Licensing Laws

The theory of license has its origins in antiquity and is derivative of the authority of the sovereign. The Oxford English Dictionary defines license as “a permit from an authority to own, use, or do something.” Anglo-American common law tradition includes sovereign authorization of exclusive rights through patents, copyrights, licenses, issuances, permits, proprietaries, prerogatives, and other privileges. In the United States, the power to grant and require licenses is balanced by the constitutional protections of federalism. Under the First Amendment, such licenses require carefully crafted legislation and administrative regulations to ensure that their impingement upon guaranteed rights is minimized while the promotion of targeted public policies is maximized.

Licensing powers are concurrently exercised in the United States by federal, state, and local governments. The licensure of business operations through permits is traditionally a state or local power, while regulation of corporate activities is primarily a federal power based on the commerce clause. The regulation of inventions and creative works through copyrights and patents is primarily a federal power enumerated in Article 1, section 8, of the Constitution. This federal power is complemented by state regulation of trade secrets, rights of publicity, and to the extent not limited by federal power, common law copyright protection. Trademarks and trade secrets are regulated by a combination of federal and state authority. The federal government derives from the commerce clause its authority to regulate these types of intellectual property.

The licensing of actions not commonly associated with expression is given little, if any, First Amendment scrutiny. As the Supreme Court noted in City of Lakewood v. Plain Dealer Publishing Co. (1988), “Laws of general application that are not aimed at conduct commonly associated with expression and do not permit licensing determinations to be made on the basis of ongoing expression or the words about to be spoken, carry little danger of censorship.” The licensing of expressive acts, however, must be carefully reviewed. In cases where regulations discriminate on the basis of the content of speech, the Court will apply a strict scrutiny standard that it would not apply in the case of content-neutral regulations. A federal appeals court thus observed in Bery v. City of New York (2d Cir. 1996), “A content-neutral regulation may restrict time, place, and manner of protected speech, provided it is ‘narrowly tailored to serve a significant governmental interest’ and ‘leaves open ample alternative channels for communication.’”

The Supreme Court has upheld the right of the federal government to regulate businesses and individuals engaged in interstate and international communication despite First Amendment concerns. In Federal Communications Commission v. Pottsville Broadcasting Co. [Page 676](1940), the Court upheld the regulation of radio frequencies on the grounds of “public convenience, interest, or necessity” and in National Broadcasting Co. v. United States (1943) asserted, “The facilities of radio are limited and therefore precious; they cannot be left to wasteful use without detriment to the public interest.” Similar regulation now extends to television, wire, satellite, and cable communications.

State and local entities have established the right to regulate adult bookstores and related businesses engaging in expressive activities through the issuance of licenses, although such businesses clearly have First Amendment protections. This right to regulate, however, is not unfettered. The licensing laws must have procedural safeguards against censorship; as the Court held in FW/PBS, Inc. v. City of Dallas (1990), “the licensor must make the decision whether to issue a license within a specified and reasonable time period during which the status quo is maintained, and there must be the possibility of prompt judicial review in the event that the license is erroneously denied.” Furthermore, governments “cannot make arbitrary distinctions based on the manner of speech or the media used for publication,” as stated in Forsalebyowner.com v. California Department of Real Estate (E.D. Cal. 2004).

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