florida, and the

University of California.

For each of the lawsuits that were identified through surveys and site

visits, we attempted to obtain the necessary citations so that we could

review the cases independently. To obtain a better perspective on the

relationship of state intellectual property infringement lawsuits to all

infringement lawsuits, we obtained statistical information from the

Administrative Office of the U.S. Courts and reviewed guidelines and

interviewed cognizant officials from the federal court system to determine

how such cases are reported.

To determine what alternatives and remedies that respondents believed

were available after the Florida Prepaid decision, we included questions

to this effect on the surveys to the attorneys general and, to a lesser

extent, state institutions of higher education. We also sent separate

surveys to the intellectual property law sections of the 37 state bar

associations that had such sections.4

 We chose intellectual property

sections of state bar associations for surveys because we believed the

attorneys who were members of these sections would be most

knowledgeable in intellectual property law in their states and would be in

a position to discuss the immunity issue as it affects potential plaintiffs in

infringement suits against states. Of the 37 bar associations that received

our surveys, 21 completed them in whole or in part and returned them to

us.

 4

 We use the word “section” to include those sections, committees, etc., that were

specifically designated by the bar association as focusing on intellectual property or

referred to us by bar association officials as being the group within the bar most capable of

addressing intellectual property issues.
Appendix I: Scope and Methodology

Page 40 GAO-01-811 State Immunity in Infringement Actions

To obtain further information on alternatives and remedies, as well as on

what the intellectual property community believes should and could be

done to protect intellectual property owners, we relied on site visits, our

review of published documentation, and discussions with other individuals

and groups in the intellectual property community. For example, we met

with legal scholars from state universities that had studied the Eleventh

Amendment immunity and intellectual property issue and, in some cases,

had testified before the Congress and published law review articles. We

also discussed immunity issues with USPTO and Copyright Office officials,

associations that focus on intellectual property issues (including the

American Intellectual Property Law Association, the American Bar

Association, and the International Trademark Association), intellectual

property attorneys, and others (such as the National Association of

Attorneys General and the Software & Information Industry Association).

In addition, we reviewed testimony and related documentation on the

issue of Eleventh Amendment immunity and intellectual property from a

July 27, 2000, hearing before the Subcommittee on Courts and Intellectual

Property, House Committee on the Judiciary; a special panel assembled by

the USPTO in March 2000; and a workshop held by the National

Academies of Science in April 2001. We also reviewed other

documentation such as the briefs filed and decisions rendered in Florida

Prepaid and related cases.

We reviewed S.1835, a bill introduced on October 29, 1999, by Senator

Patrick J. Leahy—then the Ranking Minority Member and now the

Chairman of the Senate Committee on the Judiciary—proposing

legislation that would have required states acquiring a patent, trademark,

or copyright to waive their rights to immunity in federal court in an

intellectual property infringement suit during the terms of these

properties. This bill was not acted upon and expired at the end of the

106th Congress. We did not attempt to determine the effect this proposal

could have had on the Eleventh Amendment immunity and intellectual

property issue, as this was beyond the scope of our review.

We did not independently verify the information contained in the survey

responses, although we did check the citations provided to ensure that the

cases or other legal references met the criteria we had established. We

also analyzed and edited the surveys for internal consistency. We drew no

conclusions about why some of our surveys were not returned, although

we did make followup efforts to ensure the surveys were returned and the

provided information was complete and to clarify certain information.
Appendix I: Scope and Methodology

Page 41 GAO-01-811 State Immunity in Infringement Actions

To provide perspective on the states’ participation in the intellectual

property system, we developed partial statistics on state ownership of

federally issued or registered patents, trademarks, and copyrights. We

were unable to develop a complete statistical database because (1) USPTO

and the Copyright Office do not maintain their databases in such a way

that these data can be readily extracted and (2) as discussed elsewhere in

this report, it is not always possible to determine a state entity’s affiliation

with a state for Eleventh Amendment purposes. The data that we did

accumulate were developed as follows:

• The data on patents were developed by first having the USPTO provide a

listing of U.S. colleges, universities, and associations of colleges and

universities that had utility patents in force as of December 31, 1999. We

selected from this list those entities that were state-supported, based on

our analysis of the institutions’ web pages, other Internet sites on higher

education, and the responses to our surveys. We included in our data only

those patents issued.

• The data on trademarks resulted from our search of the USPTO’s

trademark database to identify trademarks owned by those institutions

identified as state-supported institutions of higher education. This process

was similar to the process used to identify patents. We included statistics

on trademarks registered as well as those pending because, unlike patents,

such data are provided in USPTO’s publicly available databases. The

statistics provided were as of February 2001.

• The Copyright Office provided the statistics on copyrights, using data

taken from a detailed analysis of its own databases for use in

congressional hearings. These statistics were provided by state, rather

than by individual institution; thus, we could not compare the included

institutions for each state with those identified in our patent and

trademark analysis. We also did not independently verify the provided

data. According to Copyright Office officials, the statistics do not include

“serials” (newspapers, magazines, etc.). Only those copyrights registered

with the Copyright Office between January 1, 1978, and December 31,

1999, are included in the statistics.

