Metropolitan Regional Information Systems, Inc. v. American Home Realty Network, Inc. et al
MEMORANDUM OPINION. Signed by Judge Alexander Williams, Jr on 8/24/2012. (rss, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
INFORMATION SYSTEMS, INC.,
AMERICAN HOME REALTY NETWORK, *
INC., et al.,
Civil Action No. 12-cv-00954-AW
Plaintiff Metropolitan Regional Information Systems, Inc. (“MRIS”) brings this action
against Defendants Jonathan J. Cardella (“Cardella”) and American Home Realty Network, Inc.
(“AHRN”). The following motions are pending before the Court: (1) Cardella’s Motion to
Dismiss, Doc. No. 23; (2) AHRN’s Motion to Dismiss, Doc. No. 24; (3) MRIS’s Motion for
Leave to File a Surreply to Defendants’ Replies in Support of their Motions to Dismiss, Doc. No.
30; and (4) MRIS’s Motion for Preliminary Injunction, Doc. No. 16. The Court has reviewed the
motion papers and finds no hearing is necessary. See Loc. R. 105.6 (D. Md. 2011).
For the reasons articulated below, the Court GRANTS Cardella’s Motion to Dismiss for
lack of personal jurisdiction, DENIES AHRN’s Motion to Dismiss, DENIES as moot MRIS’s
Motion for Leave, and GRANTS MRIS’s Motion for Preliminary Injunction.
FACTUAL AND PROCEDURAL BACKGROUND
The following facts are taken from the Complaint and the parties’ briefs and attached
exhibits. Plaintiff MRIS is a Delaware corporation with its principal place of business in
Rockville, Maryland. MRIS provides what is known in the real estate industry as “multiple
listing services” (“MLS”). Specifically, MRIS facilitates real estate transactions in the midAtlantic region by operating and maintaining an automated database consisting of compiled
property listings and related informational content (the “MRIS Database”). To use the database,
real estate brokers and agents are required to execute a subscription agreement. Subscribers
agree to upload their real estate listings to the MRIS Database and to assign to MRIS the
copyrights in each photograph included in those listings. Upon payment to MRIS and subject to
terms and conditions, subscribers are granted access to all the real estate listings in the MRIS
Database and the right to display those listings on their own websites via a licensed data feed.
MRIS oversees the use and content of the listings to ensure that subscribers are complying with
MRIS’s rules and regulations and information quality standards. In addition to the services
provided to subscribers, MRIS makes limited content available to consumers through a free
MRIS files its claims of copyright ownership in the MRIS Database with the U.S.
Copyright Office (“Copyright Office”) each quarter, in accord with the registration procedures
applicable to automated databases. The copyright registrations for the MRIS Database list “text”
and “photographs” as pre-existing material and the basis of the copyright claims. To protect its
intellectual property, MRIS affixes its mark and copyright notice—i.e., “© 2012 MRIS” —to
photographs in the MRIS Database.
Defendant AHRN is a Delaware corporation with its principle place of business in San
Francisco, California. Defendant Cardella is the Chief Executive Officer of AHRN. AHRN is a
registered California real estate broker with nine employees. AHRN owns and operates the
website NeighborCity.com, a national real estate search engine and provider of real estate agent
ratings and rankings. The data displayed on NeighborCity.com comes from real estate brokers
and agents, county tax assessors’ offices and other public records, and through foreclosure data
providers and FSBO (“For Sale by Owner”) aggregators. The website also incorporates school
data and maps from third party providers. NeighborCity.com derives its own performance
metrics, statistics, and rankings for about one million real estate agents throughout the country.
Users of the NeighborCity.com website can find nationwide real estate listings using search
parameters such as geographic region and price range. If users find a real estate agent or a
property that interests them, NeighborCity.com connects the user with the local agent of choice
or a recommended agent for the requested property. NeighborCity.com is compensated for its
agent matching and referral services if the lead turns into a sale.
AHRN has not acquired a license or permission from MRIS to reproduce, display, or
otherwise use the MRIS Database. However, NeighborCity.com has displayed Maryland real
estate listings containing photographs from the MRIS Database. On November 18, 2011, MRIS
sent a letter to AHRN putting it on notice of the alleged copyright infringement and demanding
cessation of all infringing activities. AHRN responded on December 21, 2011 by suggesting that
the parties develop a “custom license” whereby AHRN could continue to use the listing data to
which MRIS claimed a proprietary interest. MRIS rejected AHRN’s suggestion on January 26,
On March 28, 2012 MRIS filed suit in this Court alleging direct copyright infringement
against AHRN for the reproduction, public display, and creation of derivative works from the
copyrighted MRIS Database, inducement of copyright infringement and contributory copyright
infringement against AHRN, vicarious copyright infringement against AHRN and Cardella, false
designation and other claims under the Lanham Act against AHRN, and tortious conversion and
unjust enrichment against AHRN. On April 4, 2012 MRIS filed a motion for a preliminary
injunction. Defendants filed separate motions to dismiss on May 11, 2012 for lack of personal
jurisdiction, improper venue and failure to state a claim. Following briefing on the motions to
dismiss, MRIS filed a motion for leave to file a surreply on June 19, 2012.
DEFENDANTS’ MOTIONS TO DISMISS FOR LACK OF PERSONAL
A. Standard of Review
When a court’s power to exercise personal jurisdiction over a nonresident defendant is
properly challenged by a motion under Federal Rule of Civil Procedure 12(b)(2), “the
jurisdictional question is to be resolved by the judge, with the burden on the plaintiff ultimately
to prove grounds for jurisdiction by a preponderance of the evidence.” Carefirst of Md., Inc. v.
Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 396 (4th Cir. 2003) (citing Mylan Labs., Inc. v.
Akzo, N.V., 2 F.3d 56, 59–60 (4th Cir. 1993)). If the existence of jurisdiction turns on disputed
factual questions the court may resolve the motion on the basis of an evidentiary hearing. See
Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989). However, if the court rules on the motion
without conducting an evidentiary hearing and relies solely on the basis of the pleadings,
allegations in the complaint, motion papers, affidavits, and discovery materials, “the plaintiff
need only make a prima facie showing of personal jurisdiction.” Screen v. Equifax Info. Sys.,
LLC, 303 F. Supp. 2d 685, 688 (D. Md. 2004) (quoting Carefirst of Md., 334 F.3d at 396)); see
also CoStar Realty Info., Inc. v. Field, 612 F. Supp. 2d 660, 667 (D. Md. 2009). “In deciding
whether the plaintiff has made the requisite showing, the court must take all disputed facts and
reasonable inferences in favor of the plaintiff.” Carefirst of Md., 334 F.3d at 396.
A federal court may exercise personal jurisdiction over a nonresident defendant if: (1)
jurisdiction is authorized under the long-arm statute of the forum state; and (2) the assertion of
jurisdiction comports with Fourteenth Amendment due process requirements. See Christian Sci.
Bd. of Dirs. of First Church of Christ, Scientist v. Nolan, 259 F.3d 209, 215 (4th Cir. 2001).
Maryland courts have consistently held that Maryland’s long-arm statute is co-extensive with the
scope of jurisdiction permitted by the Due Process Clause. See Carefirst of Md., 334 F.3d at 396
(citing Mohamed v. Michael, 370 A.2d 551, 553 (1977)). Although the statutory and
constitutional inquiries merge, the Court must address both elements in the personal jurisdiction
analysis. See Dring v. Sullivan, 423 F. Supp. 2d 540, 545 (D. Md. 2006) (citing Mackey v.
Compass Mktg., Inc., 892 A.2d 479, 493 n.6 (2006)).
