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SPECIAL REPORT: CoStar Cracks Down On Data Thieves

Stepping Up Fight to Protect Legitimate Subscribers, Firm Files 8 Lawsuits Across Five States Alleging Thousands of Instances of Copyright Infringement
April 3, 2014
As part of a coordinated anti-piracy campaign aimed at ending theft of its services and protecting legitimate subscribers, CoStar Group this week announced it is filing a series of lawsuits against eight firms and individuals.

The suits allege the defendants engaged in the systematic theft of CoStar's services though acts of online piracy and computer hacking via illegal password sharing. If found liable, the defendants in these cases could be ordered to pay millions of dollars in damages.

In a related move, CoStar also said it is filing a "John Doe" lawsuit in New York federal court based on allegations of improper use of CoStar's proprietary data and photos to populate a competing service called CompStak.

To move the case forward against named defendants, CoStar has sought to compel CompStak's disclosure of the identities of its users that have allegedly violated CoStar's copyrights.

Implicated Firms Located in Denver, Dallas, Detroit and Chicago

Among the defendants implicated in the data theft lawsuits are two Denver real estate brokerage firms co-owned by Chang Enterprises, a family investment company that includes former tennis champion Michael Chang. CoStar's complaint alleges that the two firms, Dunton Commercial and SullivanHayes Brokerage, were responsible for 2,259 unauthorized logins to CoStar's networks over a period of several years.

Additional lawsuits have been filed against Detroit-area based Insite Commercial Group and its principal, Randall Thomas; Dallas-based Chris Chevreaux d/b/a Chevreaux & Associates and Ben Dyess d/b/a Ben Dyess & Associates; and Chicago-based Richard Griego d/b/a Frontera Realty Consultants. In total, these firms and individuals are alleged to have illegally accessed CoStar's services thousands of times.

CoStar has also sued a Los Angeles-based individual, Andrew Gee. The suit alleges that Gee engaged in widespread misuse of CoStar's services in connection with his attempts to launch a competing commercial real estate information service called Gee was formerly an acquisitions and asset manager with Meridian Property Co. before leaving and starting his own business in 2013.

Data theft remains a critical and costly issue faced by many companies, particularly companies like CoStar, which build their information products at great effort and expense. CoStar has a long-standing commitment to securing its networks. It uses extensive network monitoring technology to protect legitimate subscribers from others who would resort to stealing information.

The recent theft of credit and debit card numbers as well as home and email addresses of as many as 70 million Target customers highlighted the business risk companies face online.

CoStar said it acts decisively to prevent any data theft. It seeks to quickly and fairly resolve the vast majority of instances where companies or individuals are discovered misappropriating CoStar services, resorting to legal action only in the most egregious cases and as a last resort.

The real estate information company also has a history of successfully securing judgments against data thieves. In 2012, the United States District Court for the District of Maryland finalized a judgment ordering Alliance Valuation Group, TGC Realty Counselors and Pathfinder Mortgage Corp. to pay CoStar more than $3 million in damages for their roles in the unauthorized use of CoStar's copyrighted photos. The order brought to a close a lawsuit involving a multi-state, multi-defendant password sharing network that involved companies in Orange County, CA; Houston and Palm Beach Gardens, FL.

CoStar also said it offers substantial rewards for reports of wrongdoing that result in successful claims. Individuals who report suspected password sharing or unauthorized use of CoStar's services could receive either a $50,000 payment if CoStar chooses to file a court case, or 100% of any funds CoStar collects in a settlement or judgment after recouping its legal fees.

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