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Metropolitan Regional v. American Home Realty Network, 12-2102 (2013)

Court: Court of Appeals for the Fourth Circuit Number: 12-2102
Filed: Jul. 17, 2013
Latest Update: Feb. 12, 2020
Summary: PUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 12-2102 METROPOLITAN REGIONAL INFORMATION SYSTEMS, INC., Plaintiff - Appellee, v. AMERICAN HOME REALTY NETWORK, INC., Defendant – Appellant, and JONATHAN J. CARDELLA; NATIONAL ASSOCIATION OF REALTORS, Defendants. - CONSUMER ADVOCATES IN AMERICAN REAL ESTATE, Amicus Supporting Appellant. No. 12-2432 METROPOLITAN REGIONAL INFORMATION SYSTEMS, INC., Plaintiff – Appellee, v. AMERICAN HOME REALTY NETWORK, INC., Defendant – Appellant,
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                               PUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT


                              No. 12-2102


METROPOLITAN REGIONAL INFORMATION SYSTEMS, INC.,

                Plaintiff - Appellee,

          v.

AMERICAN HOME REALTY NETWORK, INC.,

                Defendant – Appellant,

          and

JONATHAN J. CARDELLA; NATIONAL ASSOCIATION OF REALTORS,

                Defendants.

-------------------------

CONSUMER ADVOCATES IN AMERICAN REAL ESTATE,

                Amicus Supporting Appellant.



                              No. 12-2432


METROPOLITAN REGIONAL INFORMATION SYSTEMS, INC.,

                Plaintiff – Appellee,

          v.

AMERICAN HOME REALTY NETWORK, INC.,

                Defendant – Appellant,

          and
JONATHAN J. CARDELLA; NATIONAL ASSOCIATION OF REALTORS,

                Defendants.

-------------------------

CONSUMER ADVOCATES IN AMERICAN REAL ESTATE,

                Amicus Supporting Appellant.



Appeals from the United States District Court for the District
of Maryland, at Greenbelt.   Alexander Williams, Jr., District
Judge. (8:12-cv-00954-AW)


Argued:   May 15, 2013                     Decided:   July 17, 2013


Before TRAXLER, Chief Judge, and GREGORY and DUNCAN, Circuit
Judges.


Affirmed by published opinion. Judge Duncan wrote the opinion,
in which Chief Judge Traxler and Judge Gregory joined.


ARGUED: Peter Farkas, FARKAS & TOIKKA LLP, Washington, D.C., for
Appellant.     Margaret Aldona Esquenet, FINNEGAN, HENDERSON,
FARABOW, GARRETT & DUNNER, LLP, Washington, D.C., for Appellee.
ON BRIEF: Richard S. Toikka, FARKAS & TOIKKA LLP, Washington,
D.C.; Christopher R. Miller, Chief Legal Officer and General
Counsel, AMERICAN HOME REALTY NETWORK, INC., San Francisco,
California, for Appellant.       John T. Westermeier, FINNEGAN,
HENDERSON, FARABOW, GARRETT & DUNNER, LLP, Reston, Virginia, for
Appellee.   Douglas R. Miller, Executive Director and Attorney,
CONSUMER ADVOCATES IN AMERICAN REAL ESTATE, Navarre, Minnesota,
for Amicus Supporting Appellant.




                                 2
DUNCAN, Circuit Judge:

     Appellant American Home Realty Network, Inc. (“AHRN”) and

Appellee     Metropolitan     Regional       Information        Systems,      Inc.

(“MRIS”) are competitors in the real estate listing business.

MRIS offers an online fee-based “multiple listing service” to

real estate brokers and agents, while AHRN circumvents those

brokers and agents by taking listing data from online database

compilers    like   MRIS     and   making      it    directly     available     to

consumers on its “real estate referral” website.

     In this action, MRIS contends that AHRN’s unauthorized use

of its copyrighted material constitutes infringement under the

Copyright    Act.      The   district       court    entered    a   preliminary

injunction     order    prohibiting         AHRN’s      display     of     MRIS’s

photographs on AHRN’s referral website, and AHRN appealed.                     For

the reasons that follow, we affirm.



                                       I.

                                       A.

     MRIS operates an online multiple listing service, commonly

known as an “MLS,” in which it compiles property listings and

related    informational     content    (the    “MRIS    Database”).          MRIS

offers this service to real estate broker and agent subscribers

in Maryland, Virginia, the District of Columbia, and parts of

Delaware, West Virginia, and Pennsylvania.

                                       3
      Upon payment of a subscription fee to MRIS and assent to

terms, subscribers upload their real estate listings to the MRIS

Database and agree to assign to MRIS the copyrights in each

photograph included in those listings.                In relevant part, the

MRIS Terms of Use Agreement (“TOU”) reads as follows:

      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.

J.A. 464 1 (emphasis added).            In order to submit photographs to

the MRIS Database, the subscriber must click a button to assent

to the TOU. 2     In exchange, subscribers are granted access to all

of   the   real   estate   listings     in   the   MRIS   Database   (including

competitors’      listings)   and   a    nonexclusive     license    to   display

those listings on their own brokerage and/or agency websites via

data feed.

