Daily Development for
Tuesday, November 7, 1995

by: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law

TITLE INSURANCE; TITLE REPORTS: Title commitment is not copyrightable. Mid America Title Co. v. Kirk, 59 F.3d 719 (7th Cir. 1995).

A bank ordered a title policy and asked for a preliminary title report from title agent, which agent supplied. Later, the bank cancelled the order and acquired insurance for the transaction from a lawyer who wrote for a competing title company. The agent alleged that the lawyer had based his title report on the report already done by the agent, and sued for various common law business torts and copyright infringement.

The other torts were dismissed in an earlier action, (Mid America Title v. Kirk, 991 F.2d 417 (7th Cir. 1993)), but the copyright infringement case was sent to a magistrate. Eventually, after reviewing cross motions from the parties, the magistrate granted summary judgment for the lawyer, finding no copyright infringement. The Seventh Circuit affirms the summary judgment in this appeal.

A recent U.S. Supreme Court decision, Feist Publications, Inc. V. Rural Telephone Service Co., 111 S.Ct. 1282 (1991) stated that a factual compilation is eligible for copyright if it features an original selection, coordination or arrangement of facts. "Original" means that the work was independently created and possessed some minimal degree of creativity.

Title agent in this case contended that deciding what facts to include in the commitment entailed sufficient originality and a minimal level of creativity. Defendant argued there was no creativity because the title examiner was restricted to simply listing all factual information. The Court here agreed that the process used to prepare the commitment failed to meet a minimal level of creativity. Selecting which facts to include in this compilation of data was not a matter of discretion based upon Agent's personal judgment or taste but, instead, was a matter of convention and strict industry standards. Selection of facts by Agent was too rote and mechanical a task to constitute an original element of work..

The court decided that, in this particular case, the element of selection was not sufficiently original to merit copyright protection and further stated that the decision does not mean that a commitment can never be copyrightable

Reporter's Comment: Although the court indicates that some title reports may be copyrightable, the overall impression left by the language of this case is that title examinations represent rote and mechanical work lacking in creativity and originality. Obviously, examining titles and determining marketability and insurability are much more complicated than merely selecting what mortgages and encumbrances affect the title. Contrary to what the court said, there is no strict industry standard. Underwriters disagree regularly on what standards they apply in order to insure marketability. Title examiners face a stressful, front-line job making crucial, creative and original decisions in interpreting laws and factual situations that are frequently ambiguous, unclear and controversial. They risk substantial money of the underwriter in doing so.

Ignoring the complexities of determining marketability and insurability, the court held that writing a title report involves less originality and exercise of judgment than selecting 5,000 premium baseball cards from a total of 18,000 (an activity that the Second Circuit has found copyrightable). Every title examiner should review this opinion.

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