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Copyright Concerns Could KO Proposed Delaware Green Building Legislation

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Early last week, the Newark (Delaware) City Council postponed a vote on proposed amendments to Newark’s building codes that would require new construction to earn 25 points under either LEED 2009 for New Construction or LEED 2008 for Homes. In addition to the typical green building regulatory concerns relating to costs and red tape which were raised by local designers, builders, and developers, one architect who participated at the City Council session suggested that – as drafted – the ordinance might violate the copyrights which USGBC holds in its various LEED systems. According to the Newark Post, the city’s staff has contacted USGBC and is investigating the issue, and expects resolution at another council meeting shortly.

The first question I asked myself when I saw this story is whether a state or local government enjoys immunity from suits for copyright infringement, which must be brought in federal court pursuant to 28 U.S.C. § 1498. (Of course, whether USGBC would choose to assert a claim against a government which has allegedly infringed one of its copyrights is a totally different question). Although local governments (towns, cities, counties, etc.) are not immune from suits brought under federal law, the answer is not straightforward with respect to state immunity. (The federal government, on the other hand, has expressly waived its immunity from claims for copyright infringement, though the only available remedy is money damages and not injunctive relief.)

Section 511 of the Copyright Act was adopted by Congress in 1991 in the aftermath of BV Engineering v. University of California at Los Angeles, where UCLA successfully defended a copyright infringement claim on the basis that it enjoyed sovereign immunity under the Eleventh Amendment. 858 F.2d 1394 (9th Cir. 1988). Section 511 states clearly that “[a]ny State . . . shall not be immune, under the Eleventh Amendment of the Constitution of the United States, from suit in Federal court . . . for a violation of any of the exclusive rights of a copyright owner.” 17 U.S.C. § 511. (Just a reminder that the Eleventh Amendment immunizes states from suits for money damages or equitable relief without their consent).

Despite this seemingly clear statutory provision, two Supreme Court cases from the late 1990s suggest that Section 511 might not allow a copyright infringement claim to proceed against a state government. In Florida Prepaid Postsecondary Education Expense Board v. College Savings Bank, 119 S.Ct. 2219 (1999) (patent) and College Savings Bank v. Florida Prepaid Postsecondary Education Expense Board v. College Savings Bank, 119 S.Ct. 2199 (1999) (trademark), the Court rejected patent and trademark infringement claims against the state of Florida that were purportedly authorized by similar provisions in the patent and trademark statutes (35 U.S.C. § 271(h) and 15 U.S.C. § 1125(a)(2), respectively). Justice Stevens suggested in a footnote in the patent decision that Section 511 might nevertheless receive different treatment, but some brief follow up research did not identify any subsequent cases in this line which confronted the Copyright Act. It is also worth noting that the Court’s holding in both cases was grounded in Congress’s inability to enact statutes that effectively circumvent constitutional protections.

Regardless of where the law currently stands on the interplay between sovereign immunity and Section 511 of the Copyright Act, it’s unclear here exactly how Newark’s proposed amendments could violate USGBC’s copyrights because the text of the proposed amendments does not incorporate any language from the rating systems directly. Nevertheless, it’s an interesting and important consideration for state and local governments that do, in fact, pull relevant sections from third-party rating systems directly into proposed legislation, and a good reminder that a broad range of legal issues exist for policymakers to analyze as they consider and ultimately craft legislation.

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8 Responses to Copyright Concerns Could KO Proposed Delaware Green Building Legislation

  1. Jerome L. Garciano June 24, 2010 at 9:31 am #

    This is another example of potential problems with the quasi-public nature that the LEED system has acquired. For example, federal stautes and regs are not protected by copyright with the idea of pursuing a general policy of free and open information dissemination on public matters. I would think USGCB would want to pursue the same policy in order to promote green building. But once the LEED system is disseminated, I’m not sure there is much to stop USGCB from enforcing (i.e. getting paid for the use of) its copyrights.

    I’d be interested to know if the City of Newark allows its statutes and ordinances to be disseminated free of charge.

  2. Chris Cheatham June 24, 2010 at 3:03 pm #

    If the proposed Delaware statute creates copyright liability, then more than 30 other states are going to have to re-examine their LEED-inclusive policies. I don’t think this will be an issue.

  3. Brian D. Anderson June 25, 2010 at 9:41 am #

    SDP,

    The links I posted above provide some background on how it works with real “standards” like the national electric code. I think there’s no sane standard owner would ever object to a city/state citing its standard in law/reg. Having your standard cited in a reg or law is hitting the powerball pirate booty jackpot for a standards developer because it grants them a glorious, monopolistic stream of cash in training, certification, publication, hotel seminars, t-shirts, annual vegas conventions, etc. The reg/law won’t reprint the law. It’ll simply cite to the standard (as amended infinitum) forcing all of the schmucks who have to comply at penalty of law to turn to the standards developer to pay steep prices for copies of the precious elixer.

  4. Brian D. Anderson June 25, 2010 at 10:02 am #

    Also, see the Veeck decision:

    “Our short answer is that as law, the model codes enter the public domain and are not subject to the copyright holder’s exclusive prerogatives.”