The Maryland long-arm statute limits specific jurisdiction to cases where the cause of
action “aris[es] from any act enumerated” in the statute itself. Md. Code Ann., Cts. & Jud. Proc.
§ 6-103(a). Thus, a plaintiff must “identify a specific Maryland statutory provision authorizing
jurisdiction.” Ottenheimer Publishers, Inc. v. Playmore, Inc., 158 F. Supp. 2d 649, 652 (D. Md.
2001). In this case, MRIS argues that this Court may exercise personal jurisdiction over
Defendants pursuant to sections 6-103(b)(1) and 6-103(b)(4) of the Maryland long-arm statute.
Section 6-103(b)(1) authorizes jurisdiction when a person “[t]ransacts any business or
performs any character of work or service in the state.” Md. Code Ann., Cts. & Jud. Proc. § 6103(b)(1). “Transacting business pursuant to subsection (b)(1) ‘requires actions that culminate
in purposeful activity within the state.’” Capital Source Fin., LLC v. Delco Oil, Inc., 520 F.
Supp. 2d 684, 689 (D. Md. 2007) (quoting Bahn v. Chi. Motor Club Ins. Co., 634 A.2d 63, 67
(Md. 1993)). “Subsection (b)(1) does not require the defendant to have been present physically
in Maryland.” Capital Source Fin., LLC, 520 F. Supp. 2d at 689 (citations omitted). In Bahn,
for example, the court found that the nonresident defendant “transacted business” within the
meaning of section 6-103(b)(1) because it mailed notices to the Maryland plaintiffs, contracted
with the Maryland plaintiffs, and received payments from Maryland. 634 A.2d at 67–68.
Section 6-103(b)(4) applies to any person who “[c]auses tortious injury in the State or
outside of the State by an act or omission outside the State if he regularly does or solicits
business, engages in any other persistent course of conduct in the State or derives substantial
revenue from goods, food, services, or manufactured products used or consumed in the State.”
Md. Code Ann., Cts. & Jud. Proc. § 6-103(b)(4). Copyright infringement is an intentional tort,
and a persistent course of conduct in committing copyright infringement satisfies section 6103(b)(4). See CoStar, 612 F. Supp. 2d at 671. Establishing a “persistent course of conduct”
under section 6-103(b)(4) is “not tantamount to establishing general jurisdiction, but it does
require greater contacts that those necessary to establish jurisdiction under [section 6103(b)(1)].” American Ass’n of Blood Banks v. Bos. Paternity, LLC, No. 2008-2046, 2009 WL
2366175, at *8 (D. Md. July 28, 2009).
In addition to making a prima facie showing that this Court has jurisdiction over
Defendants under Maryland’s long-arm statute, MRIS must show that this Court’s jurisdiction
complies with the Due Process Clause. A court’s exercise of jurisdiction over a nonresident
defendant comports with due process if the defendant has “minimum contacts” with the forum,
such that requiring the defendant to defend its interests in that state “does not offend traditional
notions of fair play and substantial justice.” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316
(1945) (internal quotation omitted). Courts have recognized two types of personal jurisdiction:
general and specific jurisdiction. See, e.g., Helicopteros Nacionales de Colombia, S.A. v. Hall,
466 U.S. 408, 414 (1984). General jurisdiction is proper where a defendant’s contacts with the
forum are “continuous and systematic.” Id. at 416. Specific jurisdiction is appropriate when “(1)
the defendant purposely directed its activities toward residents of Maryland or purposely availed
itself of the privilege of conducting activities in the state; (2) the plaintiff’s cause of action arises
out of or results from the defendant’s forum-related contacts; and (3) the forum’s exercise of
personal jurisdiction in the case is reasonable, that is, consistent with ‘traditional notions of fair
play and substantial justice.’” Cole-Tuve, Inc. v. Am. Mach. Tools Corp., 342 F. Supp. 2d 362,
366 (D. Md. 2004) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477–78 (1985)). In
this case, MRIS does not appear to argue that either defendant could be subject to the general
jurisdiction of Maryland courts, so the Court will focus on the specific jurisdiction inquiry.
The jurisdictional question is particularly complex where, as here, the alleged contacts
between the defendants and the forum state are largely based on electronic communications and
Internet activity. The Fourth Circuit has held that a court may, consistent with due process,
exercise judicial power over a nonresident when the nonresident “(1) directs electronic activity
into the State, (2) with the manifested intent of engaging in business or other interactions within
the State, and (3) that activity creates, in a person within the State, a potential cause of action
cognizable in the State’s courts.” ALS Scan, Inc. v. Digital Serv. Consultants, Inc., 293 F.3d 707,
714 (4th Cir. 2002). This test is not dissimilar to the “effects test” applied in Calder v. Jones,
465 U.S. 783, 789–90 (1984), in which the Supreme Court held that a California court could
constitutionally exercise jurisdiction over a Florida citizen whose only material contact with
California was to write a libelous story, directed at a California resident for a publication
circulated in California, knowing that the injury would be felt by the California resident in her
state. See ALS Scan, 293 F.3d at 714. The Fourth Circuit has emphasized, however, that merely
feeling the effects of out-of-state conduct is insufficient to establish personal jurisdiction:
“Although the place that the plaintiff feels the alleged injury is plainly relevant to the inquiry, it
must ultimately be accompanied by the defendant’s own contacts with the state if jurisdiction
over the defendant is to be upheld.” ESAB Grp., Inc. v. Centricut, Inc., 126 F.3d 617, 626 (4th
With these principles in mind, the Court will discuss personal jurisdiction over Cardella
and AHRN in turn.
1. Personal Jurisdiction over Cardella
MRIS has failed to make a prima facie showing that this Court has personal jurisdiction
over Cardella. Personal jurisdiction over Cardella must be based on his personal contacts with
the state of Maryland, not simply his status as AHRN’s CEO. See, e.g., Harte-Hanks Direct
Mktg./Baltimore, Inc. v. Varilease Tech. Fin. Grp., Inc., 299 F. Supp. 2d 505, 513–14 (D. Md.
2004); see also Amhil Enter. Ltd. v. Wawa, Inc., No. HAR 93-1349, 1994 WL 750535, at *4 (D.
Md. Dec. 16, 1994) (“The potential for personal liability of a corporate officer . . . is no
substitute for a determination of whether the Court may exercise personal jurisdiction over that
officer.”). MRIS’s allegations with respect to Cardella are based almost exclusively on AHRN’s
Maryland activities and not on Cardella’s personal contacts with the state or its residents. For
example, MRIS alleges that Cardella has “oversight and management responsibility” for
AHRN’s activities, that he has “actual knowledge” of AHRN’s alleged infringement and failed
or refused to stop it, and that he has a “financial interest” in AHRN’s infringement. Doc. No. 1,
Compl. ¶¶ 4, 11–12, 78–82.
MRIS also maintains that because Cardella is the “public face” of
AHRN, it is implausible that Cardella is not personally involved in AHRN’s infringing activities
in Maryland. See Doc. No. 26, at 22. These arguments are speculative at best and find no
specific factual support in the record. The only specific evidence MRIS presents to establish
Cardella’s personal contact with Maryland is Cardella’s 44-page Twitter feed, which includes a
single tweet, “Realtor® Performance Profile for Catherine Cusack in Edgewater, MD,” followed
by a link to the real estate agent’s online profile. See Doc. No. 26, Cooke Decl. Ex. 8.
