Court Rules Standards Incorporated by Reference into Laws Need not be Free

Dollar%20Sign%20100_0.pngWhen standards developed by the private sector become laws, should anyone be able to download a copy for free? At first blush, the answer seems too obvious to debate. But yesterday, a U.S. district court held otherwise, saying that the developer of a standard that has been “incorporated by reference” (IBR) into a law continues to have the right to enforce its copyright. It also confirmed the right to charge a reasonable fee for an IBR standard. 

The ruling (subject to appeal) is less surprising when it is reviewed in detail.

The defendant is (PRC), founded by public access advocate Carl Malamud. Malamud has been posting thousands of IBR standards on the PRC website for years. More recently, he ratcheted up his conduct to the point where it appeared he was daring standards setting organizations (SSOs) to sue him in order to settle the issue once and for all.

In years gone by, this issue rarely came up, in part because technical standards tend to be of interest only to commercial entities who have the funds to purchase copies of building codes and other IRB standards. But with the rise of the Internet has come an expectation of being able to access anything for free. At the same time, a preference for all things open – open source, open data, open research, and so on – has grown. In this context, having to pay for a copy of a law that one is bound by seems at best out of date, and at worst against public policy.

As desirable as that may be, there are arguments on the other side. One is that in 1995 Congress passed the Technology Transfer and Advancement Act, which ordered government agencies to get out of the business of setting standards to the greatest extent possible. The legislation did what it was supposed to do, with the government ever since saving a fortune by buying off the shelf, rather than custom made, goods Agencies also and saved a bundle by not having to maintain industry experts on staff to write hundreds of new regulations a year.

There was just one catch: the Act didn’t provide any funding to reimburse SSOs for the costs of developing the standards for the government to reference into law. Those burdens were shifted to SSOs, and the SSOs in question were in most cases the traditional ones that, unlike ICT SSOs (which almost universally make their standards available for free) defray much of their operating costs by charging for copies of standards – a practice which raised few eyebrows when all copies had to be printed, rather than accessed on line.

For a while, SSOs mostly kept their cool. But when the Sheet Metal and Air Conditioning Contractors Association asked Malamud to take down its standards, and he refused, they sued. And lost.

That really caught the attention of the traditional SSOs. Not long after, three of the largest traditional SSOs (ASTM, NFPA and ASHRAE) sued, Inc. in the federal district court in the District of Columbia. As in the previous suit, Malamud was defended by the Electronic Freedom Foundation. And this time he lost.

It’s worth noting that the three plaintiffs in this suit already posted all their IBR standards on their sites in “read only” mode, meaning that anyone could already study them for free. And to their credit, although the three SSOs could have demanded what could have amounted to millions of dollars in damages, they only asked for Malamud’s counter claims to be dismissed, and for him to be enjoined from continuing to post their standards for download at his site.

While the court’s decision is long and detailed, the gist of it is that the court recognized that a copyright holder does not lose its rights because its standards are referenced into law. The court reviewed the legislative history and found support for its belief that Congress did not intend otherwise, although it could have exempted IRB standards from copyright protection had it chosen to do so. Specifically, it said:

There are weighty policy arguments on both sides of this issue, including the need to preserve a vital and complicated public-private partnership between the government and SDOs, and the need for an informed citizenry to have a full understanding of how to comply with the nation’s legal requirements. However, this suit is not about access to the law in a broad sense, but instead about the validity of copyrights for these standards under current federal law. Copyright protection is a creature of statute, and as such is the result of careful policy considerations by Congress. In the view of this court, Congress has already passed on the question of revoking copyright protection for standards that have been incorporated by reference into regulations, and any further consideration of the issue must be left to Congress for amendment.

It also rejected an argument that the fair use doctrine should provide complete access in the case of IRB standards.

The court did recognize one limitation on the rights of the owner of a copyright in an IBR standard, confirming that such a standard must be made “reasonably available” to the public. But it went on to state that reasonably available doesn’t have to mean free.

Finally, while the court did note that applicable legislation required that IRB standards must be “reasonably available,” it did not agree that “reasonably available” must mean free.

So where are we now? On the one hand, Malamud, who believed that it was the duty of traditional SSOs to retool their business models to earn their keep through other means, is now barred from providing IBR standards developed by the three plaintiffs available for free. The ruling does not, however, compel him to do anything with respect to all the other standards at his site, although continuing to doing so after this ruling will become riskier. The next SSO plaintiff could demand damages, noting that Malamud could scarcely claim to be an innocent infringer, now that the District Court has spoken.

But on the other hand, the traditional standards organizations have changed their position as well. The American National Standards Institute (ANSI; disclosure: I’m on the Board of Directors) has created a site specifically to host IBR standards in read only mode, and many such standards are now available there. My expectation is that free read only access will become the norm in the future.

Is that a perfect result? Not necessarily. After all, consortia make their standards available for free. And traditional SSOs never mention the value an industry receives when it is given the chance to write the laws that it’s subject to. As the ad line goes, that’s priceless.

But taking all things into consideration, it’s not a bad result either. Hopefully, the balance of the traditional SSOs will get on the read only bandwagon, and Malamud will move on to more critical issues and leave this one alone.