2019 Changes to Model MLS Rules for Complaints of Unauthorized Use of Listing Content

During the 2018 REALTORS® Legislative Meetings, NAR’s Board of Directors voted to adopt a new enforcement process to protect the brokerage community from potential copyright infringement lawsuits and the statutory damages involved in those lawsuits.

The changes to Model MLS rules to enforce this process are effective January 1, 2019 and must be adopted by all MLSs by March 1, 2019.

What follows are the Model MLS rule language, background on the changes, and FAQs. 

Goal of the Change

The goal of this process is simple but important: to reinforce MLSs’ role in managing the use and distribution of listing content and to protect multiple listing services (MLSs) and REALTORS® from frivolous and expensive copyright infringement lawsuits related to displaying listing content, including photographs, online.

Revised Policy

Two new Model MLS Rules, Sections 9.3 and 9.4, were adopted and are shown below. Additionally, the revisions to Model MLS Rules Sections 9 and 11 are indicated here. The 2019 changes shown below are mandatory for all MLSs — underscoring indicates additions and strikeouts indicates deletions.

Enforcement of Rules or Disputes

Section 9 Consideration of Alleged Violations

The committee shall give consideration to all written complaints having to do with violations of the rules and regulations. By becoming and remaining a participant, each participant agrees to be subject to these rules and regulations, the enforcement of which are at the sole discretion of the Committee (Board of Directors). (Amended 5/18)

Section 9.3 Complaints of Unauthorized Use of Listing Content

Any participant who believes another participant has engaged in the unauthorized use or display of listing content, including photographs, images, audio or video recordings, and virtual tours, shall send notice of such alleged unauthorized use to the MLS. Such notice shall be in writing, specifically identify the allegedly unauthorized content, and be delivered to the MLS not more than sixty (60) days after the alleged misuse was first identified. No participant may pursue action over the alleged unauthorized use and display of listing content in a court of law without first completing the notice and response procedures outlined in this Section 9.3 of the MLS rules.

Upon receiving a notice, the committee (Board of Directors) will send the notice to the participant who is accused of unauthorized use. Within ten (10) days from receipt, the participant must either: 1) remove the allegedly unauthorized content, or 2) provide proof to the committee (Board of Directors) that the use is authorized. Any proof submitted will be considered by the Committee (Board of Directors), and a decision of whether it establishes authority to use the listing content will be made within thirty (30) days.

If the Committee (Board of Directors) determines that the use of the content was unauthorized, the Committee (Board of Directors) may issue a sanction pursuant to Section 7 of the MLS rules, including a request to remove and/or stop the use of the unauthorized content within ten (10) days after transmittal of the decision. If the unauthorized use stems from a violation of the MLS rules, that too will be considered at the time of establishing an appropriate sanction.

If after ten (10) days following transmittal of the Committee’s (Board of Director’s) determination the alleged violation remains uncured (i.e. the content is not removed or the rules violation remains uncured), then the complaining party may seek action through a court of law.

Section 9.4 MLS Rules Violations

MLS participants may not take legal action against another participant for alleged rules violation(s) unless the complaining participant has first exhausted the remedies provided in these rules.

Note: Adoption of Sections 9.3 and 9.4 are not required if the MLS has adopted alternative procedures to address alleged misuse of listing content that includes notice to the alleged infringer.

Ownership of MLS Compilation* and Copyright

Section 11

By the act of submission of any property listing content to the MLS, the participant represents and warrants that he or she is fully has been authorized to license the property listing content as contemplated by and in compliance with this section and these rules and regulations, and also thereby does grant to the MLS license authority for the MLS to include the property listing content in its copyrighted MLS compilation, and also in any statistical report on comparables. Listing content includes, but is not limited to, photographs, images, graphics, audio and video recordings, virtual tours, drawings, descriptions, remarks, narratives, pricing information, and other details or information related to the listed property.

Each participant who submits listing content to the MLS agrees to defend and hold the MLS and every other participant harmless from and against any liability or claim arising from any inaccuracy of the submitted listing content or any inadequacy of ownership, license, or title to the submitted listing content.

Note: The Digital Millennium Copyright Act (DMCA) is a federal copyright law that enhances the penalties for copyright infringement occurring on the Internet. The law provides exemptions or “safe harbors” from copyright infringement liability for online service providers (OSP) that satisfy certain criteria. Courts construe the definition of “online service provider” broadly, which would likely include MLSs as well as participants and subscribers hosting an IDX display.

One safe harbor limits the liability of an OSP that hosts a system, network or website on which Internet users may post user-generated content. If an OSP complies with the provisions of this DMCA safe harbor, it cannot be liable for copyright infringement if a user posts infringing material on its website. This protects an OSP from incurring significant sums in copyright infringement damages, as statutory damages are as high as $150,000 per work. For this reason, it is highly recommended that MLSs, participants and subscribers comply with the DMCA safe harbor provisions discussed herein.

