XCELIGENT, A DAILY MAIL GROUP COMPANY, IS CONDUCTING AN INDUSTRIAL-SCALE OVERSEAS IP THEFT OPERATION - COSTAR
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XCELIGENT, A DAILY MAIL GROUP COMPANY, IS CONDUCTING AN INDUSTRIAL-SCALE OVERSEAS IP THEFT OPERATION
Xceligent, a Daily Mail Group company, has been caught stealing and reselling CoStar’s content on an industrial scale. Hundreds of Xceligent employees and agents created over 3,000 CoStar Group accounts and requested information from CoStar websites over 1.7 million times. They were notified over 600 times that what they were doing was wrong, yet continued to bombard the site using masked identities. The Daily Mail Group, which owns Xceligent, is a multi-billion dollar company that has all the resources necessary to enable Xceligent to invest in the U.S. to build content honestly. Instead, Xceligent has paid an army of workers in the Philippines and India low wages to hack into CoStar and steal content. 25 million people go online and use CoStar products every month to facilitate more than a trillion dollars annually of real estate leases, sales and mortgage originations. CoStar has created tens of thousands of U.S. jobs and has paid billions of dollars of U.S. salaries and taxes to create the essential content needed by the U.S. commercial real estate market. In an effort to encourage robust competition, the Federal Trade Commission brokered the sale of Xceligent, a company founded in 1999, to the Daily Mail Group. But by setting up a massive piracy operation, Xceligent threatens to stifle the ability of U.S. companies to compete. U.S. companies cannot survive if foreign competitors steal their work using low paid, offshore labor, and then dump it back into the U.S. at a fraction of its true cost.
XCELIGENT, A DAILY MAIL GROUP COMPANY, HAS BEEN CAUGHT STEALING AND RESELLING COSTAR’S CONTENT ON AN INDUSTRIAL SCALE
Hundreds of Xceligent employees and agents created over 3,000 CoStar Group accounts and requested information from CoStar websites over 1.7 million times. Xceligent rotates its IP addresses and uses anonymizers and proxy services, like TOR, CyberGhost and HideMe, to covertly access CoStar’s websites. On Xceligent’s publicly available website, CoStar found nearly 10,000 instances of its copyrighted photos and data. This is just the tip of the iceberg. Based on this pattern of theft, a comprehensive review of Xceligent’s databases is expected to reveal tens of thousands of additional instances of CoStar content. Xceligent associates have admitted that Xceligent’s business model is “unethical” and involves “steal[ing]”. Xceligent uses foreign agents to implement its scheme. After reviewing the evidence, judges in India and the Philippines found probable cause and ordered the search and/or seizure of Xceligent’s agents’ computers.
THEFT BY NUMBERS
1.7+ million 3,000+
requests for information accounts used to gain unauthorized
to LoopNet access to CoStar products
100+ 10,000
times tripped LoopNet’s instances of CoStar data and
abuse prevention system photos on Xceligent’s website
XCELIGENT CONTINUED STEALING DESPITE
REPEATED NOTICE FROM COSTAR
600+
times notified that they were
45,000+
new requests for information after
in breach of LoopNet’s terms and what receiving notice of their breach
they were doing was ILLEGAL
XCELIGENT EMPLOYEES ADMIT TO STEALING FROM COSTAR
AND BEING TOLD TO COVER THEIR TRACKS…
“ Xceligent’s method of building its business is based on
“stealing” CoStar information, a practice that is
“unethical.”
- Former Xceligent Employee
“
[Xceligent] constantly get[s] blocked out of
LoopNet…[the Xceligent researchers then]
get unblocked to steal [CoStar’s]
“
Xceligent managers specifically instructed me
and my colleagues to crop out the watermark
on any image that we copied from the
information.” internet, including the CoStar watermarks on
- Former Xceligent Employee photos we copied from LoopNet. The
removal of watermarks was part of the
training I received at Xceligent.”
