Facility Guidelines Inst., Inc. v. Upcodes, Inc.

677 F.Supp.3d 955

FACILITY GUIDELINES INSTITUTE, INC., Plaintiff, v. UPCODES, INC., Defendant.

Case No. 4:22-cv-01308-AGF

United States District Court, E.D. Missouri, Eastern Division

Signed June 15, 2023

Michael J. Hickey, Benjamin J. Siders, Bridget Hoy, Lindsey Muse Bruno, Lewis Rice LLC, St. Louis, MO, for Plaintiff.

Jennifer E. Hoekel, Husch Blackwell LLP, St. Louis, MO, Joseph C. Gratz, Pro Hac Vice, Eugene Novikov, Pro Hac Vice, Rupali Payal Singhal, Pro Hac Vice, Morrison Foerster LLP, San Francisco, CA, Allyson R. Bennett, Pro Hac Vice, Morrison Foerster LLP, Los Angeles, CA, for Defendant.

MEMORANDUM AND ORDER

AUDREY G. FLEISSIG, UNITED STATES DISTRICT JUDGE

The matter is before the Court on the motion of Plaintiff Facility Guidelines Institute, Inc. ("FGI") for a preliminary injunction against Defendant Upcodes, Inc. (Doc. No. 5). Oral argument on the motion was held on June 6, 2023. Upon review of the record, including the evidence properly before the Court for purposes of the motion for a preliminary injunction, and upon consideration of both parties' oral argument, FGI's motion for a preliminary injunction will be denied, as set forth below.

BACKGROUND

FGI is an independent, non-governmental, not-for-profit 501(c)(3) corporation. Founded in 1998, FGI is responsible for reviewing, revising, updating, and publishing three sets of guidelines pertaining to the construction of health care facilities: (1) Guidelines for Design and Construction of Hospitals; (2) Guidelines for Design and Construction of Outpatient Facilities, and (3) Guidelines for Design and Construction of Residential Health, Care, and Support Facilities (collectively, the "FGI Guidelines"). FGI owns copyright registrations for each of the FGI Guidelines published since 2006, including the 2018 and 2022 editions.

FGI reviews and revises the Guidelines on a regular cycle in a consensus process carried out by a multidisciplinary group of experts. FGI is not a trade group; it does not have members, sponsors, or affiliates who provide funding through membership fees or dues. FGI intentionally maintains neutrality and independence from outside influence, which allows FGI to develop and publish standards based on engineering principles and research without influence from paying members or sponsors. FGI relies on the sales of the FGI Guidelines (primarily the most recent editions) for funding the revision and publication of the next editions. FGI is a non-profit enterprise and thus charges only as much as necessary to fund its operations. FGI makes older versions of the FGI Guidelines available for free and provides limited public access to the current version of the FGI Guidelines.¹

UpCodes was founded in 2016 by two brothers, Scott and Garrett Reynolds, with the mission of making it easier for laypeople and professionals in the architecture, engineering, and construction industries to understand how to comply with state and local building codes. UpCodes publishes such codes on its website. UpCodes maintains that it does not post model standards—including FGI's model standards—as model standards, but only as adopted into law by specific jurisdictions. With respect to this case, UpCodes explains that it only posts the laws that have adopted or incorporated the FGI guidelines by reference. Any user can view and copy a supported jurisdiction's codes—with that jurisdiction's amendments integrated into the text—for free and without registering for an account. If a user wants features beyond full access to the law, such as advanced search and automation tools, UpCodes offers those services for a fee.

Procedural History

On December 6, 2022, FGI filed a complaint in this Court alleging copyright infringement under 17 U.S.C. § 501 and common-law unfair competition under Missouri law. Doc. No. 1. The same day, it filed this instant motion for preliminary injunction. Doc. No. 5. On January 11, 2023, UpCodes filed its opposition to the preliminary injunction, and shortly thereafter filed a motion to dismiss on similar grounds. Doc. Nos. 28 and 34. Briefing on the two motions was completed on February 27, 2023. On March 8, 2023, the Court held a video conference with counsel to discuss the pending preliminary injunction motion and case scheduling. The parties informed the Court that they did not require any discovery or further briefing in connection with the preliminary injunction motion. The parties agreed that an evidentiary hearing was not required but requested in-person oral argument on the issue. The parties also agreed to engage in good-faith settlement discussions related with respect to the 2018 FGI Guidelines and participate in good-faith discussions with respect to whether a temporary standstill agreement could be reached on the 2022 FGI Guidelines pending a determination by the Court on the preliminary injunction motion. Doc. No. 46.

