We will consistently draw a distinction between the 65-year-old ACT not-for-profit (ACT nfp) and the new entity owned by Nexus Capital Management.
Our national sponsor is the esteemed National Federation of State High School Associations (NFHS), a 100-year-old not-for-profit organization. This partnership has been in place for over 15 years.
Throughout the years, eKnowledge has established numerous unpaid, long-term affiliate/partner relationships with various military organizations and general Not-For-Profit entities, expanding our reach and impact.
Organizations that support our efforts: Click here
eKnowledge is working towards official 501(c)(3) nonprofit status, a long-term goal reflecting our dedication to providing SAT/ACT prep for all students, regardless of their ability to pay. The lawsuit has slowed progress, but we're committed to finishing by Q1 2025, enhancing our mission's reach.
Over the past 25 years, I have personally funded the efforts to build this organization. This is my life’s work.
At the core of this legal battle is the eKnowledge PowerPrep ACT Program, which has been aiding students since 2005. Over 300,000 students and families have benefited from this affordable, comprehensive program, featuring hundreds of video study hours and thousands of pages of instructional material. The program includes 295 question-stems from retired ACT exams, which ACT nfp released into the public domain over decades. ACT Nexus now seeks to reclaim copyright control over these questions, aiming to eliminate competition in ACT test prep.
Note: we do not use the ACT explanations—just the call of the question or question stems. (Example: “What is the main point of the passage?” “What is the enclosed area of the figure above?”)
These ACT question stems are crucial for students to prepare fairly, equally, and effectively for the ACT exam. However, they constitute just 0.17% of our content nodes (295 out of 165,758) and 0.026% by file size (2,360 kb out of 8,991,617 kb).
Beyond the PowerPrep content, which is 99.97% distinct from the ACT stems, we've developed:
Independent data from these pilots shows strong support, with teachers and administrators on board, and students achieving significant score improvements: an average of 4 ACT points, with many adding 10 to 13 points, after 20+ hours of focused study–the results were consistent over three consecutive years.
Public Domain Access: If Nexus Capital succeeds in stopping us from using the retired ACT question stems that ACT nfp freely released into the public domain for decades, this could prevent schools, teachers, organizations, and NFPs from accessing these questions. This would mean no valid, effective, or fair ACT prep could be created, giving Nexus control over both the ACT test and its preparation. This control would extend to access to American colleges, universities, and billions in taxpayer-funded scholarships, affecting approximately 40,000,000 students and families over the next 20 years.
If we are a just society that cares about fairness and equal access to education, where every young person has the tools to thrive in life, we cannot let ACT Nexus gain monopoly control over such an important aspect of the public education process. Equal access to college test preparation and scholarships must remain open to everyone.
✭ The ACT Organization: For 65 years, the ACT was a public service, nonprofit organization that created the ACT exam. Once questions were used, they were retired, holding no value to the test makers for future use. However, these retired questions are crucial for students, schools, organizations, and NFPs to develop valid, fair, and affordable preparation materials. For decades, ACT nfp has freely released these retired exams into the public domain, encouraging their use for student preparation.
✭ In mid-2024, ACT nfp was acquired by Nexus Capital Management, a private equity firm. Shortly after, Nexus filed a federal lawsuit aiming to prevent others, including NFPs, teachers, and schools from using these public domain questions, which had been freely available for decades.
✭ If Nexus succeeds, they would become the sole provider of both the ACT exam and its preparation, forcing all students, parents, schools, and military members to purchase Nexus's products for equal and fair preparation, as they would be the only source of actual ACT exam questions.
✭ Monopoly Control: A Nexus victory would grant them unfair control over access to colleges and universities for over half of all students. Moreover, since many states use the ACT for high school exit exams and to determine taxpayer-funded scholarship eligibility and college readiness, this control would limit equal access to educational opportunities. Further, without competition, students would face a one-size-fits-all approach to preparation, limiting educational diversity and personalized learning paths.
✭ Broader Implications: If this precedent is set, the SAT might follow, leading to a single private equity firm controlling all college entrance testing and preparation. This would mean unfair control over access to higher education and scholarships, with no competitive options, leaving families, students, schools, and military members at the mercy of pricing set by Nexus or similar entities.
Since 1899 (SAT) and 1959 (ACT), the SAT and ACT exams have been managed and created by public interest nonprofits that have released the retired exams into the public domain.
Given the SAT and ACT are the two primary standardized tests for college entry, all educational entities preparing students for these exams must align their teachings with the SAT and ACT. Access to retired questions is essential for this preparation, a practice both organizations have historically supported by releasing these questions into the public domain to fulfill their mission of increasing access to education.