- Former Xceligent Employee
…WHICH IS NOT ENTIRELY SURPRISING:
XCELIGENT’S CULTURE OF THEFT STARTS AT THE TOP
“[W]hat [Xceligent Top Level Management] do . . . is within very
questionable and ethical boundaries with both their investors and the
IRS, not to mention their customers. [There is] [a]bsolutely no
professionalism within the company. . . . [They are] [n]ot honest about
data integrity, accuracy of the ‘numbers’, geographies, etc., when
presenting to potential customers at all levels.”
- Former Xceligent Employee
“
90% of [Xceligent’s] updates are made
based off of information from our largest
competitor’s [i.e., CoStar’s] websites -
“
After working for a multibillion dollar company
before joining Xceligent, I cannot even begin
to understand how this company is still being
per our customers’ request.” supported by DMGI and that they have not
seen through the cloak and veil that they are
- Xceligent Employee investing in.”
- Former Xceligent Employee
XCELIGENT MANAGERS, NOT BROKERS, INSTRUCTED
RESEARCHERS TO COPY COSTAR CONTENT
“ When I was unable to obtain information about those
properties directly from brokers, Xceligent managers . . .
instructed me, and other researchers, to access LoopNet
listings and copy all of property listing information (e.g. rate,
square footage) to populate Xceligent’s databases.
- Former Xceligent Employee
XCELIGENT MANAGERS DEVISED A PROCESS FOR
CIRCUMVENTING LOOPNET’S SECURITY MEASURES
“
I was told by management, including
[Chief Research Officer] Nate
Lipowicz, that access to LoopNet was
‘business critical’ for Xceligent and I
was instructed to change the
“
Xceligent IP address in order to re-
gain access to LoopNet.” Because Xceligent researchers spent so
- Former Xceligent Employee much time every day on LoopNet, they
would be blocked by the site for
excessive use. Xceligent management
made sure that we had workarounds.
For example, the IT department installed a
TOR browser on many researchers’
computers to hide their identity from
LoopNet.”
- Former Xceligent EmployeeXCELIGENT USED COSTAR AND LOOPNET CONTENT TO OPEN
NEW MARKETS
“ Xceligent did not get property information for
these markets in the right way. Instead, when
launching these markets, Xceligent Market Analysts
including myself initially populated the Xceligent
databases using information that we copied
mainly from LoopNet. We did so because that was
what Xceligent managers told us to do.”
- Former Xceligent EmployeeTHIS ISN’T THE FIRST TIME XCELIGENT HAS STOLEN COSTAR’S
DATA – IT’S IN THEIR DNA
Xceligent was forced – on the advice of its attorneys – to
purge its entire database of all San Diego listings because
there was no way that they
“ …could prove that the information they
were using was not CoStar’s
information.”
– Former Xceligent Director of Client Services,
Cinnamon TrimmerXCELIGENT READILY ACKNOWLEDGES THIS BEHAVIOR IS
UNETHICAL AND BAD FOR THE INDUSTRY . . . JUST ASK ITS CEO
“ We don’t want people downloading our aggregate data
set we’ve spent over $100 million building and sending
it off because that wouldn’t be right for the industry.”
- Doug Curry, Xceligent CEO
Source: Xceligent Demonstrates The Power Of Big Data At CCIM Thrive, 10/31/16
http://www.globest.com/sites/ccim/2016/10/31/xceligent-demonstrates-the-power-of-big-data-at-ccim-thrive/XCELIGENT PAYS AND TRAINS FOREIGN CONTRACTORS WHO STEAL COSTAR CONTENT
EVIDENCE SEIZED FROM XCELIGENT’S AGENT’S COMPUTERS
CONFIRMS A STEP-BY-STEP GUIDE TO STEALING COSTAR
CONTENT
1. Xceligent managers travel to the Philippines to train their
foreign workers at Avion.
