Zillow Copyright Infringement Trial Nears End

February 7, 2017

Real estate professionals should watch carefully the outcome of a jury trial taking place in federal district court in Seattle. The case, expected to wrap up Wednesday, centers around whether real estate technology company Zillow Group Inc. improperly used listing photos for its home improvement site Digs.

VHT Inc., a real estate photography company, sued Zillow in 2015 for copyright infringement, saying Zillow violated its Terms of Use (TOU) in the reuse of listing photos. VHT licenses photos to real estate agents and brokers. VHT says that, according to its terms, the photos may be used only for marketing an active listing. In the suit, VHT says Zillow failed to remove photos from its listing website once a property was sold and used VHT photography on Digs without permission.

Before the trial, Zillow had argued that VHT’s TOU was ambiguous as to whether it referred to the use of photos for marketing the property shown in the photo or marketing properties in general. On that issue, the court granted summary judgment to VHT, saying its use of the term “specific” in the phrase, “Content is made available to clients for property specific marketing purposes only,” was unambiguous. It could be made clearer, the court allowed, with the use of a hyphen in the compound adjective “property-specific.”

The court also rejected an argument by Zillow that the case couldn’t continue without joining VHT licensees — the brokers and MLSs who used their services and provided their photos to Zillow — in the case. Zillow said those brokers and MLSs had granted Zillow perpetual use of imagery and had indemnified Zillow. “Zillow had no way to know how VHT’s license agreements defined the scope of the agents and brokers’ rights in VHT photographs,” the company said in the motion. Judge James L. Robart rejected that argument, saying in December that VHT “is not required to join all infringers in a single action.”

Robart ruled that as a company serving real estate agents and brokers, Zillow represented the interests of VHT’s clients and the case could move forward to trial. Zillow is now arguing that VHT sent marketing emails to its clients encouraging them to use photography “wherever you want, any way you want, and for as long as you want,” directly contrasting language in its contracts.

While the court’s decision was good news for the brokers and MLSs who provided VHT photos to Zillow, the decision doesn’t mean VHT can’t sue them for copyright infringement, warns NAR General Counsel Katie Johnson. Brokers and agents who purchase photography for marketing their listings and for other purposes need to read the contracts carefully and understand their rights, Johnson says. To help, NAR attorneys have developed sample agreements.

Attorneys for Zillow filed a motion late last week asking the judge to grant summary judgment in its favor as a matter of law — referring to a recent 9th Circuit Court decision in the case Perfect 10 Inc. v. Giganews Inc. —before the jury is permitted to issue a verdict. VHT filed a response Sunday, saying the Giganews case does not apply and calling for a jury determination.

—REALTOR® Magazine