These are insufficient grounds for this Court’s exercise of personal jurisdiction under the
Maryland long-arm statute. MRIS has failed to demonstrate that Cardella transacted business
within the state or engaged in regular business or a persistent course of conduct in the state. See
Md. Code Ann., Cts. & Jud. Proc. §§ 6-103(b)(1), (b)(4). Due process principles also prohibit
this Court’s exercise of personal jurisdiction. Although Cardella arguably directed electronic
activity to Maryland residents, the Court will not conclude that he intended to engage in business
in the state based on an isolated tweet. MRIS also fails to articulate how this particular tweet
would have created a cause of action in Maryland courts. Finally, the Court concludes that it
would be constitutionally unreasonable to hale Cardella, a California resident who has never
been to Maryland, into a Maryland court based on a single tweet that referenced the state.
MRIS argues that Cardella’s involvement in AHRN’s operations satisfies the Calder
“effects test.” See 465 U.S. at 789; see also Carefirst of Md., 334 F.3d at 398 n.7. However,
personal jurisdiction in this case must be based on Cardella’s personal contacts with Maryland,
not simply his status as an officer and employee or vague allegations of “involvement” with
AHRN. Absent such personal contacts, the fact that the injury may be felt in Maryland is
insufficient for this Court to exercise personal jurisdiction over Cardella. See, e.g., ESAB Grp.,
126 F.3d at 626.
MRIS also relies on this Court’s decision in Planet Technologies, Inc. v. Planit
Technology Group, LLC, 735 F. Supp. 2d 397 (D. Md. 2010) to argue that this Court has
personal jurisdiction over Cardella. In Planet Technologies, this Court exercised personal
jurisdiction over a defendant CEO of a Virginia corporation in a trademark infringement and
unfair competition action. However, Planet Technologies is distinguishable from the instant
case. There, the plaintiff alleged that the defendant CEO personally participated in selecting the
allegedly infringing mark, directly controlled the service mark, directed the company’s counsel
to file for federal trademark registration, and directed his company to provide competing
services. Id. at 399. Unlike the plaintiff in Planet Technologies, however, MRIS cites to no
specific evidence that Cardella directed or personally participated in AHRN’s allegedly
infringing activities. See id. at 403 (“[T]he plaintiff must . . . point to specific activity indicating
that the defendant expressly aimed its tortious conduct at the forum.”) (citation omitted). As
discussed above, the fact that Cardella is CEO of AHRN is insufficient to subject him to the
Court’s jurisdiction for the acts of AHRN in Maryland. Absent more fact-based allegations that
Cardella was involved with AHRN’s Maryland-related activities and that he engaged in tortious
conduct in the forum, the Court cannot exercise personal jurisdiction here.
Accordingly, Cardella’s Motion to Dismiss for lack of personal jurisdiction, Doc No. 23,
is GRANTED, and he is hereby DISMISSED from this action.
2. Personal Jurisdiction over AHRN
MRIS has made a prima facie showing that the Court has personal jurisdiction over
AHRN. It is undisputed that NeighborCity.com lists Maryland properties and Maryland-based
real estate professionals. AHRN admits that as a result of its operation of NeighborCity.com, it
is compensated for real estate agent matching and referral services. AHRN does not dispute that
NeighborCity.com “Client Specialists” have directly contacted Maryland real estate
professionals to solicit business for the website’s referral program. As an example, MRIS cites
an unsolicited e-mail from NeighborCity.com to a Maryland real estate broker in which a Client
Specialist identified the recipient as a “qualified local agent” in Maryland, identified a Maryland
property of interest to a NeighborCity.com client, offered broker-to-broker referrals in exchange
for a fee, and directed the broker to the NeighborCity.com website and phone number. Doc. No.
26, at 5–6, Campbell Decl. ¶ 4–6. AHRN also admits to earning more than $11,000 in referral
fees from Maryland brokers since the beginning of 2011. See Doc. No. 24, Vahabzadeh Decl. ¶
Furthermore, as of at least March 8, 2012, NeighborCity.com’s listing pages stated that
the website was owned and operated by AHRN, Inc., that its headquarters was in Gaithersburg,
Maryland, and that AHRN, Inc. had a Maryland real estate license. Doc. No. 1, Compl. Exs. A1–A-6. AHRN maintains that this information was inaccurate and that the language was
removed in or about February 2012. See Doc. No. 24, Vahabzadeh Dec. ¶ 16. It further
maintains that the Gaithersburg location was operated by AHRN, LLC, a separate legal entity,
that AHRN, Inc. was not involved in the LLC’s business, and that the Maryland real estate
license belonged to the LLC. See id. ¶ 15. However, the Disclaimer on NeighborCity.com
stated, as of May 22, 2012, that AHRN, LLC and AHRN, Inc. “are brother/sister entities that are
organized in the state of Delaware. For convenience of reference the term ‘American’ will be
used to refer to one of both of these entities.” Doc. No. 26, Cooke Dec. ¶ 11, Ex. 10.
The Court finds ample grounds to exercise personal jurisdiction over Defendant AHRN.
AHRN has “transacted business” in Maryland within the meaning of section 6-103(b)(1) by
contacting Maryland real estate professionals and soliciting business for its website, as well as by
earning substantial revenues from transactions with Maryland residents in 2011 and 2012. The
Court also finds that it may exercise personal jurisdiction over AHRN under section 6-103(b)(4)
of the long-arm statute. MRIS has alleged a colorable claim of tortious copyright infringement1
and Lanham Act violations that cause injury both inside and outside Maryland. AHRN has
See infra Part IV.
engaged in regular transactions with Maryland residents, regularly solicits business from
Maryland residents, and has earned substantial revenue as a result of transactions with Maryland
residents. Furthermore, until at least May 2012, AHRN represented itself or a closely affiliated
entity as having a Maryland headquarters and real estate license. The Court is also satisfied that
exercising personal jurisdiction over AHRN comports with due process for many of the same
reasons that personal jurisdiction is appropriate under the long-arm statute. AHRN actively and
repeatedly directed electronic activity into Maryland with the clear intent of engaging in business
with Maryland residents, the causes of action in this case result from AHRN’s display of MRIS’s
copyrighted content on NeighborCity.com’s Maryland real estate listings, and the Court discerns
nothing unreasonable in exercising jurisdiction over the defendant in these circumstances.
AHRN claims that the NeighborCity.com website is “essentially passive” because it does
“little more” than make information available to the public. Doc. No. 24, at 18. This
mischaracterizes the nature and operation of NeighborCity.com, however. In its own motion,
AHRN describes an interactive process in which the website enables users to connect with real
estate professionals. Id. at 3. Specifically, the user hits a “contact” button on a desired agent’s
profile, after which the website sets up a meeting between the user and the agent. The website
similarly facilitates communications between users and agents when users express interest in
particular properties. As previously discussed, AHRN also derives compensation from the
website based on its agent matching and referral services. This does not meet the definition of
“passive Internet activity” as defined by the Fourth Circuit. See ALS Scan, 293 F.3d at 714.
AHRN also maintains that its website is of a national character and that it does not
specifically target Maryland or focus its activities on the state. AHRN emphasizes that only
2.4% of its revenue since 2011 has come from Maryland transactions, only 2.58% of its listings
have been for Maryland properties, and Maryland referral agreements have constituted only
2.05% of all NeighborCity.com referral agreements. See Doc. No. 24, Vahabzadeh Dec. ¶¶ 13–
14. The fact that Maryland transactions form a relatively minor part of the NeighborCity.com
portfolio does not alter the conclusion that AHRN expressly aimed its activities at Maryland and
transacted business in Maryland, as discussed above. See, e.g., Young Again Prods., Inc. v.