Initially, we believed our mission was aligned with ACT Nexus (formerly ACT nfp), focusing on helping students and enhancing access to prep. However, our assumption of a simple misunderstanding was shattered when Nexus Capital Management, upon acquiring ACT in 2024, launched a hostile lawsuit against us, aiming to monopolize these questions, reversing decades of precedent in pursuit for private gain.
Since 2005, we've helped over 300,000 families, primarily military and homeschooled, with high-quality, affordable prep through our SAT/ACT PowerPrep program, sponsored by the National Federation of State High School Associations (NFHS). We managed to keep costs between $10 and $50 for a year's license, with all proceeds reinvested to improve the program and reach more students. We’ve never produced a profit. Comparatively, private tutoring typically costs $1,500 to $5,000 per student. Our effectiveness is evidenced by over 45,000 5-star reviews and countless expressions of gratitude, which we shared with Nexus to demonstrate our impact.
Beginning in 2005, our reach was broad through unpaid partnerships with various nonprofits and organizations like military groups, homeschool organizations, US Youth Soccer, and the Boy Scouts. However, as digital platforms evolved, our ability to directly reach parents diminished. To counter this, over the past several years we have developed a classroom-compatible program for public and private schools. To fund this venture, I sold my home in California.
By 2024, we completed beta testing, proving the program's efficacy with independent data showing an average 4-point increase in ACT scores, and many students improving 10 to 13 points. Our next step was to transition to an official 501(c)(3) nonprofit by Q1 2025. Nexus's legal action has impacted this progress, but we are still on course.
Despite our transparency, Nexus pursues us with what seems like vengeful intent, aiming to dismantle our work even though it aligns with the original ACT mission (the same mission ACT Nexus claims it will continue) of helping students and expanding access. This lawsuit isn't just against us; it's an assault on the principle of equal educational access and opportunity, threatening to stagnate preparation materials and simultaneously exclusive to those who can afford Nexus's prices.
Throughout this ordeal, we have acted in good faith at every turn:
We have complied with every request from ACT Nexus, except one: we cannot agree to their demand to cease using the retired exam questions that ACT nfp has freely released into the public domain for over 65 years. This stand is non-negotiable because these questions are fundamental for providing students with an equal, affordable, fair, and effective preparation for the ACT, crucial for their access to state-funded scholarships and college readiness. This fight is about preserving equal access and opportunity and the public trust in the educational system, not just about our organization's survival.
In May 2024, when things hadn’t settled, I sought an unbiased perspective from Mr. Bryan Wheelock, a principal attorney at Harness IP Firm in Washington D.C., an intellectual property expert, and an adjunct professor at Washington University School of Law. Mr. Wheelock voluntarily reviewed the case details, including ACT Nexus' claims under copyright law (17 USC 107), the Lanham Act (15 USC 1124-1125), and relevant precedents. His analysis concluded that ACT Nexus would not prevail. But he also proposed a reasonable settlement that considered both parties' interests.
His opinion letter and proposed settlement was shared with Plaintiff with high hopes it would completely resolve the matter. The letter concluded:
eKnowledge has delivered low-cost ACT test preparation services to thousands of students, its continuation is essential to making sure that ACT test is a test of a student’s learning ability, and not his/her parents’ ability to pay for an effective preparation course. eKnowledge has always cooperated with requests from ACT, Inc. and is addressing the bulleted points in your letter, we hope that in return you will acknowledge that the limited use of question stems is a fair use, and even if you do not agree, that you will provide a license of these question stems on fair, reasonable, and non-discriminatory terms, as your monopoly position requires.
Please see May 13, 2024 neutral case evaluation letter Click here
Shockingly, ACT Nexus ignored Mr. Wheelock's proposal. Their next move was to personally serve the lawsuit at my doorstep, an action that left us bewildered. We had hoped they would come to understand the vital role we play in supporting military families, homeschoolers, and at-risk students in classrooms, offering them preparation that existing programs fail to provide, all at no profit to us, by utilizing retired ACT questions that ACT nfp had freely released into the public domain for decades, encouraging their use.
In essence, we were embodying ACT's stated mission more authentically than they were. Why, then, were they intent on eliminating us?
On November 7, 2024, with the lawsuit looming, we crafted our final settlement proposal. This proposal was comprehensive, detailing our origin story, the diverse groups we've been aiding, and our core mission. To underscore the critical role of our program, we included testimonials from:
Two schools: Letters from a small school principal on the Navajo Reservation in south east Utah, and an experienced ACT teacher from a large middle class high school in Knoxville, TN. Both emphasized the indispensable nature of our program for their students.
