Jun 16, 2011
NAR meets first payment milestone with CIVIX
16 Jun 2011
Posted by Andrew Kantor
The quick background: In December 2005, a company called CIVIX sued NAR, Move (which runs Realtor.com), and Hotels.com claiming the companies’ websites infringed on CIVIX’s patents for location-based services. Later CIVIX also sued two giant MLSs: MRED (in Illinois) and MRIS. Move and MRIS each settled for an undisclosed sum.
Seeing the writing on the wall, about 50 MLSs across the country — each of which could be the target of a CIVIX suit — asked NAR to negotiate a blanket agreement. When the dust cleared, NAR agreed to pay the company $7.5 million to license the technology, and the MLSs were off the hook. (Considering that CIVIX was demanding $6 per member for four years, the alternative could have been crippling for MLSs and Realtor associations; NAR estimated it would have cost the industry $20 million.)
So CIVIX agreed not to sue any MLS or Realtor association if NAR raised that $7.5 million in licensing fees in three equal installments: $2.5 million by June 17, another by July 17, and another by August 16.
NAR hit that first $2.5 million goal today. But if it doesn’t meet those other goals, any MLS or Realtor association that hasn’t paid the licensing fee will be subject to a lawsuit.
Want to know more?
For some good background on the issue, check out this piece from Crain’s Detroit Business.
And for a strictly real estate perspective, read John Reilly’s piece in RealTown.