DC Circuit: “Fair Use” Means Sharing Safety Standards Incorporated by CPSC is Fair Game
A recent court decision that does not expressly mention the U.S. Consumer Product Safety Commission (CPSC) at all may nonetheless have significant ramifications for consumer products companies and other product safety-related stakeholders across, and for, CPSC itself. In Am. Soc’y for Testing & Materials v. Public.Resource.Org Inc. No. 22-7063 (D.C. Cir. Sept. 12, 2023) (ASTM IV), the U.S. Court of Appeals for the D.C. Circuit held that “the non-commercial dissemination of [technical] standards, as incorporated by reference into law, constitutes fair use and thus cannot support liability for copyright infringement.”1 This holding could dramatically reshape how CPSC establishes – and companies comply with – consumer-product laws and regulations.
In 2013, ASTM and two other technical standards development organizations (SDOs) – the National Fire Protection Association (NFPA) and the American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE) – sued Public.Resource.Org (PRO). The SDOs alleged that PRO’s online distribution of certain standards developed and published by the SDOs violated those organizations’ copyrights in those standards. At the time of that suit, some of the standards that PRO had posted to its website had been incorporated into law by various agencies, while others had not. The district court granted the SDOs’ motion for summary judgment, rejecting PRO’s claim that its dissemination was fair use.2
In its first foray into the case, the D.C. Circuit reversed and remanded, directing the parties and the district court to “develop a fuller record regarding the nature of each of the standards at issue, the way in which they are incorporated, and the manner and extent to which they were copied.”3 In remanding, the D.C. Circuit noted that “there is reason to believe ‘as a matter of law’ that PRO’s reproduction of certain standards ‘qualif[ies] as a fair use of the [SDOs’] copyrighted work,’” but that the court needed more information in the factual record to settle that question.4
On remand, the district court ultimately found that PRO’s posting of 184 incorporated standards was fair use, its posting of 32 standards PRO had not demonstrated had been incorporated was not fair use, and, for one standard, partial posting was fair use.5 However, the district court declined to enjoin PRO from posting unincorporated standards, as PRO agreed to voluntarily take down unincorporated standards and an injunction could prove problematic in the event any of these standards were later incorporated.6
The SDOs appealed, and the D.C. Circuit, applying the four statutory factors of fair use, determined that three favored PRO and one was equivocal. Namely, the court held:
- Purpose and character of the use: PRO’s use of the SDOs’ incorporated standards “is for nonprofit, educational purposes” and had transformed the works by putting them to a different use. Specifically, PRO seeks to tell the public “what the law is, not what industry groups may regard as current best practices.”7
- Nature of the copyrighted work: “This factor strongly supports a finding of fair use” simply because a standard incorporated into law is the law and thus “falls plainly outside the realm of copyright protection.”8
- Amount and substantiality of the portion used in relation to the copyrighted work as a whole: As PRO “posts standards that government agencies have incorporated into law – no more and no less,” the extent of this reproduction is necessarily coextensive with the extent of the incorporation and thus consistent with finding fair use.9
- Effect on market or value of the copyrighted work: The court noted that the SDOs “press heavily on what seems to be a common-sense inference: If users can download an identical copy of an incorporated standard for free, few will pay to buy the standard.”10 However, “[l]ike the district court, [the D.C. Circuit found] it telling that the plaintiffs do not provide any quantifiable evidence, and instead rely on conclusory assertions and speculation long after [PRO] first began posting the standards.”11 Further, even if the SDOs had been able to demonstrate some concrete financial harm, the court “would also have to consider the substantial public benefits of free and easy access to the law.”12 Thus, the potential effect on the market or value of the SDOs’ incorporated standards “does not significantly tip the balance one way or the other.”13
Ultimately, the D.C. Circuit affirmed both of the district court’s decisions: fair use permits PRO’s dissemination of incorporated standards, and, even though fair use does not permit dissemination of unincorporated standards, no injunction was necessary as “the plaintiffs give us no reason to think that [PRO] will post unincorporated standards again absent an injunction.”14 Given the implications of the decision for the SDOs, discussed below, they may appeal, and thus the Supreme Court may have the final say.
