Real Estate Blog - COURT SAYS MLS IS A FORUM FOR REAL ESTATE PROFESSIONALS

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COURT SAYS MLS IS A FORUM FOR REAL ESTATE PROFESSIONALS

MUST READ - MLS IS for BROKERS TO SHARE INFORMATION - IT IS NOT PUBLIC INFORMATION

[Decision]

Filed in the U.S. Court of Appeals, Florida
June 21, 2007

Appeals from the United States District Court
for the Southern District of Florida

BUC Int�l Corp. v. Int�l Yacht Council Ltd.

"The vessel listings in the BUCNET database were not available to the public;
only BUCNET licensees had access to these compilations. BUCNET was thus
a broker-to-broker multiple listing service6 (�MLS�), as opposed to a primarily
retail-based website available to the public at large."

~~~~~~~~~~~~~~~~~Footnotes to the Decision~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

5 In pertinent part, the �BUC Marine Sales and Charter Management System
Membership and Software License Agreement� provides that:
Licensee shall not use, sell, distribute, display, or otherwise transfer, any
information obtained from the BUC Licensed System to others for any purpose
provided however, that Licensee may provide printed listings of vessels for sale or
charter to prospective boat buyers, sellers, or charterers on an individual basis and
in such limited and reasonable quantities for their consideration. No right or
license is granted herein for the use of the BUC Licensed System, databases,
reports, listings or any other item delivered by BUC to Licensee hereunder, for
any third person, or for any use by any third person of the BUC Licensed System.

6 A multiple listing service, or MLS, applies within a specific market, such as the market
for real estate or for the buying and selling of yachts, and provides professionals with a
forum to submit and browse information about properties for sale in that market.

===================================================================

Court decisions upheld by the U.S. Court of Appeals have significant importance as
"precedent". Unless reversed by the U.S. Supreme Court, this case could be the
model upon which MLSs throughout the country defy attempts by various consumers
groups, non-MLS members to use MLS information on their web sites for commercial
gain.

The question in my mind is "where do the web sites using MLS information as bait to
get the public to view their web sites, get that information". If they obtain the information
from one of the various MLSs and use the listing information on their web sites, it would
appear that they are have violated the copyright of the MLS from which they obtained the
MLS data.

The act of obtaining a real estate license and joining an MLS for access to the information
is not the same as joining an MLS to use listing information intended for "broker to broker"
use.

What does that say about the various directories and lead generating web sites that
use information from local MLSs to attract home buyers and sellers to that web site?? The
web site may be selling agent/broker directory listings, selling banner ads from real estate
related vendors; mortgage companies, moving companies, furniture companies, etc.

The home buying and selling consumer is the target of the web site and the
MLS information is the bait.

Realtor.com is licensed by the NAR to do what they do. What about the many other
companies that use MLS information as bait?

==============================================================

UPDATE: SINCE PUBLISHING THIS POST, some of the comments relate to IDX data feeds. I don't believe that this court decision would affect IDX subscriptions at all. IDX feeds are purchased by MLS members and used according to the license agreements between the MLSs and the subscribers. It could affect new entities who try to use the VOW platform which makes the MLS available to folks who sign in.

The entities that I believe COULD be affected by this decision, assuming anyone cares, are competing MLSs, large brokers who wish to operate their own MLS (we've been hearing rumors about them for a year or more), web site owners who join the MLS to gain access to the MLSs and then use the MLS information on their web sites. I'm of the opinion that even brokers who post information ABOUT OTHER BROKERS' listings on their web sites, even though they are members, unless they have permission from every other broker, are violating the MLS copyright by publishing that information.

This is very complidated and may be above my pay grade, but I see implications of this case in the future.

Posted by Lenn Harley, Real Estate Broker, Maryland & Virginia on 08/22/2007 06:53 AM

Comments (32)

homefinders, lenn harley, realtor, mls, copyright

32 Comments on COURT SAYS MLS IS A FORUM FOR REAL ESTATE PROFESSIONALS

AUG

2007

That's an interesting question Lenn. I imagine there are grounds for some legal actions from the MLS's around the country for copyright infringement.

Does this pertain to individuals my company has an IDX link but I am a member of the MLS, and I use it to get consumers to my website?

