This post continues the more detailed look at the RPR agreement that we began last week. We are still referring to “Version 2010.01.22” of the agreement.
In this post, we’ll consider what uses RPR can make of your MLS’s data if your MLS signs the current RPR MLS Data License Agreement. As we shall see, the license agreement permits RPR to do things that its leaders have promised (on its web site and in presentations) that it would not do. I suspect that’s just because whoever drafted the RPR agreement wanted to skew it as much possible in RPR’s favor (damned lawyers!). But MLSs may want to consider incorporating the promised restrictions into the license agreement before signing.
Broad grant of license
First, consider the broad grant in Section 2(a). In it, the MLS licenses RPR the right to
access and use the Licensed Content for the purposes of
i) integrating the Licensed Content into the RPR Offerings,
ii) granting Authorized RPR Users access to the RPR Offerings via a password protected database
iii) marketing and distributing RPR Offerings to RPR Customers
iv) displaying to Authorized RPR Users all Active Listings in the Licensed Content and
v) displaying to Participants/Subscribers and such other Persons authorized by Provider all Pending Sales and Off Market Listings in the Licensed Content.
Let’s take these permitted uses one-by-one.
Integrating the Licensed Content into the RPR Offerings. “Licensed Content” means essentially the entire MLS database, including member roster information. I noted last week that this must probably be read to exclude the data of brokers who do not consent to their data being in RPR. “RPR Offerings” is defined as “those business products, services and/or applications created and developed by RPR using the Licensed Content, including the RVM Product, the Match & Append Products and other products as from time to time developed by RPR.” This language poses no limitation; based only on it an “RPR Offering” can be any business product, service, or application that RPR develops. (But see below.)
Access to RPR Offerings by Authorized RPR Users. “Authorized RPR User” means “a Person who is a Participant/Subscriber or a member in good standing of NAR.” Essentially, the Authorized RPR Users with regard to a given MLS’s data are all that MLS’s participants/subscribers and all NAR members (regardless what MLS they belong to or whether they belong to an MLS at all).
Marketing and distributing RPR Offerings to RPR Customers. “RPR Customers” means “Persons who are not NAR Members and with whom RPR has contracted to provide the RPR Offerings.” This is not limited in any way; under this provision, NAR can provide the RPR Offerings to anyone.
Displaying all Active Listings in the Licensed Content to Authorized RPR Users. With regard to the MLS signing the agreement, this means that its active listings can be visible on the RPR site to all the MLS’s own participants and subscribers as well as to ALL REALTORS (whether they belong to this MLS or to any MLS at all).
Displaying all Pending Sales and Off Market Listings in the Licensed Content. With regard to the MLS signing the agreement, this means the off-market data will be available on the RPR site only to the MLS’s own participants and subscribers, unless the MLS authorizes further display. For example, two neighbor MLSs might allow each other’s participants and subscribers to see each other’s off-markets; that’s an inexpensive data share.
Let’s stop a moment. We’ll talk about the restrictions, but it’s key to understand the scope of this grant of license: under subparagraphs (i), (ii), and (iii), RPR can make basically any product and sell it to anyone. There is a catch-all clause, 2(b), that prevents any use or access by RPR “except as expressly set forth herein,” but the uses “expressly set forth” in 2(a) are essentially unlimited. If there are to be any limits on RPR’s use of the data, we’ll have to find them in the “Limitations and other Restrictions” section – Section 3.
Restrictions and limitations in Section 3
In general, the restrictions in Section 3 cover three types of thing: (1) RPR’s use of the MLS data; (2) clarification of rights under the Section 2 license; and 3) RPR’s conduct relating to matters other than the MLS data. We’ll look at each as well as a couple items in Section 5. (There is no Section 3(c) or 3(d) – the paragraphs are mis-numbered in the copies I have seen.)
RPR uses of the data. Sections 3(b) and 3(f) do not really impose any restrictions on what can be RPR Offerings. Section 3(b) provides “Provider acknowledges that RPR may add or combine other data with the Licensed Content for purposes of creating the RPR Offerings.” This permits the MLS data to be combined in any way with other data to create RPR Offerings. A second sentence prohibits their combination for other purposes, but as we have seen above, the definition of RPR Offerings is very broad. Section 3(f) prevents RPR from redistributing the MLS data or licensing it to others “[e]xcept as authorized in this Agreement”.
The agreement allows RPR Offerings (a broad category); these two sections do not limit what can be an RPR Offering.
