Bob Butters - Arnstein & Lehr, LLP
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MLS Content & Data Licensing Agreements

MLS Content & Data Licensing Agreements

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Bob Butters - Arnstein & Lehr, LLP Bob Butters - Arnstein & Lehr, LLP Presentation Transcript

  • ISSUES FOR MULTIPLE LISTING SERVICES TO CONSIDER BEFORE LICENSING DATA TO REALTOR® PROPERTY RESOURCE (RPR) OR FIRST AMERICAN CORE LOGIC (FIRST AMERICAN) Robert d. Butters, Esq. Arnstein & Lehr LLP 120 South Riverside Plaza, Suite 1200 Chicago, Illinois 60606 312-876-6933 Email: rdbutters@arnstein.com
  • RPR MLS CONTENT LICENSE AGREEMENT
  • Basic Business Considerations
    • Value of RPR as a Free Member Benefit
    • Access to RPR Public Records
    • No Revenue Share
    • RPR’s Total Control over “RPR Offerings” and “RPR Customers”
    • RPR “Licensed Content” Includes Active, Pending and Off Market (Sold) Listings and Roster Information
  • License Agreement Issues
      • Definitions (Section 1)
          • “ Authorized RPR User” (Includes Thompson Brokers without any limitations on level of use. Includes other Associations of REALTORS®)
          • “ Licensed Content” (Includes all listing categories and roster information)
          • “ Multiple Listing Service” (Traditional Definition)
          • “ RPR Customers” (Any non-NAR Member)
          • “ RPR Offerings” (Only excludes products targeted at Authorized RPR Users and property owners)
  • License Agreement Issues
      • License Grant (Section 2)
          • Levels of access available to Thompson Brokers Is not defined nor is whether RPR Content can be used to create BPOs.
          • Does not address broker “opt out” right
          • Grants RPR rights to combine RPR Licensed Content with data from other sources.
          • Rights of Authorized Users to display RPR Content on VOWs or IDX sites is not clear.
          • Non-compete is limited to MLS’ “Market Area” and is limited to definitions of “MLS” in Section 1.
  • License Agreement Issues
    • Proprietary Rights (Section 5)
          • Only recognizes MLS proprietary rights in “selection, compilation, and arrangement” of Licensed Content in MLS Databases.
  • License Agreement Issues
    • Liability Provisions/Limitations (Section 8)
        • No warranties by RPR
        • MLS liable for actual damages; only consequential or punitive damages are excluded
        • RPR indemnifies MLS only for RPR’s own conduct, but not for conduct of RPR Customers or Authorized RPR Users who are not MLS’ Participants/Subscribers.
  • License Agreement Issues
    • Term and Termination (Section 9)
          • One year term with automatic rollover. No right of either party to terminate without cause.
  • License Agreement Issues
    • Authorized RPR User Terms of Use Agreement (Exhibit A)
        • Grants license to “Realtor Associations”
        • Does not expressly define limits on access of different types of Authorized Users.
  • First American MLS Data License Agreement
  • Basic Business Considerations
        • Data for Dollars
        • Exclusive versus Non-Exclusive (More $$ and Use of ValueMap Property Valuation Product if Exclusive)
        • Exclusive Option would preclude any agreement with RPR or similar company.
        • Open Ended “Permitted Use” Definition
        • No Direct Consumer Access to MLS Data
  • Specific License Agreement Issues
      • Definitions (Section 1)
        • “ MLS Data” (includes all listing statuses, but does not address broker “opt out.”)
        • “ Permitted Use” (means any “derivative” created by First American)
        • “ Risk Management” (virtually all B2B uses in financial sector)
  • Specific License Agreement Issues
    • License Grant (Section 2)
        • Exclusive or Non-Exclusive
        • Consumer applications excluded
        • First American can continue to use MLS Data for 12 months after termination.
        • No acknowledgement of MLS’ intellectual or proprietary rights in MLS Data.
  • Specific License Agreement Issues
    • Consideration (Section 3)
        • Revenue Share does not include AVM Revenue
        • MLSs agreeing to exclusivity can use Realist ValueMap product
  • Specific License Agreement Issues
    • Term/Termination (Section 4)
        • Three year initial term with one year renewal terms unless 90 days notice of non-renewal
        • No termination without cause
        • Post termination MLS Data use does not apply if agreement is terminated because of First American’s breach
  • Specific License Agreement Issues
    • Indemnification/Disclaimers (Section 7)
        • MLS must give a non-infringement warranty
        • MLS must indemnify First American for third party infringement claims based on MLS Data
        • First American will indemnify MLS only if agreement is exclusive
        • No First American warranties, including any warranty of non-infringement of First American “Permitted Uses.”
  • Specific License Agreement Issues
    • Liability Limitations (Section 8)
        • First American’s and MLS’ damage liability is limited to monies paid to MLS during 12 months prior to claim
        • Indemnity obligations (if any) are excluded from limitations
  • Specific License Agreement Issues
    • Royalty Payments (Exhibit A)
        • Royalties based on First American Revenues derived from pool of data from all MLSs, and percentage of pool represented by MLS’ “Active Listings”.
        • Non-Exclusive Royalty=7%
        • Exclusive Royalty=30%
        • Additional Royalty percentages if MLS is a First American “client”, and if Active Listings in Pool exceed 1M, 1.75M, and 2.5M
  • Conclusion
  • RPR MLS Content Agreement
        • Use of RPR Functionality—Very Robust
        • Access to “Free” RPR Public Records
        • No Revenue Share
        • RPR has rights to use Licensed Content to create unrestricted “RPR Offerings” and market them to any non-NAR Member
        • Ambiguous provisions on use of RPR Content by Thompson Brokers and NAR-Member “Authorized RPR Users”
        • Limited recognition of MLS’ proprietary rights in Licensed Content
  • First American MLS Data License Agreement
        • Primarily a Revenue Share Proposition
        • Three year commitment
        • Open ended grant of right to “Permitted Uses” of MLS Data
        • Minimal Revenues if Non-Exclusive
        • Enhanced Benefits and Protections only if Agreement is exclusive
        • Liability exposures from lack of First American indemnity promise (if non-exclusive) or warranties
  • Questions?