      To protect its claims of copyright ownership in the MRIS

Database, MRIS affixes its mark and copyright notice--e.g., “©

      1
       Citations to “J.A.” throughout this opinion refer to the
Joint Appendix filed in the initial appeal, while “S.J.A.”
refers to the Supplemental Joint Appendix filed in the second,
consolidated appeal.
      2
       The record is not clear as to the precise manner in which
the TOU appears to subscribers.



                                         4
2012 MRIS”--to all photographs published in the MRIS Database,

and registers the MRIS Database with the Copyright Office each

quarter       under        the     registration       procedures            applicable        to

automated         databases.         See     J.A.    460. 3           For     example,       one

application from 2008 reads, in pertinent part:

       Type of Work:            Computer File

       Application Title:    Group registration for automated
       database   titled  Metropolitan   Regional  Information
       Systems, Inc. MRIS Database; unpublished updates from
       September 1, 2007 to December 31, 2007.

       Authorship          on    Application:         [MRIS],          employer        for
       hire[.]

       Pre-existing   Material:       Previous   versions of
       unpublished automated database updated and revised
       from September 1, 2007 to December 31, 2007.

       Basis of Claim:    Daily updated and revised text and
       images and new text and images.

       Copyright Note: Regarding deposit: Application states
       that    ID    material    (database    records)  from
       representative date December 31, 2007.

J.A.       426.        Other       applications          list        “text,”      or    “text,

photographs,”         as    pre-existing         material       or    the    basis      of   the

claim.        See,     e.g.,       J.A.    428-30.        According          to   MRIS,      its

quarterly         registrations      of    the    MRIS    Database          “extend     to   the

       3
       See also J.A. 158-67, 426-30 (copies of registration
applications spanning the period from October 1, 2003 to
December   31,   2011);    J.A.  406-25,    431-58   (corresponding
certificates   of   registration).       As   AHRN   notes,   these
registration certificates do not identify the names of any of
the  authors   or   titles    of individual    photographs.     See
Appellant’s Br. at 42.


                                              5
collection and compilation of the real estate listings in the

MRIS Database and to expressive contributions created by MRIS or

acquired       by    MRIS,      including    the    photographs     included    in    the

listings.”          J.A. 460.

       AHRN     is    a   California       real    estate    broker   that   owns    and

operates the website NeighborCity.com, a national real estate

search engine and referral business.                   Among other sources, AHRN

acquires the data displayed on NeighborCity.com from real estate

brokers      and     agents,      county    tax    assessors’     offices    and   other

public records, foreclosure data providers, and multiple listing

services such as the MRIS Database.                     AHRN expressly disclaims

any role in the creation of the data it makes available: the

terms     of    use       for    NeighborCity.com       provide       that   the     user

understands “all the data on properties available for sale or

rent is maintained by various . . . MLSs” and that AHRN “does

not alter or add to this information on the properties in any

way.”     J.A. 360.             That AHRN has displayed on NeighborCity.com

real    estate       listings     containing       copyrighted    photographs      taken

from the MRIS Database is not presently disputed.

                                             B.

       On November 18, 2011, MRIS sent AHRN a cease and desist

letter.        In     response,     AHRN    suggested       the   parties    develop   a

“custom license” whereby AHRN could continue to use the listing

data    to     which      MRIS    claimed     a    proprietary     interest.         MRIS

                                              6
rejected that idea and, on March 28, 2012, filed suit against

AHRN and its CEO, Jonathan Cardella, 4 alleging various claims

related      to    copyright             infringement.           A   few    days    later,    MRIS

sought a preliminary injunction under the Copyright Act, which

authorizes         a        federal       court    to     “grant      temporary      and     final

injunctions on such terms as it may deem reasonable to prevent

or restrain infringement of a copyright.”                               17 U.S.C. § 502(a).

AHRN       moved       to     dismiss       for    lack     of       personal      jurisdiction,

improper venue, and failure to state a claim.                                      The district

court denied AHRN’s motion to dismiss, and granted MRIS’s motion

for preliminary injunction.                       See 
888 F. Supp. 2d 691
(D. Md.

2012).      AHRN timely appealed.

       In response to motions filed by the parties, the district

court revised its preliminary injunction order while the appeal

was still pending. 5                The revised order specifies that the court

enjoins       only          AHRN’s        use     of    MRIS’s        photographs--not         the

compilation         itself          or     any    textual     elements        that    might    be

considered         part        of     the       compilation--and           also    renders    the

injunction’s effect conditional upon MRIS’s posting of security.



       4
       The district court dismissed Cardella from the action for
lack of personal jurisdiction. He is not party to this appeal.
       5
       Specifically, the district court granted AHRN’s motion for
clarification, granted in part MRIS’s motion for modification,
and denied AHRN’s motion for reconsideration or suspension.



                                                   7
See 
904 F. Supp. 2d 530
(D. Md. 2012).                       AHRN again appealed, and

the    two     appeals      were    consolidated.            We   thus    review    AHRN’s

remaining challenges to the district court’s revised preliminary

injunction order. 6



                                              II.