Acord, 307 F. Supp. 2d 713, 717 (D. Md. 2004) (concluding that exercise of personal jurisdiction
over Internet retailer was proper because defendant could not dispute that it engaged in business
in Maryland, even where an exceedingly low 0.02% of its nationwide sales occurred there).
AHRN relies on Gallman v. Sovereign Equity Group, Inc., No. AW-11-2150, 2012 WL
983937 (D. Md. Mar. 21, 2012) to argue that the exercise of personal jurisdiction in this case
does not comport with due process or the Maryland long-arm statute. In Gallman, however, this
Court held that it lacked jurisdiction because the plaintiff failed to provide any evidence that the
defendant’s alleged contacts with Maryland related to the plaintiff’s claims, there was no
evidence that the defendant sought to target Maryland residents, and there was no evidence that
the defendant was even aware that she was communicating with Maryland residents. Id. at *4–5.
In this case, MRIS has presented competent evidence that AHRN has infringed its copyrights on
Maryland real estate listings and that AHRN knowingly targeted, communicated with and
transacted business with Maryland residents. AHRN also relies on Allcarrier Worldwide
Services, Inc. v. United Network Equipment Dealer Ass’n, 812 F. Supp. 2d 676 (D. Md. 2011),
but this case too is distinguishable. In Allcarrier, this Court declined to exercise personal
jurisdiction over an out-of-state website operator where the operator did nothing more than
establish website membership and grant access to members. Id. at 682. Unlike the Allcarrier
defendant, AHRN’s website actively engaged in communications and business with Maryland
Accordingly, AHRN’s Motion to Dismiss for lack of personal jurisdiction is hereby
DEFENDANTS’ MOTIONS TO DISMISS FOR IMPROPER VENUE
“To survive a motion to dismiss for improper venue when no evidentiary hearing is held,
the plaintiff need only make a prima facie showing of venue.” Mitrano v. Hawes, 377 F.3d 402,
405 (4th Cir. 2004). In considering motions to dismiss under Federal Rule of Civil Procedure
12(b)(3), “all inferences are to be drawn in plaintiff’s favor.” Equal Rights Ctr. v. Equity
Residential, 483 F. Supp. 2d 482, 488 (D. Md. 2007). Venue is proper in “(1) a judicial district
in which any defendant resides, if all defendants are residents of the State in which the district is
located; [or] (2) a judicial district in which a substantial part of the events or omissions giving
rise to the claim occurred, or a substantial part of property that is the subject of the action is
situated.” 28 U.S.C. § 1391(b). For venue purposes, an entity with the capacity to be sued “shall
be deemed to reside, if a defendant, in any judicial district in which such defendant is subject to
the court’s personal jurisdiction with respect to the civil action in question.” Id. § 1391(c)(2). In
copyright actions, venue is proper “in the district in which the defendant or his agent resides or
may be found.” Id. § 1400(a).
In this case, venue in this District is proper under Section 1391(b)(1) because this Court
may exercise personal jurisdiction over AHRN, thereby making it a Maryland resident for the
purposes of the venue statute, id. § 1391(c)(2), and because AHRN is the only remaining
Defendant in this action. Venue is also proper under Section 1391(b)(2) because a substantial
part of the property that is the subject of the action is situated in Maryland. See CoStar Realty
Info., Inc. v. Meissner, 604 F. Supp. 2d 757, 773 (D. Md. 2009) (holding in copyright
infringement action that venue is proper in Maryland where “Plaintiffs’ servers and associated
copyrighted material, which constitute property that is the subject of the action, are located in
Maryland”). In this case, MRIS operates and maintains its MRIS Database from its Maryland
headquarters, and Defendants have allegedly misappropriated copyrighted content from or
sourced from the database. Doc No. 26, at 24. Finally, venue is proper under Section 1400(a)
because AHRN resides and may be found in Maryland. See id. (concluding that the term “may
be found” in Section 1400(a) means any district which may assert personal jurisdiction over a
Accordingly, Defendants’ Motion to Dismiss for improper venue is DENIED.
DEFENDANTS’ MOTIONS TO DISMISS FOR FAILURE TO STATE A
A. Standard of review
If, on a motion under Rule 12(b)(6), matters outside the pleadings are presented to and
not excluded by the court, the motion must be treated as for one summary judgment under Rule
56. Fed. R. Civ. Pro. 12(d). “It is well settled that district courts may convert a Rule 12(b)(6)
motion to dismiss into a Rule 56 motion for summary judgment, allowing them to assess whether
genuine issues of material fact do indeed exist.” Bosiger v. U.S. Airways, 510 F.3d 442, 450 (4th
Cir. 2007). In this case, both parties have submitted items of extrinsic evidence with their briefs.
As such, this Court will treat Defendants’ Motion to Dismiss under Rule 12(b)(6) as a motion for
summary judgment. See, e.g., Amirmokri v. Abraham, 437 F. Supp. 2d 414, 419 (D. Md. 2006);
Talbot v. U.S. Foodservice, Inc., 191 F. Supp. 2d 637, 639 (D. Md. 2002).2
Defendants complain that MRIS responded to their 12(b)(6) Motion to Dismiss with evidence going beyond the
four corners of the Complaint without requesting that the motion be treated as one for summary judgment, and that
the Court should decline to consider and strike these materials. Doc. No. 29, at 1–2. Defendants appear to cite
Summary judgment is only appropriate “if the pleadings, the discovery and disclosure
materials on file, and any affidavits show that there is no genuine issue as to any material fact
and that the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c); see Celotex
Corp. v. Catrett, 477 U.S. 317, 323–25 (1986). The court must “draw all justifiable inferences in
favor of the nonmoving party, including questions of credibility and of the weight to be accorded
to particular evidence.” Masson v. New Yorker Magazine, Inc., 501 U.S. 496, 520 (1991) (citing
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)).
To defeat a motion for summary judgment, the nonmoving party must come forward with
affidavits or other similar evidence to show that a genuine issue of material fact exists. See
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). Although the
Court should believe the evidence of the nonmoving party and draw all justifiable inferences in
his or her favor, a party cannot create a genuine dispute of material fact “through mere
speculation or the building of one inference upon another.” Beale v. Hardy, 769 F.2d 213, 214
(4th Cir. 1985).
Copyright protection extends to “original works of authorship fixed in any tangible
medium of expression.” 17 U.S.C. § 102. Under Section 103(a) of the Copyright Act, copyright
protection extends to compilations, which are works “formed by the collection and assembling of
preexisting materials or of data that are selected, coordinated, or arranged in such a way that the
resulting work as a whole constitutes an original work of authorship.” 17 U.S.C. § 101. A
Amirmokri in support of this argument, but the court in Amirmokri did not strike any evidence from the record. See
437 F. Supp. 2d at 418–19. The Court discerns no unfairness in considering the extrinsic evidence and reviewing
Defendants’ Motions under Rule 56, particularly because Defendants have been permitted to respond to MRIS’s
evidence in their Reply Briefs and have submitted their own extrinsic evidence for the Court’s consideration.
