The tech startup Opendoor has not been shy about its plans to re-invent real estate transactions across the U.S., making them faster, easier, and more convenient, in part by offering an array of inter-linked online services, from offering all-cash to buy homes from consumers over the internet to loans through its own Opendoor Mortgage brokerage.
But now the company, one of a cadre of rival online hombuying services (a.k.a. iBuyers), is being sued by a national mortgage lender for trademark infringement over the “Opendoor Mortgage,” name.
In a lawsuit filed on April 4, the “multi-channel” mortgage lender Open Mortgage accused Opendoor Mortgage of unlawfully using its two trademarks for “Open Mortgage.” Open Mortgage is seeking treble (triple) damages and attorneys’ fees.
Opendoor declined to the opportunity to comment to Inman. Open Mortgage and attorneys representing also did not respond to a request for comment made prior to this article’s publication.
Open Mortgage operates 79 branches in 22 states and offered $668 million in home loans in 2017, according to a complaint the lender filed with United States District Court for the Eastern District of Texas. It was founded in 2003, is headquartered in Austin and has 315 employees, according to its website.
Opendoor Mortgage, meanwhile, is a wholly-owned subsidiary of Opendoor Labs, which presumably also owns Opendoor’s real estate investment and real estate brokerage arms. Opendoor launched the mortgage brokerage in 2017 with an eye towards providing buyers with loans to purchase the homes it has listed for sale on the open market.
Opendoor Morgtage offers potential homebuyers and borrowers up to a $1,000 rebate towards closing costs on home purchases if they use the service. But it doesn’t appear to have expanded beyond Dallas-Fort Worth or Phoenix.
The complaint called the marks used in Opendoor Mortgage’s advertising “confusingly similar to Open Mortgage’s trademarks.”
It also claimed Opendoor Mortgage’s infringement of its trademarks was “willful.”
That’s because Opendoor Mortgage itself, Open Mortgage said, has recently applied for trademarks for “opendoor mortgage.” The search that Opendoor conducted as part of its trademark applications, Open Mortgage alleges, would have revealed Open Mortgage’s own trademarks.
Opendoor Mortgage’s alleged trademark infringement has “caused actual confusion concerning the source of Open Mortgage’s services” and caused damages in amount to be proven at trial, the complaint alleges.
“Consumers are likely to think, and have actually thought,” that Opendoor Mortgage’s products and services “originate with Open Mortgage,” the complaint said.
On April 12, Opendoor was granted a request to extend its deadline for answering the complaint until May 30.
Opendoor only appears to have mortgage brokerage licenses in Arizona and Texas. This suggests that even though Opendoor Mortgage launched well over a year ago, Opendoor is proceeding slowly in pairing its in-house mortgage offering with its core iBuying service, which is available in 19 markets nationwide.
It appears instead to be focusing on achieving mortgage integration through partnerships with two national lenders, Movement Mortgage and VIP Mortgage.