Medical Imaging & Technology Alliance v. Library of Congress
CourtCourt of Appeals for the D.C. Circuit
Date FiledSeptember 1, 2026
Docket25-5328
StatusPublished
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Full Opinion
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued May 15, 2026 Decided September 1, 2026
No. 25-5328
MEDICAL IMAGING & TECHNOLOGY ALLIANCE AND
ADVANCED MEDICAL TECHNOLOGY ASSOCIATION,
APPELLANTS
v.
LIBRARY OF CONGRESS AND TODD BLANCHE, IN HIS OFFICIAL
CAPACITY AS ACTING LIBRARIAN OF CONGRESS,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 1:22-cv-00499)
Michael B. Kimberly argued the cause and filed the briefs
for appellants.
Laura E. Myron, Attorney, U.S. Department of Justice,
argued the cause for appellees. With her on the brief were Brett
A. Shumate, Assistant Attorney General, and Daniel Tenny,
Attorney.
Before: MILLETT, CHILDS and PAN, Circuit Judges.
Opinion for the Court filed by Circuit Judge CHILDS.
2
CHILDS, Circuit Judge: In accordance with authority
granted by Congress in the Digital Millennium Copyright Act
(DMCA or the Act), the Librarian of Congress (Librarian)
conducts a rulemaking every three years (triennial rulemaking)
to consider requests for limited exemptions to the Act’s
copyright anticircumvention provision. See 17 U.S.C.
§ 1201(a)(1)(C). Appellants Advanced Medical Technology
Association and Medical Imaging & Technology Alliance
(together, Appellants) sued the Librarian and the Library of
Congress (together, Appellees) challenging the Librarian’s
initial adoption and subsequent renewal of a medical device
repair exemption. This exemption permits circumvention of
technological protection measures (TPMs), allowing access to
copyrighted “medical equipment computer programs and data
files . . . that are used to support operation, mechanical, and
electronic processes of the medical systems,” JA628 (citation
modified), for the sole purpose of the “diagnosis, maintenance,
or repair” of a medical device, 37 C.F.R. § 201.40(b)(17). The
district court denied Appellants’ motion for summary judgment
and granted summary judgment to Appellees, concluding that
the medical device repair exemption was lawful under the
DMCA. For the reasons explained below, we affirm the district
court’s decision.
I.
Both this court and the district court have fully recounted
the background events giving rise to this litigation in several
opinions. See Med. Imaging & Tech. All. v. Libr. of Cong.
(MITA I), No. 22-499, 2023 WL 2387760 (D.D.C. Mar. 7,
2023); Med. Imaging & Tech. All. v. Libr. of Cong. (MITA II),
103 F.4th 830 (D.C. Cir. 2024); Advanced Med. Tech. Ass’n v.
Libr. of Cong. (MITA III), No. 22-499, 2025 WL 2029804
(D.D.C. July 21, 2025). We restate here only the information
relevant to this appeal.
3
A.
1.
The Constitution grants Congress the power to provide
copyright protection. See U.S. Const. art. I, § 8, cl. 8 (granting
Congress the power “[t]o promote the Progress of Science and
useful Arts, by securing for limited Times to Authors and
Inventors the exclusive Right to their respective Writings and
Discoveries”). In accordance with this authority, Congress
passed the Copyright Act of 1976, 17 U.S.C. § 101 et seq. The
Copyright Act’s purpose, in broad terms, is “to increase and
not to impede” creative and innovative activity while also
ensuring creators “a fair return” for their contributions. Harper
& Row, Publishers, Inc. v. Nation Enters., 471 U.S. 539, 545–
46 (1985) (explaining that (1) “copyright is intended to
increase and not to impede the harvest of knowledge” and (2)
“[t]he rights conferred by copyright are designed to assure
contributors to the store of knowledge a fair return for their
labors”). Through a bundle of exclusive rights, the Copyright
Act protects “original works of authorship fixed in any tangible
medium of expression, now known or later developed, from
which they can be perceived, reproduced, or otherwise
communicated, either directly or with the aid of a machine or
device.” 17 U.S.C. § 102(a); see also id. §§ 101, 106; Google
LLC v. Oracle Am., Inc., 593 U.S. 1, 23 (2021) (“By defining
computer programs in § 101, Congress chose to place this
subject matter within the copyright regime.”). The Copyright
Act remains the primary source of copyright law in the United
States. E.g., DeCarlo v. Archie Comic Publ’ns, Inc., 127 F.
