Are Reports “Intellectual Property”

Recently one of my Mastermind students asked about Intellectual Property. He told me that he’d had an associate leave his firm to go solo. Later, he was reading one of his former-associate’s reports and found the now-independent associate’s reports looked a lot like his in format, and even language. My student asked me if this was wrong. Well, I’m not a lawyer, but there are some sound issues to consider here.

If you write something, if you are its author, it is your intellectual property. You can either trademark it (like a logo), or copyright it (like a novel). We are not the authors of our data, so they are not our intellectual property. However, our analyses of that data are our intellectual property. The language we use to describe what we did to form a credible value opinion, how we did it, and why we did it, however, are our intellectual property. Our value conclusion is our intellectual property since it never existed until we thought it up; it was the product of our creativity. It is ours. To the client, we sell the appraisal report with a summary of our efforts, true. However, the client owns the report, but not our intellectual property.

So, was the ex-associate of my student “guilty” of something wrong? Again, I’m not an attorney, so my answer is my own and, since you got it for free in this blog, worth every penny of what you paid for it. I think, yes, the associate was guilty of plagiarism. The ex tried to pass my student’s work off as his/her own when, indeed, it was not. Moreover, the ex got paid for taking credit for what my student originally wrote, for my student’s intellectual property. While imitation may be the sincerest form of flattery, it can also be plagiarism. You do not need to copyright something for someone else to plagiarize it. It is okay to use the intellectual property of another, but you must do that properly.

If you are going to use a lot of someone else’s work in your own, that requires permission of the author and/or the copyright holder. If you are going to use just a few words, then what you borrow must be in its proper context, you must quote it correctly, and you must cite the author in a footnote or the bibliography.

In the language of the Certification (see SR2-1, 2nd bullet-point), USPAP warns against plagiarism. Using another’s work without property authority and/or reference is plagiarism. In the Conduct section of the Ethics Rule USPAP says an appraiser “…must not communicate assignment results with the intend to mislead or defraud…”(ibid, lines 187 to 205) [See? Proper citation so you know I did not write that]). So when my student’s ex-associate, without authorization or proper citation took large parts of his appraisal template, as well as copious amounts of language from the reports my student had set-up/written, the ex mislead any clients or intended users. How? Simply by attempting to make them thing the ex set up the template and/or composed the language in the report. That was an attempt to mislead. So, the ex engaged in two ethical violations.

It should be clear, then, that the appraisal is intellectual property. If follows, therefore, the parts of the appraisal report the appraiser writes are also intellectual property. If another appraiser uses them without property authorization or citation, that is both plagiarism, as well as misleading. Both are breaches in USPAP’s Ethics Rule.

Now, is it worth pursuing? That is another question entirely, and come down in large part to harm. Is there a lesson here? If you were trained by your mentor, and end up going out on your own, do your own templates! It doesn’t take very long, and it’s just the right thing to do.

For more information on this subject, please download and listen to The Appraiser Coach Podcast Episode: 213 Is An Appraisal Report Considered ‘Intellectual Property?’

7 thoughts on “Are Reports “Intellectual Property””

  1. When a condition adjustment in a report varies between comparables I will copy and paste the MLSs comments stating the recent improvements, updating, remodeling, etc. to aid reader(s) understand why there’s a difference – anyone see a problem with this?

  2. Chris Shoemaker

    This is a problem as old as the profession. We all had to learn somewhere and when we strike out on our own, it is natural that we take what we learned with us. To complicate the issue, many appraisers train new appraisers to write a report as if it were done by the trainer, not in their own voice. So a relatively inexperienced appraiser likely isn’t even aware that there is any other way to write a report. They won’t have been doing reviews (hopefully) because of their lack of experience and may not have many other examples. Finally, this simply isn’t an issue that gets discussed enough for appraisers to fully understand. It may seem obvious to some that this is wrong, but the idea of “stealing” language from the person that trained you is pretty normal in my experience. We need to build the idea of intellectual property into our training programs.

