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. In the 1980s, the Congress grew concerned that some states were claiming that the Eleventh Amendment to the U.S. Constitution 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.” In response to these concerns, the Congress in the early 1990s passed “clarification” laws for patents, trademarks, and copyrights 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, 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 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 competition 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, 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 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. Furthermore, accusations that are made through such mechanisms 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. 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. 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 institutions of higher education (about 71 percent) responded to our survey. 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.