Therefore, to the extent that Defendants move to strike evidence attached to Plaintiff’s Response Brief, their motion
is denied. That portion of Plaintiff’s Motion for Leave to File a Surreply to respond to Defendants’ motion to strike
is denied as moot.
copyright holder has certain exclusive rights to the work, including the right to reproduce all or
any part of the copyrighted work. Id. § 106. One infringes a copyright when he or she violates
one of the copyright owner’s exclusive rights. See 17 U.S.C. § 501. “[T]o establish copyright
infringement, two elements must be proven: (1) ownership of a valid copyright, and (2) copying
of constituent elements of the work that are original.” CoStar Grp., Inc. v. LoopNet, Inc., 373
F.3d 544, 549 (4th Cir. 2004) (quoting Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340,
Subject to limited exceptions, “no civil action for infringement of the copyright in any
United States work shall be instituted until preregistration or registration of the copyright claim
has been made in accordance with this title.” 17 U.S.C. § 411(a). Regulations promulgated by
the Register of Copyrights provide for the registration of compilations, including “automated
databases” such as the MRIS Database. See 37 C.F.R. § 202.3(b)(5). A certificate of registration
issued by the Copyright Office is “prima facie evidence of the validity of the copyright and of
the facts stated in the certificate.” 17 U.S.C. § 410(c). When such a certificate exists, the burden
shifts to the defendant to prove that the claimed copyrights are invalid. Universal Furniture
Int’l, Inc. v. Collezione Europa USA, Inc., 618 F.3d 417, 428 (4th Cir. 2010).
Defendants argue that they are entitled to judgment as a matter of law to the extent
Plaintiffs seeks to enforce copyrights on the individual elements—i.e., the photographs—of the
copyrighted MRIS Database. Specifically, Defendants assert that MRIS does not have an
infringement cause of action with respect to the photographs because it did not individually
register the photographs with the Copyright Office or list the author and title of each photograph
on its copyright registrations for the MRIS Database. Defendants’ arguments are contradicted by
Fourth Circuit precedent and based on an incorrect reading of the relevant statutory authorities.
In Xoom, Inc. v. Imageline, Inc., the Fourth Circuit held that the registration of
compilations is “sufficient to provide copyright protection to the underlying works which those
[compilations] encompassed.” 323 F.3d 279, 283–84 (4th Cir. 2003). In Xoom, the defendant
Imageline, which had registered compilations of electronic clip-art images with the U.S.
Copyright Office, claimed that the plaintiff Xoom infringed its copyrights by sublicensing and
distributing the individual clip-art images. See id. at 281–282. The court concluded that
because Imageline owned copyright [in the compilations] and in the underlying
works of each, its registration of [the compilations] was sufficient to permit an
infringement action on the underlying parts, whether they be new or preexisting. .
. . If Xoom improperly used any copyrightable image contained in the [registered
compilations], new or preexisting, that usage would give rise to potential statutory
Id. at 284 (emphasis in original). Defendants argue that this Court should not rely on Xoom
because the Fourth Circuit’s treatment of registration as a “jurisdictional prerequisite” to an
infringement suit has been overruled, see Reed Elsevier, Inc. v. Muchnick, 130 S.Ct. 1237, 1241
(2010), and because the Xoom court declined to decide whether Imageline’s registration of the
compilations also constituted a registration of the underlying parts, see Xoom, 323 F.3d at 283–
84. But these factors do not alter the Xoom court’s central holding that an owner and registrant
of a compilation may bring an infringement action on the underlying parts where it also owns
copyrights in the underlying parts, even where those parts have not been individually registered.
See id. In this case, MRIS, the owner and registrant of the MRIS Database compilation, has
presented credible evidence that it also owns the copyrights in the underlying photographs. See
Doc. No. 26, Heithaus Decl. ¶ 8. The Court recognizes that there is a split of authority on this
issue,3 but under Fourth Circuit precedent, Defendants are not entitled to judgment as a matter of
law on the grounds that MRIS did not individually register the photographs.
Defendants’ statutory arguments are also unpersuasive. First, Defendants contend that
MRIS’s claims on the photographs are unenforceable under Section 409 of the Copyright Act.
Section 409 provides, in relevant part:
The application for copyright protection shall be made on a form prescribed by
the Register of Copyrights and shall include-…
(2) in the case of a work other than an anonymous or pseudonymous work, the
name and nationality or domicile of the author or authors, and, if one or more of
the authors is dead, the dates of their death;
(6) the title of the work, together with any previous or alternative titles under
which the work can be identified.
17 U.S.C. § 409. Defendants argue that MRIS’s failure to provide the names of the authors and
the titles of all underlying works in its database registrations limits the registrations and scope of
copyright protection to the MRIS Database as a whole, but does not cover the individual,
underlying works such as the photographs. The Court disagrees with Defendants’ reading of
Section 409. The statute does not unambiguously require every application for a compilation to
include the author and title of each underlying work. In fact, the statute could easily be read to
require only the listing of the author and title of the compilation itself.
In the context of automated databases, at least one district court has reached the conclusion this Court reaches
today. See, e.g., Masterfile Corp. v. Gale, No. 2:09-cv-966, 2011 WL 4702862, at *2 (D. Utah Oct. 4, 2011)
(“Because Masterfile owns the constituent parts of the collection the registration of the collection extends copyright
protection to the constituent parts.”). At least three other district courts have ruled that copyright registration of an
automated database that did not include authors’ names for each underlying work did not cover the individual,
underlying works. See, e.g., Muench v. Houghton Mifflin Harcourt Publ’g Co., 712 F. Supp. 2d 84 (S.D.N.Y.
2010); Bean v. Houghton Mifflin Harcourt Publ’g Co., No. CV10-8034-PCT-DGC, 2010 U.S. Dist. LEXIS 83676
(D. Ariz. Aug. 10, 2010); Alaska Stock, LLC v. Houghton Mifflin Harcourt Publ’g Co., No. 3:09-cv-0061-HRH,
2010 U.S. Dist. LEXIS 108041 (D. Alaska Sept. 21, 2010). These courts relied on Sections 409 and 103(b) of the
Copyright Act in holding the copyright protection did not extend to the individual, underlying works. For the
reasons stated herein, the Court does not find this reasoning persuasive.
The only reference Section 409 makes to the registration of compilations does not
explicitly require the listing of all authors and titles of each underlying or preexisting work, nor
does it address whether the registration of the compilation covers independently copyrightable
component works that the registrant owns. Section 409(9) provides that applications shall
include, “in the case of a compilation or derivative work, an identification of any preexisting
work or works that it is based on or incorporates, and a brief, general statement of the additional
material covered by the copyright claim being registered.” 17 U.S.C. § 409(9). MRIS’s
identification of “photographs” and “text” as preexisting material and the basis of the copyright
claims in its copyright registrations appears to be adequate under this provision.4 See Doc. No.
24 Ex. 1.
In implementing Section 409, the Copyright Office has not required registrants of
collective works5 such as the MRIS Database to list the author and title of each underlying work
in their applications:
Where a collective work is being registered, the application should name the
author of the collective work. The names of the individual authors of separate
contributions being registered as part of the claim need not be given on the
application. The registration may cover (a) the collective work authorship, (b)
any contribution created by the employee or other party commissioned by the
author of a work made for hire, and (c) any other contributions that the claimant
of the collective work obtained by transfer.
Compendium of Copyright Office Practices II § 615.06 (1984) (emphasis added).6 Because
Section 409 is silent as to whether the author and title of each underlying or preexisting work
The Fourth Circuit in Xoom did not analyze Section 409. Unlike MRIS, the registrant in that case did not even
mention the underlying, individual clip-art images in its registration application, although it did deposit copies of the
individual images with the application. 323 F.3d at 281. The Xoom court’s holding did not appear to depend on
these facts, however.
