Source: https://dukelong.com/realmassive-response-to-co-star-lawsuit/
Timestamp: 2019-04-24 08:28:11+00:00

Document:
RealMassive Response to Co-Star Lawsuit.
This is posted with the permission from RealMassive.
Craig Negoescu (Defendants) hereby move to strike, pursuant to Rule 12(f), Fed. R. Civ. P., Section V of the Complaint filed by Plaintiff CoStar Realty Information, Inc. (CoStar).
This is a copyright infringement lawsuit. CoStar claims to own the copyright in certain pictures of buildings contained in RealMassive’s database of commercial property listing information. RealMassive denies infringement, but it removed the challenged images as soon as it learned of CoStar’s claims. CoStar does not seek preliminary injunctive relief.
customers’ properties. 1 RealMassive is an Austin-based start-up that, shortly before CoStar filed this lawsuit, publicly announced receiving Series A financing.
The Complaint alleges, “upon information and belief,” that RealMassive’s entire business model is based on “preying on the intellectual property of others.” This is false. RealMassive poses a commercial threat to CoStar precisely because its business model does not rely on any data owned or controlled by CoStar. In truth, CoStar’s claims in this lawsuit are based on a tiny and easily-replaced portion of RealMassive’s enormous public database. CoStar could have used the common and inexpensive method of sending RealMassive a Digital Millennium Copyright Act (DMCA) notice to request that RealMassive remove the contested pictures, and RealMassive would have readily complied. Instead, CoStar – which has a well-deserved reputation for aggressive litigation practices – filed this lawsuit and began a publicity campaign to smear RealMassive and its founders. Before summons was even served, CoStar had issued a press release and launched a website devoted solely to promoting this lawsuit. See www.realmassivecase.com (last visited June 16, 2015).
1 When CoStar’s parent acquired its next-largest competitor, LoopNet, Inc., the Federal Trade Commission required CoStar to divest its Xceligent subsidiary and LoopNet’s website at www.commercialsearch.com in order to avoid being charged with violating Section 7 of the Clayton Act (15 U.S.C. § 18) and Section 5 of the Federal Trade Commission Act (15 U.S.C. § 45). See https://www.ftc.gov/sites/default/files/documents/cases/2012/08/120830costardo.pdf (last visited June 17, 2015).
claim of copyright infringement in this case. They serve no purpose other than to disparage one of RealMassive’s co-founders and attempt to smear the other Defendants by association.
Rule 12(f) permits this Court to strike any “immaterial, impertinent or scandalous” allegations. Defendants respectfully request that the Court strike the irrelevant Section V from the Complaint, so that CoStar’s claims will be tried on their merits alone.
Plaintiff CoStar alleges that it is “a leading provider of commercial real estate information.” Comp. ¶ 27. CoStar provides access to its commercial real estate data primarily through paid customer subscriptions. Comp. ¶ 34.
Defendant RealMassive is a growing Austin-based commercial real estate data company that was co-founded in 2013 by two U.S. Air Force Academy classmates, Joshua McClure and Craig Hancock. RealMassive does not restrict access to its database to paid subscribers. Instead, RealMassive provides free access through its website and plans to generate revenue through other services. RealMassive’s open-access, free data model is, obviously, a commercial threat to CoStar’s closed-access, paid subscription model.
Shorn of hyperbole, CoStar’s claims in this lawsuit are simple: CoStar claims to own the copyright to 115 images of commercial buildings that are contained in RealMassive’s database and which can be accessed through searches for properties on RealMassive’s website. Comp. ¶¶ 27-65 & Ex. A. CoStar claims that two of these images are also contained in a RealMassive tutorial and brochure. Id. ¶ 59. The images at issue are a tiny fraction of the data in RealMassive’s database, which contains many tens of thousands of commercial property listings, usually with multiple pictures for each.
own website. See Complaint ¶¶ 27-65. Despite its rhetoric, CoStar does not allege facts showing a pattern, let alone a “business model,” of deliberately misusing CoStar images. Of the 115 disputed images at issue, CoStar’s complaint identifies only 5 that bear a small CoStar corner watermark, and only 1 that bears a RealMassive watermark. Id. at ¶¶ 56-61. CoStar alleges no facts that would have put the Defendants on notice that it claims to own the copyright in the remaining images. Id.
CoStar’s dramatic claim that RealMassive’s business plan is “to steal and profit from CoStar’s copyrighted content” is not borne out by these allegations. RealMassive obtains the images in its database from various sources, including original photography and customer uploads. RealMassive does not need or want images owned by CoStar, and it promptly removed the challenged images when it received CoStar’s complaint (the first and only notice CoStar gave RealMassive of its claims). Likewise, CoStar’s claim that “RealMassive’s website prominently displays CoStar’s copyrighted photographs,” id. ¶ 11, is simply false. As shown by the Complaint itself, the disputed images are pictures of buildings associated with particular commercial real estate listings that would only be displayed to individual visitors to the website in response to searches. See Comp. Ex. A.
Sections I through IV of CoStar’s Complaint, although overblown and vigorously contested, set out the facts on which CoStar bases its claim of copyright infringement. Comp. ¶¶ 27-65. The Defendants are filing their Answer to those allegations today. Section V of CoStar’s Complaint, however, is something altogether different. Clearly written for public consumption and promoted in CoStar’s press release and www.realmassivecase.com website, Section V is a full-bore attempt to use this lawsuit and this Court as a platform to smear one Defendant based on his alleged past, and to tag the other Defendants with guilt by association. Id. ¶¶ 66-80.
