It's not his case yet, but attorney J.T. Westermeier, partner in the firm of DLA Piper Rudnick Gray Cary US LLP, says the Department of Justice is off-base in suing the NAR for its Internet Listings Display policy.
The policy that NAR spent nearly four years developing was designed to allow brokers to share their listings in online advertising environments with each other (i.e. websites) without violating the ownership rights that listing brokers have on their own listings in the MLS cooperative environment.
NAR claims the DOJ is suing the trade organization over policies that were scrapped that allowed brokers to opt-out of sharing their listings online with competitors that they were uncomfortable doing so, while the DOJ says it has every right to pursue NAR because the new ILD policy still allows brokers to opt-out. However, there's a difference; if the broker's opt-out, they aren't allowed to put other brokers' listings on their websites that come from the MLSs.
"I do not understand how antitrust claims can be based on "defunct NAR policies" that do not exist and were never enforced," begins Westermeier. "Policies by themselves, as a general rule, do not violate antitrust laws. Antitrust violations arise where a policy that has been demonstrated to be an unreasonable restraint of trade has been enforced. The enforcement is what usually causes the objectionable restraint of trade. In my view, defunct policies that were never enforced do not violate antitrust laws."
Westermeier says his firm does represent some MLSs, so he has an active interest in the outcome of the DOJ-NAR dustup. He believes at this point that the DOJ case against NAR fails to consider the fact that real estate property listings are protected by copyright, and that makes a huge difference in antitrust analysis.
"No one should question that the photographic images and expressive textual content contained in property listings are protectible by copyright," explains Westermeier. "Under the copyright laws, each copyright owner of any copyrighted property listing has five exclusive rights: one of these exclusive rights is the right to display copyrighted works in public. Copyright owners have the exclusive right to display publicly and to authorize others to display their copyrighted listings. The copyright owners of property listing content are not subject to compulsory licensing. The copyright owner can refuse to permit their listings to be displayed publicly by third parties even if the third parties are brokers who believe to compete effectively, brokers must be able to show customers virtually all relevant listings in the MLS system."
One point the DOJ never seems to get is that the listings are available to all members of the MLS to show to clients. What they are not available for is advertising to get customers by anyone other than the listing broker. That's why NAR has worked on an equitable policy.
"This is the nature of intellectual property and the owner's right to exclude others from accessing or using the property," says Westermeier. "In the United States, we strike a balance between our intellectual property laws and our competition laws. The right to license copyrighted materials (and to dictate the terms of such license) is the untrammeled right of the intellectual property owner."
He says, "In my view, the VOW policy (virtual office website policy in which brokers could opt out of sharing their listings with any or all competitors for online publication) challenged by the DOJ is totally consistent with the broker's exclusive copyright rights within the permitted scope of their copyright rights are not engaged in any form of anticompetitive conduct in violation of the antitrust laws."
"I just believe the real estate industry has very strong arguments that should be asserted more aggressively," says Westermeier. "I have advocated copyright protection for property listings. I realize the view is somewhat controversial, but I believe if the DOJ understood that listings are protected by copyright DOJ would have a different view of its likelihood of success."
