Real Estate Alliance Ltd., a company that sells licenses to an electronic mapping technology, and the inventor announced Thursday that a Manhattan Beach, Calif., real estate agent — one of 34 defendants in an ongoing patent dispute case filed in California — has settled for undisclosed terms.
Litigation for that case and several other related case is ongoing. The original case, filed three years ago against a Pennsylvania Realtor, has been stayed pending the related lawsuits in California. A countersuit in that case alleged patent backers violated federal racketeering laws by threatening agents with lawsuits if they did not purchase licenses for the mapping technology.
The National Association of Realtors has pitched in about $1.3 million to date to assist the legal defense in the patent-dispute litigation, which alleges infringements of patents related to online real estate mapping technology.
In a statement on Thursday, REAL and inventor Mark Tornetta estimated that "hundreds of billions of dollars in real estate transactions have been facilitated by the unlawful infringement of the patents." Patent backers have placed some information about the patents and legal actions online at real989.com.
Realtor.com operator Move Inc., in response to a court filing in the Pennsylvania case, on April 3, 2007, filed a complaint in U.S. District Court for the Central District of California that seeks judgment as to whether the company’s operations infringe on the patents in question.
Move’s property-search sites incorporate map-based searches, and interactive online mapping tools are almost ubiquitous at real estate search sites these days.
REAL and Equias Technology Development LLC, a licensing entity for REAL, filed counterclaims against Move, charging infringement and seeking a range of damages, Move notes in a U.S. Securities and Exchange Commission filing. Later, REAL filed a motion to add other parties to its counterclaims, including the National Association of Realtors, National Association of Home Builders and others.
REAL filed a separate lawsuit on March 11, 2008, that seeks class-action status and names dozens of industry entities and individuals, including NAR, Keller Williams Realty, RE/MAX International, individual agents, multiple listing services, NAHB and several builders, and real estate tech vendors including Birdview Technologies, eNeighborhoods and Rapattoni Corp., among others.
That lawsuit charges "massive, nationwide infringement" of its patents, which describe methods for locating properties for sale, lease or rent using a database of available properties and describe the process of zooming in on an area of interest and displaying approximate locations and information about the properties.
A month later, on April 8, Real Estate Alliance Ltd. filed a related patent-infringement lawsuit against LoopNet, a commercial real estate search portal, and judges in the separate California cases are reportedly evaluating whether to combine them.
And NAR and NAHB in May filed responses to REAL’s lawsuit, "denying infringement and asserting that the patents are invalid and unenforceable, and asserting counterclaims against REAL," according to a Move Inc. SEC filing. Move’s Realtor.com site is operated through an agreement with NAR.
Move "intends to vigorously prosecute and to defend against REAL’s allegations in the Move California action and vigorously defend and to prosecute the claims that have been brought on behalf of NAR and NAHB," according to the filing.
Louis M. Solomon, a lawyer who is representing Real Estate Alliance, said he could not reveal the terms of the settlement agreement with Robert Freedman, who was named in the March 2008 lawsuit.
The announcement about the settlement was accompanied by a letter from Freedman titled, "An Open Letter to Members of the National Association of Realtors" that asserts that NAR officials "made a serious mistake" and disregarded the patents in question. Freedman’s letter also suggests that NAR spent money "wastefully without our full knowledge if not our full agreement" — claims that NAR officials deny.
Freedman, reached Thursday by Inman News, declined to comment further about the settlement. Solomon said Thursday that he could not confirm whether the letter attributed to Freedman was a part of the settlement agreement, as the terms of the settlement are confidential.
This is not the first time that the patent holder has sought to establish infringement in court cases. Tornetta filed lawsuits in 1998 charging that cyberhomes.com (then operated by Moore USA) and Microsoft Corp.’s HomeAdvisor sites infringed upon his mapping technology patents, and those cases were later dropped. Court filings have charged that Tornetta has made hundreds of attempts to collect license fees from individuals and entities.
Solomon said that a handful of licensing agreements have been issued so far related to the patents, and some of those agreements involve multiple users.
Lucien Salvant, a spokesman for the National Association of Realtors, said, "We dispute a lot of the points that (Freedman) made in his letter. It’s just patently untrue," he said.
Salvant noted that the Realtor trade group has posted information to its Web site to keep members informed about the litigation and its board of directors voted in favor of contributions to the legal defense.
Earlier this year, NAR organized a meeting in Chicago for dozens of defendants in the REAL case, though Freedman did not attend, he said. "All of the main points he makes in the letter, all of the criticisms, are based on the assumption that the patent is valid and that there’s been an infringement, and NAR totally disagrees with that."
He added, "NAR has a history of defending its members and that’s exactly what we did here and that’s what the members would expect of us."
Move’s lawsuit that seeks a judgment on whether that company violated the patents is set for trial in February 2009.
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