Click to Assign Copyright

I’ve been meaning to blog about a Fourth Circuit opinionthat went under noticed, although it should have raised alarm bells.  That opinion, rendered in MetropolitanRegional Information Systems, Inc.  v.American Home Realty Network, Inc.,722 F.3d 591 (July 17, 2013) held thatcopyright could be transferred via a clickwrap. 

MRIS operates a website that offers a “multiple listingservice” for a fee to real estate brokers and agents.  Subscribers to the site can upload their realestate listings, including photographs. In order to submit their photographs they must click to indicate assentto the terms of use.  The court doesn’tspecify exactly how this is done (and states in a footote that the “record isnot clear as to the precise manner in which the TOU appears to subscribers). 

The TOU states:

“All images submitted to the MRIS Service become the exclusiveproperty of (MRIS).  By submitting animage, you hereby irrevocably assign (and agree to assign) to MRIS, freeand clear of any restrictions or encumbrances, all of your rights, title andinterest in and to the image submitted. This assignment includes, without limitation all worldwide copyrights inand to the image, and the right to sue for past and future infringements.”

The defendant, AHR, operates a website, NeighborCity.com whichdisplays real estate listings using a variety of sources, including photographstaken from the MRIS website.

MRIS sued AHR for copyright infringement.  Photographs are protected under the CopyrightAct.  Section 204 of the Copyright Actrequires that transfers of copyright ownership require a writing that is signedby the owner.  AHR argued that  MRIS did not own the copyright to thephotographs because its TOU failed to transfer those rights.   Theissue then was whether a subscriber who clicks agreement to a TOU has “signed”a “written transfer” of the copyright in a way that meets the requirement ofSection 204.  The Fourth Circuit foundthat “(t)o invalidate copyright transfer agreements solely because they weremade electronically would thwart the clear congressional intent embodied in theE-Sign Act.  We therefore hold that anelectronic agreement may effect a valid transfer of copyright interests underSection 204 of the Copyright Act.”

Given the reality that few read wrap contracts, holding that an author/creator can give up copyright with a click is alarming.  The opinion is a prime example of a court doing what isarguably the right thing for reasons of business competition but creating analarming precedent in the process. Shades of ProCD!  Online businesses will certainly benefit from this decision, but creators – not so much.  They may realize too late that when they clicked to upload content, they also assigned their rights to their work.  This is especially problematic since the primary reason creators use some of these sites is to get publicity for their work. The bargain, in other words, may be quite different from what the creator might have intended.

So – all you creators out there – BEWARE and check out those terms before you click.  They may not be as harmless as you think.

H/T to  my former student,Leslie Burns and her blog.

[Nancy Kim]