Metropolitan Regional Information Systems, Inc. v. American Home Realty Network, Inc.

In deciding issues of first impression for the circuit, the U.S. Court of Appeals for the Fourth Circuit upheld a preliminary injunction against a website that used copyright protected photographs assigned to a real estate listing service. Metropolitan Regional Information Systems, Inc. v. American Home Realty Network, Inc., Case Nos. 12-2102, -2342 (4th Cir., May 15, 2013) (Duncan, J) (Gregory, J., and Traxler, J., joining). The Fourth Circuit held that assignee of photographs need not comply with Section 409 of the Copyright Act’s requirement to list the authors of each photograph in order to register a compilation. The Fourth Circuit, relying on the E-Sign Act, also held that an electronic transfer assignment of a copyright satisfies the Copyright Act’s requirement that such transfers be signed and in writing.

The plaintiff-appellee, Metropolitan Regional Information Systems, Inc. (MRIS), is an online real estate listing service. Under MRIS’s terms of service, subscribers upload their real estate listings to an MRS database and agree to assign to MRIS the copyrights in each photograph included in those listings. The subscribers assign their rights through an electronic Terms of Use Agreement (TOU) by clicking on a button. MRIS registers its database quarterly with the Copyright Office under the procedures applicable for automated databases. In doing so, MRIS identifies itself as the author of the database, which includes the compilation of photographs from subscribers. The defendant-appellant, American Home Realty Network, Inc. (AHRN), operates a website that is a national real estate search engine. The website pulls information, including the photographs, from the MRIS database.

MRIS sued AHRN for copyright infringement for unauthorized use of the photographs and moved for a preliminary injunction. The district court granted the preliminary injunction and enjoined AHRN from using MRIS’s photographs. AHRN appealed.

On appeal AHRN challenged MRIS’s registration of its database and the transfer of rights to the photographs from the subscribers. First, AHRN alleged that MRIS’s failed to meet with the requirements of Section 409 of the Copyright Act, which requires that the names of authors for each component in a compilation be included in the registration. The MRIS database is a compilation of photographs that AHRN argued falls within this category. Second, AHRN alleged that the electronic assignment did not meet the signed and written requirements of the Copyright Act for assignments.

In addressing this first issue, the 4th Circuit noted that district courts disagreed on how to apply Section 409 to compilations and their component parts. Some courts barred infringement suits for failure to list each individual author for the components. Other courts allowed infringement actions if the registrant owns the rights to the individual component works. The 4th Circuit adopted the latter approach because for such databases, such as MRIS, that involve large numbers of component works assigned to the registrant, it would be “absurd and inefficient” to list each author.

Turning to the electronic assignment issue, the 4th Circuit relied on the E-Sign Act, which mandates that no signature be denied legal effect simple because it is electronic form. The E-Sign Act allows button clicks to act an electronic signature. Moreover, the court noted that agreements to transfer exclusive rights to copyrights are not included in the exceptions to the E-Sign Act.

Practice Note: The 4th Circuit’s decision in this case highlights how technological advances and e-commerce can effect federal regulations. As technology makes it easier to make mass compilations of works and assignments, the Copyright Office must catch up to those advances. Indeed, the 4th Circuit noted that the Copyright Office also disagreed with cases requiring the identification of each author in a compilation where the registrant is the assignee of the copyright. This case will make it easier for database compilers to register their works and protect their rights.