Supp. 2d 497, 505 (S.D.N.Y.), aff’d, 11 F. App’x 26 (2d Cir.
2001) (“Since the effective date of the Copyright Act of 1976,
the exclusive source of rights arising from authorship of a work
fixed in tangible form is that statute.”).
4
One limitation on copyright liability is fair use. 17 U.S.C.
§ 107 (providing that “fair use . . . is not an infringement of
copyright”). Conceptually, the fair use doctrine permits certain
types of otherwise infringing uses. It “permits and requires
courts to avoid rigid application of the copyright statute when,
on occasion, it would stifle the very creativity which that law
is designed to foster.” Campbell v. Acuff-Rose Music, Inc., 510
U.S. 569, 577 (1994) (citation modified) (quoting Stewart v.
Abend, 495 U.S. 207, 236 (1990)). The statute identifies
illustrative fair use purposes such as “criticism, comment, news
reporting, teaching (including multiple copies for classroom
use), scholarship, or research.” 17 U.S.C. § 107. Fair use
operates as an affirmative defense to a claim of copyright
infringement. See Andy Warhol Found. for the Visual Arts,
Inc. v. Goldsmith, 598 U.S. 508, 526–27 (2023).
A fair use determination requires a case-by-case inquiry.
Harper & Row, 471 U.S. at 549. Courts traditionally consider
four non-exhaustive statutory factors in evaluating fair use:
(1) the purpose and character of the use, including
whether [the] use is of a commercial nature or is for
nonprofit educational purposes; (2) the nature of the
copyrighted work; (3) the amount and substantiality
of the portion used in relation to the copyrighted work
as a whole; and (4) the effect of the use upon the
potential market for or value of the copyrighted work.
17 U.S.C. § 107.
5
2.
In response to “the ease with which pirates could copy and
distribute a copyrightable work in digital form,” Congress
again utilized its copyright powers and passed the DMCA in
1998, which “backed with legal sanctions the efforts of
copyright owners to protect their works from piracy behind
digital walls such as encryption codes or password
protections.” Microsoft Corp. v. AT&T Corp., 550 U.S. 437,
458 (2007) (citation modified). “Those walls, also called
[TPMs], limit access to and use of copyrighted work.” Green
v. U.S. Dep’t of Just., 111 F.4th 81, 89 (D.C. Cir. 2024). To
protect TPMs, the DMCA contains an anticircumvention
provision prohibiting a “person” from circumventing or
overcoming a TPM which “effectively controls access to a”
copyright-protected work. 17 U.S.C. § 1201(a)(1)(A).
However, “[t]he anticircumvention provision is subject to
statutory and regulatory exemptions.” Green, 111 F.4th at 89.
Critically, the DMCA authorizes the Librarian to issue limited
three-year exemptions from the Act’s anticircumvention
provision for persons “who are or are likely to be ‘adversely
affected’ . . . in their ability to make noninfringing uses of
copyrighted materials.” Id. at 90; see also 17 U.S.C.
§ 1201(a)(1)(C)–(D). The Librarian decides whether to grant
an exemption by looking at an entire “class of copyrighted
works,” not a single work. 17 U.S.C. § 1201(a)(1)(C).
Additionally, the Librarian’s determination is prospective,
looking ahead to the “succeeding 3-year period,” rather than
focusing on assertedly infringing acts that have already
occurred or will imminently occur. Id.
The Librarian grants exemptions by conducting triennial
rulemakings and acting “upon the recommendation of the
Register of Copyrights,” after the Register has “consult[ed]
6
with the Assistant Secretary for Communications and
Information of the Department of Commerce.” 17 U.S.C.
