Manufacturers of software-enabled equipment often make substantial revenue after the initial sale through maintenance, diagnostics, and repair. Technological access controls can help preserve that business by limiting who can reach the software embedded in the product. In Medical Imaging & Technology Alliance v. Library of Congress, No. 25-5328 (D.C. Cir. Sept. 1, 2026), the D.C. Circuit addresses an increasingly important question for those business models: when independent repair providers take service work from the manufacturer, is that lost revenue necessarily harm that copyright law protects?
The D.C. Circuit upheld the Librarian’s answer: not necessarily. Upholding the DMCA exemption for diagnosis, maintenance, and repair of certain medical devices, the court accepted the distinction between competition in a repair-services market and substitution in the market for copyrighted software. The manufacturers’ trade associations could show that independent service organizations competed for repair work. They did not adequately show that those organizations displaced sales or licenses of the embedded software itself, or that a separate market for repair software existed in the first place.
The ruling does not establish a general right to circumvent software protections for repair, and it does not decide the infringement liability of any particular service organization. Its broader significance lies instead in exposing a recurring weakness in efforts to use copyright to control an aftermarket: a valuable repair business is not automatically a copyright market. The manufacturer must identify the copyrighted work and the market for that work, and in a Section 1201 rulemaking it must build a record that supports the claimed market injury.
The Dispute Was Really About Aftermarket Control
Section 1201(a)(1)(A) of the Digital Millennium Copyright Act generally prohibits circumvention of technological measures that effectively control access to copyrighted works. Congress also created a triennial rulemaking process under which the Librarian of Congress may exempt classes of works when the prohibition is adversely affecting, or is likely to adversely affect, users seeking to make noninfringing uses.
In the eighth triennial rulemaking, independent service organizations sought an exemption allowing access to software-enabled medical devices and related data files when necessary for diagnosis, maintenance, or repair. The Librarian adopted the exemption in 2021 on the recommendation of the Register of Copyrights, and renewed it in 2024. The exemption is now codified at 37 C.F.R. § 201.40(b)(17). The Medical Imaging & Technology Alliance and Advanced Medical Technology Association challenged both the original exemption and its renewal.
The case had already produced one significant D.C. Circuit decision. In Medical Imaging & Technology Alliance v. Library of Congress, 103 F.4th 830 (D.C. Cir. 2024), the court held that DMCA exemption rules are subject to review under the Administrative Procedure Act. After remand, the district court granted summary judgment to the Librarian and Library of Congress. The September 2026 decision affirmed that judgment in a precedential opinion.
The procedural posture sharply limits the holding. The D.C. Circuit stressed that this was not a copyright infringement action. It was reviewing agency action under the APA. The question was therefore not whether every use covered by the exemption would necessarily qualify as fair use in later litigation, but whether the Librarian’s prospective, class-wide conclusion that the covered uses were likely noninfringing was reasonable, lawful, and supported by the administrative record.
A Repair Market Is Not Necessarily a Copyright Market
The trade associations’ strongest economic argument was straightforward. Independent service organizations perform work that manufacturers or their authorized technicians otherwise could perform. If the exemption makes that competition easier, manufacturers may lose repair revenue. But the fourth fair-use factor does not ask whether a copyright owner loses money somewhere in its broader business. It asks whether the challenged use harms the actual or potential market for the copyrighted work or legitimate derivatives of that work.
That distinction proved decisive. The Librarian had found that the medical-device software and related data files were sold with the equipment and had no independent value separate from the devices. The associations did not develop evidence establishing a separate market for the covered software. One appellant had gone further and told the Copyright Office that there was no independent market for the medical-imaging device software beyond the devices themselves.
The independent service organizations also were not selling competing copies of the software, licensing substitute programs, manufacturing competing medical devices from copied code, or retaining additional copies for use with other machines. They accessed the embedded software as part of restoring the customer’s equipment to working condition. The D.C. Circuit therefore upheld the Librarian’s conclusion that competition in repair services did not itself establish harm to the market for the protected software.
