Monday, October 7, 2013
I’ve been meaning to blog about a Fourth Circuit opinion that went under noticed, although it should have raised alarm bells. That opinion, rendered in Metropolitan Regional Information Systems, Inc. v. American Home Realty Network, Inc.,722 F.3d 591 (July 17, 2013) held that copyright could be transferred via a clickwrap.
The TOU states:
“All images submitted to the MRIS Service become the exclusive property of (MRIS). By submitting an image, you hereby irrevocably assign (and agree to assign) to MRIS, free and clear of any restrictions or encumbrances, all of your rights, title and interest in and to the image submitted. This assignment includes, without limitation all worldwide copyrights in and to the image, and the right to sue for past and future infringements.”
The defendant, AHR, operates a website, NeighborCity.com which displays real estate listings using a variety of sources, including photographs taken from the MRIS website.
MRIS sued AHR for copyright infringement. Photographs are protected under the Copyright Act. Section 204 of the Copyright Act requires that transfers of copyright ownership require a writing that is signed by the owner. AHR argued that MRIS did not own the copyright to the photographs because its TOU failed to transfer those rights. The issue 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 of Section 204. The Fourth Circuit found that “(t)o invalidate copyright transfer agreements solely because they were made electronically would thwart the clear congressional intent embodied in the E-Sign Act. We therefore hold that an electronic agreement may effect a valid transfer of copyright interests under Section 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 is arguably the right thing for reasons of business competition but creating an alarming 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.