When Dennis R. Colgan, director of computer services at South Seattle Community College, received a letter last year from the Software and Information Industry Association accusing the college of pirating software, he thought it was a scam. As far as he knew, the college used only legal copies of software. But at the association's insistence, South Seattle inventoried the software on all its computers. The software group considered some of what turned up to be pirated, and demanded that the college pay $20,473 to the group's copyright-protection fund.

Then it was the software association's turn to feel cheated. The Washington State attorney general's office said the college did not have to pay the fine, citing a U.S. Supreme Court interpretation of the 11th Amendment to the Constitution. The court ruled in 1999 that the amendment, which shields states from paying damages in federal lawsuits, also protects state entities, including colleges, from liability for infringement of intellectual property.

The software industry isn't taking that answer lying down. It is urging Congress to approve legislation that would pressure states and their institutions, including public colleges, to waive their 11th Amendment immunity in infringement cases. Other industries have expressed concerns about public institutions' infringing on their patents and trademarks. They, too, want Congress to intervene.

For their part, higher-education groups are fighting the proposal, out of worries that it could inadvertently cripple their ability to protect their own intellectual property. Some in academe also fear that they would be subjected to unfair fines from the software industry.

Congress Steps In

It's difficult to know how often colleges invoke the 11th Amendment shield, also known as sovereign immunity, to avoid paying for allegedly pirated software. Higher-education groups don't track such incidents. Keith M. Kupfershmid, vice president for intellectual-property policy and enforcement at the software-industry association, estimates that about once every other month the group receives a complaint, usually through its telephone hot line or Web site, that a public college has pirated software. Lawyers for the accused colleges routinely raise sovereign immunity when their clients are asked to pay fines, says Mr. Kupfershmid.

Faced with that response, "there's nothing we can do," he adds.

But the Intellectual Property Protection Restoration Act of 2003 could change that. The legislation, introduced in the House last month by Rep. Lamar Smith, a Texas Republican, and Rep. Howard L. Berman, a California Democrat, would not revoke the states' immunity. Rather, the bill would allow a state or its institutions to collect damages for infringement of their own intellectual property only if the state voluntarily waives its own 11th Amendment immunity to paying such damages. Sen. Patrick Leahy, a Vermont Democrat, introduced the same bill in the Senate last month.

"States now have the ability to infringe copyrights, patents, and trademarks with impunity," Mr. Smith said at a hearing in June to discuss his legislation. "And states are increasingly using this as a defense to infringement claims." The hearing was before the House Judiciary Committee's Subcommittee on the Courts, the Internet, and Intellectual Property, of which Mr. Smith is chairman.

Higher-education groups fought a similar bill that was introduced last year, and after it was debated in the Senate Judiciary Committee in February 2002, the National Governors Association and the National Association of Attorneys General had also voiced concerns. That bill died in committee.

But Representatives Smith and Berman are undeterred. "That doesn't mean we shouldn't try again," says a House aide.

The bills have attracted support outside the software industry. For example, they are endorsed by the U.S. Copyright Office and the American Bar Association.

The Recording Industry Association of America also supports the legislation, which could give the group another tool with which to fight online music piracy. Recording studios might be able to collect damages from state colleges when students download music in violation of copyright law. Amanda Collins, a spokeswoman for the recording-industry association, declines to say whether the recording industry would start suing colleges if the legislation is adopted.

Trading Threats

On Capitol Hill, the software association, which represents more than 600 software makers and content providers, has been complaining about what it says is colleges' reliance on sovereign immunity to escape paying for software that they use.

During the House subcommittee hearing on the issue this year, Mark Bohannon, the software association's general counsel and senior vice president for public policy, cited a case at the Nashua/Claremont campus of New Hampshire Community Technical College. Mr. Bohannon gave the committee a copy of a 1998 letter from the New Hampshire attorney general's office to the software association, which said that the college would not pay $50,000 in damages to the software-industry group and would stop training students in the use of the software if the group sued the college.

Nancy J. Smith, the assistant attorney general who wrote the letter, did not return phone calls from The Chronicle.

Mr. Bohannon also gave the committee letters to the association from lawyers for Washington State who, on behalf of South Seattle and Shoreline Community College in Shoreline, Wash., cited the 11th Amendment as a shield against paying fines levied by the software association for piracy.

Mr. Bohannon said that in the six years leading up to the 1999 Supreme Court decision, the software-industry group identified a total of 39 cases in which public colleges had violated copyrights by using software without a license.

Following that court's ruling, the software-industry group temporarily stopped tracking infringement cases from state institutions, thinking the data were no longer needed. As a result, the group hasn't figured out how much money the industry has lost because of illegal copying of software by colleges, says Mr. Bohannon. Mr. Kupfershmid resumed tracking the cases about a year ago.

Worried About Fines

College administrators and their lawyers fear that, under the legislation, public colleges could be unjustly burdened with fines.

"Colleges and universities are pretty big institutions, and they have a lot of computers in them," says Derek L. Edward, an assistant attorney general for Washington State. "We do our best to police our networks and educate our employees. But there's always a possibility that somebody will put a rogue or unauthorized piece of software on their computer."

