Protecting Digital Database Content

MRIS registers its claims of copyright ownership in the MRIS Database on a quarterly basis in compliance with the Copyright Office's group registration procedures applicable to automated databases. As part of the uploading process for adding a new real estate listing to the MRIS Database, MRIS subscribers irrevocably assign to MRIS the copyrights in the photos the subscriber is uploading for a specific real estate listing. The MRIS copyright assignment process is implemented using a Terms of Use (TOU) click-wrap agreement. The MRIS TOU copyright assignment provided as follows:

All images submitted to the MRIS Service become the exclusive property of Metropolitan Regional Information Systems, Inc. (MRIS). By submitting an image, you hereby irrevocably assign (and agree to assign) to MRIS, free and clear of any restrictions or encumbrances, all of your rights, title and interest in and to the image submitted. This assignment includes, without limitation, all worldwide copyrights in and to the image, and the right to sue for past and future infringement.

Validity of Click-Wrap Copyright Assignment

The Fourth Circuit found that MRIS's copyright assignment process met the requirements under 17 U.S.C. '204(a) that require copyright assignments to be in writing and signed by the owner of the rights conveyed or by such owner's duly authorized agent. The Fourth Circuit determined that the “writing requirement” under Section 204(a) had been satisfied by virtue of the Electronic Signatures and Global National Commerce Act (E-SIGN), 15 U.S.C. ” 7001 et seq. Under E-SIGN, the term “electronic signature” includes a “process logically associated with a contract” and “executed or adopted by a person with the intent to sign the record.” 15 U.S.C. '7006(5). The Fourth Circuit concluded that the MRIS electronic assignment process by which MRIS subscribers assigned the copyrights in the photographs to MRIS met the requirements of E-SIGN and Section 204(a). Copyright assignment contracts are not one of the specified exceptions to the legal mandate under E-SIGN which requires that a contract (like the MRIS TOU) “not be denied legal effect, validity, or enforceability solely because an electronic signature or electronic record was used in its formation.” 15 U.S.C. '7001(a).

With the MRIS copyright assignment process, each subscriber uploading photographs to the MRIS Database was “logically associated” with the TOU assignment agreement and specific photographic images uploaded for a particular real estate listing by virtue of the subscriber's unique personal credentials required to be furnished as part of the submission process to MRIS. The Fourth Circuit found that the TOU copyright assignments to MRIS relating to photographs were valid, and that an electronic agreement may affect a valid transfer of copyright interests under Section 204 of the Copyright Act.

The MRIS Lawsuit

MRIS sent American Home Realty Network, Inc. (AHRN) a cease-and-desist letter in November 2011 regarding AHRN's unauthorized use and display of MRIS's copyrighted database contents. When AHRN failed to stop using and displaying MRIS's real estate listing content, MRIS filed suit against AHRN and sought a preliminary injunction under the Copyright Act. The district court denied AHRN's motion to dismiss and granted MRIS's motion for a preliminary injunction, which was modified by the district court to prohibit only the unauthorized copying, display or distribution of MRIS's copyrighted photographs, or creation of any derivative works based upon MRIS's copyrighted photographs. AHRN appealed the district court's preliminary injunction order to the Fourth Circuit. The Fourth Circuit affirmed the preliminary injunction order prohibiting AHRN from displaying MRIS's photographs and rejecting AHRN's arguments that MRIS did not possess a copyright in the photos and MRIS had failed to register its copyright in the individual photos properly.

Scope of Copyright Protection

MRIS's quarterly copyright registrations of the MRIS Database extend to the collection and compilation of the real estate listings in the MRIS Database and to expressive contributions created by MRIS or acquired by MRIS, including the photographs included in the listings. MRIS, as part of its copyright enforcement program for the MRIS Database, includes an MRIS copyright notice on the photographs included in the MRIS Database. These markings allow MRIS to track the use of MRIS photographs on the Internet and provide strong evidence of unauthorized copying in appropriate situations.

