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Acquisition leads to intellectual property lawsuit

On Behalf of | Dec 15, 2016 | Intellectual Property

Back in 2012, the company CoStar Group Inc., which specializes in commercial real estate data, acquired LoopNet Inc in an $860 million deal. LoopNet held a partial stake in another company, Xceligent, which was a competitor of CoStar’s. So in order for the acquisition to go through, the Federal Trade Commission imposed a number of requirement on CoStar to ensure the deal was fair. Two of these conditions involved having LoopNet sell its stake in Xceligent and forcing CoStar to give Xceligent a list of broker that were used by LoopNet in the years prior to the deal.

In the wake of this deal and these conditions, Xceligent posted some 9,000 images that, CoStar says, breaches intellectual property of CoStar as they were republished without permission from LoopNet.

It’s a confusing story with a lot of moving parts, but there are two keys lessons here. The first is that business acquisitions and mergers are complex transactions that do not happen without a lot of scrutiny and oversight. Whether a company is the acquiring company or the company being acquired, they will need legal help to ensure the deal goes through smoothly.

The other lesson is that intellectual property concerns can occur in many different contexts. Here we have an intellectual property issue that occurred as a result of a acquisition. These claims are very serious, but considering the many layers involved in this particular case, there will be a lot that needs to be unraveled to get to the bottom of the issue.

Source: Memphis Business Journal, “CoStar sues the competitor it bolstered with its LoopNet merger,” Daniel J. Sernovitz, Dec. 15, 2016

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