Bob Butters - Arnstein & Lehr, LLP


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MLS Content & Data Licensing Agreements

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Bob Butters - Arnstein & Lehr, LLP

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