Law’s Interaction with Voluntary Codes and Standards

Voluntary codes and standards are, well, voluntary.

Yet despite this fact, these codes and standards influence industry behavior and can result in wide-reaching impacts on modern products and industry practices. These privately created norms also interact with the law and the legal system in a variety of important ways that make knowing about them vital for both law students and lawyers.

For this reason, an extensive resource website recently announced by the Penn Program on Regulation (PPR) provides teaching materials that can help law professors and other instructors build into their existing courses some structured learning about voluntary codes and standards and how they are developed by non-governmental organizations comprising as their members the very businesses to which their standards apply.

PPR’s collection of materials not only shows how voluntary codes and standards are developed to govern many industry practices, products, and services, but also show how these privately established norms interact with the legal system.

Consider six important ways that voluntary codes and standards interact with the law.

First, they can help determine the standard of care in negligence and products liability cases. Since it can often be difficult for triers of fact to determine if a standard of care has been met in products liability cases, voluntary codes and standards provide helpful guideposts.

Second, voluntary codes and standards hold important implications for those who practice intellectual property law—especially the law of patents. To meet some voluntary standards, businesses must use a specific patented technology. That technology then becomes known as a standard-essential patent. Under prevailing principles, the patent owners must license standard-essential patents to others on fair, reasonable, and non-discriminatory terms (FRAND). Disputes over what constitutes FRAND in specific cases can and do spill over into litigation.

Third, voluntary codes and standards intersect with contract law, as seen in FRAND requirements themselves. The prevailing FRAND principles stem from express or implied contractual arrangements that patent holders enter into when they join a standard-setting organization.

Voluntary codes and standards enter into contracts in other ways too, such as by defining the basis for contractual performance or specifying the precise characteristics of products and services to be exchanged. Failure to provide products or services that conform to any referenced standards would constitute breach of contract.

Fourth, voluntary codes and standards can help facilitate international trade. Various sources of international trade law—including World Trade Organization materials and provisions of international agreements—urge countries to rely on international standards over domestic regulations to promote efficient trade in products built to common standards.

Fifth, surprising as it may seem, voluntary codes and standards can have implications for criminal law and procedure. For example, voluntary standards govern many aspects of the operation of forensic laboratories. Forensic science is constantly evolving, and voluntary standards developed with direct participation by scientists themselves are often thought to be more adaptable and responsive. For criminal lawyers, forensic analysis produced by laboratories that fail to meet the relevant standards can be deemed inadmissible in court.

Finally, voluntary codes and standards can themselves be borrowed wholesale by legislatures and regulatory agencies and transformed into binding law. This practice happens through a process known as incorporation by reference—that is, by a regulatory agency referring to the citation of a voluntary code or standard and declaring that it has become part of the law.

Rather than developing all of its own safety standards for toys, for example, the Consumer Product Safety Commission (CPSC) issues rules that incorporate by reference the standard for toy safety created by ASTM International, a private standard-setting organization. When CPSC does so, toy manufacturers then assume a mandatory, legal obligation to comply with ASTM’s standard.

A legal debate has ensued for some years over whether incorporation by reference comports with general policies that favor the transparency of binding law. When standards are incorporated by reference, their actual content cannot be found in the normal, publicly accessible and online sources of law, such as the Federal Register or the Code of Federal Regulations.

Moreover, when legislatures and agencies incorporate a voluntary code or standard into binding law, they do not eliminate any copyright protection that may apply to that private code or standard. As a result, to read an incorporated code or standard, an individual must either visit an agency’s headquarters or purchase a copy from the standard-setting organization, at times at significant expense.

As this short review should make clear, voluntary codes and standards are far from walled off in an entirely separate world of private governance. Instead, they regularly interact with the law, and at times will even prove to be the centerpiece of litigation or key parts of the legal system.

Yet for too long, voluntary codes and standards have been overlooked in the training given to lawyers and other professionals who interact with the legal system. We suspect that the vast majority of law students never encounter any discussion of voluntary codes and standards during their time in law school—such as about how they are made, what they do, and how they can affect the clients that lawyers serve.

The Penn Program on Regulation’s new voluntary codes and standards resource website aims to correct this oversight in the typical law school curriculum. Its materials can make it easier for professors everywhere to find a way to build some discussion of voluntary codes and standards into their existing courses, whether by taking 10 minutes to explore a teachable moment or by devoting an entire class session to a standards-related lesson.

The many ways that private governance intersects with public law and the legal system make it time to devote more deliberate attention to voluntary codes and standards in the normal course of legal training. Although voluntary codes and standards may be voluntary, law professors should no longer make all learning about them voluntary for their students.

Cary Coglianese is the Edward B. Shils Professor of Law and the Director of the Penn Program on Regulation at the University of Pennsylvania. He serves as the faculty advisor to The Regulatory Review.