We conducted our work from August 2000 through August 2001 in

accordance with generally accepted government auditing standards.
Appendix II: Intellectual Property Owned by

State Institutions of Higher Education

Page 42 GAO-01-811 State Immunity in Infringement Actions

Table 3: Federally Issued Patents Owned by State Institutions of Higher Education

and In Force as of December 31, 1999, Aggregated by Statea,b

State Patents

Alabama 198

Alaska 13

Arizona 140

Arkansas 106

California 2,297

Colorado 173

Connecticut 85

Delaware 0

Florida 613

Georgia 327

Hawaii 68

Idaho 0

Illinois 206

Indiana 220

Iowa 473

Kansas 127

Kentucky 114

Louisiana 161

Maine 2

Maryland 171

Massachusetts 144

Michigan 761

Minnesota 393

Mississippi 52

Missouri 109

Montana 31

Nebraska 158

Nevada 7

New Hampshire 3

New Jersey 94

New Mexico 129

New York 381

North Carolina 448

North Dakota 29

Ohio 538

Oklahoma 107

Oregon 165

Pennsylvania 0

Rhode Island 0

South Carolina 112

South Dakota 7

Appendix II: Intellectual Property Owned by

State Institutions of Higher Education
Appendix II: Intellectual Property Owned by

State Institutions of Higher Education

Page 43 GAO-01-811 State Immunity in Infringement Actions

State Patents

Tennessee 104

Texas 1,065

Utah 286

Vermont 20

Virginia 304

Washington 280

West Virginia 7

Wisconsin 583

Wyoming 15

Totals 11,826

a

USPTO statistics were for utility patents only. A utility patent is a patent of any new and useful

process, machine, manufacture, or composition of matter, or any new and useful improvement

thereof.

b

The information provide by USPTO included statistics for some institutions we later found not to have

Eleventh Amendment immunity. We adjusted the statistics in this table accordingly.

Source: GAO analysis of USPTO data.

Table 4: Federally Registered Trademarks Owned by State Institutions of Higher

Education as of February 2001, Aggregated by Statea

State Pending Registered Total Trademarks

Alabama 15 53 68

Alaska 2 12 14

Arizona 22 59 81

Arkansas 5 74 79

California 38 119 157

Colorado 13 22 35

Connecticut 3 7 10

Delaware 0 0 0

Florida 53 94 147

Georgia 11 121 132

Hawaii 7 11 18

Idaho 0 1 1

Illinois 13 53 66

Indiana 14 47 61

Iowa 16 77 93

Kansas 13 36 49

Kentucky 5 36 41

Louisiana 8 11 19

Maine 9 0 9

Maryland 16 10 26

Massachusetts 11 7 18

Michigan 29 109 138

Minnesota 9 22 31
Appendix II: Intellectual Property Owned by

State Institutions of Higher Education

Page 44 GAO-01-811 State Immunity in Infringement Actions

State Pending Registered Total Trademarks

Mississippi 10 21 31

Missouri 5 44 49

Montana 2 0 2

Nebraska 21 19 40

Nevada 1 16 17

New Hampshire 3 6 9

New Jersey 10 15 25

New Mexico 9 22 31

New York 21 25 46

North Carolina 13 86 99

North Dakota 2 18 20

Ohio 56 209 265

Oklahoma 6 61 67

Oregon 12 22 34

Pennsylvania 22 41 63

Rhode Island 0 0 0

South Carolina 6 39 45

South Dakota 9 1 10

Tennessee 5 20 25

Texas 45 206 251

Utah 10 17 27

Vermont 0 11 11

Virginia 13 59 72

Washington 29 58 87

West Virginia 10 5 15

Wisconsin 20 39 59

Wyoming 2 13 15

Totals 654 2,054 2,708

a

Institutions we found not to have Eleventh Amendment immunity are not included on this table.

Source: GAO analysis of USPTO data.

Table 5: U.S. Copyrights Registered in the Names of State Institutions of Higher

Education from January 1, 1978, through December 31, 1999, Aggregated by Statea

State Registrations

Alabama 169

Alaska 72

Arizona 182

Arkansas 92

California 626

Colorado 340

Connecticut 50

Delaware 212
Appendix II: Intellectual Property Owned by

State Institutions of Higher Education

Page 45 GAO-01-811 State Immunity in Infringement Actions

State Registrations

Florida 1,416

Georgia 1,670

Hawaii 81

Idaho 115

Illinois 2,941

Indiana 857

Iowa 1,835

Kansas 153

Kentucky 95

Louisiana 1,036

Maine 34

Maryland 685

Massachusetts 62

Michigan 1,598

Minnesota 1,515

Mississippi 83

Missouri 703

Montana 38

Nebraska 97

Nevada 24

New Hampshire 47

New Jersey 871

New Mexico 776

New York 3,066

North Carolina 1,078

North Dakota 63

Ohio 973

Oklahoma 108

Oregon 154

Pennsylvania 2,484

Rhode Island 27

South Carolina 562

South Dakota 19

Tennessee 146

Texas 966

Utah 437

Vermont 47

Virginia 1,002

Washington 1,047

West Virginia 66

Wisconsin 1,194

Wyoming 405

Totals 32,319
Appendix II: Intellectual Property Owned by

State Institutions of Higher Education

Page 46 GAO-01-811 State Immunity in Infringement Actions

a

The Copyright Office data did not include serials. The Copyright Office defines serials “...as works

issued or intended to be issued in successive parts bearing numerical or chronological designations

and intended to be continued indefinitely.” For example, newspapers, magazines, newsletters, and

journals are serials.

