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ARLINGTON - A federal judge has ruled that commercial real estate platform CREXi deliberately copied and cropped thousands of copyrighted photographs from CoStar Group (NASDAQ:CSGP) through an offshore operation in India, according to a press release statement. CoStar Group, with a market capitalization of $34.3 billion, stands as a prominent player in the Real Estate Management & Development industry, according to InvestingPro data.
Judge Marshall of the federal district court in Los Angeles issued an opinion Wednesday determining that CREXi had implemented a systematic policy to copy listings and images from CoStar’s LoopNet platform, including instructions to remove CoStar watermarks from the photos.
The court found "ample evidence that CREXi and its BPOs [offshore teams in India] copied listing information, including images, from LoopNet" and that CREXi "would take screenshots of photos or otherwise crop out CoStar’s watermarks" to build listings on its website.
The ruling stems from a 2020 lawsuit in which CoStar accused CREXi of "industrial-scale copyright infringement." While the court denied both parties’ motions for summary judgment, it made several findings favorable to CoStar, including that "there is no genuine dispute of fact that CoStar has stated a prima facie case for copyright infringement."
The court also rejected CREXi’s claim to safe harbor protection under the Digital Millennium Copyright Act regarding the copied images, as well as its "unclean hands" defense.
The case will now proceed to trial to resolve remaining factual issues and determine damages.
Gene Boxer, CoStar Group General Counsel, called CREXi a "parasitic company" that "harvested intellectual property from CoStar Group rather than compete fairly."
CoStar Group provides commercial real estate information, analytics, and online marketplaces, with brands including LoopNet, Apartments.com, and Homes.com. The company maintains impressive gross profit margins of nearly 80% and generates annual revenue of $2.8 billion.
In other recent news, CoStar Group reported its first-quarter 2025 earnings, showing a 12% year-over-year revenue increase to $732 million, though it missed earnings per share (EPS) expectations with a reported loss of $0.04 against a forecast of $0.12. Needham analysts responded by raising CoStar’s price target to $98, maintaining a Buy rating due to strong first-quarter results and successful integration of Matterport. Meanwhile, Citizens JMP reaffirmed a Market Outperform rating with a stable price target of $85, noting robust performance in CoStar’s core businesses like CoStar Suite and Apartments.com, despite challenges in the Residential segment.
CoStar Group also announced a definitive agreement to acquire Domain Holdings Australia Limited for A$3.0 billion, a move that will expand its international presence. The acquisition awaits several approvals, including from Domain shareholders and Australian regulatory bodies. The Domain Board has recommended shareholders accept the offer, which is backed by Nine Entertainment Co. Holdings Limited. Additionally, BofA Securities resumed coverage on CoStar Group with a Neutral rating, emphasizing the challenges of scaling the residential segment profitably amid recent investments.
These developments highlight CoStar’s strategic efforts to expand through acquisitions while managing the complexities of its residential real estate investments. Analysts continue to monitor CoStar’s financial performance, particularly in light of its strategic initiatives and market conditions.
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