A non-profit organization that develops and sells technical standards for use in industry brought suit against a for-profit company that operates an online library of building codes. The for-profit company published on its website the full text of several copyrighted standards developed by the non-profit, which had been incorporated by reference into the International Building Code. This building code, in turn, was adopted as law by the City of Philadelphia and other jurisdictions. The for-profit company made these incorporated standards freely available, though it also sold premium subscriptions for enhanced features. The non-profit derived significant revenue from licensing and selling its standards, including those incorporated into law, and did not authorize the copying.

The case was first heard in the U.S. District Court for the Eastern District of Pennsylvania. After limited discovery and a hearing, the District Court denied the non-profit’s motion for a preliminary injunction, concluding that the for-profit company was likely to succeed on its fair use defense. The District Court found that the company’s publication of the standards for the purpose of public access to the law was transformative, even though the use was commercial in part, and that the standards, as incorporated into law, were primarily factual in nature. The District Court also found that copying the entire standards was reasonable because the law incorporated those standards in full, and that the effect on the market for the standards was at best equivocal.

On appeal, the United States Court of Appeals for the Third Circuit affirmed the District Court’s denial of the preliminary injunction. The Third Circuit held that the for-profit company is likely to succeed on the merits of its fair use defense, as three of the four statutory fair use factors favored fair use and the fourth was equivocal. The order denying the preliminary injunction was affirmed. View “American Society for Testing & Materials v. UPCODES Inc” on Justia Law