Source: Copyright Office.
Appendix III: Responses to Selected

Questions From GAO Surveys Sent to State

Attorneys General, State Institutions of

Higher Education, and Intellectual Property

Law Sections of State Bar Associations

Page 47 GAO-01-811 State Immunity in Infringement Actions

Table 6: Does the Attorney General’s office provide legal representation when a

state entity is a party to an infringement lawsuit?

Response States respondinga

Yes, in all cases 6

Yes, in most cases 11

Yes, in some cases 9

Never 8

No response 2

Total 36

a

One response per state.

Source: GAO surveys to state attorneys general.

Table 7: When the Attorney General does not represent the state in an infringement

lawsuit, which, if any, of the following provide such representation?

Response States respondinga

Counsel of the state entity involved in the lawsuit 16

Private counsel retained by the Attorney General’s Office or the

state entity involved in the lawsuit

27

Other:

Counsel for state contractor

State risk management agency

Not specified

1

1

1

The Attorney General always represents the state in infringement

lawsuits.

2

a

As many responses per state as apply.

Source: GAO surveys to state attorneys general.

Appendix III: Responses to Selected

Questions From GAO Surveys Sent to State

Attorneys General, State Institutions of

Higher Education, and Intellectual Property

Law Sections of State Bar Associations

Attorneys General

Lawsuits
Appendix III: Responses to Selected

Questions From GAO Surveys Sent to State

Attorneys General, State Institutions of

Higher Education, and Intellectual Property

Law Sections of State Bar Associations

Page 48 GAO-01-811 State Immunity in Infringement Actions

Table 8: To how many infringement lawsuits has your state or any state entity been

a party since January 1, 1985?

Lawsuits identified per statea

Number of

states

Total lawsuits

identified

14 1 14

6 16

3 13

2 12

1 44

0 18 0

Did not have information available 9 0

No response 1 0

Total 36 29

a

Includes lawsuits where the state was either plaintiff or defendant.

Source: GAO surveys to state attorneys general.

Table 9: To your knowledge, how often is the Attorney General’s office informed

when infringement allegations against the state are disposed of by another state

entity without a lawsuit being filed?

Response

Number

respondinga

Always 7

Most of the time 6

About half of the time 2

Some of the time 3

Never or almost never 2

Do not know 15

No response 1

Total 36

a

One response per state.

Source: GAO surveys to state attorneys general.

Matters Dealt With

Administratively
Appendix III: Responses to Selected

Questions From GAO Surveys Sent to State

Attorneys General, State Institutions of

Higher Education, and Intellectual Property

Law Sections of State Bar Associations

Page 49 GAO-01-811 State Immunity in Infringement Actions

Table 10: Who represents your state in cases where a state entity has been accused

of infringement without a lawsuit having been filed?

Response

Number

respondinga

Attorney General’s office 19

Counsel for state entity accused of

Infringement

15

Private counsel retained by the Attorney General or the state entity

involved in the action

8

Other:

State risk management agency

Affected agency or administrative tort claims office

Not specified

1

1

1

Do not know 4

a

Some states provided more than one response.

Source: GAO surveys to state attorneys general.

Table 11: Since January 1, 1985, about how many times has your state or any state

entity been accused of infringement without a lawsuit having been filed?

Response

Number

respondinga

None 6

1-5 11

6-10 4

11-15 1

16-30 2

More than 30 0

Do not know 12

Total 36

a

One response per state.

Source: GAO surveys to state attorneys general.
Appendix III: Responses to Selected

Questions From GAO Surveys Sent to State

Attorneys General, State Institutions of

Higher Education, and Intellectual Property

Law Sections of State Bar Associations

Page 50 GAO-01-811 State Immunity in Infringement Actions

Table 12: In your opinion, which, if any, of the following entities in your state can

claim state sovereign immunity as a defense to an infringement lawsuit in federal

court?

Response

Number

respondinga

State agencies 32

State colleges and universities 29

County governments and/or county agencies 1

Municipal governments and/or municipal agencies 1

Other local governments and/or agencies 1

Foundations that are affiliated with colleges and universities and are set

up to own and manage some of the colleges’ or universities’ intellectual

property

6

Associations, such as a university athletic association, that have their

own sources of funding but own and manage some of the colleges’ or

universities’ intellectual property

4

State employees acting in their official capacities 29

State employees acting in their individual capacities 4

a

As many responses per state as apply.