    Case here: http://bulk.resource.org/courts.gov/c/F3/293/293.F3d.791.99-40632.html

    • Stephen Del Percio June 25, 2010 at 10:04 am #

      Thanks- I was hoping the discussion would get to this line of cases; also see Building Officials & Code Admin. v. Code Tech, 628 F.2d 730 (1st Cir. 1980).

      • Brian D. Anderson June 25, 2010 at 10:53 am #

        SDP,

        Do you think Veek is enough comfort for our friends in Newark and that their very sensible concern over copyright can be set aside? I wonder whether LEED’s status as a non-”standard” is important. The USGBC is an ANSI standards developer but I don’t think all of its LEED products have been developed under the formal rubric of ANSI standards. As a final thought–I’d bet that the USGBC would be deemed to have waived any copyright objections since they’ve not objected to such incorporation into law in the past.

        But I’m also wondering whether the city would have the right to publish and distribute copies of the relevant LEED product once they’ve enacted it into law. Of course, one initial problem would be defining just what is LEED? Publishing “LEED” should probably include the manuals, CIRs, program guides and other ancillary materials and updates, right? Why would they spend the $ to print something that’s going to change or might not present everything required for compliance? It’s a tangled mess that most any city would just leave to the USGBC to handle. Same is true for most other “standards” incorporated into law–building and electrical codes and even those of certain Self-Regulatory Organizations (SRO) like NASD. The law cites to them, and the standards developers and SROs publish and charge lots of $ for copies.

  5. Ujjval K. Vyas, Ph.D., J.D. June 27, 2010 at 8:02 pm #

    This discussion is of great interest, particularly since the USGBC’s LEED products are not “consensus-based standards” under the definition provided by the federal gov’t or by ANSI as Brian Anderson has properly noted. Even more interesting is to look more closely at the claimed value of “consensus-based standards” that are the domain of all ISO approved orgs in this country and elsewhere.

    The assumption has been that standards organizations such as ANSI, ASTM, CSA, etc. provide a public value though participating in what often appears to be dangerously close to various types of collusion. As Stephen has noted elsewhere, standards organizations are looked at with particular intensity by the courts because of the ever-present danger of monopolistic and other market curtailing activity embodied in the creation of consensus-based standards.

    The assumptions have been that the price to pay for treading the thin line between public value and anti-trust issues are protected by the “consensus” arrived at via a required diversity of represented interests to qualify as an ISO derived standard. A much closer look at this problem would, I think, lead to a very different conclusion and should be entertained by both the judiciary and the public policy advocates.

    The current view of standards organizations is that they are to be tolerated as a result of the economic benefit they provide through the reduction of frictional costs to society; they are created by volunteer committees having enough diversity of interests to permit viable economic benefits to the general public; and, finally that the economics of the creation of these standards will by its own nature bring the proper parties to the table to “vote” their interests via the volunteer committees. I am convinced that standards have significant economic benefits. I am not convinced, having been a member of a number of volunteer standard setting organization volunteer committees that they are either diverse enough or transparent enough to generate the appropriate incentives for all economically affected participants the come to table.

    Brian Anderson is correct to point out that standards orgs are purely money-making entities (not a bad thing)–the barrage of green-standards put out by every one of these organizations is evidence enough that standards follow market trends, not public value.

    Allowing copyright protections even after the standard is referenced as law is neither economically prudent, since this inclusion creates a form of monopoly for its products, nor advisable since the standards actually pursued by a standard organization are not selected for public benefit but potential market revenue. It is the job of the standards org to account for the economic trade-offs of inclusion in legislation. It should not, and cannot be the role of the judiciary or legislative branches at the federal, state or local levels to determine the economic impact to the standards orgs from inclusion in legislative or regulatory activity.

    The argument used by standards orgs that they would not be economically incentivized to pursue standards activity is fictitious. The whole field makes its money by having the standard put into legislation or regulation and thereby creates monopoly power in the market. The potential for monopoly power in the market is the economic trade-off for the loss of the copyright protection. Either they have copyright protection and cannot be included in legislation or regulation, or they do not have copyright protection and must make business decisions as to the requisite size of the monopoly market created by developing certain standards. They can’t have it both ways.

    Finally, it should be noted that even this economic analysis fails to support the position of standards orgs relative to copyright protection. This economic circumstance assumes that the actual process for creating these standards is validated by the myth of a transparent and open consensus. Hard as it is to fathom, the fundamental basis of consensus orgs is no longer believable given the significant work in behavioral economics. Timur Kuran’s Private Truths and Public Lies, as well and significant other work in the area demonstrate the difficulties at the core of the claims by standards organizations that they function in a neutral and open manner for the benefit of the public.

    The USGBC’s own odd internal process for decison-making–”dynamic governance”–and its commonly known “black-box” decision-making methods suggest that the LEED products will never attain even the minimum requirements as an approved consensus-based standard.

    This adds an additional wrinkle to the problems of copyright protection for a standard. It should be noted that the USGBC/GBCI are very aggressive in protecting their intellectual property rights and clearly seek to be included in legislation to generate monopoly revenues. For this reason, I think it important to stress that the LEED rating system(s) are products in the marketplace pure and simple, not the generous gifts of a kindly group of visionary oligarchs.

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