Appraisal Reports Are Copyrightable Under Copyright Law And USPAP

Appraisal reports are copyrightable, under copyright law and USPAP according to Jennifer Sides, Corporate Counsel, a la mode. The following is from their April 19, 2006 newsletter. Recently, counsel for the Appraisal Institute produced and distributed an article, "Copyrighting Appraisal Reports: Can You? Should You?", which called into question the ability and wisdom of appraisers copyrighting their reports. Since we've been in the lead convincing appraisers to protect their rights, we felt we needed to respond. The primary author of our response is our Corporate Counsel, Jennifer Sides. Sides' background in intellectual property law has made her the industry's leading expert on copyrighting appraisal reports. A recent Appraisal Institute-sanctioned article, "Copyrighting Appraisal Reports: Can You? Should You?" was not only delivered to Institute members, but ran in the Appraisal Buzz e-mail newsletter, seemingly indicating that the Institute wanted a much wider readership than it could have managed solely by sending it to its own member list. We wish they had put an equal amount of effort into making sure it was accurate on even the most basic aspects of copyright law. Some of our customers have contacted Appraisal Buzz and the Institute demanding clarification or a retraction. The publisher of Appraisal Buzz has indicated she takes no responsibility for the accuracy of what she e-mails, and the Institute has not responded publicly. Therefore, I will address the falsehoods and misleading material in this article. The author of "Copyrighting Appraisal Reports: Can You? Should You?" would have benefited from browsing the U.S. Copyright website. (You don’t have to be an attorney to be better informed than the article’s author. Just visit http://www.copyright.gov.) Simply put, your appraisal report is your intellectual property. It is an asset. It is copyrightable. The creator of any work owns it. See "Appraiser Wins Copyright Suit: Now What?" There is one exception, prominently (and fallaciously) addressed in the Appraisal Institute article: "works made for hire." The Institute's author wrote, "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 the copyright seminars at our a la mode conventions we have a "catch all" slide near the end where we round up all the most easily dismissed arguments against copyrighting your appraisal reports. The "work made for hire" argument is one of them. This is the sort of stuff seen in Copyright Law 101. So, here we go.

Your appraisal reports are not "works made for hire" unless you specifically say they are. Since you own your intellectual work by default, you have to engage in very particular actions to surrender that right.

A report would be a "work made for hire" if prepared by an employee within the scope of his or her employment, or if it were specially ordered or commissioned for use as a contribution to a collective work. Most appraisers are not employees, and they are not creating a small part of a specified larger collective work. They are providing a stand-alone piece of intellectual property as an outside professional. In the case of a non-employee such as almost all appraisers are, copyright law is very clear. Not only must a work be specially ordered or commissioned, but there must also be a prior written agreement between the parties specifying that the commissioned work is indeed specifically a "work made for hire." If you never signed an agreement with that language, you did not perform a work for hire. If they say it is anyway, then tell them thanks for "hiring" you as an employee, and ask when you get your 401(k) and health insurance. Access to the cafeteria would be nice too. Really, the "work for hire" argument is that ridiculous. The article further attempts to scare appraisers away from copyrighting with another misleading assertion:

"The Copyright Office's records are available for public inspection, and most may be copied for a fee. Public access to actual works deposited at the Copyright Office is permitted if the copyright owner authorizes access or for litigation-related reasons...."

Everything after the "if" is quite important, but creatively glossed over. There is nothing "public" to it. Unless your report is part of litigation (where it would be disclosed anyway, regardless of USPAP confidentiality), anyone wishing to view it at the Copyright Office must have your written permission to do so. Just don't grant it. But most importantly, as we tell attendees of our copyright seminars, you may indeed redact the confidential information from your reports prior to filing with the Copyright Office, without impacting your right to copyright protection one iota. Redaction is standard procedure in copyright filings containing confidential information or trade secrets. The confidential data which you placed in your report is not material to the intellectual work anyway; those parts are a regurgitation of data you received and which bear none of your creativity. Instead, it is the uniqueness of your work, the "IQ points" you put into it in arriving at and describing the value conclusions and the characteristics, which you are copyrighting. "Data" components, whether they are the confidential tidbits or the MLS data used in the report, are immaterial in the context of a broader work. That standard has been upheld in the courts repeatedly. Appraisers always err on the side of strict compliance with USPAP, and redaction is a great way to do so. But even if an appraiser specifically chose not to do so, the implication that USPAP or other laws and regulations prohibit you from protecting your rights is irresponsible and incorrect. A pile of administrative rules prepared by a team of bureaucrats in a windowless office in the bowels of Washington does not trump the Constitution's core rights to intellectual property. It is important to remember that our Constitution set remarkable standards not only in personal freedoms but in the right to benefit from owning property, including intellectual property. Article I, Section 8, Clause 8, empowers Congress to legislate copyright and patent statutes, and standardized the scattered copyright laws the colonies already had in place. Why was it important enough to encode for the first time as a core part of the guiding law of a nation? Because of the chain of events set forth by a little piece of new technology of the late fifteenth century — the printing press. Since that time, copyright law development has been a continuing response to the challenge posed by other new technologies. The mortgage industry, regardless of how hard the enemies of appraisers hope and wish, will not be the first group to successfully reverse 500 years of creators exercising and strengthening their intellectual property rights. The protection of your rights starts with you. Learn and understand them, and most importantly, exercise them. You value property belonging to others everyday; place a value on your own intellectual property assets as well. Read the full article in the a la mode news. Appraisal , Real Estate , Appraiser , Blog , Technology