Source: GAO surveys to state attorneys general.

Table 13: Do state entities in your state have the right to waive sovereign immunity

as a defense to an infringement lawsuit brought in federal court?

Response

Number

respondinga

Yes 4

No 22

Do not know 10

Total 36

a

One response per state.

Source: GAO surveys to state attorneys general.

Alternatives and Remedies

in Federal Courts
Appendix III: Responses to Selected

Questions From GAO Surveys Sent to State

Attorneys General, State Institutions of

Higher Education, and Intellectual Property

Law Sections of State Bar Associations

Page 51 GAO-01-811 State Immunity in Infringement Actions

Table 14: Which of the following is the authority that permits state entities to waive

sovereign immunity as a defense to an infringement lawsuit brought in federal

court? (Question was for those answering “Yes” to the question in table 13)

Response

Number

respondinga

State constitution 0

State statute 1

Case law 1

Other:

Counterclaim to state suit

Policy; only Deputy Attorney General can agree to waiver

1

1

Total 4

a

As many responses per state as apply.

Source: GAO surveys to state attorneys general.

Table 15: Which of the following is the authority that prevents state entities from

waiving sovereign immunity as a defense to an infringement lawsuit brought in

federal court? (Question was for those answering “No” to the question in table 13)

Response

Number

respondinga

State constitution 6

State statute 5

Case law 7

Other:

Not specified 3

No response 1

Total 22

a

Highest authority cited per state.

Source: GAO surveys to state attorneys general.
Appendix III: Responses to Selected

Questions From GAO Surveys Sent to State

Attorneys General, State Institutions of

Higher Education, and Intellectual Property

Law Sections of State Bar Associations

Page 52 GAO-01-811 State Immunity in Infringement Actions

Table 16: Apart from any type of suit for damages, to what extent do you agree or

disagree that an owner of intellectual property can obtain an injunction in federal

court against an employee of your state who infringes on the property in question

while acting within the scope of his or her authority?

Response

Number

respondinga

Strongly agree 5

Somewhat agree 7

Neutral 4

Somewhat disagree 1

Strongly disagree 4

No opinion 15

Total 36

a

One response per state.

Source: GAO surveys to state attorneys general.

Table 17: In your opinion, other than pursuing an infringement lawsuit or obtaining

an injunction, does an intellectual property owner have any cause of action in

federal court if your state infringes on the owner’s property?

Response

Number

respondinga

Yes 1

No 11

No opinion 24

Total 36

a

One response per state.

Source: GAO surveys to state attorneys general.

Table 18: In your opinion, if a property owner believes one of your state agencies or

entities has infringed on his or her intellectual property, can the property owner

bring an infringement lawsuit in any of your state courts?

Response

Number

respondinga

Yes 10

No 5

No opinion 21

Total 36

a

One response per state.

Source: GAO surveys to state attorneys general.

Alternatives and Remedies

in State Court
Appendix III: Responses to Selected

Questions From GAO Surveys Sent to State

Attorneys General, State Institutions of

Higher Education, and Intellectual Property

Law Sections of State Bar Associations

Page 53 GAO-01-811 State Immunity in Infringement Actions

Table 19: For which, if any, of the following types of intellectual property, can an

infringement lawsuit against the state be brought in any of your state courts?

(Question was for those answering “Yes” to the question in table 18)

Response

Number

respondinga

Patent 3

Trademark 8

Copyright 3

None of the above 1

No opinion 1

a

As many responses per state as apply.

Source: GAO surveys to state attorneys general.

Table 20: Which, if any, of the following are impediments to bringing an

infringement lawsuit against your state in any of your state courts? (Question was

for those answering “Yes” to the question in table 18)

Response

Number

respondinga

Federal preemption 7

State’s right to claim sovereign immunity in state court 8

State law 3

Other:

Case law not developed 1

No impediments 2

No opinion 0

a

As many responses per state as apply.

Source: GAO surveys to state attorneys general.
Appendix III: Responses to Selected

Questions From GAO Surveys Sent to State

Attorneys General, State Institutions of

Higher Education, and Intellectual Property

Law Sections of State Bar Associations

Page 54 GAO-01-811 State Immunity in Infringement Actions

Table 21: Assume that an infringement lawsuit could not be brought against the

state in any of your state courts. In your opinion, under which of the following

alternative legal theories might an intellectual property owner bring a lawsuit

against the state in any of your state courts for unauthorized or improper use of

intellectual property?

Response

Number

respondinga

Taking, such as reverse eminent domain 7

Tort 7

Contract 10

Criminal law 1

Other:

Claim with state claims commission or board

Unfair competition

Unfair trade and consumer protection

False advertising

Declaratory judgment

Conversion

Trespass to chattel

2

1

1

1

1

1

1

None of the above 3

No opinion 20

a

As many responses per state as apply.

Source: GAO surveys to state attorneys general.

Table 22: If an intellectual property owner could obtain a judgment against your

state in state court for unauthorized or improper use of intellectual property under

any of the theories identified in the previous question, how certain, in your opinion,

is it that the plaintiff would or would not be allowed to recover damages?

