In Frederick L. Allen; Nautilus Productions, LLC v. Roy A. Cooper, III, Governor of North Carolina, the shipwreck of the infamous pirate ship Queen Anne’s Revenge failed to deliver intellectual property riches its explorers had expected.
The Queen Anne’s Revenge famously was run aground off the coast of North Carolina in 1717 — some say intentionally — by Edward Teach, known and feared as Blackbeard. In 1996, the wreck was discovered. In the months to come, the State of North Carolina entered into an agreement with a company called Intersal for the salvage rights and the right to make and market all commercial narrative (including video) related to the wreckage — except for non-commercial and educational purposes retained by the State of North Carolina. And that’s where the trouble began.
Intersal retained plaintiffs Allen and Nautilus, Allen’s production company, to document the salvage operation, and Allen registered the copyright in a year’s worth of footage. Plaintiffs discovered that the State was making their video available to the public through the State’s website as part of North Carolina’s “public records” allegedly in violation of their agreement, and brought a copyright infringement lawsuit against the State of North Carolina in the federal court.
North Carolina argued that the 11th amendment of the U.S. Constitution unambiguously granted states sovereign immunity – that is, the absolute right to immunity from lawsuits.
Eastern District of North Carolina
The Eastern District of North Carolina found that North Carolina was not immune to lawsuits because of Section 511 of the Copyright Act, set forth in the Copyright Remedy Clarification Act of 1990. That Section specifically says that a state, agency or officer is not immune from lawsuits for infringing copyright.
One would think an Act passed by Congress would be sufficient to allow copyright holders to sue a state under these circumstances — but one would be wrong…
Fourth Circuit Court
The Fourth Circuit reversed the district court. First, it held that under the 11th Amendment, a State, its agencies and its officials acting in their official capacity cannot be sued in federal court without their consent; any consent to be sued in their own state courts is not a waiver of sovereign immunity. (This is important, because federal courts have exclusive jurisdiction over copyright infringement.)
Second, even though Congress had passed Copyright Act Section 511, that provision is unconstitutional because it would violate the sovereign immunity granted to states in the 11th Amendment:
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.
The court went on to say that if plaintiffs’ claim involved the due process rights of the 14th Amendment, then Congress could say that its federal powers took over and preempted the State’s sovereign immunity. However, the rationale for the Copyright Act was not derived from the 14th Amendment, but rather Article 1 of the Constitution, the article in which copyright and patent laws are grounded:
[The Congress shall have power] “To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.”
Further, there was no evidence of any widespread deprivation of rights (that is, any pattern of states’ infringing on copyright in ways violated the 14th Amendment) which would justify Congress’ passing legislation that would override a state’s immunity from lawsuits. (In contrast, think of the systematic rights deprivation of “Jim Crow,” segregation laws; that pattern of discrimination had justified desegregation laws.) The court noted that its denying the plaintiffs the right to sue North Carolina for copyright infringement was consistent with “numerous other courts” that had considered this issue.
The court denied the injunctive relief plaintiffs requested against future infringement because the State had removed from the website the six places where the videos were accessible. To bring a case against a state requires an ongoing violation of rights; here, it appeared that the infringement had ceased when the posts were deleted.
Nautilus and Allen claimed that a state law which had been passed in anticipation of this lawsuit (which specifically provided that “photographs and video recordings of shipwrecks in the custody of North Carolina are public records”) also violated their rights, but the court said that the officials who had been sued had no role in “enforcing” that statute. So, nothing provided an exception to North Carolina’s 11th Amendment immunity.
Finally, the officials had a qualified immunity from being sued for their allegedly infringing conduct because a settlement agreement with Intersal specifically preserved the State’s right to make its records available to the public — and the videos had become part of those state records. The officials could reasonably rely on that agreement in making the videos available on the Internet.
I’m not sure if there is a lesson in this case other than to be aware of potential problems with seeming to enforce copyright against a State. From a human perspective, it sounds like these poor guys spent 15 years under water, with the intention of accumulating and making money from their intellectual property, only to be blocked by constitutional considerations that they never anticipated when signing a contract with the State. Indeed, their initial IP law assessment could have reasonably included reliance on Section 511 of the Copyright Act – only to learn, years later, that in the 4th Circuit’s view, that provision of the Act is unconstitutional. It will be interesting to see if other Circuit Courts follow the 4th Circuit’s lead.
