United States Federal Court Orders Two Real Estate Companies To Pay CoStar Group $1.1 Million In Damages For Illegal Password-Sharing

WASHINGTON, Dec. 23, 2010 (GLOBE NEWSWIRE) -- For many companies, illegally sharing passwords to online services has become commonplace. However, as a landmark verdict issued by a federal court on Tuesday shows, the online terms of use that Internet users often click through have real teeth, and can turn password sharing into something that bankrupts your business or costs millions of dollars. 

CoStar Group, Inc. (Nasdaq:CSGP), commercial real estate's leading provider of information, analytic and marketing services, announced today that the federal court in Greenbelt, Maryland issued a verdict awarding CoStar more than $1.1 million in damages from two defendants engaged in password sharing. The final award is the result of an investigation into a multi-state, multi-defendant password sharing network that involved companies in Orange County, California, Houston, Texas, and Palm Beach Gardens, Florida. The Court also ruled that CoStar was entitled to statutory copyright damages of $3,000 per photograph infringed by the Defendants.

The Court entered separate verdicts of breach of CoStar's terms of use and direct copyright infringement against Russ Gressett of Houston, Texas (doing business under the name TGC Realty Counselors) and Pathfinder Mortgage Corporation, which does business in Orange County and elsewhere in California. The Court ordered Gressett to pay CoStar $683,280 for sharing his CoStar user name and passwords with several Houston-area commercial real estate companies, while separately stating that CoStar was entitled to copyright damages of $120,000 for Gressett's copying of CoStar photographs. The Court ordered Pathfinder Mortgage Corporation to pay CoStar $483,120 for using passwords assigned to another company, while separately stating that CoStar was entitled to copyright damages of $438,120 for copying CoStar copyrighted photographs. Together, CoStar is entitled to collect more than $1.1 million in damages from the two defendants. 

Two aspects of the verdict are noteworthy. First, the Court held that the online terms of use on CoStar's website were enforceable against those who use CoStar's services, even if the user never read those terms. Second, the Court found that the copies made by the Defendants' computers during the process of viewing CoStar's copyrighted photographs was legally sufficient to put Gressett and Pathfinder Mortgage Corporation on the hook for copyright infringement.