Mass Law Blog

Nonprofit Copying and Publication of Laws “Incorporated By Reference” is Fair Use

by | Oct 26, 2023

By Lee Gesmer and Andrew Updegrove

 Every citizen is presumed to know the law …  and it needs no argument to show… that all should have free access to its contents.

U.S. Supreme Court in Georgia v. Public.Resource.Org (2020)

Many private organizations promulgate best-practice standards. Two examples you might be familiar with are the National Fire Protection Association (NFPA) and the American Society  for Testing and Materials (ASTM). 

In the U.S., unlike most foreign countries, standards are developed “from the bottom up” by the private sector, rather than “from the top down” by government agencies or quasi-public bodies. In keeping with this division of labor, government agencies have come to rely extensively on private sector standards developers to provide standards suitable for adoption as regulations.

Federal law permits federal agencies to incorporate privately developed standards into law by referencing them in the Federal Register without reproducing them there. The Code of Federal Regulations (CFR) has more than 27,000 incorporated standards. States and municipalities do this as well, adding to that number. Once adopted the standards carry the force of law.

These private-government relationships are crucially important – they leverage specialized knowledge and industry expertise to formulate robust and reliable standards that the government could not create by itself, and save untold millions of tax dollars in avoided costs for government agencies that would otherwise have to generate them. The standards organizations that provide standards referenced into law, in turn, gain legal legitimacy and wider application for their standards.

There is also a commercial side to these relationships – many standards organizations support themselves in part by the sale of their standards.

Public.Resource.Org (Public Resource) is a nonprofit group that disseminates legal materials. Its website has posted thousands of standards, including those produced and copyrighted by ASTM. ASTM (along with two other standards organizations) sued Public Resource for copyright infringement. The case has been working its way through the courts for a decade. Absent a successful appeal to the Supreme Court, the Court of Appeals for the District of Columbia finally decided the issue on September 12, 2023. It held that the non-commercial dissemination of these standards as incorporated by reference into law constitutes copyright fair use, and therefore cannot support liability for copyright infringement.

As we have observed on many occasions, copyright fair use is an unpredictable legal doctrine. Often, the outcome seems to be in the eye of the beholder – the judge or judicial panel – rather than the result of any predictive legal test. A recent example of this is Goldsmith v. Warhol: a federal district court held that Warhol’s use of Goldsmith’s photo of Prince was fair use. The Second Circuit reversed, holding that it wasn’t. The Supreme Court upheld that ruling, but under a different rationale from the Second Circuit. Three courts, three different approaches to fair use. For another example see Final Thoughts On Google v. Oracle. The result is a confusing body of law that lacks predictability for the copyright community, both authors and the lawyers that are asked to advise them.

D.C. Circuit’s Holding in ASTM

While Warhol involved art and Oracle software, ASTM involved privately developed technical standards that had been incorporated into law “by reference.” 

There is no question that in most cases technical standards are copyrightable – that is, they reflect sufficient originality to be protected by U.S. copyright law. Hence, without an affirmative defense Public Resource’s reproduction and distribution of ASTM’s standards infringed its copyrights. Public Resource’s defense was copyright fair use.

The D.C. Circuit applied – as it must – the four-factor fair use test:

Purpose and Character of the Use. Under the first factor it found that the “purpose and character“ of Public Resource’s nonprofit status favored fair use. Further Public Resource’s use of the standards – to provide a free repository of the law – is “transformative,” a key issue in any fair use case. While in most cases the term “transformative” involves changes to the work, here the court construed it to mean a transformative “use” of the work. 

Nature of the Copyrighted Work. Factor two also favored fair use. Because the court viewed the standards as “factual” in nature – a conclusion we find questionable – it conclude that they “fall at best, at the outer edge of copyright’s protective purposes.” Factual works are often given “weak” or “thin” copyright protection, and because protection is weaker for such works, it’s easier to establish fair use.

Amount and Substantiality of the Portion Used. Under factor three, although Public Resource copied the standards in their entirety, the court found that this was necessary in light of the purpose. “If an agency has given legal effect to an entire standard, then its entire reproduction is reasonable in relation to the purpose of the copying . . ..” This is not unusual in the context of copyright fair use – many fair use cases involve comprehensive copying. Oracle is a good example of this. 

Effect of the Use Upon the Potential Market for or Value of the Copyrighted Work. Lastly, the fourth fair use factor required the court to consider the “market harm“ caused by Public Resource’s copying, including any substantially adverse impact on the “potential market“ for the original standards. While the court observed that it “seems reasonable” to suppose that economic harm might result, it found that the plaintiffs could not quantify past or future financial harms, relying instead on “conclusion, assertions and speculation.“ In any event, even if Public Resource’s free postings lowered the demand for the plaintiffs’ standards, this was outweighed by “the substantial public benefits of free and easy access to the law.“ The court concluded that the fourth fair use factor did not tip the balance one way or the other. But because the first three factors “strongly“ favored fair use, it found that Public Resource’s non-commercial posting of standards incorporated into law by reference is fair use.

