LendingTree Sues Zillow and Three Others over Internet Loans

09/10/2010

By: Carrie Bay

LendingTree has filed a lawsuit against the online real estate marketplace Zillow Inc. and three other competitors, which alleges the companies stoleLendingTree’s method for providing borrowers with a comparison shopping experience for home mortgage products.

The Charlotte, North Carolina-based online lending exchange claims its four rivals all infringed on LendingTree’s 2002- and 2003-patented formulas for competitively matching borrowers with lenders based upon a single loan application from the consumer.

In addition to Zillow, the complaint names the digital marketing technology company Adchemy Inc. the consumer shopping site NexTag Inc. and QuinStreet Inc., a vertical marketing and media firm as defendants.

According to legal documents, LendingTree asserts, “The LendingTree invention has proved successful in the lending market” and resulted in “billions of dollars in loans for millions of borrowers.”

LendingTree says the Web sites run by Zillow, Adchemy, NexTag, and QuinStreet, have copied its patented process. The lawsuit says LendingTree’s founder, Doug Lebda, went to Zillow’s CEO in 2008 and NexTag’s general counsel in 2005 to offer them a license to the company’s patent. The two declined and instead “opted to continue willful, deliberate, and intentional infringement” of LendingTree’s patented methods, the lawsuit states.

LendingTree filed its suit Wednesday in a Charlotte federal court. The company is seeking a jury trial to recover “lost profits” and other damages resulting from the defendants’ alleged patent infringements.