LII’08 [Legal Information Institute, “State Regulation of Intellectual Property”, Cornell Law School, https://www.law.cornell.edu/constitution-conan/article-1/section-8/clause-8/state-regulation-of-intellectual-property, TP]
In the absence of preemptive federal legislation to the contrary, nondiscriminatory exercises of state police and taxing powers are not invalid just because such state laws affect federal copyrights and patents.1 Thus, state safety regulations are not void because they limit or preclude the practice of an invention protected by a federal patent.2 Similarly, a state may prescribe reasonable regulations on the transfer of intellectual property rights to protect its citizens from fraud.3 States may tax royalties received from patent or copyright licenses as income.4
Furthermore, states may provide IP-like protections to material that Congress could regulate under the IP Clause, so long as these provisions are neither (i) expressly preempted by a valid act of Congress, nor (ii) in conflict with the purposes of, or the policy balance struck by, federal IP law.5 For example, before the Copyright Act of 1976, federal copyright law only applied to published works, and many states protected unpublished creative works under “common law” copyright.6 Similarly, in Goldstein v. California, the Supreme Court ruled that states may use criminal law to penalize the unauthorized pirating of sound recordings that (although they are the writings of authors) were not protected by federal copyright law.7
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, tit. II, 132 Stat. 3676, 3728–37 (2018). States may also provide trade secret protections for economically valuable information that is kept secret, even if that information constitutes patentable subject matter.8
However, states may not regulate in the field of copyrights and patents in a way that “conflict[s] with the operation of the laws in this area passed by Congress” or “clashes with the balance struck by Congress” in its IP laws.9 Indeed, a core purpose of the IP Clause’s inclusion in the Constitution was to provide national uniformity in intellectual property law.10 Thus, states cannot offer patent-like protection to the subject matter of an expired patent or to “intellectual creations which would otherwise remain unprotected as a matter of federal law.” 11 For example, states may not use unfair competition law to prevent the copying of items that are not patentable for a lack of novelty or nonobviousness,12 or create a patent-like regime that prohibits the copying of certain unpatented industrial designs.13 Such state laws impermissibly interfere with the federal patent policy that “ideas once placed before the public without the protection of a valid patent are subject to appropriation [by the public] without significant restraint.” 14