In National Association of Boards of Pharmacy v. Board of Regents of the University System of Georgia, 97 U.S.P.Q.2D 1931 (11th Cir. 2011), the National Association of Boards of Pharmacy (hereinafter “NABP”) owns copyrighted tests which it uses to accredit pharmacists. Professor Flynn Warren of the University of Georgia offered a review course for these tests, and used actual questions from the tests in his review course. After receiving a tip, the NABP confirmed that Professor Warren was using the actual copyrighted questions, after which Professor Warren and the University of Georgia agreed to cease and desist using the copyrighted questions. Subsequently, NABP again determined that Professor Warren was again gathering copyrighted test questions for use in his course in violation of agreement previously reached. To confirm their suspicions, the NABP purchased a copy of Professor Warren’s course materials for $100, and after confirming that 150 questions were copied from the NABP test, the NABP was forced to replace the 150 questions with new questions.
As a result, NABP brought suit against the University of Georgia claiming copyright infringement under 17 U.S.C. §§ 501 and 511 in Count I, breach of contract in Count II, as well as trade secret infringement under the Georgia Trade Secrets Act of 1990 in Count III. NABP also sought, and obtained, a temporary restraining order to obtain the infringing questions as well as to prevent their continued use.
The University of Georgia subsequently moved for summary judgment claiming lack of subject matter jurisdiction due to immunity under the 11th Amendment. In an attempt to address the summary judgment, NABP then amended its complaint to add further copyright claims and requests for damages against various University officials in their individual and official capacity, including claims based upon Ex parte Young, 209 U.S. 123, 28 S. Ct. 441, 52 L. Ed. 714 (1908) to prevent the individuals from future copyright infringement, and takings claims for the prior use of the copyrighted test questions as there was a lack of due process or remedy in Georgia which compensates for this use of Constitutionally provided property under United States v. Georgia, 546 U.S. 151, 126 S. Ct. 877, 163 L. Ed. 2d 650 (2006). The University of Georgia subsequently moved for summary judgment for all claims, again noting the lack of subject matter jurisdiction, but also noting that there was a lack of continued infringement due to Professor Warren no longer teaching the infringing course such that the Ex parte Young claim was no longer tenable.
The District Court granted the summary judgment as to Count I since Congress lacks the authority to waive Georgia’s sovereign immunity in regards to copyright infringement claims. In regards to the claims under the United States v. University of Georgia theory, the District Court found that Congress also could not abrogate Georgia’s sovereign immunity since there was no shown actual violation of procedural due process caused by the University since it was not feasible to have a procedure to prevent random copyright infringement. Lastly, the District Court found that there was no ongoing infringement, and thus dismissed the claims against the University officials.
The District Court also dismissed Counts II and III as being exclusively matters of Georgia law, after which NABP brought suit in the State of Georgia to pursue these state-based causes of action.
On appeal, the Eleventh Circuit first quoted Bd. of Trs. v. Garrett, 531 U.S. 356, 363, 121 S. Ct. 955, 962, 148 L. Ed. 2d 866 (2001) for the proposition that “[t]he ultimate guarantee of the Eleventh Amendment is that nonconsenting States may not be sued by private individuals in federal court.” There is a narrow exception under Ex parte Young, 209 U.S. 123, 28 S. Ct. 441, 52 L. Ed. 714 (1908) which allows the grant of a prospective injunction to prevent continuing violations of Federal law.
The District Court had granted summary junction since there was evidence that the violation was not continuing based upon representations made to the court by the University that the course was no longer being taught, which thereby rendered moot any need for a prospective injunction. The Eleventh Circuit noted that a voluntary cessation can only render a prospective injunction moot where there is no “reasonable expectation” that the violation will resume as soon as the case is dismissed. Jews for Jesus, Inc. v. Hillsborough Cnty. Aviation Auth., 162 F.3d 627, 629 (11th Cir. 1998). The Government further enjoys a rebuttable presumption that its cessation will not be resumed after the suit is dismissed.
While the District Court relied upon statements to the court by the University as well as answers to interrogatories, the Eleventh Circuit found that other circumstances overcome the rebuttable presumption such that the District Court should not have granted summary judgment. Specifically, the evidence did not unambiguously show that the copyright infringement would be ceased, since Counsel further indicated that Professor Warren had only cancelled the review course for one month but intended to continue teaching the same course from retirement. Thus, the evidence was ambiguous as to whether there was a total cessation of the copyright infringement and therefore the summary judgment denying the prospective injunction was improper.
