The initial public offering registration papers that online real estate and mortgage search company
The two resolved lawsuits, one brought by mortgage search website Mortgage Grader in Oct. 2009 and the other by Source Search Technologies, filed in May 2010, resulted in out-of-court settlements requiring Zillow to pay patent licensing fees to each company.
Zillow’s legal expenses increased by $400,000 in 2010 compared to 2009 because of the increased litigation activity, but the company did not disclose the portion of its $6.7 million general and administrative expense that went to cover legal costs in 2010.
Zillow said it contests the claims in the three other pending lawsuits. CoreLogic, then a subsidiary of First American Financial Corp., filed a suit against Zillow and numerous other providers of automated valuation model technology, claiming the technology companies’ products infringe on CoreLogic’s patent.
In a March 2010 suit that claims Zillow infringed on patents held by location-based real estate search provider Smarter Agent, Zillow petitioned the U.S. Patent Office to reexamine the three Smarter Agent patents. That case is on hold pending the review.
The latest case, filed in September 2010, alleges Zillow infringed on the patents of online loan search company LendingTree, Zillow said in its IPO registration papers that it’s seeking court declarations that it is not infringing on LendingTree’s patents and that the patents are unenforceable and invalid.
“Although we cannot be certain of the outcome of any litigation and claims, nor the amount of damages and exposure that we could incur, we currently believe that the final disposition of such matters will not have a material adverse effect on our business, financial position, results of operations or cash flow,” Zillow said in its registration papers.
