State Government’s Alleged Copyright Infringement Wasn’t a “Taking”–Jim Olive v. University of Houston (Guest Blog Post)

by guest blogger Tyler Ochoa

Last week, the Texas Supreme Court held that “the violation of a copyright, without more, is not a taking of the copyright,” and affirmed the dismissal of Olive’s inverse condemnation claim.

UH allegedly downloaded Olive’s photograph from his website, removed the CMI, and posted it to its website. When Olive discovered the removal years later, UH complied with his demand to cease and desist, but he sued for damages anyway. Because he could not sue in federal court (under Allen v. Cooper, the State has sovereign immunity), he sued in state court for inverse condemnation. (Texas has waived its sovereign immunity for “takings” claims.)

The court notes that scholars disagree whether copyright should be treated as “property” for Fifth Amendment purposes; but it assumes arguendo that it is treated as property. A “taking” can be a physical taking or a regulatory taking. Either way, to determine whether it is a “taking,” a court ordinarily conducts a fact-specific “ad hoc” inquiry using a multi-factor balancing test. But permanent physical occupation is a “per se” taking without a multi-factor analysis.

Olive cited Horne v. Dep’t of Agriculture, 576 U.S. 350 (2017), for the proposition that “takings” law does not distinguish types of property; but the Texas Supreme Court says that in context, the Supreme Court was referring to personal property versus real property. Intangible property is potentially different. The precedent is Ruckelshaus v. Monsanto, 467 U.S. 986 (1984), using multi-factor “ad hoc” analysis to determine that trade secrets were “property” subject to a taking.

The court notes that the government did not take “possession and control” of the copyright, nor is the copyright “physically occupied” because it is intangible. A “per se” violation would be taking the entire bundle of sticks, not just one strand in the bundle. The copyright still has value: the right to exclude others (non-state actors) from reproducing the work, and the right to license its use. The copyright owner can still transfer the copyright to others for compensation.

Thus, “[a]llegations of copyright infringement assert a violation of the owner’s copyright, but not its confiscation, and therefore factual allegations of an infringement do not alone allege a taking.” Because there is no taking, Texas retains its sovereign immunity, and the case was properly dismissed.

Case citation: Jim Olive Photography v. University of Houston System, No. 19-0605 (Tex. Supreme Ct. June 18, 2021)