Zillow Throws Jabs at CoStar and Compass As War of Words Continues

Zillow has asked a federal judge to move CoStar Group’s copyright infringement lawsuit from New York to Washington state, and used the motion to take swipes at its rival.

In the motion, filed Thursday, Zillow argued that CoStar “deliberately” chose the Southern District of New York to avoid courts on the West Coast, where it has previously suffered legal setbacks. The company referenced CoStar-owned VHT’s 2022 loss to Zillow over the display of listing photos as evidence of what it called “forum shopping.”

“But CoStar instead chose to burden Zillow and the judicial system by filing this lawsuit in a forum that is inconvenient to both parties, already congested with other cases, and conspicuously outside of the Ninth Circuit, where CoStar has faced a series of unfavorable decisions,” the filing states.

Zillow also contended that CoStar could have avoided litigation entirely had it simply notified the company of the disputed, watermarked photos. “Zillow could have taken down the images,” the filing notes, calling the suit “unnecessary and tactical.”

The Seattle-based portal said fewer than 5% of its staff are in New York, while nearly half of CoStar’s employees are based in the Washington, D.C. region. Zillow added that a Washington court would have “a greater interest in regulating a Washington-based company” and that average caseloads there are “around one-third” of New York’s.

Zillow also accused CoStar of following a “playbook” of “deploying copyright lawsuits to attack competitors,” pointing to similar actions the company has filed in other jurisdictions. The case, filed in August, alleges that Zillow used thousands of CoStar watermarked images on its rental listings without permission.

In response, CoStar Group's General Counsel Gene Boxer said:

“Zillow infringed tens of thousands of CoStar-copyrighted images bearing the CoStar watermark.  This infringement is a key component of Zillow’s rental strategy.  Zillow—not its users—is the infringer: Zillow built “unclaimed property” pages to attract business.  Zillow used CoStar images to feed its website features.  And Zillow distributed CoStar images to its supposed competitors, Redfin and Realtor.com.

Rather than acknowledge its plain wrongdoing, Zillow seeks to transfer the case in a transparent attempt to delay justice.  Zillow pretends that litigation in Manhattan is not feasible; meanwhile, it is actively litigating in the city against Compass.  Zillow paints itself as a stranger to New York, but it plasters its StreetEasy ads in the subways while touting a flagship office on Broadway.  And while the infringement concerns images of properties nationwide, those properties are most heavily concentrated in and around New York City.

Zillow’s attempts to delay aside, the choice of courthouse will ultimately prove a sideshow.  Zillow will be held to account for its mass infringement no matter where this case proceeds.  Whatever procedural gambits Zillow deploys, justice will prevail.”

In other Zillow-related news, the portal has thrown petrol on the already raging bonfire of its legal and verbal battle with brokerage firm Compass.

Yesterday, Zillow published the findings of a survey of Anywhere-affiliated agents it carried out in the second half of October. The portal claims that more than half of the brokerage's agents would consider leaving if the planned merger with Compass goes ahead.

In an unsubtle dig at Compass' exclusive listings marketing plan, Zillow also claims that 98% of the agents surveyed "sent a clear message that they value openness and fairness in the market, saying private listing networks could have at least one negative impact".

While the sample size was not given, if the survey's findings are to be believed, Compass will struggle to retain the agents it looks set to inherit via its $4.2 billion bombshell deal to acquire its competitor.