[Update] Why Copyrights and Licensing Matter in the Shifting Online Landscape

If you’re in the brokerage business, you understand real estate law and property rights. Now, with more and more business moving online and everyone wanting access to your listings, you also need to be versed in intellectual property (IP) rights as well.

Content is king when it comes to the internet. Real estate listings and their associated photographs and media are very valuable content (Intellectual Property). This content is so valuable that some websites have built pretty large kingdoms using other peoples’ content.

Real estate listings attract consumers and clicks, and in turn, this web traffic delivers big advertising dollars for the websites that present this content. That’s why so many companies are asking brokers to sign agreements that get their listings online for free. What better way for them to get compelling, engaging content without having to pay for it? These agreements can however backfire if the company who is asking you to sign is asking you for free reign to use that content for any purpose it chooses. The good news is that you can protect yourself and shield your brokerage with the simple stroke of a red pen.

Clauses for concern 

It is routine to display listing data, photographs and other media to market your real estate listings. But, brokers need to be aware that the agreements they sign to get exposure for their listings often include a complex array of terms or clauses that deal with intellectual property. At their simplest there are two key types of clauses you need to be aware of:

1. Verifies that you have the rights to use and/or own the intellectual property you are displaying on their site for the purpose for which you are displaying it.
2. Asks you to extend or sublicense rights to the website owner for them to use that content for other purposes

The first type of clause is very standard and if you have written agreements with your content creators/providers you can have confidence in YOUR use of that content.  The second type of clause is almost entirely for the benefit of the other party, and rarely benefits you, in fact it could create liabilities that you don’t want to have.  Let’s look at that type of clause first.

Extending or sublicensing intellectual property rights

This is the clause you really need to look out for in any listing display or syndication agreement you consider. This clause is important because the parties that want your photographs will slip it into their terms of use strictly for their benefit, not yours. It typically reads something like this:

You _____ grant ______ an irrevocable, perpetual, royalty-free worldwide license to (a) use, copy, distribute, transmit, publicly display, publicly perform, reproduce, edit, modify, prepare derivative works of or incorporate into other works, in any media, and (b) sublicense these rights, to the maximum extent permitted by applicable law.  

There are a whole host of concerns you should have about a clause like this. This will not help – and may even harm – you, your agents or your agents’ clients.

The online listing syndicator might need to be able to reformat photographs to make them fit their web pages, but that’s the most you should allow them to do in an agreement that you sign.

Everything else in this clause allows the other party to use the photographs however they want, whenever they want and wherever they want, whether it benefits you, your agents and their clients or not. There are two parts of this clause that you need to understand.

A. Part (a) of a clause like this states that with your consent the third party could possibly use the photographs for purposes other than selling your listing or promoting your efforts to sell that property. They could show the photographs without any attribution to your company or your agents. They could even use the photographs to help promote the services of companies that you compete against.

B. Part (b) of a clause like this states that this “sublicense” not only gives this third party intellectual property rights to the content, but it allows the third party to give these same rights to anyone else they choose for any other purpose that they choose even to competitors of yours or people in completely different lines of business.

What a clause like this does for the other party is to try to pass the responsibility onto you for copyright and licensing violations they may make.  You cannot give away greater rights than you have. They can claim, if challenged, that they relied on your say so and they can even try to pass their liability on to you. Indemnification clauses in other parts of the agreement pass all the financial and legal responsibility on to you as well.  Again, this is very important to note, this type of clause enables them to use the content for purposes other than YOUR intended purpose – selling a home or promoting the fact that your company/agents have that listing.

The best way to understand the extent of this type of clause is to imagine if, when you went to Kinko’s to make a copy, not only did they ask if you have the rights to copy that document but said that by making the copy, they were going to keep a copy for their own uses, which includes giving your document to other parties. Because these clauses are online and in terms that take time to read, they are often egregious.

Agreeing that you are allowing a third party unlimited use of this intellectual property opens the door to all kinds of issues for you and your company. The homeowner that allowed your company and your agent to market their home most likely thought the photographs were for the purpose of selling the home, not other businesses. The new home buyer would be even more concerned about how photographs of their home are being used, since they now live in the bedrooms, bathrooms and living rooms featured in those images.

If it wasn’t for the fact that displaying listings is nominally “free” on these sites, most people would pay much more attention to what they are really giving away. Both the value of photographs to a web marketer and the potential liabilities of ‘letting’ them use them for other purposes are worth much more scrutiny.

When another party wants you to sign an agreement that states they can help you promote your listings, make sure you understand the true costs and don’t give up your rights unwittingly. Also, make sure you aren’t making representations to this website of rights you don’t have. This creates even further risk when they ask you to indemnify them from all liabilities. There is a saying; “If a company is giving you a service for free, chances are you aren’t their customer, you are their product.”

