By CoStar News Staff on April 16, 2014.
In an important development late last week, U.S. District Judge Alvin K. Hellerstein ordered CompStak Inc. to disclose the names and addresses of its users that allegedly misused CoStar's proprietary data and photos while populating the competing service. CoStar claims that these users have infringed CoStar's copyrights and violated their CoStar license agreements.
In filing a "John Doe" lawsuit earlier this month, CoStar sought a court order requiring CompStak to disclose the identities of allegedly offending users so that they could be named as defendants. The case is part of a coordinated, national anti-piracy campaign aimed at ending theft of CoStar services.
CoStar’s complaint, filed in U.S. District Court for the Southern District of New York, claims that certain unidentified users of CompStak's service downloaded restricted information and images from CoStar’s service while populating CompStak’s service. By compelling CompStak to identify these users, the court order will enable CoStar to move the case forward against named defendants.
CompStak, which bills itself as a marketplace for the exchange of lease comps, was given one week to produce the names of those involved in the alleged infringement. CoStar then plans to amend its previously filed "John Doe" lawsuit, substituting the identified parties in the lawsuit.
The New York case was one of a series of lawsuits CoStar filed earlier this month as part of its most recent coordinated anti-piracy campaign.
The suits implicate various individuals and firms located in Los Angeles, Denver, Dallas, Detroit and Chicago, alleging the defendants engaged in the systematic theft of CoStar's services, including acts of online piracy and computer hacking via illegal password sharing. If found liable, the defendants in these cases could be ordered to pay damages totaling millions of dollars.
As previously reported (see: SPECIAL REPORT: CoStar Cracks Down On Data Thieves), the defendants implicated in the data theft lawsuits include a pair of Denver real estate brokerage firms co-owned by Chang Enterprises. CoStar's complaint alleges that the two firms, Dunton Commercial and SullivanHayes Brokerage, were responsible for 2,259 unauthorized logins to CoStar's networks over a period of several years.
Additional lawsuits have been filed against Detroit-area based Insite Commercial Group and its principal, Randall Thomas and Chicago-based Richard Griego d/b/a Frontera Realty Consultants. In total, these firms and individuals are alleged to be responsible, in the aggregate, for thousands of instances of illegal access to CoStar's services.
CoStar has also sued a Los Angeles-based individual, Andrew Gee. The suit alleges that Gee engaged in widespread misuse of CoStar's services in connection with his attempts to launch a competing commercial real estate information service called PropertyDeets.com. Gee was formerly an acquisitions and asset manager with Meridian Property Co. before leaving and starting his own business in 2013.
Taking On a Critical and Costly Issue
Data theft remains a critical and costly issue faced by many companies, particularly companies like CoStar, which go to great length and expense to build their information products. CoStar, which has a long-standing commitment to securing its networks, uses extensive network monitoring technology to protect legitimate subscribers from others who would resort to stealing information.
The company said it acts decisively to prevent data theft. In the vast majority of instances where companies or individuals are discovered misappropriating its services, CoStar said it is able to quickly and fairly resolve the matter, resorting to legal remedies such as the coordinated actions taken earlier this month only as a last resort.
The Washington, D.C.-based real estate information company has successfully secured numerous judgments against data thieves. In 2012, the United States District Court for the District of Maryland finalized a judgment ordering Alliance Valuation Group, TGC Realty Counselors and Pathfinder Mortgage Corp. to pay CoStar more than $3 million in damages for their roles in the unauthorized use of CoStar's copyrighted photos. The order brought to a close a lawsuit involving a multi-state, multi-defendant password sharing network that involved companies in Orange County, CA; Houston and Palm Beach Gardens, FL.
CoStar also said it offers substantial rewards for reports of wrongdoing that result in successful claims. Individuals who report suspected password sharing or unauthorized use of CoStar's services could receive either a $50,000 payment if CoStar chooses to file a court case, or 100% of any funds CoStar collects in a settlement or judgment after recouping its legal fees.
This report was written by CoStar News Director Tim Trainor with contributions by other CoStar News staff.