Oh snap: Zillow sues online real estate rival Trulia over patent (court docs)

Oh snap: Zillow sues online real estate rival Trulia over patent (court docs)

Well, this is interesting.

Online real estate giant Zillow, which just successfully raised almost $150 million in a public offering of its shares after IPO’ing in 2011, is suing its U.S. rival Trulia, which is almost a public company, over alleged patent infringement.

At the heart of Zillow’s complaint is its ‘Zestimates’ product, which basically values properties with sophisticated, proprietary algorithms.

Zillow alleges that Trulia infringes on its patented technology by offering a similar service dubbed ‘Trulia Estimates’, originally launched in 2011 in what Zillow refers to as a ‘copycat service’.

From the court documents, embedded below:

“Trulia’s blatant and ongoing copying of Zillow’s innovative approach to home valuation infringes Zillow’s patent and Zillow is entitled to damages and an injunction against further infringement.”

The key passage from the court documents on the infringement:

Trulia calls its version of Zestimates “Trulia Estimates.” Like Zestimates, Trulia Estimates provide automatic valuations of properties based on “recent sales of similar homes and home facts like number of bedrooms and bathrooms, square footage, and more.”

Also like Zestimates and the invention taught by the ‘674 Patent, Trulia Estimates permit and rely on homeowners to “claim your home” and provide additional information about their properties to refine the automatic valuations.

Trulia states on its website: “Our estimates also incorporate updates from home owners who claim their homes and enhance the profiles for those homes on Trulia.”

The invention taught by the ‘674 Patent is a key feature of Trulia Estimates and it features prominently in Trulia’s own descriptions of the Trulia Estimate feature.

The patent-in-suit is U.S. Patent Number 7,970,674, entitled “Automatically Determining A Current Value For A Real Estate Property, Such As A Home, That Is Tailored To Input From A Human User, Such As Its Owner.”

It was originally filed for by Zillow in February 2006, right after its launch. It was granted in June 2011.

In its complaint, Zillow says its Zestimates service has delivered results, too:

To date, more than 33 million homes have been updated in this way, or 33 percent of Zillow’s database of more than 100 million homes, making the Zillow database substantially more useful and accurate for users.

In addition to damages, Zillow is seeking a permanent injunction for Trulia Estimates.

In a recent S-1 filing with the SEC, Trulia says it generated revenue of $38.5 million in 2011, and that it booked $29 million in the first six months of 2012 (up from $16.2 million in the six months ended June 30, 2011).

Net loss for those periods of time were $6.2 million and $7.6 million, respectively, the filing showed. Trulia plans to raise up to $75 million in an initial public offering.

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