CoStar accuses Blue Springs’ Xceligent of widespread theft of intellectual property

CoStar, a Washington, D.C.-based firm known for its online real estate listings, has accused its Blue Springs competitor Xceligent of “brazen” misappropriation of copyrighted materials for its own use.

CoStar filed a lawsuit Monday in federal court in Kansas City, claiming it has evidence that Xceligent takes information and images from CoStar’s real estate listings and “integrates the stolen intellectual property into its own, lower-priced rival products.”

Xceligent on Tuesday denied CoStar’s charges, saying the timing of the lawsuit coincides with Xceligent’s plans to enter into the New York market.

“The lawsuit fits with a pattern of action by CoStar of filing lawsuits against its competitors to protect its dominant market position in commercial real estate research in the United States,” said Xceligent CEO Doug Curry in a written statement.

CoStar is a leading online provider of real estate listings, which give subscribers access to commercial real estate property information like building square footage, occupancy rates, property values and other information. Real estate brokers, appraisers and government officials are frequent users of such listing services. Assembling the information that goes into the listings is an expensive, time-consuming process.

Xceligent, founded in 1999, has emerged as a rival to CoStar. Xceligent has entered large real estate markets like Los Angeles, Dallas and Atlanta through its CommercialSearch brand.

DMG Information, a division of British firms Daily Mail and General Trust, bought a majority stake in Xceligent in 2012. That same year, CoStar purchased LoopNet, an online real estate marketing website that owned a stake in Xceligent.

DMG Information’s purchase of Xceligent stemmed from a Federal Trade Commission order in 2012 that required CoStar to sell LoopNet’s holdings in Xceligent to resolve antitrust concerns about the merger.

DMG Information’s acquisition of Xceligent gave the firm the resources it needed to try to compete with CoStar.

CoStar said in its lawsuit that Xceligent employees populated its real estate information database with content pulled from CoStar. Among pieces of evidence included are what CoStar says are identical photographs from its real estate listings that appear on Xceligent’s site.

CoStar also claimed hundreds of Xceligent employees created thousands of CoStar accounts to access its data, and then created workarounds when CoStar tried to block Xceligent’s access to its website.

Xceligent said Tuesday that CoStar’s claims were without merit. Xceligent said it respects intellectual property rights and requires its data collectors and third-party contractors to do the same.

“Additionally, our clients and other commercial real estate market participants load data and images into our platform and we require that they agree to only load content for which they have the legal right to provide to us,” Xceligent’s statement said.

This story was originally published December 13, 2016 at 6:14 PM with the headline "CoStar accuses Blue Springs’ Xceligent of widespread theft of intellectual property."