Response

Number

respondinga

Definitely would be allowed to recover damages 5

Probably would be allowed to recover damages 6

Just as likely to be allowed to recover damages as not 1

Probably would not be allowed to recover damages 3

Definitely would not be allowed to recover damages 1

No opinion 17

No response 3

Total 36

a

One response per state.

Source: GAO surveys to state attorneys general.
Appendix III: Responses to Selected

Questions From GAO Surveys Sent to State

Attorneys General, State Institutions of

Higher Education, and Intellectual Property

Law Sections of State Bar Associations

Page 55 GAO-01-811 State Immunity in Infringement Actions

Table 23: How strongly do your agree or disagree that, post Florida Prepaid, an

intellectual property owner will not be able to recover damages from an entity of

your state for intellectual property infringement?

Response

Number

respondinga

Strongly agree 2

Somewhat agree 4

Neutral 1

Somewhat disagree 2

Strongly disagree 3

Too early to tell 3

No opinion 21

Total 36

a

One response per state.

Source: GAO surveys to state attorneys general.

Table 24: Who among the following provides your legal representation when your

college, university or university system is a party to an infringement lawsuit?

Response

Number

respondinga

State Attorney General’s office 49

Private counsel retained by the Attorney General’s office 26

General counsel or equivalent for the college, university or university

system

45

General counsel or equivalent for the entity accused of infringement 10

Private counsel retained by the college, university or university system 53

Other:

Private counsel retained by private foundation or corporation

owning intellectual property from university

City corporation counsel

Not specified

3

1

1

a

As many responses per institution as apply.

Source: GAO surveys to state institutions of higher education.

State Institutions of

Higher Education

Lawsuits
Appendix III: Responses to Selected

Questions From GAO Surveys Sent to State

Attorneys General, State Institutions of

Higher Education, and Intellectual Property

Law Sections of State Bar Associations

Page 56 GAO-01-811 State Immunity in Infringement Actions

Table 25: To your knowledge, how often is your state’s Attorney General’s office

informed when your college, university or university system is a party to an

infringement lawsuit?

Response

Number

respondinga

Always 52

Most of the time 4

About half of the time 0

Some of the time 5

Never or almost never 22

Do not know 7

No response 9

Total 99

a

One response per institution.

Source: GAO surveys to state institutions of higher education.

Table 26: To how many infringement lawsuits has your college, university, or

university system been a party since January 1, 1985?

Lawsuits identified per institutiona

Number of

institutions

Total lawsuits

identified

12 1 12

8 1 8

5 1 5

4 1 4

3 4 12

2 6 12

1 8 8

0 71 0

Did not have information available 4 0

Did not respond 2 0

Total 99 61

a

Includes lawsuits where the institution was either plaintiff or defendant.

Source: GAO surveys to state institutions of higher education.
Appendix III: Responses to Selected

Questions From GAO Surveys Sent to State

Attorneys General, State Institutions of

Higher Education, and Intellectual Property

Law Sections of State Bar Associations

Page 57 GAO-01-811 State Immunity in Infringement Actions

Table 27: Who among the following provides legal representation when your

college, university or university system has been accused of infringement without a

lawsuit having been filed?

Response

Number

respondinga

State Attorney General’s Office 26

Private counsel retained by the Attorney General’s Office 14

General counsel or equivalent for the college, university or university

system

67

General counsel or equivalent for the entity accused of infringement 12

Private counsel retained by the college, university or university

system

40

Other:

Private counsel retained by private foundation or corporation

owning intellectual property from university

2

a

As many responses per institution as apply.

Source: GAO surveys to state institutions of higher education.

Table 28: To your knowledge, how often is your state’s Attorney General’s office

informed when your college, university or university system has been accused of

infringement without a lawsuit having been filed?

Response

Number

respondinga

Always 19

Most of the time 12

About half of the time 0

Some of the time 10

Never or almost never 39

Do not know 11

No response 8

Total 99

a

One response per institution.

Source: GAO surveys to state institutions of higher education.

Matters Dealt With

Administratively
Appendix III: Responses to Selected

Questions From GAO Surveys Sent to State

Attorneys General, State Institutions of

Higher Education, and Intellectual Property

Law Sections of State Bar Associations

Page 58 GAO-01-811 State Immunity in Infringement Actions

Table 29: Since January 1, 1985, about how many times has your college,

university, or university system been accused of infringement without a lawsuit

having been filed?

Response

Number

respondinga

None 35

1-5 42

6-10 4

11-15 7

16-30 1

More than 30 0

Do not know 10

Total 99

a

One response per institution.

Source: GAO surveys to state institutions of higher education.

Table 30: In your opinion, which, if any, of the following entities in your college,

university or university system can claim state sovereign immunity as a defense to

an infringement lawsuit in federal court?