This Opinion has generally referred to the MRIS Database as a “compilation,” a term which includes “collective
works” under the Copyright Act. 17 U.S.C. § 101. The Copyright Act defines “collective work” as “a work, such as
a periodical issue, anthology, or encyclopedia, in which a number of contributions, constituting separate and
independent works in themselves, are assembled into a collective whole.” Id. Because the MRIS Database contains
photographs and text that are independently copyrightable works, the database is also a “collective work” under the
must be listed, and because the Copyright Office’s interpretation of Section 409 is reasonable,
the Court will defer to that interpretation. See, e.g., Chevron, U.S.A., Inc. v. Natural Resources
Defense Council, Inc., 467 U.S. 837, 843–45 (1984); Skidmore v. Swift & Co., 323 U.S. 134,
139–140 (1944); see also Batjac Prods., Inc. v. GoodTimes Home Video Corp., 160 F.3d 1223,
1230–31 (9th Cir. 1998) (deferring to Register’s reasonable interpretation of copyright laws as
provided in Compendium of Copyright Office Practices).7
Defendants’ reliance on Section 103(b) of the Copyright Act is misplaced. Section
103(b) provides that “[t] he copyright in a compilation or derivative work extends only to the
material contributed by the author of such work, as distinguished from the preexisting material
employed in the work, and does not imply any exclusive right in the preexisting material.” 17
U.S.C. § 103(b). Section 103(b) covers the subject matter of copyrights, not registrations, and
prevents a compilation copyright holder from acquiring rights to other authors’ works simply by
including them in the compilation. That is not the basis of MRIS’s infringement claims. In this
case, MRIS claims copyright ownership in the underlying works—the photographs—and the
question is whether MRIS’s registration of the MRIS Database permits an infringement action
based on unauthorized display of those photographs. Section 103(b) does not undermine the
Court’s conclusion that the registration of a compilation covers the underlying or preexisting
works of the compilation that are also owned by the registrant.
According to the Copyright Office’s website, the Compendium was undergoing revision as of the issuance of this
Defendants argue that Copyright Office Circular 65, which covers automated databases, contains no language
providing that the copyright of an automated database extends to the independently contributed works in the
database. This is in contrast to Circular 62, which covers serials and expressly provides that “[t]he claimant
registering a serial may claim copyright not only in the collective-work authorship for which the claimant is
responsible, but also in any independently authored contributions in which all rights have been transferred to the
claimant by the contributors.” The Court finds nothing significant about Circular 65’s apparent silence on the issue,
especially in light of the explicit approach adopted in the Compendium. The Court also notes that as of the issuance
of this Opinion and according to the Copyright Office’s website, Circular 65 was undergoing revision.
Defendants’ next statutory argument relies on Section 204(a) of the Copyright Act, which
provides that “[a] transfer of copyright ownership, other than by operation of law, is not valid
unless an instrument of conveyance, or a note or memorandum of the transfer, is in writing and
signed by the owner of the rights conveyed or such owner’s duly authorized agent.” 17 U.S.C.
204(a). Defendants argue that the purported assignments to MRIS of copyrights in the individual
photographs are void because the assignments were not in writing and signed by MRIS
subscribers. The Court disagrees. The Electronic Signatures in Global and National Commerce
Act (“ESIGN”) provides,
“[n]otwithstanding any statute, regulation, or other rule of law . . . with respect to
any transaction in or affecting interstate or foreign commerce-(1) a signature, contract, or other record relating to such transaction may not be
denied legal effect, validity, or enforceability solely because it is in electronic
(2) a contract relating to such transaction may not be denied legal effect, validity,
or enforceability solely because an electronic signature or electronic record was
used in its formation.
15 U.S.C. § 7001(a). “The term ‘electronic signature’ means an electronic sound, symbol, or
process, attached to or logically associated with a contract or other record and executed or
adopted by a person with the intent to sign the record.” Id. § 7006(5). In this case, the
assignments of the copyrights in the individual photographs are governed by the following
All images submitted to the MRIS Service become the exclusive property of
Metropolitan Regional Information Systems, Inc. (MRIS). By submitting an
image, you hereby irrevocably assign (and agree to assign) to MRIS, free and
clear of any restrictions or encumbrances, all of your rights, title and interest in
and to the image submitted. This assignment includes, without limitation, all
worldwide copyrights in and to the image, and the right to sue for past and future
Doc. No. 26, Heithaus Decl. ¶ 8. The MRIS TOU constitutes credible evidence that MRIS’s
users intended to assign their copyrights to MRIS through the electronic submissions of
photographs, which would satisfy the relevant provisions of ESIGN. Accordingly, Defendants
are not entitled to judgment as a matter of law on the grounds that the assignments of copyrights
in the individual photographs were void. See, e.g., Vergara Hermosilla v. Coca-Cola Co., No.
10-21418-CIV, 2011 WL 744098, at *3 (S.D. Fla. Feb. 23, 2011) (citing ESIGN and holding that
conveyance of copyright interest by electronic mail was valid).
Finally, Defendants argue that the assignments are invalid as a matter of law on the
grounds that they fail to “clearly identify the deal and its basic parameters.” Woods v. Resnick,
725 F. Supp. 2d 809, 826 (W.D. Wis. 2010) (quoting Weinstein Co. v. Smokewood Entm’t Grp.,
LLC, 664 F. Supp. 2d 332, 342 (S.D.N.Y. 2009)). In Woods, the court concluded that an
assignment of copyright ownership was invalid because the written documents in the record were
not between the purported assignor and assignee. 725 F. Supp. 2d at 826. Accordingly, the
record did not reveal clear and unequivocal intent to transfer rights, and the court was unable to
identify the terms of the deal. See id. In Weinstein, the court concluded that an assignment was
invalid because the copyright owner’s communications were “noncommittal” as to the
assignment of its rights. See 664 F. Supp. 2d at 341. In this case, however, the MRIS TOU is
between MRIS (the purported assignee) and its subscribers (the purported assignors), its terms
are clear, and MRIS has a credible claim that the subscribers, in submitting the images, intended
to assign their rights to MRIS.8
Defendants make a variety of other arguments in their Reply Briefs. For example, Defendants assert that MRIS
failed to comply with the Copyright Act because the assignment from the photographer to the MRIS subscriber must
also comply with Section 204(a). See Doc. No. 29, at 4–5. The photographers and subscribers are not parties to this
action, and Defendants present no factual support that such assignments were faulty. Defendants also contend that
because the MRIS TOU only covers images, MRIS cannot be the owner or assignee of the listing information to the
extent it is copyrightable. Id. at 4. Even if the Court accepted Defendants’ argument, it would not entitle them to
judgment as a matter of law with respect to the photographs. Finally, Defendants claim that the MRIS TOU is a
“sham” on the grounds that the assignor of the copyright can continue to use the image following the conveyance
and because the TOU leaves open the possibility that the assignor will retain the copyright. See id. at 9. Defendants
cite no legal authority in support of this argument, and the Court finds no reason to grant them judgment as a matter
of law on this basis.
Accordingly, based on Fourth Circuit precedent and the relevant statutory provisions, the
Court finds that Defendants are not entitled to judgment as a matter of law. AHRN’s Motion to
Dismiss, Doc. No. 24, is therefore DENIED.
PLAINTIFF’S MOTION FOR A PRELIMINARY INJUNCTION
A. Standard of review
“A plaintiff seeking a preliminary injunction must establish [(1)] that he is likely to
succeed on the merits, [(2)] that he is likely to suffer irreparable harm in the absence of
preliminary relief, [(3)] that the balance of equities tips in his favor, and [(4)] that an injunction
is in the public interest.” Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 20 (2008).
“[P]reliminary injunctions are extraordinary remedies involving the exercise of very far-reaching
power to be granted only sparingly and in limited circumstances.” MicroStrategy, Inc. v.
Motorola, Inc., 245 F.3d 335, 339 (4th Cir. 2001) (quoting Direx Israel, Ltd. v. Breakthrough
Med. Corp., 952 F.2d 802, 816 (4th Cir. 1991)).
