CIVIX vs. the real estate world
Over the years, we have written and spoken about the merits and damage of patent lawsuits, noting the new trend in real estate as suing for patent infringement which we maintain that in most cases impedes innovation. We asked how the legal system will handle the onslaught of patent lawsuits with the new patent trolling groups popping up left and right (although some patents are, of course, legitimately defended by the owners using the patent).
In the past, CIVIX-DDI, LLC has sued Realtor.com and later the MLSs which led to the National Association of Realtors (NAR) stepping in. The suits name CIVIX’s patent on “systems and methods for remotely accessing a selected group of items from a database” aka web search relying on geo-location. While many in the real estate industry cried foul and claimed the company is patent trolling, Move, Inc. (Realtor.com operator) and NAR (on behalf of MLSs) both settled with the company.
NAR General Counsel, Laurie Janik told AGBeat in May that “NAR reached an agreement with CIVIX whereby NAR can license MLSs at a cost of $9.06 per paid subscriber in the MLS. The total payment to CIVIX is $7.5 million, to be paid in three payments of $2.5 million. We distributed the license agreement to the MLSs [on May 20th].”
CIVIX has now set their eyes on a new target: Trulia.
CIVIX’s new lawsuit targets Trulia
CIVIX has now filed suit, demanding a trial by jury against Trulia for allegedly infringing the CIVIX patent on “systems and methods for remotely accessing a selected group of items from a database.”
As Trulia potentially gears up for an initial public offering (IPO), the timing of this lawsuit seems predatory, as if it could be aimed at the company to settle quickly and quietly so as not to hurt their IPO chances.
Given that Realtor.com, MLSs, and now Trulia have been targeted by CIVIX, we wonder who is most vulnerable to be next in line as the company’s new lawsuit makes it clear the intent to sue as many companies as possible. Is Zillow next?
The threat to innovation
“Traditionally the real estate industry has been served by a lot of independent software companies. Think about it, Top Producer was a couple brothers from Canada, Advanced Access, eNeighborhooods, Lone Wolf, Tarasoft, Rapattoni, W&R Studios, etc. I could think of a bunch more but hopefully you get the point. It’s not like IBM, Oracle, Microsoft have really focused on real estate software/technology,” W&R Studios co-founder, Greg Robertson told AGBeat.
Robertson continued, “These patent trolls are threatening the ability for these independent software companies to do business. Meaning, bigger companies who have the assets to pay the extortion money will end up being the winners. Independent software companies will either go out of business or get gobbled up by bigger companies. Both scenarios equal less choice for real estate professionals.”
Regarding VC backed companies like Trulia and Zillow, Robertson said, “whether you like them or not, they are the ones really investing and leading on the innovation side. So we are all in this fight together. The consequences are clear; less choice and less innovation.”