Management Guide to Intellectual Property for State Departments of Transportation (2015)

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87 This chapter details five important case studies that illustrate IP management challenges. These cases provide practical examples of the information discussed throughout this Guide. 9.1 Mechanically Stabilized Earth Wall During the early 1970s, the Georgia Department of Transportation (Georgia DOT) began allowing its contractors to use mechanically stabilized earth (MSE) retaining walls as alternatives to traditional cast-in-place (CIP) concrete retaining walls. At the time, MSE retaining walls were understood to be subject to patents issued to French inventor Henri Vidal (181). In 1971, Vidal established a U.S. corporation, the Reinforced Earth Co. (RECO), as the exclusive U.S. licensee of his patents (182). The RECO retaining wall used a cruciform-shaped facing block with steel straps extending into the retained backfill as reinforcement. However, RECO and Vidal would aggressively challenge other variants of MSE walls (such as those using different facing blocks and different reinforcement methods). In some cases, RECO obtained rulings that its competitors’ products infringed the Vidal patents, which effectively stopped use of the infringing products in the United States (183). In other cases, RECO challenged the validity of its competitors’ patents (citing the Vidal patents as prior art), and its competitors claimed that the resulting “cloud” on their patents impinged their ability to develop a marketable product (184). RECO also sued its competitors for misappropriation of RECO’s trade secrets, such as aspects of its proprietary design and construction methods that were not disclosed in the Vidal patents (185). As a result, there was very little competition for MSE walls; RECO effectively had a monopoly on MSE retaining wall construction for all state DOTs (186). Use of the MSE retaining wall as an alternative to CIP walls was effective at reducing the cost of construction for the Georgia DOT in the early 1970s, from $60/ft2 for CIP walls to $45/ft2 for MSE walls (187). However, Georgia DOT contractors were required to subcontract with RECO to design and build the proprietary system. The Georgia DOT began to believe that the RECO walls were more expensive than they needed to be, and that some competition was needed to reduce prices. The Georgia DOT also believed that RECO’s proprietary design methodology was overly conservative, further increasing the price of the RECO walls. In the early 1980s, the Georgia DOT developed an alternative MSE wall, known as the Georgia Stabilized Embankment (GASE) wall. This technology was developed by Georgia DOT employees with the understanding that the Georgia DOT (and not its employees) would own all IP rights (although the Georgia DOT did not attempt to patent the system). Relying on large-scale labo- ratory test results performed by the California Department of Transportation (Caltrans) on the effectiveness of wire mesh for earth anchoring, the GASE wall used a steel grid (rather than RECO steel strips) as the reinforcement material (188). The GASE wall also used a more rounded C H A P T E R 9 Case Studies

88 Management Guide to Intellectual Property for State Departments of Transportation facing block than did the RECO wall. The Georgia DOT developed its own method of analyzing the GASE wall based on traditional soil mechanics (189), and developed a computer program to design GASE walls independent of the proprietary RECO design methodology. Nevertheless, RECO believed that the GASE design infringed the Vidal patents and threatened legal action. The Georgia DOT and RECO reached a settlement in which Georgia DOT was required to pay a royalty of $1/ft2 for every GASE wall, with royalty payments made directly to Vidal, not to RECO (190). In exchange, RECO granted Georgia DOT a sub-license to the Vidal patents. The sub-license arrangement was in force through August 1989 (191). The Georgia DOT considers this experience to have been a success, as it created competition for MSE walls. Contractors had the choice to subcontract with RECO to build the proprietary Vidal wall, or the contractors could build the GASE wall (and include $1/ft2 for royalty fees in their bid price). Contractors electing to use the proprietary RECO wall would take on design-build responsibilities, whereas the Georgia DOT would design the GASE wall (using its internally developed software and methods) for contractors electing to build the GASE wall. This arrange- ment was effective in reducing the price of MSE walls, from approximately $45/ft2 for the RECO wall in the late 1970s, down to an average of $32.74/ft2 for the RECO wall (and $29.61/ft2 for the GASE wall) in 1984 (192). It also created a local cottage industry for manufacturers who supplied the facing block and reinforcing grid for the GASE wall. The GASE wall was not adopted by other state DOTs (although the GASE wall was based in part on the stabilized earth system developed by Caltrans, suggesting that other state DOTs were taking similar approaches to work around the Vidal patents). In the early 1990s, shortly after the RECO sub-license agreements (and certain Vidal patents) expired, contractors stopped opting to build the GASE wall. By that time, competitors were able to bring their own variants of the MSE wall to market using non-metallic geotextiles or polymer geogrids as the reinforcement material, without concerns about infringing the Vidal patents. To some extent, the research and innovation by state DOTs that was conducted during the time the Vidal patents were active facilitated entry into the marketplace by competitors once the patents had expired. 