Copyrighting appraisal reports: can you? Should you?

Valuation Insights & Perspectives, Wntr, 2006 by Terrence Canela

IN A RECENT CASE BROUGHT IN FEDERAL COURT, an appraiser sued a real estate firm and individual real estate salespersons and brokers, claiming they violated his copyright by using portions of his appraisal report to prepare their advertising and marketing materials. Although the case was ultimately settled before trial, it has sparked discussions among appraisers as to whether they should copyright their reports. The following general copyright principles and their possible application to appraisal reports should aid appraisers in making that decision.

U.S. Copyright Act

Originally enacted in 1790, the U.S. Copyright statute affords authors the exclusive right to their original creations. Underlying the policies that have shaped this area of law is an objective to strike a balance between encouraging individual creativity and society's access to resources. The U.S. Supreme Court has repeatedly confirmed this objective stating in Fogerty v. Fantasy, Inc., 510 U.S. 517, 526 (1994)

  [T]he policies served by the Copyright Act are more complex, more
  measured, than simply maximizing the number of meritorious suits for
  copyright infringement. The Constitution grants to Congress the power
  "To promote the Progress of Science and useful Arts, by securing for
  limited Times to Authors and Inventors the exclusive Right to their
  respective Writings and Discoveries." We have often recognized the
  monopoly privileges that Congress has authorized, while "intended to
  motivate the creative activity of authors and inventors by the
  provision of a special reward," are limited in nature and must
  ultimately serve the public good.

Under the present copyright law, copyright exists in original works of authorship created and recorded in a tangible medium of expression, now known or later developed, from which they can be read, heard, viewed or otherwise communicated, either directly or indirectly with the aid of a machine or device. In other words, copyright is an incident of creative authorship not dependent on statutory formalities. The key factor in copyright is originality, which implies that the work originated from the author and was not taken from some other source.

The copyright owner has the exclusive right to control how the work is used, and generally speaking, third-party use of the copyrighted work requires the author's permission. Failure to obtain the copyright owner's permission can result in criminal and civil penalties.

Copyright limitations

Not all original work is entitled to copyright protection. For example, works in the public domain may be used without permission. With regard to appraisal reports, some aspects of a report may be copyrightable and others may not. For example, facts are not protected under the copyright law (e.g., the parcel number, recorded easements).

An appraiser who creates an appraisal report as a "work made for hire" would generally not be considered the copyright owner. In cases of a work made for hire, the employer or other person for whom the work was prepared is considered the copyright owner, unless the parties have expressly agreed in a signed written document that copyright remains with the employee or contractor. When an appraiser's services are engaged, the report he or she provides the client would typically be considered work for hire, unless the engagement contract states otherwise.

In some instances, a party may have a right to copy or otherwise use a copyrighted work because the owner of the work may have implicitly permitted use of the work in a particular manner. Referred to as an "implied nonexclusive license," courts may find that no infringement occurred because circumstances suggest that permission to copy or otherwise use the copyrighted work was implied. Even if the copyright owner retains a valid copyright and does not explicitly authorize third-party use of the work, he or she may have implicitly permitted use of the work in a particular manner. Unlike an exclusive license, an implied nonexclusive license may be granted orally, or may be implied from conduct. Whether an implied nonexclusive license exists depends on numerous factors and is subject to state law so determinations may vary according to different jurisdictions.

Use of the [c] symbol

Use of the [c] symbol is simply an indicator that the author of the work is claiming a copyright on the work. Typically, this is stated: "Copyright [c] 2006 by Jane Smith. All rights reserved." In some instances, the title of the work is included and/or the city and state of the author. The author of the work can use the [c] even if he or she has not registered the work with the U.S. Copyright Office. Note, however, using [c] does not automatically mean the work in question is copyrightable. Copyrightability can always be challenged.

Copyright registration

An individual does not need to register or take other action in the U.S. Copyright Office to secure copyright. Once fixed in a tangible medium, an original work is automatically entitled to copyright protection. The primary advantages of registering a copyright with the U.S. Copyright Office are that: