The University of Houston got a big win this week when a state appeals court agreed to reverse a lower court ruling that would have allowed a Houston photographer to sue the university for using an aerial photograph the university used to promote its business school.

The Court of Appeals for the First District of Texas determined that the university's copyright infringement of Houston photographer Jim Olive was not a "taking" of his property, an argument typically associated with real estate and not with intellectual property claims. In real estate when the government takes a person's property to build a road or bridge, the owner must be compensated.

In a closely watched case in creative and publishing circles, Olive, who has made a career out of getting difficult and dangerous aerial shots from open helicopters, sued the University of Houston two years ago with a novel argument that using one of his photographs without compensation or permission was an unlawful "taking" under the Texas Constitution, which prohibits government agencies from taking private property without adequate compensation.

Olive tried the approach after the University of Houston rejected his claim that the public university should pay for a photo it used without permission in web and print publications, contending the university has sovereign immunity, a well-established legal principle that protects a state from getting sued.

Olive was elated his constitutional takings case was allowed to proceed last year, but this week he was trying to make sense of what happened. He has never been paid for the picture by the University of Houston, now he can't recover damages and he was ordered by the appeals court to pay the legal fees of the University of Houston, which Olive said he had no idea how he was going to do.

"It just doesn't seem fair to me," he said.

The bigger issue for the creative community, he said, is that the decision means that public institutions in Texas -- including public hospitals, universities and government agencies -- don't have to pay for photographs and other creative content.

"With this, they can just run rampant over copyright and take intellectual property with impunity," said Olive.

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"UH has great respect for artistic talent and federal copyright protections and has routinely paid, and will continue to pay, market value for images provided by artists and professional photographers," said Mike Rosen, executive director of media relations.

Olive discovered the university's business school had been using one of his aerial skyline photos for four years. He sent the university a bill for $41,000, which included $16,000 for the frequent use of the photo and $25,000 for stripping off his credit line when the university allegedly provided a copy to a national magazine for a story about the university's ranking.

Within days, the University of Houston removed the photo from its website and later offered to pay $2,500, according to court documents. When Olive threatened legal action, the university said it was immune from federal copyright lawsuits under the common law principle of sovereign immunity.

Note: This story has been updated to include comment from the University of Houston.