DOJ, copyright and real estate listings

Editor's note: The following article first appeared in Seattle attorney Russ Cofano's newsletter, "MLS Law and Business."

Just when you thought it was safe to go outside again, it's baaaack! That's right, copyright and MLS listing data. This time, however, it has surfaced in the context of a defense to the current litigation between the U.S. Justice Department and the National Association of Realtors.

The DOJ in September filed an antitrust lawsuit against the Realtor trade group, alleging the NAR's policies for online property listings display are too restrictive against Internet brokers.

In a recent news publication, attorney J.T. Westermeier, partner in the firm of DLA Piper Rudnick Gray Cary US LLP, said that copyright owners of property listings content are not subject to compulsory licensing and that brokers can refuse to allow their listings to be displayed publicly by third parties even if the third parties are competing brokers. In Westermeier's view, NAR's online listings display policy being challenged by the DOJ is consistent with the broker's exclusive copyright rights.

Like many of the arguments that have supported the use of copyright laws to protect listing data, I believe that this argument is misguided. First, Westermeier correctly addressed only copyright rights associated with the photographs and the expressive comments to the listing. As we all should know by now, there can be no copyright to the property facts contained in a single listing. In the perfect world, I might agree that a broker could limit the use of copyrighted photographs and listing comments if indeed the broker owned all of those rights. That is when reality sets in and we realize that the multiple listing service/broker/agent interrelationship is anything but perfect.

For a broker to assert Mr. Westermeier's argument, the broker must own the copyright to the listing photographs and the comments. Unfortunately, many do not. Copyright follows the person who created the copyrightable work (in real estate, many times the agent). In an employer/employee relationship, the employer is generally deemed to own the copyrightable works of the employee performed in the scope of their employment. However, the same does not hold true for independent contractors.

Since most agents are independent contractors, there must be a written "work for hire" agreement between broker and agent for the broker to claim copyright in the agent's comments about a particular listing. Without such an agreement, the agent would own the copyright to listing comments.

The same holds true with the photograph if the agent takes the photo. This gets even more complicated however since many MLSs and third-party photographers offer photo services to brokers and agents. Brokers would need a similar "work for hire" agreement or other assignment of rights in order to claim copyrights to photos taken by others. To the contrary, many MLSs specifically state in their rules that the MLS (and not the broker) owns all copyright in any photographs taken by the MLS.

If, within a single MLS, there was uniformity that led to the broker owning the copyright in the copyrightable elements of each listing, Mr. Westermeier's argument might be a good one. The reality is that within most MLSs, and even within many brokerages, there is no such uniformity. Because of this lack of uniformity, the argument of broker copyright to support an MLS listing display policy that applies equally to the entire MLS membership just won't work.

(Note: This information is general in nature and not intended as legal advice. Consult your legal counsel for specific advice.)

Russ Cofano is a Seattle-based attorney, speaker and consultant to the real estate industry. His background includes representing Realtor associations, multiple listing services and brokerage companies. He also ran a real estate technology company and more recently, served as legal counsel and business development director for a publicly traded information security technology company. Cofano can be reached at russ@cofanolaw.com.

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