Over the next two months, the parties periodically informed the Court of their ongoing settlement discussions. On May 12, 2023, the parties filed a joint status report and motion for a hearing on the preliminary injunction. Doc. No. 48. The parties informed the Court that while they had participated in good-faith settlement discussions, they were unable to reach an amicable resolution. With respect to the 2022 FGI Guidelines, the parties noted that, without waiver of their positions, including FGI's right to amend its Complaint to further allege facts related to UpCodes' temporary posting and subsequent removal of the 2022 FGI Guidelines, the parties agreed to a temporary standstill such that UpCodes removed and will not re-post or post any of the 2022 FGI Guidelines until at least ten business days after the Court's ruling on the preliminary injunction motion. Upon the parties' request, oral argument for the preliminary injunction motion took place on June 6, 2023. Doc. No. 50.

ARGUMENT OF THE PARTIES

FGI argues that it is entitled to a preliminary injunction enjoining UpCodes from continuing its copying, publication, and distribution of the FGI Guidelines on the UpCodes website because FGI has more than a "fair chance" of prevailing on its copyright infringement and unfair competition claims; UpCodes' conduct threatens irreparable harm to FGI in that it will either force FGI to discontinue operations entirely or will harm FGI's reputation by robbing FGI of its much-valued independence and objectivity; there is little threat of harm to UpCodes aside from a potential minimal pecuniary loss; and the issuance of the injunction is in the public's interest.

In response, UpCodes argues that FGI is not likely to succeed on the merits of its copyright claim because UpCodes is merely publishing the law and "no one can own the law" and to the extent any of the materials on UpCodes' website are not "the law," reproducing them in their entirety is permissible under the doctrine of fair use. UpCodes also argues that FGI's unfair competition claim fails because Upcodes does not make any representations that it is an authorized FGI distributor or any other representations that are likely to deceive the public. UpCodes further argues that FGI cannot establish a threat of irreparable harm; the balance of hardships weighs in favor of UpCodes; and an injunction would disserve the public interest in wide and unfettered access to and knowledge of the law.

In reply, FGI argues that UpCodes' characterization of the guidelines as "the law" is incorrect and the FGI Guidelines are still protected by copyright regardless of whether a state adopts or incorporates the FGI Guidelines by reference. FGI also argues that UpCodes is only posting the FGI Guidelines and is not posting the actual laws of the various states.

Additional facts and arguments will be discussed in further detail below as relevant to the parties' specific arguments.

DISCUSSION

"A preliminary injunction is an extraordinary remedy, and the burden of establishing the propriety of an injunction is on the movant." Sleep No. Corp. v. Young, 33 F.4th 1012, 1016 (8th Cir. 2022) (quoting Watkins, Inc. v. Lewis, 346 F.3d 841, 844 (8th Cir. 2003)). Courts consider four factors in determining whether to issue a preliminary injunction: (1) the threat of irreparable harm to the movant; (2) the balance between this harm and the injury that granting an injunction will inflict on other parties; (3) the movant's probability of success on the merits; and (4) the public interest. D.M. by Bao Xiong v. Minn. State High Sch. League, 917 F.3d 994, 999 (8th Cir. 2019). In the Eighth Circuit, these four factors are known as the "Dataphase" factors, based upon the 1981 en banc case, Dataphase Sys., Inc. v. C L Sys., Inc., 640 F.2d 109, 114 (8th Cir. 1981).

In each case, the factors must be balanced to determine whether they tilt toward or away from granting injunctive relief. West Pub. Co. v. Mead Data Cent., Inc., 799 F.2d 1219, 1222 (8th Cir. 1986). No single factor is dispositive; however, the movant's probability of success is the most significant factor. Young, 33 F.4th at 1016. The party requesting injunctive relief bears the "complete burden" of proving that an injunction should be granted. Gelco Corp. v. Coniston Partners, 811 F.2d 414, 418 (8th Cir. 1987).

Likelihood of Success

The Eighth Circuit has expressly rejected the notion that a plaintiff must prove a greater than 50% likelihood that he or she will prevail on the merits. See Dataphase, 640 F.2d at 113. There is no bright-line percentage or "mathematical probability" that FGI must meet at this stage, rather, FGI need only show that it has a "fair chance" of prevailing on its claims. Bao Xiong, 917 F.3d at 999; Dataphase, 640 F.2d at 113.

Copyright Infringement Claim

FGI contends that it is likely to prevail on its claim for copyright infringement because it holds a valid copyright for the 2018 FGI Guidelines and UpCodes has engaged in clear and direct infringement without any viable defense. To establish a claim of copyright...