The Court finds that MRIS has established the requisite elements for a preliminary
injunction. The Court will address each element in turn.
1. Success on the merits
As discussed above, supra Part IV.B, “to establish copyright infringement, two elements
must be proven: (1) ownership of a valid copyright, and (2) copying of constituent elements of
the work that are original.” CoStar Grp., Inc. v. LoopNet, Inc., 373 F.3d 544, 549 (4th Cir. 2004)
(quoting Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991)). As it did in
support of its Motion to Dismiss, AHRN argues that MRIS does not have a cause of action on
the photographs in the MRIS Database because MRIS did not register the underlying works.
Doc. No. 25, at 15–17. The Court has already rejected this argument, and will not revisit it here.
See supra Part IV.B.
MRIS is the owner of registered copyrights in the MRIS Database. See Doc. No. 24 Ex.
1. The certificates of registration are sufficient to constitute prima facie evidence of the validity
of these copyrights. See 17 U.S.C. § 410(c). MRIS has also shown that it owns the copyrights of
the underlying parts of the MRIS Database, as “© 2012 MRIS” notices are prominently
displayed on the photographs of properties. Doc. No. 1, Compl. Exs. A-1–A-6. MRIS appears
to have obtained these copyrights by assignment when the photographs were uploaded to the
MRIS Database by subscribers. See supra Part IV.B; Doc. No. 26, Heithaus Decl. ¶ 8.
Given the existence of MRIS’s certificates of registration, the burden is on AHRN to
prove that the claimed copyrights are invalid. AHRN argues that the MRIS Database is not
copyrightable because it is not an “original work of authorship” under the Copyright Act’s
definition of “compilation.” See 17 U.S.C. § 101. Specifically, AHRN argues that MRIS “added
no written expression” and “does not make any selections” of the texts and photographs because
“they are provided on automatic pilot through uploading by the subscribers.” Doc. No. 25, at 15.
To determine whether a compilation meets the originality requirement of the Copyright Act, the
court should determine “whether the selection, coordination, and arrangement are sufficiently
original to merit protection.” Feist, 499 U.S. at 358. “Originality requires only that the author
make the selection or arrangement independently (i.e., without copying that selection or
arrangement from another work), and that it display some minimal level of creativity.” Id. The
Court in Feist ultimately held that a phone book lacked the requisite originality to entitle it to
The selection, coordination, and arrangement of Rural’s white pages do
not satisfy the minimum constitutional standards for copyright protection.
As mentioned at the outset, Rural’s white pages are entirely typical.
Persons desiring telephone service in Rural’s service area fill out an
application and Rural issues them a telephone number. In preparing its
white pages, Rural simply takes the data provided by its subscribers and
lists it alphabetically by surname. The end product is a garden-variety
white pages directory, devoid of even the slightest trace of creativity.
Id. at 362.
The Court finds that the MRIS Database exhibits the requisite originality for copyright
protection. MRIS oversees and controls the quality and accuracy of the content in the MRIS
Database. Doc. No. 27, Heithaus Dec. ¶¶ 6–7. Each month, the compliance department sends
thousands of notices to its subscribers identifying violations of MRIS policy, including the
failure to update the status of a property or the manipulation of information in property listings.
See id. ¶ 7. Maintenance of the MRIS Database, which provides “more than 70,000 current,
active residential real estate listings integrated with over 5 million public records” and other
property-related information, Doc. No. 1, Compl. ¶ 14, requires original selection, arrangement,
and coordination of the material uploaded from MRIS subscribers. Furthermore, MRIS’s control
over the quality and content of the MRIS Database contradicts Defendants’ suggestion that the
Database is on “automatic pilot.” MRIS’s creation and ongoing maintenance of the MRIS
Database certainly requires more creativity than simply listing subscribers’ submissions in
alphabetical order, as was the case in Feist.9 See 499 U.S. at 362; see also Montgomery Cnty.
Ass’n of Realtors, Inc. v. Realty Photo Master Corp., 878 F. Supp. 804, 810 (D. Md. 1995)
(holding that arrangement of information in MLS database “possesses at least some minimal
degree of creativity”) (citing Feist, 499 U.S. at 345).
The Court is not suggesting that the MRIS Database is entitled to copyright protection based on MRIS’s efforts in
compiling the data. This “sweat of the brow” or “industrious collection” theory was rejected by the Supreme Court
in Feist. See 499 U.S. at 352–54. Rather, the Court finds that the database is entitled to copyright protection
because MRIS makes creative decisions in arranging and compiling the data. To the extent the Court cites MRIS’s
efforts, it does so because they evidence control over the selection, coordination, and arrangement of the
The Court also finds that MRIS has shown that AHRN has copied constituent, original
elements of the MRIS Database. MRIS has presented persuasive evidence of AHRN’s direct
copying of photographs containing the MRIS mark and copyright notice from the MRIS
Database onto NeighborCity.com. Doc. No. 1, Compl. Exs. A-1–A-6. AHRN does not deny
persuade the Court that AHRN is engaged in direct copying of information from Multiple Listing
Services such as MRIS:
You understand that all the data on properties available for sale or rent is
maintained by various real estate brokers, real estate agent boards, MLSs and
associations in the communities where you are searching or where your property
is located. These local boards of real estate are independent of American
[AHRN] and are solely responsible for the accuracy of the information on
properties entered into their own MLS data. American does not alter or add to
the information on the properties in any way.
Doc. No. 26, Cooke Decl. ¶ 10 (emphasis added).
AHRN argues that to establish infringement, “MRIS must show substantial similarity
between its copyrighted work and what it alleges AHRN, Inc. to have copied.” Doc. No. 25, at
18. MRIS has shown that NeighborCity.com website content is not only substantially similar,
but identical, to constituent, original elements of the MRIS Database. Regardless, even if
evidence of direct copying was insufficient in this case, copying may also be “established by
proof that the defendant had access to the plaintiff’s work and produced a work that is
substantially similar to the plaintiff’s work.” M. Kramer Mfg. Co., Inc. v. Andrews, 783 F.2d
421, 445 (4th Cir. 1986). AHRN does not appear to dispute that it had access to the MRIS
Database via MRIS licensees or third party websites and that the photographs on
NeighborCity.com are at least substantially similar to MRIS’s photographs.
AHRN asserts that it has a viable copyright misuse defense in this action, thereby
diminishing MRIS’s likelihood of success on the merits. See Ocean Atl. Woodland Corp. v.
DRH Cambridge Homes, Inc., No. 02C2523, 2003 U.S. Dist. LEXIS 16737, at *12
(N.D. Ill. Sept. 23, 2003). AHRN alleges that MRIS filed this lawsuit in collusion with other
Multiple Listing Services to shut down AHRN. They also imply that MRIS and other MLSs
may be in violation of a Consent Decree that the Department of Justice entered with the National
Association of Realtors (“NAR”) regarding anticompetitive activity. There is insufficient
evidence before the Court, however, suggesting that MRIS is attempting “to control competition
in an area outside its copyright” such that it is engaging in copyright misuse. See Lasercomb
Am., Inc. v. Reynolds, 911 F.2d 970, 979 (4th Cir. 1990) (emphasis added).
AHRN cites an e-mail from a NorthStar MLS employee suggesting collective action on
the part of MLSs. See Doc. No. 25, at 9–11, 23. This e-mail does not mention MRIS, however.
