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 however, can cause unforeseen liability problems. The good news is that you can 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.
2) Asks you to extend or sublicense rights to the website owner for them to use the content.
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
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 “edit” 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 company and your agents. 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. Those fourth parties could be competitors of yours or in completely different lines of business.
What a clause like this does for the other party is to give it the ability to use the content for their own purposes, on your say so – essentially passing the responsibility onto you for copyright and licensing violations they may make. 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 your company/agents.
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 and the liabilities it can create are worth much more scrutiny.