ASTM v. PublicResource.org: Copyright

American Society for Testing and Materials v. Public.Resource.Org, Inc., No. 17-7035 (D.C. Cir. Jul. 17, 2018)

The panel, citing “serious constitutional concerns,” vacated the district court’s finding of trademark and copyright infringement based on PRO’s copying of privately drafted standards that have been incorporated into law in various jurisdictions.  Finding errors in the district court’s dual fair use analyses, the court left for another day “the far thornier question of whether standards retain their copyright after they are incorporated by reference into law.”  The court also left it to the district court to re-apply copyright fair use after further factfinding, and to determine how to apply nominative fair use.

Incorporation into law varies across jurisdictions, as do the legal consequences thereof, across thousands of technical standards (over 1200 ASTM standards in the CFR alone).  Some incorporated standards define legal obligations, while others are “mere references” that “have no direct legal effect on any private party’s conduct,” and there are others in the middle, e.g. that trigger agency obligations or establish eligibility for federal programs.  The court of appeals disagreed with the district court’s blanket treatment of standards for fair use purposes, thus allowing it to avoid the larger constitutional question for some or perhaps all of the infringement claims.

Treating this case as one involving fair use rather than copyrightability also “limits the economic consequences that might result from the [plaintiff] SDOs losing copyright—which they repeatedly emphasize would jeopardize the continued development of high-quality standards—by allowing copying only where it serves a public end rather than permitting competitors to merely sell duplicates at a lower cost.”  And it avoids difficult questions about what happens, for example, when a newer version of a standard becomes incorporated—would older versions regain any lost copyright?  If necessary, these issues might have to be reached on a fuller record.

Fair use: The district court found that the purpose of PRO’s copying was “for the direct purpose of undermining [the SDOs’] ability to raise revenue.” The record didn’t support that conclusion: “by all accounts, PRO distributed these standards for the purpose of educating the public about the specifics of governing law.” Further, the district court failed to consider each standard on its own facts.  This might not require individual factual development as to each standard, but rather might allow for groupings that are fair use-relevant.

As for the commerciality of the use, the district court found that PRO’s use had commercial elements because it distributed identical standards in the same consumer market.  This was too broad a definition of commerciality.  [Happy sigh.]  Although PRO’s copies might serve as substitutes, “little, if anything, in the record indicates that PRO stands to profit from its reproduction.” Even if distributing the standards is part of PRO’s fundraising appeal, “that hardly rises to the level of making this a ‘commercial’ use.” [Happier sigh.]

As a general matter, freely distributing standards incorporated by reference into law furthers the purposes of fair use. Transformativeness is important, and format change isn’t transformation for these purposes, but a purpose to facilitate public access could be transformative without altering the original work. (Citing A.V. ex rel. Vanderhye v. iParadigms, LLC, 562 F.3d 630 (4th Cir. 2009), and Swatch Group Management Services Ltd. v. Bloomberg L.P., 756 F.3d 73 (2d Cir. 2014)).

Exact copying can be important to understand, say, one’s legal obligations, and where this is so, “this factor would weigh heavily in favor of permitting a nonprofit seeking to inform the public about the law to reproduce in full the relevant portions of that particular standard.”  For example, federal law’s incorporation of ASTM specifications to “dictate” whether a retailer of diesel fuel needs to provide additional fuel labels likely favors PRO’s copying, while using ASTM standards as a reference procedure for determining whether gasoline without ethanol has an “[e]vaporated initial boiling point” of “75- 95[°F],” likely doesn’t.  Copying the version that is incorporated in federal law is also likely to be favored over copying a later edition that is not so incorporated (though the court doesn’t here discuss copying prior versions so that the public can see what’s changed over time—something of particular interest as this administration dumps ever more once-public information down the memory hole).

