CoStar Sues Crexi for ‘Flagrant and Widespread’ Intellectual Property Theft

There’s a history of lawsuits alleging theft of copyrighted photography from CoStar, and a lawsuit filed Dec. 20 in the U.S. District Court Central District of California is by far the largest yet.

CoStar alleges that Crexi has illegally used no fewer than 50,395 images for its real estate listings. Today’s suit is a follow-up to one filed in September 2020 that alleged approximately 10,000 images were stolen.

Crexi is a Los Angeles-based company that operates an online commercial real estate marketplace.

New evidence has emerged recently that CoStar says shows many more images were used, claiming, “flagrant and widespread theft of CoStar’s intellectual property” in an “unlawful scheme to build a competing business on the back of that stolen content, and through unauthorized use of CoStar’s services,” and calling the scale of Crexi’s operation as “breathtaking.”

The suit (Case No. 220—cv-08819-CBM-AS) alleges that more than half of the images lifted occurred after the September 2020 suit was filed as Crexi “remains defiant,” the suit said.

CoStar says that authorities recently seized evidence from three business process outsourcing companies (BTOs) based in India that were used as part of Crexi’s scheme to lift photos illegally.

CoStar says it has obtained judgments and injunctions that value its copyrighted images and listings most recently at $50,000 per photograph and $50,000 per listing.

Crexi did not respond to requests for comment Tuesday.

Basement Raid Nets Evidence

India’s Economic Times (ET) reported in early December that one BPO employee, working for Saxena, had his home raided in November after a court assigned a technical expert to seize into its custody all infringing photographs and content. The court also asked the expert to conduct a forensic analysis of the handheld devices and tablets for the purpose of identifying any material, data, record, pertaining to the work BPOs performed for Crexi.

Saxena and a team of 15 to 20 staff members operated from a building basement being used to download PDF brochures. They removed any logos and watermarks from the said PDFs and uploaded the photographs from the said brochures along with the details of the listings on third-party websites, ET reported.

On checking the mobile phone, the technical expert found various chats which revealed that Saxena received instructions to access websites like CoStar’s LoopNet and others and download photographs and other details from those websites, remove the logos and watermarks from said downloaded images and upload the same on different websites, including Crexi, ET reported.

The BPO used approximately 70,000 rotating IP addresses in an effort to avoid detection, according to the lawsuit.

Crexi Filed Counterclaims to 2020 Suit Unsuccessfully

CoStar spends a great deal of time and resources to maintain its own database, including averaging 24,000 phone calls to brokers, owners and developers, canvasses a half-million properties and takes nearly 1 million photographs annually.

In response to the 2020 lawsuit, Crexi filed 14 counterclaims with the primary allegation being that CoStar’s refusal to allow Crexi access to its websites for the purposes of copyrighting and using its content violated American (federal) California antitrust laws, ET reported.

ET reported that in June 2022, the district court rejected those antitrust claims. Saying further, “CoStar is under no obligation to provide information or photographs to Crexi at all and that CoStar has a right to “block its competitors from accessing commercial real estate listing information hosted on [CoStar’s] own websites.”

Xceligent Settled an Earlier Case with CoStar

In December 2016, CoStar sued Xceligent, a former competitor, for copyright infringement. Xceligent filed for bankruptcy in December 2017, and CoStar won a judgment in December 2019 that found Xceligent liable for $500 million in damages.

Xceligent didn’t have the assets to fulfill the entire ruling. A settlement was then reached through which its insurers agreed to pay CoStar $10.75 million.

CoStar has filed more than 30 lawsuits since 1999, many of them for similar copyright infringement claims. A judge in 2017 ordered Apartment Hunters to pay CoStar for stealing its listings, and in 2016 RealMassive agreed to pay $1 million in a settlement for a copyright infringement suit, Biznow reported.