Verifying that you have rights to use the content 

If you work with a reputable photographer or photography company for your brokerage, you should have a written agreement from the provider that expressly grants YOU rights to use the photographs to market YOUR listings. Such a limited right is called a license.

This license typically allows your agents and your brokerage to copy, duplicate and display the photographs at will in connection with your efforts to sell the property those photographs depict. Securing this license protects you from legal and financial liabilities. With this written agreement and the correct verbiage in place you can be confident in your ability to use those photographs in the normal course of your business.

These licenses are not boundless however. As mentioned above, some typical restrictions you may see in these types of agreements include restrictions on the right to sell the images, or to transfer the rights you have been granted, or to use the images for purposes other than those specified in the license.

If you don’t have an agreement in writing from your photography provider, you should get one ASAP. Without this, you may not have all rights you believe you have and your capacity to use the images might be impaired.

If your agents are having their own photographs taken and you are using them, make sure they have secured rights from their photographers, and, more importantly, that the rights they have apply to your brokerage as well. If your agents take their own photographs, they should confirm for you in writing that they are giving you permission to use those photographs and should also clearly specify for which specific purposes they give you the rights to use the images. In a dispute – let’s say for example that an agent leaves your brokerage – this could become an area of contention.

Copyright Law 

Ownership of the copyright in any kind of work gives the owner certain rights in the creative content (IP) in that work, including the right to license it.  Those rights of ownership are separate and different from ownership of the physical copy in which the IP is found     For example, if you buy an artist’s canvas, you generally do not secure the copyright. You can hang the canvas in your own home or offices but you cannot use it to produce a hundred lithographs for sale in an art gallery. That right belongs only to the copyright owner.  Of course, the copyright owner can agree to give you permission to make those lithographs by licensing that right to you. Then you have a license to make one hundred lithographs, but you don’t have the right to put that image on t-shirts and sell them.    In the same way, a real estate photographer (or his employer) owns the copyright in their photographs.  Even though they may give you a digital file of the photograph, it does not transfer ownership of the IP.  If they give you a license to use the digital image for a specific purpose, such as marketing a home for sale, it does not provide permission to use the image any and all other purposes.

Just like any time you place an ad in a publication or make a copy at a copy store of that picture in your possession, the party receiving the image needs to ensure that you actually have the rights to do what you are doing. Otherwise, the publication or the copy store will be equally liable for copyright infringement. Those rights will come in writing from the authors or creators of the content you are using. In the case of photographs, they will come from the photographer or his/her employer.

U.S. copyright law states that the author of a work (or his/her employer) is the owner of the copyright and has all rights unless they expressly grant rights to someone else. If you don’t have an agreement in writing with anyone who has produced photographs that are displayed on your site, you should get one. Without that consent, the owner of the copyrights could possibly take you to court for copyright infringement. U.S. copyright law stipulates that in some cases, you may be liable for very expensive statutory damages for copyright infringement; anywhere from $250 to over $150,000 per infringement. In some egregious cases, this damage can be further multiplied.

Examples:  http://bit.ly/1FkH2qR

Remember, copyright law is designed to protect the author, or in the case of professional photography, the photographers themselves. The burden is often on the persons copying the image to prove they own or have secured the proper rights to the image. Using reputable photography studios is the best way to ensure this first protection.

What is a Watermark?   © ABC Studios 

Unlike listing data, images are protected by a copyright, which belongs either to the photographer or the photographer’s employer from the time the image is created.

The same way Picasso signed his paintings, copyright owners are entitled by law to include a notice of ownership of their own rights. One form of this initial notice may take is called a ‘watermark’, and identifying image embedded in the photo or other work.  Altering and cutting these watermarks is prohibited by law. The use of the watermark by a professional firm that has a contract with you, ultimately protects you.

1. Seeing a watermark on an image from your contracted provider assures you and any of your marketing partners and employees at your brokerage that this image comes with whatever rights you have in your contract.  If you don’t see a watermark on an image and don’t know who owns the IP, you most likely do not know what rights you have to use that image and should be very cautious.
2. A copyright watermark conveys to others that the image is registered with the US Copyright Office, so if they use it without permission, especially for purposes that don’t benefit you, they may well be infringing on the copyright.

What Now? 

Contracts are two way streets. If someone wants to use your content for purposes other than yours, make sure you understand the ramifications and negotiate from a position of knowledge.  Sometimes it’s as simple as using a red pen to say ‘no’.

VHT Studios 2016