A battle was waged between MLSs and the National Association of REALTORS® against the Library of Congress, who administers copyright in America. For many years, it has been the common practice of MLSs to copyright their data set – referred to as the MLS compilation, each month or each quarter. About a year ago, the copyright office of the Library of Congress continued to receive the copyright applications but stopped issuing copyright numbers. The copyright office invited a discussion with the real estate industry to understand the copyright more fully. NAR created a “how to” guide for MLSs to remove the issues with their applications so that they could be properly submitted and considered on the merits of each MLSs application. Today, copyright requests for the MLS compilation that are properly submitted are again being registered.
*note to brokers – If you are not certain about your MLSs practice related to submitting your listings in their compilation to the copyright office, call their CEO and ask them. If they are puzzled, invite them to read this article or contact WAV Group. MLS practices in relation to copyright are spotty. This is not something that you can assume.
Perfecting copyright is a pretty technical process. I will attempt to describe some of the details in business language. You should consult your attorney for a legal review of your data copyright strategy. We also highly recommend the book on MLS copyright written by Brian Larson and Mitch Skinner. $100 on Amazon. It is a must read.
Copyright does not extend to all things as it relates to real estate data. However, three things are pretty well understood under the copyright laws.
The person taking a photo or writing a property description is the de facto copyright holder
Because of photographer or property description writer is an artist under copyright laws, every broker needs to have two policies in place to establish their data sovereignty over the work being produced to market a property. The first policy should be established in the independent contractor agreement and employee agreement of the firm covering anyone that takes photos writes property descriptions or enters data. Brokers need to have their agents and staff assign the photos and property descriptions to the firm along with the compilation of facts (full listing input). The broker is the responsible party and the supervisor of these activities. This policy is an effort to keep the relationships clean. The second policy is a license agreement mandate for photographers. The National Association of REALTORS® has an excellent group of agreements. Be sure to pick the right one (i.e. a Work for Hire agreement might establish an employment issue in California, so don’t use that one). To find these agreements, contact NAR Legal or visit Realtor.org.
Another element that is copyrightable is called the compilation. Think of a collage. There is an art to the arrangement, selection and coordination of data elements that are certainly beautiful…….stay with me here!
This is one of the challenges debated with the copyright office. They were suggesting that the selection and coordination of data elements is not art. NAR successfully argued that there is painstaking detail that goes into the selection and coordination – lots of rules on each field detail that are strictly enforced. Real estate data may be the most beautiful set of data ever created. Heck, nearly a Billion people look at these collages every month on hundreds of thousands of websites. It may be the most popular art ever……again, stay with me.
The importance of data agreements between the broker and the MLS.
There was a moment last year when a few hundred brokerages contacted WAV Group to ask about the new MLS agreements that they were being asked to sign. The agreement required the broker to assign limited copyright usage of the data provided to the MLS. The keyword here is limited.
Limited license Agreement between Broker and MLS
The broker is essentially assuring the MLS that they have rights to the data being submitted to the MLS. Furthermore, the broker is giving the MLS the license to use the submitted data for the purpose of delivering MLS services. Lastly, the broker authorizes the MLS to offer limited sub-licenses the data as necessary to deliver the MLS service. Examples of this would be the sub-license of data to the MLS vendor or IDX vendors who are handling data on behalf of the MLS and its participating brokers. The broker is also allowing the MLS to include the broker’s data compilation into a new compilation comprising the data submitted from all brokers in the marketplace – and allowing the MLS to copyright that bulk compilation. Imagine that the MLS compilation is a collage of broker listing collages.
Broker Data Sovereignty Is Not Assumed
I started the last paragraph with the sentence, “The broker is essentially assuring the MLS that they have rights to the data being submitted to the MLS.” It begs the question. Has the brokerage truly secured the rights to the data? I would argue that if the broker has not required that agents and photographers assign the rights of the photos and the property descriptions to the brokerage, then they are in breach of the agreement with the MLS. I would also argue that if the data goes directly into the MLS, the broker would not have any claim to the copyright of the compilation since the selection and coordination of data would be the artistry of the MLS. Brokers can easily cure this issue with suggestions denoted herein and as outlined by the National Association of REALTORS®. If you need help, hire WAV Group.
