Real Estate Alliance Ltd. has issued the first major license for a patent the company holds for using a computer mapping system to locate available real estate properties for sale.
LendingTree on Monday announced it has obtained a license from Real Estate Alliance Ltd., or REAL for short, for its patented REAL989 map search functionality for use on the LendingTree-owned RealEstate.com Web site.
Under the agreement, RealEstate.com will become a fully licensed nationwide user of REAL’s patents, granted by the U.S. Patent and Trademark Office in 1989 and 1991, and will incorporate its mapping and zooming interfaces on RealEstate.com.
REAL caught the industry’s attention last July when it filed a lawsuit against Philadelphia Realtor Diane Sarkisian, accusing her of illegally using its patented property locator method and asking for unspecified royalties and court costs.
The case, which is pending in U.S. District Court in Philadelphia, could have broad implications for the real estate industry as the method of using computer-mapping programs to search available homes on real estate Web sites has become more common. An attorney for the patent holder said that real estate agents throughout the country may be infringing the patent and subject to legal action.
The federal suit against Sarkisian is in the discovery stage, said Lawrence Husick, an attorney for REAL, and the parties expect trial to begin by the end of summer. “It’s been a pretty substantial undertaking by all parties,” he said.
Sarkisian, an agent with RE/MAX Action Realty, is represented by DLA Piper Rudnick Gray Cary, a prominent law firm serving clients across the globe. Steven Nash, an attorney representing Sarkisian, declined to comment for this article.
Husick on Monday said that REAL has not filed any additional patent infringement lawsuits against agents or real estate companies, but the company has sent additional letters to those whom they claim are infringing the patent, offering the chance to license it for a one-time fee of $10,000.
“We are focusing on Sarkisian’s suit because we think it’s a very good case to go forward with,” the attorney said.
REAL is “in discussions with a number of other companies and will make some announcements shortly,” regarding more patent licenses, Husick said.
Another company, Equias Technology Development, holds a license for the REAL patent. “Equias is a licensee in their own right and also a licensing agent for the Real Estate Alliance,” Husick said.
According to court documents, Sarkisian in December denied allegations in an answer to the amended REAL complaint and included counterclaims against plaintiffs. Sarkisian also filed a countersuit in January, naming Andrew Rooke, president of REAL; Mark Tornetta, the original patent holder and shareholder of REAL; Lawrence Husick, counsel for REAL; Scott Tatro and Equias Technology Development LLC, a Delaware company.
Sarkisian’s January complaint alleges defendants violated antitrust laws, the Racketeering Influenced and Corrupt Organizations Act (RICO) and Pennsylvania state laws of defamation, false light and trade libel, among other allegations.
The complaint alleges defendants devised a “‘bottom up approach’…designed to target individual real estate agents, who can not afford to employ patent counsel or to fight expensive patent lawsuits.”
Husick on Monday said that defendants have denied all countersuit allegations and he has moved, through counsel, to dismiss the suit as being without basis in law or fact.
“Enforcing a patent is not a violation of antitrust laws,” he said, and “as for state law claims, the federal courts have not usually allowed them to be used to attack a patent or its owner.”
The countersuit alleges that Equias works in concert with REAL principals to provide a purported cheaper way for individual real estate agents to license the REAL patents.
According to the countersuit, this process allegedly starts with a letter to a real estate agent informing of the patent infringement and offering to sell him or her a patent license. The letters include a license application form, a sample license signed by Rooke, a draft of an initial disclosures form, and a draft complaint directed specifically to Sarkisian, according to the lawsuit.
Some time after the letters are sent, Tatro of Equias follows up with the agents to offer Equias’ cheaper licensing alternative, the countersuit alleges.
Equias and REAL have “thereby developed an intimidation scheme in which individual real estate agents are forced to choose between paying a $10,000.00 license fee, becoming a ‘subscriber’ of the Equias System or defending a patent infringement lawsuit,” according to allegations.
The lawsuit against Sarkisian is “a sham litigation brought only to force Sarkisian to pay defense costs amounting to more than the offered license fee, harass and embarrass Sarkisian, cause damage to her reputation and business, and make an example of her for all other real estate agents across the country who do not acquiesce to the demands of the REAL Principals and Equias/Tatro,” according to Sarkisian’s countersuit.
According to court documents filed in defendants’ answers, Equias is a licensee of REAL’s patents and operates “completely independently of REAL.” “REAL has no right to, and does not control the actions of Equias,” the documents state.
Sarkisian’s countersuit is still pending, according to Husick, and the judge has not yet decided on the motion to dismiss.
The patent, dubbed “Real Estate Search and Location System and Method,” was filed in 1989 and granted in 1991, long before commercial use of the Internet became common. According to U.S. patent No. 5,032,989, Windermere, Fla.-based systems engineer Mark Tornetta invented an interactive mapping system used to find homes for sale similar to the way a number of real estate Web sites today allow users to search for properties.
The infringement lawsuit against Sarkisian is a second attempt for Tornetta. In 1998, he sued two leaders among national home listing Web sites, Moore USA’s Cyberhomes and Microsoft’s HomeAdvisor, claiming both infringed upon and deliberately ignored his patented method for finding homes via computer.
At the time the suits were filed, both companies denied Tornetta’s claims and said they intended to mount a vigorous defense.
Tornetta eventually dropped the suits because Microsoft and Cyberhomes each had discontinued the services that allegedly infringed the patent, according to Husick.
Husick has noted that the patent, which expires in 2008, does not claim “the mere providing of interactive zoomable maps…it is the specific set of steps in the claim that applies the mapping technology to the location of available real estate.”
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