Furthermore, the only connection AHRN makes between MRIS and the other MLSs is that
MRIS was one of several MLS entities that sent AHRN a cease-and-desist letter in the same time
frame. See id. Even if the Court accepted that MRIS was collectively enforcing its copyrights
with other MLSs, that would not, alone, amount to copyright misuse. See, e.g., Basic Books, Inc.
v. Kinko’s Graphics Corp., 758 F. Supp. 1522, 1538–39 (S.D.N.Y. 1991) (“Plaintiffs’ effort to
restrain competition by [Defendant] is simultaneously an effort to stop [Defendant] from
infringing their copyrights. Plaintiffs have acted reasonably in so doing, not collusively for some
illegal, monopolistic purpose.”). AHRN also cites, as evidence of copyright misuse, MRIS’s
rejection “out of hand without negotiation” of AHRN’s offer to obtain a license. Doc. No. 25, at
23. MRIS’s refusal to grant AHRN a license is not probative of an unlawful or anticompetitive
purpose, especially where AHRN’s offer followed its infringement of MRIS’s copyrights and the
receipt of a cease-and-desist letter. At this time, AHRN has not presented credible evidence that
MRIS is engaged in this litigation for any unlawful objective, as opposed to merely enforcing its
copyrights. Accordingly, the Court finds that MRIS has made a clear showing of a likelihood of
success on the merits on their copyright claims.10
2. Irreparable harm
“Irreparable injury often derives from the nature of copyright violations, which deprive
the copyright holder of intangible exclusive rights.” Christopher Phelps & Assocs., LLC v.
Galloway, 492 F.3d 532, 544 (4th Cir. 2007); see also Splitfish AG v. Bannco Corp., 727 F.
Supp. 2d 461, 467 (E.D. Va. 2010) (“[A]llowing defendants to continue to distribute products
containing plaintiffs’ copyrighted work would ‘deprive the copyright holder of intangible
exclusive rights’ to control the means and methods by which its work will be seen by the
public.”) (quoting Christopher Phelps, 492 F.3d at 544). However, there is no presumption that
copyright infringement creates irreparable harm. See, e.g., Bethesda Software, L.L.C. v.
Interplay Entm’t Corp., 452 Fed. App’x 351, 355 (4th Cir. 2011). “Rather, courts evaluating
requests for injunctive relief should consider evidence of irreparable harm based on the facts of a
particular case.” EMI April Music, Inc. v. Garland Enters., LLC, No. DKC 11-3352, 2012 WL
1986529, at *4 (D. Md. June 1, 2012).
MRIS has demonstrated that its loss of exclusive control over its copyrighted content is
likely to lead to irreparable harm. MRIS’s Chief Marketing Officer avers that NeighborCity.com
real estate listings that display MRIS’s copyrighted content, including the “© 2012 MRIS”
notice, contain inaccuracies regarding the listed properties. Doc. No. 9, Heithaus Decl. ¶ 10.
These inaccuracies are likely to affect the credibility and integrity of the content published and
MRIS did not argue in its Motion for Preliminary Injunction that it was likely to succeed on the merits of its
claims under the Lanham Act. MRIS raises this argument for the first time in its Reply Brief. See Doc. No. 27, at
9–11. Defendants were unable to respond to these arguments, and the Court will not consider them here.
disseminated by MRIS, and as a result, MRIS’s reputation in the real estate market will suffer.
Id. NeighborCity.com’s use of informational content from the MRIS Database is also likely to
divert traffic from www.homesdatabase.com, a publicly available website that MRIS operates
and uses to generate leads with potential subscribers. Id. ¶ 11.
Moreover, NeighborCity.com’s unauthorized posting of MRIS’s copyrighted content is
likely to divert revenue from MRIS’s subscribers. See id. ¶ 12. Real estate brokers who
subscribe to the MRIS Database confirm that their real estate listings, which include photographs
with MRIS marks and copyright notices, are displayed on NeighborCity.com without
authorization. Doc. No. 9, Campbell Decl. ¶ 3, Coile Decl. ¶ 3. These brokers further state that
the unauthorized use of their listings by NeighborCity.com causes them irreparable harm as it
results in confusion in the real estate marketplace, diverts traffic from their websites, and reduces
the revenues in real estate transactions handled by the brokers and their agents. Id., Campbell
Dec. ¶ 4–6, Coile Dec. ¶ 5–6. When the listings on NeighborCity.com are inaccurate, the
brokers are blamed, resulting in damage to their reputation and to MRIS’s reputation. Id., Coile
Dec. ¶ 7. This will result in a loss of customers and a decrease in customer referrals. See id.
AHRN’s primary argument appears to be that MRIS relies on harm to third parties rather
than harm to MRIS, and that harm to third parties is irrelevant in the “irreparable harm” analysis.
See Doc. No. 25, at 19–20. However, MRIS’s business model depends on brokers’ and agents’
subscriptions to the MRIS Database, and to the extent that MRIS’s subscribers are harmed by
NeighborCity.com’s unauthorized postings, MRIS will also suffer harm. Regardless, even
without the Campbell and Coile declarations, MRIS has presented sufficient evidence to
establish a likelihood of irreparable harm. The Court also concludes that ascertaining MRIS’s
monetary damages based on marketplace confusion and injury to reputation would be especially
difficult in this case. See Multi-Channel TV Cable Co. v. Charlottesville Quality Cable
Operating Co., 22 F.3d 546, 551 (4th Cir. 1994) (“Generally, irreparable injury is suffered when
monetary damages are difficult to ascertain or are inadequate. . . . [W]hen the failure to grant
preliminary relief creates the possibility of permanent loss of customers to a competitor or the
loss of goodwill, the irreparable injury prong is satisfied.”) (citations and quotations omitted).
Accordingly, the Court finds that MRIS has made a clear showing that it is likely to be
irreparably harmed in the absence of a preliminary injunction.
3. Balance of equities
The Court finds that the balance of equities tips in MRIS’s favor. AHRN profits or
attempts to profit from the unauthorized display of MRIS’s copyrighted content, which includes
the “© 2012 MRIS” notice, on NeighborCity.com. See Splitfish, 727 F. Supp. 2d at 468 (“Equity
requires that defendants be ordered to cease their unlawful conduct, and that plaintiffs’ intangible
right to control the means and methods by which their copyrighted work is seen by the public be
restored.”). Any harm to AHRN will be minimized by an injunction that is no more extensive
than necessary. The Court is not persuaded that AHRN’s litigation costs demand an alternative
finding, and AHRN cites no legal authority in support of that position.
4. Public interest
Finally, the Court finds that granting preliminary injunctive relief will serve the public
interest. “Since Congress has elected to grant certain exclusive rights to the owner of a copyright
in a protected work, it is virtually axiomatic that the public interest can only be served by
upholding copyright protections and, correspondingly, preventing the misappropriation of the
skills, creative energies, and resources which are invested in the protected work.” Advance
Magazine Publishers, Inc. v. Leach, 466 F. Supp. 2d 628, 638 (D. Md. 2006) (quoting Apple
Computer, Inc. v. Franklin Computer Corp., 714 F.2d 1240, 1254–55 (3d Cir. 1983)). AHRN
asserts that the public interest is served by competition, but this Court’s grant of preliminary
injunctive relief will not prevent AHRN from legally competing in the real estate marketplace.
For the foregoing reasons, the Court will GRANT Defendant Cardella’s Motion to
Dismiss, DENY Defendant AHRN’s Motion to Dismiss, and GRANT Plaintiff’s Motion for a
Preliminary Injunction. Plaintiff’s Motion for Leave to File a Surreply to Defendants’ Motions
to Dismiss is DENIED as moot. A separate Order will follow.
August 24, 2012___
Alexander Williams, Jr.
United States District Judge