CoStar Group, Owner of Homes.com, Sues Zillow for Massive Copyright Infringement, Seeking Over $1 Billion in Damages

CoStar Group, Owner of Homes.com, Sues Zillow for Massive Copyright Infringement, Seeking Over $1 Billion in Damages

Introduction

CoStar Group, the owner of Homes.com, has filed a lawsuit against Zillow, accusing the largest U.S. online real estate portal of publishing nearly 47,000 copyrighted photos without permission. The lawsuit seeks unspecified compensatory and punitive damages, which CoStar estimates could exceed $1 billion.

Factual Background

Zillow allegedly used CoStar's photos, many with watermarks, to boost its rental listings business. The photos were used to induce property managers and landlords to "claim" properties not actively listed for rent, allowing Zillow to sell advertising packages and tools. CoStar also alleges that Zillow distributed some of these photos under syndication agreements to rival portals Realtor.com and Redfin. CoStar claims Zillow's actions constitute copyright infringement "on a massive scale."

Contentions of the Parties

CoStar’s Contentions:

• Unauthorized Use: Zillow published 46,979 copyrighted photos without permission, violating CoStar's intellectual property rights.
• Business Model: Zillow used the photos to boost its rental listings business and sell advertising packages, generating revenue without compensating CoStar.
• Limited Licensing: CoStar contends it provides limited licenses of its photos only to real estate professionals and does not allow sublicensing to third parties, and Zillow’s actions exceeded any permissible use.

Zillow’s Response:

• No Immediate Comment: Zillow did not immediately respond to requests for comment.

Implications

This lawsuit highlights the importance of intellectual property rights in the real estate industry. If CoStar's claims are successful, it could set a precedent for how online real estate platforms use copyrighted materials. The outcome may also impact the business models of similar companies.

Outcome

The case is ongoing, with CoStar seeking unspecified damages. The potential damages exceeding $1 billion underscore the significance of the alleged infringement. CoStar has also threatened to sue Realtor.com and Redfin if they do not remove its copyrighted photos.

Related Cases

• CoStar Group's Previous Lawsuit: CoStar obtained a $500 million judgment against Xceligent's bankruptcy estate in 2019 for publishing 38,489 copyrighted photos. This precedent may influence the current case.
• Compass Lawsuit: Compass sued Zillow in June for allegedly trying to monopolize private home listings, violating federal antitrust law. Zillow has called Compass' claims unfounded.

Potential Impact

The outcome of this case could have significant implications for the real estate industry, particularly regarding intellectual property rights and the use of copyrighted materials. It may also affect the business models of online real estate platforms.