IBM sues Zillow, accuses the real estate giant of building key features using Big Blue’s tech

(Bigstock Photo)

IBM filed a lawsuit against Zillow this week, accusing the real estate giant of piggybacking off its patented technology to build key parts of its home value estimation and search features. The dispute is the latest in a series of high-profile patent suits filed by IBM against other well-known tech companies.

The seven patents at the center of the suit cover a variety of different technologies, but the ones that stand out most deal with using computing power to analyze the quality and desirability of a geographic area and list-based searches that let users see the results on a map that fits within their screen.

Zillow offers services that sound a lot like these technologies, including the Zestimate algorithm that gives informal estimates of how much a home is worth and the home search function that relies heavily on maps and lists.

In the lawsuit, filed Tuesday in federal court in California, IBM says it has tried for three years to reach a patent licensing deal with Zillow. Those efforts haven’t been successful, so IBM claims it must now turn to the courts.

“Because IBM’s over three-year struggle to negotiate a license agreement that remedies Zillow’s unlawful conduct has failed, IBM has been forced to seek relief through litigation,” according to the lawsuit. “Among other relief sought, IBM seeks royalties on the billions of dollars in revenue that Zillow has received based on their infringement of IBM’s patented technology.”

IBM is also asking the court to bar Zillow from using each of the seven patents going forward, in addition to damages from patent infringment.

Zillow issued the following statement on the case: “We are aware of the lawsuit filed in federal court. We believe the claims in the case are without merit and we intend to vigorously defend ourselves against the lawsuit.”

Here’s what IBM had to say about the case: “IBM invests more than $5 billion annually in research and development, and relies on its patents to protect that investment,” according to a statement. “We are acting to address Zillow’s unauthorized use and infringement of IBM intellectual property after years of trying to negotiate a fair agreement.”

Zillow’s home search map and list. (Screenshot Via Zillow)

The U.S. Patent and Trademark Office has issued more patents to IBM than any other company in the world over the last two decades, according to the suit. IBM says it holds more than 110,000 patents worldwide, and it isn’t afraid to defend them in court.

“IBM, like any property owner, is entitled to insist that others respect its property and to demand payment from those who take it for their own use,” according to the lawsuit. “Defendants have built their business model on the use of IBM’s patents. Moreover, despite IBM’s repeated attempts to reach a business resolution, Defendants refuse to negotiate a license to IBM’s patent portfolio.”

IBM has sued a number of big tech companies for patent infringement in recent years, including Twitter, Groupon, Priceline and Expedia, which was founded by Zillow co-founder and CEO Rich Barton. IBM has gotten big payouts in some of these suits, including $57 million and $36 million from Groupon and Twitter, respectively. Priceline and IBM settled confidentially last year. The Expedia case remains ongoing.

IBM’s aggressive patent litigation strategy has drawn suggestions that it is on the verge of “patent troll” territory. One of the biggest names in the history of technology, IBM remains a force in the modern era, bringing in more than $19 billion in revenue in the most recent quarter and making one of the biggest acquisitions of the last few years: The $34 billion deal for open-source server operating system provider Red Hat.

Here is the full lawsuit:

IBM vs. Zillow by Nat Levy on Scribd

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