MLS granted injunction against NeighborCity.com

Insurer denies duty to pay for portal's defense against copyright lawsuits

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Editor’s note: This story was updated on Oct. 4, 2012 to clarify that after MRIS requested and NAR approved funds to cover part of MRIS’ legal expenses in the suit against NeighborCity, MRIS decided not to accept the funds. NAR and NorthstarMLS have declined to comment on whether NorthstarMLS has accepted, or will accept, similar financial support approved by NAR.

Five months after filing suit against the operator of NeighborCity.com, mid-Atlantic multiple listing service Metropolitan Regional Information Systems, Inc. (MRIS) has been granted a preliminary injunction prohibiting NeighborCity from using copyrighted content from the MRIS database without authorization.

In a complaint filed March 28, MRIS alleged NeighborCity’s owner and operator, American Home Realty Network Inc., reproduced, displayed and distributed copyrighted listing content, including photographs, without the MLSs’ authorization and violated copyright laws through "the creation of unauthorized derivative works incorporating the MRIS database."

St. Paul, Minn.-based Regional Multiple Listing Service of Minnesota Inc. (NorthstarMLS) filed a similar suit against AHRN on April 18. NorthstarMLS has also filed for a preliminary injunction against the company, but the court has yet to render a decision.

The lawsuits were filed not long after San Francisco-based American Home Realty Network, which is licensed as a brokerage in California, updated profile pages for 850,000 agents on NeighborCity.com that feature agent scores and performance metrics based on their transaction history.

The preliminary injunction in the MRIS case, filed Aug. 27, denied NeighborCity’s motion to dismiss the MRIS case and enjoined the company "from unauthorized copying, reproduction, public display, or public distribution of copyrighted content from the MRIS database, and from preparing derivative works based upon the copyrighted content from the MRIS database."

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In a statement, MRIS said, "This is an important step forward for MRIS’ mission to protect its subscribers and the consumers who rely on information legitimately sourced from MRIS."

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NeighborCity

The MLS declined to comment further. 

NeighborCity CEO Jonathan Cardella said the company planned to file a motion to appeal the preliminary injunction.

"We’ll see if we get an opportunity to have that decision reviewed," Cardella told Inman News.

Cardella said he was "not that surprised" by the injunction, characterizing it as "not extremely relevant at this point" because the decision is not final "until we’re able to have our case heard," which he anticipates will be sometime next year.

Cardella was originally named as a co-defendant in the suit against NeighborCity, but in the same document ordering the preliminary injunction, the court granted his motion to dismiss the case against him.

Meanwhile, the company NeighborCity has purchased liability insurance from, Travelers Casualty Insurance Company of America, filed a complaint on May 22 against Cardella and AHRN. In the complaint, Travelers denies any duty to pay for NeighborCity’s defense against the MLS copyright suits and asks for reimbursement of costs associated with the defense against the MRIS case.

Travelers has declined to pay for the defense against the NorthstarMLS case at all. Last week, further action on the Travelers’ case against NeighborCity was postponed until October.

"That’s been delayed or postponed because they (Travelers) are paying for our defense (against the MRIS case) and they want to have a judge review that obligation," Cardella said.

"(The complaint) is a breach of their duties as our insurers," he added.  

Cardella anticipated that Travelers, which declined to comment for this story, would also pay for the defense against NorthstarMLS in the near future.

"It’s the same matter. You can’t have one without the other," Cardella said.

"Chances are they’re going to have to wait for these other cases to conclude before we can proceed with the motion," he added.

In May, the National Association of Realtors decided to cover a portion of the legal expenses incurred by MRIS and NorthstarMLS in the suits against NeighborCity. MRIS requested the funds before NAR’s decision but has not accepted them. Through an attorney, NorthstarMLS declined to comment on whether it had accepted or was planning to accept NAR’s assistance.

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