Friday, October 17, 2008

Sarasota REALTOR Files Federal Lawsuit To Keep MLS Domain Name

Inman New ran an article yesterday (link here) about a Sarasota real estate agent who filed a federal lawsuit in the U.S. District Court in for the Eastern District of Virginia in September in order to keep his domain name www.thesarasotamls.com. See Rasmussen v. Sarasota Association of Realtors, Inc., Case No. 08-cv-00954 (E.D. Va. September 15, 2008).

In August 2003, Marc Rasmussen, a REALTOR® and member of Sarasota Association of Realtors (“SAR”), registered the domain name http://www.thesarasotamls.com/ to promote his real estate services. In June, SAR filed a UDRP action against Rasmussen arguing that SAR had acquired trademark rights to the Sarasota MLS mark and that his domain name was confusingly similar to such mark and was registered in bad faith. A split decision by the arbitration panel ordered the domain name to be transferred. Rasmussen’s lawsuit will provide a temporary reprieve against the panel’s domain name transfer order while the parties battle it out in federal court.

As most people (and certainly most real estate agents) know, MLS is the well-recognized abbreviation for Multiple Listing Service – the databases of real estate listings which are controlled by various regional associations affiliated with the National Association of Realtors (“NAR”). In this case, SAR owned the domain name SarasotaMLS.com. What people may not know is that the term MLS is not actually a registered trademark owned by NAR or any associated group (unlike the REALTOR® mark which NAR for years has worked to protect from genericide).

What complicates the issue for NAR members is that for many years, NAR did not have any policy regarding the use of the MLS mark in domain names. In fact, NAR’s own REALTOR magazine an article at one time (before Rasmussen registered his domain name) by “Mr. Internet” (Michael J. Russer) specifically advising agents to register domain names with the term “MLS” in them in order to drive internet traffic to their sites.

When NAR last November finally did approve a policy, it gave the local associations running the local MLSs the option to enact a policy banning their members from using the terms "MLS" and "Multiple Listing Service" from Web site URLs, company names, e-mail addresses and other marketing materials. NAR also provided some guidance for local associations to use in determining whether the use of terms such as "MLS" in a website operated by an NAR member might conflict with provisions in NAR’s Code of Ethics that all members are bound to comply with (e.g., where use of MLS for a domain name might lead a consumer to believe that the website is the local MLS). But such a determination of whether a member’s use of MLS in a domain name is an ethical violation is ultimately left in the hands of the local associations – and thus decisions about use of MLS in domain names can vary by regional area and even on a case by case basis. In addition, the impact is felt mostly by members of the local association – real estate agents who choose not to be affiliated with NAR and the local NAR chapter or its MLS are not bound by NAR’s Code of Ethics or any local policy.

In the case of Rasmussen, there was an ethics panel decision by SAR which apparently found the he had not committed an ethical violation by the domain name registration. Interestingly, when Rasmussen attempted to enter this ethics decision into evidence before the UDRP panel, SAR cited a provision in NAR’s rules governing the ethics proceeding which apparently prevent Rasmussen from disclosing the ethics decision and or using the decision in an arbitration case.

Part of Rasmussen’s argument is that SAR does not have any valid rights to the mark Sarasota MLS. The website http://www.sarasotamls.com/ redirectes to SAR’s site at http://www.sarasotarealtors.com/. And while the website contains a small link at the top which reads “Sarasota MLS,” a click on the link leads to the current MLS to which Realtors in the Florida counties of Sarasota and Manatee use – the Mid-Florida MLS. SAR’s counterargument is that the Sarasota MLS does still exist and provides information to the Mid-Florida MLS.

While Rasmussen’s domain name is currently being forwarded to another domain name while the case is pending, his website still contains the disclaimer in bold that was on his previous site:

This is not the Sarasota Multiple Listing Service (MLS). The Sarasota MLS no longer exists. Realtors in Sarasota and Manatee counties now use the Mid-Florida MLS system. This website contains virtually all of the properties for sale in Sarasota and Manatee counties. There is no need to search multiple websites since this site is updated daily with almost every property for sale.