I think I am reading to much into this.

Lenn, unfortunately, I believe many of these website interlopers such as Homegain, Housevalues, etc. have over the past years gotten brokers licenses in almost every state, thus providing them access to MLS listings to use as bait for consumers. It is really crummy that they obtain a brokers license solely for the purpose of extorting large referral fees out of hard or not-so-hard working agents and never plan on getting into the actual business of real estate themselves. They then use the money they get from these massive referral fees to further their web advertising and SEO perpetuating the cycle. Agents who don't understand how to market themselves or SEO at all continue this vicious cycle.

Lenn, different MLS board have different rules. In my board Ann Arbor Board of Realtors, we as agents can get as many IDX or RAW DATA feeds as we want free. I use them on all my sites.

The board down the road only gives one raw data feed per broker. So this is one reason I don't think a national MLS would be productive.

Remax.com gets a feed for many MLS boards and puts it together in one big search. But, it is the agent or member of the MLS in that locality that has to ask for the data feed. Remax could not just go and get them.

If someone wants a feed from our board and it NOT getting it through a member, then they pay us 1500.00 per year. The applicants are screened so we do not sell to companies that will sell us back leads for a referral. This is clearly outlined in the application and if they try to do it we cut them off.Each individual broker in our board had to sign a agreement that they wanted to exchange data amongst the offices or if they said no, then that company could not have our listings on their web site. I think most complied as I see my listings on their sites.

Andrew. Thanks for commenting. I believe so too. More in the future.

Rebecca. I don't believe this decision affects the use of IDXs licensed from our own MLSs at all.

Brian. You are preaching to the choir. I agree completely. But, this decision clearly states that the MLS information is a forum for professionals, it does not give these "professionals" the right to share the information obtained from the MLS with the public.

Missy. Interesting. If your MLS enforces the limitation of the data feed to companies that use the information to get buyer/seller leads and sell them back to members, they are way ahead of many.

Hi Lenn,

A small victory in the courts? What a tangled web we weave. Gotta love the court systems.

That is a very interesting judgement. Call me dumb but I'm not aware of any companies that offer the consumer MLS data that are not members themselves or are getting the info through members. What are some examples? I know homegain and homes.com don't.

I too think it's important to not confuse IDX with the MLS. The MLS is a data base of active, sold, pending etc...IDX is nothing but active listings. That's a HUGE difference. Through IDX we are advertising our products to attract consumers. That's why we are hired in the first place. The MLS is to assist us in making our product available to other MLS members AND give us the historical data we need to perform our duites.

What we need to do is stop calling IDX or other property searches, the MLS. The consumer does NOT have access to the MLS.

Interesting case and post Lenn. Thanks

Bryant.

The court seemed clear that the MLS information is intended for "broker to broker" use.

When a company obtains a data feed and designs their own IDX using data, even just active listings data, to feed their own designed IDX system, are they using MLS copyrighted information. Of course they are. One thing I found interesting in the court's decision is their use of the word data as copyright protected. This is not the position of various MLSs in the past. MLSs have claimed that, once the listing "data" is compiled into a listing, it is then copyrighted to that MLS. No problem there. But, the court's ruling would seem to indicate that the "raw data" can be copyrighted just like computer code.

Homegain and Homes.com do not simply subscribe to the IDX offered by our MLS as I do and as several thousand other agents and brokers do. They have a third party obtain the data from the MLS services and feed that data into a format designed for Homegain and Homes.com. They are obtaining "data", not IDX formatted listing information. Other brokers do the same. In fact, I'm having one programmed for me now because our IDX system insists on including a lot of information that I don't want in the listing serch results. But, I am a broker and I do sell real estate.

The court would seem to believe that any data obtained from MLS sources could not be used except by broker to broker exchange.

It's not necessarily the overall decision in the court's decision that I find so interesting, but the nuance of some of the language.

Interesting.

Thanks Lenn, can't wait to see how this plays out for the rest of the country.

court's decision is their use of the word data as copyright protected.

