Another Loss For Online Realtor

I wrote about the online realtor American Home Realty Network in a recent newsletter.  That piece talked about AHRN’s troubles with a Maryland based federal trial court stemming from AHRN’s failure to remove certain copyrighted material from its Web site after the court ordered it to do so. Now, a federal appeals court has compounded AHRN’s woes.

To recap, AHRN takes real estate listing data from online database compilers (whose services are typically fee based) and makes it available for free on its Web site. The problem for AHRN is that, in addition to using the data compiled by the fee based providers, it also posted photos from those services on the AHRN Web site. One competitor – Metropolitan Regional Information Systems, Inc. – brought a copyright infringement action against AHRN. The trial court granted an injunction ordering AHRN to remove the photos (see the aforementioned newsletter) and AHRN appealed.

AHRN did not find a receptive audience in the Fourth Circuit. For its main argument, AHRN contended that MRIS didn’t actually have a copyright in the photos. According to AHRN, the brokers and other MRIS subscribers uploaded the listing photos to the MRIS Web site. To do so, those folks needed to click “yes” to accept the MRIS Terms of Use. Included in the TOU is a copyright assignment.

Section 204(a) of the Copyright Act requires a copyright assignment to be in writing to constitute an effective transfer. AHRN argued that the click didn’t cut it. 

The appeals court had two responses. First, it questioned whether AHRN had any basis to rely on Section 204. The writing requirement is intended to eliminate disputes between the copyright holder and the assignee. And none of the MRIS customers were disputing the transfer. AHRN was picking a fight where none existed. 

But in addition to the threshold point, the court relied on the federal E-Sign Act, 15 USC 7001, to resolve the issue. The E-Sign Act simply provides that a court can’t deny the validity of a contract “solely because an electronic signature . . . was used in its formation.”   And while the E-Sign Act carves out certain contracts (wills for example) copyright transfers are not accepted.  

Tough luck for AHRN, and a lesson for anyone thinking that just because it’s easy to cut and paste Web content it’s okay to do it. Guess again.