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CoStar Starts Going After Password-Sharing Users In Latest Legal Blitz

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CoStar Group HQ
CoStar Group's HQ at 1331 L St. NW in Washington, D.C.

CoStar Group is following through on its threat to sue individuals who steal access to its platform. 

The $14B, D.C.-based commercial real estate data giant filed seven lawsuits Wednesday evening in six different federal courts against real estate professionals based in New Jersey, California, Oregon, Texas and Georgia. 

The lawsuits allege that individuals who did not pay for CoStar's platform obtained user names and passwords to its subscription database from authorized users. It says they then used the platform to access information on hundreds of properties for their own business purposes. CoStar said it contacted each individual and offered a resolution in which they would sign up for a subscription and pay for their past use, but it said they declined. 

"The importance of protecting our database is the primary goal of the litigation of the seven cases filed today," CoStar Deputy General Counsel Jaye Campbell told Bisnow. "We are an information company. Information is our key asset, and in some ways our only asset ... We have customers who pay fairly to access the information and we feel when people access without paying and are given the opportunity to come back to us in a fair and reasonable way and they refuse, we don't have any recourse besides to resort to litigation." 

The defendants in the cases are: 

  • Edgewater, New Jersey-based Sand Box Real Estate and Development LLC and its principal, John Choi.
  • Plano, Texas-based Richard Martin, who it says stole content while he was an agent of Pathway Mentor LLC. 
  • Duluth, Georgia-based Great Atlanta Realty Inc.; its CEO, Peter Wan; and employees Eun Young Kim, Dennis Cheon and Kathy Yoo.
  • Portland, Oregon-based Bear Consulting Services LLC; its principal consultant, Zach Howell; and Beltran Properties' Ryan Kristin 
  • Los Angeles-based NegotiateLease.com Inc. and its CEO, Joon Lee
  • Woodland Hills, California-based DealPoint Merrill LLC and its employee Jason Limbert
  • Monterey, California-based Mahoney & Associates Commercial Real Estate and its employee Dev Patel

CoStar CEO Andy Florance told investors on an April earnings call the company is prepared to sue thousands of "freeloaders" who use its system without paying. He said he believes at least 10,000 people are using the services illegally, and potentially three times that.

The lawsuits come after CoStar's largest competitor, Xceligent, shut down operations in December following a yearlong legal battle with the D.C.-based company. CoStar had previously filed at least 31 lawsuits since 1999, most of them claiming copyright infringement.

“For CoStar, litigation is a last resort—when we have significant evidence of wrongdoing, and no other options," Campbell said. " We look forward to successfully prosecuting this new set of unlawful-access cases, and anticipate that more cases of a similar nature will follow.”