Lenn, If I'm understanding this the court is saying that data (the listing info including pictures) is proprietary to the listing broker or the MLS. It is considered intellectual property?

What a interesting case and I must say I agree with the comments on this matter. MLS is for the use of the agents to provide the service for the buyers and to provide marketing for the sellers. I hope this will be resolved soon but as stated it is sure to go on for a while and there will always be something.

Mitchell. I believe that the MLS information, as compiled by the MLS from raw data fed by the brokers has always been considered intellectual property of the MLS. It's the compilation that's copyright protected. The photos are copyright protected by the person who took the photo and a limited use is granted to the MLS when the agent enters the photo into the listing data. The original still belongs to the agent.

But, this court seems to be going farther and asserting that the data is copyrighted when used by the MLS and that data can't be used by another entity for use in other compilations.

I need to study it. This case opened up a can of worms for me.

I pay MLS dues to access info, Sandy does as well, about $250 per month for us, about the same for E&O insurance, NAR and local dues, plus much, much more to be a REALTOR. Consumers pay nothing! Either we pay nothing or start charging the consumer.......boy that will work! (NOT)
Dick and Sandy. There is some talk about a National MLS that consumers would pay to belong. Like you say, FAT CHANCE.

Lenn, much of that is way above what I really understand. I heard that Lending Tree is going to roll out a software where people can get text messages and emails to their phone to inquire about listings. The one they are interested in and others directly surrounding it. I see what you mean..I also see how this could go pretty deep and affect many different companies and websites, like the one I just mentioned. I do not know how some of these guys get their information but it will be interesting to see what happens in the future.
A small victory in the courts? What a tangled web we weave. Gotta love the court systems.
Stephanie. This stuff is above what almost anyone understands. But, copyright is an ongoing interest of mine so I read a lot of it. How these guys get their information is no secret, they join the MLS and get the data feeds.

I believe this all stems from the notion that if something(data,photos,etc.) is on the web...then it "must be free"....But wait, you mean if I use what I believe to be free for my own personnel gain I am entitled.Sorry, that you as an agent or owner/broker had to pay for this; sign contracts and conduct yourself in a business and professional manner. After all "It's on the web----it's free". Very nice, Lenn...Only in America would we allow this to happen.
Kim. You are absolutely right. Even a former President of the United States from the State of Georgia said, after stealing content and maps from another author, "I found it on the Internet".

Thanks Lenn, can't wait to see how this plays out for the rest of the country.
Kathy. Neither can I.

I don't know why it was ever the case that MLS's would be considered public domain considering its a private enterprise paid for with private money.

It's really hard to know where this will all lead. Depends on the lawyers and judges. I will say however, that all businesses evolve. I will evolve with it, regardless. I am watching it carefully, however.

Thanks for the update.

I just think that this is a great victory for all of us who rightfully use the MLS every day. It is a private site that we all pay to be a part of, so I am thankful that the courts have also seen it in this light. Thank you for posting this, Lenn.

"The home buying and selling consumer is the target of the web site and the
MLS information is the bait"

This may be way over my head as well although the statement above is one thing that caught my eye (maybe because you put it in bold lol!) You know Lenn, this whole thing with lead gen. co's and these websites that are literally "buying our mls listings" by buying into our real estate industry by obtaining a license are just another example of why the consumer is "thinking" we are are a shady bunch.

And expounding on the copyright infringment law. Yup. Give me more and keep us informed please.

Ki. There are so called "consumer groups" that believe that the MLS should be public domain. Don't ask me who will fund it. This case, while not exactly on point, does impinge on that view and favorably.

Chris. Hard to say is right. The Internet really let a lot of sqirmming cats out of the bag. Generally, not to the benefit of all Realtors.

Jim and Miria. It is a victory. How it will help is the question.

Lenn thanks. This is one topic that is key to all of our futures in real estate.

This is a fascinating subject and confusing. I don't think I understood the difference between the MLS and the IDX feed until a couple of years ago. I think we each need to know OUR own MLS rules and who owns the data, I think that must vary by market.