9.1.1 Case Analysis: MSE Wall The GASE case study illustrates a state DOT actively seeking a workaround to avoid the monopoly costs (to itself and its contractors) created by the U.S. patent system. It also shows the IP management strategy of many private entities. In many cases, private organizations seek to aggressively protect their IP and to leverage it via product development and licensing. The private firm RECO was able to capitalize on its IP in an industry where the key customers were state DOTs. Although the Georgia DOT was successful in introducing a competing technology, RECO was still able to profit from the new technology as a result of its IP ownership. It can be argued that the success of GASE was due in part to the fact that the Georgia DOT and Caltrans did not attempt to protect their IP but effectively devoted their innovations to the public domain. Also, the Georgia DOT recognized potential legal conflicts over IP ownership and resolved those conflicts with the patent owner and licensee, shielding its contractors from potential liability. It is significant that the Georgia DOT was proactive in managing this technology in order to help decrease cost and to bring new innovation to the marketplace. 9.2 Paver Placed Surface Treatment In approximately 2000, the Vermont Agency of Transportation (VTrans) identified paver placed surface treatment (PPST), or chip-seal, as a potentially cost-effective alternative to the traditional mill-and-fill method of resurfacing highways (193). VTrans understood the PPST

Case Studies 89 method to be covered by a U.S. patent (194), which describes first coating the road with a layer of bituminous binder, followed by a thin layer of aggregate coated with a bituminous paste. The French patent owner also registered the trademark NovaChip in the United States (195), and the patented chip-seal method was marketed as NovaChip by SemMaterials, L.P. (in certain parts of the United States) and by Midland Asphalt Materials, Inc. (in certain other parts of the United States) under licenses with the patent owner. The licensees (SemMaterials, in particular) actively enforced their licenses by filing patent infringement lawsuits against con- tractors who furnished chip-seal resurfacing under contracts with state DOTs in the licensees’ respective territories (196). Generally speaking, FHWA regulations do not permit federal funds to be used by state DOTs to pay the costs of royalties or premiums for the use of patented or proprietary technology (197). Exceptions to the general rule include research applications “on relatively short sections of road for experimental purposes,” or when the state DOT is willing to certify that the “patented or pro- prietary item is essential for synchronization with existing highway facilities, or that no equally suitable alternate exists.” If acceptable alternatives to the patented technology are available, then the state DOT can generally obtain federal funding for the price that would result from competitive bidding involving both the patented technology and the unpatented alternative (198). VTrans experimented with the use of NovaChip, first on an entirely state-funded resurfacing project in 2001, then on a federally funded experimental demonstration project in 2006. After concluding that NovaChip was a desirable replacement for traditional mill-and-fill techniques, in 2007, VTrans obtained federal funding and issued a solicitation for resurfacing a portion of I-89 (199). The solicitation specifically required the use of “paver placed surface treatment,” although it did not identify NovaChip by name. VTrans included the following pro-competition provision in its solicitation: NOTICE TO BIDDERS. All bid proposals submitted for this project shall be non-proprietary. The State of Vermont will not recognize proprietary bids or other single source proposals (200). VTrans received three bids: two from contractors (Gorman Bros., Inc., and All States Asphalt, Inc.) who held sub-license agreements with Midland Asphalt to use NovaChip, and one from Pike Industries, Inc., which had received subcontractor bids from both Gorman and All States. Gorman bid a price of $2.25/yd2 for the NovaChip work, and All States bid a price of $2.65/yd2 for the NovaChip work. Pike’s bid proposed to use Gorman as its subcontractor (201). Gorman was the overall low bidder, but apparently Midland Asphalt’s sublicense agreement with All States gave All States the exclusive right to provide NovaChip in the territory where this resurfacing project was located. Midland would not allow Gorman to perform the contract, so Gorman withdrew its bid, forfeiting its bid bond of $32,095.60 (202). When Gorman informed VTrans that All States had an exclusive sublicense agreement to provide NovaChip in the ter- ritory, VTrans also disqualified All States for violating the “pro-competition” provision (203). That left Pike as the only remaining bidder. However, Midland Asphalt would not allow Gorman to perform the subcontract work for Pike, given Midland Asphalt’s exclusive sublicense to All States for that territory. Nevertheless, Pike executed the contract with VTrans in June; then, in July, Pike filed a claim with VTrans for the additional cost of hiring All States as its subcontractor (i.e., an additional $0.40/yd2, plus Pike’s additional overhead and profit, for a total claim of $57,600) (204). The claim was denied by VTrans, and Pike appealed to the Vermont Transportation Board (the Board). On appeal, the Board concluded that Pike was not entitled to a contract adjustment (205). Pike was aware at the time of its bid that NovaChip was proprietary, as Pike had performed other NovaChip projects elsewhere in the United States under a sublicense from SemMaterials. Pike also knew at the time that it executed the contract with VTrans that Gorman did not have a valid sublicense for that territory. Pike could have attempted to recover its damages from Gorman

