We are pleased to bring you a report entitled "A Hidden Cost of Government Adoption: The Fifth Circuit Rejects Copyright Protection For A Privately Developed Model Code Enacted Into Law" by Andrea B. Hasegawa, an attorney with the Los Angeles office of Sheppard, Mullin, Richter & Hampton LLP.

by Andrea B. Hasegawa

In a recent eight-to-six decision, the Fifth Circuit Court of Appeals held that a private standard-setting organization that had developed and copyrighted a "model building code" could not assert its copyright against a person who purposely published the code in violation of the copyright after two Texas towns adopted the code as their law.

Veeck v. Southern Building Code Congress Int'l, Inc. ("SBCCI"), No. 99-40632 (5th Cir. June 7, 2002), involved the model building code that SBCCI developed. SBCCI is a non-profit organization that creates model codes, including plumbing and gas codes, and encourages local government entities to enact its codes into law.^1/ SBCCI asserts its copyright prerogatives with respect to all of its codes but does not charge government entities for use. SBCCI charges non-governmental entities for copies of its code, although it sometimes allows private parties to copy portions upon request.^2/

The case arose from a website operator's (plaintiff Veeck) decision to publish the building codes of two small Texas towns on his informational website. Both towns had adopted SBCCI's model code as law. Veeck purchased a disk containing the building code from SBCCI and, despite an admonishment on the disk that the code was protected by copyright, published it on his website. Veeck identified the code only as the towns' building codes and did not mention SBCCI.^3/

SBCCI demanded that Veeck remove the code from his website. Veeck sought a declaratory judgment that his publishing of the code did not violate the Copyright Act, and SBCCI counterclaimed for copyright infringement, unfair competition and breach of contract. The district court granted SBCCI summary judgment,^4/ and a panel of the Fifth Circuit upheld the decision.^5/ The Fifth Circuit then granted a rehearing en banc to examine whether a model code author--who indisputably holds a copyright in the model code itself--has the right to also prevent the copying of its code after the code has become the law of a jurisdiction.^6/

The court began its analysis by noting that the Supreme Court has long excluded "the law" from copyright protection. As early as 1834, the Supreme Court held in Wheaton v. Peters that "no reporter has or can have any copyright in the written opinions delivered by this Court..."^7/ In that early case, the Court unanimously rejected an official reporter's attempt to assert copyright protections for his annotated compilation of court decisions. The Court recognized, as the respondent had argued, that statutes could not be copyrighted because the policy of government is to disseminate the law widely. The Court reasoned that "the law" in the form of judicial opinions, as distinct from the reporter's individual work, was analogous to statutes and also could not be the subject of copyright protection.^8/

The Fifth Circuit then examined another early case in which the Supreme Court denied a copyright to a court reporter for opinions of the Ohio Supreme Court.^9/ In that case, the Supreme Court stated that public policy prevented the copyrighting of any work performed by judges in their official capacity:

The Banks Court also relied upon a decision from the Supreme Judicial Court of Massachusetts which held that "all should have free access to the opinions."^11/ The Fifth Circuit remarked that this case showed "a continuous understanding that 'the law,' whether articulated in judicial opinions or legislative acts or ordinances, is in the public domain and thus not amenable to copyright," noting that modern decisions are in accordance with the precedent.^12/

The court then observed that, consistent with this analysis, the Copyright Act of 1976 specifically denies protection to federal statutes and regulations.^13/ Moreover, since the Banks Court and subsequent decisions had relied on state law opinions, state and local laws also cannot be copyrighted. Thus, since the building codes of the two Texas towns were governing law, they were not copyrightable.^14/

Nevertheless, SBCCI argued that Banks actually had two holdings, and that applying the holdings in accordance with the policies of copyright law supported protecting its copyright. The first holding of Banks, SBCCI claimed, prohibited the copyrighting of judicial opinions because judges, who are paid by the government, are not "authors" of official works and do not need the incentives of copyright law to encourage them to publish. By contrast, SBCCI argued, private code-writing organizations whose work eventually becomes law do rely on such incentives. SBCCI cited as support two recent circuit court opinions which held that the consideration of authorship incentives was a holding of Banks.^15/ SBCCI argued that the second Banks holding, which required "the law" to be free for all, was a matter of due process. Because the public had access to its code even after the towns' enactment of the code as law, SBCCI claimed, this holding of Banks did not apply.^16/

The Fifth Circuit rejected SBCCI's interpretation of Banks. Examining the language of Banks, the court concluded that the discussion of the source of judges' salaries merely established that the public, not the judges, held the interest in the work created. The court also examined Building Officials and Code Adm. ("BOCA") v. Code Technology, Inc.,^17/ in which the plaintiff code author argued that the decision in Wheaton denying copyright protection was based on the public's ownership of the judges' work. The First Circuit held that the premises of Wheaton and Banks was that the public's ownership of the law, together with the public policy that all citizens must have free access to the law, prevented BOCA from asserting a copyright.

