Guest Article: More Patent Infringement Cases For MLSs
Friday, September 24, 2010
Developing and providing services in an online world can provide significant benefits to users, but they can also appear to be deceptively complex simple. Notwithstanding the best efforts to conduct due diligence and understand the potential risks of launching a new service or feature, potential claims can still arise and cause expensive headaches. Whether there is ultimately a successful infringement claim, the cost of litigation alone can be significant. At a time when most MLS are trying to look ahead in a dynamic industry and in an incredibly difficult economy, another new potential claim has surfaced in the MLS world.
Several years ago Real Estate Alliance, Ltd. (REAL) filed patent infringement cases naming multiple parties in the real estate industry alleging infringement based on drill-down mapping features in MLS systems. Now, CIVIX-DDI, LLC (CIVIX) has filed several lawsuits asserting patent infringement by at least National Association of REALTORS® (NAR) and Homestore, Inc., which was in the same action filed December 6, 2005, MidWest Real Estate Data, LLC (MRED), which was filed on August 4, 2010, and most recently Metropolitan Regional Information Systems, Inc. (MRIS), which was filed on August 30, 2010. In the case against Homestore, Inc. and NAR, a stipulated dismissal of claims and counterclaims was filed on January 5, 2010.
In each of the complaints, CIVIX asserts patent infringement based on patents for location-based searching systems, services, and related products, a common feature in real estate searching applications. In a July 22, 2010 demand letter from CIVIX’s legal counsel to MRED, CIVIX asserts that CIVIX has “consistently and successfully” litigated the CIVIX patents against “dozens of defendants” in federal courts. The letter also references the settlement between CIVIX and NAR and Homestore, Inc., and states that “three years of litigation successfully concluded in a settlement and dismissal at the beginning of this year.” How does litigation successfully end in a settlement, particularly one subject to confidentiality obligations? Did one of the parties prevail? In addition, the letter asserts that CIVIX has licensed dozens of location based search industry companies, “including many of the biggest names in search technology (including several real estate search systems).”
MRIS has not yet filed an answer, but MRED filed an answer and counterclaim on August 20, 2010 seeking a determination that the patents are invalid. Among other claims, MRED raises several issues of prior art.
Because the terms of the NAR and Homestore, Inc. settlement are confidential, we don’t know if NAR obtained a license or other right to use the patented technology on www.realtor.com, or if any settlement amount was paid. The other cases are still pending. These are cases worth watching, however.
For access to the patents, see http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&p=1&u=%2Fnetahtml%2FPTO%2Fsearch-bool.html&r=12&f=G&l=50&co1=AND&d=PTXT&s1=6385622&OS=6385622&RS=6385622
John H. Rees
Callister Nebeker & McCullough
10 East South Temple
Salt Lake City, UT 84133