Legal Precedents Favored Public Resource

The extent to which the law should be in the public domain is not a new issue for copyright law. In 2020 the Supreme Court held that annotations to Georgia’s official statutory code, as government edicts, were free from copyright. In that case the Court didn’t even reach fair use – it held that officials who “speak with the force of law” cannot claim copyright in the works they create in the course of their official duties.” Georgia v. Public Resource

The lower courts have also weighed in on this issue. In Veeck v. Southern Building Code the Fifth Circuit relied on fair use to hold that model building codes adopted by reference could be copied. In Building Officials & Code Administration. v. Code Technologies, Inc. the First Circuit suggested that once a model building code has been adopted into law it is in the public domain, and remanded for further consideration.

Public Resource relied heavily on these cases on appeal, and indeed, these precedents put ASTM and its co-plaintiffs in an uphill battle heading into the appeal to the D.C. Circuit. 

Copyright Fair Use Based On “Public Benefits” 

While not explicitly identified in the Copyright Act, the “public benefit” theory of fair use prioritizes societal and cultural benefits in the application of copyright law. A recent example of this is the Supreme Court’s holding in Oracle v. Google. In this 2021 case the issue was whether Google’s use of Oracle’s Java API (Application Programming Interface) in its Android operating system constituted fair use. While Google copied all of Oracle API and used it commercially, the Court found fair use, based in part on the benefit to the software development industry and technical innovation. As the Court said, “we must take into account the public benefits the copying will likely produce.”

Similarly, in the 2015 Google Book Search decision, Author’s Guild v. Google, the Second Circuit recognized the substantial public benefits of Google’s project in concluding that Google’s verbatim copy of books was protected by fair use.

The D.C. Circuit’s ruling in the ASTM case follows this line of reasoning. Just as there is a public benefit in allowing software developers to use the Java API, and a public benefit in allowing the public to search copyright-protected books for relevant “snippets,” so does the publication of laws incorporated by reference benefit the public by making the law more accessible. However, as we discuss below, it did this at the risk of upsetting the delicate balance between the standards organizations and the governments that benefit from their works.

Was the “Public Benefits” Theory of Fair Use Properly Applied in ASTM?

While the D.C. Circuit’s holding allowing the unauthorized reproduction of standards may fall within the “public benefits” line of fair use cases, in our view there is a risk that the court misjudged the interplay between standards organizations, government entities, and public access. Any challenge to the delicate symbiotic private-government relationship risks injury  to the public interest, which benefits from the creation of these standards. Based on our experience working with nonprofit standards organizations for decades, we fear that the D.C. Circuit underestimated this potential disruption. 

Importantly, the court found insufficient an accommodation that many standards developers (including ASTM) have already put in place in response to Public Resource’s challenge. Specifically, they have created public “reading rooms” where every standard they have developed that has been incorporated into law by reference can be read, free of charge, online in read-only mode. The American National Standards Institute (ANSI) hosts an “IBR Standards Portal” offering one stop access to the incorporated by reference (IBR) standards of a dozen major standards organizations can be accessed, as well as links to another sixteen standards organizations reading rooms with links to their own IBR’d standards.

As noted, many standards organizations charge a fee for copies of their standards. In the case of many traditional standards developers, such fees comprise a major, or even the majority, of the budgets of the organizations. Developing standards is inherently time-consuming and expensive, and in some cases (e.g., organizations that develop building codes), most or all of the production of such organizations is referenced into law. In other cases, standards were never intended for referencing into law, but have been nonetheless, without notice to, or consent by, the organization that developed them. The revenues from sales and licensing are reinvested into research, development, and enhancement of new and existing standards. Respecting copyright protects the investments of these organizations in developing standards, ensuring they can fund their continuing operations and standards development and providing incentives to continue to create these essential public goods.

The unauthorized distribution by nonprofits risks reducing those revenues and incentives by offering a free alternative to purchasing or licensing the standards. This, in turn, risks slowing down the frequency of updating existing standards and innovating new ones, potentially leaving them outdated or less applicable to evolving industry needs.

This may prove to be the case if the implications of the decision extend beyond nonprofit vendors to for-profit companies. Some for-profit companies already do sell copies of standards without first paying for the rights to do so. It is difficult to see how the court’s rationale – finding fair use when a nonprofit engages in this behavior – does not extend to for-profit sales of standards. 

Our bottom line takeaway: the implications of this decision on private standard-setting organizations and their business models may be far reaching. Hopefully, there may be a legislative solution that may provide relief.  On March 17, 2023, Darrell Issa (R CA) introduced proposed amendments to amend the Copyright Act with bipartisan support from seven representatives from each party. If enacted, the bill would void a fair use defense against a claim of infringement of an IBR’d standard if that standard “is displayed for review in a readily accessible manner on a public website,” without cost.

We support this common sense ratification of the public reading room approach and hope that the bill is adopted.

American Society for Testing and Materials v. Public.Resource.Org., Inc. (D.C. Cir. Sept. 12, 2023).