Real Estate Dispute
A big lawsuit was filed earlier last week by Top Agent Network, a real estate business network website for real estate agents against Zillow for allegedly stealing trade secrets and making a copycat version of its “coming soon” feature for its listings. Zillow is a major online site which caters to home buyers and renters that are looking for information about homes for sale or rent. Apparently, Zillow had shown interest in investing in Top Agent Network (TAN), private members only online community connecting the top 10 percent of real estate agents to the local markets. Verified TAN agents exchange information about local real estate and market trends. They discuss buying patterns, recommend service providers, provide referrals and other industry insights.
Zillow was given access to Top Agent Network’s confidential information while it was considering investing TAN with the purpose to learn more about the company and its technology before investing. Zillow was given access to confidential and proprietary information under the guise of being serious in making an investment into TAN for real estate agents. The business strategies and models of TAN were also made available to Zillow under the assurance that the information shared with Zillow would remain confidential.
TAN unique Selling Proposition For Real Estate Agents
TAN CEO David Faudman stated that many systems offer versions of the “coming soon” or “pre-MLS” tool, but their particular version was adjusted over the years while being used by real estate agents. He also mentioned the proprietary system features, including presentation and dissemination of pre-MLS listings, as well as strategy behind it. There were other particular tools and features unique to TAN. The Top Agent Network for real estate agents states that collaboration between real estate professionals and flow of information is also beneficial to sellers. Their properties receive substantial pre-MLS exposure and allow for easier and more profitable transactions.
Zillow Launches its Own “Coming Soon” Feature For Real Estate Agents
David Faudman points out that TAN would never have agreed to meet and share information with Zillow if they had disclosed their true intent of planning to launch their competing product using proprietary information and knowledge that they obtained from TAN, the network for real estate agents. Zillow declined to invest in TAN in May 2014 and four weeks later debuted a “coming soon” product for its site. This product is what TAN alleges is a copycat product.
Stockholders and the real estate industry professionals loved Zillow’s “coming soon” feature. The shares of Zillow skyrocketed up more than 18 percent just shortly after the debut of their “coming soon” product. Zillow’s spokesperson declined to talk about it saying that the company had not yet been served the papers for the complaint.
This is not the first time that Zillow has been accused of infringing on another organizations intellectual property and trade secrets. In March of this year Zillow was hit by a similar lawsuit by the National Association of Realtors (NARS). It seems Zillow is trying to do everything it can to stay on top of the real estate game. For example earlier this year they bought the competing site Trulia for 3.5 billion dollars.
Stay tuned as we continue to providing further information as the story unfolds.