US Appellate Court Holds That Copyright Can Be Transferred Via A Computer Click

In Metropolitan Regional Information Systems Inc v American Home Realty Network Inc et al, the US Court of Appeals for the Fourth Circuit (Court) has held that an electronic “click” of a mouse can meet the “signed writing” requirement for a copyright transfer. The Court also held that a registrant of a collective work database can launch an infringement action on behalf of component works if the registrant also owns the rights to the individual works. The case involved two competing real estate listing companies. Metropolitan Regional Information Systems Inc (MRIS) offers fee-based online access to a multiple listing service comprised of property listings and related information (Database). Real estate brokers and agent subscribers are required to upload their real estate listings and photographs to the Database and assent to MRIS’s Terms of Use Agreement (TOU) with the click of a mouse. By assenting to the TOU, subscribers agree to assign exclusive copyright in their photographs to MRIS. In exchange for their assent, subscribers are granted access to the entire Database and a non-exclusive license to display listings on their own web sites. In order to protect its right to launch an infringement action, MRIS registers the MRIS Database as a collective work with the Copyright Office each quarter. American Home Realty Network Inc (AHRN) operates a national real estate search-engine and referral business called NeighborCity.com. Its web site displays data and photographs gleaned from both public sources and multiple listing services such as the MRIS Database. Rebuffing AHRN’s request for a “custom license,” MRIS filed suit against AHRN and its CEO, alleging various copyright infringement claims regarding AHRN’s use of the Database photographs. AHRN subsequently appealed a preliminary injunction granted to MRIS under the Copyright Act. First, AHRN argued that MRIS should be barred from bringing an action because it did not hold a valid copyright assignment for the photographs. Section 204(a) of the Copyright Act states that a transfer of one or more of the exclusive rights of copyright ownership by assignment or exclusive license “is not valid unless an instrument of conveyance, or a note or memorandum of the transfer, is in writing and signed by the owner of the rights conveyed or such owner’s duly authorized agent.” AHRN contended that a subscriber’s electronic assent to MRIS’s TOU via a “click“ was not sufficient to meet the signature requirements. MRIS successfully argued that the Copyright Act should not be read in isolation from the Electronic Signatures in Global and National Commerce Act (E-SIGN Act), which provides that no signature may be denied legal effect simply because it is in electronic form. Although the E-SIGN Act contains exceptions to its application, the Court held that none applied in this case and proceeded to read the two statutes together. The Copyright Act does not define a “signature,” but the E-SIGN Act describes the term as “an electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record.“ A subscriber`s “click” was found to qualify as a valid signature under this provision. AHRN`s last argument was that MRIS should be precluded from filing suit because it only registered its copyright in the Database as a whole and not in the individual photographs. While the author of a collective work is presumed unable to file suit in such situations, this presumption is defeated when the author also owns copyright in the individual works. The Court sided with MRIS in stating that there is no specific statutory requirement for compelling registrants of databases to list the name and authors of each owned component work. The Court held that it would be “[absurd and] inefficient to require the registrant to list each author for an extremely large number of component works to which the registrant has acquired an exclusive license.” Such a requirement would clash with the purpose of Sections 408 and 409 of the Copyright Act, which encourage easy and prompt registration for copyright holders. Summary by: Elena Iosef