2. Xceligent teaches its foreign workers at Avion how to
circumvent CoStar’s abuse monitoring technology.
3. Xceligent oversees “audits” that instruct its foreign workers to
copy and rewrite CoStar content for integration into
Xceligent’s databases.
4. Avion researchers crop photos to remove watermarks before
uploading to Xceligent.
5. Xceligent pays Avion to “research” CoStar’s content.
6. None of these actions are broker-directed.XCELIGENT SENIOR LEADERSHIP VISITS THE PHILIPPINES TO
TRAIN, DIRECT AND MANAGE THE FOREIGN RESEARCH TEAM
Xceligent – Research Director Xceligent – Research Managers Xceligent – Corporate Trainer / Research Manager
Xceligent – Research Director Xceligent – Research Manager Xceligent – VP Research
Source: Avion FilesXCELIGENT TEACHES AVION RESEARCHERS HOW TO BYPASS
COSTAR’S SECURITY MEASURES AND PROVIDES THE
NECESSARY SOFTWARE
“ Guys you can use TOR browser
to access Loopnet…
– Avion Skype chat log
“ Good Morning [sir,] I believe that Brent [Hansen, an
Xceligent manager] sent you sir an email regarding
a software that shall be used by a couple of our
agents in accessing [L]oop[N]et. . . . If you have
the copy sir if it would be possible to forward it to
the ITs. Thank you sir and have a great morning.
– Avion Skype chat log
Source: Avion FilesSKYPE CHATS IN AVION’S FILES SHOW DAILY DISCUSSIONS ABOUT BYPASSING COSTAR’S SECURITY MEASURES Skype chat 7/15/15 10:34AM: “We currently are unable to access loopnet through any sort of proxy site as an alternative. TOR isnt working well.” Skype chat 7/15/15 10:35AM: “Leslie Houston: LoopNet blocks us after so many hits from our IP Address and we have to switch IP Addresses. Do you know if you guys have more than 1 IP Address?” Skype chat 7/16/15 6:04AM: “So to increase their production, it would be better for us to reset the IP unless loopnet bans all of Phil. IPs.” Skype chat 7/17/15 5:00AM: “If just incase TOR for loopnet is not working, try kproxy.com or other proxy browser nor server, try to use also Mozilla browser, clear history, inform us of any message prompted by your browser if you can’t access the said site.” Source: Avion Files
When LoopNet access was denied, Avion used kproxy to
gain access… just as Xceligent instructed.
Source: Avion FilesAS XCELIGENT AND AVION KNOW, ACCESS TO LOOPNET IS COVERED BY TERMS PROHIBITING COMPETITIVE USE Source: Avion Files
AVION’S ACCESS WAS REPEATEDLY BLOCKED FOR VIOLATION
OF THESE TERMS AND CONDITIONS
Screenshot captured on Avion computer
Source: Avion FilesUNDETERRED BY THE ACCESS DENIED BLOCK, AVION AND
XCELIGENT FIND NEW WAYS TO GET TO LOOPNET
Hope Proxy is a free anonymous proxy.
Source: Avion FilesUNDETERRED BY THE ACCESS DENIED BLOCK, AVION AND
XCELIGENT FIND NEW WAYS TO GET TO LOOPNET
FilterBypass is a “safe, secured web proxy.”
Source: Avion FilesSCREENSHOTS CAPTURE AVION SELECTING TEXT FROM LOOPNET IN ORDER TO COPY IT Source: Avion Files
SCREENSHOTS CAPTURE AVION INPUTTING CONTENT LIFTED
FROM LOOPNET INTO XCELIGENT’S CDX DATABASE
18 Commerce Dr.
open on LoopNet.