       We     review     the       district    court’s        decision      to    grant    a

preliminary injunction for abuse of discretion, assessing its

factual determinations for clear error and its legal conclusions

de novo.        Pashby v. Delia, 
709 F.3d 307
, 319 (4th Cir. 2013)

(citing Aggarao v. MOL Ship Mgmt. Co., 
675 F.3d 355
, 366 (4th

Cir.       2012)).     Parties       seeking       a   preliminary       injunction   must

demonstrate that (1) they are likely to succeed on the merits,

(2) they are likely to suffer irreparable harm, (3) the balance

of hardships tips in their favor, and (4) the injunction is in

the public interest.           Winter v. Natural Res. Def. Council, Inc.,

555 U.S. 7
, 20 (2008).

       AHRN argues that MRIS has failed to show a likelihood of

success on its copyright infringement claim primarily for two

reasons:      (1)    when    MRIS    registered        its    Database     it    failed   to


       6
       Following the district court’s entry of the revised order,
AHRN withdrew the objections raised in its first appeal to the
order’s lack of specificity and failure to require security.
See Appellant’s Supp. Br. at 2.



                                               8
properly register its copyright in the individual photographs;

and    (2)    MRIS    does     not    possess     copyright      interests      in    the

photographs       because      the    subscribers’      electronic       agreement     to

MRIS’s terms of use failed to transfer those rights. 7

       We    note    at   the       outset   that     our   consideration       of    the

parties’       arguments       is    complicated       by     their   conflation      of

copyright protection and copyright registration. These are two

entirely distinct matters, governed by separate sections of the

Copyright Act.        Compare 17 U.S.C. § 102, with 17 U.S.C. §§ 408-

412.       Unlike registration, which we discuss at length below, the

scope of copyright protection is not at issue in this appeal.

The    district      court’s    revised      order    enjoins     only    the   use    of

photographs uploaded by MRIS’s subscribers, and AHRN does not

contest      that    these     photographs       of   homes    and    apartments      are

worthy of copyright protection. 8                To the extent AHRN argues that


       7
       AHRN also challenges the district court’s evaluation of
the second, third, and fourth prongs of the preliminary
injunction analysis.   Because we find AHRN’s arguments in this
regard to be without merit, and because they are largely factual
inquiries to which we afford substantial deference to the
district court, we reject them without further discussion here.
       8
       Nor could it reasonably do so. “For more than a century
photographs have been held to be copyrightable ‘writings’ under
Article I, § 8 of the Constitution.” Rogers v. Koons, 
960 F.2d 301
, 306 (2d Cir. 1992) (citation omitted).    This is so even
when they are largely “factual,” rather than artistic, in
nature.   See Burrow-Giles Lithographic Co. v. Sarony, 
111 U.S. 53
, 60-61 (1884) (recognizing wide copyright protection over
photographs in holding that a photograph of Oscar Wilde was an
(Continued)
                                             9
the MRIS Database itself fails to merit copyright protection in

its originality as a compilation, we reject this contention as

well. 9

      In    the    following   discussion,       we   first   set   forth     the

necessary statutory framework, and then consider each of AHRN’s

arguments     in   turn.       Although    the    arguments    present      novel

questions, we ultimately reject both.

                                      A.

      In general, the Copyright Act protects “original works of

authorship    fixed    in   any   tangible   medium     of    expression.”     17

U.S.C. § 102.       This protection commences as soon as the original

work is created and fixed in some tangible form, becoming the




original work of art because the author was required to make
such creative decisions as placement of Oscar Wilde in front of
the camera, selection of the angle, light and shade, etc.).
      9
       As the Supreme Court has made clear, it is only a “narrow
category of works in which the creative spark is utterly lacking
or so trivial as to be virtually nonexistent” so as to render
the work “incapable of sustaining a valid copyright.”      Feist
Publ’ns, Inc. v. Rural Tel. Serv. Co., 
499 U.S. 340
, 359 (1991).
Furthermore, originality is usually considered a question of
fact, Craigslist, Inc. v. 3Taps Inc., 
2013 WL 1819999
, at *6
n.11 (N.D. Cal. April 30, 2013) (citations omitted); thus, we
may reverse the district court’s finding here only if it is
clearly erroneous--which it is not.
     We also question the relevance of this issue to our present
inquiry.   Our review is limited by the scope of the revised
preliminary injunction order, which reaches the issue of
copyright infringement only as to the photographs contained in
the database.