What may have given Rasmussen enough encouragement to file the federal action were the comments by the dissenting panelist in the UDRP action. That panelist felt that SAR had not established common law trademark rights to the MLS mark prior to the registration of the domain because SAR tended to use the MLS mark in a descriptive sense to identify the MLS database and not in a trademark sense, and never sought to protect the term as a mark until real estate agents began using the term in domain names. The panelist also felt that Rasmussen did not have the requisite bad faith needed under the UDRP, specifically noting the aforementioned advice to its members to register include the term “MLS” in their domain names in order to drive traffic to their sites (even though NAR later changing its policies about that). Finally, NAR’s own ethics decision declining to censure Rasmussen for this particular domain registration – even though the decision arguably should not have even been presented as evidence – nonetheless supported Rasmussen’s argument that he did not have any bad faith intention at the time he registered the domain name.

7 comments:

Tony Sena said...

This case is getting alot of coverage and is being closely followed by many real estate agents all across the country. From many of the blog articles covering this issue, it appears many are supporting Marc with his fight against SAR.

Here are a few blog articles supporting Marc:

http://blogs.wannanetwork.com/blog/2008/10/18/unite-against-the-sarasota-mls-board/

http://www.realestateoutpost.com/2008/10/18/sarasota-mls-board-dispute/

http://activerain.com/blogsview/744440/TheSarasotaMLScom-Is-History-Maybe-Youre-Next

Thanks for covering the story!

gulfshoreslife said...

A great summary of Marc Rasumussens conundrum with the Sarasota Association of REALTORS Ryan!

The REALTORS code of ethics calls for issues to be settled within in house closed door arbitration hearings. Marc did so and allegedly won that hearing. It is my understanding that the arbitration hearings are final and that those within the hearing are to abide by the results of the hearing. It is apparent that the Sarasota Association of REALTORS Board did not keep up with their end of the bargain in regards to "their" and NAR's guidelines for those hearings in regards to allowing the results to be final. The Board that did not get the result they wanted pursued the matter through ICANN and then stated before the ICANN hearing panel that Marc had violated the policy that the matter was not to be discussed publicly. Marc did not discuss the matter until the Board refused to allow the original hearing results to be final. The SAR Board continued to persue the matter (that should have been resolved within their own Kangaroo Court hearings) and then cried foul and tried to assault Marc's character by saying he breached the confidentiality of their in house hearings.

I would certainly love to hear your thoughts on this one sided arbitration where one party is supposed to follow the rules, but the sanctioning body that has the rules refuses to honor their end of the bargain.

Ryan Ward said...

Would you feel that there is any merit to a class action lawsuit filed on behalf of the many other REALTORS - not just Marc Rasmussen - who have been monetarily affected by the change in Article 12 based upon the idea that the NAR (the trade organization REALTORS should be able to count on) once recommended its member to use domains such as this and has now created the wording that allows lawsuits ethics hearings such as this to take place? Should they not be able to rely on their own organization to protect them from what is essentially an ethics change created by the NAR which affects only member of the NAR?

relady said...

What really bothers me about this is not only the Mr. Internet article which Marc may or may not have read, but the fact that he called NAR and FAR (Florida Association of REALTORS) before purchasing the domain to see if it was acceptable. He was told there was no problem. Unfortunately, he didn't get it in writing.

Now the rules have changed many years after the fact and because his site has been #1 in the search engines he is the one being attacked, not the other Sarasota sites that also have MLS in the domains.

Kyle said...

Nice article. What are your thoughts about the outcome of this pending lawsuit?

Charles Richey said...

It seems they are free to change the rules as they see fit. What really bothers me is that he forwarded the url, making it invisible to web surfers, yet they went after it thru ICANN. About as subtle as a drive by.

John Sabia said...

Great synopsis -
I agree - I find it unethical to prohibit the the results of an ethics hearing as evidence when one side disregards the outcome with a legal maneuver going to ICANN because they didn't like the result from their own peers. Where's the ethics there?

It will be interesting to see if SAR goes after any other sites (less ranked in search engines) for using the term or of they only targeted Marc.

The whole issue can be described by one word "shameful."