Statement: The Intellectual Property Protection Restoration Act
Washington,
Jun 17, 2003 -
Today the Subcommittee will consider H.R. 2344, the "Intellectual Property Protection Restoration Act of 2003."
In 1790, Congress passed the first intellectual property protection laws. As a result, the intellectual property of the United States is the envy of the world. It is one of the top U.S. exports, generates billions of dollars in revenue, creates jobs, and enriches the lives of the American people.
Since the enactment of these laws, it was understood that the states were subject to suit for intellectual property infringement in federal court, notwithstanding the sovereign immunity states enjoy under the Eleventh Amendment.
Based on its Article I "Commerce Clause" powers, Congress specifically expressed its intent to abrogate the Eleventh Amendment immunity by enacting three statutes subjecting the states to suit in federal court for damages resulting from state infringement of patents, trademarks, and copyrights. However, in 1999, the Supreme Court issued three rulings that invalidated these statutes.
These decisions adversely impact intellectual property owners and thousands employed in the industry. States now have the ability to infringe copyrights, patents, and trademarks with impunity. And states are increasingly using this as a defense to infringement claims. This is particularly frustrating for intellectual property owners because states are also owners of copyrights, patents, and trademarks, and can sue for infringement of their intellectual property.
In one example of this disturbing trend, hundreds of pirated software programs were found on computers owned by a Maryland state hospital. Damages ranged from $250,000 to $750,000. Although the hospital initially engaged in settlement negotiations, it ultimately shielded itself from liability by declaring sovereign immunity. This alarming behavior is permitted under the Supreme Court’s decisions, a result that clearly conflicts with the spirit of Article I, section 8, of the Constitution.
Given the Supreme Court’s response to previous congressional attempts to resolve this problem, Congress, affected government agencies, and the intellectual property community have carefully considered possible solutions that would protect the rights of all intellectual property owners while passing Constitutional muster.
H.R. 2344 is a balanced solution to the growing problem of state infringement of intellectual property. It prevents the award of damages for infringement of intellectual property owned by a state if that state has not waived its immunity under the Eleventh Amendment for infringement of intellectual property.
This approach is fair: if states are going to take advantage of intellectual property laws for their own benefit, they should also be willing to enforce the laws for the benefit of others. These are two sides of the same patented coin.
That concludes my opening statement, and the gentleman from California, Mr. Berman, is recognized for his.
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