Sections 3(g) and 3(i) do actually limit the types of products that can be RPR Offerings. Section 3(g) provides:
RPR shall not allow access, use or display, or permit other[s] to access, use or display, any Licensed Content or any part of the Database on any third party Internet websites, or profit by or accept any consideration for enabling any third party to access, use or display Licensed Content through links to or by framing such Content or data from a website owned or operated by or for the benefit of RPR….
The emphasis is mine. This section appears to be intended to prohibit the display of actual MLS data (as opposed to RPR Offerings derived from the MLS data) on any website. There is an exception to this section that allows “Member” (an undefined term) to use the listing data “in the RPR database” to prepare “consumer reports.”
Section 3(i) prevents the MLS data from being used in any product for the purpose of
· establishing an individual’s eligibility for credit;
· establishing an individual’s eligibility for insurance;
· evaluating an individual for employment purposes;
· determining an individual’s eligibility for a government license or permit; or
· in any other manner that would cause such use of the [MLS data] to be construed as a report by any authority….”
I interpret this section as preventing the MLS data from being used for purposes that would trigger the Fair Credit Reporting Act and similar regulations. If this section is read too strongly, it would undermine RPR’s business model: Indirectly, at least, an AVM is used to establish an individual’s eligibility for credit with regard to the subject property as part of the loan-to-value calculation. But the AVM is not a report about the consumer’s conduct (which is the common theme under the FCRA definitions).
Clarification of rights under license. Section 3(e) provides the agreement
does not convey or grant to RPR an interest in the Database or the Licensed Content but only a limited right to use the Licensed Content in connection with the creation of RPR Offerings. RPR agrees that it will not challenge or take any action inconsistent with [MLS’s] rights to the Database or the Licensed Content.
This provision in echoed in 5(a). But neither of them in any way limits the types of products that RPR can create under the moniker “RPR Offerings.”
RPR Conduct Restrictions. Section 3(a) requires RPR to comply with privacy and information security laws; 3(h) requires RPR not to compete with the MLS during the term of the agreement; 3(j) requires that RPR not use the data to break the law or infringe anyone’s rights. In Section 5(b), RPR agrees to put the MLS’s copyright notice on displays of the MLS data. None of these sections limits what can be an RPR Offering.
The bottom line: Broad license minus prohibitions equals what?
All this boils down to the following:
Under this agreement RPR can create any kind of product it wants incorporating the MLS’s data (RPR Offerings) and sell those products to anyone it wants (RPR Customers), EXCEPT:
· Actually displaying the MLS data on any web site (other than RPR’s site for “Members”); and
· Providing consumer “reports” that would trigger scrutiny under FCRA or similar consumer protection regulations.
Consistent with the claimed value proposition?
So the question is whether this agreement embodies the kinds of limitations that RPR leaders have claimed in presentations and on the RPR blog. As of Feb. 17, the RPR Blog provided the following FAQ answers, among others (the emphasis is mine):
Will my listing information be sold? The RPR business model is based on the sales of analytics, or aggregated information. No listing-level information will be sold or distributed.
Will my data be sold back to me? No. Access to the RPR is free for NAR members, and the company will not provide it to any entities which wish to resell it to NAR’s members.
Who are the customers to whom RPR will be selling analytical information? The market for analytics and trend information is primarily composed of lenders, servicers, insurance companies, securitizers, and government entities. It is important to note that no listing-level data will be sold to these customers, to whom only aggregate statistical information will be made available.
Will my personal information be sold? No. NAR member information will never be sold or distributed.
In one case, the RPR license agreement directly contradicts these answers. The “Match & Append” product that is expressly permitted in the mix of RPR Offerings is defined this way in the RPR license agreement (emphasis again is mine):
“Match & Append Products” means a list of properties created by the transmittal by an RPR Customer of a data set that includes property addresses to be matched by RPR against its database for the purpose of identifying those properties in the data set that are currently on the market for sale and the list price of such properties.
This looks like “listing-level data” to me.
In the other cases, the RPR MLS license agreement does not embody the promises in the FAQ. If the MLS expects to be able to enforce the promises in the FAQ, it should be prepared to incorporate them into the license agreement.
I’m not soured on the RPR idea. It may provide great value to brokers and salespeople, and the RPR Offerings may be a great way to pay for it. But RPR has been making promises about how data will be used (on its blog, in presentations, etc.) without incorporating those promises into the license agreement. MLSs that want to be sure that their data is used as RPR has promised will want to incorporate those promises into the license agreement before signing.