Retiring Justice John Paul Stevens has not authored many opinions relating to intellectual property law, but those he has written reflect his interest in striking an appropriate balance between the protection of intellectual property rights and public access to the products of creative and inventive minds. His intellectual property opinions seek to serve the central purposes of the Copyright and Patent Clause of the Constitution—(1) encourage and reward the creativity of authors and inventors by offering them exclusive legal rights to their respective writings and discoveries, and (2) promote the progress of science and useful arts by requiring that the monopoly privileges last only for a limited period, after which the public gains free access to such work. This report examines Justice Stevens' opinions involving copyright law, patent law, and state sovereign immunity and patent infringement lawsuits. A brief summary of the basic principles and provisions of copyright and patent law precedes each section describing these opinions. Copyright is a federal grant of legal protection for certain original works of creative expression, including books, movies, photography, art, and music. The Copyright Act refers to the creator of such works as an "author;" ownership of a copyright initially vests in the author, but the author may transfer ownership of the copyright to another person or company. A copyright holder possesses several exclusive legal entitlements under the Copyright Act, which together provide the holder with the right to determine whether and under what circumstances the protected work may be used by third parties. The grant of copyright permits the copyright holder to exercise, or authorize others to exercise, the following exclusive rights: the reproduction of the copyrighted work; the preparation of derivative works based on the copyrighted work; the distribution of copies of the copyrighted work; the public performance of the copyrighted work; and the public display of the copyrighted work, including the individual images of a motion picture. Therefore, a party desiring to reproduce, adapt, distribute, publicly display, or publicly perform a copyrighted work must ordinarily obtain the permission of the copyright holder, which is usually granted in the form of a voluntarily negotiated license agreement that establishes conditions of use and an amount of monetary compensation known as a royalty fee. There are, however, other ways a third party may legally use a copyrighted work in the absence of affirmative permission from the copyright holder, including the use of statutory licenses or reliance upon the "fair use" doctrine. The doctrine of "fair use" recognizes the right of the public to make reasonable use of copyrighted material, under particular circumstances, without the copyright holder's consent. For example, a teacher may be able to use reasonable excerpts of copyrighted works in preparing a scholarly lecture or commentary, without obtaining permission to do so. The Copyright Act mentions fair use "for purposes such as criticism, comment, news reporting, teaching, scholarship, or research." However, a determination of fair use by a court considers four factors: the purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes, the nature of the copyrighted work, the amount and substantiality of the portion used in relation to the copyrighted work as a whole, and the effect of the use upon the potential market for or value of the copyrighted work. Because the language of the fair use statute is illustrative, determining what constitutes a fair use of a copyrighted work is often difficult to make in advance—according to the U.S. Supreme Court, such a determination requires a federal court to engage in "case-by-case" analysis. Violation of one of the exclusive rights of the copyright holder constitutes infringement, and the copyright holder may bring a civil lawsuit against the alleged infringer to collect monetary damages and/or to obtain an injunction to prevent further infringement. The direct infringer is not the only party potentially liable for infringement; the federal courts have recognized two forms of secondary copyright infringement liability: contributory and vicarious. The concept of contributory infringement has its roots in tort law and the notion that one should be held accountable for directly contributing to another's infringement. For contributory infringement liability to exist, a court must find that the secondary infringer "with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another." Vicarious infringement liability is possible where a defendant "has the right and ability to supervise the infringing activity and also has a direct financial interest in such activities." For manufacturers of consumer electronics and personal computers, the Supreme Court's 1984 decision in Sony Corporation of America v. Universal City Studios is considered the "Magna Carta" of product innovation and the technology age. The Sony decision held that the sale of the home video cassette recorder (VCR) did not constitute contributory infringement of the copyrights on television programs, because such a "staple article of commerce" is capable of "substantial noninfringing uses" that include "time-shifting"—recording a television program to view it once at a later time, and thereafter erasing it. Sony's embrace of time-shifting as a "fair use" of copyrighted works has created a safe harbor from copyright infringement liability for developers and sellers of electronic devices that facilitate the recording, storage, and