For manufacturers, this is a more important point than the simple statement that repair may qualify as fair use. The fourth fair-use factor focuses on harm to the market for the copyrighted work and its legitimate derivatives; it does not automatically encompass every adjacent source of revenue associated with that work. A proprietary service network may be commercially central to the product’s economics while still being analytically distinct from the copyright market for the software.
That does not mean manufacturers lack other ways to structure or protect an authorized service model. Contractual restrictions, licensing arrangements, warranties, access credentials, product architecture, and other legal rights may affect who can service a product and on what terms. None of those issues was resolved in this case. The narrower point is that copyright cannot simply be assumed to perform the work of protecting the entire aftermarket.
The Manufacturers Had a Market-Definition Problem and a Record Problem
The fourth-factor analysis cannot be separated from another recurring feature of the opinion: the associations repeatedly described the relevant copyrighted material as repair software that manufacturers had created or licensed specifically for servicing their equipment. Had that characterization been established, the associations’ first- and fourth-factor arguments would at least have rested on a materially different factual premise. An independent service organization using software for the same repair purpose for which the manufacturer created and licensed it would have a stronger resemblance to market substitution.
But the D.C. Circuit found that the administrative record did not establish a distinct body of repair software independent from clinical-operation software or a standalone market for such software. The comments submitted during the rulemakings referred to a possible distinction only in vague terms and without developed evidentiary support. The court therefore accepted the Librarian’s characterization of the covered programs as software used to support operation of the medical devices, even though the software could contain information relevant to repair.
This was not a technical failure of administrative law divorced from the copyright analysis. It changed the substance of the fair-use inquiry. Once the protected work was treated as operational software rather than a separately marketed repair product, the independent service organization’s use looked different in purpose and less substitutive in market effect. The record problem thus shaped both the first and fourth fair-use factors and also undermined the associations’ argument about use of the entire work under the third factor.
The practical lesson for companies participating in Section 1201 rulemakings is therefore unusually concrete. If a manufacturer contends that circumvention threatens a distinct copyright market, it should establish that market before the agency. Relevant evidence could include separate development of repair programs, separate licensing or pricing, customers who actually obtain repair-software access apart from the device, revenue attributable to those licenses, and evidence that the proposed exempted use would substitute for those transactions. The D.C. Circuit did not hold that such a record would necessarily defeat an exemption. It held that the manufacturers could not overturn the Librarian’s decision based on a distinction they had not adequately established.
Warhol Did Not Turn Paid Repair Into the Same Copyright Use
The manufacturers relied heavily on the Supreme Court’s 2023 decision in Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith, 598 U.S. 508 (2023). Under Warhol, when the original work and the secondary use share the same or highly similar purposes, particularly in a commercial setting, the first fair-use factor is likely to weigh against fair use absent another justification for copying. The associations argued that manufacturers used their software to service medical devices and independent providers did exactly the same thing for money.
The D.C. Circuit did not reject Warhol. It rejected the factual premise needed to make the analogy work on this record. The Librarian could reasonably treat the software’s original purpose as operating a device that functions as designed, while the service organization’s purpose was to use that software as a tool to restore a malfunctioning device. On that characterization, the secondary use was materially different rather than merely substituting for the original use.
The commercial nature of the repair business did not change that conclusion. The court emphasized that customers were paying for the service provider’s labor and technical expertise, not for copies of the embedded program. The providers were not reproducing the software and reselling it. This distinction matters because it separates commercial exploitation of a copyrighted work from a commercial service that incidentally requires access to the work to accomplish a different objective.
The decision therefore should not be reduced to the proposition that repair is transformative. The more useful rule is that transformativeness depends on how the copyrighted work is defined and what the secondary user is actually doing with it. A standalone diagnostic or repair program that is separately licensed for the same servicing function could present a materially different Warhol analysis.
The Remaining Fair-Use Factors Supported, but Did Not Drive, the Result
The second and third fair-use factors supported the Librarian’s determination but are less important to the decision’s broader commercial significance. Both sides agreed that the computer programs were functional works used to control and understand the operation of medical equipment. The court therefore upheld the Librarian’s conclusion that the nature of the works favored fair use, consistent with the principle that utilitarian works generally lie farther from the core of copyright protection than highly expressive works.
