CoStar Wins Copyright Infringement Lawsuit against Competitor CREXi

A California Central District Court has thrown out an antitrust lawsuit against US portal CoStar.

CREXi, a commercial data startup and CoStar competitor, filed 14 counterclaims in August 2022 after CoStar itself sued CREXi in 2020 for copyright infringement.

CoStar originally alleged that CREXi published circa 50,000 watermarked images on its commercial real estate listings platform—images that originated from CoStar-owned LoopNet—with the lawsuit seeking to recoup damages.

CREXi counterclaimed, arguing that many brokers use LoopNet as a de facto repository for their images, accusing CoStar of anti-competitive activity by preventing brokers from using those images elsewhere.

But last week, Judge Consuelo Marshall in California’s Central District court ruled that CREXi failed to prove any anticompetitive activity:

“Whether brokers have become dependent on LoopNet and thus choose not to maintain additional copies of listings apart from what is on LoopNet is not anticompetitive conduct by CoStar. If CREXi wishes to do business with brokers, CREXi can advise brokers to use their own images, not the modified images listed on LoopNet or linked through LoopLink."

CREXi also argued that CoStar holds a monopoly in many markets, but the judge again ruled in favor of CoStar, saying the portal provides listing services in a market—not selling property—and therefore CREXi’s analysis didn’t prove a monopoly.

Judge Marshall granted CoStar's motion to dismiss the claims with prejudice, which means CREXi cannot bring the same charges again.

CREXi has the right of appeal.

CoStar's litigious reputation is well-known across the US real estate industry.

CoStar was awarded a $500M judgement against Xceligent in 2016 in a copyright infringement lawsuit that forced the Xceligent into bankruptcy—the business is now defunct.

And last summer, CoStar also sought an injunction against a disillusioned ex-employee who ran an online smear campaign against the portal via an Instagram 'meme' account.

The copyright infringement trial will continue in March 2024.

CoStar released its Q4 figures last week, with revenues up 12% YoY.