In a case of first impression, the U.S. Court of Appeals for the Fourth Circuit recently held that accepting a website’s terms of use through a so-called “clickwrap” agreement constitutes a signature for purposes of effecting a transfer of copyright.

The case, Metropolitan Regional Information Systems, Inc. v. American Home Realty Network, Inc., revolved around photographs displayed with real estate listings.  The plaintiff, MRIS, operated an online real estate listing service.  As part of its terms of use, MRIS’s service required users to “irrevocably assign” all rights they had in any images submitted as part of a listing.  The defendant, AHRN, a real estate broker, displayed photographs taken from the plaintiff’s site on its own website.  When MRIS sued for infringement, AHRN challenged its ownership of copyrights in the photos.  The lower court rejected AHRN’s challenge, granting a preliminary injunction, and the Fourth Circuit has now affirmed.

Section 204(a) of the Copyright Act requires that in order to be effective, a transfer of copyright ownership must be “in writing and signed by the owner of the rights conveyed or such owner’s duly authorized agent.”  The appellate court noted that this requirement serves to guard against fraud and ensure certainty of ownership of copyrights.  In affirming the district court, the court relied on the E-Sign Act, under which a signature “may not be denied legal effect, validity, or enforceability solely because it is in electronic form.”  The court noted that the E-Sign Act defines an electronic signature broadly, as an “electronic sound, symbol, or process.”  Accordingly, the court held that a user “who ‘clicks yes’ in response to  . . . electronic [terms of use] prior to uploading copyrighted photographs[] has signed a written transfer of the exclusive rights of copyright ownership in those photographs consistent with Section 204(a).”

Earlier this year, a district court in California reached a similar result, finding that users had conveyed to Craigslist an exclusive license as to certain posts they had made on the site.  However, that court considered only the requirement that a transfer be in writing, not that it be signed.  Nonetheless, in spite of the differences in rationale, both decisions will prove important in future disputes over the ownership of user-generated content.