§ 1201(a)(1)(C).1 “The Register will recommend granting an
exemption only when the preponderance of the evidence in the
record shows that the conditions for granting an exemption
have been met.” Exemption to Prohibition on Circumvention
of Copyright Protection Systems for Access Control
Technologies, 86 Fed. Reg. 59,627, 59,628 (Oct. 28, 2021)
(citation modified). “The evidence must show that it is more
likely than not that users of a copyrighted work will, in the
1
Section 1201(a)(1)(C) provides:
During the 2-year period described in subparagraph (A),
and during each succeeding 3-year period, the Librarian of
Congress, upon the recommendation of the Register of
Copyrights, who shall consult with the Assistant Secretary
for Communications and Information of the Department of
Commerce and report and comment on his or her views in
making such recommendation, shall make the
determination in a rulemaking proceeding for purposes of
subparagraph (B) of whether persons who are users of a
copyrighted work are, or are likely to be in the succeeding
3-year period, adversely affected by the prohibition under
subparagraph (A) in their ability to make noninfringing
uses under this title of a particular class of copyrighted
works. In conducting such rulemaking, the Librarian shall
examine—(i) the availability for use of copyrighted works;
(ii) the availability for use of works for nonprofit archival,
preservation, and educational purposes; (iii) the impact that
the prohibition on the circumvention of technological
measures applied to copyrighted works has on criticism,
comment, news reporting, teaching, scholarship, or
research; (iv) the effect of circumvention of technological
measures on the market for or value of copyrighted works;
and (v) such other factors as the Librarian considers
appropriate.
7
succeeding three-year period, be adversely affected by the
prohibition on circumvention in their ability to make
noninfringing uses of a particular class of copyrighted works.”
Id. (citation modified). The Register, and ultimately the
Librarian, determine whether a given use is noninfringing by
looking to the statutory fair-use factors previously detailed.
See 17 U.S.C. § 107.
B.
The United States Copyright Office launched the eighth
triennial rulemaking on June 22, 2020, and issued its notice of
proposed rulemaking approximately four months later. See
Exemptions to Permit Circumvention of Access Controls on
Copyrighted Works, 85 Fed. Reg. 65,293, 65,293 (Oct. 15,
2020). The Copyright Office received many proposals for new
exemptions to the DMCA’s anticircumvention provision from
independent service organizations (ISOs). Because they
“derive a ‘commercial benefit’ from medical equipment repair
services,” JA627, these ISOs petitioned for (1) an exemption to
circumvent “TPMs on software-enabled medical devices and
systems for purposes of diagnosis, maintenance, and repair”
and (2) “access to related data files stored on medical devices
and systems, including manuals and servicing materials.” 86
Fed. Reg. at 59,635.
On October 19, 2021, the Register recommended that the
Librarian grant “a new exemption allowing circumvention of
TPMs restricting access to firmware and servicing materials on
medical devices and systems for the purposes of diagnosis,
maintenance, and repair.” JA651. In support of the
recommendation for adopting the medical device repair
exemption, the Register explained that the agency had
“previously concluded that diagnosis and repair are likely to be
transformative uses,” thus, “the first factor favors fair use.”
8
JA628. The Register then observed that the second factor also
favors fair use because “the computer programs and data
embedded in medical devices and systems are not used for their
expressive qualities, but rather for their functional and
informational aspects that enable users to control and
understand the operation of the equipment.” JA629. After
giving the third factor “little weight . . . because the use is
necessary to accomplish the transformative purposes of
diagnosis, maintenance, and repair,” JA630, the Register
decided that the fourth factor also favors fair use after
“conclud[ing] that diagnosis, maintenance, and repair of
medical devices and systems is unlikely to harm the market for
the embedded software,” JA631. In summation, the Register
considered the four statutory factors and determined that the
proposed uses underlying the medical device repair exemption
were “likely to be noninfringing fair uses.” JA631.
The Librarian accepted the Register’s recommendation, 86
Fed. Reg. at 59,637, and adopted the regulation in a final rule,
id. at 59,627. The medical device repair exemption—which
permits circumvention with respect to “[c]omputer programs
that are contained in and control the functioning of a lawfully
acquired medical device or system, and related data files, when
circumvention is a necessary step to allow the diagnosis,
maintenance, or repair of such a device or system”—was
codified at 37 C.F.R. § 201.40(b)(15) (2021). See also 86 Fed.
Reg. at 59,640.
C.
Appellants are trade associations representing
manufacturers of various kinds of medical and digital
devices. In February 2022, Appellants sued Appellees alleging
that the Librarian violated the Administrative Procedure Act
(APA), exceeded statutory authority, and exercised
9
unconstitutional rulemaking power in adopting the medical
device repair exemption during the eighth triennial rulemaking.
