From the New York website: Commercial real estate data company CoStar Group is suing its biggest rival Xceligent for copyright infringement, in a near mirror image of its previous lawsuits against data startups RealMassive, LoopNet and against users of CompStak.
In a complaint filed Tuesday in Kansas City, Missouri federal court, CoStar accused Xceligent of “piracy” and “copyright infringement on an industrial scale,” alleging that Xceligent’s researchers regularly trawl CoStar’s and LoopNet’s (now a CoStar subsidiary) databases to steal property data and images. The firm seeks millions of dollars in damages and injunctive relief to prevent the alleged copyright infringement from happening again.
Xceligent immediately dismissed the charges in a statement, accusing CoStar of anti-competitive behavior. “The lawsuit fits with a pattern of action by CoStar of filing lawsuits against its competitors to protect its dominant market position in commercial real estate research in the United States,” Xceligent’s CEO Doug Curry said in a statement. “In fact, in August 2012, the Federal Trade Commission issued an Order restraining CoStar from engaging in certain activities, which the Federal Trade Commission determined to be anti-competitive in nature.”
Competitors have long accused CoStar of using lawsuits as a weapon to weaken rivals. CoStar claims it spends a lot of capital gathering its data, and insists that rivals are trying to mooch off its hard work.
Last year, the company sued unnamed users of leasing comp database CompStak for copyright infringement, and earlier this year it sued Texas-based online marketplace RealMassive. It also filed several lawsuit against the online leasing marketplace LoopNet, before acquiring the company for $860 million in 2012.
The latest lawsuit comes just as Xceligent — which sources say is the only company seriously attempting to offer a product similar to CoStar — is preparing to launch in New York City, taking on the behemoth in its most important market. Both CoStar and Xceligent offer online databases with commercial property and leasing information, along with separate online leasing marketplaces (LoopNet and commercialsearch.com). And both companies use armies of researchers who call landlords and brokers to compile their databases.
CoStar claims that hundreds of Xceligent employees created over 3,000 CoStar accounts to steal data and images. Xceligent, an open-source platform, counters that its “data centers operate to ensure protection of intellectual property rights and have controls in place to ensure we publish data that we have collected within the scope of those rights.”
Washington, D.C.-based CoStar is a public company with a current market cap of $6.3 billion. Xceligent, meanwhile, with 1,300 employees as of August, is owned by DMGI, the investment arm of Britain’s Daily Mail Group.
The Federal Trade Commission helped arrange DMGI’s acquisition of Xceligent in 2012 as part of a settlement agreement approving CoStar’s LoopNet acquisition. Xceligent had been a LoopNet subsidiary, but was spun off as a condition for the merger’s approval. “By maintaining Xceligent as an independent competitor and ensuring Xceligent’s ability to grow and expand, the FTC’s settlement order will foster continued competition in these markets,” Richard Feinstein, the head of the FTC’s Bureau of Competition at the time, said in a 2012 statement.