Software Fair Use in 2025: Rules of the Road

Navigating software innovation in 2025 requires a clear understanding of copyright’s boundaries. Software fair use isn’t a shortcut—it’s a protected lane, defined by legal rules businesses must prove and practical controls they should implement. This blog unpacks “Software Fair Use” for businesses, mapping out the actionable “rules of the road” and the documentation that turns a risky journey into a lawful business strategy.

Software Fair Use in 2025: Plain Rules, Real Risks, and What Developers Must Prove

Businesses often ask: Is software fair use a viable defense in 2025? The answer is yes, when it is used for legitimate purposes, such as enabling interoperability, supporting functional research, or maintaining developer continuity across platforms. However, fair use does not justify broad copying or training rival tools on proprietary editorial content. To benefit from fair use, companies must prepare and maintain detailed records that demonstrate necessity, restraint, a clear purpose, and that their use does not replace the copyright holder’s market.

Often, courts resolve hard disputes by applying simple rules. In copyright, the simple rule is in the text: fair use turns on four statutory factors. Those factors are not slogans. They are guides that ask what the user did, why the user did it, how much the user took, and whether the taking harms the actual market for the work. When thinking about “software fair use,” drive fast but not blind. Software fair use can get you where you need to go, if you follow the rules, document your route, and avoid the off-ramps.

Why Software Fair Use Matters

Courts don’t resolve fair use disputes with slogans—they apply four statutory factors:

• The purpose and character of use

• The nature of the copyrighted work

• The amount taken

• The effect on the actual market

For software, “fair use” covers real purposes Congress recognized—interoperability, functional research, limited API re-use, and educational or transformative uses. Businesses should avoid generic generalizations and instead focus on the specific legal grounds for software fair use, backed by strong, organized documentation.

I. Reverse Engineering for Interoperability

It remains lawful—and essential—to reverse engineer software interfaces for practical interoperability, but only when:

• The copying is necessary to access unprotected functional information

• Only the minimum amount required is taken

• The resulting product serves a distinct market that doesn’t substitute for the original

When the record shows necessity, restraint, and a distinct market function, the statutory factors point toward fair use.

More than thirty years ago the Ninth Circuit recognized that a developer may copy software as an intermediate step to discover unprotected functional interfaces when there is no other practical way to achieve interoperability. In Sega Enterprises Ltd. v. Accolade, Inc., the court held that disassembly of code to learn the interface information was fair use, because the purpose was to reach the functional ideas that copyright does not grant a monopoly over. The court reasoned that copyright protects expression, not method, system, or idea, and that refusing intermediate copying would tilt the law toward a de facto monopoly over function. In Sony Computer Entertainment, Inc. v. Connectix Corp., the same court held that copying a BIOS in the course of developing a non-infringing emulator was fair use, because the copying was necessary, temporary, and directed toward a different product that served a different market.

Developers should not treat these points as litigation rhetoric. They should build them into ordinary practice. An internal memorandum that states the compatibility objective, identifies the interfaces at issue, describes the testing method, and records the destruction of intermediate copies will carry real weight.

II. Re-Implementing API Declarations

The Supreme Court in Google LLC v. Oracle America, Inc. held that copying APIs for compatibility can be fair use when tied to a recognized transformative purpose, not market substitution. The Court assumed without deciding that the computer code at issue was copyrightable and then applied the statute. It emphasized that certain code is organized to serve a specific function, that Google took only what was needed to allow programmers to call certain software functions in a familiar way, and that the purpose was to let programmers work in a new environment with a different set of constraints. The Court explained that the amount taken must be examined in relation to the justified purpose and that the market analysis must focus on whether the use displaces the original’s legitimate market.

In the case of Google, the court did not license wholesale copying. It supports a limited taking to give developers continuity across technical platforms. If a company copies beyond what is required to let developers call methods or if the company uses the copied material to sell the same product to the same customers, the defense weakens. The best practice is to tie every line used to a developer-portability purpose and to demonstrate that the implementation code is new, that the environment is meaningfully different, and that the plaintiff’s licensing market is not displaced.