Response

Number

respondinga

The college, university or university system as a whole 82

A specific college or university within the university system 58

A foundation set up to own and manage intellectual property for the

college, university or university system

6

An association, such as a university athletic association, that has its

own sources of funding

2

College, university, or university system employees acting in their

official capacities

72

College, university or university system employees acting in their

individual capacities

7

Other (not specified): 1

None of the above 5

a

As many responses per institution as apply.

Source: GAO surveys to state institutions of higher education.

Alternatives and Remedies

in Federal Court
Appendix III: Responses to Selected

Questions From GAO Surveys Sent to State

Attorneys General, State Institutions of

Higher Education, and Intellectual Property

Law Sections of State Bar Associations

Page 59 GAO-01-811 State Immunity in Infringement Actions

Table 31: Does your college, university or university system have the right to waive

sovereign immunity as a defense to an infringement lawsuit brought in federal

court?

Response

Number

respondinga

Yes 12

No 58

Do not know 20

No response 9

Total 99

a

One response per institution.

Source: GAO surveys to state institutions of higher education.

Table 32: Which of the following is the authority that permits state entities to waive

sovereign immunity as a defense to an infringement lawsuit brought in federal

court? (Question was for those answering “Yes” to the question in table 31)

Response

Number

respondinga

State constitution 4

State statute 5

Case law 3

Other:

Contract or agreement

Attorney General decision

Not specified

2

1

1

Total 16

a

As many responses per institution as apply.

Source: GAO surveys to state institutions of higher education.
Appendix III: Responses to Selected

Questions From GAO Surveys Sent to State

Attorneys General, State Institutions of

Higher Education, and Intellectual Property

Law Sections of State Bar Associations

Page 60 GAO-01-811 State Immunity in Infringement Actions

Table 33: Which of the following is the authority that prevents state entities from

waiving sovereign immunity as a defense to an infringement lawsuit brought in

federal court? (Question was for those answering “No” to the question in table 31)

Response

Number

respondinga

State constitution 20

State statute 12

Case law 9

Other:

Attorney General decision

Only legislature can authorize

Not specified

4

5

5

No response 3

Total 58

a

Highest authority cited per institution.

Source: GAO surveys to state institutions of higher education.

Table 34: How strongly do you agree or disagree that, post Florida Prepaid, an

intellectual property owner will not be able to recover damages from your college,

university or university system for intellectual property infringement?

Response

Number

respondinga

Strongly agree 4

Somewhat agree 11

Neutral 10

Somewhat disagree 10

Strongly disagree 10

Too early to tell 16

No opinion 26

No response 12

Total 99

a

One response per institution.

Source: GAO surveys to state institutions of higher education.
Appendix III: Responses to Selected

Questions From GAO Surveys Sent to State

Attorneys General, State Institutions of

Higher Education, and Intellectual Property

Law Sections of State Bar Associations

Page 61 GAO-01-811 State Immunity in Infringement Actions

Table 35: To your knowledge, which of the following entities in your state can claim

state sovereign immunity as a defense to an infringement lawsuit in federal court?

Response

Number

respondinga

State agencies 17

State colleges and universities 15

County governments and/or county agencies 8

Municipal governments and/or municipal agencies 8

Other local governments and/or agencies 6

Foundations that are affiliated with colleges or universities and are set

up to own and manage some of the colleges’ or universities’ intellectual

property

3

Associations, such as a university athletic association, that have their

own sources of funding but own and manage some of the colleges’ or

universities’ intellectual property

2

State employees acting in their official capacities 13

State employees acting in their individual capacities 3

Other:

All agencies and arms of state except state-created agencies with

independent proprietary powers

1

None of the above 3

a

As many responses per state as apply.

Source: GAO surveys to intellectual property sections of state bar associations.

Table 36: Do state entities in your state have the right to waive sovereign immunity

as a defense to an infringement lawsuit brought in federal court?

Response

Number

respondinga

Yes 5

No 6

Do not know 10

Total 21

a

One response per state.

Source: GAO surveys to intellectual property sections of state bar associations.

Intellectual Property

Law Sections of State

Bar Associations

Alternatives and Remedies

in Federal Court
Appendix III: Responses to Selected

Questions From GAO Surveys Sent to State

Attorneys General, State Institutions of

Higher Education, and Intellectual Property

Law Sections of State Bar Associations

Page 62 GAO-01-811 State Immunity in Infringement Actions

Table 37: Which of the following is the authority that permits state entities to waive

sovereign immunity as a defense to an infringement lawsuit brought in federal

court? (Question was for those answering “Yes” to the question in table 36)

Response

Number

respondinga

State constitution 1

State statute 2

Case law 4

Total 7

a

As many responses per state as apply.

Source: GAO surveys to intellectual property sections of state bar associations.

Table 38: Which of the following is the authority that prevents state entities from

waiving sovereign immunity as a defense to an infringement lawsuit brought in

federal court? (Question was for those answering “No” to the question in table 36)

Response

Number

respondinga

State constitution 3

State statute 1

Case law 2

Total 6

a

Highest authority cited per state.

Source: GAO surveys to intellectual property sections of state bar associations.