The Veeck court also discussed the practical issues that would arise if a private party could hold a copyright in the law because it had participated in its creation. The court observed that it is often necessary to involve private experts and interest groups in drafting statutes and regulations, and allowing copyright protection should not hinge on a determination of whether the drafter "needed" incentives to perform its work.^18/ Moreover, the court stated, since the lawmakers can only enact laws with the consent of those governed by the laws, the public itself are the "final authors" of the law. This concept, together with the "free access" requirement, prohibited copyrighting the model code.^19/

The court then turned to SBCCI's argument that Banks' and BOCA's requirement of free access to the law was a matter of due process. SBCCI claimed that since its codes were available for inspection and copying at a public office, there was sufficient public access to satisfy due process. The court rejected this argument on the basis that the Banks Court did not base its decision on the concept of due process. Rather, the Banks Court held that public ownership of the law required that the law remain in the public domain. Moreover, the public's right to know the law would conflict with a copyright owner's right to prevent publication or dissemination of his or her work. For all of these reasons, the court concluded that "the law" is not subject to federal copyright protections. Thus, the court held, Veeck's publication of "the law" on his website did not infringe SBCCI's copyright in its model building code.^20/

The court also examined Veeck's arguments under the Copyright Act. First, Veeck argued that model codes adopted by towns are "facts," which the Copyright Act does not protect. Second, he argued that because there is only one way to express the codes, the "idea" embodied therein merges with SBCCI's expression of the code and is also excluded from copyright protection.^21/ The Fifth Circuit agreed with Veeck, noting that the Copyright Act does not protect ideas that can only be expressed one way. Since the codes are an "unique, unalterable expression of the 'idea' that constitutes local law," they were "facts" within the meaning of the Act.^22/ Although SBCCI argued that a model code could be expressed in many different ways, the court noted that once a code is transformed into a town's law, that law cannot be expressed in any other way.

The court emphasized, however, that SBCCI's model codes themselves are protected by copyright laws. The decision merely establishes that once those codes are enacted into law, they can be reproduced or distributed freely.^23/ Moreover, the court explained, a copyright would not be vitiated merely because a governmental entity incorporated a standard by reference.^24/ Rather, copyright protection simply does not extend to a code that a government adopts wholesale and enacts into law.

The court also examined the contention by SBCCI's amici that the decision constituted a "taking" by the government. The court noted that SBCCI itself urged the government to adopt its codes and held that this was not a "takings" case.^25/ Finally, the court rejected the policy argument that SBCCI would lose its economic incentive to continue drafting model codes, stating that the organization and its participants have a strong self-interest in promoting uniform codes, and that SBCCI could still copyright versions of its code that contain any "value added" text, including commentary, questions and answers, and other information.^26/

In sum, the Fifth Circuit held that once the copyrighted code became "the law," through wholesale adoption and incorporation by a government body, SBCCI's copyright did not allow it to prevent the copying and dissemination of the work. The opinion suggests, however, that if the towns merely referred to standards set forth in the codes without actually adopting them in whole, SBCCI's copyright protection would have remained.

Both dissents criticized the majority for establishing a per se rule that whenever a model code is enacted into law, it loses all copyright protection.^27/ Both dissents also distinguished the Supreme Court precedent by arguing that the Banks prohibition on copyrighting the works of judges was based on the notion that judges, as public servants, did not own their works, and not that these works were "the law."^28/ In particular, Judge Wiener argued that the majority's rationale for denying copyright protection--that citizens must have access to the law--was unsupportable in this case, because Veeck made no showing that anyone had been denied access to the law.^29/ Further, Judge Wiener emphasized the difference in status between judicial opinions and statutes on the one hand, and highly technical and complex codes on the other, noting that Congress' National Technology and Transfer Act of 1995 directs federal agencies and departments to use technical standards developed by voluntary bodies and requires them to protect the copyrights of such organizations.^30/ Finally, the dissents feared that denying copyright protection to private parties for these important works would have a far-reaching impact on the government's ability to develop codes and standards in the future. Given the close divide of the en banc court, the apparently conflicting decisions from other circuits,^31/ and the importance of the issue, it may not.