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Canadian real estate case sets direction for online trading

29 November 2011

We have all become accustomed in recent years to searching for real estate online. A recent Canadian case between two companies in the real estate business raises some interesting issues about doing business online.

The plaintiff, Century 21, is a real estate franchise whose website allows searches according to various categories, including locality. The website was publicly accessible but Century 21 sought to restrict its use by competitors through certain terms of use. These terms gave a licence to use the website and its contents for personal use while requiring users to seek permission if they wanted to link to the Century 21 website. There was no “I accept” icon; the terms were simply displayed at the bottom of the website’s homepage.

The defendant, Zoocasta, also operates a real estate website with features including local area information and property listings. The Zoocasta site used robots (automated software programs) to scrape data (a form of indexing that looks for specific information on selected webpages with known layouts) from other sites to collate this information. There was evidence that the Zoocasta site indexed and linked to the Century 21 site, including reproductions of the full property listings.

The case proceeded on a number of grounds, including breach of contract, copyright infringement and trespass to chattels. The court’s findings in relation to contract, subsistence of copyright and fair dealing are particularly interesting.

1. Contract
The court examined the development of the law in relation to electronic contracts and concluded that Century 21’s terms of use constituted a binding contract between the parties. On the facts before it, the court found that Zoocasta had actual knowledge of the terms of use and that there had been a breach of contract.

This finding builds on the existing law in relation to “clickwrap” “shrinkwrap” and “browsewrap” agreements, and will give significant comfort to website operators seeking to manage use of their sites by third parties.

2. Subsistence of copyright
Recent case law has examined whether copyright can subsist in compilations such as medical records, telephone directories and television listings. In this case the court found that copyright did subsist in the individual property descriptions and photographs (although not in the general factual information on the website).

3. Fair Dealing
Canada, like Australia and the United Kingdom has a fair dealing exception which operates as a defence to copyright infringement. In this case, the defendant tried to argue that its use of the Century 21 property listings was a fair dealing and that they were therefore not liable for copyright infringement The court first examined whether the use fell into one of the fair dealing purposes (such as news reporting, research or study, criticism or review). Interestingly the court held that the fact that Zoocasta’s use was clearly commercial did not by itself take its use outside a fair dealing purpose. The court next examined whether the use was fair in all the circumstances. In doing so, it looked at the character of the dealing, the alternatives to the dealing, the amount of the dealing and the nature of the work and concluded that the dealing had not been fair. Hence Zoocasta was found to have infringed copyright in the property listings.

While fair dealing always requires a case-by-case analysis, the Supreme Court of British Columbia’s discussion in the Centruy 21 case will provide useful guidance on the parameters of fair dealing.

The decision is available here.

To read more about this story go to: http://www.copyright.org.au/news-and-policy/details/id/2026/

For inquiries relating to publishing and copyright law please contact Adam Simpson.

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