Licensing to Realtors Property Resource (RPR) and Others — Things to Consider
If one thing is true about the world of MLS today, there is no shortage of discussion topics. MLS are working in a rapidly changing and uncertain environment, and there’s plenty of advice and crystal ball reading to satisfy everybody’s needs. Now at the center of the fray is RPR (REALTORS Property Resource™). What will it be when it launches? What will it become? How will it change MLS services? Will the FTC or DOJ have any concerns? The list goes on. The advent of RPR does, however, bring home a reminder to MLS executive officers and boards of directors that certain fundamentals should not be discarded because the of the glitz and promise of any new technological tool or resource, whether RPR or any other service.
When any vendor, service provider, or potential licensee knocks on the door of an MLS requesting access to or a feed of listing content, several matters should be given due and thoughtful consideration, regardless of whether the listing feed is required by law, policy, or otherwise. Here is a list of things for consideration in a license agreement, and questions that should be asked of any potential licensee. No access should be granted to or feed of listings made without a written and signed license agreement. Obviously all of these issues do not apply to all licensing arrangements, but similarly, this list is certainly not comprehensive. Unless there is a fatal flaw, license agreements are legally enforceable documents, and will bind the parties to the terms, conditions, and covenants in the license agreement. MLS hold the valuable assets of all of their participants, and decision-makers should give thoughtful consideration to each of these issues.
I debated whether to break this into multiple posts, as was recommended by a seasoned friend in the industry, but in the interest of getting this information in your hands, I am dumping a complete checklist in one post. Happy reading! John
What is being requested?
- Does the licensee want access to an IDX database, VOW database, or other combination of listing elements? Is the licensee requesting access to or a feed of other information, such as the membership database?
- What is the MLS obligated to provide as a matter of NAR policy, local MLS policy, or law? Is the licensee request for more than the MLS is required to give?
- Is the nature of the database clearly defined? What will be included in the feed of listing content, and what will not be included?
- Is it clear what constitutes confidential information and how the use of that information is different from use of the other database information?
- Does the MLS have an obligation to give notice of the license to its participants under Policy Statement 7.85? (“Use of listings and listing information by MLSs for purposes other than the defined purposes of MLS requires participants’ consent.”)
- What are the longer-term implications of providing the license?
What is the scope of the license?
- For what specific purpose is the listing feed being requested? Does the license agreement clearly identify that purpose?
- Does the license agreement expressly provide what the licensee may not do with the listing content? May the licensee repurpose the listing content?
- May the licensee provide a feed of listing content to third parties without the limitations on use imposed on the licensee?
- Does the MLS know all of the ultimate users of the listing content?
- Does the license agreement use the term “perpetual” in describing the license? Is it really perpetual?
- Is the license non-exclusive, and does it state that? If the license is exclusive as to a type of service or class of vendor or service provider, what are the longer-term implications of excluding other potential future opportunities?
Does the license agreement provide for the payment of fees or other consideration?
- Are the fees and when they are due clearly described?
- Is any other consideration clearly identified?
- What remedies does the MLS have if payments or consideration are not made timely? Payment of interest? Late charges? Right to terminate?
Where will the licensee store the listing content?
- Will the licensee’s service provider/host provide adequate security for the servers?
- Will the licensee ensure that unauthorized third parties do not have access to the listing content?
- What rights will the service provider/host have with respect to listing content?
- What rights will be grant to someone with credentials?
- If the service provider/host allows a breach of security, does the MLS have a cause of action against the service provider/host?
- Are the service provider/host and licensee both obligated to comply with any security rules, limitations, or standards imposed by MLS? Has MLS clearly identified such standards?
- Does the MLS have any liability to licensee or its service provider/host if the MLS server has a bug or is unavailable?
Are users of the content obligated to comply with limitations on their use of the listing content?
- Are the terms of use enforceable?
- Do the terms of use provide limits on the use of listing content?
- Is the licensee requiring representations and warranties regarding ownership of copyright protected listing content?
- Does the MLS have all of the applicable rights so it can make the representation and warranty? Does it have rights from property sellers, sales licensees/agents, brokers, photographers, virtual tour providers, and anyone else who may be contributing to listing content?
- What are the licensee’s remedies for breach by the MLS?
- Does the MLS indemnify the licensee if there is a breach of warranty or infringement?
- May the MLS expressly disclaim such warranties?
Does the license agreement clearly identify the intellectual property elements?
- Does it accurately identify who owns what intellectual property? What is the ownership based on?
- Does the ownership include applicable software application rights?
Is the MLS assuming risk for the listing content?
- Is the MLS indemnifying the licensee for infringement, or any other potential claim?
- Has the MLS limited its liability to the licensee?
- Is the MLS making implied warranties without any warranty language in the license agreement?
- Has the MLS limited the licensee to specific remedies and excluded all others?
What remedies does the MLS have if the licensee fails to perform?
- What rights does the MLS have if the licensee, or any downstream person, uses the listing content in a way not permitted under the license agreement?
- Does the licensee indemnify MLS? Does licensee have the financial strength to back the indemnification? Should the MLS require licensee to be insured?
May the MLS terminate the license agreement, and on what terms?
- How long is the term of the license agreement? Is it short enough that if the deal is bad the MLS can modify the terms through a new license agreement?
- What happens to the listing content on termination?
- Does the licensee have a transition right, and is the MLS obligated to cooperate and assist the licensee?
Does the MLS have the right to audit the systems of the licensee to confirm compliance with the terms of the license agreement?
- Does the MLS have off-site access?
- Is the right exercisable at any time, or only after a default?
- Is the licensee liable for the cost of the audit if the licensee is found not to be in compliance?
What if there is a dispute under the license agreement?
- Does the license agreement provide for litigation or arbitration, and where will such proceedings be held?
- What law will govern?
- Do the parties need to mediate any dispute before proceeding with arbitration or litigation?
- Does the license agreement adequately protect the intellectual property rights of the MLS, and the MLS as the steward of the rights of its participants?
What privacy rights need to be protected?
- What confidential information will be used and displayed, and where?
John Rees
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Thanks, John. This is another good resource for MLSs considering licensing data to RPR.
-Brian
Thanks so much for this well thought out list. The post is timely for our MLS (Tucson) and I am glad you did not break it up.
John, Good post. This provides a nice check-list of items to consider when developing a content license agreement. I always recommend to my clients that they retain capable legal counsel for such matters. Hope you are well.
Hey guys
Super, super effort! Getting solid answers to these questions is such a recipe for success regardless of the intended use by the licensee. Thanks for making this available for our use!
David
Great article and please add me to your mailing list,
Thanks
Great list. I have always wondered what RPR was all about and this list gives me a much better understanding. As a member of the MLS it makes sense to know where my information is going, who will have access and if they will be able to reconstitute it in some form other than what was input by the listing agents. Great work. Thanks for the comprehensive analyses.
Well done, John. Great list of questions for any data licensing agreement.
Gregg
Well articulated. Questions are useful. The Ohio Association of Realtors is convening a special review group to meet with RPR’s president on March 1 at our offices in Columbus.