E-Alert Case Updates

District Court Modifies Preliminary Injunction in Copyright Infringement Action

Metro. Reg’l Info. Sys, Inc. v. Am. Home Realty Network, Inc.
No. 12-cv-00954 (D. Md. Nov. 13, 2012)
by Wayne Heavener, Law Clerk
Semmes, Bowen & Semmes (www.semmes.com)

In Metropolitan Regional Information Systems, Inc. v. American Home Realty Network, Inc., the United States District Court for the District of Maryland clarified the scope of its preliminary injunction to enjoin American Home Realty Network, Inc. (“American”) from displaying component photographs from a database maintained by Metropolitan Regional Information Systems, Inc. (“Metropolitan”), as opposed to underlying textual information. The court had previously issued a preliminary injunction preventing American from displaying any content derived from Metropolitan’s real estate database. The court reasoned that Metropolitan failed to demonstrate that the database’s underlying textual data, such as real estate listings, were under copyright. Therefore, the court clarified the scope of its injunction to reach only the database’s photographs. However, the court left open the possibility that it would revise its order should discovery reveal that American is displaying copyrightable textual information.

Metropolitan brought claims of copyright infringement against American, alleging that American had copied and displayed copyrighted photographs on NeighborCity.com. These photographs were part of an entire compilation of real estate listings from Metropolitan’s database, and contained Metropolitan’s mark and copyright notice. Metropolitan permitted its subscribers to assign copyrights in their photographs per its online Terms of Use Agreement, and their photographs then become part of the Metropolitan database. Metropolitan moved for a preliminary injunction, and American moved to dismiss. American argued that Metropolitan never actually owned the copyright to its photographs because the assignments thereof failed to comply with the Copyright Act’s written signature requirement. On August 24, 2012, the United States District Court granted Metropolitan’s Motion for Preliminary Injunction (“August 24 Order”), enjoining American from any unauthorized copying, reproduction, or public display of copyrighted content from Metropolitan’s database of photographs. In reaching its decision, the court reasoned that Metropolitan had established a likelihood of success on the merits of its action because (1) Metropolitan owned a valid compilation copyright in its database, and (2) American had copied constituent, original elements of the Metropolitan’s database. Accordingly, the court denied American’s Motion to Dismiss.

After the court issued its August 24 Order, American brought a Motion to Reconsider the court’s preliminary injunction, and a Motion to Clarify the injunction’s scope. With respect to its Motion to Reconsider, American argued that the court committed a clear error of law in holding that American was not entitled to judgment as a matter of law on Metropolitan’s infringement claims. Furthermore, American alleged that the court’s Order was deficient because it made no mention of the Copyright Act or the Electronic Signatures in Global and National Commerce Act (“E-SIGN”); therefore, the court failed to explain how Metropolitan’s Terms of Use Agreements served to transfer its subscribers’ copyrights. If, however, the court was unwilling to reconsider its Order, American also argued that the August 24 Order failed to comply with the specificity requirements of FED. R. CIV. P. 65(d). In particular, American sought clarification that the injunction applied only to Metropolitan’s photographs and not its textual real estate listings. Both Metropolitan and American sought modification of the Order, pursuant to Rule 65(c)’s requirement that a preliminary injunction be accompanied by a security “in an amount that the court considers proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined or restrained.” FED. R. CIV. P. 65(c).

Writing for the United States District Court for the District of Maryland, Judge Alexander Williams denied American’s Motion to Reconsider the court’s August 24 Order. The court rejected American’s argument that denying American judgment as a matter of law constituted clear error. Rather, Metropolitan complied with the Copyright Act’s written signature requirement because its subscribers supplied electronic signatures as defined under E-SIGN. Thought the court acknowledged that its August 24 Order did not discuss the Copyright Act’s written signature requirement or E-Sign, the court’s Memorandum Opinion relevant thereto stated that “[Metropolitan] appears to have obtained these copyrights by assignment when the photographs were uploaded to the MRIS Database by subscribers.” Metro. Reg’l Info. Sys, Inc. v. Am. Home Realty Network, Inc., No. 12-cv-00954, slip op. at 11 (D. Md. Nov. 13, 2012). Therefore, the court properly exercised its authority issuing the preliminary injunction.

The court agreed with American that its Order was insufficiently specific under Rule 65, and amended its Order to enjoin the unauthorized copying, reproduction, public display, or public distribution of Metropolitan’s photographs only. In reaching its conclusion, the court noted that a copyright on a factual compilation is thin, and that copyright protection extends only to those components of a work that are original. However, the court provided that, if during discovery Metropolitan identifies an original selection and arrangement of content, or that American has copied particular copyrightable textual elements, the court would be willing to revisit the scope of the preliminary injunction. The court also modified its August 24 Order to comply with Rule 65(c)’s requirement that a security be given by the party seeking a preliminary injunction, and accordingly ordered that Metropolitan post a bond of $10,000.