                                      10
author’s property immediately upon fixation.                          See 
id. § 201(a). Copyright
ownership takes the form of several exclusive rights,

such as the right to reproduce the work.                        
Id. § 106. Although
ownership   vests      initially         with    the       author    of   the    work,    the

author may transfer any of the exclusive rights attendant to

copyright     ownership      by     granting          an    assignment      or    exclusive

license.    
Id. § 201(d). A
copyright owner may seek judicial

enforcement      of     his        property           rights        against      subsequent

infringers,    so     long    as    he    has    registered         the   work    with    the

Copyright   Office      prior       to    filing       the     copyright      infringement

action.    
Id. § 411(a). One
type of “original work of authorship” protected under

the Copyright Act is a “compilation,” which is “formed by the

collection and assembling of preexisting materials or of data

that are selected, coordinated, or arranged in such a way that

the resulting work as a whole constitutes an original work of

authorship.”          
Id. § 101. The
   protection         afforded   to     a

compilation    is     independent         of     any       protection     that    might   be

afforded to its individual components.                        Thus, ownership of the

copyright in a compilation, standing alone, “extends only to the

material contributed by the [compilation’s author] . . . and

does not imply any exclusive right in the preexisting material.”

Id. § 103(b). 11
      As   relevant    here,       compilations       made    up     of    individual

components    which       are     themselves        copyrightable         are    called

“collective works.”       A collective work is:

      a work, such as a periodical issue, anthology, or
      encyclopedia, in which a number of contributions
      constituting   separate   and  independent   works in
      themselves, are assembled into a collective whole.

Id. § 101. The
copyright in individual component works need not

be owned by the author of the collective work.                     See 
id. § 201(c) (“Copyright
in each separate contribution to a collective work

is distinct from copyright in the collective work as a whole,

and   vests   initially      in    the     author    of   the      contribution.”).

Indeed, the Copyright Act establishes a default presumption that

the author of a collective work does not own the copyright in

any component part:

      In the absence of an express transfer of the copyright
      or of any rights under it, the owner of copyright in
      the collective work is presumed to have acquired only
      the privilege of reproducing and distributing the
      contribution as part of that particular collective
      work, any revision of that collective work, and any
      later collective work in the same series.

Id. § 201(c) (emphasis
added).              However, this statutory language

clearly states that where, as MRIS alleges here, the author of a

collective    work    has       obtained     the    express       transfer      of   the

copyrights    in   each     separate       contribution      to    that    collective

work, Section 201(c)’s presumption of distinct ownership in the

collection’s component works does not apply.


                                           12
                                             B.

      We turn now to the first question presented: whether MRIS

has     failed     to     register      its       interest      in        the    individual

photographs with the Copyright Office prior to filing suit for

copyright infringement as required by the Copyright Act.                                    If

AHRN is correct, and the registrations obtained by MRIS do not

cover     the     photographs        themselves,         MRIS        may        not   assert

infringement of those photographs by AHRN in this action.                                  See

17 U.S.C. §§ 409, 411(a); Reed Elsevier, Inc. v. Muchnick, 
559 U.S. 154
, 157-58 (2010).

      It is uncontested that MRIS filed registration applications

with the Copyright Office for the copyrighted material in the

Database under          the    regulations        governing   automated          databases,

and     attained        corresponding         certificates           of     registration.

However, the parties dispute the scope of those registrations.

AHRN argues that MRIS’s “failure to identify names of creators

and titles of individual works as required by 17 U.S.C. § 409(2)

and (6) limits the registration[s] to the Database itself” and

therefore       that    “the    registration[s]        do[]     not       extend      to   the

individual elements in the Database.”                     Appellant’s Br. at 42.

MRIS disagrees, pointing to its indication on the registration

applications       that        its   Database         consists        of        pre-existing

photographic works, and emphasizing the lack of any specific

statutory    requirement         that   an    automated       database          registration

                                             13
list       the    names     and    authors         of    component     works     in    order      to

effectively          register          copyright         ownership    in   those       component

works.       For the reasons that follow, we agree with MRIS.

       Section        409     of        the       Copyright     Act     provides       that      an

application for registration of a compilation “shall be made on

a    form        prescribed       by    the       Register    of     Copyrights       and    shall

include,” as relevant here, the name of the author or authors,

the title of the work, and “an identification of any preexisting

work or works that it is based on or incorporates, and a brief,

general          statement    of       the    additional      material      covered         by   the

copyright claim being registered.”                         17 U.S.C. § 409.           As applied

to     a    collective        work       whose       author    has     also      acquired        the

copyrights in individual component works, the text of Section

409 is ambiguous at best.                     Some additional guidance is provided

in Section 408, which permits the Register of Copyrights to ease

the    burden       on    claimants          of    collective      works    by    promulgating

regulations to allow “for particular classes . . . a single

registration for a group of related works.”                                
Id. § 408(c)(1); see
also Kay Berry, Inc. v. Taylor Gifts, Inc., 
421 F.3d 199
,

205        (3d    Cir.    2005)        (explaining          that     the   Copyright         Act’s

provision for group registration is “based on Congress’s desire

to liberalize the registration process”) (citing H.R. Rep. No.

94-1476, at 154 (1976), reprinted in 1976 U.S.C.C.A.N. 5659,

5770).