In Section V, CoStar purports to describe Defendant Josh McClure’s “history” of “disregarding others’ intellectual property rights, and seeking to profit from them.” Comp. ¶ 66. CoStar first alleges, “upon information and belief,” that “in or around 2008,” McClure “became involved with” a software company called EasyAd. Comp. ¶ 67. The Complaint alleges that craigslist sued EasyAd and its principal, Kevin Mesiab, and that during the case, McClure gave a deposition in which he “testified about EasyAd and its unlawful software.” Id. ¶ 68. CoStar alleges that “at the conclusion of the case,” craigslist won a $6.1 judgment, but CoStar fails to mention that it was a default judgment, not a ruling on the merits.2 Id. ¶¶ 68-69.
company, Troopal, that “trafficked” in software designed to post advertisements on craigslist.
III. A party is entitled to have “immaterial, impertinent or scandalous matter” struck from a pleading under Rule 12(f).
allegations “do not pertain, and are not necessary, to the issues in question.” Wright, Miller & Kane, 5A Federal Practice & Procedure § 1382 at 458, 463. “Scandalous” allegations “improperly casts a derogatory light on someone, most typically on a party to the action.” Id. at 465.
Rule 12(f) is “designed to reinforce the requirement in Rule 8(e)(1) that pleadings be simple, concise, and direct.” Sefton v. Jew, 204 F.R.D. 104, 106 (W.D. Tex. 2000). Striking irrelevant allegations “avoid[s] the expenditure of time and money that must arise from litigating spurious issues,” such as prior disputes and lawsuits. Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir. 1993), rev’d on other grounds, 510 U.S. 517 (1994).
documents, potentially adding weeks to the trial.” Id.
Fogerty’s counterclaim, and should likewise be struck.
IV. Section V’s allegations are wholly irrelevant to this lawsuit and prejudice the Defendants.
In sum total, Section V alleges that one Defendant in this case was, years before RealMassive was formed, sued by a giant company and suffered a default judgment. The Complaint does not claim that the craigslist lawsuits involved allegations of copyright infringement, let alone photos of commercial buildings, let alone any of CoStar’s rights. CoStar does not, and cannot, allege that RealMassive is related to EasyAd or Troopal; the only connection is a single co-founder’s prior work history. The craigslist lawsuits were not even decided on their merits, but rather as defaults. Section V is simply an attempt to raise (and then publicize) purported “other acts” evidence that are clearly inadmissible under Rule 404(b), Fed. R. Evid.
Although, as a general matter, Rule 12(f) motions are not favored, courts routinely strike allegations from pleadings that recite a history of unrelated claims and litigation. The Fantasy, Inc. v. Fogerty case is the most prominent example, but there are many others. See, e.g., Reiter’s Beer Distributors, Inc. v. Christian Schmidt Brewing Co., 657 F. Supp. 136, 145 (E.D.N.Y. 1987) (striking allegations that defendant had “been the subject of considerable other litigation revealing a pattern of disregard for the antitrust laws”); Galindo v. Southwest Texas Telephone Co., No. DR-84-CA-19, 1984 WL 48919 (W.D. Tex. Jul. 19, 1984) (striking “allegations of discrimination other than the single event of unlawful discharge,” because they “serve no purpose as part of plaintiff’s complaint”); Sefton v. Jew, 204 F.R.D. 104, 107 n.3 (W.D. Tex.
2000) (Nowlin, J.) (striking complaint alleging, among other things, that the defendants’ “entire business model is based on providing content belonging to others”). Cf. Frank Betz Associates, Inc. v. Jim Walter Homes, Inc., 226 F.R.D. 533, 536-37 (D.S.C. 2005) (declining to strike allegation that defendant had copied other designs owned by the plaintiff because it may tend to show a “plan, pattern or practice” by the defendant to copy the plaintiff’s designs).
If a plaintiff could prove a defendant’s current “intent” by re-litigating allegations made by other parties in past cases about different conduct, lawsuits would never end. The witnesses and evidence necessary to respond to the allegations would multiply exponentially as defendants were forced to defend not just the allegations in suit, but every alleged “bad act” in their past. Rule 12(f) exists to prevent such misuse of the judicial system. The allegations in Section V are irrelevant and potentially highly prejudicial to all of the Defendants, and therefore should be struck.
For the foregoing reasons, Defendants ask that this Court enter an order pursuant to Rule 12(f), Fed. R. Civ. P., striking Paragraphs 66 through 78 of the Plaintiff’s Complaint and granting such other and further relief to which Defendants may be justly entitled.
ATTORNEYS FOR DEFENDANT REALMASSIVE, INC.
ATTORNEYS FOR COSTAR REALTY INFORMATION, INC.
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“Hyperbole” is the operative word in this response. CoStar does have a rep for trying to make every infringement, real or imagined, a federal case and cause for public execution of the guilty party. In this case, they overstepped by publishing the death of the perpetrator before it occurred (re: Mark Twain). The fact that this is being adjudicated in a Texas court is not the best news for CoStar. Obama learned that lesson the hard way too.
Lol thanks for alerting me to the existence of RealMassive. I think this backfired CoStar.

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