18 Commerce Dr.
being edited in CDX.DUAL MONITOR SCREENSHOT CAPTURES AVION COPYING
LOOPNET CONTENT AND ADDING TO CDX
Town West Center, Indianapolis, Town West Plaza, Indianapolis,
IN 46254 - being added to CDX IN 46254 – viewed and
screenshotted on LoopNet“AUDITORS” INSTRUCT AVION RESEARCHERS TO COPY FROM LOOPNET BUT AVOID DETECTION BY REPHRASING THE CONTENT Source: Avion Files
AVION RESEARCHERS RELY ON FILES STOLEN FROM COSTAR’S
SUBSCRIPTION DATABASE TO BUILD CONTENT FOR XCELIGENT
Spreadsheet found in
Avion’s files
Identical export file from
CoStar databases“AUDITORS” ALSO INSTRUCT THOSE RESEARCHERS TO CROP PHOTO WATERMARKS Source: Avion Files
IT’S NO SURPRISE AVION’S FILES CONTAIN COSTAR WATERMARKED PHOTOS, PRE-CROPPING Source: Avion Files
XCELIGENT MANIPULATES COSTAR’S COPYRIGHTED
PHOTOS TO PASS THEM OFF AS XCELIGENT'S OWN
1. Replaces CoStar logo with similar looking CommercialSearch
logo
2. Crops out CoStar logo without replacing it
3. Crops out CoStar logo and replaces it with similar looking
CommercialSearch logo
4. Uses the ‘snipping tool’ to create a lower resolution copy
5. Carelessly adds the CommercialSearch logo where CoStar’s logo
still existsXCELIGENT STEALS CONTENT: COVER-UP TACTIC #1 REPLACES COSTAR LOGO WITH SIMILAR LOOKING COMMERCIALSEARCH LOGO A CoStar copyrighted photo of a commercial building located at 1344 South Apollo Boulevard, Melbourne, FL 32901, appears on CommercialSearch (with a CommercialSearch logo instead of a CoStar logo)
XCELIGENT STEALS CONTENT: COVER-UP TACTIC #2 CROPS OUT
COSTAR LOGO WITHOUT REPLACING IT
Example of image editing process:
Cropping ToolXCELIGENT STEALS CONTENT: COVER-UP TACTIC #3
CROPS OUT COSTAR LOGO AND REPLACES IT WITH SIMILAR
LOOKING COMMERCIALSEARCH LOGO
CommercialSearch cropped image
CoStar logo to the right of the tree.
The image is cropped precisely to exclude only the original
logo. CommercialSearch logo placed to the left of the tree.XCELIGENT STEALS CONTENT: COVER-UP TACTIC #4 USES THE ‘SNIPPING TOOL’ TO CREATE A LOWER RESOLUTION COPY
XCELIGENT STEALS CONTENT: COVER-UP TACTIC #5
CARELESSLY ADDS THE COMMERCIALSEARCH LOGO WHERE
COSTAR’S LOGO STILL EXISTS
CoStar logo
The CoStar logo remains on the image with the
CommercialSearch logo placed adjacent to it.Photo still contains CoStar’s logo
UNDETERRED BY COSTAR’S LAWSUIT, XCELIGENT AND AVION
CONTINUE THEIR WILLFUL INFRINGEMENT
LoopNet screenshot found in Avion’s files
Stolen photo on CommercialSearch.com in May 2017XCELIGENT TRIES TO HIDE THE PAYMENTS IT MAKES TO AVION
TO STEAL COSTAR CONTENT
Xanivo (an anagram of
“Avion X”) is a company
owned and operated by
Avion’s CEO and COO,
registered in the
Seychelles and based in
Hong Kong
Source: Avion FilesTHE DAILY MAIL GROUP, WHICH OWNS XCELIGENT, IS A MULTI-BILLION DOLLAR COMPANY THAT HAS ALL THE RESOURCES NECESSARY TO ENABLE XCELIGENT TO BUILD CONTENT HONESTLY
THE DAILY MAIL GROUP HAS THE FUNDS & RESOURCES TO
ENABLE XCELIGENT TO BUILD A COMPETITIVE PRODUCT FAIRLY
$3.2 billion
Current market cap
$2.3 billion
2015 Revenue
$362 million
2015 Operating profitXCELIGENT WRONGLY ATTEMPTS TO RELY ON THE FTC CONSENT ORDER TO JUSTIFY ITS THEFT
Xceligent betrayed the FTC, which brokered the sale of Xceligent to the Daily Mail Group to encourage robust competition. Nothing in the FTC brokered deal allows for Xceligent’s misconduct yet that is exactly Xceligent’s response to CoStar’s lawsuit.
