Redfin co-founder sues company

by Ryan Smith15 May 2020

Online real estate brokerage is being sued by one of its own co-founders, who says the company has violated his patents for years.

Redfin co-founder David Eraker is suing the company, claiming that its alleged violations of his patents has cost him millions of dollars, according to an Inman report.

After leaving Redfin, Eraker formed Surefield, an online brokerage that pioneered 3D home-tour technology, Inman reported. Eraker claims that Redfin and partner Matterport copied Surefield’s technology, according to a lawsuit filed in federal court.

Another lawsuit, filed in Washington state court, claims that Redfin, along with investor Madrona Venture Group, misappropriated map-based search technology invented by Eraker while he was still at Redfin, Inman reported.

Both suits ask for monetary damage, and the federal suit asks that Redfin be prohibited from using technology based on Eraker’s patents, Inman reported.

According to the lawsuits, Eraker founded Redfin in 2002 and was later joined by Michael Dougherty and David Selinger. The lawsuits state that within two years of its founding, Redfin was “the first and only company” to combine data types including satellite imagery, data from county assessors’ offices, and data from multiple listing services.

Redfin was able to combine this data thanks to technology Eraker developed, according to the lawsuits. Several patents from the period are under Eraker’s name, Inman reported.

But as Redfin was preparing for a Series A funding round in 2005, Madrona managing director allegedly discovered technology that Eraker had developed while at Redfin, Inman reported. The Washington state lawsuit claims that Goodrich filed a provisional patent for the technology, concealing that patent from Eriaker. Goodrich assigned the patent from Redfin “only after Mr. Eraker had been ousted from the company,” the state lawsuit said.

The suit called the move “fraudulent behavior” that “resulted in Mr. Eraker losing millions of dollars in equity.”

The federal lawsuit concerns technology developed after Eraker founded Surefield in 2012, Inman reported. The suit claims that Surefield was the first company to offer “commercial image-based rendering” to create 3D home tours “that combined photorealism and spatial navigation amongst other features.” Surefield launched the technology – which is now common in the real estate industry – in 2014, according to the Inman report. Surefield holds several patents related to the technology, naming Eraker as its inventor.

Eraker’s lawsuit claims that shortly after Surefield launched its 3d tour tech, Redfin and Matterport launched their own version – which Eraker claims was stolen from him.

“The visual presentation and underlying technology were copied from Surefield’s first-to-market service,” the lawsuit said.

Nearly three years ago, right before Redfin’s initial public stock offering, Eraker sent a letter to the company threatening legal action over patent violations, according to Inman. Redfin said at the time that the claim was meritless.