Cite as 896 F.3d 437 (D.C. Cir. 2018)
op the factual record and weigh the factors as applied to PRO’s use of each standard in the first instance. As we have emphasized, the standards here and the modes of their incorporation vary too widely to conclusively tell goose apart from gander, and the record is just too thin to tell what went into the sauce. On remand, the district court will need to develop a fuller record regarding the nature of each of the standards at issue, the way in which they are incorporated, and the manner and extent to which they were copied by PRO in order to resolve this “mixed question of law and fact.” Id. This is not to say that the district court must analyze each standard individually. Instead, it might consider directing the parties, who poorly served the court by treating the standards interchangeably, to file briefs addressing whether the standards are susceptible to groupings that are relevant to the fair use analysis.
The first factor asks courts to consider “the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes.” 17 U.S.C. § 107(1). Mindful of the statute’s stated goal to protect such “purposes such as criticism [and] comment,” id. § 107, the Supreme Court has explained that the fact that an infringing “publication was commercial as opposed to nonprofit … tends to weigh against a finding of fair use,” Harper & Row, 471 U.S. at 562, 105 S.Ct. 2218. The district court found that even though PRO “did not earn revenue directly from the display of the standards, its activity still bears ‘commercial’ elements given that it actively engaged in distributing identical standards online in the same consumer market.” ASTM, 2017 WL 473822, at *16. This, in our view, takes too broad a view of when a use is commercial rather than nonprofit. To be sure, one consideration of the fair use inquiry is whether the copy “may serve as a market substitute for the original,” Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 587, 114 S.Ct. 1164, 127 L.Ed.2d 500 (1994) (discussing the fourth fair use factor, i.e. market effect), but “[t]he crux of the profit/nonprofit distinction is … whether the user stands to profit from exploitation of the copyrighted material without paying the customary price,” Harper & Row, 471 U.S. at 562, 105 S.Ct. 2218. Although PRO’s copies of the technical standards may, in some cases, serve as a substitute for the SDOs’ versions, little, if anything, in the record indicates that PRO stands to profit from its reproduction. Moreover, the district court discounted PRO’s claimed purpose, reflected in the organization’s mission statement and summary-judgment submissions to the court, that it was distributing the standards to facilitate public debate. On appeal, the SDOs suggest in passing that distributing the standards is part of PRO’s fundraising appeal, but that hardly rises to the level of making this a “commercial” use. Thus, at least as a general matter, PRO’s attempt to freely distribute standards incorporated by reference into law qualified as a use that furthered the purposes of the fair use defense.
Of course, “the mere fact that a use is educational and not for profit does not insulate it from a finding of infringement, any more than the commercial character of a use bars a finding of fairness.” Campbell, 510 U.S. at 584, 114 S.Ct. 1164. Thus, another facet of the “purpose and character” factor that courts consider is whether the use “adds something new, with a further purpose,” or, put differently, “whether and to what extent the new work is ‘transformative.’” Id. at 578–79, 114 S.Ct. 1164 (quoting Pierre N. Leval, Toward a Fair Use Standard, 103 Harv. L. Rev. 1105, 1111 (1990)). Although “transformative use is not absolutely necessary for a finding of fair use, the goal of