                                                    14
       Pursuant     to     its    authority           under   Section      408(c)(1),     the

Register has promulgated rules allowing for group registration

of certain categories of collective works: automated databases,

related serials, daily newspapers, contributions to periodicals,

daily    newsletters,          and     published        photographs.         37    C.F.R.   §

202.3(b)(5)-(10).              The     provision        utilized     by    MRIS    for    its

quarterly registrations of the MRIS Database permits a single

registration       to     be    made      “for    automated      databases        and   their

updates or other derivative versions that are original works of

authorship.”        
Id. § 202.3(b)(5)(i). Under
this provision, the

author of an automated database may file a single application

covering up to three months’ worth of updates and revisions, so

long as all of the updates or revisions (1) are owned by the

same copyright claimant, (2) have the same general title, (3)

have a similar general content, including their subject, and (4)

are similar in their organization.                      
Id. Each registration must
also     comply     with       certain      notice,       publication,       and     deposit

formalities.        
Id. As in the
text of the statute, nothing in 37

C.F.R.    §   202.3(b)(5)         or      any    related      regulation      specifically

requires MRIS to list the name and author of every component

photograph     it       wishes       to   register       as   part    of     an    automated

database registration.

       Lacking clear statutory guidance on the matter, courts have

disagreed     on    how    to     apply     the       Copyright      Act’s    registration

                                                 15
requirement to collective works and their component parts.                             Some

courts    have   barred    infringement          suits   to    protect    copyrighted

component works for failure to comply with Section 409’s pre-

suit     registration      requirement          where    the    authors     of        those

component works were not listed in the application to register

the collective work.             See, e.g., Muench Photography, Inc. v.

Houghton Mifflin Harcourt Publ’g Co., 
712 F. Supp. 2d 84
, 94

(S.D.N.Y.    2010)      (“[A]sking        the    Court    flatly    to    ignore        the

requirement that the authors’ names be listed . . . goes a

bridge too far” in the context of automated databases); Bean v.

Houghton Mifflin Harcourt Publ’g Co., 
2010 WL 3168624
, at *4 (D.

Ariz. Aug. 10, 2010) (holding that registrations of collective

works      containing           numerous         photographs        by      different

photographers,       all    of     whom     assigned      their    rights        to     the

collective       work    author     prior        to     his    registration,           were

insufficient to permit each photographer to sue for copyright

infringement); Alaska Stock, LLC v. Houghton Mifflin Harcourt

Publ’g Co., 
2010 WL 3785720
, at *4 (D. Ala. Sept. 21, 2010)

(adopting    approach      taken    in    Bean    and    Muench    in    holding       that

registration of CD-ROMS as automated databases did not effect

registration of the copyrights in the individual images that

comprise the databases).

       On the other hand, some courts have recognized collective

work    registrations      as    sufficient        to    permit    an    infringement

                                           16
action on behalf of component works, at least so long as the

registrant owns the rights to the component works as well.                                     See,

e.g., Craigslist v. 3Taps, 
2013 WL 1819999
, at *9 (“Craigslist’s

registration       of      the     collective         work     (the    overall      Craigslist

website    and    database)         served       to    register       component         works    to

which Craigslist has an exclusive license, despite the omission

of individual authors from the registration application.”); Am.

Inst. of Physics v. Schwegman Lundberg & Woessner, P.A., 
2012 WL 3799647
,     at       *2   (D.     Minn.       July     2,     2012)       (concluding         that

plaintiffs’       registration           of    journals       as    collective      works       was

sufficient    to       satisfy      the       pre-suit         registration        requirement

vis-à-vis    the       individual        articles       contained        in   the    journals,

where the plaintiffs also owned (or exclusively licensed) the

copyrights       to    those       articles);         Pac.     Stock,      Inc.    v.    Pearson

Educ.,    Inc.,       
2012 WL 93182
,      at     *5     (D.   Haw.    Jan.    11,    2012)

(concluding       that       defendant        failed     to    show     plaintiff        had    not

validly registered its copyright interest in component works,

given the lack of specificity in the Copyright Act); Masterfile

Corp. v. Gale, 
2011 WL 4702862
, at *2 (D. Utah Oct. 4, 2011)

(finding that “[b]ecause [plaintiff] owns the constituent parts

of the collection the registration of the collection extends

copyright     protection            to    the     constituent           parts”)      (citation

omitted).



                                                17
      We   find   this    latter   approach     more   consistent       with   the

statutory and regulatory scheme. 10             Indeed, as for the trend

embodied in the former group of cases, “[t]he Copyright Office

is   optimistic    that    those   decisions      will     be    overturned    on

appeal.”     Final Rule, Deposit Requirements for Registration of

Automated Databases That Predominantly Consist of Photographs,

77 Fed. Reg. 40268, 40270 (July 9, 2012).                Bean, in particular,

is factually inapposite because it addresses the distinct issue

of   whether   individual    photographers      may    use   a    third    party’s

collective     work      registration      to   satisfy         their     pre-suit

registration requirement against subsequent infringers.

