Key claims in CoreLogic real estate valuation patent ruled invalid

Zillow, others had settled patent infringement lawsuits, but ruling could still affect Redfin case

A patent review board has ruled that several key claims made in a CoreLogic patent for an automated real estate appraisal system are “unpatentable abstract ideas” that were anticipated or obvious in view of “prior art” — information or practices already in public circulation when the patent was filed.

The decision, by a review board of the U.S. Patent and Trademark Office, comes too late for Zillow, Lender Processing Services and several other companies that had already settled patent infringement lawsuits filed against them by CoreLogic.

Gavel image via Shutterstock.
Gavel image via Shutterstock.

But the decision could come into play in deciding the outcome of another lawsuit filed by the real estate and loan data aggregator against the the Seattle-based brokerage Redfin.

CoreLogic originally filed suit against 11 companies in 2010, alleging that property valuations they provide using automated valuation models (AVMs) infringed on the patent at issue.

The defendants included Zillow Inc., Lender Processing Services, Fiserv Inc., Intellireal LLC, Interthinx Inc., Precision Appraisal Services Inc., Real Data Inc., RealEC Technologies Inc., American Flood Research Inc., Electronic Appraiser Inc., and Espiel Inc.

CoreLogic settled with six of the companies: Intellireal, Precision Appraisal, Zillow, LPS, RealEC Technologies and Espiel. Fiserv and American Flood Research were dismissed from the case. Real Data Inc. and Electronic Appraiser Inc. did not respond to the claims against them and therefore lost by default.

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CoreLogic went to trial with the remaining company, Interthinx, in 2012 and lost. A jury found that Interthinx had not infringed on two key claims asserted in CoreLogic’s patent, but that Interthinx had not proved that the claims in the patent were invalid.

CoreLogic subsequently filed a motion for a new trial and sought to overturn the jury’s verdict in a renewed motion for  ”judgement as a matter of law.” Interthinx also sought to overturn the jury’s decision regarding the patent claims in a similar motion.

The motions from both companies were denied in September. The two companies settled in October, and asked that the review of CoreLogic’s patent under way at that time be terminated. But the Patent Trial and Appeal Board decided to continue the review process.

The patent in question — U.S. Patent 5,361,201 — was issued Nov. 1, 1994, for an “automated real estate appraisal system” using predictive models to generate estimated property values based on individual property characteristics and neighborhood or area characteristics.

In a final decision on Jan. 30, the Patent Trial and Appeal Board declared four of the 20 claims made in the patent to be “unpatentable abstract ideas” that were anticipated or obvious in view of prior art.

The board said that “determining a price,” as done in real estate valuations, has previously been found to be abstract as a method of calculating.

“(W)e find the claimed development of a model to predict a value and an error model to assess the error range around the predicted value … is an abstract concept,” the board said.

The claims at issue “recite the abstract and well-known concept of examining the geographic area around the subject property so that relevant samples can be obtained to predict the price of the property.”

CoreLogic spokeswoman Alyson Austin said, “We respectfully disagree with the findings of the (review board) and we are considering an appeal at this time.”

CoreLogic sued Seattle-based real estate brokerage Redfin in May 2012, alleging infringement of the ’201 patent. Two real estate analytics and valuation companies that were also named in the suit, Collateral Intelligence LLC and Collateral Analytics LLC, were dismissed from the case in April. The case against Redfin had been stayed pending the patent board’s review.

It is unclear what will happen in that case now that the patent board has rendered its decision. Both Redfin and CoreLogic declined to comment on active litigation.

In its complaint, CoreLogic alleged Redfin.com and the Redfin Home Price Tool, which debuted in March 2012, infringe on the ’201 patent, and claimed Redfin’s products include “(automated valuation models) for real estate appraisal.”

The Redfin Home Price Tool allows sellers to build their own comparative market analysis, or “CMA,” by choosing comparable homes using recently sold data from multiple listing services. “It’s not an automated valuation model. It’s user-driven and technology-supported,” Redfin spokesman Matt Wakefield told Geekwire at the time of the product’s launch.


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