What happens to listing photos displayed on third-party websites after a property sells? Real estate photography company VHT Inc. and real estate technology and media giant Zillow Group are set to square off on that question at trial.

  • VHT filed a copyright infringement suit against Zillow Group in July 2015, alleging that Zillow had illegally used VHT’s photos on Zillow Digs for its own profit and gain.
  • The real estate tech giant and photography firm will argue the case in a jury trial starting Jan. 23.
  • VHT has not named any brokers or MLSs as defendants in this case, but that's not to say that they should consider themselves off the hook in the future.
  • The list of possible witnesses for both sides contains an array of familiar real estate industry names.

What happens to listing photos displayed on third-party websites after a property sells?

Real estate photography company VHT Inc. and real estate technology and media giant Zillow Group are set to square off on that question at a Seattle jury trial starting Jan. 23.

VHT filed a federal copyright infringement suit against Zillow Group and its Zillow Inc. subsidiary in July 2015. The photography company alleges Zillow has been stealing tens of thousands of VHT’s photos and illegally using them on site sections devoted to recently sold homes and to home improvement.

Zillow obtains listing photos mainly from brokers and MLSs that send data feeds to the site. The outcome of the lawsuit hinges on whether Zillow’s use of those images after a property sells violates copyright law.

If brokers or MLSs try to give Zillow additional photo rights than those provided by the owner, could they be at risk of litigation? VHT has not named any such parties as defendants in this case, but that’s not to say that they should consider themselves off the hook in the future.

“[I]f the brokers or MLSs are purporting to license these photos to Zillow after the listings go off-market, VHT might also have claims against them; but it may view it as strategically unwise to make such claims,” attorneys Brian Larson and Mitchell Skinner wrote in their 2016 book Real Estate Listings & Copyright.

The home improvement section of Zillow’s website, called Zillow Digs, is also a separate mobile app. Zillow Digs links to third-party vendors through items that appear in specific photographs, though the company claims it has only received revenue from Digs in a “very limited number of circumstances.”

Screenshot of one of the photos at issue in the lawsuit.

Zillow says it removes the photos from its site when required to under contract, but that most of the photos it obtains do not restrict its ability to use data or images after a property sells.


The upcoming trial

The trial is currently slated to last 10 court days, from Jan. 23 to Feb. 7., in front of a nine-person jury.

If the court accepts a pretrial order proposed by VHT, each party will be limited to four expert witnesses.

According to the proposed order, VHT’s expert witnesses will be:

  • Robert Henson, who will speak to the independent economic value of each of VHT’s photos
  • Dr. Ward Hanson, who will speak to how Zillow benefits from use of VHT’s photos
  • Victor Lund, partner at real estate consulting firm WAV Group, who will discuss the structure and operation of the online real estate industry and Zillow’s role in particular
  • Jeffrey Sedlik, who will also speak to the independent economic value of each of VHT’s photos

Zillow’s expert witnesses will be:

  • Jeffrey Sedlick, (yes, the same one) who will speak to flaws and problems with Henson’s expert opinions
  • Patrick F. Gannon, who will speak to flaws and problems with Henson’s and Hanson’s expert opinions as well as on what VHT should recover if it prevails on its infringement claims
  • John H. Vogel Jr., who will testify to how technology and the internet have changed the role of the real estate agent, what role Zillow plays in agents’ marketing efforts, and what role photographs play in the homebuying process

Other witnesses may also be used by each party and a list of possible witnesses contains some familiar names.

The possible witnesses on behalf of VHT:

  • Brian Balduf, CEO of VHT
  • Michael Emerson, a member of VHT’s board of directors
  • John Bosch, VHT’s vice president of product management
  • Kevin McGuire, VHT’s vice president of sales
  • Chris Baker, web and development team lead at David Wright Tremaine LLP, the law firm representing VHT
  • Doug Angelaccio, VHT’s manager of client services
  • Flatworld Solutions Inc.
  • Microstock Solutions LLC
  • Kristin Acker, senior vice president at Zillow
  • Ben Schielke, group manager at Zillow
  • Jonas Boli, senior group manager at Zillow
  • Jason Gurney, group manager at Zillow
  • Greg Schwartz, Zillow Group’s chief business officer
  • Curt Beardsley, Zillow Group’s vice president of industry relations
  • Sara Bonert, Zillow’s vice president of broker services
  • Alex Kutner, senior development manager at Zillow
  • Lynette Lewis, digital marketing manager at Chicago brokerage @properties

All of the Zillow Group employees on the plaintiff’s list of possible witnesses are also on the defendants’ list, except for Beardsley. Balduf, Emerson, McGuire, Bosch and Lewis are also on the list.

