New trend in technology- sue for patent infringement, impede progress

This is nothing new

For those of you focused on the business of selling real estate or any other small business, you may not know that patent infringement is part of every day life in the legal system. You may not know that your broker has been sued for patent infringement dozens of times (Keller Williams, RE/MAX, etc.) as a natural part of business and it has nothing to do with real estate but everything to do with the technology our industry is using and developing.

Innovation is escalating at a break neck pace, but from time to time, a patent lawsuit stifles not only the very practice of modern real estate, but any innovation and strikes fear in the hearts of real estate companies, just so patent trolls can make a buck (please take a second to read the link about patent trolls, it will speed this argument up considerably).

It is to be expected, however, that when a market is down and suffering that lawsuits will increase – it is a true sign of market conditions. Therefore, this is just a drop in the bucket… we will see more of these cases popping up as we predicted in the Genius30 awards as it is an inevitability in any industry.

Enter case number one: mobile real estate search

In a board meeting for a major real estate marketing and web development firm, we listened as they pitched their next move which would be a “social media widget” they could resell because they were so terrified of making a move that involved real estate search that they were at a loss for how to expand their business.

Why were they so scared? The “Boopsie lawsuit” wherein Smarter Agent sues everyone from Zillow to ZipRealty, claiming they own the patent on “mobile real estate search” and everyone that has an app that allows consumers to search for real estate on their phone is violating their trademark. If you live in 2011 and are a real estate professional, especially a broker, you can’t allow your consumers to search real estate unless it’s done through their platform according to their suit.

Case number two: real estate search

We cover the real estate search industry on nearly a daily basis as it has so many moving parts and is growing and innovating at an amazing pace. There is a wrench in the system, however, known as the “REAL lawsuit” which claims a 1991 patent for real estate search (more specifically they claim they own the process of creating a database of properties for sale, mapping results and offering zoom). Sounds like every single real estate website on the planet, no? Even Google.

The suit is broader and goes after many types of entities from Alain Pinel Realtors, Keller Williams, Move Inc., Georgia MLS, NAR, RE/MAX Gold, Pulte, Ryland and more. The National Association of Home Builders teamed up with the National Association of Realtors and Move, Inc. this week winning a countersuit to the claim and now REAL was remanded to further proceedings where they will go back to a lower court and explain what their patent covers more specifically.

A call for patent reform

The above cases are oversimplified for expediency, there are years worth of legal documents in both events. I’m not a lawyer, I don’t even play one on television, and none of this is legal advice (only my opinion, but I know that patent trolling is real and even when patent suits are legitimate, it seems that protection of a tech function for one company can stifle and freeze an entire industry. Some lawsuits (maybe even one of the above) go above and beyond to file their claims in area that are patent friendly, hundreds of miles from their headquarters, just to pad their claims while other companies are truly protecting a unique patent claim.

Can someone really own real estate search or mobile real estate search or mapping or hell, even “real estate?” Technically, yes. And technically, patent lawyers will pump this system for every penny it’s worth. And will Realtors suffer at the hands of these lawsuits? More importantly, will consumers? If innovation is frozen, yes. Patent reform must be taken seriously and as a Realtor, it seems like a far away topic to rally behind, but it absolutely is not (unless you don’t want consumers to be able to search for real estate anywhere besides your printed MLS book in your office one can only access via time machine).

Patent lawsuits and their impact on technology

Other reading to help you form a more rounded opinion on patent issues in today’s tech world:

1. Fred Wilson, famed investor, outlines the Supreme Court ruling in the Bilski case, calls for patent reform and notes that software and tech patents are mostly a negative for startups.
2. NTP sues Apple, Google, Microsoft, LG, HTC etc. claiming they own the patent on electronic mail over wireless communication systems. In other words, you can’t see email on your phone unless NTP says so.
3. XPRT sues eBay, PayPal, claiming they confided electronic payment ideas with them years ago and that eBay’s filing for a patent acknowledges the values of those ideas. There’s a possible element of underdog here, but one can’t be sure.
4. Patent trolling may continue despite the University of Texas report revealing that it does not have a good return.
5. TechCrunch covers why patents hold back innovation not only for our tech toys but for important humanitarian projects like desalination of water.
6. The Guardian shows all of the dozens of smartphone lawsuits each company has filed against the other and a more descriptive infographic shows what they’re suing for.
7. TechRadium sues Twitter for mass messaging system (although I recall using AIM in high school, long before Twitter was thought up and possibly before TechRadium’s IRIS tech was developed, but who knows?).
8. Apple sues HTC over more than 20 infringements of interface patents

The list goes on and on. Contact your local politician and tell them strongly that you are against patent trolling or that you support patent protection, but either way, we encourage reform of an easily abused system. This issue is not going away, it’s just getting warmed up.