Intellectual Property: State Immunity in Infringement Actions	 
(25-SEP-01, GAO-01-811).					 
								 
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 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. 
Some intellectual property owners are concerned that they no	 
longer have adequate remedies if a state commits infringement.	 
Although the precise number is difficult to determine, few	 
accusations of intellectual property infringement appear to have 
been made against the states through either lawsuits or matters  
handled out of court. GAO 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. 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. States are not likely to waive their	 
immunity voluntarily and, in some cases, their own laws may	 
prohibit them from doing so. 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.							 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-01-811 					        
    ACCNO:   A01662						        
  TITLE:     Intellectual Property: State Immunity in Infringement    
Actions 							 
     DATE:   09/25/2001 
  SUBJECT:   Constitutional law 				 
	     Federal case law					 
	     Intellectual property				 
	     Patents						 
	     Copyrights 					 
	     Trademarks 					 

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GAO-01-811
     
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

community 1 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. Constitution 2 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
copyrights 6 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
competition 8 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 lawsuits a Status

Jurisdiction Resolved by court Dropped

or settled by parties

Still active Type of intellectual property Total Federal State Decided
Dismissed b

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 plaintiff 17
(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 X a Settled prior to decision. 7 Trademark X b Dismissed. State
was not a contributory infringer. 8 Copyright X Settled prior to decision. 9
Copyright

X c 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. 11 d Copyright,

trademark X e 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 State a, 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 State a

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 State a

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 responding a

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 responding a

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 state a Number of states Total lawsuits

identified

14 1 14 6 16 3 13 2 12 1 44 0 180 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 responding a

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

responding a

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 responding a

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

responding a

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 responding a

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 responding a

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 responding a

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 responding a

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 responding a

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 responding a

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 responding a

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 responding a

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 responding a

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 responding a

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 responding a

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 responding a

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 responding a

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 institution a 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

responding a

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 responding a

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 responding a

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 responding a

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

responding a

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

responding a

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

responding a

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 responding a

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

responding a

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 responding a

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 responding a

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 responding a

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 responding a

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 responding a

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 responding a

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 responding a

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 responding a

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 responding a

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 responding a

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 responding a

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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