90 Management Guide to Intellectual Property for State Departments of Transportation (given that Pike’s contract price was based on representations from Gorman that Gorman had a valid NovaChip sublicense). Pike could have requested to be disqualified (like All States) for offering to supply a proprietary product, or alternatively, Pike (like Gorman) could have declined to execute the VTrans contract (and forfeited its own bid bond). However, by executing the contract with full awareness of the IP constraints, Pike voluntarily took on the responsibility for the license fee. Although the Board concluded that Pike was not entitled to a contract adjustment, it observed that VTrans had in effect created an “impossible” situation for Pike by soliciting a proprietary product while simultaneously providing that no proprietary proposals were permitted (206). The approach taken by VTrans appeared to be aimed at obtaining federal funding for the entire project, including the NovaChip royalty, violating the spirit of FHWA regulations related to patented or proprietary materials. In order to require the use of NovaChip and still obtain federal funding, VTrans could have certified “that no equally suitable alternate exists,” or sought a ruling from the FHWA that requiring NovaChip was “in the public interest.” Alternatively, VTrans could have solicited traditional mill-and-fill resurfacing, with PPST listed as an acceptable alternative. Then, if a NovaChip licensee prevailed in a competitive bid against the non-proprietary resurfac- ing methods, there would be no problem awarding the bid to the NovaChip licensee. However, if VTrans received a lower bid for a non-proprietary method, federal funding would be limited to the amount of the lower bid. 9.2.1 Case Analysis: PPST The PPST case study illustrates the very limited protection afforded by sovereign immunity regarding patent infringement. State DOTs still must be concerned about patent royalties because their contractors can be liable for patent infringement, and the state DOTs themselves can be liable under state law claims. If the state DOT realizes that its solicitation includes proprietary technology, this should be made clear in the solicitation so that the contractor clearly understands its potential liability. It is also recommended that the state DOT specify acceptable nonproprietary alternatives whenever possible, if for no other reason than to justify federal reimbursement for patent royalties. In an interesting postscript, the PPST patent was subsequently acquired by Road Science, LLC, a successor of sorts to SemMaterials (which was dissolved in bankruptcy). Road Science has continued the aggressive strategy of SemMaterials of suing state DOT contractors for patent infringement for chip-seal resurfacing work performed without a NovaChip license (207). Although the original PPST patent has expired, Road Systems has obtained a new patent describ- ing a similar but purportedly improved method (208). Road Systems has marketed this product as BondTekk, and continues to market NovaChip licenses bundled with BondTekk licenses. Road Systems has informed various state DOTs, as well as contractors purchasing spray pavers, that certain uses of spray pavers and chip-seal treatments may require a NovaChip/BondTekk license. One condition of the license is that the licensee may only use the Road Systems licensed methods for chip-seal treatment, even though the original PPST patent has expired. Roadtec, Inc., a manufacturer of spray pavers whose customers have solicited to purchase licensing agreements from Road Systems, has sued Road Systems in an attempt to have the new Road Systems patent invalidated (209). However, this illustrates that the loss of patent protection does not automatically make the technology available royalty-free to state DOTs. Technology providers are increasingly relying on non-patent methods, including the use of trade secrets, trademarks, and private agree- ments, to maintain proprietary control of technologies that could benefit state DOTs. In the PPST case, state DOT contractors were encumbered by the third-party owner of the IP, which was very willing to enforce its rights. There are cases in which third-party IP is needed or

Case Studies 91 desired. Legal mechanisms and instruments (contracts, licensing agreements, etc.) are in place to facilitate gaining access to third-party IP; however, it is important that state DOT research and development be forward-looking to ensure that state DOT R&D investments target key areas where privately funded R&D is ongoing. 