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Copyright and Solds-Over-IDX

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Lawsuit

Judging by the stats, it appears that few people actually took the time to listen to my most recent podcast, featuring Brian Balduf of VHT Studios. We discussed a number of issues surrounding copyright of photographs and liability that arises from misuse, which… yeah, I understand those are sleeping aids for most people. Nonetheless, I wanted to write this brief (I hope?) post because the issue is important and one that MLSs and brokerages need to get ahead of right now, rather than waiting for a lawsuit to land on their desks.

If you do have the time, I’d recommend going and listening to the full podcast. Brian’s perspective is invaluable here. But, let me give you the bottom line here.

Photography and Intellectual Property

Basically, far too many brokers and agents do not realize that when they use a professional photographer to take pictures of a house, the “standard” way of doing business is for the photographer to grant the agent/broker a license to use those photos. According to Brian, the normal terms of such licenses are to allow the agent/broker to use the photos:

  • to promote/market the property; and
  • to promote/market the agent or broker.

Any other usage would be in violation of the license.

Unless you have negotiated different terms with the photographer — including a “work-for-hire” contract in which case all of the photos belong to you — assume that the only thing you can use those photos for is to market the property or market yourself.

The Portal Issue

Brian’s concern was that brokerages and MLSs who are doing direct syndication deals with portals like Zillow and Realtor.com are not reading the terms of those agreements. In many (if not most) cases, according to Brian, the brokerage grants the portal a license to use the “data” for various purposes that are not “marketing and promoting” the property or the broker/agent.

For example, allowing Zillow to keep the data and incorporate it into its “living database” of all properties in the U.S. means that Zillow can use that data — including the photographs — for properties that are no longer on the market.

Brian’s point is that the photographer in that case has a claim against Zillow for violating his intellectual property. But Zillow has (and is quite unlikely to waive) indemnification clauses in its agreement with the brokerage, which means that should Zillow pay out the photographer, Zillow can come after the brokerage for what it paid out: indemnification.

The Issue I Worry About: Solds Over IDX

I’m less concerned about the portal issue, because most MLSs and larger brokerages would read that agreement carefully. My friend Mitch Skinner is barely sleeping these days because he has to review syndication agreements, and I’ve spoken to brokers who have complained about the Zillow agreements because they read those with care.

What brokerages typically have not read with care, if they read it/thought about it at all, is MLS policy and IDX policies. Because they rightfully trust the MLS not to screw them over.

But last year, NAR approved a change to its MLS Policy allowing the display of sold data over IDX. Indeed, if “solds” are available publicly in that MLS’s market (i.e., it is not a non-disclosure state like Texas), then the MLS cannot prohibit the display of sold information over IDX.

This then gives rise to potential liability for both the MLS and the brokerage when photographs are used in these solds-over-IDX. This is a property I found on Redfin, which is a brokerage and a participant in the MLS:

161_Cherrybrook_Ln__Irvine__CA_92618___MLS__OC15048092___Redfin

Redfin did not sell this house. According to the record, this home was listed by Laura Syme of Bauhaus Properties, and the buyer agent on the deal was Fay Liu of Re/Max Premier Realty.

The source of this information is CRMLS, the local MLS. I have no idea whether Redfin is using solds-over-idx or some other methodology for this display. But I think it’s illustrative of the issue at hand.

The 14 photographs for the house above are fantastic. They appear to be taken by a professional, so let’s assume that they were.

If the photographer here was using the standard terms (as above), then Redfin as the brokerage is liable for display of these photographs without a license, and the MLS is likely liable for providing these photographs to Redfin. In addition, Bauhause Properties, the listing broker, may be on the hook for providing the photographs to the MLS to be put into the Sold Data compilation which Redfin used to display these images.

Because the property has been sold, there is no marketing/promotion of the property here. The argument that perhaps the sold data on Redfin is used to promote Laura Syme the agent or Bauhaus Properties the broker is really, really thin. I don’t think that holds.

The usage here is outside of the photographer’s grant of license, and everyone involved has violated the photographer’s copyright.

It’s just a matter of time before nasty letters, demands for payment, and possibly a class action lawsuit by companies that have sprung up to “protect the photographer’s interests” start coming down the pike.

Get With Your Lawyer

There are a number of things brokers and MLSs can do to avoid this potential liability. This is a blogpost, not legal advice, so I urge you in the strongest terms to consult your own attorney. And I’m not going to get into how you should/could avoid violating copyright — that’s for your attorney to recommend.

However, I will say that brokerages and MLSs should pay careful attention to this issue. They already pay careful attention to Zillow and the portals. But in quite a lot of cases, I believe that solds-over-IDX results in liability for the displaying broker/agent, the listing broker/agent, and the MLS when photographs of the sold listing are provided. Get with your lawyer and fix this before you start getting nastygrams.

Here endeth the public service announcement of the day.

-rsh