Update 2/1: Some folks using Internet Explorer had problems with the links in this post earlier today. WAVGroup fixed the problem on its server. They should work now.
If your MLS is considering licensing data to RPR, I think you will find that the WAVGroup whitepaper on the topic, by Mike Audet, is an essential tool for your decision-making.
Mike is a former colleague of mine and is blessed with a sharp mind and fine critical thinking skills. I'm telling you now, but it would be obvious to you after reading the white paper.
The whitepaper provides a sort of checklist of questions your MLS should answer for itself before agreeing to license to RPR.
I'll keep an eye on the WAVGroup blog for your comments, or you can share them here!
-Brian
Sunday, January 31, 2010
Wednesday, January 27, 2010
RPR’s Content License Agreement: What am I missing?
We obtained a copy of the RPR MLS Content License Agreement (CLA) from an MLS client of our law firm on January 27. Our client provided a copy and said we could review it and blog about it but did not give permission to post the actual agreement. (The document is a PDF file that embeds the name of the client.) The document is marked “Version 2010.01.22”. I expect this means RPR completed this draft on January 22. Note that RPR may be distributing different versions of the agreement to different MLSs. RPR has told us we cannot have an ‘official’ copy for our review, that we must get one from one of the MLSs. If you are not an MLS, you are on your own getting one for the time being. We’ll post one if we get permission.I planned for this post to provide an overview and high-level assessment of the RPR MLS Content License Agreement (CLA). Subsequent posts would have looked at it in more detail and addressed brokers’ perspectives.
But frankly, I’m flummoxed. In this contract, RPR basically does not promise to do anything for the MLS or its subscribers in return for the MLS and brokers turning over one of their most valued possessions. Will RPR offer a separate contract where it promises to deliver all the fine things that Marty Frame and Dale Ross have been talking about for the last month? If this is all there will be, I can’t imagine any MLS signing it.
If you are curious what I’m talking about, read on.
The 5Ws
An overview of a contract should address the same things as a good news article – the 5Ws (and the H): Who, what, where, when, why, and how? Briefly, then, here they are for the RPR CLA.Who: The parties are RPR and the MLS (referred to as “Provider” in the CLA). The CLA addresses services to be provided to three other classes of people/entities.
- “Participant/Subscriber” means brokers, salespeople, and appraisers that are customers of the MLS.
- “Authorized RPR User” refers to all Participants/Subscribers (whether or not they are REALTORS®) and to all REALTORS® (whether or not they are customers of this or any other MLS).
- “RPR Customer” refers to those “who are not NAR Members and with whom RPR has contracted to provide the RPR Offerings.”
With the Licensed Content, the CLA permits RPR to create “RPR Offerings,” defined as “those business products, services and/or applications created and developed by RPR using the Licensed Content.” The agreement provides examples of two types of products, RVMs and something called “Match & Append Products.” But these examples illustrate – they do not limit the products NAR can provide.
In short, RPR gets everything the MLS has and can largely create any kind of product it wants to with the MLS data. (There are some limitations on those uses detailed in the agreement, but they are not significant.)
One would imagine that the contract would then offer the MLS a host of useful things in return. But AMAZINGLY none of the following appears in the CLA:
- There is no promise from RPR to provide the RPR system, the demo of which so many folks have been crowing about, or that MLS’s subscribers will be able to use the RPR system.
- There is no promise from RPR to incorporate the MLS data into the RPR system, which would theoretically make both much more valuable.
- There is no promise from RPR that MLSs subscribers will get public record data from RPR or that MLS will be able to access public records from RPR via an API.
- There is no promise from RPR that active listings from your MLS will be visible on the RPR system to subscribers in other MLSs.
The only thing RPR really promises in the agreement is NOT to do certain naughty things:
- RPR will not compete with the MLS as a “multiple listing service,” a term defined in the CLA more broadly than in NAR policies. (The broader definition of “MLS” in this case is good for MLSs, but puzzling coming from an NAR subsidiary.)
- RPR will not “challenge or take any action inconsistent with Provider’s rights” to the Licensed Content.
- RPR will not provide products that would make it or MLS a credit reporting agency, subjecting them to the Fair Credit Reporting Act.
