A Maryland federal court has considered whether a multiple listing service was entitled to receive a preliminary injunction for copyright infringement against the company that operates NeighborCity.com for its reposting of the MLS’s copyrighted listing data without permission.
Metropolitan Regional Information System, Inc. (“MRIS”) operates a multiple listing service in the mid-Atlantic region. Real estate brokers that participate in the MLS execute a subscription agreement which allows them to share their listing information with other participants as well as view the information submitted by the other participants. The participants agree to assign all copyrights to MRIS for the photographers included in each listing that the broker uploads to the MLS database.
American Home Realty Network, Inc. (“Website Operator”) operates a website known as “NeighborCity.com” (“Website”). The Website purports to offer a national real estate search and provides rankings of real estate professionals. The data displayed on the Website comes from a variety of sources, including real estate professionals and public records. If the Website provides a lead to a real estate professional, the Website receives compensation when the lead results in a sale.
MRIS has copyrighted its database compilation with U.S. Copyright Office. MRIS files claims of copyright ownership every quarter with the Copyright Office in accordance with the provisions for registering a copyright for automated databases. MRIS displays a copyright ownership mark on all photographs within the database and on its website pages.
The Website contained listing information and photographs from the MRIS database. The Website Operator had not obtained a license or permission from MRIS for the posting this information on the Website. When MRIS requested removal of this information, the Website Operator offered to enter into a licensing agreement with MRIS but did not stop its practice of using MRIS’s information.
MRIS rejected this offer and filed a lawsuit alleging copyright infringement and other claims arising from the alleged copyright infringement. MRIS sought a preliminary injunction from the court to prevent further unauthorized copying by the Website Operator.
The United States District Court for the District of Maryland, Southern Division, entered a preliminary injunction barring the Website Operator from using the MRIS’s copyrighted information. The court first looked at whether it could exercise jurisdiction over the Website Operator. A court can only exercise jurisdiction over an out-of-state entity if the state’s “long arm statute” allows for the exercise of jurisdiction and the exercise of jurisdiction does not violate the Constitution’s due process protections.
The court found that it could exercise jurisdiction over the Website Operator. The Maryland statute allows courts to exercise jurisdiction over those conducting business in the state. The statute does not require the party conducting business to physically enter the state. The Website Operator lists properties in the state and works with Maryland real estate professionals on referrals. These activities clearly fall within the state’s long arm statute and do not offend the Constitution’s due process requirements. The court ruled that it had jurisdiction over the Website Operator.
Next, the court considered the Website Operator’s motion to dismiss the lawsuit for failing to state a claim. The Website Operator argued that MRIS could not claim copyright protection for its compilation because the compilation contained separately copyrighted works like photographs that the MLS had not registered for copyright protection. The Copyright Act protects an author’s original works, and the Act allows copyright protection for compilations that are works of preexisting materials assembled in an original way that entitles the resulting work to copyright protection. To establish copyright infringement, a party must show a valid copyright and the unauthorized copying of the original work.
The court rejected the Website Operator’s argument that MRIS could not claim copyright protection for the photographs in its database because it had not registered the photographs individually. First, the act of registering a compilation is prima facie evidence of a valid copyright and so the burden shifts to the other party to prove invalidity of the copyright. The court ruled that the Website Operator had failed to establish that the Copyright Act required the registration of individual photographs; indeed, the Act instead allows for the registration of compilations containing pre-existing works. Thus, the court denied the motion to dismiss the lawsuit.
Finally, the court evaluated MRIS’s request for a preliminary injunction. In order to obtain a preliminary injunction, a party must show: first, it is likely to succeed on the merits; second, it is likely to suffer irreparable harm without the injunction; third, the balance of the equities is in its favor; and finally, an injunction is in the public interest. MRIS had established copyright infringement by the Website Operator, and had made “a clear showing of likelihood of success on the merits.”
The court also determined that MRIS could suffer irreparable harm. The unauthorized use of its listing information is likely to cause confusion in the marketplace over the source of the information, particularly if the information is inaccurately presented on the Internet. Additionally, the lack of control over MRIS’s information could undermine its participants’ willingness to contribute information to the MLS. The court ruled that the equities were in favor of MRIS, as the Website Operator was attempting to profit on its unauthorized use of MRIS’s copyrighted information. Upholding the copyright laws is also in the public interest. Therefore, MRIS had established the grounds for a preliminary injunction and so entered an injunction prohibiting the Website Operator from its unauthorized use of MRIS’s copyrighted information.
Metro. Reg’l Info. Sys. v. Am. Home Realty Network, 12-CV-00954-AW, 2012 WL 3715350 (D. Md. Aug. 27, 2012). [This is a citation to a Westlaw document. Westlaw is a subscription, online legal research service. If an official reporter citation should become available for this case, the citation will be updated to reflect this information].
Editor’s Note: NAR’s Legal Action Committee considered and approved a request for support of MRIS in this litigation.