The National Association of Realtors is offering sample contracts that are designed to enhance copyright protection for property information created and collected by its members. The documents include sample agreements between multiple listing services and participants, brokers and agents, and MLSs with vendors and other third parties.
John Rees, a lawyer who worked with the association this year to hold workshops, gather input and produce the sample contracts, said he believes there is some urgency for industry participants to better protect copyrighted information associated with property listings, as Internet technologies can spawn a wide array of business models.
“The biggest threat is probably what hasn’t been developed yet,” said Rees, a lawyer with the Callister Nebeker & McCullough law firm in Salt Lake City. “The only limit on the Internet pretty much is creativity.” There are many third parties that “would love to have access to a feed so they could market their own products,” and there are business models for companies that seek “to use the listings for the sole purpose of providing referrals back to the listing brokers. It’s just a matter of if the MLS has in place appropriate protections.”
The online display and sharing of property listings information is a hot topic in the industry, as issues over the ownership and control of this information are at the core of an antitrust lawsuit that the U.S. Justice Department has brought against NAR. Also, more brokers have been seeking greater control over MLS operations and how listings data is handled.
Rees said the creation of the sample documents “is not a huge undertaking but it really ought to be done to provide legal integrity, avoid liability and have the systems or the structure so that when the problem arises they can deal with it,” he said. “Most industries that are on the Internet have already kind of figured this stuff out. I think the (real estate) industry has lagged — it’s time to catch up on this one. (This effort) is recognizing that the MLS is sitting on a very valuable resource to all of its subscribers.”
While most larger MLSs have already taken steps to protect copyrighted property information, he said fewer mid-sized MLSs have implemented thorough copyright protections, and “smaller MLSs are scrambling trying to figure out what’s going on.” He added, “A lot of MLSs are like a deer in the headlights — (saying), ‘Wow, I didn’t know about any of this stuff.’”
Adopting clear agreements on the use of property information can help to prevent future infringement claims among the many parties who create or display listings information, he said.
“If an MLS grants a license to the listings to a third party and there are some infringing materials in the listings — and that vendor gets sued for infringement — (the vendor) is going to come back to the MLS, that MLS is going to go back to the broker, and the broker is going to be stuck with the liability,” Rees said, unless the broker has extended copyright agreements to agents and those who supplied copyrightable content to the agents.
“They need to finish the chain back up to the agent and seller and photographer and anyone who’s creating listing content,” he said.
Some of the contract language could be established through online click-through agreements in which users must agree to the terms of the copyright agreement before gaining access to information, Rees said, or the contracts could be in written form.
None of the documents are mandatory, and Rees said he encourages interested MLSs and participants to review the sample contracts with their lawyers. “It has really got to be customized to the local area. I’m not suggesting that anybody should take this and just print it and sign it.”
MLSs who are at the entry level in creating copyright agreements should first focus on a license agreement with subscribers, he said, while brokers should take a look at agreements with agents and contract language for the property listing agreement.
In an article written by Rees that was published Nov. 1 in the National Association of Realtors’ Realtor Magazine, Rees stated that “copying and wide distribution of listings is easy and cheap,” and this “easy access, in turn, has focused new attention on copyright issues.”
To obtain exclusive rights to property listings information, “brokers must obtain all of the rights from others who may have participated in the creation of the copyrightable elements.” For example, “when a seller determines a list price and an agent creates remarks about a property, both the agent and the seller have rights to the applicable copyrightable elements of the listing,” and brokers and MLSs “should institute standard procedures to obtain written transfers of copyrights from sellers and other suppliers of copyrightable material.”
Similarly, a third-party photographer who snaps photos for a property listing, Rees states in the article, “is the creator of the photos and … the owner of the copyrights in those photos. A broker or the MLS must obtain written rights to use the pictures.”
While some aspects of property information cannot be protected by copyright, such as factual information about the property including number of bedrooms and square footage, other content such as photographs and descriptions are generally considered to be copyrightable.
Brian Larson, a Minneapolis lawyer who specializes in real estate and copyright, trademark and licensing law, said the documents that were created by Rees do provide a good model for MLSs, though for his own clients he may offer slightly different recommendations on contract agreements. “It is competently done and far better than not handling those issues at all,” Larson said. “My experience is … with a great percentage of MLSs: If NAR doesn’t offer something as a model they just won’t do it. Having this stuff offered up as model documents is a great help to a great many organizations.”
Larson said that the contract documents may not change the enforceability of copyright, but they could “make it harder for someone who’s infringing on the rights to weasel out of enforcement using technicalities.”