CHICAGO — A tool that allows multiple listing services to combat unauthorized use of real estate listing data is at risk.
In 2012, when two multiple listing services sued the operator of third-party listing and referral site NeighborCity for alleged copyright infringement, they were able to do so because the U.S. Copyright Office had allowed them to copyright their MLS databases. After a two-year legal battle, NeighborCity was forced to remove listing photos from its website and now no longer exists.
But the U.S. Copyright Office is questioning the automated database copyright registrations it has granted to MLSs for decades.
These copyright registrations protect the arrangement, selection and coordination of MLS compilations; and if an MLS owns the underlying copyrightable components of its database, such as photographs, listing descriptions and agent remarks, then that copyright extends to those components, according to the National Association of Realtors.
“Really we were surprised because this is a major shift in policy from the Copyright Office’s prior practice,” NAR Senior Counsel Chloe Hecht told MLS executives at NAR’s annual conference last week.
Hundreds of MLSs had copyright applications pending before the Copyright Office when all of a sudden there was a delay, and in August, the MLSs started receiving requests for clarification, according to Hecht.
The requests alleged the copyright applications showed no new creative authorship and asked the MLSs to identify that creativity within 20 days.
“[They said], ‘We don’t see the creativity. Point that creativity out to us,'” Hecht said.
Why question the copyrightability of MLS databases now? Because of a 1991 case called Feist v. Rural Telephone Service Co, according to Hecht. This case involved a telephone directory publishing company (Feist) that copied white pages listings from a competing directory issued by Rural.
Facts cannot be copyrighted, but works with a minimum degree of creativity can; that creativity could include an arrangement of facts. So someone can use the underlying facts of a compilation, but can’t arrange them the same way, Hecht said.
The court found that Rural could not “claim originality in its coordination and arrangement of facts” because it had only listed its subscribers in alphabetical order, which lacked any “spark” of creativity. Therefore, Rural’s white pages were not protected by copyright.
When MLSs started getting clarification requests, NAR had happened to have a meeting already set up with the head of registration policy at the Copyright Office and other officials to deal with other issues, according to Hecht.
At that meeting the officials explained that the Copyright Office was revising its Compendium of U.S. Copyright Office Practices (an administrative manual) when it started to question the registrations issued to MLS databases.
They implied that some MLSs may be entitled to copyright protection, but said not all MLS applications had the necessary creativity to merit it, Hecht said.
“They believed that prior registrations were issued in error, but weren’t going to go back and revoke those,” she added.
Hecht and NAR Senior Technology Policy Representative Melanie Wyne were able to obtain a grace period during which the Copyright Office will not take any adverse action on pending applications, including those applications where the MLS has already replied to the request for clarification, NAR said on its website.
“This grace period is intended to allow NAR and our members time to assess the situation and determine the best plan of action for addressing it,” the trade group said.
The grace period, which suspends that original 20-day deadline, “will last until further notice,” NAR spokesperson Sara Wiskerchen told Inman via email.
On Oct. 19 in Chicago, NAR’s Legal Affairs team held a work group with about 15 broker and MLS representatives to brainstorm the best possible legal strategy for protecting listing content.
“NAR is scheduling a follow-up discussion with the Copyright Office and working on other resources to help brokers and MLSs protect listing content,” Wiskerchen said.
“NAR’s efforts are focused on how MLSs can demonstrate sufficient creativity to the Copyright Office as our conversations with the Copyright Office continue,” she added.
As a condition of the grace period, MLSs are not allowed to contact the Copyright Office directly. All communications during the grace period must be channeled through NAR, the trade group said.
NAR didn’t ask for that requirement, according to Hecht.
“The office is notoriously dysfunctional and disorganized, so we think they were trying to avoid” getting hundreds of MLSs contacting them, she said.
NAR invited anyone with questions to email Hecht at email@example.com.
MLSs also cannot submit complaints about the Copyright Office to a third-party entity. “If you do that, it waives grace period,” Hecht said, prompting laughter from conference attendees.
NAR did not respond to questions asking for the reasoning behind this stipulation and if it is legal for a federal government agency to require such a thing.
Filing new applications will not waive the grace period for existing applications, but the grace period will not apply to new applications, Hecht said.