“[W]here knowing the content of an incorporated standard might help inform one’s understanding of the law but is not essential to complying with any legal duty, the nature of PRO’s use might be less transformative and its wholesale copying, in turn, less justified” because paraphrase or summary might be adequate to serve the purpose.  [Would paraphrase avoid an infringement claim based on structure, sequence, and organization? The court seems to assume the answer is yes, and I think it should, but I’m not confident it would.  Query also how much room there is to rephrase a reference procedure for determining an initial boiling point; that sounds a little merger-y to me.]  Purpose has to be assessed use by use, even though that may be difficult.

Factor two: “All of the works at issue here fall at the factual end of the fact-fiction spectrum, which counsels in favor of finding fair use.”  But the district court found that because technical standards “are vital to the advancement of scientific progress in the U.S.,” they are “exactly the type of expressive work that warrants full protection under . . . the Copyright Act.” If these were “ordinary technical standards used for no public purpose,” the court of appeals might have agreed. [Though it shouldn’t have! Patent and copyright are different, and “science” now means something very different than it did in “Science and Useful Arts.”]  But these standards have all, in some capacity, been incorporated by reference into law, and, “the express text of the law falls plainly outside the realm of copyright protection.” Standards incorporated by reference into law are thus, “at best, at the outer edge of ‘copyright’s protective purposes,’” though just how far at the edge depends on the degree of incorporation, as above.

Factor three: Must be considered standard by standard, in light of PRO’s purpose.  “If PRO limits its copying to only what is required to fairly describe the standard’s legal import, this factor would weigh strongly in favor of finding fair use here, especially given that precision is ten-tenths of the law.”  So where specific provisions are incorporated into law, maybe you can only copy those provisions [and I presume any provisions required to understand those provisions—the court of appeals doesn’t mention cross-references, but given its discussion, definitional and other foundational provisions would have to be fair game as well].  Where the law refers generally to a standard’s specifications, by contrast, a greater amount of copying would be allowed. “And where the incorporation merely makes reference to an external standard, but that standard does not govern any conduct, perhaps the copier’s purpose could be achieved with only a paraphrase or a summary.”

Factor four: first, the district court erred in presuming market harm based on PRO’s [nonexistent] commercial purpose. The record didn’t show how serious any adverse impact on the SDOs’ market might be.  On remand, the district court should consider that (1) the SDOs already make copies of their standards freely available online (in “controlled reading rooms”), presumably “without entirely cannibalizing sales of their standards.”  How much additional harm could PRO’s copying cause?  (2) The market harm question has to be addressed with reference to the legal alternatives—that is, if PRO were only to reproduce the portions of a longer standard that were actually incorporated into law, “would there still be a vibrant market for the standards in their entirety?” [There are a couple of ways to read this, but I think one significant point is this: suppose that partial copying had the same effect on the market as full copying.  Given that such partial copying is fair use, then the marginal market impact of PRO’s infringing use would be zero.  Of course, partial copying might not have the same effect on the market.]  (3) What’s up with derivative works?  Because SDOs routinely update their standards, “in many cases, the edition PRO posts to the internet—and, indeed, the one incorporated into the law—is long outdated.” Does PRO’s copying of old standards harm the market for updated, unincorporated editions?  If the SDOs are to be believed, the primary purpose of technical standards is “to have them used by private industry and other non- governmental users to address technical issues or problems,” indicating that “market demand for the most up-to-date standards would be resilient.”  Does the SDOs’ ability to market derivatives provide an adequate incentive to continue producing standards even with PRO’s copying?  Even after Veeck v. Southern Building Code Congress International, Inc., 293 F.3d 791 (5th Cir. 2002), the successor SDO remains profitable both through sales of codes and of “program services, including consulting, certification, and training.”

Ultimately, genuine issues of material fact precluded summary judgment on copyright fair use.

Judge Katsas concurred to emphasize that law cannot be copyrighted and that the majority opinion was pretty clear that “[W]here a particular standard is incorporated as a binding legal obligation, and where the defendant has done nothing more than disseminate it, the Court leaves little doubt that the dissemination amounts to fair use.”