MLSs Endeavor to Protect Broker Data
In order for MLS to protect the data on behalf of the participating brokerage firms, they need to shore up the chain of custody for the submitted data. The MLS license agreement between the participating brokerage and the MLS is the cornerstone to this protection, along with the acceptance of the Terms of Use when entering data. I would be willing to wager that at least a few of the brokers who belong to MLSs have signed agreements or allowed agents or staff to accept Terms of Use assuring the MLS that they have secured the rights to the data when they have not. We have seen this happen before to Zillow Group.
In the case of VHT vs. Zillow, the discovery was that brokers had a limited license from VHT to use photography in perpetuity in the MLS but only during the term of the listing agreement for marketing activities like Zillow advertising display. Brokers would often assure Zillow Group (by accepting Zillow’s terms of use) that they could use photos in perpetuity in data license agreements between the broker and Zillow and also in license agreements between the MLS and Zillow. When VHT came to the realization that Zillow was displaying their photography after a listing was no longer active, they sent a notice of their copyright to Zillow and requested that they remove them from the site. Zillow refused on many grounds. The court ruled in favor of VHT and awarded millions of dollars in damages. Zillow had grounds to pass along those damages to the brokers who misrepresented the data sovereignty, but they took the high road and let the brokers off the hook. I would imagine that MLS would take the same high road if there was a data sovereignty dispute with a brokerage. Neither Zillow Group or an MLS wants to take their broker customer to court, but they have the right to do so. Accepting terms of use is contractual.
Upstream Will Support Broker Data Sovereignty
Upstream plays into the strategy of establishing brokerage sovereignty of data. When brokers enter data into Upstream, the user assigns the copyright of all submitted data to the broker through a click-through agreement accepting the Terms of Use. Because Upstream collects data specific to each brokerage, there is a unique selection and coordination to the data too. Upstream will help brokers establish a chain of custody and an acceptable practice to validate the broker’s ownership of data.
Upstream Will Help MLSs Perfect Copyright Claims
As mentioned above, the chain of custody is an important consideration when it comes to perfecting copyright. It is pretty hard for a broker to claim that they are the copyright holder of photos and property descriptions when they do not have an agreement in place with photographers or their agents who may have taken the photos and written the property descriptions. Moreover, the broker may have not ever held or even seen the data if it goes straight from the agent into the MLS. In my experience, the process of data origination by the agent going directly into the MLS is pretty common. I do not know how a broker can assure the MLS that they are compliant with the data license agreement to the MLS when this is the case, especially when the broker does not have an explicit agreement with the agent.
Establishing broker copyright over their data requires careful consideration and process.
Data Sovereignty Goes Beyond Listing Data
It may be helpful for you to understand that facts are not copyrightable. For example, an address is not subject to copyright, nor can the number of bathrooms or bedrooms in a house. These are facts. But the For Sale status of an address published along with a brokerage logo and an agent headshot with a custom written property description and photographs of the home create a data set that is certainly subject to copyright. The point here is that there is a lot of data related to the Firm Record that compliment a Listing Record. These are things like the broker logo, broker bio, broker office bios, broker office photos, agent photos, agent bios, and the unique selection and coordination of these elements that are assembled for the purpose of operating a real estate brokerage to market services to homebuyers and sellers.
This is super important to appreciate in terms of broker data sovereignty. Consider a website that sends bots out onto the internet to scrape the broker record and agent records. This website might take that data and publish a representation on their website along with something like agent ratings. Consumers go to this scrapers’ website and shop for a brokerage or agent using data that was not authorized for use by the broker or the agent. The scraper site generates a lead using the broker’s data and is in the business of selling that lead back to the broker. Yikes! For a broker to stop this behavior, they would need to establish their sovereignty over the firm record using copyright laws. There is a little more to it, but you get the idea. Brokers could follow the VHT case against Zillow exchanging the copyright of the Firm Record in place of the Listing Record. It’s the same copyright argument, just a different data set.
Hire WAV Group
Data license agreements and copyright are tricky, and details must be painstakingly considered. It is a good idea to audit your copyright practices if you are an MLS, brokerage firm, or Franchise. We are happy to build a proposal for you to consider
Additional Reading
NAR Guidance on Photographs
Sample Descriptive Statement for Copyright https://www.nar.realtor/sites/default/files/documents/Template-MLS-Database-Descriptive-Statement-2018-08-02.pdf
Larson Skinner
http://larsonskinner.com/2018/03/23/mls-terms-use-changes-copyright-faq/
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