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One year after CoStar sued the founder of Homesnap, alleging he stole trade secrets, the commercial-turned-residential giant has now dismissed the suit, citing the “limited nature” of a rival product.
CoStar filed a notice of voluntary dismissal Wednesday. The filing brings to a close a case that has its roots back in 2020, when CoStar acquired Homesnap as part of its then-budding push into residential real estate. However, three years later, CoStar alleged that Homesnap founder Guy Wolcott hired away former Homesnap employees from CoStar. Wolcott then allegedly used the employees to aid him in a new business venture after they had been exposed to proprietary CoStar trade secrets.
Wolcott’s LinkedIn profile lists his current position as “founder” of Homesnap. But according to CoStar’s legal filing Wednesday, Wolcott founded Happening Technology after the Homesnap acquisition. He then presented his company’s product to CoStar executives as a potential alternative to CoStar’s own platform.
“What was shared of the Happening product, developed by former CoStar employees with detailed knowledge of CoStar’s proprietary systems, mirrored CoStar’s proprietary platform,” the filing states. “CoStar raised these concerns with Defendants, but they obfuscated.”
Happening and Wolcott were both named as defendants in the lawsuit, as were three former Homesnap employees, including former CEO John Mazur.
The case eventually moved into arbitration. CoStar was also able to conduct discovery in the case, which allowed the company to “compare what Mr. Wolcott initially presented to CoStar with the actual state of defendants’ product,” the filing states.
Evidently, CoStar found that Wolcott’s product didn’t pose a threat after all.
“CoStar has since learned of the limited nature of Happening’s initial product,” Wednesday’s filing states. “Moreover, CoStar has determined that the Happing product now lacks critical functionality present in CoStar’s proprietary data platform and cannot serve as a replacement for that platform. As a result, CoStar has confirmed that there is no longer a threat of imminent, irreparable harm and the need for further relief on its claims at this time.”
In a statement, Gene Boxer — CoStar’s general counsel — reiterated the conclusions mentioned in the filing to dismiss the case. And he stated that CoStar will continue to defend its technology and trade secrets going forward.
“We have also made clear to defendants,” Boxer said, “the potential future ramifications for any misappropriation of CoStar’s trade secrets.”