Where did I read about a board in Indiana (?) changed the name of their MLS to something else? Maybe Inman News? Maybe it was Broker Listing Cooperative? Something like that.

Lenn, this is probably the most interesting thread I have been on for awhile. In response to your comment about us enforcing it, the answer is yes we do. I am on the Board of Directors now for 6 years, and MLS Committee, we discussed this in great length and came up with a policy.

We changed it to 0 for Ann Arbor Realtors and 1500.00 for outside companies. I have not heard of any problems and am involved in the board and MLS so I would have heard of it.

Ditto to what Broker Bryant said, they only get the active listings, not all the data. Then our webmasters can format it anyway they desire showing only the features we want them to.

Lenn,

I'm not fully aware of everything involving what Realtors deal with, but from what I read in your post, you are passing on good info to those willing to read it..

Tom Weiss

This is really good info Lenn! I am very concerned about the outsiders who are demanding access to our MLS, and the tendancy to give "the public" everything they want - at no cost to them. The agents provide the listings, photos, descriptions and the dues that pay for the MLS staff to run all the computers. There is definitely a cost that I am paying and I don't want to share my resources with aggregators who want to get between me and my clients!

Vicki

At first I thought this was great news, but now I am not sure I understand fully all of the implications it can have on how it changes how we do business.

I think that the perception that the MLS should be free to all shows the perception of the general public regarding real estate agents. I don't see any other business model where people are not expected to be charged for their services like we are.

I agree with you Lenn.. also above my pay level but I do believe there may be some major implications as many MLS associations merge and agents finally realize this is not a good thing.

AUG

2007

Where on earth do you find this stuff, Lenn? Great information! Thank you.

AUG

2007

One of the monthy newspapers were wanting our data feed and we were NOT going to sell it to them IF they tried to use it to sell our listings leads back to us. UNTIL we changed the policy, we sold it to the agents at 500.00 a one time fee. And outside companies for 1000.00. However, the APPLICATIONS are screened, not everyone who asks gets one. And it is renewable not for life.

We changed it to 0 for Ann Arbor Realtors and 1500.00 for outside companies. I have not heard of any problems and am involved in the board and MLS so I would have heard of it.

Missy. Thanks for commenting. I have a question for you. If the "outside" companies are not using the listing information to sell leads back to REALTORS, what are they using it for. I would be less suspicious if they had ABSOLUTELY NO WAY OF CAPTURING LEADS. Has that been verified????

Or, can perhaps agents that subscribe to something capture or buy leads???

Anyway you look at it, it's a good deal for the newspapers. For $1,000 they get advertising bait worth about $1,000 a day.It is the listings that are the bait for IDX sites. It's the listings that bring consumers back to brokers sites. It's the listings. It's the listings.

Any time listings are used as advertising bait on any web site other than a working brokerage, we all lose.

At first I thought this was great news, but now I am not sure I understand fully all of the implications it can have on how it changes how we do business.
I think that the perception that the MLS should be free to all shows the perception of the general public regarding real estate agents. I don't see any other business model where people are not expected to be charged for their services like we are.
Alissa. I don't either. The fact that every newspaper, every FSBO site, every lead machine, every house value site, every one who wants traffic to their web page
to sell something, wants home listings surely should tell us something about the value of the MLS and IDX links.

I agree with you Lenn.. also above my pay level but I do believe there may be some major implications as many MLS associations merge and agents finally realize this is not a good thing.
Kaye. You are right. Some times when a thing doesn't sound right, means that it isn't.

Where on earth do you find this stuff, Lenn? Great information! Thank you.
Margaret. Thanks for commenting. I follow copyright stuff.

JAN

2008

Lenn - Do you have any updated information on this? I am interested in hearing more on this subject. Again, I greatly appreciate your time.

Happy New Year!

Meg. No, nothing further. I'm sure some research time on the Internet would produce more info. I was hoping that readers would read it and understand that the matter of the public access to the MLS isn't as cut and dry as the DOJ wants to make it appear.

I guess I was hoping that the NAR attorneys would find it too.

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