• What is an “E-Signature”?

    by  • November 16, 2012 • copyright

    I just blogged about a case where an email was inadequate to transfer ownership of copyright. It wasn’t because it was email, though; an email exchange can do the trick, as was the case in Vergara Hermosilla v. The Coca-Cola Company (blogged here). There is a federal statute that allows for electronic signature of documents, the Electronic Signatures in Global and National Commerce Act (“E-Sign”), 15 U.S.C. §§ 7001 et seq., as well as state statutes. In Vergara-Hermosilla, the court acknowledged in passing, apparently without dispute, than an email can constitute a signed writing.

    But how far away from an actual signature can it go? According to the District Court for the District of Maryland in Metropolitan Regional Information Systems, Inc. v. American Home Realty Network, Inc., pretty far.

     Metropolitan Regional Information Systems, Inc. (“MRIS”) is a multiple listing service for real estate. It was unhappy that its site was being scraped by defendant American Home Realty Network, Inc. (“AHRN”) and sued for copyright infringement. MRIS alleged infringement of the database, but the preliminary injunction was granted based only on infringement of the photographs in the database.

    AHRN argued that MRIS didn’t own the copyright in the photographs, which were uploaded by subscribers to the MRIS network. MRIS claimed ownership based on a document entitled “Terms of Use” (“TOU”) which purported to assign copyright in the photos to MRIS:

    Original document at end of declaration here.

    The court noted that “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,” as defined in § 7006(5) of the E-Sign act. The court also described how the assignment was “signed” here:

    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.

    (Emphasis added.)  Really? Uploading a photograph = writing one’s name on the dotted line?

    I have a couple of problems with this conclusion. First, there was no discussion in the decision about how the subscriber encountered the TOU by which he or she was purportedly assigning copyright. The underlying MRIS declaration that the court relied on was opaque, stating only

    If you can’t see the image, the declaration states that “MRIS protects the MRIS Database contractually by requiring that third parties accessing and using the MRIS Database are subject to licensed use restrictions. In exchange for these rights and commitments (as detailed in the applicable MRIS Subscription and Terms of Use Agreements) and upon payment of a subscription fee, each subscriber is given access to the entire MRIS Database …”

    So, first note that there are two agreements, the Subscription agreement and the Terms of Use. Presumably the Subscription agreement is the main document controlling the relationship, of which the Terms of Use with the critical assignment language is not a part. So we don’t really know, at least from the decision, if the subscriber ever even saw the Terms of Use.

    Second, I also question whether uploading a photo is really within the definition of a signature – “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.” When the subscriber uploads a photo, is it manifestation of an intent to sign the agreement or instead just to upload a photograph to a database?  I think the latter, and I suggest that allowing a “process” to act as a signature was meant to facilitate something like an “I agree” button, not any action whatsoever that is somehow related to a document, particularly one of which a person might not even be aware.

    There’s also the question of subjective intent. I often wonder whether transfers like this are knowing. Websites occasionally try to grab enough ownership interest to claim copyright infringement, like Craigslist did for a brief time (revision of terms here).  But do people really understand the significance of assigning the copyright? Do they realize they can’t use the work elsewhere themselves? Do those real estate agents truly not use the beauty shots of the properties elsewhere after uploading them to the listing service website? Perhaps it isn’t relevant as a matter of contract formation law, but it sure would affect whether someone signs or not.

    Here’s hoping for an appeal.

    Metropolitan Regional Information Systems, Inc. v. American Home Realty Network, Inc., No. 12-cv-00954-AW (D. Md. Aug. 27, 2012).

    Metropolitan Regional Information Systems, Inc. v. American Home Realty Network, Inc., No. 12-cv-00954-AW (D. Md. Nov. 13, 2012) (reconsideration).

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