Article by: Billy Duan

Risks of informal agreements – Ongoing battle between Realestate.com.au and photographer

Background:

Mr Hardingham makes his living as a photographer. In late 2009, He incorporated Real Estate Marketing Australia Pty Ltd (REMA) to provide photographic and other graphic images to real estate agents (the “Agents”) for marketing purposes. The usual course of dealing between them is that the Agents will contact Mr Hardingham and request him to come to the properties listed for sale/lease and take photos of and sometimes prepare floor plans. In exchange, REMA would receive a fee. One of the promotional platforms the Agents used was Realestate.com.au which is an internet website operated by Realestate.com.au Pty Ltd (“Realestate.com.au”). This website provides real estate property listing information for customers.

In order to list a property on its website, the Agents are required to subscribe to Realestate.com.au’s services by entering into subscription agreements (the “Subscription Agreements”). The Subscription Agreements all provide a very broad scope for Realestate.com.au to enjoy perpetual licences to publish, copy, adapt and license to other persons any content that the Agents provide without any charge.

In comparison, the arrangements between REMA and the Agents were all made through oral conversations and they generally comprise of the following terms:
1. Mr Hardingham for REMA would attend the nominated site;
2. Mr Hardingham for REMA would take photos and sometimes prepare floorplans for a fee;
3. The photos and floorplans are to be in an editable digital form; and
4. The Agents have the right to use these photos and floorplans in a “marketing campaign” to sell or lease the properties.

The dispute arose when Mr Hardingham realised his works were being used by RP Data Pty Limited (“RP Data”) through its product “RP Data Professional” for similar marketing purposes. After REMA’s lawyers wrote a letter to RP Data, It turned out RP Data had obtained a license to use Mr Hardingham and REMA’s works from Realestate.com.au. However, throughout their dealings with the Agents, Mr Hardingham and REMA had no interaction with Realestate.com.au or RP Data.

Proceedings in the Federal Court

The Federal Court of Australia initially found In 2019 that although there was no express agreement or discussion, it is implied and inferred through Mr Hardingham and REMA’s dealings with the Agents that Realestate.com.au had acquired the right to use any materials the Agents supplied, including to sub-license them to third parties. Evidence was also adduced that Mr Hardingham and REMA were aware of RP Data’s use of Mr Hardingham and REMA’s works but they chose not to take action for extensive periods.

REMA appealed this decision and the Full Court ruled in REMA’s favour by a 2-1 judgment. It was found by the Full Court that although it can be implied that Mr Hardingham and REMA had consented that the photos and floorplans were sub-licensed by the Agents to Realestate.com.au for promotional use, there is insufficient basis to imply or infer the scope of such license is as board as what the Subscription Agreements provided. The Full Court found RP Data had infringed REMA’s intellectual property rights as it did not have a license to reproduce and communicate Mr Hardingham and REMA’s works and ordered compensation.

Proceeding in the High Court of Australia

However, the tides may turn very quickly as Realestate.com.au and RP Data applied to appeal the Full Court’s decision to the High Court of Australia. Special leave was granted in April this year and the parties are currently awaiting judgment to be handed down by the High Court.

Observations and takeaways

Although the matter is still to be determined by the High Court, copyright owners should turn their minds to one of the remakes cited by Justice Greenwood of the Full Federal Court of Australia, which reads as follows:

“The more detailed and comprehensive the contract the less ground there is for supposing that the parties have failed to address their minds to the question in issue.”

It is reasonable to follow that the more detailed and comprehensive the agreement is, the less room there is for terms to be implied or inferred. Copyright owners should be very careful in constructing their agreement to license others to use their works, especially when there is the risk of sub-licensing. In addition, copyright owners should be aware that their failure to take actions may inadvertently assist the interpretation of their license agreement in adverse to their interests.

Talk to one of the commercial litigation lawyers here at Ryan Murdoch O’Regan for more information on informal agreements and intellectual property rights protection.

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This article is for your information and interest only. It is not intended to be comprehensive, and it does not constitute and must not be relied on as legal advice. You must seek specific advice tailored to your circumstances.