For-profit company can republish ASTM standards incorporated by reference into law

Am. Soc. for Testing & Materials v. UpCodes, Inc., No. 24-1895 (E.D. Pa. Oct. 2, 2024)

ASTM, which produces technical standards, sued UpCodes  for providing free online access to unauthorized copies of ten ASTM standards, all of which have been incorporated by reference into state and local legal codes. ASTM sought a preliminary injunction based on its copyright and trademark claims, which the court denied.

Over seventy percent of ASTM’s revenue comes from the sale of its standards. Along with individual sales, ASTM sells a publication entitled ASTM Standards in Building Codes that contains over 13,000 ASTM standards including the ten at issue here.

“Although local, state, and federal jurisdictions reference ASTM standards in their laws, it is accepted that ASTM does not lobby the government—or other entities—to reference their standards.” Nonetheless, ASTM’s official form and style manual indicates that certain ASTM standards are “developed for reference in model building codes.” Plus, “when ASTM standards are adopted into law, ASTM can market its own compliance-focused training materials.”

UpCodes is a for-profit start-up, which only publishes standards that, in its view, have been adopted into law by specific jurisdictions. Users of the UpCodes website can filter their searches by jurisdiction or by the original publisher of the adopted standard. Any user with an UpCodes account can freely view and copy a supported jurisdiction’s laws , and they can also purchase a subscription to access UpCodes’ premium features, including bookmarking, annotating, and automation tools. Posting these standards therefore “may provide UpCodes with tangential benefits like drawing users to its website, increasing active account numbers, and enabling the collection of user information.”

Each unauthorized copy that UpCodes posted at issue here includes what ASTM describes as “expressly non-mandatory” material, such as explanatory notes, supplementary materials, appendices, and Annexes. UpCodes identifies ASTM as the original publisher. Since promulgating the ten standards at issue, ASTM has published updated versions of nine of them.

When a standard is incorporated by reference,

the incorporated standard may be enforced against regulated entities without being included in the text of the law itself. When this happens, a regulated entity will not find the text of the standard that details their legal obligations in the official public code. They must look elsewhere to access the content of the standard. Often, that access comes with a price. The private standard-developing organizations that create these referenced standards typically copyright their work and charge fees for users to access them.

When federal agencies incorporate by reference privately authored materials, federal law requires copies of incorporated standards to be, at a minimum, available for public inspection at the Office of the Federal Register’s reading room in Washington D.C., and in the promulgating agency’s public library. ASTM also operates an online read-only reading room (with no print or download options) for ASTM standards that have been incorporated into federal law.

But no such law regulates state or local government incorporation by reference. The standards at issue in this case were not available online for free before UpCodes posted them. Although incorporation by reference can save money and work, it can create “serious notice and accountability problems.” “[P]lacing legally binding standards behind paywalls undermines the ‘principle that [government] should provide regulated parties fair warning of the conduct [a regulation] prohibits or requires.’” This may also hinder mechanisms of democratic accountability.

Incorporation by reference can also occur indirectly: A government incorporates by reference a third-party publication. That publication incorporates by reference a separate privately authored standard. Whether incorporation by reference is direct or indirect, neither involve having “the content of the technical standard reprinted in the text of the law itself. Thus, people are typically unable to view the content of these standards unless they pay a fee.”

The Philadelphia Building Code states that the 2018 International Building Code “is incorporated as if fully set forth herein, subject to [] local amendments.” As the IBC’s Chapter on Referenced Standards explains, “[t]he International Building Code contains numerous references to standards promulgated by other organizations that are used to provide requirements for materials and methods of construction . . . . These standards, in essence, are part of this code to the extent of the reference to the standard.” The ten ASTM standards at issue are so incorporated. If individuals violate the Philadelphia Building Code, they can face fines of up to three hundred dollars a day per violation.

Reading the fair use factors in light of copyright’s purposes, UpCodes’ copying was likely to be fair use.

Factor one “considers the reasons for, and nature of, the copier’s use of an original work.” The court deemed UpCodes’ use of the standards “largely noncommercial,” since it didn’t derive any direct monetary profit from publishing them. And the transformative nature of the use outweighed its status as a for-profit company. “UpCodes achieves the distinct objective of making the law freely accessible and educating the public on the contents of binding laws. Unlike ASTM, UpCodes seeks neither to publish industry best practices nor to ‘positively impact[] public health and safety’ by developing high-quality technical standards.” This use had a different character and further purpose from ASTM’s use.

The court declined to see both purposes as “providing information to professionals.” UpCodes focused on standards that have been enacted into law, while ASTM sought to publish standards that improve safety and performance. One objective indication of that different purpose (following Warhol) that weighed in UpCodes’ favor was that ASTM has updated 9 of the 10 standards, but UpCodes doesn’t publish the updated versions because they’re not the law, showing that the reasons for copying were different than ASTM’s reasons for publishing. (Although this isn't a big data case, it follows the pattern, which Warhol may have accelerated, of courts being more confident in identifying different purpose in identical copies than different "character" when the latter requires assessing the meaning of physical changes to the copied work.)