      Here, MRIS owned the copyright in each of the thousands of

component photographs that had been transferred to MRIS prior to


      10
        Notably, the government’s amicus brief in the appeal of
Bean currently pending before the Ninth Circuit explains the
Department of Justice’s position that, “if the author of a
collective work is also the author of the component works, or if
the authors of the component works transfer all rights in the
works to him, the author of the collective work may claim a
copyright in the component works that make up the collective
work,” even where the registration for the collective work fails
to identify the author and title of each component work.     See
J.A. 378 (citing 17 U.S.C. § 201(d)).    The amicus brief points
to Circulars issued by the Copyright Office, in which “the
Copyright Office has consistently taken the position that the
registration   of   a  collective   work   also   registers  any
independently copyrightable works within the collective work--
referred to here as ‘component works’--in which the claimant
owns all rights, even if the registration application does not
specify the titles and authors of the component works.” 
Id. at 380. 18
its automated database registrations--as we will discuss further

in Part C.          In each registration, MRIS listed photographs as the

basis    for    its       updated    claim.        As   the     court   articulated    in

Craigslist v. 3Taps, “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.”          
2013 WL 1819999
,    at   *10

(internal       citation       and    quotation         marks     omitted).      Adding

impediments to automated database authors’ attempts to register

their own component works conflicts with the general purpose of

Section 409 to encourage prompt registration, see U.S. Copyright

Office, Circular No. 1, 7: Copyright Basics (2012), and thwarts

the specific goal embodied in Section 408 of easing the burden

on group registrations, see Kay 
Berry, 421 F.3d at 204
.

      Before        concluding       our    analysis,      we    discuss   one    recent

regulatory change, though the parties did not clearly address

it.     In 2012 the Copyright Office promulgated, after notice and

comment, a final rule amending the regulations governing the

deposit requirement applicable to databases primarily composed

of    photographs.           See     Final    Rule,      Deposit     Requirements     for

Registration of Automated Databases That Predominantly Consist

of Photographs, 77 Fed. Reg. 40268 (July 9, 2012).                            Under the

new rule, effective August 8, 2012, “when a registration is made

for a database consisting predominantly of photographs, and the

                                              19
copyright      claim     extends     to        the       individual       photographs

themselves, each of those photographs must be included as part

of the deposit accompanying the application.”                        
Id. at 40270. “Identifying
portions and a descriptive statement will no longer

constitute a sufficient deposit.”               
Id. 11 However, this
amended

regulation was not in effect at the time of MRIS’s registrations

in this case, at which point no such requirement existed for

group registration of photographic component works.                       We will not

find MRIS’s compilation registrations inadequate for failing to

comply with later-added requirements.                 Furthermore, we note that

neither     the   Copyright     Office        nor    the     district     court    has

determined    that     the   MRIS   Database         consists    predominantly       of

photographs, and we decline to undertake that decision here.

      For    these     reasons,     we     endorse         the   district       court’s

conclusion that “MRIS’s identification of ‘photographs’ . . . as

preexisting material and the basis of the copyright claims in

its   copyright    registrations”        satisfied         Section   409’s     pre-suit

registration      requirement.       See      888     F.    Supp.    2d   at    706-07.

Consequently, MRIS is not barred from asserting infringement of


      11
         The final rule implements this change by adding
“automated databases that consist predominantly of photographs”
to the list of applications for which registrants are required
to provide all photographs covered by a registration as part of
the deposit. See 37 C.F.R. § 202.20(c)(2)(xx) (as amended August
8, 2012).



                                         20
its copyrighted photographs, which were registered as component

works in its automated database registrations, in the present

action.

                                               C.

     Having          determined         that      MRIS        satisfied      its       pre-suit

registration requirement, we turn finally to AHRN’s challenge to

the merits of MRIS’s copyright infringement claim.                                   MRIS must

prove    two    elements         to    establish        copyright      infringement:          (1)

ownership      of     a    valid       copyright;       and    (2)    AHRN’s       copying    of

constituent elements of the work that are original.                                  See 
Feist, 499 U.S. at 361
.           As AHRN does not dispute the second element on

appeal, we need address only copyright ownership.                              Specifically,

AHRN argues that a subscriber’s electronic agreement to MRIS’s

TOU does not operate as an assignment of rights under Section

204 of the Copyright Act.                      MRIS responds that an electronic

transfer       may    satisfy          Section        204’s    writing       and      signature

requirements,         particularly           in       light     of     the     later-enacted

Electronic Signatures in Global and National Commerce Act (the

“E-Sign Act”), 15 U.S.C. § 7001 et seq., effective October 1,

2000.    We agree.

     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

                                               21
owner of the rights conveyed or such owner’s duly authorized

agent.”       17 U.S.C. § 204(a) (emphasis added); see also 3 Nimmer

on Copyright § 10.03[A][1].                      Section 204(a) is intended “‘to

protect        copyright          holders        from         persons       mistakenly          or

fraudulently         claiming       oral    licenses          [or    transfers].’”             SCO

Group, Inc. v. Novell, Inc., 
578 F.3d 1201
, 1211 (10th Cir.

