CoStar Sues Homesnap Founder Over Trade Secrets

Three years after buying Homesnap for $250 million, CoStar is suing the founder of the listing platform.

CoStar is suing Guy Wolcott for hiring away three Homesnap employees with proprietary knowledge of CoStar trade secrets, according to a lawsuit filed in the U.S. District Court for the District of Columbia reported by Inman. Former Homesnap CEO John Mazur is also a defendant.

The suit alleges Wolcott and former employees used knowledge of the CoStar Sync data-transfer system to develop a similar platform at a company called Happening Technology.

CoStar claims that Wolcott approached company executives to pitch them on Happening Technology, and in that meeting revealed some of the site’s functions, which were already CoStar trade secrets. CoStar said suspicions arose in part due to the speed with which the platform was developed.

“Through such use of CoStar’s trade secrets and confidential information, Happening Technology managed to ‘develop’ this revolutionary technology in only six months — a fraction of the time it took CoStar to develop the technology in the first instance,” the filing says.

Wolcott is also accused of being in conversation about the platform with CoStar’s competitor Black Knight, according to an email described in the filing.

“I won’t comment on an ongoing legal matter, but I am confident that once the facts have been shared, it will be clear that no misappropriation or copying has taken place,” Wolcott wrote in an email to Inman.

CoStar is asking the court to make the defendants stop marketing the platform “including by removing from public access any materials” discussing the new technology.

— Harrison Connery