After Appellants and Appellees each moved for summary
judgment, the district court ultimately granted Appellees’
alternative motion to dismiss, concluding that (1) sovereign
immunity barred the APA claims, MITA I, 2023 WL 2387760,
at *9–11; (2) Appellants failed to plausibly allege how
adoption of the medical device repair exemption was beyond
the scope of the Librarian’s designated powers, id. at *11–13;
and (3) the Librarian’s promulgation of rules under the DMCA
was not an unconstitutional exercise of either legislative or
executive authority, id. at *13–15. Appellants timely appealed
in March 2023 and we subsequently reversed, holding that
“DMCA rules are subject to the APA just like other copyright
rules,” and remanded for the district court “to assess the APA
claims in the first instance.” MITA II, 103 F.4th at 833.
Before we ruled in MITA II, the Copyright Office launched
the ninth triennial rulemaking on June 8, 2023, and issued its
notice of proposed rulemaking on October 19, 2023.
Exemptions to Permit Circumvention of Access Controls on
Copyrighted Works, 88 Fed. Reg. 72,013 (Oct. 19, 2023).
Numerous entities petitioned for renewal of the medical device
repair exemption. Appellants and others submitted opposition
comments to the renewal. Of note, the opponents of the
exemption argued that the United States Supreme Court’s
decision in Andy Warhol Foundation for the Visual Arts v.
Goldsmith undermined the Librarian’s rationale for adopting
the medical device repair exemption. See JA1510; JA1514–
17; JA1550–54; JA1559–60; JA1563–64. One opponent
specified that in Warhol, the Court clarified that the use of a
copyrighted work “for the same or highly similar purpose” as
it was created “is non-transformative,” an infringing use, “and
not fair use under the Copyright Act.” JA1510. A second one
agreed opining that the medical device repair exemption failed
10
“the Warhol test” because the “original copyrighted work” and
the “secondary use” “share[d] the exact same purpose.”
JA1552.
On October 18, 2024, the Register recommended that the
Librarian renew the medical device repair exemption. The
Register considered the exemption opponents’ arguments
regarding the applicability of other regulatory schemes and the
Warhol decision. See JA810–12. Those arguments did not
persuade the Register that “the Office’s analysis from the 2021
cycle” was now unsound. JA811. The Librarian accepted the
Register’s renewal recommendation regarding the medical
device repair exemption, Exemption to Prohibition on
Circumvention of Copyright Protection Systems for Access
Control Technologies, 89 Fed. Reg. 85,437, 85,445 (Oct. 28,
2024), and it was codified at 37 C.F.R. § 201.40(b)(17) (2024).
See also 89 Fed. Reg. at 85,449.
On remand after MITA II, Appellants amended their
complaint to allege only APA violations, adding allegations
about the Librarian’s renewal of the medical device repair
exemption in the ninth triennial rulemaking. Subsequently,
both parties moved for summary judgment. The district court
granted summary judgment in favor of Appellees and denied
Appellants’ motion. Specifically, the district court found that
the Librarian’s assessment of the medical device repair
exemption was well reasoned and consistent with modern
copyright law, particularly the fair-use doctrine. The district
court rejected Appellants’ contention that the Librarian’s
conclusions regarding the transformative nature of the ISOs’
use of copyrighted works was arbitrary or capricious. The
district court further ruled that the Librarian’s analysis was
consistent with the text and purpose of the DMCA and the 2021
11
and 2024 rulemakings had addressed all relevant comments.
Appellants timely appealed.2
II.
Because the district court’s order “ended the litigation on
the merits,” we have jurisdiction under 28 U.S.C.
§ 1291. Budinich v. Becton Dickinson & Co., 486 U.S. 196,
199 (1988) (citation modified). We review the district court’s
summary judgment decision de novo where it granted one
motion and denied the other, and we review the Librarian’s
decision for compliance with the APA. Grossmont Hosp.
Corp. v. Burwell, 797 F.3d 1079, 1082 (D.C. Cir. 2015); see
also Insider Inc. v. Gen. Servs. Admin., 92 F.4th 1131, 1134
(D.C. Cir. 2024). We “will affirm summary judgment for the
agency unless it violated the APA by taking action that is
arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law.” Alignment Healthcare Inc. v. U.S. Dep’t
of Health & Hum. Servs., 181 F.4th 1236, 1242 (D.C. Cir.