Thus, based on Copyright Office practices, copyrights that are registered in a database extend to the claimant's collective work authorship as well as to any contribution created by an employee of the claimant or other party commissioned by the author of a work made for hire, and any other contributions that the claimant obtained by transfer. For example, a copyright in a collection of short stories would extend to the collective work authorship relating to the arrangement, selection and coordination of the short stories as well as to any short stories authored by the claimant's employees and to any short stories for which the claimant acquired the copyrights by assignment from the original author. Based on the Copyright Office registration practices, the Fourth Circuit held that MRIS's registered copyrights for the MRIS Database extended to the photographs in the MRIS Database as to which MRIS had acquired the copyrights.

Importance of the MRIS Case

While most practitioners believed that copyright assignments in electronic agreements would meet the requirements of Section 204(a) of the Copyright Act by virtue of E-SIGN and therefore be valid and enforceable, the MRIS case provides strong legal authority confirming the validity of electronic copyright assignment agreements. This legal authority should pave the way for the use of electronic copyright assignments in many different e-commerce business applications.

The other important development relates to the scope of copyright protection for automated databases. Claimants can obtain protection for expressive copyright-protected content included in the database by registering the copyrights in an automated database. This is very important because the copyright protection for automated databases is very thin. By adding protectible content to an automated database, database owners are able to develop much stronger copyright protection schemes.

J. (“Jay”) T. Westermeier is Of Counsel to Finnegan, Henderson, Farabow, Garrett & Dunner LLP, in the firm's Reston, VA, office. A member of this newsletter's Board of Editors, he is past president of the International Technology Law Association (ITech Law) (formerly known as the Computer Law Association), a Life Fellow of the American Bar Foundation, 2001 Burton Award recipient. He can be reached at [email protected].

The Fourth Circuit's ruling in Metropolitan Regional Information Systems, Inc. v. American Home Realty Network, Inc.,'722 F.3d 591'(4th Cir. July 17, 2013), is an important court decision relating to e-commerce and protecting digital database content. The ruling relates to a multiple-listing copyrighted database of real estate listings. In the MRIS'decision, the Fourth Circuit affirmed the validity of MRIS's copyright assignments based on the click-wrap agreement that MRIS used to acquire the ownership of the copyrights in the photographs in the MRIS Database. The Fourth Circuit also affirmed that MRIS's copyright registrations of the MRIS Database included MRIS's authorship in the collective work of real estate listings in the MRIS Database and extended as well to the photographs included in the database for which MRIS acquired the copyrights by assignment. We will discuss the importance of these holdings in this article. [Editor's Note: The author was part of the trial team for Metropolitan Regional Information Systems in this case. Further information relating to the case may be found in Metro Reg'l Info. Sys., Inc. v. Am. Home Realty Network, Inc., 888 F. Supp. 2d 691 (D. Md. 2012).]

The MRIS Database

MRIS is a multiple-list service provider in the mid-Atlantic region, serving real estate brokers, agents, appraisers and other authorized licensees. MRIS maintains an automated database of real estate property listings and related content. The MRIS Database consists of about 70,000 active real estate listings.

MRIS registers its claims of copyright ownership in the MRIS Database on a quarterly basis in compliance with the Copyright Office's group registration procedures applicable to automated databases. As part of the uploading process for adding a new real estate listing to the MRIS Database, MRIS subscribers irrevocably assign to MRIS the copyrights in the photos the subscriber is uploading for a specific real estate listing. The MRIS copyright assignment process is implemented using a Terms of Use (TOU) click-wrap agreement. The MRIS TOU copyright assignment provided as follows:

All images submitted to the MRIS Service become the exclusive property of Metropolitan Regional Information Systems, Inc. (MRIS). By submitting an image, you hereby irrevocably assign (and agree to assign) to MRIS, free and clear of any restrictions or encumbrances, all of your rights, title and interest in and to the image submitted. This assignment includes, without limitation, all worldwide copyrights in and to the image, and the right to sue for past and future infringement.