- RPR will not use the MLS data to violate the law.
- RPR will stop using the Licensed Content (mostly) when the agreement terminates.
Where: There are some issues relating to geography, but they are largely trivial.
When: The agreement has a term of one year from its execution by the MLS. It automatically renews for consecutive one-year periods unless either party gives notice at least 90 days before the expiration of the current period.
Why: That’s a good question. See the next section.
How: MLS must provide data to RPR via a RETS data feed, updated no less frequently than MLS updates the data feed for its other licensees.
Why?
OK, I’m tired – I’ve been traveling today – I’m reading this agreement for the third time, but my brain cells are dimming. Could I have missed something? I’m going over it one more time before I make the following assessment.... OK, back now.I think it is fair to say that RPR does not promise to make, produce, or deliver any product or service whatsoever to the MLS, its subscribers, or to REALTORS® under this license agreement. In effect RPR is saying, “Let us use your data. In return, we promise not to do certain naughty things.”
That’s it.
Really.
How many times have folks come to MLSs asking for data and promising the world? Those promises may have been pie-in-the-sky, but at least there were promises. RPR promises nothing. Marty and Dale have articulated a variety of value propositions for MLSs to license their data to RPR, but none of them appears in the agreement. Why would any MLS agree to this?
I guess I’ll wait for comments. For myself, I’m too confused to speculate.
-Brian
Tuesday, January 26, 2010
Where are the copyrights? Copyrights in MLS listing content Part I
UPDATE: Link to second part of this series.
With RPR now on the scene seeking to license listing data from essentially every MLS in the country, Brian and I figured it was a good time to review the way that copyright law interacts with MLS databases; several issues make that interaction complex. Chief among them is the 'fractured ownership' of copyrights in MLS data content. In the absence of certain concrete steps, brokers and MLSs probably own less than they think they do, and brokers and MLSs need to reach an understanding about ownership to permit them to enforce the copyrights effectively.
The key determinations with regard to MLS data content are (1) whether the MLS has obtained the rights to use the content as it must to carry out its purpose and (2) whether the MLS has the power to prevent misuse and piracy of the data content. The answers to these two questions hinge on two bodies of law: federal copyright law and state contract law. In this post, I'll provide a summary of the key legal principles and then discuss some important issues for MLSs.
Who are the copyright authors and owners?
In general, the author of a work is the individual human being who creates it, and she secures copyright in it the moment she creates it. Sometimes, the author of an original work is the employer of the human being who creates it. It is also possible for certain kinds of works to belong to an entity that commissions them from the actual creators. In each case, this is referred to as a "work for hire" or "work made for hire." In the case of real estate salespeople, however, the work for hire doctrine is probably of little use. Most salespeople are not employees of the brokers, and most have not signed independent contractor agreements with brokers that designate their creative work product as works made for hire of the broker.
Compilation is the selection, coordination, and arrangement of the elements in the MLS database, to the extent they are creative as opposed to merely functional. The author of this work is whoever created the selection, coordination, and arrangement; this will usually be the MLS, the MLS's vendor, or both jointly.
Original text is text that has at least a spark of creativity: This would include all remarks and free-form text fields where salespeople and brokers have an opportunity to express themselves freely. It may even include the list price, since that number is the product of a creative process by the listing salesperson. (Whether the listing price can be protected by copyright is a subject of legal debate.) The author of original text in the MLS is usually the listing salesperson but may also be a salesperson's assistant or a broker. In some cases, particularly limited service brokers, the seller may have written the public remarks, for example.
The author of a photograph is whoever snapped the picture. This will usually be the listing salesperson but can often be the seller or a professional photographer.
The person who currently owns a copyright is called the "owner." An author may transfer her copyright interest to another party, so the copyright owner is not necessarily the author. But such a transfer or "assignment" is effective only if it appears in a writing signed by the author.
Some brokers can and do obtain copyright ownership of creative elements generated by their salespeople; they do so by either (a) hiring the salespeople as employees or (b) requiring salespeople to sign written independent contractor agreements transferring their copyright ownership.