2026) (citation modified). “This standard examines whether the
agency’s decision was based on a consideration of the relevant
factors and whether there has been a clear error of judgment.”
Id. (citation modified). In conducting that review, we afford
“no particular deference” to the district court’s review of an
agency action under the APA. NACS v. Bd. of Governors of
2
Soon after oral argument, the Copyright Office initiated the tenth
triennial rulemaking. See Exemptions to Permit Circumvention of
Access Controls on Copyrighted Works, 91 Fed. Reg. 34,795 (June
9, 2026) (setting August 24, 2026, as the deadline for submission of
“written petitions for renewal of current exemptions,” and September
28, 2026, as the deadline for submission of “written comments in
response to petitions for renewal” of current exemptions). The
parties do not suggest that this ongoing rulemaking proceeding
affects our resolution of this matter. Therefore, we need not address
it.
12
Fed. Rsrv. Sys., 746 F.3d 474, 482 (D.C. Cir. 2014) (citation
modified).
III.
Appellants’ main argument on appeal is that the Librarian
misapplied the statutory fair-use factors in adopting and
renewing the medical device repair exemption. But this is not
a copyright infringement case. Appellants bring claims for a
violation of the APA, and that is how we must resolve this
appeal. In that regard, Appellants assert that the record so
poorly supports the Librarian’s conclusion that the medical
device repair exemption permits noninfringing use that the
decision was “arbitrary, capricious, and not in accordance with
law.” Reply Br. 2. As such, the burden rests on Appellants to
demonstrate that the Librarian’s decision violates the
Copyright Act or “entirely failed to consider an important
aspect of the problem, offered an explanation for its decision
that runs counter to the evidence before the agency, or is so
implausible that it could not be ascribed to a difference in view
or the product of agency expertise.” Motor Vehicle Mfrs. Ass’n
of the U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29,
43 (1983).
After consideration of the Librarian’s determination as to
each of the four factors of the fair use analysis, we affirm the
district court’s determination that the Librarian’s adoption of
the medical device repair exemption was lawful, reasonable,
and supported by “thorough and well-reasoned explanations
from the Eighth and Ninth Triennial Rulemaking procedures.”
See JA1715.
Appellants argue that the primary purpose of the
copyrighted software is repair and maintenance, and the
Librarian erred in determining that the software is primarily for
13
clinical operational use. In both their challenge to the medical
device repair exemption and the district court’s grant of
summary judgment, however, Appellants did not point to
record evidence supporting this argument. The Librarian’s
decision, after all, creates an exemption to “medical equipment
computer programs and data files . . . that are used to support
operation, mechanical, and electronic processes of the medical
systems,” JA628 (citation modified). While that copyrighted
material includes information relevant to the repair process,
Appellants’ argument turns centrally on the proposition that
there is a distinct body of repair software independent from the
clinical-operation software and that it occupies its own
standalone market. Appellants, however, made no such record
in the rulemaking process or before the district court. Nor have
they shown that the Librarian’s classification of the relevant
software exemption was unreasoned or unsupported by the
administrative record.
A.
We begin by assessing the Librarian’s determination under
the first fair-use factor, which concerns “the purpose and
character of the use, including whether the use is of a
commercial nature or is for nonprofit educational
purposes.” 17 U.S.C. § 107(1). “This factor considers the
reasons for, and nature of, the copier’s use of an original
work.” Andy Warhol Found., 598 U.S. at 527–28. “The
central question it asks is whether the new work merely
supersedes the objects of the original creation . . . (supplanting
the original), or instead adds something new, with a further
purpose or different character.” Id. at 528 (citation modified).
While commerciality is a relevant element, it does not carry
presumptive force against a finding of fair use. “[T]he more
transformative the new work, the less will be the significance
of other factors, like commercialism, that may weigh against a
14
finding of fair use.” Campbell, 510 U.S. at 579, 591; see also
Google, 593 U.S. at 29 (explaining that a use is transformative
if the copy adds “something new and important” (citing
Campbell, 510 U.S. at 579)). However, “[i]f an original work
and a secondary use share the same or highly similar purposes,
and the secondary use is of a commercial nature, the first factor
is likely to weigh against fair use, absent some other
justification for copying.” Andy Warhol Found., 598 U.S. at
532–33.
