CoStar Lawsuits: Voluntarily Dismisses Its Own Case Against Homesnap Founder, Files Counter against Move Inc.

CoStar Group has voluntarily dismissed a lawsuit it filed against Guy Wolcott, the founder of Homesnap, of its own volition citing the "limited nature" of the rival product.

CoStar acquired Homesnap in 2020 as part of its strategy to expand into residential real estate.

Then, in September 2023, CoStar submitted a case accusing Wolcott of poaching former Homesnap (now CoStar) employees once they had experienced the inner workings of the CoStar setup—then using their knowledge to boost his new business venture.

But CoStar voluntarily withdrew the lawsuit this week, essentially brushing off Wolcott's new venture, Happening, as a non-rival not worth CoStar's litigation dollars. At the very least, Happening doesn't operate in a way that CoStar believes is worth pursuing as intellectual property theft, or that it presents a realistic threat to CoStar's business.

The filing reads:

In July of 2023, Mr. Wolcott pitched Happening’s product to CoStar’s technology executives, including its alleged “secret sauce,” as a potential replacement for CoStar’s proprietary data platform. What was shared of the Happening product, developed by former CoStar employees with detailed knowledge of CoStar’s proprietary systems, mirrored CoStar’s proprietary platform.
CoStar raised these concerns with Defendants, but they obfuscated.

As noted above, CoStar then filed suit to protect its intellectual property and sought expedited discovery, but still Defendants
refused to provide CoStar with the necessary discovery. They pointed to prior products as the alleged source of their ideas, despite knowing that those products differed from what Defendants would have learned about CoStar Sync.

CoStar has since learned of the limited nature of Happening’s initial product.

Moreover, CoStar has determined that the Happing product now lacks critical functionality present in CoStar’s proprietary data platform and cannot serve as a replacement for that platform. As a result, CoStar has confirmed that there is no longer a threat of imminent, irreparable harm and the need for further relief on its claims at this time.

Earlier today, CoStar voluntarily dismissed its claims in arbitration, and it is likewise voluntarily dismissing this lawsuit.

Gene Boxer, general counsel, commented:

"As the lawsuit demonstrates, CoStar will not hesitate to protect its intellectual property. Through the proceedings, CoStar learned of the limited nature of Happening’s product, which lacks critical functionality present in CoStar’s proprietary data platform and cannot serve as a replacement for that platform.

"As a result, CoStar has confirmed that there is no longer a need for further relief on its claims at this time. We have also made clear to Defendants the potential future ramifications for any misappropriation of CoStar’s trade secrets.

CoStar counters Move Inc. injunction in new filing

In other lawsuit-related news, CoStar has also filed a court request for the Judge to reject an injunction request filed by Move Inc. (Realtor.com).

Move Inc. had called for an injunction against former employee James Kaminsky to prevent him from accessing proprietary information allegedly accessed after joining rival firm CoStar.

But CoStar argued the injunction is frivolous on three levels: citing the weakness of Move's case (and evidence) against CoStar; that Move "cannot demonstrate that it will suffer irreparable harm"; and that neither CoStar nor Kaminsky have used, or are using, Move’s documents on any meaningful basis.

Gene Boxer commented:

"CoStar has never had interest in Realtor.com’s strategies or alleged trade secrets, as its ‘lead diversion’ tactics are anathema to Homes.com’s agent and user-friendly ‘your listing, your lead’ model. Move’s lawsuit is based on false, and now shifting, premises."