Former Homesnap employees stole trade secrets over online marketplace tech, CoStar alleges | SkipLeadPro

By Ashraful Islam Updated October 2, 2023 Reviewed by Ashraful Islam
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CoStar acquired Homesnap in late 2020 for $250 million in cash, with $7.8 million each going to Wolcott and former Homesnap CEO John Mazur, according to the complaint.

All named defendants, including Wolcott and Mazur, were “either involved in the development of CoStar Sync or had access to substantial confidential and proprietary information regarding CoStar Sync and its development,” the complaint alleges.

All the former employees named in the suit went on to start a new company, Happening Technology, with CoStar alleging that they did so “with the apparent intention of repurposing the proprietary and confidential information they had access to and worked with at CoStar so that Happening Technology could offer competitive technology and services to CoStar’s competitors.”

The complaint details that after starting the new company and platform, Wolcott traveled to the Washington, D.C. headquarters of CoStar to pitch an agreement between the companies to Frank Simuro, CoStar’s chief technology officer and Adam Kleiner, its VP of software development.

Following his presentation, Wolcott allegedly said in an email that his new company was also engaged in dialogue with Black Knight, which competes with CoStar in the real estate and property data business.

“Based on Wolcott’s presentation, Simuro and Kleiner realized that Happening Technology’s product was developed using CoStar’s trade secrets and confidential information, including the CoStar Sync technology that the former employees worked on or had access to during their employment at CoStar,” the complaint reads.

It continues: “Indeed, in his presentation, Wolcott claimed many of CoStar’s trade secrets as if they were conceived of and owned by Happening Technology.”

CoStar alleges that all named defendants breached their agreements not to disclose confidential company information when separating from CoStar, and not to “solicit or recruit CoStar employees for other causes,” the complaint alleges.

CoStar says it has been “severely and irreparably harmed” by the alleged actions of the defendants, adding that prior engagement between counsel for both companies did not lead to a solution, ultimately requiring this legal action which was filed in the U.S. District Court for the District of Columbia.

CoStar seeks “preliminary and permanent injunctive relief enjoining Happening Technology from further misappropriation of its trade secrets and [to compel] the former employees from further misuse of CoStar’s confidential information and breaches of the agreements,” according to the complaint.

CoStar also seeks monetary damages stemming from the costs and legal fees resulting from the suit.

Representation for Happening Technology, Wolcott, Mazur and the other defendants have yet to file a response to the complaint in court as of Monday afternoon. When reached by Inman, Wolcott expressed confidence that the facts will determine “no misappropriation or copying has taken place,” he said in an email to the outlet.

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