The recent opinion of the Texas Court of Appeals (First District) in University of Houston v. Jim Olive Photography, No. 01-18-00534 (June 11, 2019) addressed a fascinating (and still unsolved) question: does intellectual property qualify as "property" for purposes of the takings clause?
The court held "no," but that answer isn't definitive.
The facts of the case are pretty simple: Jim Olive took a photograph which -- shame on them --- the University used on its website without compensating Mr. Olive. He sued the University in a Texas state court for taking his intellectual property, seeking compensation.
If your first instinct was to say this looks like copyright infringement, you'd be right. Problem is, copyright claims are brought in federal court. But state cannot be sued for damages there. And copyright claims are "tort-y" which means that if a copyright holder sues the state government for damages in state court, the claim is subject to that old bugaboo, sovereign immunity.
What about takings? After all, intellectual property would seem to be "property," and appropriating Olive's picture and pressing it into public service on the University's web site sort of looks like a taking. And in Horne v. USDA, the Supreme Court held that raisins (a healthy snack, as Chief Justice Roberts noted), are property, because personal property is just as much protected by the takings clause as real property. And the Supreme Court has also already ruled that IP is property for due process purposes. So why not intellectual property like copyrights for purposes of the takings clause?
Well, as the opinion notes, this is where it gets unsettled, both in courts and in the scholarly discussions. See slip op. at 10-13. The short story is that some argue yes, others no. And that there's no definitive judicial authority either way. Slip op. at 12 ("No Texas case appears to have addressed whether a copyright is property for purposes of the takings clause and whether copyright infringement by a state actor is a taking.").
Starting on page 13, the court analyzed a series of cases, looking for clues about whether intangible IP is enough like traditional property to be considered protected by takings. See id. at 13-28. For you property wonks, this section of the opinion is well worth a read, as the court searches for clues.
Ultimately what swayed the court was the idea that government use of Olive's photo did not prevent him from using it also, what scholars have labeled "nonrivalrous" use. Slip op. at 30 ("Olive does not allege that the University took his copyright interest; the only reasonable construction of Olive’s claim is that the University committed infringement. Because copyright is nonrivalrous, Olive never lost his right to use or license his photograph; the University’s infringement cost Olive a licensing fee.") (citations and footnote omitted). The court analogized the University's use of the photo to a "transitory trespass" on real property by a government agent, which is not compensable as a taking.
On page 32, the courts gets to the conclusion:
Based on this authority, we hold that the Olive’s takings claim, which is based on a single act of copyright infringement by the University, is not viable. We sustain in part the University’s first and second issues, and we conclude that the trial court erred in denying the University’s plea to the jurisdiction. This opinion should not be construed as an endorsement of the University’s alleged copyright infringement, and as discussed, copyright owners can seek injunctive relief against a state actor for ongoing and prospective infringement. Instead, in the absence of authority that copyright infringement by a state actor presents a viable takings claim, and based on the contrary persuasive authority cited above, we decline to so hold.
Slip op. at 32-33 (footnote omitted).
As the court noted ("legal scholars are divided on whether copyright should be protected from government takings, and legal authority is scant"), so we don't think the court of appeals' opinion will be the last word, either in this case, or especially in others.
University of Houston v. Jim Olive Photography, No. 01-18-00534-DV (Tex. App. June 11, 2019)
