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Trulia sued by CIVIX, what continued patent lawsuits mean to innovation

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 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. ( 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.

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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, 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.”

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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.”

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  1. Melanie Wyne

    August 4, 2011 at 1:28 pm

    A quick legislative update on patent reform. The House and Senate have both passed slightly different patent reform bills. The Senate is signalling that it will consider the House version shortly after it returns from recess in September. If the Senate passes the bill, the President has indicated he will sign it and we will have the first reforms to the U.S. patent system in over 50 years. There are provisions in the legislation that will help to reduce the burden of litigation and allow a non-judicial process for challenging questionable patents.

  2. Gary Little

    August 4, 2011 at 3:12 pm

    I have no problem when a company (troll or not) is trying to enforce a legitimate patent. The patent in question here, however, appears to embody such an obvious concept that the patent application should have been rejected. At least CIVIX is going after big companies that can afford to defend themselves — it's just a shame that NAR/Move chose to settle (it was probably cheaper to settle than defend).

    I note that Move, Inc. did fight the real estate map patent awarded to REAL, Ltd. and won:

    • Gary Little

      August 5, 2011 at 4:59 pm

      I learn know that the Move/REAL map patent dispute is continuing. The decision favoring Move was overturned on appeal in March. And on it goes…

  3. Mike Price

    August 5, 2011 at 12:57 am

    There are entirely too many instances of patent owners using extremely broad applications to either extort money from companies and shut down competitors on the edge of "out innovating" the patent holders. There are entirely too many patents that have been issued despite evidence of prior art. There are thousands of software patents that should be reviewed and summarily dismissed in my opinion. The problem isn't with the concept of a patent, it's with a bureaucracy that is so inept that it has created a system that allows someone with the resources to take advantage of positions of strength that they should not have. It's not just here either. Have you ever tried to get a patent in the EU? I've heard Australia is no better, in fact, a man actually patented the wheel there in 2001 to demonstrate the shortcomings of their system. I wouldn't be surprised if you couldn't pull it off in the states as well.

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