Additional names on the defendants’ list include:

  • Errol Samuelson, Zillow Group’s chief industry development officer
  • Kathleen Phillips, Zillow Group’s chief financial officer
  • Kimber Van Ry, a consultant to VHT

The claims

VHT’s complaint includes claims for direct copyright infringement, contributory copyright infringement by material contribution, contributory copyright infringement by inducement, and vicarious copyright infringement.

In an emailed statement, Zillow Group spokeswoman Amanda Woolley told Inman, “We believe this suit is without merit, and are confident in our position as the court has already dismissed several claims. We respect and enforce copyright protections and permissions across our platforms, and will vigorously fight the remaining allegations.”

Inman determined that the court dismissed one of VHT’s claims, direct copyright infringement on Zillow home detail pages. VHT’s claim of direct copyright infringement on Zillow Digs stands.

Inman has reached out to Zillow Group for further information on the other dismissed claims referenced in its statement.

VHT seeks a permanent injunction barring Zillow Group from infringing VHT’s copyrights and either maximum statutory damages or actual damages, plus defendants’ profits “attributable to the infringements” in an amount to be proven at trial.

VHT co-founder and CEO Brian Balduf declined to comment for this story.

Zillow countersues

Zillow Group filed a countersuit against VHT in November, alleging that VHT had induced real estate professionals to place photographs in Zillow’s systems with misattributed rights.

The company alleged VHT represented to these professionals that they had rights to the images that they could then convey to Zillow, even though VHT contends they did not have those rights and therefore could not convey them.

Zillow Group cited as evidence of inducement an email template in which VHT told its customers, “We provide you a license to use the photographs wherever you want, any way you want, and for as long as you want. This includes promotion of your brokerage, your agents, and your listings. You just can’t sell them.”

VHT described that email as a cover letter for VHT’s standard service level agreement and photography rider.

The judge in this case, U.S. District Judge James L. Robart, did not buy Zillow Group’s argument. He dismissed all four claims in the countersuit in December.

Part of his reasoning was that the email was not directed at the general public but rather “real estate professionals, who are sophisticated parties capable of reading contracts and interpreting their language.”

What agents and brokers are handing over

Agents, brokers and MLSs may negotiate with Zillow the terms under which they provide the site with data.

But if they don’t, Zillow’s generic listing feed terms state that agents, brokers and MLSs grant Zillow “license to use, copy, distribute, publicly display and perform, and create derivative works of the data, only on and in connection with the websites and other properties owned or operated by Zillow.”

The terms also say that “after a listing terminates, Zillow will retain the corresponding data and will provide you with attribution whenever displaying that data on the Zillow website.”

The generic listing terms on Zillow’s website state that brokers and MLSs “promise to indemnify and defend Zillow and its affiliates against all claims related to your data.”

Infringement of copyright does not need to be intentional to be prohibited by copyright law.

But VHT alleges it was intentional, particularly since the feeds Zillow receives from MLSs explicitly tell Zillow when a property has been sold.

According to Zillow, its “systems are designed only to retain post-sale images provided by sources that have assured Zillow they have the right to authorize that use.”

The company also contends that it is able to use the images under the fair use exemption of U.S. copyright law.

‘A property is always on the market’

VHT counts more than 75,000 real estate professionals nationwide among its customers.

According to the complaint, with the exception of one brokerage, VHT retains copyright for all photos taken by photographers on its behalf. It licenses the photos to listing agents and brokers solely for marketing the specific pictured property or the company or agent representing the property — and only while that property is on the market.

“Nonetheless, Zillow continues to date to use photographs owned by VHT in listings for properties that were sold weeks, months, or even years ago, even after notice and after the filing of the original complaint in this action,” attorneys for VHT said in an October 2016 amended complaint.

“These uses of the photographs cannot serve to market or advertise the properties that are pictured because the properties have already been sold and there is no longer a listing agent or broker ‘representing’ that property.

“To the contrary, Zillow appears to be selling advertising space to other agents and brokers, not the listing agent or broker who had the listing, and features those advertisements alongside the subject photographs.”

In its response to the amended complaint, Zillow Group said,”[I]t is well-known in the real estate industry that a property is always on the market and Zillow provides users with photographs of properties and interiors on [zillow.com] and on Digs for the purpose of assisting with the marketing or sale of properties and/or for marketing or sale of the services of brokers or agents” and therefore “such uses are within the scope of the VHT license.”

Moreover, the company said its use of sold-listing photographs continues to market the services of the listing broker or agent, who remains identified in the listing, usually with a link to his or her profile on Zillow.

Agents’ authorization of post-sale photo displays reflects their understanding that past sales make up their “resumé,” and that unlisted properties may generate unsolicited offers and opportunities, Zillow’s attorneys said.

Given the companies’ varying interpretations of the permissions and authorizations VHT has given its licensees, both Zillow Group and VHT have asked the court to determine whether VHT’s terms of use are ambiguous or unambiguous before the trial.

Zillow Group argues they are ambiguous and VHT argues they are not.

Email Andrea V. Brambila.

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