Appellants claim that ISOs use manufacturer-created
repair software and data files in a commercially substitutive
manner, thereby infringing Appellants’ copyrights. They
further contend that, because the software’s purpose is to repair
the machines and the ISOs’ purpose is also to repair them, the
ISOs’ work is not transformative and is commercially
substitutive of Appellants’ work. They state that “[a]ll third-
party servicers do is put the works at issue to their intended
uses in a commercial application,” Reply Br. 11, and claim that
ISOs profit from the fees for the labor they perform in the same
manner a licensed operator would.
Appellants’ challenge to the Librarian’s determination of
transformativeness is rooted in their argument about the scope
of the medical device repair exemption. Again, Appellants’
challenge relies on their argument that the copyrighted works
at issue are separately licensed and created for the primary
purpose of repair, and that the Librarian did not adequately
assess that distinction in making its determination.
That argument is misplaced. The Librarian reasonably
determined that the purpose and character of the secondary
repair use favored fair use. In adopting the Register’s 2021
recommendation, the Librarian understood that ISOs requested
an exemption for “medical equipment computer programs and
15
data files . . . that are used to support operation, mechanical,
and electronic processes of the medical systems.” JA628
(citation modified); see also 86 Fed. Reg. at 59,637
To be sure, the Librarian did not address the proposed
distinction between operating works and repair works. But that
is because Appellants did not demonstrate before the agency
the existence of this distinction that it now presses. At most,
comments before the agency discuss the possible distinction
only in vague terms and provide no supporting evidence. See,
e.g., JA1356, JA1361. In fact, in the Ninth Rulemaking, one
of Appellants argued that both the original and secondary uses
of the work were the same: “operating a medical device or
system.” JA1563. The other argued that both uses “share the
exact same purpose—to enable the device[s] to function.”
JA1552. So the record amply supported the Librarian’s finding
in the Ninth Rulemaking that “the original purpose of the
software is to operate a device that functions as designed”—
not to repair devices. JA812.
Moreover, Appellants were fully aware that the medical
device repair exemption’s “proponents were clear that they
sought [the] exemption for diagnostic software and data files”
and this repair use is distinct from the general operational
software. Appellants’ Br. 30 (citation modified).
As for transformativeness, ISOs put clinical operation
software to a new use when it is used as a tool for repairing
medical devices, transforming the machines from
nonfunctional to functional devices—a use that is markedly
different from the original, manufacturer-intended
purpose. Since the primary use of the clinical operation
software by ISOs was fundamentally different from the
primary purpose of Appellants, the Librarian found that the
ISOs’ use is not a substitutive use, but transformative.
16
Appellants argue that the ISOs’ use of clinical operation
software to repair devices results in a commercial benefit. But
as the Register recommended and the Librarian agreed, that
secondary use would not “commercialize the embedded
copyrighted [clinical operation] software and other servicing
materials” themselves. JA628 (emphasis added). The mere
fact that a secondary use was primarily commercial in purpose
does not presumptively preclude that purpose from favoring
fair use. See Andy Warhol Found., 598 U.S. at 531. ISOs are
neither creating copies of the embedded software and reselling
those copies for a profit, nor using those copies to create
compatible hardware or identical software of their own and
selling it to other manufacturers. The object of the transaction,
which lends the use its commercial nature, is instead the labor
and technical expertise of the operators. Appellants’ analogy
to selling tickets to a screening of an illegally downloaded film
misses the mark. When a party illegally copies a film and sells
tickets to a screening, it has not restored an otherwise
nonfunctional or incomplete film to a viewable state. Rather,
they have simply reproduced and commercialized a copy of the
protected work itself.
Appellants’ focus on the money exchanged for the repair
service is not dispositive. In the 2021 recommendation during
the eighth triennial rulemaking, the Register directly addressed
this concern observing that Appellants “overstate[d] the
significance of the commercial purpose element to the fair use
analysis.” JA628. In that same analysis, the Register also
supported the distinction in purpose by citing earlier analogous
exemptions and comments on the initial proposals and
replies. Id. In short, calling the Register’s analysis, which the
Librarian adopted, an “illogical ipse dixit,” Appellants’ Br. 33,
is simply a claim unsupported by the record. Appellants’
17
disagreement with the Librarian’s reasoning does not render
the conclusions at issue arbitrary or capricious.
