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Zillow sues Trulia in new patent lawsuit [exclusive]

Zillow’s Zestimates have long been in the spotlight in the real estate industry, but will now be the center of attention during a potential patent trial.

Zillow, Inc. v. Trulia, Inc.

Two real estate media companies are about to go head to head in a lawsuit filed today by Zillow, alleging Trulia has infringed on Zillow’s patented technology that valuates properties, known as Zestimates, by launching “Trulia Estimates” for public consumption.

Zillow filed for the patent in February of 2006 and was granted in June of 2011, U.S. Patent Number 7,970,764 for an invention entitled “Automatically Determining A Current ValueFor A Real Estate Property, Such As A Home, That Is Tailored To Input From A HumanUser, Such As Its Owner.”

Filed in the U.S. District Court of Western Washington at Seattle, this lawsuit says, “When Trulia first launched Trulia Estimates, it was obvious tocommentators that Trulia was merely copying Zillow. Commentators accused Trulia of being a “copycat” of Zillow’s Zestimate service and predicted that Trulia’s copycat versionmight “ding” Zillow’s web traffic.”

Zillow seeks permanent injunction, damages

Of particular note is the patent lawsuit’s reference to Trulia’s recent S-1 filing for IPO status with the U.S. Securitites and Exchange Commission, in which Trulia refers to their Estimates as part of their efforts to raise $75 million.

“Trulia’s acts of infringement have caused damage to Zillow, and Zillow isentitled to recover from Trulia the damages sustained by Zillow as a result of Trulia’s wrongful acts in an amount subject to proof at trial.”

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In addition to damages being sought in the amount to be determined during the demanded jury trial, Zillow is seeking a permanent injunction, which could effectively end Trulia Estimates if a court sides with Zillow.

Full lawsuit:

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  1. DannyDietl

    September 12, 2012 at 10:47 pm

    @JimDuncan #zillow revolutionized what, crappy data? @zillow @ZillowforPros

  2. Jason Sandquist

    September 12, 2012 at 11:19 pm

    As real estate agents front the bill….

  3. Gary McNinch

    September 13, 2012 at 12:01 am

    I wonder if the amount of damages that Zillow requests will be an “estimate” that is as accurate (LOL) as their original Zestimates! LOL

  4. Matthew Parrish

    September 13, 2012 at 1:07 am

    When the going gets tough, sue the competition!

  5. nicwinder

    September 13, 2012 at 1:34 am

    @andrearealtor Wait, zestimates inaccuracies doesn’t hurt zillow enough on its own and trulia can damage zillow further? That’s crazy.

    • AndreaRealtor

      September 13, 2012 at 8:15 am

      @nicwinder I don’t believe what one’s opinion is of the Zestimate is a fact in the litigation?

  6. Michael DeFilippi

    September 13, 2012 at 8:07 am

    This is absolutely ridiculous. Very negative move by Zillow.

  7. rqd

    September 13, 2012 at 9:57 am

    First American/CoreLogic sued Zillow for the Zestimate saying it violated FACL’s patent for AVM.  Zillow settled and paid for a license.  I’m not sure if Trulia was also named in FACL’s lawsuit but if they were, would a settlement with FACL play in Trulia’s favor? laniar 

  8. Jonathan Cardella

    September 13, 2012 at 9:01 pm

    This is a desperate and thinly veiled strategy by Zillow to derail Trulia’s IPO, as evidenced by the timing of the complaint. Zillow has known about Trulia’s AVMs for over a year, yet waited until the IPO filing to file its suit.
    While this is merely conjecture on my part, it is highly unlikely that this is a mere coincidence. The intention behind the timing of this suit must be to diminish the value of Trulia in the minds of investors, thereby sabotaging the IPO at a time when Trulia is most vulnerable. If I am correct in my assumptions, this is a disgusting tactic that should be met with a fierce counter-complaint by Trulia, especially if the IPO or valuation collapses before it comes to fruition.
    Further, if Trulia’s AVM feature was truly damaging to Zillow, they would have filed claim by October, perhaps November last year and then amended their complaint as needed, once they got their ducks in a row. This smacks of litigation filed in bad faith, in my untrained opinion (I am not a lawyer).
    Zillow’s AVM patent is a perfect example of the nonsense coming out of the USPTO. In order to be eligible for patent protection, a patent must be New or Novel, Useful, and Non-Obvious. Zillow’s patent only fulfills one of those requirements (usefulness). Brokers and appraisers have been doing property valuations/”CMAs” for many decades, as have appraisers, albeit they were done manually. Simply automating this process does not make it new or novel. And I would love to hear Zillow argue that an AVM was non-obvious in 2006. In fact, institutional investors have been using AVM technology since the late 1990’s.
    The USPTO routinely errs in granting patents that do no comport with US IP laws. A patent isn’t “hardened” until it is challenged via litigation. This is the first litigation involving the Zillow AVM patent and Trulia attorneys will attack this patent for not meeting these requirements. Only after this case will we know if Zillow has a patent that will stick.
    In conclusion, this case will be interesting because it will likely see the Zillow patent over-turned and a cross complaint from Trulia for any damages that result from the malicious timing and motivations behind this suit that seemingly go far beyond protecting IP, which is a recurrent theme in this industry, as I have learned first hand. And hopefully this skirmish will underscore the need for meaningful IP Reform in the US.

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