CoStar Halts RealMassive's Systematic Theft Practices Receiving $1M Payment

WASHINGTON, March 3, 2016 /PRNewswire/ -- CoStar Realty Information, Inc., a subsidiary of CoStar Group, Inc. (Nasdaq: CSGP), will receive a $1 million initial payment and a wide-ranging federal injunction as a result of the rampant theft of its listings content by RealMassive, Inc., which runs the listings website RealMassive.com.  In a suit filed last May, CoStar accused RealMassive and its management team of systematic theft of CoStar's intellectual property.  This conduct came as little surprise.  RealMassive co-founder and former CEO Josh McClure had twice been a defendant in intellectual property cases and had previously been ordered to pay a multi-million dollar judgment for his unlawful conduct. 

McClure's previous company was set up in Panama deliberately to avoid U.S. law, and he touted that strategy to other infringers.  "I'd highly recommend you take advantage of something like this if you plan on continuing a career of making really large companies mad at you," said McClure on a public Internet message board.  "It's very profitable in the short term and very harmful to your bank and credit score when they track you down.  If they find you, you can't win."  Fortunately, CoStar was able to track down McClure and the RealMassive team, obtain an injunction stopping them from profiting off of CoStar's intellectual property, and also make RealMassive compensate CoStar for its unlawful conduct. 

The unprecedented federal injunction ordered by the court will prohibit RealMassive, and four individuals on its current and former management team, including both McClure and current CEO Craig Hancock, from further infringement of CoStar's intellectual property rights, and force RealMassive to change its business model.

As CoStar delved deeper, the true scope of RealMassive's misconduct became clear.  In addition to unlawful copying and reproduction of CoStar's photographs, publicly available websites and videos demonstrated that RealMassive was systematically stealing CoStar's listing data and republishing that data, without attribution, on its website.  RealMassive's agents were even cropping out the CoStar logo from CoStar's photographs.

CoStar's suspicions about RealMassive's unlawful activities were substantiated, forcing the company not only to pay $1 million dollars to CoStar, but also to accede to a sweeping federal injunction..  The injunction requires them to license and implement a content filter and subjects them to additional automatic damages if further infringement were ever to reoccur.  On top of the $1 million initial payment, RealMassive will also be required to pay CoStar $4,000 per photo, per day, and attorneys' fees, for any subsequent CoStar content that appears on RealMassive.com in violation of the parties' agreement. 

"Our win against RealMassive is a win for our clients and consumers who rely on our best in class commercial real estate products," said Andrew Florance, CoStar Founder and CEO. "Our teams work passionately and tirelessly to compile the insight and information that our clients trust to give them a competitive advantage," he continued.

"We've found that RealMassive's business model was to hire contractors to copy listings from brokers' sites – including CoStar-hosted sites –then reproduce those listings wholesale on RealMassive.com.  As the case went forward, it became clear that RealMassive's systematic theft of CoStar intellectual property had been conducted on, for lack of a better phrase, a real massive scale."

"We discovered and presented the court with incontrovertible evidence of RealMassive's systematic theft of our content," said CoStar General Counsel Jon Coleman.  "The federal injunction and initial $1 million dollar payment represents a big win for CoStar and its clients and we will remain vigilant in protecting our intellectual property by taking swift action in cases as egregious as this one."

Today the federal court ordered RealMassive and its management team, including  Hancock and McClure individually, to cease further infringement and to implement changes to the company's business model, including a filter for proprietary content.  In addition to this injunction, RealMassive also signed an agreement with CoStar agreeing to pay damages, prohibiting it from scraping CoStar-powered sites, binding it to CoStar's websites' terms of use and permitting unprecedented access to RealMassive's system if further wrongdoing is suspected.  Together, the federal injunction and the parties' written agreement ensure that RealMassive cannot again seek to freeload off of CoStar's investment in the products and services commercial real estate professionals have come to rely on and trust.

About CoStar Group

CoStar Group, Inc. (NASDAQ: CSGP) is the leading provider of commercial real estate information, analytics and online marketplaces. Founded in 1987, CoStar conducts expansive, ongoing research to produce and maintain the largest and most comprehensive database of commercial real estate information. Our suite of online services enables clients to analyze, interpret and gain unmatched insight on commercial property values, market conditions and current availabilities. LoopNet is the most heavily trafficked commercial real estate marketplace online with more than 10 million registered members. Apartments.com, ApartmentFinder.com and ApartmentHomeLiving.com form the premier online apartment resource for renters seeking great apartment homes and provide property managers and owners a proven platform for marketing their properties. Through an exclusive partnership with Move, a subsidiary of News Corporation, Apartments.com is the exclusive provider of apartment community listings across Move's family of websites, which include realtor.com®, doorsteps.com and move.com.  CoStar Group's websites attracted an average of more than 22 million unique monthly visitors in aggregate throughout 2015.  Headquartered in Washington, DC, CoStar maintains offices throughout the U.S. and in Europe and Toronto with a staff of approximately 2,600 worldwide, including the industry's largest professional research organization. For more information, visit www.costargroup.com.

This news release includes "forward-looking statements" including, without limitation, statements regarding CoStar's expectations, beliefs, intentions or strategies regarding the future. These statements are based upon current beliefs and are subject to many risks and uncertainties that could cause actual results to differ materially from these statements. The following factors, among others, could cause or contribute to such differences: the risk that CoStar is unable to collect the damages or other amounts from RealMassive that are stated in this release, the risk that RealMassive and its management team fail to comply with the injunction and the agreement with CoStar, and the risk that despite being vigilant we are unable to take swift action against infringers of our intellectual property.  More information about potential factors that could cause actual results to differ materially from those discussed in the forward-looking statements include, but are not limited to, those stated in CoStar's filings from time to time with the Securities and Exchange Commission, including in CoStar's Annual Report on Form 10-K for the year ended December 31, 2015, which is filed with the SEC, including in the "Risk Factors" section of the filing, as well as CoStar's other filings with the SEC available at the SEC's website (www.sec.gov). All forward-looking statements are based on information available to CoStar on the date hereof, and CoStar assumes no obligation to update such statements, whether as a result of new information, future events or otherwise.

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SOURCE CoStar Group, Inc.

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