Back in court: CoStar sues rival over “massive” copyright infringement

CEO Andy Florence alleges CREXi breach was larger than similar case brought against Xceligent

CoStar CEO Andy Florance and CREXi founder Michael DeGiorgio (Photos via CoStar on YouTube; CREXi)
CoStar CEO Andy Florance and CREXi founder Michael DeGiorgio (Photos via CoStar on YouTube; CREXi)

CoStar is going after another rival, alleging “flagrant and widespread” copyright infringement.

The real estate data giant sued Los Angeles-based CREXi on Friday, saying its employees created fake accounts and accessed the CoStar database over 1 million times. According to the suit, the employees then uploaded at least 10,000 unauthorized images to its own site.

“It’s a massive copyright infringement,” CEO Andy Florance told Bisnow, which first reported news of the suit. “It’s actually larger than the copyright infringement we had with Xceligent.”

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CoStar sued Xceligent in 2017, claiming its rival stole thousands of images and proprietary material. Xceligent later went bankrupt and CoStar reached a $10.75 million settlement with its insurer in 2019.

CREXi, which uses artificial intelligence to identify patterns in property data, was founded by Michael DeGiorgio, a former Ten-X executive. It has raised $54 million since 2015, according to Crunchbase. But in 2016, Ten-X sued CREXi, alleging DeGiorgio stole trade secrets. Under a 2017 settlement, CREXi paid Ten-X $1.6 million.

CoStar scooped up Ten-X for $190 million in cash this year. “We are never going to pursue a path where we try to get smaller and smaller and smaller and become less effective and provide less solutions,” Florence told The Real Deal at the time, alluding to claims that the company had become monopolistic.

Since 1999, CoStar has filed 30 lawsuits on similar grounds. The company reported $315 million in net income in 2019, up 32 percent year-over-year, after acquiring hotel data provider STR and apartment listing firm RentPath. Its revenue last year was $1.4 billion, up from $1.2 billion the year before. [Bisnow] — E.B. Solomont