A closer look at the trade secrets driving the Move-CoStar lawsuit
Move Inc. lawyers said that a former employee who went to work for CoStar accessed Realtor.com’s proprietary document containing future plans for articles.
Key points:
- Move counsel described the editorial calendar as a “1,000-page document” that details what Realtor.com writers will be working on “for the next few months.”
- CoStar lawyers denied that Kaminsky shared any information from the document with Homes.com colleagues.
- U.S. District Court Judge George H. Wu repeatedly asked the litigants to focus on settling the dispute outside of court.
A hearing this week for the trade secrets lawsuit by Move Inc. against CoStar shed new light into the dispute over what was accessed and allegedly misappropriated by a longtime writer and editor for Realtor.com who was laid off in January and then started a content position with CoStar's Homes.com in March.
The crux of the case appears to be James Kaminsky's access of an editorial calendar for Realtor.com's News and Insights vertical, which lawyers discussed during the hearing.
Lawyers for Move, Inc., parent company of Realtor.com, previously alleged that Kaminsky had logged into its systems "at least 37 times" and "stole confidential business information" to benefit CoStar. However, in his declaration, Kaminsky said that the files he had accessed were largely personal documents and articles he had worked on. CoStar execs have repeatedly denied any wrongdoing and have previously referred to the lawsuit as a "PR stunt" by Realtor.com.
The issue with the editorial calendar and 'immediate harm'
When pressed by U.S. District Court Judge George H. Wu on "the nature of the immediate harm" regarding the specific trade secrets that Move was concerned about, Move counsel Brent Caslin replied, describing a news or editorial calendar for Realtor.com.
"This is a 1,000-page document in which our client lists out what subject is going to be writing articles on in the future. So if you are with the New York Times, wouldn't you love to know what the Wall Street Journal is going to be looking into for the next few months?" Caslin said, highlighting that CoStar and Move are direct competitors in the residential real estate space.
Judge Wu conceded that since the document is not accessible by the public, Kaminsky's alleged handling of it after starting at CoStar could be seen as "clearly improper" and "somewhat problematic," though he also acknowledged CoStar's argument that Kaminsky's role with Homes.com was focused on a different editorial product.
CoStar counsel Matthew Walch reminded the judge that Kaminsky had been placed on administrative leave to focus on his defense, but Wu said Kaminsky could have discussed Realtor.com's editorial calendar with CoStar colleagues before being put on leave.
"That's exactly what we will prove through discovery, that that didn't happen," Walch replied, adding that Kaminsky stated under oath that "he did not share that information with anybody" or "use it in any way at CoStar."
Judge asks parties to seek a path to settlement
If CoStar has evidence that proves Kaminsky never shared the editorial calendar, then CoStar should provide this proof with Realtor.com, the judge said. Wu also suggested that the entire issue could have been avoided if Realtor.com took some basic precautions with information security, such as changing passwords.
Judge Wu also recommended — multiple times — that instead of debating the merits and terms of discovery that the two parties should focus instead on settling.
"If you guys want to just spend some time trying to see if you can resolve the case, it seems to me that perhaps some time might be better spent doing that," he said. "Remember, it's better to settle than it is to litigate."