As an IP attorney, I often get asked what kinds of things really land someone in copyright trouble these days. Obviously, the answer to that depends, but the recently filed lawsuit by CoStar (owner of Homes.com) against Zillow is a vivid and timely example worth unpacking – especially for anyone who deals with images, content, or third-party licenses.
What exactly is the case about?
The Dispute in a Nutshell
In July of this year, CoStar sued Zillow in federal court, alleging that Zillow had published at least 46,979 copyrighted photographs owned by CoStar without permission. To add insult to alleged injury, many of those photos reportedly still bore CoStar's watermarks.
CoStar claims Zillow used those images to attract landlords and property managers to "claim" properties on Zillow's platform, and that they generated revenue via advertising and subscription tools built on that content.
It does not end there, though. CoStar also asserts that Zillow distributed some of those photos to other listing sites via syndication, spreading them far and wide.
For all of these reasons, CoStar is seeking both compensatory and punitive damages, and estimating the harm could exceed $1 billion.
Why This Case Matters (Especially to Non-Lawyers)
To those outside the legal world, that might sound like a lot of legal drama over some copyrighted photographs. However, this case underscores several critical principles (and pitfalls) in copyright law that should matter a lot to creators, businesses, and everyday users alike.
Here are some issues raised by the case to take note of:
Copyright Inherently Protects Photographs (and More)
Even ordinary-looking photography is typically eligible for copyright protection the moment it is fixed in a tangible medium. The owner holds exclusive rights to reproduce, distribute, display, and create derivative works unless those rights are licensed away or an exception applies.
Watermarks Do Not Waive Rights
Just because a photo bears a watermark does not mean the owner has forfeited its copyright. Instead, watermarks are often used by rights holders as a deterrent and a visual reminder. As such, the presence of a watermark may strengthen an infringement claim: it tends to show the infringer knew (or should have known) the image was protected and belonged to someone.
Licensing Terms Must Be Respected (No "Sublicensing" Unless Granted)
In this case, CoStar claims it grants limited licenses for its photos to real estate professionals, but forbids sublicensing. If Zillow obtained photos under restricted licensing terms, redistributing them (or reselling access) beyond those terms could constitute breach of contract and copyright infringement.
Scale and "Free Riding" Increase the Stakes
CoStar frames Zillow's conduct as "free riding" on its investment in photograph creation. When you scale up (even an act that seems minor or fair use in isolation), mass misuse of many works increases your exposure to large liability. CoStar is not simply demanding a few dollars per photo; they are seeking sweeping redress for large-scale use.
Earlier Precedents Show It Is No Empty Threat
CoStar previously secured a $500 million judgment against a platform (Xceligent) for unauthorized use of nearly 38,500 photos. That outcome signals to would-be infringers that courts can treat large-scale image misuse quite seriously.
What Actionable Lessons Should You Take from This?
- Always check your license rights. If you acquire content (photos, graphics, etc.) from others, review whether you have the right to post, distribute, sublicense, or modify.
- Document everything. Maintain records of who licensed what, when, and under what terms.
- Do Not assume "public domain" status lightly. Attributions, watermark removal, or reuse do not automatically strip copyright protection.
- When in doubt, negotiate or license properly. If your business model depends on using third-party content, obtaining clear, broad licenses (or assigning rights) is far safer than hoping for fair use.
- Do not take and use copyrighted photographs from one of your direct competitors.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.