2009) (quoting Eden Toys, Inc. v. Florelee Undergarment Co., 
697 F.2d 27
, 36 (2d Cir. 1982)).                        The signed writing requirement

also    serves       the       purpose    of     “enhanc[ing]            predictability        and

certainty       of     ownership--Congress’s                paramount           goal    when    it

revised the Act in 1976.”                  Effects Assocs., Inc. v. Cohen, 
908 F.2d 555
,     557       (9th     Cir.       1990)     (internal         quotation         marks

omitted); cf. Schiller & Schmidt, Inc. v. Nordisco Corp., 
969 F.2d 410
,    412    (7th       Cir.     1992)       (Copyright         Act    “make[s]      the

ownership of property rights in intellectual property clear and

definite, so that such property will be readily marketable”).

       Significantly, Section 204(a)’s signed writing requirement

“is    in     fact    different      from       a     statute       of    frauds.”           Lyrick

Studios, Inc. v. Big Idea Prods., Inc., 
420 F.3d 388
, 391 (5th

Cir. 2005) (citing Konigsberg Int’l, Inc. v. Rice, 
16 F.3d 355
,

357    (9th    Cir.    1994)).           “Rather       than     serving      an    evidentiary

function      and    making       otherwise         valid   agreements          unenforceable,

under   §     204(a)       a   transfer     of      copyright       is    simply       not   valid

without a writing.”               
Id. (citation and internal
quotation marks

                                                 22
omitted).      Courts       have   elaborated         that     a    qualifying         writing

under Section 204(a) need not contain an elaborate explanation

nor any particular “magic words,” Radio Television Espanola S.A.

v. New World Entm’t, Ltd., 
183 F.3d 922
, 927 (9th Cir. 1999),

but   must   simply       “show    an    agreement       to    transfer         copyright.”

Lyrick 
Studios, 420 F.3d at 392
(citation omitted).

      Before delving into the E-Sign Act and the sufficiency of

the transfer here, we note one initial consideration deriving

from the particular relationship of these parties.                              Courts have

held that, in situations where “the copyright [author] appears

to have no dispute with its [assignee] on this matter, it would

be    anomalous    to     permit     a   third        party    infringer         to    invoke

[Section     204(a)’s       signed       writing       requirement]            against    the

[assignee].”         Eden    
Toys, 697 F.2d at 36
;       see    also     Radio

Television, 183 F.3d at 929
(adopting the rule of Eden Toys, and

listing other cases to do so).                 Put another way, Section 204(a)

“was intended to resolve disputes between owners and alleged

transferee[s], and was not intended to operate for the benefit

of a third-party infringer when there is no dispute between the

owner and transferee.”             Kindergartners Count, Inc. v. Demoulin,

249   F.   Supp.     2d   1214,     1221       n.22    (D.    Kan.       2003)    (internal

quotation    marks      omitted).        Although       MRIS       did   not     raise   this

argument, we nevertheless feel compelled to note the anomaly of

allowing AHRN to fabricate for its own benefit a dispute between

                                           23
MRIS    and    its     subscribers       over      copyright     ownership            in    the

photographs.

       The issue we must yet resolve is whether a subscriber, who

“clicks      yes”    in    response    to     MRIS’s      electronic       TOU   prior        to

uploading copyrighted photographs, has signed a written transfer

of     the    exclusive      rights     of     copyright       ownership         in        those

photographs         consistent    with       Section      204(a).          Although          the

Copyright Act itself does not contain a definition of a writing

or a signature, much less address our specific inquiry, Congress

has provided clear guidance on this point elsewhere, in the E-

Sign Act.

       The E-Sign Act, aiming to bring uniformity to patchwork

state legislation governing electronic signatures and records,

mandates that no signature be denied legal effect simply because

it     is     in     electronic       form.          15     U.S.C.     §     7001(a)(1).

Additionally, “a contract relating to such transaction may not

be   denied        legal   effect,     validity,       or    enforceability            solely

because an electronic signature or electronic record was used in

its formation.”            
Id. § 7001(a)(2). The
E-Sign Act in turn

defines “electronic signature” 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.”             
Id. § 7006(5). 24
     Although        the     E-Sign       Act       states      several     explicit

limitations, none apply here.              The Act provides that it “does

not . . . limit, alter, or otherwise affect any requirement

imposed by a statute, regulation, or rule of law . . . other

than a requirement that contracts or other records be written,

signed, or in nonelectric form[.]”                      
Id. § 7001(b). Because
Section 204(a) requires transfers be “written” and “signed,” a

plain     reading    of    Section     7001(b)          indicates    that   Congress

intended the provisions of the E-Sign Act to “limit, alter, or

otherwise affect” Section 204(a).

     Furthermore, 15 U.S.C. § 7003 specifies types of contracts

or records to which the provisions of Section 7001 shall not

apply.     See 
id. § 7003(a)-(b) (excepting,
inter alia, “statutes

. . . governing the creation and execution of wills, codicils,

or testamentary trusts”; “adoption, divorce, or other matters of

family    law”;     “court    orders      or    notices,       or   official    court

documents”;    and    “any    notice      of    .   .    .    the   cancellation   or

termination of health insurance or benefits or life insurance

benefits”).         Agreements       to    transfer          exclusive    rights   of

copyright ownership are not included in these exceptions. 12                       Nor


     12
        Section 7003 also explains that these exceptions are
meant to be phased out over time as consumer protections
surrounding e-signatures are bolstered.  15 U.S.C. § 7003(c)(i)
(“The Secretary of Commerce . . . shall review the operation of
the exceptions in subsections (a) and (b) of this section to
(Continued)
                                          25
does the enumerated list contain any “catchall” generic category

into which copyright transfers might possibly fall.                          We decline

to read in an invitation to create new exceptions piecemeal.

