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Appraiser Wins Copyright Suit: Now What?

And they said it couldn’t be done.

Tim Vining, MAI becomes the first appraiser in the U.S. to successfully sue and win for copyright infringement of his intellectual property – his appraisal.

The culprit is a real estate broker who lifted Vining’s work for use in a sales brochure. According to Vining, who specializes in the appraisal of agricultural properties in Washington State, this was not the first time he found his work in reports that he did not author and for which he was not paid. This time he decided to do something about it.

(Tim Vining tells his story in the upcoming issue of Working RE Magazine, mailing in about three weeks. Subscribe here: www.workingre.com.)

Now What?
The case resolves the debate whether appraisal reports are copyrightable. Clearly they are. But now what?  What does this mean for the average appraiser, which in many ways Tim Vining is not.  And can copyright protection help in the struggle with AVMs, which appraisers have long suspected are fueled by data lifted from their reports without their permission. (story continued below)

(story continued)
Vining’s presentation at the a la mode Winter Convention in Las Vegas this month makes clear that while the results of his case are encouraging, the circumstances are unique: the property in question is a large-scale diversified agricultural enterprise of several thousand acres. Work from his 250-page report is unique and easily recognizable. Also unique are the potential damages; reports such as these take months to complete and command fees upwards of $20,000.

Controlling the Data
While it would be much more difficult for a residential form filler to identify his or her work in another appraisal report and to prove infringement, many appraisers at the show agreed that it is not impossible. 

In any case, the point of copyrighting appraisals is not to seek a large windfall but to take control of your product, according to Matt Barr, Communications Director at a la mode. "Copyright isn't a get rich quick scheme for appraisers. It’s a tool that appraisers can use to either prohibit the unauthorized use of their work or to get paid if they do decide to license it,” said Barr. 

“There's a great parallel to the Multiple Listing Service (MLS). AVM companies would love to use real time MLS data but they can't because the MLS won't sell it. That's a business decision they have made. Appraisers on an individual basis should be able to make the same licensing decision. Many will agree to unlimited use provided that they're paid enough,” said Barr. 

Another hurdle is that the copyright fee to register a work is $35, which makes it prohibitively expensive for appraisers to register every report. Interestingly, a work does not have to be registered to prove infringement and win an award, as in the Vining case (Vining’s report was not registered with the Copyright Office). Creative work, including appraisal reports, is protected at the moment of creation. Vining’s case was supported by the inclusion of the copyright symbol © and date in the report, leaving no question as to ownership of the work. Adding this verbiage is free and does not require registration. Vining adds the verbiage to his reports routinely and this time it paid off.  (story continued below)   

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(story continued)
Though Vining’s award is considerable, he was not awarded statutory damages because he had not registered his work with the Copyright Office within 90 days of creation. If a work is registered ($35 fee), statutory damages can be as high as $150,000 per occurrence plus attorneys fees and costs.  

Barr and others maintain that once AVM companies get stung a few times by large settlements, they will no longer feel comfortable using data without permission. 

"In class we talk about the difference between having enough evidence to win in court and having enough evidence to write, or better yet, have your attorney write a cease and desist letter,” said Barr. “That cease and desist letter will end up on the desk of the AVM/data company's lawyer, who will be risk averse and advise his/her client that they'd better start thinking about paying for all this data they're currently getting for free.”

Poisoning the Well
Barr concedes that not all appraisers will register all or even some of their reports with the Copyright Office. But, the theory goes, if just a small percentage copyright every 10^th or 15^th report, that is enough to poison the well and make AVM providers pause before dipping in for a free drink.  

“Data strippers won't know which reports are registered. The consequences for stealing a report that is registered with the Copyright Office are severe, to say the least. Risk aversion will make these companies negotiate with all appraisers, even the ones who aren't in front of the issue,” Barr said.

Appraisal Advocacy Coalition
Also unveiled at the a la mode show is the Appraisal Advocacy Coalition, a non-profit organization dedicated to the protection and support of residential appraisers (www.appraisaladvocacy.org). Look for more on this future editions of Working RE.

Related stories Leveraging AVM Technology  What business are you in? It’s a question that every forward-looking appraiser ought to be asking themselves right now. Can AVMs Work for You? - by Bradley H. Ellis, IFA, RAA By now, most of us have utilized technology to change the way we do business. We’ve been able to leverage technology to work faster, smarter and cheaper. But what do we do about AVMs, which many feel will eventually put appraisers out of business?  Free Book Download: 143-page book entitled Appraising in the New Millennium: Due Diligence & Scope of Work,      NEW - Help Wanted/Available - Trainees-Mentors (bulletin board)

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