Real estate information portal Zillow Inc. has paid $850,000 to release the company from any claims that it infringed on two patents held by CIVIX-DDI LLC, an Alexandria, Va.-based company that’s sued more than a dozen operators of websites that offer location-based search capabilities to consumers.
Meanwhile the target of CIVIC’s latest lawsuit, commercial listing portal operator LoopNet Inc. — says it intends to "vigorously defend itself" against a patent infringement complaint CIVIX filed in January.
CIVIX has been involved in lawsuits with more than a dozen companies dating back to 1999, including some household names like Microsoft Corp., Motorola Inc., Orbitz LLC and Expedia Inc.
Typically, CIVIX is able to obtain licensing payments from companies it claims have infringed upon its patents — sometimes without having to go to court. In its lawsuit against LoopNet, CIVIX says that so far, it’s entered into 26 licensing agreements for its patents, generating more than $42 million in royalties.
In its annual report to investors, Zillow revealed that it hadn’t been sued by CIVIX, but elected to obtain a "fully paid-up, perpetual, irrevocable, nonexclusive, worldwide, royalty free, personal right and license" from the company "outside the context of litigation."
CIVIX had sued a Zillow rival, Trulia, in July. Like the LoopNet suit, the complaint against Trulia alleged infringement of U.S. patents 6,385,622 and 6,415,291, which cover techniques for remotely accessing a selected group of items of interest from a database. CIVIX dropped the lawsuit two months later, before Trulia had filed a response.
In December 2009, Realtor.com operator Move Inc. paid a total of $4.86 million to settle not only a 2005 claim brought by CIVIX against Move and the National Association of Realtors, but another patent infringement case brought by Tren Technologies Holdings LLC (the cost of each settlement was not broken out separately in a Move regulatory filing).
When CIVIX sued two of the nation’s largest MLSs — Chicago-based Midwest Real Estate Data LLC (MRED) and Rockville, Md.-based Metropolitan Regional Information Systems (MRIS) — in the summer of 2010, both initially fought the claims in court, but ended up settling (see complaints in CIVIX v. MRED and CIVIX v. MRIS).
Last year, NAR helped MLSs and Realtor associations around the country negotiate a blanket licensing agreement with CIVIX for $7.5 million. Although some NAR members wanted the trade group to challenge the CIVIX patents in court, NAR called the prospects of such litigation "inherently uncertain."
Just days after NAR handed over the money it had collected from Realtor associations, MLSs and MLS vendors, CIVIX experienced a setback in court. On Aug. 19, CIVIX’s claims against Hotels.com — a co-defendant in the 2005 case against Move and NAR — were summarily dismissed.
CIVIX has appealed the decision, which was based in part on the fact that Hotels.com search results are not pulled from an internal database, but consist of framed advertisements.
That setback did not stop CIVIX from filing suit against LoopNet on Jan. 3. CIVIX said it sued LoopNet after a "protracted discussion between the parties" that began last July "failed to produce an out-of-court resolution."
In an answer and counterclaim, LoopNet denied that it’s infringed on the patents, and that CIVIX is barred from pursuing claims against it because CIVIX had previously granted a license to Microsoft Corp., which provides software that’s used to power loopnet.com and cityfeet.com (MRIS and MRED made similar arguments before settling).
Furthermore, attorneys for LoopNet maintain, the patents are unenforceable, because their inventors withheld material information from the U.S. Patent and Trademark Office, "making false and misleading statements, with the specific intent to deceive" regulators about the originality of their ideas during the patent application and re-examination processes.
Attorneys for CIVIX responded that the patents in question survived a three-year re-examination that concluded in 2009, and that the U.S. Patent and Trademark Office denied requests for further review in May 2011.
LoopNet’s counterclaim charging "inequitable conduct" in CIVIX’s dealings with the patent office was "brought on the slenderest of grounds," amounting to little more than a list of statutory provisions and lacking facts, attorneys for CIVIX maintained in court filings.