News: Section Councils

CMLS Legal Section Council: Revisiting DMCA Safe Harbor After The Final Rule

Monday, July 10, 2017   (0 Comments)
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Much has been written about the Digital Millennium Copyright Act, and the Safe Harbor it provides from financial liability for copyright infringement of certain content posted to a website. As most know, the Safe Harbor can provide benefits to MLSs and their brokers.


Interim Rules, issued under the DMCA, provided for a manual filing system that allowed “online service providers” to file a single Designation and list "alternative names" on that single Designation. Some MLSs relied on the Interim Rules to file a single Designation listing all of its broker members as “alternate names” and listing the MLS as the “Designated Agent” for receipt of infringement claims.


Brokerage firms would often file separately and list all of their various websites and agent websites on a single Designation. Although the manual system was cumbersome, it was reasonably cost effective and provided for a one time filing with additional fees only being charged when new alternate names were added.


The Final Rule, adopted effective Dec. 1, 2016, was primarily intended to implement a new electronic system. It is a new system will make the filing process significantly easier and more efficient. However, the Final Rule also raises uncertainty as to application of the Safe Harbor to the real estate industry and the cost effectiveness of the Safe Harbor.


First, the Final Rule states that “separate legal entities” are not considered "alternate names" that can be filed on a single Designation. This could significantly impact the cost to an MLS or Broker by requiring them to complete numerous Designation forms (and in the case of MLSs possibly thousands of forms) where previously only one designation was filed. Although the Final Rule does significantly reduce the cost of filing a Designation to $6 (including unlimited alternate names), each Designation must be renewed every 3 years.  


Moreover, the Final Rule provides for a phase out of the manual system, which will require any Designations filed under the prior Interim Rules to re-register before December 31, 2017. Failure to re-register during this transition period will result in the loss of the Safe Harbor.


The National Association of REALTORS (NAR) has noted the importance and benefits of the Safe Harbor to the real estate brokerage industry in a letter to the U.S. Copyright Office dated Feb. 21, 2017. 


Although supportive of the electronic filing system, NAR points out several concerns regarding the Final Rule, including the additional cost of filing multiple applications for real estate brokers and professionals that are separate legal entities. As of June 2017, the Copyright Office had not responded to NAR’s letter and it is unlikely that any requested clarification can or will be provided by the end of the transition period on Dec. 31, 2017.


Although the DMCA Safe Harbor remains a valuable tool for limiting potential copyright infringement liability, questions remain as to the most cost effective and proper way that MLSs and real estate brokers can comply with the Safe Harbor. MLSs are encouraged to consult with their legal counsel to address the requirements for filing and re-registration of interim filings and how they can educate and assist their broker members in complying with the DMCA Safe Harbor.


This article was by submitted as a special collaborative effort on behalf of the CMLS Legal Section Council