Accordingly, on this record, the Librarian’s conclusion
that the ISOs’ use of clinical operation software is
fundamentally transformative in nature and weighs in favor of
a finding of fair use did not violate the APA.
B.
Next, we turn to the Librarian’s assessment under the
second statutory fair-use factor, “the nature of the copyrighted
work.” 17 U.S.C. § 107(2). The second statutory fair use
“factor calls for recognition that some works are closer to the
core of intended copyright protection than others, with the
consequence that fair use is more difficult to establish when the
former works are copied.” Campbell, 510 U.S. at 586. While
not inherently dispositive, courts have held that some works
“are closer to the core of intended copyright protection than
others.” Campbell, 510 U.S. at 586. Primarily factual works,
by contrast, are more likely to succeed in establishing fair use.
Id.
Here, both parties acknowledge that the computer
programs at issue are functional works which serve to “enable
users to control and understand the operation of the
equipment.” JA629; see also Appellants’ Br. 52; Appellees’
Br. 36. Both the clinical operation software and the repair
software are inherently utilitarian rather than artistic and thus
beyond the “core of intended copyright.” Campbell, 510 U.S.
at 586. Furthermore, the clinical operation software is not used
for its “expressive qualities, but rather for its functional and
informational aspects that enable users to control and
understand the operation of the equipment.” JA629. The
Librarian adopted the Register’s finding that the specific works
18
here “are not used for their expressive qualities, but rather for
their functional and informational aspects that enable users to
control and understand the operation of the equipment.”
JA629; 86 Fed. Reg. at 59,637. Appellants have not shown any
error in this factual finding.
Appellants, however, contend that the commercial purpose
of the software, and their arguments regarding a lack of
transformativeness, should turn the second factor against fair
use. See Appellants’ Br. 54. Yet this contention incorrectly
assumes that the commerciality of the use defeats the
possibility that the use may be transformative due to its effects
on the market for maintenance and repair services. We know
that the commerciality of a use is not dispositive of its purpose.
See Andy Warhol Found., 598 U.S. at 531. Additionally, we
have already concluded that the Librarian did not err in
determining that the use was transformative based on the
record before the agency. See supra Section III. Similarly, in
this rulemaking context, the Librarian did not err by following
the general proposition that the software is functional and
therefore favors fair use.
C.
Appellants’ challenge to the Librarian’s assessment under
the third statutory factor likewise fails. This fair-use factor
asks whether “the amount and substantiality of the portion used
in relation to the copyrighted work as a whole,” 17 U.S.C.
§ 107(3), “are reasonable in relation to the purpose of the
copying,” Campbell, 510 U.S. at 586. When assessing “the
amount and substantiality of the portion used,” 17 U.S.C.
§ 107(3), the relevant analysis is the substance of the copy
relative to the original work, not the infringing work, Harper
& Row, 471 U.S. at 565. Put more plainly, “a taking may not
be excused merely because it is insubstantial with respect to the
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infringing work.” Harper & Row, 471 U.S. at 565. The
Supreme Court has previously held that the third factor tends
to favor fair use when the amount and substantiality are
“tethered to a valid, and transformative, purpose.” Google, 593
U.S. at 34.
Appellants argue that the third factor turns against fair use
because the copy uses the entire work. See Appellants’ Br. 55.
But even the copying of the entirety of a work can be justified
if the amount and portion copied is “central to a copier’s valid
purpose.” Google, 593 U.S. at 33. Appellants make no
developed argument in their briefing that the amount copied by
the ISOs is too much relative to the purpose of repair.
Appellants’ argument instead once again rests on
mischaracterizing the scope of the medical device repair
exemption. As stated previously, the Librarian did not err in
finding that the copyrighted material at issue is clinical
operation software and the exemption is confined to temporary
access needed to repair those systems. See supra Section III.
Because Appellants’ arguments presume that the exemption
references a distinct and independent body of purely repair
software, Appellants have offered no argument or analysis of
the third factor in the context of clinical operation software that
the Librarian, the Register, and the administrative record
addressed. Additionally, the Register and Librarian accorded
“little weight” to this factor. JA630; 86 Fed. Reg. at 59,637.
