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Copyright Infringement Injunction Upheld

A federal appellate court has considered whether a trial court properly entered an injunction barring a website from using copyrighted MLS photographs.

Metropolitan Regional Information System, Inc. (“MRIS”) operates a multiple listing service in the mid-Atlantic region.  Real estate brokers that participate in the MLS execute a subscription agreement which allows them to share their listing information with other participants as well as view the information submitted by the other participants.  The participants agree to assign all copyrights to MRIS for the photographs included in each listing that the broker uploads to the MLS database.

American Home Realty Network, Inc. (“Website Operator”) operates a website known as “NeighborCity.com” (“Website”).  The Website purports to offer a national real estate search and provides rankings of real estate professionals.  The data displayed on the Website comes from a variety of sources, including real estate professionals and public records.  If the Website provides a lead to a real estate professional, the Website receives compensation when the lead results in a sale.

MRIS has copyrighted its database compilation with U.S. Copyright Office.  MRIS registers its copyright ownership every quarter through filings with the Copyright Office, in accordance with the provisions for registering a copyright for automated databases.  MRIS displays a copyright ownership mark on all photographs within the database and on its website pages.

The Website contained listing information and photographs from the MRIS database.  The Website Operator had not obtained a license or permission from MRIS for the posting of this information on the Website.  When MRIS requested removal of this information, the Website Operator offered to enter into a licensing agreement with MRIS but did not stop its practice of using MRIS’s information. 

MRIS rejected this offer and filed a lawsuit alleging copyright infringement and other claims arising from the alleged copyright infringement.  The trial court entered a preliminary injunction barring the Website Operator from using MRIS’s copyrighted photographs.  The Website Operator brought a counterclaim against MRIS and NAR, which the trial court dismissed entirely but allowed the Website to file a new complaint on some of the allegations (which it has done).  Click here to read about the dismissal of the counterclaim.  The Website appealed the trial court’s entry of an injunction prohibiting its use of MRIS’s photographs.

The United States Court of Appeals for the Fourth Circuit upheld the trial court’s injunction.  The Website Operator made two arguments for why MRIS could not claim copyright protection for the photographs on the Website and thus was not entitled to an injunction: first, when MRIS had registered its copyright for its database, it had failed to properly register each individual author of the photographs; and second, MRIS does not possess copyright interests in the photographs because its electronic agreement with its subscribers failed to transfer those rights.  Before reviewing the Website Operator’s arguments, the court noted that the Website Operator was not questioning the ability of MRIS to copyright its database and if the Website Operator had raised this argument, the court stated it would have rejected this argument.

The court looked at the requirements for registering a compilation like the MRIS database for copyright protection.  A compilation qualifies for copyright protection as an “original work of authorship”, even though it is composed of preexisting materials, when it has selected, coordinated or arranged these materials in such a way that it constitutes an original work.  The author of a compilation made of up of individual copyrightable works does not need to own the copyright for each individual work; in that case, the author would only be able to distribute and register the collective work.  However, nothing bars the author from obtaining rights in the individual component works.  In order to bring a lawsuit for copyright infringement, a party must have ownership over the work and also must have registered the copyright with the U.S. Copyright Office

The court determined that MRIS had properly obtained the copyright for the photographs found in its database and so rejected the argument by the Website Operator.  In order to submit photographs to MRIS’s database, MRIS participants “irrevocably assign” all of their rights in the photographs to MRIS.  While MRIS had registered its compilation with the U.S. Copyright Office, it had not listed the name of each author who had created the component works included in the compilation.  The courts are split on whether a copyright holder is required to identify the authors of component works in its registration documents, with some courts finding this is a requirement while other courts have ruled that this is not required so long as the copyright holder has acquired the rights of the component works.  The court ruled that because MRIS had acquired the rights to the photographs (or component works), it did not need to list the authors of the photographs when registering its compilation with the copyright office and so rejected this argument by the Website Operator.

Next, the court ruled that MRIS had obtained a valid assignment of the copyrights in the photographs from the participants.  The Website Operator argued that MRIS used an electronic agreement to its terms use that did not satisfy the requirements of the Copyright Act because the electronic agreement did not operate as an assignment of rights for the Copyright Act.  MRIS argued that an electronic signature satisfies the terms of the U.S. Copyright Act, as e-signatures constitute a legal signature. 

The Copyright Act requires a written and signed assignment of rights in order for the assignment to be valid.  While the Copyright Act does not define what constitutes a writing and a signature, Congress had made it clear through the E-Sign Act that electronic signatures should be treated in the same way as physical signatures.  While the E-Sign Act does contain some limitations (wills, adoption papers, and similar documents can treat e-signatures differently), none of the listed exclusions are relevant to copyright assignments nor does the E-Sign Act list copyright assignments as an exception.  Since Congress intended e-signatures to be treated the same as physical signatures and no other statute barred the use of e-signatures in the assignments of copyrights, the court determined that MRIS had obtained valid copyright assignments from its participants.  Therefore, the court upheld the injunction barring the Website Operator from using MRIS’s photographs in its database without its consent.

Metro. Reg'l Info. Sys., Inc. v. Am. Home Realty Network, Inc., No. 12-2102, 2013 WL 3722365 (4th Cir. July 17, 2013).  [This is a citation to a Westlaw document.  Westlaw is a subscription, online legal research service.  If an official reporter citation should become available for this case, the citation will be updated to reflect this information].