Validity of Click-Wrap Copyright Assignment

The Fourth Circuit found that MRIS's copyright assignment process met the requirements under 17 U.S.C. '204(a) that require copyright assignments to be in writing and signed by the owner of the rights conveyed or by such owner's duly authorized agent. The Fourth Circuit determined that the “writing requirement” under Section 204(a) had been satisfied by virtue of the Electronic Signatures and Global National Commerce Act (E-SIGN), 15 U.S.C. ” 7001 et seq. Under E-SIGN, the term “electronic signature” includes a “process logically associated with a contract” and “executed or adopted by a person with the intent to sign the record.” 15 U.S.C. '7006(5). The Fourth Circuit concluded that the MRIS electronic assignment process by which MRIS subscribers assigned the copyrights in the photographs to MRIS met the requirements of E-SIGN and Section 204(a). Copyright assignment contracts are not one of the specified exceptions to the legal mandate under E-SIGN which requires that a contract (like the MRIS TOU) “not be denied legal effect, validity, or enforceability solely because an electronic signature or electronic record was used in its formation.” 15 U.S.C. '7001(a).

With the MRIS copyright assignment process, each subscriber uploading photographs to the MRIS Database was “logically associated” with the TOU assignment agreement and specific photographic images uploaded for a particular real estate listing by virtue of the subscriber's unique personal credentials required to be furnished as part of the submission process to MRIS. The Fourth Circuit found that the TOU copyright assignments to MRIS relating to photographs were valid, and that an electronic agreement may affect a valid transfer of copyright interests under Section 204 of the Copyright Act.

The MRIS Lawsuit

MRIS sent American Home Realty Network, Inc. (AHRN) a cease-and-desist letter in November 2011 regarding AHRN's unauthorized use and display of MRIS's copyrighted database contents. When AHRN failed to stop using and displaying MRIS's real estate listing content, MRIS filed suit against AHRN and sought a preliminary injunction under the Copyright Act. The district court denied AHRN's motion to dismiss and granted MRIS's motion for a preliminary injunction, which was modified by the district court to prohibit only the unauthorized copying, display or distribution of MRIS's copyrighted photographs, or creation of any derivative works based upon MRIS's copyrighted photographs. AHRN appealed the district court's preliminary injunction order to the Fourth Circuit. The Fourth Circuit affirmed the preliminary injunction order prohibiting AHRN from displaying MRIS's photographs and rejecting AHRN's arguments that MRIS did not possess a copyright in the photos and MRIS had failed to register its copyright in the individual photos properly.

Scope of Copyright Protection

MRIS's quarterly copyright registrations of the MRIS Database extend to the collection and compilation of the real estate listings in the MRIS Database and to expressive contributions created by MRIS or acquired by MRIS, including the photographs included in the listings. MRIS, as part of its copyright enforcement program for the MRIS Database, includes an MRIS copyright notice on the photographs included in the MRIS Database. These markings allow MRIS to track the use of MRIS photographs on the Internet and provide strong evidence of unauthorized copying in appropriate situations.

Thus, based on Copyright Office practices, copyrights that are registered in a database extend to the claimant's collective work authorship as well as to any contribution created by an employee of the claimant or other party commissioned by the author of a work made for hire, and any other contributions that the claimant obtained by transfer. For example, a copyright in a collection of short stories would extend to the collective work authorship relating to the arrangement, selection and coordination of the short stories as well as to any short stories authored by the claimant's employees and to any short stories for which the claimant acquired the copyrights by assignment from the original author. Based on the Copyright Office registration practices, the Fourth Circuit held that MRIS's registered copyrights for the MRIS Database extended to the photographs in the MRIS Database as to which MRIS had acquired the copyrights.

Importance of the MRIS Case

While most practitioners believed that copyright assignments in electronic agreements would meet the requirements of Section 204(a) of the Copyright Act by virtue of E-SIGN and therefore be valid and enforceable, the MRIS case provides strong legal authority confirming the validity of electronic copyright assignment agreements. This legal authority should pave the way for the use of electronic copyright assignments in many different e-commerce business applications.

The other important development relates to the scope of copyright protection for automated databases. Claimants can obtain protection for expressive copyright-protected content included in the database by registering the copyrights in an automated database. This is very important because the copyright protection for automated databases is very thin. By adding protectible content to an automated database, database owners are able to develop much stronger copyright protection schemes.

J. (“Jay”) T. Westermeier is Of Counsel to Finnegan, Henderson, Farabow, Garrett & Dunner LLP, in the firm's Reston, VA, office. A member of this newsletter's Board of Editors, he is past president of the International Technology Law Association (ITech Law) (formerly known as the Computer Law Association), a Life Fellow of the American Bar Foundation, 2001 Burton Award recipient. He can be reached at [email protected].