Two very large and influential military NFPs: Endorsements from these organizations, highlighting how our program has been vital for their members.
This proposal was not just about settling; it was a plea for understanding, showcasing the real-world impact of our work on those who need it most, reinforcing our commitment to making ACT preparation accessible for all.
These letters emphasized the importance and value of the ACT PowerPrep program for their students and members, and their request for eKnowledge to continue using the retired questions. Click here
Military Officers Association of America (MOAA): MOAA, with its long-standing commitment to military families, highlighted how eKnowledge's PowerPrep has been instrumental in providing affordable, high-quality ACT preparation to the children of military servicemembers. They stressed that this program aligns with their mission of supporting military families, especially given its accessibility and effectiveness, and urged ACT Nexus to allow eKnowledge to continue its use of the retired questions.
Association of the United States Army (AUSA): AUSA pointed out that the program has been a critical resource for the children of Army families, helping them prepare for college entrance exams at a fraction of the cost of other prep services. They emphasized the program's role in leveling the educational playing field for military dependents and requested that ACT Nexus recognize the public good served by eKnowledge's continued use of these questions.
Whitehorse High School: The principal of Whitehorse High School wrote about the significant impact of the PowerPrep program on their student body, particularly those from less privileged backgrounds. They noted substantial improvements in ACT scores, which have directly influenced college readiness and scholarship opportunities, advocating for the continuation of eKnowledge's access to the retired questions to maintain this progress.
Bearden High School: Similarly, an ACT teacher from Bearden High School provided a letter praising the program's effectiveness in their diverse student population. They detailed how the program has been tailored for classroom use, enhancing teaching methods and student outcomes. The letter requests that ACT Nexus allow eKnowledge to keep utilizing the retired questions, citing the program's role in promoting educational equity.
These letters collectively illustrate the broad support for eKnowledge's mission from various educational and military community stakeholders, underlining the program's effectiveness, affordability, and alignment with the broader educational goals of fairness and access. They serve as a powerful testament to the value of eKnowledge's work and a call to ACT Nexus to reconsider their stance on the use of retired ACT questions for the benefit of students nationwide.
In our settlement proposal, we requested that ACT Nexus allow us to use the retired question stems either without charge or under any reasonable licensing arrangement. We reiterated our plan to transition to an official nonprofit status by the end of Q1 2025, inquiring if this would influence their stance on the case, and if so, we were prepared to expedite the process.
However, on November 15, 2024, the Plaintiff's response was unequivocal: they would not accept any resolution other than "you must not use the retired exam questions and we will not license them to you."
Even though we could not understand ACT’s inflexible position, we ceased our attempts to settle amicably. Sadly, we shifted our focus to defending the lawsuit and our mission. Without legal representation, my son and I dedicated ourselves full-time for two weeks to research and draft our Answer to the complaint, which we filed on December 2, 2024.
Please see the Answer filed by eKnowledge and Mr. Hildebrandt on Dec. 2, 2024 to the ACT Nexus Complaint for copyright infringement filed in Federal Court District of Utah Click here
As we researched and prepared our Answer, the true reason behind ACT's bewildering actions and demeanor became painfully clear. The revelation came when we learned that in April 2024, the 65-year-old ACT nfp had been acquired by Nexus Capital Management, a multi-billion-dollar private, for-profit entity firm based in California.
Unfortunately, we had been operating under the false assumption that we were engaging with the original 65-year-old public-interest ACT, and believing they were acting in accordance with their well-established mission to expand educational access. This false belief led me to naively cooperate with them, sharing our proprietary work, financial details, and involving two of the largest and most respected military organizations MOAA and AUSA to vouch for our program's value. I felt foolish for my earnest attempts at a resolution.
It became evident that ACT Nexus had no intention of settling or resolving this matter amicably. Instead, they exploited our goodwill as a form of cheap and deceitful discovery. Upon reviewing our limited financials, they chose us as their test case to set a precedent that would cut off access to retired questions for all—schools, organizations, nonprofits, and beyond. Moreover, they recognized the threat posed by our successful "school room" beta program, which independent data showed improved students' scores by an average of 4 points. They fear the future potential of our program, especially when offered at a free or low cost through a genuine nonprofit, because it will far outcompete them, and ruin the HUGE payday they have promised to their private investors.
The harsh reality is that ACT Nexus seeks monopolistic control over the test prep market, and they are willing to destroy anyone in their path. This is the nature of the for-profit world. So, damn the students and families because there is profit to be made by exploiting the former ACT nfp. This lawsuit is not just about us; it's about exploiting a 65-year-old nonprofit mission for profit, disregarding the welfare of students and families in the process.
