Fourth Circuit Upholds Registration of Database Collection of Photographs

July 30, 2013

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Metropolitan Regional Information Systems, Inc., v. American Home Realty Network, Inc., U.S. Ct. Appeals for the Fourth Circuit, July 17, 2013

By Nancy Wolff Esq., PACA Counsel

For those image libraries that relied on instructions from the Copyright Office on how to register images uploaded to a website, only to have various lower level federal courts invalidate the process over the past few years, there is some good news. The first federal appellate court has upheld the use of database registrations for individual photographs owned by the copyright claimant.

The Fourth Circuit, covering Maryland, Virginia, West Virginia, North and South Carolina recently upheld an injunction against American Home Realty Network, Inc. (“AHRN”), prohibiting them from displaying Metropolitan Regional Information Systems, Inc.’s (“MRIS”) photographs on its real estate referral website. The Court held that where owners of photographs assent to transfer their copyright interest to another by way of clicking on Terms of Use, that “click” counts as being “in writing” and “signed” per the language of the Electronic Signature in Global and National Commerce Act (“E-Sign Act”) and is a valid assignment of copyright. By finding that MRSI had been lawfully assigned the copyright interest in the photographs at issue, the Court held that by registering the MRSI database as a collective work with the Copyright Office, MRSI was entitled to copyright protection for all the photographs contained in the database. MRIS could rely on this registration and prevail on an infringement claim against AHRN for its unauthorized display of the photographs.

BACKGROUND

For a fee, MRIS aggregates real estate listings and offers them to real estate brokers and agents online. Subscribers upload their own real estate listings to the MRIS Database, which include photographs of each particular listing. Before they are allowed to submit any photograph to the Database, subscribers must assent to the MRIS’s Terms of Use Agreement. Those Terms state that all images submitted to the MRIS Database become the exclusive property of MRIS. In exchange, subscribers who agree to the Terms are granted access to all the real estate listings in the MRIS database as well as a non-exclusive license to display those listings on their own websites. Each quarter, MRIS registers its newly updated Database with the Copyright Office, seeking to protect the “collection and compilation” of the real estate listings in the MRIS Database, as well as the expressive contributions created by or acquired by MRIS, including subscriber’s uploaded photographs.

AHRN, on the other hand, is a California real estate broker that owns a national, online real estate search engine and referral business. AHRN acquires the data to display on its site from a range of sources, including MRIS’. AHRN explicitly states that they acquire their data from multiple sources and databases and that AHRN does not alter any of the displayed information.

THE CLAIMS

The dispute over AHRN’s use of MRIS’ photographs arose in 2011 ad MRIS filed suit against AHRN to stop any future infringement of their photographs. The District Court granted MRIS’s preliminary injunction, prohibiting AHRN from using MRIS’s photographs, and on appeal, the Fourth Circuit affirmed, rejecting AHRN’s argument that 1) MRIS did not possess any copyright in the photographs because the subscriber’s electronic agreement to MRIS’ terms failed to actual transfer those rights to MRIS and 2) when MRIS registered its Database, it failed to properly register its copyright in the individual photographs.

AHRN first argued that a subscriber’s electronic agreement to MRIS’s Terms of Use did not suffice as an “assignment” of their rights in the photograph. But, the E-Sign Act permits an electronic transfer of copyright ownership if signed and written. The E-Sign Act defines an “electronic signature” as an electronic sound, symbol or process attached to, or logically associated with a contract and executed by a person with intent to sign. In turn, the Fourth Circuit upheld the notion that electronic agreements may be made to validly transfer copyright interests.

The Court then rejected AHRN’s second claim and clarified whether collective work registrations are sufficient to permit an infringement action on behalf of the individual component parts of the collective work. The Register of Copyrights has issued regulations to facilitate the confusion and allow, in some instances, a single registration for certain categories of collective works, including automated databases like MRIS’. This allows authors of automated databases like MRIS to file a single application covering up to three months’ worth of updates and revisions, as long as the revisions are 1) owned by the same claimant (i.e. MRIS), 2) have the same general title, 3) have a similar general content, and 4) are similar in their organization. Nothing in the regulations explicitly require MRIS to list the name and author or every component photograph it wishes to register as part of an automated database registration in order to seek protection for each of the component parts. The regulations seek to make the registration process more efficient for those registering hundreds or thousands of component parts like photographs. Indeed, by requiring a list of each author would only serve as an impediment to registration, said the Court. As MRIS did, in fact, own the copyrights of the individual components because of the express “click-through” transfer made by subscribers the Court held that MRSI complied with the registration process and had the right to bring an infringement action.

TAKEAWAY

In addition to affirming that “click assignments” are valid, this decision is significant and a long awaited relief for the stock photo industry that historically acquired copyright in submitted photographs for purposes of registration, initially published in print catalogs and subsequently in on-line web databases as technology advanced. By registering the individual works as well as the collection, relying on the Copyright Office’s instructions for automated databases, large collections of photographs could be registered which would otherwise be administratively as well as financially prohibitive if each image was required to be registered separately. This decision is in direct conflict with a prior holding in Meunch Photography, Inc. Houghton Mifflin Harcourt Publ’g Co. (SDNY 2010), (in which is part of the Second Circuit) where the court held that an author of a collective work may not assert rights in the individual photographs, despite them having being assigned to the author, since the name of author of the individual photos in the single registration were not included. Other lower courts in various federal districts followed this reasoning and an appeal of a case involving Alaska Stock is still pending in the Ninth Circuit, covering the west coast states (for two years now). Hopefully this appellate decision is a signal that copyright owners are entitled to rely on instructions from the Copyright Office and should not have to guess that many years later, a court might disagree with the Copyright Office’s advice. As there is no real practical way photo libraries seeking to register multiple works by multiple creators can accomplish the goal of registering individual images without acquiring rights and subsequently registering them under a database like process, this decision is reassuring. Now we can only hope the Ninth Circuit agrees!