The associations also argued that service organizations might access entire programs. Relying on Google LLC v. Oracle America, Inc., 593 U.S. 1 (2021), the D.C. Circuit noted that use of an entire work can still be consistent with fair use when the amount used is reasonably related to the valid purpose. The exemption was confined to temporary access necessary for diagnosis, maintenance, or repair, and the associations did not develop an argument that service organizations accessed more of the operational software than the repair purpose reasonably required.
What Software-Enabled Manufacturers Should Take From the Decision
The first implication is that companies should separate copyright strategy from aftermarket strategy. If recurring repair and maintenance revenue is an important part of a product’s economics, the business should identify which elements of that model actually depend on copyright and which depend on contract, licensing structure, product design, access controls, warranties, support relationships, or other legal rights. Treating all of those interests as a single copyright market invites the precise problem the manufacturers encountered here.
Second, product architecture and commercialization choices can influence the factual premises of later copyright disputes. Embedded operational software that is bundled with a device and has no demonstrated independent market presents a different fair-use story from a distinct servicing program that is separately developed, separately licensed, and independently monetized. The D.C. Circuit did not tell manufacturers how to architect their products, but its reasoning shows why those decisions can have legal consequences.
Third, regulatory record-building should be treated as substantive strategy rather than administrative housekeeping. Section 1201 exemptions are created through recurring triennial rulemakings, and judicial review is deferential. A manufacturer that wants to preserve an argument about a distinct software market, a particular licensing practice, or substitutive economic harm should support that argument while the Copyright Office is considering the exemption. The court noted that the tenth triennial rulemaking was already underway while this appeal was pending, underscoring that these issues recur rather than ending with a single judicial decision.
Fourth, independent service organizations should not read the opinion as a general authorization to bypass software protections. The exemption applies to defined medical-device programs and related data files and only when circumvention is necessary for diagnosis, maintenance, or repair of a lawfully acquired device or system. The decision also relied on limitations preventing users from reproducing and retaining additional copies for use with other devices. A service provider that copies software, redistributes it, uses it to build competing products, or exceeds the exemption’s scope presents different legal questions.
A Significant Right-to-Repair Decision, but a Narrow Copyright Holding
Medical Imaging & Technology Alliance is significant because it rejects a tempting shortcut in the economics of software-enabled products. A manufacturer can lose money when independent companies enter its repair market without necessarily suffering the kind of market injury that copyright law recognizes. The copyright inquiry remains tied to the protected work and the markets for that work and its legitimate derivatives.
The decision is also carefully bounded. It is a precedential D.C. Circuit ruling affirming an agency exemption under the APA, not a final infringement judgment against a particular manufacturer or service provider. Its reasoning depends heavily on the administrative record, including the absence of evidence establishing the repair-software market the associations later emphasized. Future cases involving different software architecture, licensing practices, copying conduct, or evidentiary records may come out differently.
For manufacturers of medical equipment and other software-enabled products, however, the strategic lesson is durable. If aftermarket exclusivity matters, companies should know which legal rights actually support it. And if copyright is expected to do that work, the company should be able to identify the market for the copyrighted work that it claims is being displaced, not merely the service revenue it hopes to preserve.
Key Takeaways
- Lost repair revenue is not automatically copyright-market harm. Competition for servicing work is analytically different from substitution for the copyrighted software or a legitimate derivative market.
- Defining the copyrighted work matters. The manufacturers’ theory depended on a distinct body of repair software, but the administrative record did not adequately establish that software or a standalone market for it.
- The record failure was substantive. It affected the court’s treatment of transformative purpose, market harm, and the amount of the work used, not merely the standard of judicial review.
- Commercial repair is not necessarily the same commercial use. On this record, customers paid for labor and technical expertise, while the software was temporarily accessed to restore equipment rather than sold or licensed as a competing product.
- Manufacturers should separate copyright protection from aftermarket protection. Service exclusivity may depend on contracts, licensing structure, access controls, warranties, product architecture, or other rights that were not decided in this case.
- The ruling remains narrow. The D.C. Circuit upheld a defined Section 1201 exemption under the APA; it did not establish a general right to circumvent software controls for repair or decide the liability of a particular service provider.