Intellectual Property: Copyright it!

November 1, 2006

Most likely, you know that the words you’re reading in this magazine are protected under copyright law. But it’s not just publishers who have a right and duty to protect their intellectual property. Real estate brokers have a duty to their clients and MLSs have a duty to their participants to actively protect and manage listing content. Failing to take appropriate action to safeguard this intellectual property could lead to liability and a loss of assets, particularly if such a failure is deemed to be negligence.

Protecting intellectual property has always been an option for MLSs, brokers, and other owners of listing content, but until recently, there was little need to be concerned about copyright and other forms of intellectual property law. Hardly anyone would have considered making a large number of photocopies of the listing books that once held property information and distributing them to third parties.

The Internet and electronic databases have changed all that. Copying and wide distribution of listings is easy and cheap. This easy access, in turn, has focused new attention on copyright issues.

What’s protected?

Copyrights, along with trademarks, trade secrets, and patents, are considered intellectual property. Under copyright law, the author or creator of an original work has the exclusive right to copy, publicly display, distribute, or create other works from the original work.

Although the courts haven’t found that all elements of listing content are original, generally speaking, listing content can be protected by copyright law. Specifically, a listing’s original content elements, including photographs of the property, list price, floor plans and drawings, and remarks by the listing agent on aspects of the property or neighborhood are eligible for protection under copyright law. Hard facts, such as the street address, number of bedrooms, total square feet, and amount of real property taxes paid, aren’t.

Copying, distributing, or displaying listing content without a license from the owner constitutes infringement of the owner’s rights. To enjoy exclusive rights, brokers must obtain all of the rights from others who may have participated in the creation of the copyrightable elements. For example, a photographer (unless an employee of the brokerage) who takes photos for a listing is the creator of the photos and, therefore, the owner of the copyrights in those photos. A broker or the MLS must obtain written rights (either as an assignment or a license) to use the pictures.

Similarly, 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. If the agent’s broker or the agent’s MLS intends to let a third party use the listing data, the agent’s broker must get the agent and the sellers to assign, or transfer, their intellectual property rights to this listing content to the brokerage. Only when they have these assignments or licenses can the broker or MLS grant a license to a third party to use the information. Similarly, if the broker receives an assignment of all copyrightable elements, the MLS must have a license to include the listing in the MLS database.

Most vendors, including IDX vendors, Webmasters, and Web hosts, understand that the use of intellectual property without a license constitutes infringement. Accordingly, they’ll require that the broker or MLS represent and warrant that it has the right to license the listing content to the vendor. Vendors will further ask the broker or MLS to indemnify them from liability in the event the vendor or other licensee is sued for copyright infringement. If the broker or MLS hasn’t taken appropriate steps to obtain ownership rights to the listing content, the broker or MLS will have liability to the vendor, as well as to other parties distributing listings.

Brokers and MLSs should institute standard procedures to obtain written transfers of copyrights from sellers and other suppliers of copyrightable material. To be enforceable under copyright law, an assignment must be in writing and signed by the person making the assignment. The assignment should identify the specific rights being assigned. For example, the photographer agrees to irrevocably assign and transfer to the broker all of the photographer’s right, title, and interest, including all copyrights and other intellectual property rights, in and to all photographs and other graphics and images.

The NATIONAL ASSOCIATION OF REALTORS® and the author of this article have created a tool kit for brokers and MLSs to help them develop correct procedures and documents to obtain the legal ownership rights to listing content. The Managing Listing Content tool kit includes a comprehensive set of documents that can be used to grant licenses and assignments. For example, the tool kit includes language that either assigns or licenses rights from photographers, sellers, and agents to brokers. It also includes sample license agreements for a broker to license rights to an MLS or to outside vendors to distribute listing content under an IDX program.

Regardless of current policy decisions made by associations or brokers about the distribution of listing content, all brokers and MLSs must obtain assignments or licenses from others who have rights to control content. Otherwise brokers and MLSs will be subject to liability and left without any recourse to rein in the unauthorized use of that listing content. The time and effort to implement such practices and procedures should be minimal, but the potential benefits are significant.

John H. Rees is an attorney with Callister Nebeker & McCullough in Salt Lake City. You can reach him at jhrees@cnmlaw.com or 801/530-7388.

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