Table 39: Apart from any type of suit for damages, to what extent do you agree or

disagree that an owner of intellectual property can obtain an injunction in federal

court against an employee of your state who infringes on the property in question

while acting within the scope of his or her authority?

Response

Number

respondinga

Strongly agree 3

Somewhat agree 5

Neutral 1

Somewhat disagree 5

Strongly disagree 3

No opinion 4

Total 21

a

One response per state.

Source: GAO surveys to intellectual property sections of state bar associations.
Appendix III: Responses to Selected

Questions From GAO Surveys Sent to State

Attorneys General, State Institutions of

Higher Education, and Intellectual Property

Law Sections of State Bar Associations

Page 63 GAO-01-811 State Immunity in Infringement Actions

Table 40: In your opinion, other than pursuing an infringement lawsuit or obtaining

an injunction, does an intellectual property owner have any cause of action in

federal court if your state infringes on the owner’s property?

Response

Number

respondinga

Yes 7

No 7

No opinion 7

Total 21

a

One response per state.

Source: GAO surveys to intellectual property sections of state bar associations.

Table 41: In your opinion, if a property owner believes one of your state agencies or

entities has infringed on his or her intellectual property, can the property owner

bring an infringement lawsuit in any of your state courts?

Response

Number

respondinga

Yes 7

No 7

No opinion 6

No response 1

Total 21

a

One response per state.

Source: GAO surveys to intellectual property sections of state bar associations.

Table 42: For which, if any, of the following types of intellectual property, can an

infringement lawsuit against the state be brought in any of your state courts?

(Question was for those answering “Yes” to the question in table 41)

Response

Number

respondinga

Patent 0

Trademark 7

Copyright 1

None of the above 0

No opinion 0

a

As many responses per state as apply.

Source: GAO surveys to intellectual property sections of state bar associations.

Alternatives and Remedies

in State Court
Appendix III: Responses to Selected

Questions From GAO Surveys Sent to State

Attorneys General, State Institutions of

Higher Education, and Intellectual Property

Law Sections of State Bar Associations

Page 64 GAO-01-811 State Immunity in Infringement Actions

Table 43: Which, if any, of the following are impediments to bringing an

infringement lawsuit against your state in any of your state courts?

Response

Number

respondinga

Federal preemption 16

State’s right to claim sovereign immunity in state court 13

State law 2

Other: Federal case law 1

No impediments 1

Do not know 2

a

As many responses per state as apply.

Source: GAO surveys to intellectual property sections of state bar associations.

Table 44: Assume that an infringement lawsuit could not be brought against the

state in any of your state courts. In your opinion, under which of the following

alternative legal theories might an intellectual property owner bring a lawsuit

against the state in any of your state courts for unauthorized or improper use of

intellectual property?

Response

Number

respondinga

Taking, such as reverse eminent domain 12

Tort 8

Contract 5

Criminal law 2

Other:

Trade secret misappropriation

Infringement of a state-registered trademark

Unfair competition

Deceit

Conversion

2

1

3

1

1

None of the above 2

No opinion 2

a

As many responses per state as apply.

Source: GAO surveys to intellectual property sections of state bar associations.
Appendix III: Responses to Selected

Questions From GAO Surveys Sent to State

Attorneys General, State Institutions of

Higher Education, and Intellectual Property

Law Sections of State Bar Associations

Page 65 GAO-01-811 State Immunity in Infringement Actions

Table 45: If an intellectual property owner could obtain a judgment against your

state in state court for unauthorized or improper use of intellectual property under

any of the theories identified in the previous question, how certain, in your opinion,

is it that the owner would or would not be allowed to recover damages?

Response

Number

respondinga

Definitely would be allowed to recover damages 1

Probably would be allowed to recover damages 8

Just as likely to be allowed to recover damages as not 1

Probably would not be allowed to recover damages 2

Definitely would not be allowed to recover damages 0

No opinion 9

Total 21

a

One response per state.

Source: GAO surveys to intellectual property sections of state bar associations.

Table 46: How strongly do you agree or disagree that, post Florida Prepaid, an

intellectual property owner will not be able to recover damages from an entity of

your state for intellectual property infringement?

Response

Number

respondinga

Strongly agree 7

Somewhat agree 5

Neutral 0

Somewhat disagree 3

Strongly disagree 1

Too early to tell 1

No opinion 3

No response 1

Total 21

a

One response per state.