In summary, then, the MLS and perhaps its vendor own the copyrights in the compilation; and the broker owns copyrights in works that the broker and its employees (as opposed to contractors) create, some original text and photos perhaps. But the salespeople own the copyrights in the great majority of works in the MLS, including probably most of the photos and original text. Third parties like sellers and photographers may also own copyright interests in photos and text that they provide.
Why is ownership important?
The copyright owner has the power to register the copyright and to enforce the copyright against infringement. Generally, only the owner may do so. (An "exclusive licensee" may also do so, but for purposes of simplification, I will discuss only the owner role; if you would like further details on this subject, please let me know.)
The owner of the copyright in a database compilation can take advantage of rules of the U.S. Copyright office that allow for "group registration" of all new and changed material in the compilation on a quarterly basis. This is a tremendous advantage over having to register the separate elements separately, as each registration requires the preparation of an application form and submission of a registration fee of at least $35. However, in order to register the copyright in the MLS database and its components as a single work, it is necessary that the MLS be an owner of the copyrights in all the components that it seeks to register. Registration is possible without this being true, but the protection afforded by the registration extends only to those portions the MLS owns.
For this reason, MLSs often seek to hold copyright ownership in all the separate works that the MLS comprises: compilation, text, and photographs. The MLS can register all the components in simple quarterly registrations, and if any part of the copyrighted database is infringed, the MLS will be in a position to enforce the copyright.
(NEXT: Some of the problems arising from this situation.)
-Elizabeth
With RPR now on the scene seeking to license listing data from essentially every MLS in the country, Brian and I figured it was a good time to review the way that copyright law interacts with MLS databases; several issues make that interaction complex. Chief among them is the 'fractured ownership' of copyrights in MLS data content. In the absence of certain concrete steps, brokers and MLSs probably own less than they think they do, and brokers and MLSs need to reach an understanding about ownership to permit them to enforce the copyrights effectively.
The key determinations with regard to MLS data content are (1) whether the MLS has obtained the rights to use the content as it must to carry out its purpose and (2) whether the MLS has the power to prevent misuse and piracy of the data content. The answers to these two questions hinge on two bodies of law: federal copyright law and state contract law. In this post, I'll provide a summary of the key legal principles and then discuss some important issues for MLSs.
Who are the copyright authors and owners?
(This discussion relies on a number of assumptions about how MLSs and brokers operate. I've tried to make them explicit in my comments, but it is important to recognize (more than usual) that these posts are not intended as legal advice – you should consult legal counsel before attempting to address copyright issues.)
Copyrights subsist in "original works of authorship." In the case of MLSs, there are three principal kinds of work in which copyright can arise: compilation, original text, and photographs.In general, the author of a work is the individual human being who creates it, and she secures copyright in it the moment she creates it. Sometimes, the author of an original work is the employer of the human being who creates it. It is also possible for certain kinds of works to belong to an entity that commissions them from the actual creators. In each case, this is referred to as a "work for hire" or "work made for hire." In the case of real estate salespeople, however, the work for hire doctrine is probably of little use. Most salespeople are not employees of the brokers, and most have not signed independent contractor agreements with brokers that designate their creative work product as works made for hire of the broker.
Compilation is the selection, coordination, and arrangement of the elements in the MLS database, to the extent they are creative as opposed to merely functional. The author of this work is whoever created the selection, coordination, and arrangement; this will usually be the MLS, the MLS's vendor, or both jointly.
Original text is text that has at least a spark of creativity: This would include all remarks and free-form text fields where salespeople and brokers have an opportunity to express themselves freely. It may even include the list price, since that number is the product of a creative process by the listing salesperson. (Whether the listing price can be protected by copyright is a subject of legal debate.) The author of original text in the MLS is usually the listing salesperson but may also be a salesperson's assistant or a broker. In some cases, particularly limited service brokers, the seller may have written the public remarks, for example.
The author of a photograph is whoever snapped the picture. This will usually be the listing salesperson but can often be the seller or a professional photographer.
The person who currently owns a copyright is called the "owner." An author may transfer her copyright interest to another party, so the copyright owner is not necessarily the author. But such a transfer or "assignment" is effective only if it appears in a writing signed by the author.