playback of copyrighted media, such as the digital video recorder (DVR and TiVo), portable music and video players (iPod), and personal computers. Some commentators consider the Sony decision to be the "legal foundation of the Digital Age." The outcome of Sony "meant that companies could invest in the development of new digital technologies without incurring the risk of enormous liability for the potential misuses of those technologies by some of their consumers." The Sony case concerned a lawsuit in which owners of copyrights on broadcast television programs sought to hold Sony Corporation liable for contributory copyright infringement due to its manufacture and sale of the Betamax VCR that Betamax customers used to record some of the broadcasts. The district court ruled in favor of Sony because the court concluded that noncommercial home recording of material broadcast over public airwaves was a fair use of copyrighted works. The U.S. Court of Appeals for the Ninth Circuit disagreed, believing that the home use of a video tape recorder was not a fair use because it allowed for mass copying of copyrighted television programming. The appellate court held that the copyright owners were entitled to appropriate relief, including an injunction against the manufacture and marketing of the Betamax video recorder or royalties on the sale of the equipment. The Supreme Court reversed the Ninth Circuit. Justice Stevens authored the majority opinion that garnered the support of four other justices. He was concerned that the Ninth Circuit's ruling, "if affirmed, would enlarge the scope of respondents' statutory monopolies to encompass control over an article of commerce that is not the subject of copyright protection. Such an expansion of the copyright privilege is beyond the limits of the grants authorized by Congress." He explained that defining the scope of the copyright monopoly grant "involves a difficult balance between the interests of authors ... in the control and exploitation of their writings ... on the one hand, and society's competing interest in the free flow of ideas, information, and commerce on the other hand." Justice Stevens also noted that historically, Congress has been primarily responsible for amending copyright law in response to changes in technology. He elaborated: The judiciary's reluctance to expand the protections afforded by the copyright without explicit legislative guidance is a recurring theme. Sound policy, as well as history, supports our consistent deference to Congress when major technological innovations alter the market for copyrighted materials. Congress has the constitutional authority and the institutional ability to accommodate fully the varied permutations of competing interests that are inevitably implicated by such new technology. While Justice Stevens observed that the "Copyright Act does not expressly render anyone liable for infringement committed by another," he nevertheless acknowledged that the lack of such statutory authorization does not preclude the imposition of vicarious liability on parties who have not themselves engaged in infringing activity. He observed that the only contact between Sony and its customers occurs at the moment of sale of the Betamax video recorder. The video equipment may be used for both infringing and noninfringing purposes, as it is "generally capable of copying the entire range of programs that may be televised: those that are uncopyrighted, those that are copyrighted but may be copied without objection from the copyright holder, and those that the copyright holder would prefer not to have copied." As there was no precedent in copyright law for imposing vicarious liability on Sony because it sold the video recording equipment with constructive knowledge that its customers might use it to make unauthorized copies of copyrighted programming, Justice Stevens sought guidance from patent law, defending the appropriateness of such reference "because of the historic kinship between patent law and copyright law." He first found that the Patent Act contained an express provision that prohibits contributory infringement liability in the case of the sale of a "staple article or commodity of commerce suitable for substantial noninfringing use." He then quoted from an earlier Supreme Court case involving contributory patent infringement that had said "a sale of an article which though adapted to an infringing use is also adapted to other and lawful uses, is not enough to make the seller a contributory infringer. Such a rule would block the wheels of commerce." While recognizing that there are differences between copyright and patent laws, Justice Stevens believed that the contributory infringement doctrine as it is used in patent law should also be applied to copyright law. Therefore, he "imported" the "staple article of commerce doctrine" from patent law into copyright law, in the passage below: The staple article of commerce doctrine must strike a balance between a copyright holder's legitimate demand for effective – not merely symbolic – protection of the statutory monopoly, and the rights of others freely to engage in substantially unrelated areas of commerce. Accordingly, the sale of copying equipment, like the sale of other articles of commerce, does not constitute contributory infringement if the product is widely used for legitimate, unobjectionable purposes. Indeed, it need merely be capable of substantial noninfringing uses. With this test articulated, Justice Stevens analyzed whether the Betamax was capable of commercially significant noninfringing uses.