Copyright ownership of MLS listings – a refresher

There are new industry grumblings of websites infringing MLS and broker copyrights. We have received several emails regarding the alleged infringement, and I am communicating with one website owner on behalf of several clients. While this is not the proper forum for a discussion of the allegations – that is a discussion you should have with your attorney – these developments highlight the importance of understanding copyright ownership. After all, you cannot sue for copyright infringement based on a copyright you do not own (with limited exceptions).

Copyright ownership in MLS listing content can be complex, and I thought it might be a good time for a refresher. (Elizabeth wrote about copyright in more depth here and here.) I also want to highlight the benefits of having clear ownership of registered copyrights.

Please note that there are several other important areas of copyright law that are implicated by this post—such as the subject matter of copyrights, assignment and license principles, and the fair use doctrine—but I am reserving those topics for other posts. While it is tough to discuss copyright ownership in a vacuum, I will focus on it for the digestibility of this post. Please be aware that this is a simplistic view of copyright ownership.

Copyright ownership of MLS listing content

The following is not intended to be legal advice and only describes legal concepts in generalized terms with assumptions about the MLS industry. If you have specific questions regarding your organization, please contact an attorney.

Copyright ownership vests in the author of a work. The author is the person who creates the work. Ownership of MLS listing content is inherently problematic because there are generally several authors. Absent agreements that assign copyrights, many MLSs and brokers have ‘fractured ownership’ of their MLS listing content. ‘Fractured ownership’ can occur because of the following:

• MLSs likely have a “compilation” copyright in the database. Compilation copyright subsists in the selection, coordination, and arrangement the database, as long as it is not merely functional and there is a modicum of creativity.
• Vendors may also make claims to the compilation copyright.
• Brokers own copyrights in works that the broker and its employees create, but probably not works of their independent contractors.
• Salespeople may own the copyrights in the portions of listings, such as photographs and original text, that they create.
• Others, like property sellers and photographers, may own copyrights in portions they create and provide, such as photographs and original text.

‘Fractured ownership’ of the copyrights in listing data can create serious problems for MLSs pursuing infringers.

Clarifying ownership and its benefits

In the case of MLS, ‘fractured ownership’ of copyright can be remedied through agreements between salespeople, brokers, and the MLS. We have helped several MLSs through a ‘copyright hygiene’ process where we review their agreements and help them implement new agreements. Ideally, brokerages would assign ownership of their copyrights to the MLS; the brokerages could still use the listings as they did before the assignment, but with the added benefit that the MLS can protect the listings. Some brokers are philosophically opposed to this approach, though, and there are other ways to address these concerns.

Similarly, brokerages may want agreements where the salespeople assign ownership of their copyrights to the brokerage.

So, why does ownership matter? The owner of a copyright can more easily register the copyrights and has the power to enforce the copyrights.

Why is registration important? You need to register in order to sue an infringer. Note that compilation copyrights can be registered on a quarterly basis, which is a service we provide to many clients.

If you register before the infringement occurs, you could be entitled to statutory damages and attorney’s fees, even if actual damages are minimal. Statutory damages can be up to $150,000 per infringement. (This is why high profile RIAA awards seem so astronomical.) A single listing could easily have several copyrights in it (e.g., each photo and the original text).

Now take a moment and do the math: (up to $150,000 * X listings * Y copyrights in each listing) + attorney’s fees = a copyright infringement suit with teeth. I am not saying that this is what an MLS would necessarily be awarded at the end of a trial. However, this is part of the calculus that infringers should do when they are served with a complaint and begin to weigh their options.

So, when you send a cease and desist letter, do you have the copyright ownership to back it up? If you file suit, will it be dismissed because you do not own the copyright? Hopefully your MLS or brokerage has already considered these questions, and if not, hopefully this post provides a starting point for looking critically at the way your organization handles copyright ownership.

-Mitch