This case is at its core of ACT Nexus's war to monopolize educational resources. This is their strategy, and we just happen to be standing in the way. This is a battle for the soul of equal educational access.
Since 1959, ACT nfp’s mission required that they provide free access to retired exam questions for students, teachers, and schools to ensure fair and equal access to preparation materials for the ACT exam. For generations they have encouraged widespread access and use, a practice we have followed like countless others before us.
ACT nfp's mission focused solely on creating the ACT exam, not on preparing students for it, considering the exams "retired" once administered, as they held no value to the test maker thereafter.
The motive behind this lawsuit is clear: profit maximization. Nexus Capital is attempting to monopolize both the creation of the ACT exam and its preparation. Their strategy is to eliminate all competition in ACT prep, forcing students, teachers, schools, and parents to rely solely on their proprietary products. With no viable alternatives, Nexus would dictate the market, setting prices at their discretion, thereby controlling access to educational preparation at the expense of fairness and affordability. This move threatens the core values of educational equality and access, one more step down the path of turning education into a commodity for profit rather than a public good.
“The only thing that’s changing is our tax ID,”
“The core mission of ACT would remain unchanged…”
“We are still the same ACT that people know and trust.”
“We are not veering an inch from our mission,”
We are engaged in a significantly asymmetric battle to safeguard our economic survival and business integrity, while ensuring that open, fair, viable, and equal preparation for the ACT remains accessible to schools, teachers, students, parents, organizations, and other NFPs. A victory in this case would promote equitable access to college education, prevent monopolization by a private equity firm, and protect the integrity of publicly trusted entities. This defense aims to stop the commoditization and control over access to postsecondary education, high school exit exams, and publicly funded scholarships by a single private entity.
On the ACT Nexus side of the scales: there is no harm to Plaintiff that we could identify because:
Conclusion of no potential harm to ACT Nexus:
Leaving the retired exam questions in the public domain will not cause any definable harm to ACT Nexus' interests. This is because their business model and operations will continue exactly as they have for the past 65 years. The CEO of ACT Nexus has publicly stated that nothing would change except for their tax ID, which reinforces the continuity of their business practices. Given these facts, it is impossible for the Plaintiff to suffer any significant harm from our continued use of these questions. The public domain status of these retired questions does not alter the core functionality or profitability of ACT Nexus, as they pertain to questions that cannot be reused for testing purposes, thus having no economic value to ACT Nexus in their original capacity. This situation upholds the integrity of the educational mission that ACT nfp championed, ensuring that preparation for the ACT remains accessible and equitable, without impacting ACT Nexus' business operations or future prospects.
If ACT Nexus prevails in stopping the use of publicly released retired exam questions, the consequences for eKnowledge and the broader educational community would be profound:
If eKnowledge loses, not only does it risk losing decades of work, investment, and dedication, but it also jeopardizes critical public and private interests, setting a precedent that could harm educational equity, innovation, and the public's trust in nonprofit organizations. The balance of equities heavily favors eKnowledge and the preservation of these questions in the public domain, ensuring that education remains a public good, accessible to all.
Mr. Bryan Wheelock, a principal attorney at Harness IP Firm in Washington DC., an IP expert, and an adjunct professor at Washington University School of Law voluntarily reviewed the facts and the case and wrote an opinion letter. He evaluated all of ACT Nexus’ claims against copyright law (17 USC 107), the Lanham Act (15 USC 1124-1125) and relevant case law and concluded that ACT Nexus would not prevail. He also included what he believed was a reasonable settlement proposal for both sides.
His opinion letter and proposed settlement was shared with Plaintiff with high hopes it would completely resolve the matter. ACT Nexus rejected his proposal out of hand.
Link to May 2024 neutral case evaluation by Mr. Wheelock Click here
Based on this analysis, all four factors of the fair use doctrine appear to lean in favor of your organization's use of the retired ACT questions within your nonprofit educational program. Your mission to provide affordable, effective preparation for students, particularly those from underserved communities, using materials that have been released into the public domain, aligns well with the principles of fair use. This use supports educational equity, does not compete with ACT's market, and is transformative in nature, enhancing the educational value of the questions beyond their original testing function. Therefore, under these circumstances, your use of the retired ACT questions would likely be considered fair use. However, legal outcomes can vary, and consulting with an IP attorney would provide a more definitive stance based on current legal precedents and specifics of your case.
This combined list highlights the multifaceted legal, ethical, and public policy issues at play, emphasizing the broad implications of the lawsuit on educational equity, competition, privacy, and the integrity of public interest missions.