9.3 Guardrail End Terminal In 1990, employees of the Texas Transportation Institute (TTI) of the Texas A&M University System (TAMU) obtained a patent on a guardrail end terminal designed to improve highway safety (210). The terminal, to be installed on the end of a W-beam steel guardrail, included a narrowing throat section. If the terminal was impacted by a vehicle, the W-beam guardrail would be squeezed through the narrowing section, causing the W-beam to flatten and then bend. This reduced the potential for the W-beam to impale the vehicle. The patent was assigned to TAMU upon issuance, and then licensed to Trinity Industries, Inc. Trinity marketed the patented guardrail end terminal to state DOTs as the “ET2000” impact head. The ET2000 impact head was the result of a study proposal funded under a 1985 Cooperative Research Agreement between TTI and the Texas Department of Transportation (Texas DOT) (211). Under the Cooperative Research Agreement, the Texas DOT provided funding for approved research to be conducted by TTI. The funding included state highway planning and research (HPR) funds from FHWA, as well as significant funding from the state of Texas. Under the Cooperative Research Agreement, TTI granted all state DOTs the “right to practice” and “distribute” inventions made with Texas DOT funding (212). In 1992, one of the inventors of the ET2000 impact head, Dr. Dean Sicking, left TTI to become the director of the Midwest Roadside Safety Facility (MwRSF) at the University of Nebraska-Lincoln (213). At MwRSF, Dr. Sicking continued to perform R&D related to guardrail end terminals, obtaining patents on impact heads including the Sequential Kinking Terminal (SKT) (214), Flared Energy Absorbing Terminal (FLEAT) (215), and Beam Eating Steel Termi- nal (BEST) (216) systems. SKT and FLEAT were licensed to Road Systems, Inc., and BEST was licensed to Interstate Steel, Inc., of which Road Systems and Interstate Steel were affiliated Texas corporations. Trinity and TAMU sued Interstate Steel, Road Systems, their common owner, and Dr. Sicking for patent infringement (217). The U.S. District Court for the Eastern District of Texas conducted a Markman hearing (a kind of pretrial hearing) to construe the claims of the ET2000 patent. Trinity and TAMU sought a ruling that the narrowing throat of the ET2000 impact head was not a necessary element of its patent, because the SKT, FLEAT, and BEST systems did not have a narrow throat, but rather used different methods to kink or otherwise deflect the guardrail beam. In September 2000, however, the court ruled that the “squeezing” element of the ET2000 patent necessarily involved “narrowing,” so that any impact head must include a narrowing element to infringe on the ET2000 patent (218). More than 2 years later, in December 2002, the court relied on its Markman claim construction to rule that the SKT, FLEAT, and BEST devices did not liter- ally infringe the ET2000 patent, saying: “There is no evidence that the accused devices contain a narrowing structure” (219). However, the Court held open the possibility that the SKT, FLEAT, and BEST devices might constitute patent infringement under the “doctrine of equivalents,” under which a patent may be infringed by a device that effectively performs the same function in the same way (220). The parties reached a settlement shortly thereafter, before the court ruled on the infringement issue (221). The more significant impact of this case is a September 2002 ruling in which the court ruled that the federal government obtained a paid-up license in the ET2000 guardrail terminal

92 Management Guide to Intellectual Property for State Departments of Transportation under the Bayh-Dole Act (222). The accused infringers (including Dr. Sicking) asked the court to rule that the ET2000 patent was invalid on the grounds that the inventors—including Dr. Sicking—had failed to disclose to the patent office, as required by the Bayh-Dole Act, that the ET2000 invention was developed with federal funds. Trinity and TAMU argued that the ET2000 invention was not covered by the Bayh-Dole Act because it was developed under a contract (the Cooperative Research Agreement) with the Texas DOT. However, the court ruled that FHWA’s HPR funding to Texas DOT was a “funding agreement” subject to the Bayh-Dole Act. Furthermore, by accepting HPR research grant funds under the Cooperative Research Agreement between the Texas DOT and TTI, TTI became a “subcontractor” to the Texas DOT subject to the Bayh-Dole Act (223). Therefore, the federal government had a “nonexclusive, nontransferable, irrevocable, paid-up license” in the ET2000 patent, and TAMU was required to disclose the federal government’s interest at the time it applied for the patent. The court ruled that this did not invalidate the patent (there was no indication that the USPTO would have denied the patent if it had known about the federal funding). However, the determination that the federal government had obtained a paid-up license to the ET2000 patent by operation of law, simply because Texas DOT funded its development with a combination of state and federal funds, has important implications. Shortly after that ruling, the defendants filed a number of new affirmative defenses and motions to dismiss, based on the position that the ET2000 patent could not be infringed by sales of SKT, FLEAT, and BEST devices to federal or state governments. Among other things, the defendants claimed immunity under 28 U.S.C. § 1498, which immunizes contractors who infringe patents on behalf of, and with the authorization and consent of, the federal government (224). The logic behind this argument is that if the federal government obtained a license to the patent by providing funding for a state DOT research contract, then federally funded state DOT contracts to install the infringing devices might also be “on behalf of” the federal government. This would be analogous to the court’s earlier ruling that TTI was a federal subcontractor when it received federal funds through a contract with the Texas DOT. Although a ruling on this argument would be of tremendous importance to state DOTs, the court declined to consider the argument, ruling that the defendants did not raise it in a timely manner. The parties settled shortly thereafter without a ruling on whether the SKT, FLEAT, and BEST devices infringed the ET2000 patent. 