III. Transformative Use: A Narrowed Standard

The Andy Warhol v. Goldsmith decision reminds businesses: fair use is about different legally protected purposes—not simply new aesthetics or audiences. For software creators, show how the use supports recognized goals like interoperability, criticism, teaching, or commentary. Competing products selling into the same market are not transformative for fair use.

In Andy Warhol Foundation v. Goldsmith, in a visual arts context, the Supreme Court clarified that the first fair-use factor asks whether the defendant’s use has a different purpose that the law should recognize, not merely a new style or a new audience. The Court rejected an approach that treats any change in appearance as “transformative,” and it warned that a defendant who sells into the same market for the same purpose should not expect the first factor to favor fair use.

While the issue was not related to a software matter, the Court’s ruling still matters in software disputes. A defendant who builds a competing tool and claims “transformation” because the interface is modern or the code base is different does not meet the standard set by the Court. The defendant must show a distinct purpose that the law values, such as enabling interoperability, enabling research about unprotected function, or allowing programmers to use familiar commands in a new technological context. When the record shows a head-to-head substitute, factor one will weigh against fair use, and factor four will do the same.

IV. AI Training and Fair Use Risks

In 2025 the District of Delaware issued the first substantive fair-use ruling for AI training on proprietary editorial content. In Thomson Reuters v. ROSS Intelligence, the court granted summary judgment against fair use where defendants used Westlaw headnotes and the Key Number system to train a legal research tool that competed with Westlaw. The court focused on the defendants’ purpose and on market harm. It concluded that using editorial summaries and taxonomy to build a substitute research service was not the kind of transformative purpose that the statute favors and that the use threatened the rightsholder’s licensing market.

That case teaches another lesson. When a company trains a model on proprietary editorial matter to build a tool that serves the same function as the source, the fair-use defense is weak. The safer course is to obtain licenses, to curate training sets toward public-domain or permissively licensed materials, to keep precise provenance records, and to design outputs that do not replicate the copyrighted editorial value. If a company intends to argue fair use in this setting, it must build a record that the training serves a different, legitimate purpose and that the model does not act as a substitute for the rightsholder’s product.

V. DMCA, Essential-Step, and Off-Ramps

Fair use does not repeal the Digital Millennium Copyright Act. Section 1201 prohibits circumvention of access controls even when copying might otherwise be fair use. Section 1201(f) provides a narrow path for reverse engineering for interoperability by independently created programs. Before beginning any technical effort to bypass access controls, a developer should analyze the anti-circumvention efforts and match the technical plans with those findings.  Section 117 also permits the owner of a copy of a program to make copies or adaptations as an essential step in using the program or for archival purposes. These statutory rules are not exceptions at large. They are targeted allowances. They must be matched to the facts of the specific situation, carefully.

VI. Fair Use Readiness Review

A fair use readiness review is a proactive internal evaluation that organizations concude before launching a new project to determine whether their planned use of copyrighted material, like software code, likely to qualify as fair use under copyright law. It emphasizes documenting business necessity, assesing each fiar use factor in context, identifying the risks and setting up compliance processes to strengthen future litigation issues.  This review analyzes the project against the four statutory fair use factors—(1) purpose and character of the use, (2) nature of the copyrighted work, (3) amount and substantiality taken, and (4) effect on the market for the original.

In contrast to a Fair Use Readiness Review, a legal fair use analysis, is a more formal, case-specific legal assessment, either provided as legal advice by counsel or performed by a court during litigation of a dispute. It consists of a detailed, factor-by-factor evaluation of all the facts under the four statutory fair use factors (purpose, nature, amount, and market effect). This legal analysis is subjective and fact-dependent, considering precedents and likely outcomes, and ultimately leads to a legal opinion or court decision about whether a specific use constitutes fair use.

