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Xceligent Contractor Supports CoStar's Data Theft Claims

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

CoStar's claim that its biggest competitor stole its propriety data, the basis of a December lawsuit that kicked off a high-stakes legal battle, has now been bolstered by one of Xceligent's own contractors and a Pennsylvania judge.

Pittsburgh-based RE BackOffice Inc., in a filing Friday in the U.S. District Court for the Western District of Pennsylvania, said Xceligent directed it to hack CoStar's websites and copy its content. The filing, a concession of wrongdoing, came in response to CoStar suing RE BackOffice Thursday and asking for damages and a permanent injunction.

Judge Arthur Schwab of the U.S. District Court for the Western District of Pennsylvania ruled in favor of CoStar Monday, ordering RE BackOffice to pay the commercial real estate data giant all of the profits it received from Xceligent and setting an injunction to prohibit the practice in the future. If RE BackOffice violates the injunction, the contractor must pay CoStar $20K per stolen listing and photograph. 

RE BackOffice and its India-based affiliate MaxVal Technologies have continuously contracted for Xceligent since 2012, it said in Friday's filing. It said Xceligent's management directed the contractor throughout the last five years to copy CoStar's content, including data and photographs. It names Xceligent CEO Doug Curry and Chief Research Officer Nathan Lipowicz as being directly involved.

"At Xceligent's direction, the REBO/MaxVal operations team used measures to circumvent CoStar's security measures and thereby hack into CoStar sites in order to populate the Xceligent databases with content copied from CoStar," the filing states. 

The filing in Pennsylvania court, first reported by the Washington Business Journal, came after CoStar subpoenaed RE BackOffice in July in Missouri court, where the legal battle with Xceligent is playing out. 

"The facts admitted by Xceligent’s agent, and injunction issued by a federal judge against that agent, speak for themselves," a CoStar spokesperson said. "We are continuing to pursue our claims against Xceligent directly.”  

The contractor's concession of wrongdoing and the judge's subsequent ruling could have major implications in the Missouri case, in which CoStar claims Xceligent stole and resold its content on "an industrial scale." The public company has committed to spend $20M this year on the suit. 

Xceligent responded to CoStar's December suit by filing an antitrust suit against the D.C.-based data firm in June, alleging it used illegal practices to prevent its users from doing business with competing services. The companies are waiting for the Missouri judge to rule on CoStar's motion to dismiss the antitrust suit before the case can proceed.

"We are not surprised that CoStar has now chosen to go after our vendors," an Xceligent spokesperson said in response to the RE BackOffice filing. "This stipulation contains false and misleading statements, and is yet another example of the anticompetitive goals and conduct exhibited by CoStar."

Related Topics: CoStar Group, Xceligent, Doug Curry