CoStar worked closely with the FTC and complied with the Consent Order signed
in late 2012 related to the LoopNet acquisition.
The Order makes clear that CoStar may take legal action to prevent
misappropriation of its content, and expressly states that:
Nothing in this Order shall be construed
to prohibit or prevent [CoStar] from
requesting any legal or equitable relief
or remedy of any kind in any action
commenced in state or federal court or
in any arbitration proceeding.”THE FTC ORDER IS NOT A LICENSE FOR XCELIGENT TO STEAL FROM COSTAR WHILE PRETENDING TO COLLECT INFORMATION FROM BROKERS CoStar paid over $880 million to buy LoopNet. Any argument that it is acceptable for a competitor to take data and photographs from LoopNet on a wholesale basis defies logic. Xceligent is perfectly free to obtain broker content from brokers, and brokers are free to provide their content to Xceligent. What Xceligent cannot do is use CoStar resources to build its competing business. Xceligent’s suggestion that the lawsuit impedes brokers from marketing their listings with CoStar competitors is a smokescreen. The mountain of evidence from the Philippines shows that Xceligent “researchers,” directed by management, systematically copy CoStar content from CoStar’s website and subscription database, and use elaborate schemes to cover their theft. This is not about broker uploads or broker sites – this is deliberate and unlawful freeriding on a competitor.
COSTAR PLAYS A VITAL ROLE IN THE U.S. ECONOMY
COSTAR PLAYS A VITAL ROLE IN THE U.S. & GLOBAL ECONOMY Users around the world rely on CoStar’s data. 25 million people go online and use CoStar in a month to facilitate more than a trillion dollars annually of real estate leases, sales and mortgage originations. CoStar’s customers include: Real estate brokers Vendors Owners Appraisers Developers Lenders Property managers State & federal Retailers government agencies
COSTAR HAS BEEN CONSISTENTLY PRAISED FOR ITS GROWTH,
INNOVATION AND CONTRIBUTIONS TO THE COMMUNITY
2015 PHILANTHROPY AWARD
2016 CITIZENSHIP AWARD…AND IS A MAJOR EMPLOYER IN THE U.S. CoStar has created tens of thousands of U.S. jobs and has paid billions of dollars of U.S. salaries and taxes to create its content. CoStar continues to generate new, high-paying American jobs as it innovates and grows. CoStar’s Richmond, VA facility has created over 500 jobs in the five short months since it opened.
U.S. companies like CoStar cannot survive if foreign competitors steal their work using low-paid, offshore labor, and then dump it back into the U.S. at a fraction of its true cost
COSTAR’S TRACK RECORD OF SUCCESSFULLY PROSECUTING
THOSE WHO STEAL ITS CONTENT AFFIRMED
A federal judge in California ordered a competitor who copied CoStar’s
listings and photos to pay $10,000 per day, per photo if further
copyright infringement occurs. On top of the judgment, the competitor
will also immediately pay CoStar $10,000 per stolen listing AND
$10,000 per infringed photo. Read the coverage here:
http://www.costargroup.com/costar-news/details/apartment-hunters-
held-liable-for-publishing-stolen-listings-from-costar-group-s-
apartments.comMEDIA CONTACT JOELE FRANK, WILKINSON BRIMMER KATCHER DAN KATCHER / JAMIE MOSER / JONATHAN KEEHNER 212.355.4449
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