Potential Implications for Stakeholders and CPSC
Consensus technical standards developed and/or published by ASTM and other organizations – including the American National Standards Institute (ANSI) and UL Standards (UL) – are a core of CPSC’s regulatory portfolio, with standards across its jurisdiction adopted by statute or by rule and thus carrying the force and effect of law. Below, we explore how CPSC’s various stakeholders may be affected by ANSI IV:
Manufacturers, retailers, and others along the supply chain for a wide range of CPSC-regulated products are governed by consensus standards turned mandatory upon adoption by CPSC. These range from toys to all-terrain vehicles (ATVs): Section 106 of the CPSIA made ASTM’s F963-07 “Consumer Safety Specifications for Toy Safety” a mandatory standard, 122 Stat. at 3033-35, since updated by ASTM and re-adopted by CPSC, 16 C.F.R. Part 1250, while Section 232 of the CPSIA adopted the ANSI/Specialty Vehicle Institute of America ANSI/SVIA-1-2007 standard, also since updated by SVIA and re-adopted by CPSC, 16 C.F.R. Part 1420.
For large companies, many of whom participate in the standards development process, having to purchase copies of standards (incorporated or otherwise) from SDOs has generally been a sometimes-pricey line item but likely not a barrier to entry to new markets.
However, for smaller companies, particularly solo-entrepreneur start-ups, the costs of purchasing potentially multiple copies of standards may be barriers to entry. Having to spend hundreds or thousands of dollars to buy a standard just to investigate whether entering a market is feasible may stifle even the first tentative exploration of that market. These businesses and individuals will likely be among the biggest beneficiaries of free access to standards that have been made law through incorporation.
Another likely beneficiary of the ASTM IV decision is the consumer advocacy community. Many are actively engaged not only in the safety questions surrounding various product categories, but also in the standards development process itself. Many such groups are also on limited budgets and will likely welcome the cost savings that may provide flexibility to expand their advocacy or be more active in standards development.
Among external stakeholders, those most likely to be upset by the ASTM IV decision are the SDOs themselves, three of which brought the case. While the district and circuit courts noted a lack of specific evidence of concrete financial harms from free dissemination of incorporated standards, the courts did not undermine the “common sense” premise that the organizations derive significant revenue from selling copies of standards. Prior to the decision, incorporation presumably increased this revenue, as entities who may previously have wanted to read a standard as a matter of professional interest now needed to read it as a matter of legal compliance.
As noted above, adoption by incorporation is a common tool for CPSC. Working with the SDOs and, where appropriate, incorporating their standards is also a vital force-multiplier for an agency with fewer than 570 employees and thousands of categories of products to oversee. Congress appropriated US$152.5 million for Fiscal Year 2023, a roughly US$13 million increase over Fiscal Year 2022, but well short of the US$195.5 the agency requested.
In its Fiscal Year 2023 Operating Plan, CPSC lists mandatory standards activity for 23 products, with some of these rulemakings in a long-term status that signaled the agency did not anticipate completing the work in FY23. By contrast, CPSC staff are active in 86 voluntary standards activities, including serving in voting or leadership roles on some of those bodies. It seems unlikely CPSC’s resources would allow the agency to fill the gap left if SDOs’ work were to shrink as a result of potentially reduced revenues.
Going forward, the close working relationship between CPSC and SDOs will likely continue because the agency’s expert but necessarily generalist technical staff need the product-specific knowledge of standards committees, while the SDOs and the industry representatives who serve on committees need CPSC staffs’ learned outside perspective. However, how that relationship operates in the face of the SDOs’ presumable revenue reduction will bear close watching.
If you have questions about CPSC policy, rulemaking, or enforcement practices or other product safety matters, please reach out to the authors or any of their colleagues on Arnold & Porter’s Consumer Product Safety team.
© Arnold & Porter Kaye Scholer LLP 2023 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.