A federal appeals court has handed a significant win to UpCodes, a legal tech startup that publishes building codes and technical standards online, ruling that its posting of copyrighted standards likely constitutes fair use \u2014 at least for now. In a decision issued April 7, the 3rd U.S. Circuit Court of Appeals affirmed a lower [\u2026]<\/p>\n
A federal appeals court has handed a significant win to UpCodes<\/a>, a legal tech startup that publishes building codes and technical standards online, ruling that its posting of copyrighted standards likely constitutes fair use \u2014 at least for now.<\/p>\n In a decision issued April 7, the 3rd U.S. Circuit Court of Appeals affirmed a lower court\u2019s denial of a preliminary injunction sought by ASTM International, the non-profit standards organization that had sued UpCodes for copyright infringement.<\/p>\n The ruling in American Society for Testing & Materials v. UpCodes, Inc.<\/a><\/em> adds another chapter to a long-running legal saga over who controls access to technical standards that have been incorporated into law \u2014 and whether the public has a right to read the laws that govern it.<\/p>\n ASTM is a non-profit organization that publishes technical standards widely used by engineers, architects, manufacturers and construction professionals. Legislatures and regulatory agencies frequently incorporate ASTM standards into law by reference, meaning a statute or building code will simply cite a standard by name without reproducing its text.<\/p>\n This saves government resources and draws on private-sector expertise, the 3rd Circuit notes in its opinion, but it also raises notice and accountability issues, where regulated entities may face legal consequences for violating rules they cannot freely read.<\/p>\n UpCodes, a for-profit startup founded in 2016, operates an online searchable library of building codes. Its stated mission is to \u201chelp members of the public access and comply with the laws that govern their built environment.\u201d<\/p>\n In April 2024, UpCodes began publishing 10 copyrighted ASTM standards on its website without a license. These standards related to steel and aluminum used in construction, all of which are incorporated by reference into the International Building Code (IBC), which Philadelphia and many other jurisdictions have adopted.<\/p>\n ASTM sued for copyright infringement and moved for a preliminary injunction to get the standards taken down. The district court denied the motion, concluding that ASTM was unlikely to succeed because UpCodes\u2019 copying was likely protected as fair use. ASTM appealed.<\/p>\n Writing for a three-judge panel, Circuit Judge L. Felipe Restrepo affirmed the district court, concluding that three of the four statutory fair use factors favor UpCodes and the fourth is equivocal.<\/p>\n On the critical first factor \u2014 the purpose and character of the use \u2014 the court found UpCodes\u2019 copying transformative because it serves a fundamentally different purpose than ASTM\u2019s. While ASTM publishes standards to inform industry of current best practices, UpCodes publishes them to convey what the law actually is, posting only the historical versions that are incorporated into law, not the newer versions that ASTM has since released.<\/p>\n The court followed the D.C. Circuit\u2019s 2023 decision in ASTM v. Public.Resource.Org<\/em> in reasoning that this \u201cfundamental distinction\u201d renders the use transformative, even though UpCodes republishes the standards without alteration.<\/p>\n ASTM argued that verbatim copying can never be transformative. The 3rd Circuit disagreed, joining the D.C., 2nd and 4th Circuits in holding that a secondary work \u201ccan be transformative in function or purpose without altering or actually adding to the original work\u201d (quoting prior precedent).<\/p>\n The court also noted that UpCodes has a particularly compelling justification for copying, which is that it cannot disseminate the law without reproducing it.<\/p>\n The court rejected ASTM\u2019s analogy to Hachette Book Group v. Internet Archive<\/em>, last year\u2019s 2nd Circuit ruling against the Internet Archive\u2019s digital lending program. There, the court found the use non-transformative because digitizing books served the same purpose as the originals \u2014 making authors\u2019 works available to read. UpCodes\u2019 purpose, to disseminate the law, is distinct, the 3rd Circuit said.<\/p>\n On the second factor \u2014 the nature of the work \u2014 the court found it strongly favors fair use. Technical standards sit at the factual end of the fact-fiction spectrum, and their incorporation into law moves them further from copyright\u2019s core protections.<\/p>\n The third factor \u2014 the amount of copying \u2014 also favored UpCodes, even though it copied the standards in their entirety. Because the IBC incorporates the standards fully, the court reasoned, reproducing them completely is reasonable in relation to the purpose.<\/p>\n Notably, the court also rejected ASTM\u2019s argument that non-mandatory portions of the standards \u2014 such as explanatory notes, appendices and annexes \u2014 should be treated differently, finding that these materials aid in understanding and complying with legal requirements.<\/p>\n The fourth factor \u2014 market harm \u2014 was the closest call. The court acknowledged that UpCodes\u2019 free copies could substitute for ASTM\u2019s paid offerings, and that ASTM derives roughly 70% of its revenue from standards sales.<\/p>\n But it also noted that the incorporated versions in question are largely outdated \u2014 nine of the 10 standards have since been updated by ASTM \u2014 and that there is limited evidence of how much revenue ASTM actually derives from incorporated standards specifically.<\/p>\n Weighing that against the substantial public benefit of free access to the law, the court found the fourth factor equivocal.<\/p>\nBackground of the Case<\/strong><\/h3>\n
The Third Circuit\u2019s Analysis<\/strong><\/h3>\n
Why This Matters<\/strong><\/h3>\n