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

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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.”

The American Genius is news, insights, tools, and inspiration for business owners and professionals. AG condenses information on technology, business, social media, startups, economics and more, so you don’t have to.

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30 Comments

30 Comments

  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: directionsmag.com/articles/move-inc-wins-real-estate-mapping-patent-case-over-real-ltd/122330

    • 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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Austin

Austin tops the list of best places to buy a home

When looking to buy a home, taking the long view is important before making such a huge investment – where are the best places to make that commitment?

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Looking at the bigger picture

(REALUOSO.COM) – Let us first express that although we are completely biased about Texas (we’re headquartered here, I personally grew up here), the data is not – Texas is the best. That’s a scientific fact. There’s a running joke in Austin that if there is a list of “best places to [anything],” we’re on it, and the joke causes eye rolls instead of humility (we’re sore winners and sore losers in this town).

That said, SelfStorage.com dug into the data and determined that the top 12 places to buy a home are currently Texas and North Carolina (and Portland, I guess you’re okay too or whatever).

They examined the nerdiest of numbers from the compound annual growth rate in inflation-adjusted GDP to cost premium, affordability, taxes, job growth, and housing availability.

“Buying a house is a big decision and a big commitment,” the company notes. “Although U.S. home prices have risen in the long term, the last decade has shown that path is sometimes full of twists, turns, dizzying heights and steep, abrupt falls. Today, home prices are stabilizing and increasing in most areas of the U.S.”

Click here to continue reading the list of the 12 best places to buy a home…

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Housing News

Average age of houses on the rise, so is it now better or worse to buy new?

With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.

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aging housing inventory

The average home age is higher than ever

(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.

With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.

Prices of new homes on the rise

Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.

Click here to continue reading this story…

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Housing News

Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?

The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.

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Why Realtors are vulnerable to these rapid changes

(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.

Note: We’ll let you decide which company plays which role in the image above.

So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.

1. Zillow poaches top talent, Move/NAR sues

It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.

Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.

2. Two major media brands emerge

Last fall, the News Corp. acquisition of Move, Inc. was given the green light by the feds, and this month, Zillow finalized their acquisition of Trulia.

…Click here to continue reading this story…

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