US digital real estate giant CoStar Group will receive a $1 million initial payment and a wide-ranging federal injunction following the “rampant theft” of its listings by RealMassive.
In a law suit filed last May, CoStar accused RealMassive’s management team, which runs real estate website RealMassive.com, of systematically stealing its subsidiary CoStar Realty Information's intellectual property.
According to CoStar, this conduct came as "little surprise", since it claims RealMassive’s co-founder and former CEO Josh McClure has twice been a defendant in intellectual property cases and had previously been ordered to pay a multi-million dollar judgment for his unlawful conduct.
CoStar says McClure's previous company was set up in Panama deliberately to avoid US law and he touted that strategy to other infringers.
"I'd highly recommend you take advantage of something like this if you plan on continuing a career of making really large companies mad at you," McClure is reported to have said on a public Internet message board.
"It's very profitable in the short term and very harmful to your bank and credit score when they track you down. If they find you, you can't win."
CoStar Founder and CEO Andrew Florance says the company was fortunate to have been able to track McClure and the RealMassive team down, obtain an injunction to stop them from profiting from CoStar's intellectual property and receive compensation from RealMassive.
The unprecedented federal injunction ordered by the court will prohibit RealMassive and four individuals on its current and former management team, including both McClure and current CEO Craig Hancock, from further infringement of CoStar's intellectual property rights, and force RealMassive to change its business model.
“As CoStar delved deeper, the true scope of RealMassive's misconduct became clear,” Florance says in a statement.
“In addition to unlawful copying and reproducing CoStar's photographs, publicly available websites and videos demonstrated that RealMassive was systematically stealing CoStar's listing data and republishing that data without attribution, on its website.
“RealMassive's agents were even cropping out the CoStar logo from CoStar's photographs.
“CoStar's suspicions about RealMassive's unlawful activities were substantiated, forcing the company not only to pay $1 million dollars to CoStar, but also to accede to a sweeping federal injunction.”
The injunction orders RealMassive to license and implement a content filter and subjects them to additional automatic damages if further infringement were ever to reoccur.
On top of the $1 million initial payment, RealMassive will also be required to pay CoStar $4,000 per photo, per day, and attorneys' fees, for any subsequent CoStar content that appears on RealMassive.com in violation of the parties' agreement.
"Our win against RealMassive is a win for our clients and consumers who rely on our best in class commercial real estate products," says CoStar Founder and CEO Andrew Florance.
"Our teams work passionately and tirelessly to compile the insight and information that our clients trust to give them a competitive advantage.
"We've found that RealMassive's business model was to hire contractors to copy listings from brokers' sites – including CoStar-hosted sites –then reproduce those listings wholesale on RealMassive.com.
“As the case went forward, it became clear that RealMassive's systematic theft of CoStar intellectual property had been conducted on, for lack of a better phrase, a real massive scale.
The US federal court has ordered RealMassive and its management team, including Hancock and McClure individually, to cease further infringement and to implement changes to the company's business model, including a filter for proprietary content.