9.3.1 Case Analysis: Guardrail End Terminal This case study has many implications for state DOTs hoping to develop commercial products from research funded by state DOTs. Most significantly, if other courts adopt the position that a state DOT contractor who receives federal funds from the state DOT is a federal subcontractor, then a patent owner might not be able to sue the contractor for patent infringement. Second, it is very important to determine the source of all funds used to develop a patentable invention. If federal funding was used to develop the invention, then (following the logic of this court), the invention is probably covered by the Bayh-Dole Act and the federal government has a paid-up license in the invention. Finally, even if federal funding is not used, state law or state DOT grant conditions may confer licenses to the state DOT, other state DOTs, or the federal government. Any such government license could have a major impact on the ability to commercialize the invention, so state DOTs should identify any such license long before the commercialization process begins, or even before making a decision to pursue a patent. (Immediately after the September 2002 ruling in the Trinity Industries case, Dr. Sicking began to make affirmative statements in his subsequent patent applications that the Bayh-Dole Act was “not applicable” to subsequent guardrail terminal inventions, presumably taking the position that no federal funding was involved in the subsequent work [225].)

Case Studies 93 9.4 Mural on Highway Overpass In the early 1980s, in preparation for the 1984 Summer Olympics, the Los Angeles Olympic Organizing Committee commissioned 47 murals to be painted along the Los Angeles freeways (226). One of these murals, Going to the Olympics, was painted by artist Frank Romero on the Alameda Street underpass of California Highway 101 (the Hollywood Freeway). The underpass was considered property of Caltrans. According to Caltrans, all artists painting murals on Caltrans property signed contracts with Caltrans, making the artist responsible for maintaining the murals. “If they don’t, Caltrans has the right to correct the problem in its own way,” said William Koval, head of the Caltrans office overseeing the murals (227). At the time the mural was painted, California had recently enacted the first modern “moral rights” statute in U.S. IP law, the California Art Preservation Act (CAPA) (228). CAPA authorized artists to bring lawsuits seeking damages for the defacement or alteration of recognized works of “fine art,” or to bring lawsuits seeking injunctions to prevent such defacement or alteration, even where the artist did not retain title to the artwork. CAPA also contained a notice provision for works of art that are “part of [a] building,” where the building owner was required to notify the artist before defacing or altering the artwork, in which case the artist would have 90 days to remove the artwork at the artist’s expense and reclaim title to the artwork (229). In 1990, after the mural was painted, a similar provision was enacted in federal copyright law, known as the Visual Artists Rights Act (VARA) (230). VARA authorized artists to bring lawsuits to prevent the inten- tional modification of any work of visual art, even where the artist did not retain title to the artwork (as long as the artist had not transferred title prior to the 1990 enactment of VARA). VARA also provided that, for visual art that is “part of a building,” the building owner was required to notify the artist (via registered mail to the artist’s address on record with the Register of Copyrights) prior to removing the artwork, giving the artist 90 days to remove the artwork at the artist’s expense (231). In 1998, the highway overpass mural was vandalized with graffiti. At the time, the Caltrans policy was to notify both the artist and the Mural Conservancy of Los Angeles, and give them 45 days to clean or repair the murals at their expense. Caltrans notified the Mural Conservancy “to correct it or else” (232). However, Romero said that he was never notified by either Caltrans or the Mural Conservancy (233). (Caltrans acknowledged having no written record of notice to Romero, but said that it attempted to contact Romero by phone [234].) When no action was taken to clean or repair the murals, Caltrans painted over the bottom third of the mural with gray paint. At the time, questions were raised as to whether the Caltrans policy and actions com- plied with VARA and CAPA (235). In May 2001, Caltrans revised its graffiti policy, agreeing in the future to notify artists by certified mail when their murals were vandalized, and putting a temporary moratorium on the practice of painting over the graffiti with gray paint. While the moratorium was in place, Caltrans considered new guidelines for artwork on Caltrans property, including requiring the artist to post a performance bond to cover artwork maintenance for a specified number of years (236). In 2002, the state of California allocated $1.7 million to Caltrans for the purpose of restoring and preserving the murals. Caltrans ultimately transferred the funds to the Los Angeles Depart- ment of Cultural Affairs to apply a protective coating to 17 of the murals (237). Romero’s mural was restored using a $20,000 donation from the Amateur Athletic Foundation of Los Angeles (238), then covered with the protective coating. However, according to Caltrans, “the process proved almost futile” as graffiti returned “[b]efore we could even have the completion ceremony” (239). In July 2006, Caltrans crews covering graffiti again painted over Romero’s mural. Accord- ing to Caltrans, the 2006 incident was accidental (240). To make matters worse, the protective coating did not work as intended, and the paint could not be easily removed without damaging the artwork underneath (241).