Administrators at the community colleges accused by the software industry of copyright infringement say they are baffled that the industry is trying to portray their institutions to Congress as software pirates. "It floors me," says Mr. Colgan, of South Seattle. "Here's a relatively small, working-class community college in Seattle, and we're dinged by a very large organization."

To perform the audit that the association requested, Mr. Colgan and his staff spent 500 hours checking to see whether software from about 1,000 vendors was installed on 1,300 computers. He concluded that the college had failed to remove 21 copies of Macromedia Dreamweaver from machines in one computer laboratory when a class moved to a different room -- but that the software, which helps people build Web sites, had lain unused. And he determined that someone without the college's permission or knowledge had installed 19 copies of software, some of which was also Macromedia's, on other computers.

He says the software-industry group's fine was excessive, especially since South Seattle didn't intentionally use software without a license and, once it discovered the software, removed it from its computers.

"They tend to want to believe you're guilty, and you have to prove yourself innocent," says Robert J. Young, district legal counsel for the Dallas County Community College District, in Texas. "You just have to be willing to stand up for the autonomy of your institution."

When the college was accused of piracy about 10 years ago, administrators agreed to pay a fine because they thought the case was an egregious copyright violation, says Mr. Young. But in another case, which happened about five years ago, the college refused to pay a fine. The college wasn't able to cite the 11th Amendment as a defense, however, since Texas' community-college system is not a state institution.

Protection From Poachers

Officials from several higher-education groups, including the American Council on Education, the National Association of State Universities and Land Grant Colleges, and the Association of American Universities, say they support making public colleges liable for infringement. But those organizations don't represent community colleges, which have received many of the piracy accusations.

The organizations also are troubled that the legislation now in Congress would give state governments, not colleges, the authority over whether to waive colleges' 11th Amendment immunity. That would be a problem, in particular, for colleges with robust technology-transfer programs that fear the legislation could undermine their efforts to protect from infringement their patents, copyrights, and trademarks. If a state government declined to waive its immunity, that state's public colleges would then be unable to sue to protect their own intellectual property.

"The state governments have indicated that they're very disinclined to waive sovereign immunity," says John C. Vaughn, executive vice president of the Association of American Universities.

For colleges, a lot is at stake. They earn millions of dollars from their inventions and spend plenty in legal fees to protect them from poachers. According to a survey by the Association of University Technology Managers, in 2001 -- the latest year for which figures are available -- the University of California system earned $66.7-million in patent-royalty income, the University of Florida earned $28.5-million, and the University of Washington earned $25-million.

And the National Collegiate Athletic Association expects to earn $400-million this year from licensing the exclusive rights to broadcast its sporting events.

"It is clear that states garner enormous profits from their own intellectual property, while sometimes brazenly infringing the intellectual property of others," said Representative Berman at the Judiciary subcommittee hearing.

But college administrators say public institutions, for the most part, don't infringe on patents, trademarks, and copyrights.

"We just don't do that," says Georgia K. Harper, a lawyer for the University of Texas System and an expert on copyright law, of software piracy.

And a study released by the General Accounting Office in September 2001 found that a total of only 37 lawsuits were filed against state colleges for infringement of intellectual property from 1985 to 2000.

'A Whipping Boy'

"Higher education is being used as a whipping boy in order to try to get something the industry believes it needs," says James F. Shekleton, general counsel for the South Dakota Board of Regents.

Leslie J. Winner, vice president and general counsel of the University of North Carolina system, says the legislation is overkill.

"Given that what they're proposing to do has the potential to severely injure every higher-education institution in the country, the vast majority of whom are completely innocent," she says, "it makes you wonder whether the remedy is warranted by the offense."

Furthermore, Ms. Winner says, software companies can already use the 14th Amendment to sue state colleges for piracy. That amendment's due-process clause allows private property owners to be compensated when the government seizes their property. Ms. Winner says software makers also can use the clause to collect money from someone who intentionally copies software in violation of copyright law. The suits would be appropriate in the most egregious piracy cases, she adds.

Those who support the legislation, however, argue that the GAO study understates the number of conflicts, since it considers only cases in the legal system. "We're not afraid to go to court to enforce our rights," says Mr. Bohannon. "But our approach has been to work these out prior to going to court."

Mr. Bohannon and other proponents of the bill say it doesn't matter how often states infringe. The issue is one of basic fairness, they say.

An Illegal Law?

At least one expert on sovereign immunity argues that the legislation is unconstitutional. William E. Thro, general counsel for Christopher Newport University, in Newport News, Va., who is also deputy state solicitor for Virginia, says the government cannot require individuals to relinquish their constitutional rights in exchange for accepting a benefit. The same principle can be applied to states' constitutional rights to sovereignty, Mr. Thro says. The proposed law is illegal since it would require states to give up their sovereignty as a condition of protecting their intellectual property, he says.

Paul Bender, a law professor at Arizona State University at Tempe, has weighed in on the side of industry, urging Congress to change the law and taking a stand opposite to that of state-university administrators. He represents the Property Owners Remedy Alliance, a group made up of companies and trade associations that hold copyrights.

"Why shouldn't the states pay when they steal somebody else's property," he asks, "just the way everybody else pays?"