In addition, the use was “justified because it furthers the goal[s] of copyright,” including “enriching public knowledge.” And it was “justified because copying is reasonably necessary to achieve [UpCodes’] new purpose.” As UpCodes explained, “[i]f [it] attempted to express that law using other words . . . it would not be publishing the law of Philadelphia.” The DC Circuit’s decision in Public Resource was persuasive, even though UpCodes is not a nonprofit, given the mostly noncommercial nature of the use. Although the explanatory notes, supplementary materials, and appendices weren’t binding, the court agreed with the DC Circuit that, “because law is interpreted contextually, even explanatory and background material will aid in understanding and interpreting legal duties” and, like legislative history, such materials “may prove [] important for resolving ambiguities in the portions of standards that set forth the directly binding legal obligations.”

Factor two: Technical standards generally “fall at the factual end of the fact-fiction spectrum, which counsels in favor of finding fair use.” And because “the express text of the law falls plainly outside the realm of copyright protection,” “standards incorporated by reference into law are, at best, at the outer edge of ‘copyright’s protective purposes.’” The nature of the work, that is, is that it has been incorporated into law, weighing “heavily” in favor of fair use.

Factor three: It’s ok to copy the whole thing when that’s reasonable in relation to the purpose and character of the use. “[T]his amount of copying was plainly reasonable in relation to UpCodes’ objective.” Like the DC Circuit, the court agreed that this factor “strongly” supported fair use because the copying was limited “to only what is required to fairly describe the standard’s legal import.”  

Factor four: Following Google v. Oracle’s directive that “a potential loss of revenue is not the whole story,” the court analyzed both the source of any market harm and the countervailing public benefits of the copying. Courts must consider “whether enforcing a copyright will allow the copyright holder to gain profits that would ‘interfere with, not further, copyright’s basic creativity objectives’” and balance the monetary effects against the public benefits, a consideration that was “especially weighty” when it came to standards that have been given the force of law.

Using this analysis, the fourth factor didn’t weigh clearly in either side’s favor. It was “plain” that free availability from UpCodes would have a market effect on purchases of the standards from ASTM.  Nonetheless, copyright “should not grant anyone more economic power than is necessary to achieve the incentive to create,” and “ASTM may have other incentives to continue developing technical standards even if some of its standards lose their copyright protection after being enacted into law”: “its mission of promoting product quality and public safety, its professional interest in being recognized as a global leader in standard development, and other monetary benefits that it may derive after its standards are incorporated into law, like profits derived from marketing its own compliance-focused training materials.”

And of course the countervailing public benefits were substantial—there was no requirement that referenced standards enacted by state and local jurisdictions be publicly available, but significant practical value to the public of unfettered access to such incorporated standards. “For example, journalists have explained that this access is essential to inform their news coverage; union members have explained that this access helps them advocate and negotiate for safe working conditions; and the NAACP has explained that this access helps citizens assert their legal rights and advocate for legal reforms.”

Weighing the factors, the use was fair. After all, copyright law is not designed for the primary purpose of providing “a special private benefit” to authors like ASTM. The court didn’t see why incorporation by reference was any different from direct incorporation into law for fair use purposes, since the legal consequences were “virtually indistinguishable.” (Is it even “virtually” indistinguishable? Maybe for the commentary.)

Trademark: This was nominative fair use. In nominative fair use cases, “the alleged infringer uses the trademark holder’s mark to describe the trademark holder’s product, even if the alleged infringer’s ultimate goal is to describe his own product.” Like car mechanics identifying VWs as among the types of cars they repair, UpCodes used ASTM’s mark in a nominative manner. And “the only practical way” for UpCodes to refer to them was to use the term, because the entities that incorporated the standards into law did so.

In the Third Circuit, courts use a modified LOC case in nominative use cases. Under that test, two usually key factors—similarity between the owner’s mark and the allegedly infringing mark, and strength of the owner’s mark—are ignored (because in a NFU situation they wouldn’t actually bear on likely confusion/the use is justified even, or especially, because it’s identical to a strong mark). Although district courts have discretion, four other factors are likely to be relevant: (1) the price of the goods and other factors indicative of the care and attention expected of consumers when making a purchase; (2) the length of time the defendant has used the mark without evidence of actual confusion; (3) the intent of the defendant in adopting the mark; and (4) the evidence of actual confusion. Only if those factors favor a likely confusion finding does the burden shift to the defendant to show that it’s satisfied the NFU test. ASTM didn’t make it to the burden-shifting stage.

Here, length of defendant’s use was short and thus not very probative one way or another. But the relevant consumers were sophisticated: ASTM’s standards are “targeted at technical people” including “engineers, architects, builders, and suppliers and manufacturers of construction materials.”

UpCodes’ intent was not to “confuse or deceive consumers as to the product’s source . . . .” Instead, “ASTM” was the only practical way to refer to the standards; its intent was accuracy.

And there was no evidence of actual confusion.

Thus, there was no likely success on the merits.

(It’s not even obvious that there’s more to do for summary judgment, certainly on the copyright claims.)