Trulia to Zillow: Your patent is ‘invalid on its face’

Zillow and Trulia have been at each other’s throats for years now. The two online real estate companies just don’t really like one another. Now, we’re getting a front row seat to the action — in part because of a patent lawsuit that Zillow filed against Trulia last September, a suit that came just a few days before Trulia started trading on Wall Street.

In a set of legal briefs filed this past week, both companies fired volleys at one another. Zillow defended its patent around the Zestimate automated home valuation technology and called its rival’s interpretation of the law “misleading and incomplete,” while lawyers for Trulia questioned the timing of Zillow’s suit.

“…To allow this case to proceed would waste judicial and party resources and reward Zillow for asserting—on the eve of Trulia’s IPO and over a year after the accused feature was launched—a patent that is invalid on its face,” they wrote.

Trulia is asking a federal judge to dismiss the patent suit, filing a motion last month in which it noted that “abstract ideas and principles are not patentable.”

But Zillow, which was granted a patent on the Zestimate technology in 2006, isn’t backing down. It fired back this past week:

“The ‘674 Patent is not an “idea,” it is a computer program, computer display, and interface that displays to homeowners inputs used in an automatic valuation of their homes, solicits and obtains revised inputs from homeowners, calculates a refined valuation based on those inputs, and then displays the refined valuation. This computer program, computer display, and interface has given Zillow a significant advantage over its competitors, as it has been used to refine the valuations of more than 33 million homes in Zillow’s database, which has made Zillow’s database “substantially more useful and accurate” and has “played a major role in Zillow’s success and growth into the largest real estate website, and most popular suite of mobile real estate applications for smartphones and tablet computers.”

Zillow also alleges that Trulia likely had knowledge of the patent when it launched its Trulia Estimates program, a direct competitor to the Zestimate.

This legal fight could get interesting. After all, how often do you have two direct rivals — recently publicly-traded companies that are both trying to upend a big market — duking it out in the courts?

Shares of Zillow are down about 13 percent since the lawsuit was filed. The company now boasts a market value of $1.1 billion — while Trulia is valued at $695 million.

Zillow Patent Suit


Here is Trulia’s response:

Trulia Zillow Suit by John Cook

  • Guest

    I find the premise of this article a little strange. Both Zillow and Trulia are supposedly “trying to upend a big market.” Exactly how large is the “come up with a wild-ass guess as to how much John’s house is worth” market? What do either of these companies do that earns themselves enough money to hire lawyers? (Besides advertising, of course. Any fool can come up with a real estate content farm, slap some Adsense blocks on there, and wait for the dough to roll in.)

  • JustRants

    Computing a house’s value does sound like an abstract idea. What would be not abstract is the actual formula or algorithm used to arrive at the value.

    • http://twitter.com/Vroo Vroo (Bruce Leban)

      Yes, if that were what the patent was claiming. Instead, it’s claiming the process of computing a valuation (by unspecified means) and displaying it to the user. It lists multiple inputs to be used to compute the valuation but not how the valuation is to be computed, aside from referencing linear regression and classification trees. Dependent claims include the highly original ideas of deciding two homes are near each other if they have the same zip code, have the same neighborhood name or are less than a certain distance apart (sarcasm).

      That aside, the only independent claim requires computing the valuation from inputs in five specific stages and I imagine that would be trivial to work around

  • http://blog.findwell.com Kevin Lisota

    I’ve heard Stan Humphries, Zillow’s economist describe the Zestimate model and how it is calculated. Nothing abstract at all about the formula and process of calculation. It is quite complex, in fact.

  • Guest

    Having just scanned the patent, I can’t believe they rely only on linear regression on attributes of recent sales with some options for users to correct the attributes and some really basic tree models to try to learn about locality. I’ve never heard of any serious asset valuation model that didn’t attempt to model temporal dynamics of the marketplace. You get so much more data to fit your model, because you aren’t restricted to some arbitrary notion of recency.

  • http://twitter.com/fijiaaron Aaron Evans

    Zillow’s algorithm (not detailed in the patent) could be considered proprietary. The idea of estimating a home’s value is not.

  • Web3dot0

    Here is the Zillow Model.
    3 + 2 = 4

  • Bryan Mistele

    I feel compelled to point out that Microsoft HomeAdvisor had this feature in the year 2000 – long before either Zillow or Trulia existed. A simple search will reveal we launched automated appraisals and talked a lot about it to the press, the industry, etc. at that point. I haven’t read the patent or the claims, but there is plenty of prior art around the basic concept of the automated appraisal.

  • Virgil Leroy Brown

    Bank of America also offers this product on its loan processing website. Seems from memory to be a thrid party provider.

  • e2eseal

    There was another patent application in 2006 that has some of the same ideas. Patent application number 20060235712. The provisional application date was April 2005 and patent application date was 2006.