Source: GAO surveys to intellectual property sections of state bar associations.
Appendix IV: Intellectual Property Lawsuits

Involving States and Active at Any Time Since

January 1985

Page 66 GAO-01-811 State Immunity in Infringement Actions

Table 47: Status of Lawsuits Where State Was a Defendant Since January 1985

Status Patent Trademark Copyright

Trademark and

copyright

Patent and

trademark

Patent and

copyright Total

Federal court:

 Infringement:

 Decided 1 1 5 1 0 1 9

 Dismissed 3 1 5 1 1 0 11

 Dropped/settled 4 2 6 1 0 0 13

 Still active 0 1 0 1 0 0 2

Total infringements 8 5 16 4 1 1 35

 Declaratory judgment:

 Decided 1 0 0 0 0 0 1

 Dismissed 1 1 0 0 0 0 2

 Dropped/settled 5 1 0 0 0 0 6

 Still active 2 1 0 0 0 0 3

Total declaratory judgments 9 3 0 0 0 0 12

Total federal court 17 8 16 4 1 1 47

State court:

 Decided 1 1 0 0 0 0 2

 Dismissed 0 1 1 0 0 0 2

 Dropped/settled 1 1 1 1 0 0 4

 Still active 2 0 1 0 0 0 3

Total state court 4 3 3 1 0 0 11

Total state and federal court 21 11 19 5 1 1 58

Source: GAO analysis of federal and state case law; responses to GAO’s questionnaires to state

attorneys general and state institutions of higher education.

Appendix IV: Intellectual Property Lawsuits

Involving States and Active at Any Time Since

January 1985
Appendix IV: Intellectual Property Lawsuits

Involving States and Active at Any Time Since

January 1985

Page 67 GAO-01-811 State Immunity in Infringement Actions

Table 48: Status of Lawsuits Where State Was a Plaintiff Since January 1985

Status Patent Trademark Copyright

Trademark and

copyright

Patent and

trademark

Patent and

copyright Total

Federal court:

 Infringement:

 Decided 6 1 1 1 0 1 10

 Dismissed 1 0 0 0 0 0 1

 Dropped/settled 12 2 3 0 0 0 17

 Still active 3 2 0 0 0 0 5

Total infringements 22 5 4 1 0 1 33

 Declaratory judgment:

 Decided 0 1 0 0 0 0 1

 Dismissed 0 0 1 0 0 0 1

 Dropped/settled 0 0 0 0 0 0 0

 Still active 1 0 0 0 0 0 1

Total declaratory judgments 1 1 1 0 0 0 3

Total federal court 23 6 5 1 0 1 36

State court:

 Decided 0 1 0 0 0 0 1

 Dismissed 1 0 0 0 0 0 1

 Dropped/settled 3 0 0 0 0 0 3

 Still active 0 1 0 0 0 0 1

Total state court 4 2 0 0 0 0 6

Total state and federal court 27 8 5 1 0 1 42

Source: GAO analysis of federal and state case law; responses to GAO’s questionnaires to state

attorneys general and state institutions of higher education.
Appendix V: Federal District Court Cases

Involving Intellectual Property

Page 68 GAO-01-811 State Immunity in Infringement Actions

Table 49: Federal District Court Cases Involving Protected Property Rights

(Copyright, Patent, and Trademark) During the 16-Year Period of Fiscal Years 1985

Through 2000

 Type of intellectual property

Fiscal Year Copyright Patent Trademark

Total number

of cases

1985 2,113 1,155 2,144 5,412

1986 2,198 1,105 2,378 5,681

1987 1,994 1,129 2,395 5,518

1988 2,265 1,224 2,545 6,034

1989 2,251 1,162 2,452 5,865

1990 2,075 1,236 2,418 5,729

1991 1,795 1,171 2,220 5,186

1992 2,080 1,474 2,276 5,830

1993 2,588 1,553 2,419 6,560

1994 2,828 1,617 2,457 6,902

1995 2,417 1,723 2,726 6,866

1996 2,263 1,840 2,925 7,028

1997 2,258 2,112 3,189 7,559

1998 2,082 2,218 3,448 7,748

1999 2,093 2,318 3,831 8,242

2000 2,050 2,484 4,204 8,738

Total 35,350 25,521 44,027 104,898

Source: Administrative Office of the U.S. Courts.

Appendix V: Federal District Court Cases

Involving Intellectual Property
Appendix VI: Comments From the United States Patent and

Trademark Office

Page 69 GAO-01-811 State Immunity in Infringement Actions

Appendix VI: Comments From the United

States Patent and Trademark Office
Appendix VI: Comments From the United States Patent and

Trademark Office

Page 70 GAO-01-811 State Immunity in Infringement Actions
Appendix VI: Comments From the United States Patent and

Trademark Office

Page 71 GAO-01-811 State Immunity in Infringement Actions
Appendix VII: Comments From the United States Copyright

Office

Page 72 GAO-01-811 State Immunity in Infringement Actions

Appendix VII: Comments From the United

States Copyright Office
Appendix VII: Comments From the United States Copyright

Office

Page 73 GAO-01-811 State Immunity in Infringement Actions
Appendix VIII: GAO Contacts

and Staff Acknowledgments

Page 74 GAO-01-811 State Immunity in Infringement Actions

John P. Hunt, Jr., (404) 679-1822

Frankie Fulton, (404) 679-1805

In addition to those named above, Carolyn Boyce, Bert Japikse, Gary

Malavenda, Jonathan S. McMurray, Deborah Ortega, and Paul Rhodes

made key contributions to this report.

Appendix VIII: GAO Contacts and Staff

Acknowledgments

GAO Contacts

Staff

Acknowledgments

(141479)
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