Home Valuation Services Face Off Over Fight for Patent

By Joseph Mandour on June 24, 2013

Los Angeles PatentsOrange County – Rival home appraisal companies Zillow Inc. and Trulia Inc. have continued their bitter feud in federal court in Washington’s Western District.  Most recently, Trulia petitioned on June 17th to have the court invalidate Zillow’s patent for its home valuation program while Zillow continues to claim patent infringement against Trulia.

Zillow originally brought lawsuit against Trulia for patent infringement in 2012, claiming that San Francisco-based Trulia’s home appraisal program was too similar to Zillow’s own program.  Trulia then countered, arguing that Zillow’s case should be dismissed because the home valuation service it patented is an abstract idea and therefore not eligible for patent protection.

The patent at issue in this case is for Zillow’s online home valuation program, U.S. Patent Number 7,970,674 B2, described as a program for “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.”  This process is utilized for Zillow’s service, Zestimate, in which users enter information about a property and Zillow generates an estimate of the property’s worth.

U.S. District Court Judge James L. Robart deferred ruling on the case in April until a similar case was decided by the Federal Circuit court on a patent held by CLS Bank.  The Circuit court ruled in May that CLS Bank’s computer platform for reducing risk in financial trading was simply an abstract idea, and therefore not eligible for a patent.

The court found that an eligible patent needs to be able to tie an abstract idea to a specific way of performing that operation on a computer.  Simply performing the task on a computer is not sufficient to garner patent protection, according to the court.  Trulia argues that the patent held by Zillow does not pass this threshold, as these computations could be performed with paper and pencil and do not require a computer.

Trulia argues that the case brought by Zillow should be dropped on the same grounds as the CLS Bank case.  The company claims that allowing Zillow’s patent to stand would monopolize use of  the abstract idea of calculating a home’s value from user input in general, and would not just limit the specific process that Zillow is claiming.

Zillow is seeking damages in the case, as well as royalty payments from Trulia for use of the patent.

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Posted in: Patent Infringement