ASTM v. UpCodes is a Troubling Misapplication of Warhol’s Transformative Use Clarifications
In early April, the Court of Appeals for the Third Circuit affirmed a denial of a preliminary injunction sought by the American Society of Testing and Materials (ASTM) in its lawsuit against an online platform, UpCodes, over the unauthorized publication of ASTM’s copyrighted standards. Finding that UpCodes’ publication of ASTM’s standards to “enhance public access” to the standards was transformative, the court concluded that it was likely to succeed on the merits of a fair use defense. However, the court’s transformative use analysis makes a critical error by conflating the defendant’s stated objective or “mission” with the actual purpose of the use. The result is a decision that excuses a near identical use as transformative, and despite the Supreme Court’s clear warning against it in Warhol v. Goldsmith, allows that finding to control the entire analysis.
Background
It should first be recognized that UpCodes is a for-profit company, not a nonprofit public interest group. It copied ASTM’s standards in their entirety, including supplemental non-mandatory material, and made them freely available to attract users to its platform. UpCodes describes its mission in terms of public interest and access to the law, which seems like an altruistic goal. But however beneficial UpCodes’ stated mission may be, it is not a substitute for proper legal analysis and the correct application of Supreme Court precedent.
It’s also important to understand that ASTM, which is a nonprofit organization, funds itself largely through sales and licensing of its standards. Its standard development process is not publicly funded, rather its standards are the product of years of expert development and peer review that would not be possible without a business model based on fundamental and established copyright laws. Unfortunately, the Third Circuit misapplied established law, including the Supreme Court’s seminal Warhol decision, in a way that actually contradicts Warhol’s core teaching and should concern all copyright owners.
Misconstruction of Transformativeness Post Warhol
Central to the Supreme Court’s Warhol transformativeness clarification is that the “further purpose or different character” inquiry must be evaluated with precision. Defendants in fair use cases (and courts) cannot simply claim a lofty purpose and call it transformative. The opinion explains that “ASTM publishes technical standards to ‘positively impact[] public health and safety, consumer confidence, and overall quality of life.’” It then explains that UpCodes’ “stated mission” is to “help members of the public access and comply with the laws that govern their built environment.” The Third Circuit says UpCodes’ use is transformative because it publishes “only what the law is” rather than “current best practices,” but that is a distinction about framing and marketing, not about what UpCodes actually did with the works.
UpCodes copied ASTM’s standards word-for-word. There were no additions, commentary, or alterations. The court even acknowledges that “both ASTM and UpCodes make the Works available to architecture, engineering, and construction professionals interested in compliance.” Under any meaningful reading of Warhol, copying without alteration demands a very compelling justification for why an alleged purpose distinction should tip the scales in favor of fair use.
The opinion’s main flaw is that it confuses UpCodes’ “stated mission” purpose with the actual purpose of the use. Warhol’s objective inquiry asks what the use does with the original, not what a defendant’s stated mission is. UpCodes’ mission statement (“help members of the public access and comply with the laws that govern their built environment”) is doing a lot of heavy lifting here, but a for-profit company can describe its mission however it likes and that shouldn’t be determinative of whether a specific use qualifies as a fair use.
Compare UpCodes’ use to that in Hachette v. Internet Archive, where the Second Circuit rejected a nearly identical “access to knowledge” framing for the Internet Archive—which is a nonprofit with arguably more credibly public-interest mission than UpCodes. The Third Circuit tries to distinguish Hachette, but the distinction is thin. Both cases involve verbatim reproduction of complete copyrighted works made freely available to substitute for the originals.
The bottom line is that both ASTM and UpCodes published the works for the purpose of helping the public understand the codes and technical standards that impact and govern safety. To say that UpCodes’ purpose is transformative simply because they take the works and post them where the public can access them for free is antithetical to the foundations of copyright law. If that logic were applied widely, it would excuse almost any type of piracy so long as the infringer claimed it was in service of some kind of public interest. In no way does that type of analysis flow from Warhol, and it should be recognized for its glaring flaws.
