Broker Intellectual Property At Risk

by Victor Lund on December 20, 2013

200px-C-symbolMany real estate brokers are being asked to sign new MLS Participant Agreements. The cause for new agreement is based upon the MLSs efforts to support real estate brokers to protect their intellectual property. This is a very important initiative that every broker should take very seriously. Every broker should also consult with their attorney to discuss ramifications and meet with the MLS in a forum to discuss the best path.

There are a couple cases before state supreme courts (MD and MN) that are ruling on the ability for the MLS to defend the intellectual property rights when they are scraped from public websites or misused by licensees. Since I am not an attorney, I will not opine on the cases but suggest that you get a statement from the attorney for your MLS. I surmise from my reading of each case that the courts are divided. The specific methods that MLSs use to perfect and protect copyright have a lot to do with the ability to defend the copyright on behalf of the broker.

New Intellectual Property Options in MLS Participant Agreements

Although there are variations on what I have seen, this is the language that seems to be popular for MLS adoption into their rules:

Election regarding copyrights in Participant Contributions

  1. Assignment from Participant. Participant hereby assigns to the MLS all right, title and interest, including all rights under U.S. and international copyright law, in the Participant Contribution, Participant warrants that it has the authority to make this assignment. Participant acknowledges that once it has made the election agreeing to this section, all copyrights in all portions of the Participant Contribution, whether submitted to or after executing this Agreement, shall irrevocably vest in the MLS
  2. MLS Obligations. MLS hereby grants to Participant a non exclusive, perpetual, worldwide, transferable, royalty-free, license to reproduce, prepare derivative works of, distribute, display, perform and license (including sublicenses through multiple tiers) the Participant Contribution and those portions of the MLS Database relating to Participant’s listings. MLS shall secure the rights of Participant hereunder by obtaining assignments and licenses from Subscribers and others as necessary. MLS shall make quarterly registrations of the copyrights in the MLS Database, including the Participant Contribution, MLS shall employ reasonable efforts to detect and hinder third parties using the Participant Contribution without Participant’s permission.

Of course, there is typically an option to opt-out of the MLS protecting your Intellectual Property for your MLS contributions, but that makes little sense.

When you speak to your attorney, here are a few questions that you may want to get opinions on.

  1. If the agent takes the photos and writes the description text of the property, does the broker have the ability to copyright the content? In the Assignment, you are indicating that you do have the authority to make the assignment. You may need to amend your agreement with your agents to position the brokerage to guarantee the ability to make this assignment. Alternatively you may need to employ a photographer, write the description text with staff, and enter the MLS data with staff.
  2. Should the license be revocable? What if you want to leave the MLS and you want to take your data with you. Sometimes MLSs split up. You may want to choose who gets your data. You may want to discuss this with your attorney. It is reasonable to have a termination of the license in any license agreement.
  3. Unrestricted license – You are assigning all right and title and interest. That means that the MLS is in complete control of your data. They can grant a license to anyone they like without your permission. You may want to discuss limitations whereby any sub-license be approved by you. This will prevent the MLS from licensing your data to a third party that you do not want to have your data. Moreover, they could be profiting from the data that you license to the MLS in competition with data licenses that you are attempting to structure for your intellectual property.

 

 

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