Some brokers can and do obtain copyright ownership of creative elements generated by their salespeople; they do so by either (a) hiring the salespeople as employees or (b) requiring salespeople to sign written independent contractor agreements transferring their copyright ownership.
In summary, then, the MLS and perhaps its vendor own the copyrights in the compilation; and the broker owns copyrights in works that the broker and its employees (as opposed to contractors) create, some original text and photos perhaps. But the salespeople own the copyrights in the great majority of works in the MLS, including probably most of the photos and original text. Third parties like sellers and photographers may also own copyright interests in photos and text that they provide.
Why is ownership important?
The copyright owner has the power to register the copyright and to enforce the copyright against infringement. Generally, only the owner may do so. (An "exclusive licensee" may also do so, but for purposes of simplification, I will discuss only the owner role; if you would like further details on this subject, please let me know.)The owner of the copyright in a database compilation can take advantage of rules of the U.S. Copyright office that allow for "group registration" of all new and changed material in the compilation on a quarterly basis. This is a tremendous advantage over having to register the separate elements separately, as each registration requires the preparation of an application form and submission of a registration fee of at least $35. However, in order to register the copyright in the MLS database and its components as a single work, it is necessary that the MLS be an owner of the copyrights in all the components that it seeks to register. Registration is possible without this being true, but the protection afforded by the registration extends only to those portions the MLS owns.
For this reason, MLSs often seek to hold copyright ownership in all the separate works that the MLS comprises: compilation, text, and photographs. The MLS can register all the components in simple quarterly registrations, and if any part of the copyrighted database is infringed, the MLS will be in a position to enforce the copyright.
(NEXT: Some of the problems arising from this situation.)
-Elizabeth
Thursday, January 21, 2010
MLSTesseract gets a new author
Beginning in the next few days, my business partner Elizabeth Sobotka will be writing posts for MLSTesseract, too. Elizabeth is a co-founder of Larson/Sobotka, PLLC, attorneys at law, and our consulting subsidiary, Larson/Sobotka Business Advisors, LLC. She focuses her legal work on issues relevant to MLSs and brokers: copyrights and licensing listing data content; pursuing data pirates; technology service agreements; trademarks and cybersquatting; and MLS rule drafting and enforcement, among other topics. She’s a fine attorney and over the last two and a half years has encountered and overcome all the most common MLS legal issues out there.
But perhaps just as valuable is her excellent business sense. Elizabeth has a master’s degree in management and spent more than a decade as a management consultant before going to law school. She worked with consulting firms such as Deloitte on projects ranging from operations efficiency to product marketing. She brings a common-sense, business-oriented perspective to her law clients. She won’t advise you to spend your money on legal projects unless she thinks it will deliver real value to your business.
Having Elizabeth join me on MLSTesseract reflects the way we are focusing our business in 2010:
• I’m shifting more of my energies to consulting projects, strategic planning for our MLS and association clients, and other types of development work with our consulting firm. I’ll still be involved in many legal projects.
• Elizabeth is focusing her efforts on delivering legal counsel, but she’ll still be involved in every major consulting project. We hope the combination of our focus and mix of skills will prove very valuable for clients.
Clients should feel free to contact either of us about either type of project. We’ll always be there to help!
Say hello to Elizabeth here or in comments on her posts!
-Brian
But perhaps just as valuable is her excellent business sense. Elizabeth has a master’s degree in management and spent more than a decade as a management consultant before going to law school. She worked with consulting firms such as Deloitte on projects ranging from operations efficiency to product marketing. She brings a common-sense, business-oriented perspective to her law clients. She won’t advise you to spend your money on legal projects unless she thinks it will deliver real value to your business.
Having Elizabeth join me on MLSTesseract reflects the way we are focusing our business in 2010:
• I’m shifting more of my energies to consulting projects, strategic planning for our MLS and association clients, and other types of development work with our consulting firm. I’ll still be involved in many legal projects.
• Elizabeth is focusing her efforts on delivering legal counsel, but she’ll still be involved in every major consulting project. We hope the combination of our focus and mix of skills will prove very valuable for clients.
Clients should feel free to contact either of us about either type of project. We’ll always be there to help!
Say hello to Elizabeth here or in comments on her posts!
-Brian
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