      AHRN’s      proffered         authorities       to        the     contrary      are

inapposite.      None mention the E-Sign Act; instead, AHRN points

to courts which have invalidated transfers in circumstances not

at   all     analogous--for        example,   where       there       was   no   written

agreement, but merely one party’s declaration after the fact

that he had assigned his copyright interest, see Am. Plastic

Equip., Inc. v. Toytrackerz, LLC, 
2009 WL 902422
, at *6 (D. Kan.

Mar. 31, 2009), or where an e-mail purporting to transfer the

relevant     rights    was   not     actually     sent     by    the    owner    of   the

copyright interest, see McMunigal v. Bloch, 
2010 WL 5399219
, at

*8   (N.D.    Cal.    Dec.   23,    2010).      We   do    not    find      these   cases

relevant to our present inquiry.

      There is little authority regarding the application of e-

signatures to instruments conveying copyrights.                        In what appears

to be the only case relying on the E-Sign Act in this context,

the Southern District of Florida held that the conveyance of a

copyright interest by e-mail was valid.                    See Vergara Hermosilla

v. Coca-Cola Co., 
2011 WL 744098
, at *3 (S.D. Fla. Feb. 23,



evaluate, over a period of 3 years, whether such exceptions
continue to be necessary for the protection of consumers.”).



                                         26
2011), aff’d by per curiam opinion, 446 F. App’x 201 (11th Cir.

Nov. 3, 2011).         In its brief analysis of the issue, that court

relied    on    the    purpose     of    Section    204,   which   is    to     “resolve

disputes between copyright owners and transferees and to protect

copyright       holders     from        persons    mistakenly      or    fraudulently

claiming       oral    licenses     or    copyright       ownership,”     not    to   be

“unduly burdensome” or to “necessitate[] protracted negotiations

nor    substantial        expense.”         
Id. (citations and internal
quotations      omitted).         The     court    reasoned    that     allowing      the

transfer of copyright ownership via e-mail pursuant to the E-

Sign   Act      accorded    with,       rather     than    conflicted     with,    this

purpose.

       Additionally, courts have held that agreements reached by

electronic means are not invalid pursuant to analogous statutory

requirements.          For example, the Federal Arbitration Act (the

“FAA”) specifies that its protections for arbitration agreements

pertain only to a “written provision” in any contract.                        9 U.S.C.

§ 2.     Courts have uniformly applied the E-Sign Act to subsequent

interpretations        of   the     FAA’s    written       provision     requirement.

See, e.g., Campbell v. Gen. Dynamics Gov’t Sys. Corp., 
407 F.3d 546
,     556    (1st    Cir.     2005)     (“[The    E-Sign     Act]     definitively

resolves the issue . . . as to whether an e-mail agreement to

arbitrate is unenforceable under the FAA because it does not

satisfy the FAA’s ‘written provision’ requirement, 9 U.S.C. § 2.

                                            27
By its plain terms, the E–Sign Act prohibits any interpretation

of the FAA’s ‘written provision’ requirement that would preclude

giving legal effect to an agreement solely on the basis that it

was in electronic form.”); Specht v. Netscape Comm’cns Corp.,

306 F.3d 17
, 26 n.11 (2d Cir. 2002) (assessing whether clicking

to download software created enforceable agreement to arbitrate,

and   noting     that    the    matter    of     whether     “the   agreement          is   a

‘written    provision’         despite    being       provided      to    users        in   a

downloadable electronic form . . . has been settled by [the E-

Sign Act],” although ultimately finding that consumers’ clicking

“yes” in the context presented in that case did not manifest

assent to license terms).

      We    find    this       analysis    helpful      in    reaching          the     same

conclusion in the context of the Copyright Act.                          To 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. 13                       Accordingly,



      13
        We make no comment (nor did the district court) as to
whether the subscribers’ assent to MRIS’s TOU constitutes a
valid  agreement   under  generally   applicable  principles of
contract law, or whether, as in 
Specht, 306 F.3d at 27
, it might
fail for lack of mutual assent.     AHRN waived this argument by
raising it for the first time in its reply brief. See McBurney
(Continued)
                                           28
we agree with the district court that MRIS is likely to succeed

against    AHRN   in   establishing     its   ownership   of   copyright

interests in the copied photographs.



                                 III.

     For the foregoing reasons, the decision of the district

court is

                                                               AFFIRMED.




v. Young, 
667 F.3d 454
, 470 (4th Cir. 2012), aff’d, 
133 S. Ct. 1709
(2013).



                                  29

Source:  CourtListener

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