After ruling on the Ex parte Young issue, the Eleventh Circuit reviewed the issue of whether state sovereign immunity for copyright infringement remained after the Supreme Court’s decision in Central Virginia Community College v. Katz, 546 U.S. 356, 126 S. Ct. 990, 163 L. Ed. 2d 945 (2006). Specifically, after Florida Prepaid Postsecondary Education Expense Board v. College Savings Bank, 527 U.S. 627, 119 S. Ct. 2199, 144 L. Ed. 2d 575 (1999) and Seminole Tribe of Fla. v. Florida, 517 U.S. 44, 55, 116 S. Ct. 1114, 1123, 134 L. Ed. 2d 252 (1996), the Congress cannot validly abrogate state sovereign immunity relying on its Article I powers, and since the copyright statute relies upon an Article I power, Congress lacks the power to abrogate this sovereign immunity so as to hold states liable for copyright infringement. However, since this decision, the Supreme Court ruled in Katz that Congress can use its Article 1 authority to abrogate state sovereign immunity in the context of Bankruptcy. In reconciling the two case lines, the Eleventh Circuit noted that Bankruptcy is an in rem proceeding directly against property as opposed to directly against the states. Moreover, there is no suggestion in Katz that other precedent, such as Florida Prepaid, has been overruled. Therefore, the Eleventh Circuit held that the District Court was correct in that NABP cannot recover damages against the state as there remains no valid waiver of sovereign immunity for state copyright infringement.
Lastly, on the issue of whether § 5 of the Fourteenth Amendment supports Congress’ abrogation of the state’s sovereign immunity in the context of copyright infringement, the Court noted that, after United States v. Georgia, 546 U.S. 151, 158, 126 S. Ct. 877, 881, 163 L. Ed. 2d 650 (2006), § 5 does provide Congress the with the authority to abrogate state sovereign immunity for violations of the Fourteenth Amendment. In the context of copyrights, the Eleventh Circuit found that “copyright is a property interest protected under the Due Process Clause.” As such, any deprivation of the copyright does require due process under the Fourteenth Amendment. Further, while pre-deprivation due process is usually required, the Eleventh Circuit noted that post-deprivation due process also satisfies the Fourteenth Amendment where no procedure would be possible prior to the deprivation of the property. In these cases, the inquiry becomes whether there are adequate remedies at law after the deprivation. McKinney v. Pate, 20 F.3d 1550, 1562–63 (11th Cir. 1994) (en banc).
In reviewing the facts of copyright infringement by the University, the Eleventh Circuit noted that employee infringement is generally a random act by the University. There was no process by which infringement was specifically authorized by the University, and thus no process which could prevent these random activities. Moreover, while NABP argued that it was very foreseeable that Professor Warren would infringe NABP’s copyrights, the Eleventh Circuit noted that, for purposes of pre-deprivation due process, the actions of employees in general is what is analyzed as opposed to specific people. As such, since there was no process which generally directed employees to infringe copyrights, the Eleventh Circuit upheld the District Court’s holding that pre-deprivation hearings were impractical and not required to satisfy due process under the Fourteenth Amendment. Moreover, as there were post-deprivation procedures available, such as for breach of contract as well as under the Georgia Tort Claims Act currently pending in state court, the District Court was correct in finding that there was no violation of due process under the Fourteenth Amendment which would subject the University to copyright liability.
Significance for IP Owners
As shown in NABP v. Board of Regents, when a sovereign entity is infringing IP, the IP owner cannot approach the problem using a standard commercial approach. Since a sovereign entity cannot be sued except in the specific manner provided, claimants need to ensure that they understand each mechanism by which the sovereign can be held accountable. Moreover, mere claims of Constitutional takings will not prevail without evidence that no remedy actually exists. In the context of states, this very often will mean using both state courts under state-based sovereign immunity waivers and state-based claims processes to obtain damages, and also using Federal Courts for obtaining injunctive relief. Thus, while possible, claimants need to be prepared for a multi-jurisdictional action when the infringer is a State actor.
IP Currents 