Where are the copyrights? Copyrights in MLS listing content Part I

UPDATE: Link to second part of this series.

With RPR now on the scene seeking to license listing data from essentially every MLS in the country, Brian and I figured it was a good time to review the way that copyright law interacts with MLS databases; several issues make that interaction complex. Chief among them is the ‘fractured ownership’ of copyrights in MLS data content. In the absence of certain concrete steps, brokers and MLSs probably own less than they think they do, and brokers and MLSs need to reach an understanding about ownership to permit them to enforce the copyrights effectively.

The key determinations with regard to MLS data content are (1) whether the MLS has obtained the rights to use the content as it must to carry out its purpose and (2) whether the MLS has the power to prevent misuse and piracy of the data content. The answers to these two questions hinge on two bodies of law: federal copyright law and state contract law. In this post, I’ll provide a summary of the key legal principles and then discuss some important issues for MLSs.

Who are the copyright authors and owners?

Copyrights subsist in “original works of authorship.” In the case of MLSs, there are three principal kinds of work in which copyright can arise: compilation, original text, and photographs.

In general, the author of a work is the individual human being who creates it, and she secures copyright in it the moment she creates it. Sometimes, the author of an original work is the employer of the human being who creates it. It is also possible for certain kinds of works to belong to an entity that commissions them from the actual creators. In each case, this is referred to as a “work for hire” or “work made for hire.” In the case of real estate salespeople, however, the work for hire doctrine is probably of little use. Most salespeople are not employees of the brokers, and most have not signed independent contractor agreements with brokers that designate their creative work product as works made for hire of the broker.

Compilation is the selection, coordination, and arrangement of the elements in the MLS database, to the extent they are creative as opposed to merely functional. The author of this work is whoever created the selection, coordination, and arrangement; this will usually be the MLS, the MLS’s vendor, or both jointly.

Original text is text that has at least a spark of creativity: This would include all remarks and free-form text fields where salespeople and brokers have an opportunity to express themselves freely. It may even include the list price, since that number is the product of a creative process by the listing salesperson. (Whether the listing price can be protected by copyright is a subject of legal debate.) The author of original text in the MLS is usually the listing salesperson but may also be a salesperson’s assistant or a broker. In some cases, particularly limited service brokers, the seller may have written the public remarks, for example.

The author of a photograph is whoever snapped the picture. This will usually be the listing salesperson but can often be the seller or a professional photographer.

The person who currently owns a copyright is called the “owner.” An author may transfer her copyright interest to another party, so the copyright owner is not necessarily the author. But such a transfer or “assignment” is effective only if it appears in a writing signed by the author.

Some brokers can and do obtain copyright ownership of creative elements generated by their salespeople; they do so by either (a) hiring the salespeople as employees or (b) requiring salespeople to sign written independent contractor agreements transferring their copyright ownership.

In summary, then, the MLS and perhaps its vendor own the copyrights in the compilation; and the broker owns copyrights in works that the broker and its employees (as opposed to contractors) create, some original text and photos perhaps. But the salespeople own the copyrights in the great majority of works in the MLS, including probably most of the photos and original text. Third parties like sellers and photographers may also own copyright interests in photos and text that they provide.

Why is ownership important?

The copyright owner has the power to register the copyright and to enforce the copyright against infringement. Generally, only the owner may do so. (An “exclusive licensee” may also do so, but for purposes of simplification, I will discuss only the owner role; if you would like further details on this subject, please let me know.)

The owner of the copyright in a database compilation can take advantage of rules of the U.S. Copyright office that allow for “group registration” of all new and changed material in the compilation on a quarterly basis. This is a tremendous advantage over having to register the separate elements separately, as each registration requires the preparation of an application form and submission of a registration fee of at least $35. However, in order to register the copyright in the MLS database and its components as a single work, it is necessary that the MLS be an owner of the copyrights in all the components that it seeks to register. Registration is possible without this being true, but the protection afforded by the registration extends only to those portions the MLS owns.

For this reason, MLSs often seek to hold copyright ownership in all the separate works that the MLS comprises: compilation, text, and photographs. The MLS can register all the components in simple quarterly registrations, and if any part of the copyrighted database is infringed, the MLS will be in a position to enforce the copyright.

(NEXT: Some of the problems arising from this situation.)

-Elizabeth