Institutional Theft: When Stolen Intellectual Property Is Your Business Model

We Need to Del This Key

by Seton Motley, Contributing Author: Anything the brain creates – belongs to the brain that created it. Including the physical work product – of the ideas the brain creates.

All of which – is vitally important to our Information Economy. If you can’t profit from your information – you’ll stop creating the information. Because – human nature. And there goes the Information Economy. So all of it – deserves government protection from theft.

The examples of IP’s vital-to-the-economy impact – are nigh endless.

To wit: Company CoStar’s real estate business model. You may be aware of their work – as proffered on their website Apartments.com. The site with all the Jeff Goldblum television advertisements.

CoStar hopes you use their website to find and secure an apartment in which to live. In their efforts to ensure that you do, they spend millions and millions of dollars collecting and displaying all sorts of photographs and data – of and on the apartments they list on their website.

All of this time, effort and money expended to collect this data – so as to maximize the allure of the apartments, and thereby CoStar’s Apartments.com. All so you will ultimately choose your apartment – via CoStar’s Apartments.com.

How do we know all of this information is valuable? Because people keep stealing it.

From May 2015:

CoStar Sues RealMassive, Alleges Copyright Infringement: “CoStar is seeking millions of dollars in damages and a permanent injunction against RealMassive and its senior executives, claiming that the company features CoStar’s copyrighted photographs in listings posted on its site….

“RealMassive…used CoStar’s photographs in its marketing materials, such as a print brochure and an online presentation….In all probability, RealMassive’s alleged systematic theft has been conducted on a much larger scale….”

“The research firm…submitted concrete evidence of the national-scale copyright violations to the court, including photos showed on RealMassive.com with the CoStar logo or watermark still on them.”

How’d that suit turn out?

CoStar, RealMassive Settle Copyright Lawsuit: “‘We are glad to have this lawsuit resolved,’ RealMassive’s CEO Craig Hancock said in a statement Wednesday. ‘CoStar’s claim that we deliberately added its photos to our database was false.’”

Ummm…you were using photos with CoStar’s logo and/or watermark on them. To quote G. Gordon Liddy: “That’s what we in the FBI used to call a clue.”

From April 2014:

CoStar Sues “John Doe” – CompStak Responds: “CoStar alleges that…four CompStak members have committed copyright infringement and breach of contract by furnishing CompStak with information originating from CoStar’s database.”

How’d that suit turn out?

CoStar Group Drops Piracy Lawsuit, but Can it Claim Victory?: “‘We basically got what we wanted,’ CoStar spokesman Mark Klionsky said. ‘We reached out to the John Does, we had what I would consider successful discussions with them, and they’ve agreed not to put our intellectual property into third-party systems.’”

And now, presently, there is this:

CoStar Sues Longtime Competitor Xceligent, Alleging Data Theft: “CoStar alleged it has found thousands of examples of its copyrighted photos and data on publicly accessible portions of Xceligent’s site.

“It also alleges that Xceligent contractors in India and the Philippines ‘bombard’ one of CoStar’s sites to copy CoStar’s content ‘despite technological blocking and repeated notice…that such conduct is prohibited.’…

“The filing of CoStar’s lawsuit was timed with the execution of a search-and-seizure order issued by a regional trial court in the Philippines that was requested by CoStar. That order, which was issued Dec. 7 in Pasig City, instructed sheriffs to raid offices of Avion BPO Corp., a Filipino company that CoStar alleges has been a contractor to Xceligent.

“According to the search-and-seizure order, the Filipino court found ‘probable cause’ that ‘Avion is committing contributory infringement by…stealing Costar Realty copyrighted photographs for the benefit of Xceligent, a client of Avion.’”

How’d that raid go?

“(T)he (search warrant execution) teams swept through Avion’s sprawling facility – eight hours from Manila and accessible by a single road – and emerged with 262 hard drives containing 35 terabytes of data.”

Wow – that’s a lot. And the lawsuit proceeds even as we type – with these terabytes of evidence in hand.

Of course, the reason Xceligent – and all these companies – steal CoStar’s data…is obvious:

“Xceligent and CoStar have different price scales for different customers. But some big clients pay tens of thousands of dollars for annual subscription to the services, which increasingly are becoming a necessity in the modern real-estate industry.

“In its lawsuit, CoStar alleges that Xceligent is able to charge lower prices because it ‘integrates the stolen intellectual property’ into its own product.”

Yes, it is much easier for Xceligent to charge lower prices…because they wait for CoStar to spend millions and millions of dollars collecting all the cool intellectual property that makes the business possible – and then just steal it from them.

That’s an inordinate reduction in Xceligent’s cost of doing business.

And obviously, blatantly illegal.
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Seton Motley is the President of Less Government and he contributes to ARRA News Service. Please feel free to follow him him on Twitter   /   Facebook.

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