San Diego – As a result of a case brought before the United States Patent and Trademark Office’s Patent Trial and Appeal Board (PTAB), the patent encompassing Zillow’s popular home valuation tool has been seriously diluted. In its ruling, the Board found 25 of the 40 claims mentioned in the patent, referred to as the ’674 patent, unpatentable. Zillow filed for the patent back in 2006 but wasn’t granted patent protection for its “Z-Estimate” tool, which is featured prominently on its website, until 2011.
The proceedings were instituted by Washington, D.C.-based Microstrategy, Inc., which sought a review of Zillow’s “Z-Estimate” patent claims in an effort to have the entire patent thrown out. The Board ultimately held that two of the claims included in the ’674 patent were invalidated because they were not novel and that 23 of them were obvious in light of prior inventions.
The ruling comes as a major blow for Zillow , less because of the fallout with Microstrategy, but more because of the effects that it will have on the outcome of its major lawsuit against rival Trulia. Commenced last year, Zillow contends in its patent infringement lawsuit that Trulia’s automated property value estimates, called “Trulia Estimates,” infringe on its patented “Z-Estimate” calculations. In response, Trulia filed a motion to dismiss the patent infringement lawsuit, arguing that “Abstract ideas and principles are not patentable.” With much of the “Z-Estimate” patent now invalidated by the PTAB, Zillow will likely be waging an uphill battle in trying to stop Trulia from providing its own competing home value estimates.
The two biggest names in online real estate have been at each other’s throats for years. Seattle-based Zillow will reportedly spend upwards of $65 million on its nationwide advertising campaign in 2014. Not to be outdone, Trulia countered by announcing the hiring of its new Chief Marketing Officer in February and its plan to spend over $40 million this year on ads. Though Zillow went public a year before Trulia, the smaller company has been giving Zillow a run for its money since its August 2012 IPO, when its stock debuted at more than 30% above its projected value.