Bizjournals: CoStar Group drops privacy lawsuit, but can it claim victory?

By Daniel J. Sernovitz on June 02, 2014.

District-based CoStar Group Inc. has dropped its lawsuit over a group of anonymous defendants it claims unlawfully posted its commercial real estate data to a rival company, one of a dozen lawsuits CoStar filed in an antipiracy campaign in April.

CoStar claims it was victorious because the judge denied a motion from crowdsourced real estate firm CompStak$ seeking to block its request to reveal the identity of several "John Doe" defendants who allegedly posted CoStar data to CompStak.

"We basically got what we wanted," CoStar spokesman Mark Klionsky said. "We reached out to the John Does, we had what I would consider successful discussions with them, and they've agreed not to put our intellectual property into third-party systems."

CoStar (NASDAQ: CSGP) filed the suit April 1, alleging it found "seeded" information, or information that is deliberately false, posted to CompStak and that it tracked that information back to several CompStak users whose identities were kept confidential.

CompStak CEO Michael Mandel disputed CoStar's claim of victory, calling the case groundless to begin with. CompStak turned over the names of its clients only because of a looming deadline. The judge, Mandel added, only ruled the issue was moot because CoStar had already received the information it wanted. Ultimately, he said, CoStar's lawsuit only succeeded in casting a pall over CompStak and could have a chilling effect on the clients who feed it information.

"All they wanted to do is drag our names through the mud," Mandel said, noting the company issued several press releases calling attention to the lawsuit but none on its decision to dismiss the case. "The lawsuit was a sham. CoStar can twist this all they want, but the reality is they filed a lawsuit that had no merit."

Mandel also disputed Klionsky's claim that the company reached out to the John Does and reached an agreement with them. He said he has spoken to several of them who say they have not heard from CoStar.