The Real Deal New York

CoStar Group files 7 federal lawsuits against alleged freeloaders

The CRE data giant accused defendants of using its subscription service without authorization
By David Jeans | October 04, 2018 04:34PM

CoStar Group CEO Andrew Florance

Commercial real estate data giant CoStar Group has launched another legal campaign against individuals and real estate firms it says stole its content by using shared user-login passwords.

The publicly-traded company, whose market cap Thursday was $14.5 billion, filed seven federal lawsuits Wednesday against individuals and real estate firms it accused of illegally using CoStar’s product by logging on to its subscription service without authorization. By doing this, the firm alleged, each defendant was using its proprietary information for profit.

“CoStar’s database is our key asset and we cannot passively allow people to steal access,” a CoStar spokesperson said in a statement. “CoStar always attempts to resolve password theft through discussions with the parties involved, and we always offer fair and reasonable terms for resolution. Litigation is a last resort.”

Last month, The Real Deal published an exhaustive review of CoStar’s litigation history, which revealed that the firm has gone to great lengths to protect its data product, and has filed at least 33 federal copyright infringement-related lawsuits against competitors and people who use its services.

During an April earnings call, CoStar revealed it was focusing its attention on “freeloaders” that use its subscription service without authorization. “We believe that there is as many as 10,000-plus people and perhaps two to three times that number illegally accessing CoStar,” CEO Andrew Florance said during the call.

In the most recent lawsuits, CoStar has targeted small real estate firms, including Mahoney & Associates, DealPoint Merrill, BEAR Consulting, Sandbox Real Estate and Development, NegotiateLease.com, as well as a number of individuals. The lawsuits were filed in California, Oregon, New Jersey, Georgia and Washington D.C. through powerful law firm Williams & Connolly LLP.

In one complaint, the firm accused Zach Howell, a partner with BEAR Consulting Services in Portland, Oregon, of illegally logging on to CoStar using another person’s credentials. “Rather than pay to subscribe to CoStar’s services, Howell and his company decided to steal them,” the complaint read. The sentence was repeated in each lawsuit.

“Before filing the cases, CoStar gave defendants an opportunity to resolve their alleged misconduct by purchasing a valid CoStar subscription,” the company said in a statement. “They declined.”

When reached for comment, the defendants in these suits either did not immediately return requests for comment or declined to comment. Representatives at Mahoney & Associates and DealPoint Merrill said they were not aware of the lawsuits until contacted by The Real Deal.