A fair use readiness review typically involves:

• Reviewing documentation of necessity and purpose for any copying or reuse

• Mapping how the use is distinct from the copyright holder’s ordinary market

• Assessing whether the amount taken is limited to what’s needed for a lawful purpose, such as interoperability or research

• Checking if internal processes exist for documenting and destroying intermediate copies

• Flagging risks posed by bypassing technological protection measures (DMCA concerns) or mixing in publicity/trademark matters

The review yields concrete recommendations and required records to help ensure that if the project is ever challenged in court, the business can demonstrate careful consideration of, and compliance with, the legal requirements for fair use. For software developers and businesses, conducting a fair use readiness review before launching a new feature, workflow, or product reduces litigation risk and helps align innovation with current copyright law.

VII. Publicity and Trademark: Separate Lane, Separate Rules

Software disputes often surface likeness or trademark claims under state law and the Lanham Act (see Rogers v. Grimaldi test). Fair use in copyright does not shield businesses from separate liability for publicity or trademark rights, especially in video game and sports software. Businesses should carefully and separately analyze copyright, publicity, and trademark issues for each new software project. Litigation in high-profile video game lawsuits involving the use of athletes’ images in video games was hotly contested and often misunderstood: those cases do not provide a ruling on copyright fair use. For example, in Keller v. Electronic Arts, the court considered the right of publicity under state law and rejected a broad First Amendment defense. In Brown v. Electronic Arts, the court examined a trademark claim under the Lanham Act, applying the Rogers v. Grimaldi test to decide that using Jim Brown’s likeness was artistically relevant and not misleading. These rulings rely on publicity and trademark law—not copyright’s fair use rules under Section 107. Because software games often involve a miriad of issues, software companies must assess each type of legal right independently, since evidence supporting copyright fair use may not protect against a publicity claim, and defeating a trademark claim under Rogers does not mean the copyright issue is also resolved.

VIII. Navigating the Fair Use Rules of the Road

General counsel should insist on practices that match the cases and the statute. The following rules state what builders must prove and what records they must keep.

1. Written necessity memos for interoperability. Teams should document interoperability issues before copying any code. The document should identify the interfaces, explain why no public documentation or clean-room method will work, identify the narrow files to be read, and set a date to destroy intermediate copies.

2. Documentation mapping code use to API re-implementation goals. Engineers should identify the API code they intend to reuse, state how each API enables familiar calls, and show that implementation code is original to the new environment based on Google v. Oracle.

3. AI Training Must Respect Editorial and Proprietary Value. Product leaders should assume that training on proprietary editorial matter is not fair use when the model will serve the same market. They should negotiate licenses, shape datasets toward public or permissive sources, track provenance, and design outputs that do not reproduce the source’s expressive summaries or taxonomies.

4. Anti-Circumvention must align with DMCA exceptions. If any technical protection measure will be bypassed, counsel must analyze Section 1201 and determine whether Section 1201(f) applies. The engineering plan should reflect that determination.

5. Publicity and Trademark are seperate from Copyright. If a product uses names, images, or likenesses, counsel should analyze state publicity law. If a product uses brand indicators, counsel should analyze the Lanham Act and apply the Rogers test. The presence of a fair-use argument in copyright does not excuse a failure to clear these separate rights.

These are not burdensome rules. They are ordinary business controls that match the statute and the cases. They reduce litigation risk because they produce the very proof that courts have said matters.

Fair use is not a license to copy broadly, to train models on proprietary editorial systems for a competing service, or to avoid the separate rules that govern circumvention, publicity, and trademarks. The party who copies must bring forward clear records that show necessity, restraint, and a distinct purpose. When the records show that, the defense stands on solid ground. When they do not, the defense fails.

Courts read statutes as they are written. Section 107 sets out factors. Section 117 and Section 1201 set out limits and allowances. The cases apply these words in ways that are consistent and predictable when the facts are well-proved. Companies that build their processes around those words—and that keep straight the difference between copyright, publicity, and trademark—can innovate with confidence, defend their work when challenged, and respect the rights that the law protects.

Conclusion

Relying on fair use in your software projects requires more than good intentions—it demands careful planning and strong records. Consider a fair use readiness review. Make sure every project is supported by documentation that proves necessity, restraint, a recognized purpose, and genuine market separation. For straight answers and proactive protection, contact our IP law firm today to review your fair use strategies and ensure your business operates with confidence and clarity.