Given the lack of meaningful alternative arguments, and the
little weight accorded to this factor in the Librarian’s decision,
the Appellants have not demonstrated that the Librarian erred
in finding that the third factor favors fair use.
D.
As to the Librarian’s assessment of the fourth fair-use
factor, we look to “the effect of the use upon the potential
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market for or value of the copyrighted work.” 17 U.S.C.
§ 107(4). We “consider not only the extent of market harm
caused by the particular actions of the alleged infringer, but
also whether unrestricted and widespread conduct of the sort
engaged in by the defendant . . . would result in a substantially
adverse impact on the potential market for the original.”
Campbell, 510 U.S. at 590 (citation modified). Appellants
claim that ISOs take market share away from higher-cost
manufacturers and destroy the licensing market for the
protected software. However, we have long recognized that
copyright protections are not absolute. There are myriad
exceptions in which unauthorized uses or reproductions of a
given work do not infringe upon the rights of the copyright
holder. But a use that usurps market demand for the original
work is ordinarily an infringement. Harper & Row, 471 U.S.
at 566–68. Note that this factor of fair use is concerned with
market harm, specifically, to the original work and its
derivatives. Id. at 568.
The Librarian adopted the Register’s view that the medical
device repair exemption was “unlikely to harm the market for
the embedded software,” JA631, 86 Fed. Reg. at 59,637,
because “medical device and system software and data files are
sold with the equipment and have no independent value
separate from the devices,” JA630.
Appellants disagree, claiming market harm based upon
loss of revenue from copiers, healthcare providers, and higher-
cost manufacturer-affiliated technicians. But Appellants did
not introduce evidence into the administrative record to prove
their claims. In fact, one of the Appellants told the agency that
“there is no independent market for the medical imaging device
software beyond the devices themselves.” JA646 n.1261.
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Again, the Librarian viewed the primary purpose of the
software at issue was not facilitating maintenance and repair,
but rather the operation of the original device wholesale. See
JA811–12 (explaining that “repair supports—rather than
displaces—the purpose of the embedded programs that control
the device” (citation modified)). Since “[a] secondary use that
is more different in purpose and character is less likely to usurp
demand for the original work or its derivatives,” Andy Warhol
Found., 598 U.S. at 536 n.12, the Librarian’s determination
points the fourth factor towards fair use. This conclusion is
further reinforced when one considers the administrative
record and the nature of the market effects alleged by
Appellants. Appellants point to competition from ISOs in the
repair services market as evidence that the fourth factor weighs
against fair use. Now, while it is certainly the case that the
medical device repair exemption enables competition in the
maintenance and repair services market, that does not itself
demonstrate an adverse effect on the market for the original
device or its clinical operation software, which is the protected
work. Courts have previously highlighted that not all lost
revenue constitutes the type of harm copyright is intended to
protect against. See Campbell, 510 U.S. at 592 (concluding
that market harm to a work or its derivatives caused by a critical
parody of the original can still be protected by fair use).
Here, the harm alleged by Appellants is the type that
typically falls outside the realm of copyright protection because
the secondary use cannot usurp or replace the market for the
original. Recall that, per the Register’s 2021 recommendation,
ISOs neither retain copies nor create competing works using
those copies because, even with the medical device repair
exemption, users would be prohibited from “reproduc[ing] and
retain[ing] additional copies of any copyrighted materials for
use with other devices.” JA631. The ISOs’ purpose is to
“restore a medical device or system’s functionality, not to
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commercialize the embedded copyrighted software and other
servicing materials.” JA628. Because ISOs neither directly
sell nor license the protected clinical operation software, nor
use it to prepare commercialized derivative works such as their
own machinery, it cannot be said to usurp the market for the
original protected work. There is little in the administrative
record to indicate that the exemption and subsequent repair
services provided by ISOs have harmed the market for
sophisticated medical technology. Appellants’ concerns are
focused entirely on the secondary market of repair and
maintenance services, services that require human input and
expertise that the Librarian previously deemed
transformative. Because the ISOs’ use does not replace or
substitute for the original work, we agree with the district court
that the Librarian did not err in finding that the fourth factor
favors fair use.
*****
In sum, we uphold the Librarian’s medical device repair
exemption as consistent with the law, reasoned, and