Common-Sense Decision Is a Trap for the Unwary (and Everyone Else)

A surprisingly fertile field for litigation are “multiple listing services” (MLS) and related real-estate websites. Here’s an MLS for Nashville. The Internet completely inverted the information-relationship between real estate agents and prospective buyers. It used to be that the agents’ main advantage was knowledge of what was for sale, but thanks to MLSs, this information is easily accessible. The very powerful National Association of Realtors jealously guards the trademark rights to MLS (to the extent they even exist)*.

* I know this from personal experience, as I have represented two real estate agents who had the temerity to use MLS in one of their domain names. Did you know that Realtor associations have their own highly complex dispute-resolution and enforcement procedures, completely with their own rules of procedure? I was honestly impressed.

This information is obviously of tremendous value, but protecting it is tricky. Data can’t be protected by copyright. Even if “hot news” is a thing, this data isn’t “hot news.” You can place the data behind a wall, but how is the public supposed to access it? You can place anti-scraping language into your terms of use, but enforcing website terms of use can be tricky.*

* Even sophisticated companies screw it up.

7006596664_30b10e5561_c

A good photograph of your property can really make it a “hot” commodity on an MLS site. The MLS site might think your copyright in the photograph is “hot,” too, but in a different way.

Needless to say, then, a lot of websites profit by scraping the data from MLS sites. What to do? Enforce what you can enforce: photographs, which are copyrightable. True, the purpose of putting photographs on an MLS is exactly the same as disclosing the square footage, but one has just enough originality to be copyrighted; the other doesn’t.

I’ve Fallen & Can’t Get Standing

But wait, who takes those photographs? Not the MLS operator! Usually the seller, right? If the seller uploads the photographs to the MLS site, the MLS operator can’t enforce the copyrights in those photographs. Hmm…

Oh, I know! Let’s make the sellers license the photographs to us, and make them give the right to enforce them! No, that specifically doesn’t work for copyright. OK, let’s make them exclusively license the content, or just make them give us the copyrights. Those will confer the necessary standing.

OK, but how? Copyright assignments (and their equivalents, such as exclusive licenses) must be in writing, signed by the assignor. Traditionally, this has required paper, ink and some kind of fax machine, resulting in something that can be immediately misplaced.* But, hey, it’s, I don’t know 2013. Maybe there’s some kind of electronic signature we can use? Because I left my fax machine in 1996.

* Ever tried to trace the title to a song? This is why I can believe someone has been “licensing” Aimee Mann songs without maybe, you know, owning them or anything like that.

E-Signatures Work Just Fine

That brings us to Metropolitan Information Systems v. American Home Realty Network. The defendant operated a real-estate website that was, essentially, scraping data from the plaintiff’s MLS site, including the uploaded photographs. The MLS site sued for infringement of the copyrights in the photographs. The defendant contended that the MLS site didn’t really own those copyrights; the photographers still did.

When the seller “clicks yes” in response to the MLS’s terms of service, the seller apparently agrees to “irrevocably assign” to the MLS operator “all of your rights, title and interest in and to the image submitted … includ[ing] … all worldwide copyrights in and to the image.”* Does this constitute a written assignment?

* Plus some other stuff, I’m betting.

To really no one’s surprise, the court held that it was.* The only surprise is that this is apparently the first time a U.S. Court of Appeals has addressed this issue. Yes, the year 2000 is on holding on line 3. Do you want to speak to it?

* The court suggested that the result might be different if the uploading seller were the one contesting ownership. Courts traditionally have enforced the requirement for written copyright assignment less stringently when raised by strangers to the putative assignor-assignee relationship, like the defendant in this case. The idea is that the requirement is there to resolve disputes between owners, but I’ve never understood this rationale. Since ownership confers standing and the right to exploit, doesn’t everyone have an interest in clear ownership of copyright?

You’re Suing for Using My Own Photograph?

What really should be the key takeaway is the ease with which the sellers gave away the copyrights in their photographs. Technically, they can’t use those photographs for anything else ever. They cannot print out copies and show them to friends, families and prospective buyers. You couldn’t show pictures of Uncle Ted at the back of the house.

OK, that’s not such a big deal. The sellers probably snapped the photographs specially for purpose of uploading them to the MLS website, though it would be a serious problem if they tried uploading the same photographs to multiple MLSs.* Imagine being sued for using your own photographs, especially if you didn’t read or really take in the MLS’s lengthy terms of use.

* Before you ask: yes, the MLS operator was clever enough to register the copyrights. A very exciting portion of the opinion deals with, and ultimately approves, of the way the MLS operator did this.

But what about other sites? We upload photographs to many sites, and we may have other plans for those photographs—plans that involve the exercise of the exclusive rights of copyright ownership. Most reputable sites aren’t so greedy as to take full ownership, or even an exclusive license, to your uploaded photographs. A non-exclusive license will do just fine.*

* The question then becomes: what does the license allow the site to do with your photograph. You might not care. Then again, you might.

But are you sure you know what you’ve signed away when you upload something to a website after clicking “yes” to the websites terms of use?*

* Might you become Bill Gates’ towel boy?

With that happy thought: thanks for reading!