Commerciality Given Short Shrift
Addressing commerciality under the first factor, the court confoundingly finds such an inquiry “does little to help either party.” UpCodes uses free access to copyrighted works as the hook in a “freemium” model, attracting users with free content then converting them to paying subscribers. The court cites a California district court’s finding (in a related case against UpCodes involving NFPA standards) that UpCodes “generates revenue by attracting users to its website,” but then declines to weigh that against fair use under the first factor.
Warhol makes clear that when a use “has no critical bearing on the substance or style of the original composition,” other factors like the extent of its commerciality “loom larger.” And yet despite UpCodes’ verbatim copying, and the fact that they became a direct competitor of ASTM, the court found that the commercial benefit is only “tangential” to its copying of ASTM’s works and that “the manner and extent of that benefit remain unclear.”
The decision rightly states that “[c]ommerciality is only one consideration under the first factor and does not alone determine whether a use is fair.” But, as Warhol teaches, so is the transformative inquiry. Yet the Third Circuit clearly affords that analysis more weight.
Fourth Factor Substitution Effect Ignored
The court finds the fourth factor “equivocal,” but the harmful substitution effects that result from UpCodes’ publication of ASTM’s works for free could not be more unequivocal. ASTM’s business model depends on licensing standards. When those standards are copied and distributed without authorization or compensation, it directly harms ASTM’s ability to license its product and recoup investments in standards and codes development. That type of market harm, especially if the use was to become widespread, is exactly what the fourth factor is meant to recognize.
Moreover, the court’s suggestion that the market for incorporated-but-outdated standards may be “dim” is speculative at best, and it ignores ASTM’s subscription product, which bundles building code standards and generates substantial revenue. It also ignores the fact that there aren’t separate markets for old and new standards. That would be like arguing that pirating a movie, book or song has less impact on the market because the work is a year or two old. The market may be smaller than when the movie, book, song or standard first came out, but there is still a market.
A proper fourth-factor analysis should take seriously the undeniable risk to ASTM’s business model and the development of standards and codes, generally. If every for-profit platform can invoke “access to law” to reproduce technical standards without a license, ASTM and similar organizations lose the revenue that funds the very standard setting the public benefits from. It’s akin to a university arguing that it should get textbooks for free. Eventually there would be no commercial incentive to make textbooks, and textbook publishers and authors would stop producing them. Such a scenario cannot be in the public interest.
The Decision’s Troubling Implications
The decision, if widely followed, provides commercial platforms an infringement roadmap. As long as your stated mission is described in public-interest terms, you can publish incorporated standards without authorization or compensation and profit indirectly from the resulting traffic. Other categories of works, including annotated codes, technical manuals, and safety guidance incorporated by regulation—not to mention books, movies, video games, or any other copyrighted works—could face the same treatment.
Perhaps more alarming, the decision undermines the incentive structure that produces the standards in the first place. ASTM’s ability to develop cutting-edge safety standards depends on revenue from licensing. Eliminate those revenue streams, and the public ultimately suffers. Indeed, the court acknowledged this concern but then declined to let it affect the outcome because there wasn’t enough “factual development” in the record.
Unfortunately, some defendants in AI-related copyright infringement cases are already trying to argue the Third Circuit’s opinion supports their fair use claims. In Thomson Reuters v. ROSS Intelligence, a case involving an AI developer’s unauthorized use of Westlaw’s editorial headnotes for training, the defendant recently sent a letter to the court claiming that the same transformative fair use analysis in UpCodes should be applied in its ongoing appeal before the Third Circuit. However, a response letter from Thomson Reuters explains that ROSS copied analysis from Westlaw to create a legal-research platform that would substitute for Westlaw, which, like the substitutional nature of UpCodes use, cannot be transformative. Moreover, the letter explains that the record in the ROSS case is “replete with substitution evidence.”
Conclusion
The Supreme Court in Warhol made clear that they were reigning in an untethered transformative use doctrine that was swallowing fair use analyses. But the Third Circuit’s decision in ASTM v. UpCodes is a step backwards, as it elevates a defendant’s stated purpose over actual analysis of what was done with the copyrighted work. However, the court’s order only addresses whether the District Court erred in ruling that ASTM was not likely to succeed on the merits of its copyright infringement claim because UpCodes’ copying likely constitutes fair use. The case will continue on remand with a fuller factual record, and copyright owners and creators should watch closely. Hopefully, a more nuanced and faithful application of Warhol is ahead.
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