To qualify for this safe harbor, the OSP must:

1. Designate on its website and register with the Copyright Office an agent to receive takedown requests. The agent could be the MLS, participant, subscriber, or other individual or entity.

2. Develop and post a DMCA-compliant website policy that addresses repeat offenders.

3. Comply with the DMCA takedown procedure. If a copyright owner submits a takedown notice to the OSP, which alleges infringement of its copyright at a certain location, then the OSP must promptly remove allegedly infringing material. The alleged infringer may submit a counter-notice that the OSP must share with the copyright owner. If the copyright owner fails to initiate a copyright lawsuit within ten (10) days, then the OSP may restore the removed material.

4. Have no actual knowledge of any complained-of infringing activity.

5. Not be aware of facts or circumstances from which complained-of infringing activity is apparent.

6. Not receive a financial benefit attributable to complained-of infringing activity when the OSP is capable of controlling such activity.

Full compliance with these DMCA safe harbor criteria will mitigate an OSP’s copyright infringement liability. For more information see 17 U.S.C. §512. (Adopted 11/15)

*The term MLS compilation, as used in Sections 11 and 12 herein, shall be construed to include any format in which property listing data is collected and disseminated to the participants, including but not limited to bound book, loose-leaf binder, computer database, card file, or any other format whatsoever.

Background on the Changes

The new enforcement process is complementary to the Safe Harbor provisions of the Digital Millennium Copyright Act (“DMCA”). DMCA is a federal copyright law that exempts an online services provider (“OSP”) from copyright infringement liability for allegedly infringing works that are posted to the OSP’s website by third parties. In order to qualify for protection under the DMCA, the OSP must comply with certain requirements, including removing allegedly infringing content upon receipt of a takedown notice from a copyright owner. The definition of “online service provider” is broadly construed by courts, and NAR strongly believes that participants and subscribers hosting an IDX display qualify as OSPs under the DMCA. The DMCA is a crucial risk management tool, and NAR has been a vocal and powerful advocate encouraging agents, brokers, and MLSs to seek the protections of the DMCA.

Until the courts make clear the applicability of the DMCA to listing photographs as part of online property display, it is incumbent on the brokerage industry to do what it can to protect real estate professionals. This new enforcement process serves as a backstop to bring the framework of the DMCA within the MLS ecosystem.

FAQs

Q1: Can an MLS handle claims of unauthorized use through an alternative process?

A: Yes. Adoption of Sections 9.3 and 9.4 are not required if the MLS has adopted similar procedures to address alleged misuse of listing content provided those procedures include notice to the alleged infringer and the opportunity to take down the infringing content. Adoption of these rules, or similar rules, is mandatory.

Q2: For any alternative procedure, would NAR require the same timelines and absolute waiver of litigation rights?

A: The MLS’s process must include a prompt and expeditious notice requirement with an opportunity for the alleged infringer to remove the infringing content.  The benefit of waiving litigation unless the MLS’s process is enacted first, is to eliminate the likelihood of alleged misuse of listing content (photos, comments, etc.) winding up in the courts and costing brokers exorbitant legal fees. Strict adherence to the policy and process is not a necessity, but any alternate process needs to include 1) notice, 2) an opportunity to remove infringing content, and 3) a requirement to follow the MLS’s process prior to pursuing court action.      

Q3: May the MLS remove photos from the MLS compilation if those photos have been challenged?

A: Typically not. Based on the new model rules, that removal is done on the part of the alleged infringer, rather than the MLS, which will help protect the MLS where authority may have been previously given. 

Q4: Does this qualify as an alternative process: Claims of misuse of another Participant's photographs, being handled in a manner consistent with other ethical or legal concerns, either through an appropriate State regulatory agency or through a REALTOR® dispute resolution program?

A: No.

Q5: Are the board of directors/committee hearing the matter really equipped to adjudicate copyright?

A: If and when the board of directors/committee needs to make determinations under the new enforcement process, it will be whether authority has been granted to use the content rather than issues of copyright. When applicable, the advice of the MLS’s legal counsel can be obtained.

Q6: What if the MLS committee and board of directors are uncertain about whether authority was given?

A: The decision of whether authority has been given will only come into play if the content isn’t removed, and there’s a disagreement over whether authority to use the listing content was ever provided. In that case, the committee or board of directors can determine if the information provided establishes the appropriate authority given the information provided in the complaint and by the parties involved. If needed, the committee and board of directors can seek advice from legal counsel. Where a clear violation exists, a fine may be issued and the content can be removed by the MLS. Where it’s unclear, the content can remain, and the complaining broker is feel to take the matter to court. 

Further Resources

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