Multiple listing services and Realtor associations now have blanket protection from legal claims by a company that holds several patents on location-based Internet search techniques, after the National Association of Realtors raised $7.5 million in licensing fees by Tuesday’s deadline.
Alexandria, Va.-based CIVIX-DDI LLC has filed patent infringement lawsuits against a number of companies that offer location-based search capabilities to consumers — including two of the nation’s largest MLSs: Chicago-based Midwest Real Estate Data LLC (MRED) and Rockville, Md.-based Metropolitan Regional Information Systems (MRIS). After filing counterclaims against CIVIX, MRED and MRIS both elected to settle out of court.
When CIVIX began sending other MLSs letters demanding that they pay a licensing fee of $6 per member per year for four years, about 50 MLSs asked NAR to take the lead in negotiating a blanket licensing agreement that would apply to the industry as a whole.
NAR announced the blanket licensing agreement in May, and hit milestone requirements to raise $2.5 million by June 16 and $5 million by July 17. The trade association said it met the third and final deadline on Monday, a day early, paying CIVIX a total of $7.5 million that NAR collected from Realtor Associations, MLSs and MLS vendors.
Some initially questioned the licensing agreement, which amounts to a payment to CIVIX of $9.06 per MLS subscriber, saying the CIVIX patents might not survive a court challenge. In the end, enough paid the licensing fee to provide blanket protection for all Realtor Associations, MLSs, commercial information exchanges, MLS system vendors, and real estate brokers and agents.
The licensing agreement does not apply to third-party property portals, however, and on July 28 CIVIX filed suit against Trulia Inc., claiming the popular listing portal has infringed on U.S. patents 6,385,622 and 6,415,291. The patents were issued in 2002, and the U.S. Patent & Trademark Office turned down requests for re-examination in May.
Trulia declined to comment on the lawsuit and has not filed a formal answer to the CIVIX complaint, filed in the U.S. District Court for the Eastern District of Virginia.
Realtor.com operator Move Inc. disclosed in its 2009 annual report that it settled a 2005 claim brought by CIVIX, along with a separate patent infringement case brought by Tren Technologies Holdings LLC in 2002, for a total of $4.86 million. Move, NAR and NAHB took the Tren Technologies case to a federal appeals court before paying for a license.
Move, NAR and the National Association of Home Builders are currently embroiled in another legal dispute with Real Estate Alliance Ltd. (REAL), which claims Move and dozens of other real estate companies, brokers and agents violated its mapping technology patents.
That 6-year-old legal dispute could be headed for trial next year, after a court-ordered mediation session in June failed to resolve the parties’ differences.