  3. Chris Shoemaker

    Possibly interesting follow up – I once worked in a very large (at least for our area) residential shop. This was the early 90’s and we had 25-30 appraisers and trainees. The place was a bit of a mill and the guy running it chewed up and churned out a LOT of appraisers. Nothing shady, he was just difficult to work for. I was one of the only appraisers that came in fully trained – my three whole years of experience made me the most experienced appraiser he had. I know, lots of red flags, but I was really, really young (I was, ahem, 22 when I started there). Anyway, point of all this is that those of you who were around and appraising back then will remember all the new rules and regulations we had to operate under in the wake of the S&L fiasco, plus the new licensing laws. And every lender had a laundry list of requirements. I spent a lot of time and effort laying out all those rules, regulations, and requirements from all parties and creating a template that was compliant with all of them. Basically, taking the most stringent requirements and writing reports to that standard, then using language that would satisfy everyone. This became the company template and, with no false modesty, it worked incredibly well. We got business because it became known that we almost never had underwriting issues. When I finally got tired of the mill, I went out on my own. Here is the point of this ridiculously long-winded story: when I left, I took my template (which had been modified over time, by me, as rules changed) with me. Now I felt entitled to do this because I wrote it, but it was approved by the owner and used as the “company” template. The language was mine, but I was an employee. Did I steal intellectual property by doing this? It never came up at the time, but looking back on it I now wonder.

  4. You don’t have to actively copyright something for it to be copyrighted. The moment it is created by you, the copyright is in place. The moment you snap a picture, put the period on the sentence, it is copyrighted. This does not mean it is federally registered which is often needed to claim damages or attorney fees, but you can get others to stop using it.

    Does this mean you have a copyright on the appraisal? Maybe, maybe not. If intellectual property is created for another, it may be considered work for hire. If you are a staff appraiser and you’re being paid to create the appraisal, you don’t own the copyright. This next part may get a little fuzzy, but I think it would default to the lender, AMC or whoever ordered the appraisal. Work for hire is “a work specially ordered or commissioned for use” This could very well cover the appraisal as a work for hire, meaning the appraiser that wrote it does not own the copyright.

    Now the form itself could be copyrighted as a unique design. The elements within the form, including the probably not owned commentary, photos, etc., may not be copyrighted by the appraiser, but the unique form design is likely a treademarked element. A loophole to that might be if the function of that form design is required for that form to work. Think of a speedometer. There’s some things on there that are required for a normal person to understand a speedometer. Numbers, ascending scale, etc, but the design could be copyrighted or more rightly trademarked. Apple lost a trademark case because of a clock design. They lost because of the unique look and the font used, not because the numbers went in a circle. Translate that to a form design.

    C. Shoemaker, your creation of the template was work for hire. You did not own the copyright. Here in silicon valley, programmers used to get into trouble all the time because they would take code they wrote for one employer and take it to another company or use it for themselves. That code writing action is work for hire and the copyright resides with the employer.

  5. That depends if the Appraiser, who signs up with an AMC (or any client) who has you sign off on their unilateral contract (indemnification, etc.) and it clearly states that the Appraisals finish product is a “Work for Hire”… If it is, then the client owns the rights.

  6. I do agree that our work is our intellectual property; however, there is another perspective regarding the specific scenario indicated in this blog. The teacher agreed to teach the student; therefore it could be argued that the student was taught to think like the teacher which could bring the student to similar conclusions and similar descriptions and even report formatting for an assignment the student is working on as taught by the teacher; but, separate from the teacher. Unless the teacher specifically told the student that the student could not use the same descriptions and formatting the teacher was using to teach the student can the teacher later forbid the student from using what the teacher taught the student to do? I do not think so.

    Side note: I believe that in order to be considered work for hire by an independent contractor the client and contractor must make an agreement in writing that it is a work for hire in order for the rights to reside with the client and not the contractor.

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