94 Management Guide to Intellectual Property for State Departments of Transportation In June 2007, after determining that Romero’s mural could not be salvaged, Caltrans again painted over it (242). This time, Caltrans notified the Department of Cultural Resources the day after the mural was painted over (243). Romero filed suit in federal court in California alleging violations of VARA. Although state governments are traditionally understood to be immune from suit in federal court as a result of the Eleventh Amendment to the U.S. Constitution, Romero argued that the Copyright Remedy Clarification Act of 1990 (CRCA) provided for state govern- ments to be sued for violations of copyright laws such as VARA. Furthermore, Romero argued that Caltrans had waived its right not be sued in federal court by accepting federal highway funds, some of which (according to Romero) were appropriated for mural restoration (244). The federal court disagreed. Although the court agreed that a state agency such as Caltrans could waive its sovereign immunity as a condition of accepting federal funds, there was no evidence that such a condition was attached to the federal highway funds received by Caltrans (245). Further- more, in dismissing Romero’s lawsuit, the court held that CRCA itself was unconstitutional. In order to abrogate the states’ constitutional rights under the Eleventh Amendment, Congress must have found evidence of a pattern of state abuses of copyright laws for which the copyright owners had no remedy. Instead, congressional hearings on CRCA turned up only sporadic evidence of copyright infringement by state governments, mostly by state universities, not state DOTs. “Also, there was no evidence that Congress considered other possible remedies in state courts—for example, claims for the unlawful taking of private property by the state government or breach of contract claims” (246). Taking his cue from the federal court opinion, Romero immediately filed suit against Caltrans in California state court (247). The focus of Romero’s lawsuit was not uncompensated takings or breach of contract, but rather violations of CRCA (because CRCA provided for punitive damages in addition to the costs of repairing the mural). It is questionable whether a state court judgment on CRCA violations would be enforceable, given that copyright law has been preempted by the federal government and one typically cannot bring a copyright action in state court. It appears that Romero and Caltrans arrived at a mutual settlement before any judgment could be reached. In 2011, with the support of Caltrans, the Mural Conservancy began a 15-month-long effort to restore Romero’s mural. Although Caltrans did not concede liability and did not contribute funds to the mural’s restoration, Caltrans did “coordinate permits and logistics, such as coning off sections of the freeway so that work [could] be done.” “It’s definitely a working partnership,” said a Caltrans spokesman (248). 9.4.1 Case Analysis: Mural on Highway Overpass The Olympics mural case study illustrates the general rule that a state DOT cannot be liable even for a pattern of intentional infringement of federal copyright law. However, the case illus- trates that contractors working on behalf of the state DOT may be liable, and the state DOT could find itself subject to suit for state law violations such as uncompensated takings, breach of contract, or even state “moral rights” violations. Best practice would be to assume that any applicable federal or state copyright laws might apply, and to obtain the necessary waivers, per- missions from the copyright owner, or (preferably) title to the copyright as a condition of com- missioning any copyright-protected work. If copyright or license was not obtained from the creator as a condition of performance, then the state DOT should attempt to conform to appli- cable copyright law (e.g., pay the royalty fee to obtain a license, or provide the notice required under moral rights provisions) to shield itself from suit in state court, or to shield its contractors from suit in federal court.