Homes.com is being sued by Monster Content, LLC, a remnant of Monsterdaata.com. in which Monster Content alleges that Homes.com and three of its employees who were formerly with Monster Content, took proprietary code from a product called Agentlink, used it in a Homes.com product called AgentExpert, and then contacted Monster Content's customers to sell it.

Homes.com CEO Tom Orsi, who says he was so surprised by the suit that he hasn't even lawyered up yet, insists the suit is without merit. But there's much more to the story than who's right or wrong.

Both sides have a tale to tell, but the outcome of the suit could have repercussions for all technology service providers in the real estate industry. The suit could answer questions such as:

• How small is the real estate vertical?
• How do you prove that a technology common among service providers was written with proprietary code?
• How can employees who leave a company disassociate what they know when hired by a new company?
• Where does intellectual property begin and end? If a vertical is limited in number like the real estate industry with its 2 million licensees, of which 800,000 are Realtors, can it be proven that the same customer is not on a number of direct sales call lists?
• Is it possible to own a customer?
• Do employees exist who will risk their companies in order to make a sale?
• What will this case mean to the real estate vertical?

Meanwhile, both sides say they will go to the mat.

Charles McElroy, Esquire, a Nashville attorney with White and Reasor, PLC, is one of the attorneys for the plaintiff, an entity called Monster Content, LLC. "This is a case in which Monster Content is attempting to protect its intellectual property rights and investment in software and program development and prevent competitors from profiting off of our work product and getting the benefits of our labor."

When asked to comment further, McElroy demurred and said that he does not comment for the press before a case goes before the court. "The complaint and papers filed with the comlplaint speak for themselves and describe what the case is about and what the plaintiff's theory is," said McElroy.

According to an e-filing forwarded to Realty Times by a reader, the complaint is as follows:

Monster Content, LLC v. Homes.com, Inc.; Andrew S. Fishman; Brent E.Davis; John Lorance C03-0152 SC 01/10/03 [E-Filing] Complaint alleging copyright and trademark infringement, conspiracy, misappropriation and misuse of trade secrets and confidential information, conversion, unfair competition, breach of contract and tortious interference with contractual and business relations. Plaintiff alleges that prior to individual defendants' termination as managers and employees of Fishman & Davis for mismanagement and loan default, they copied confidential and proprietary information and the AgentLink computer program. Plaintiff also alleges that individual defendants solicited F&D customers and entered into contracts with Homes.com for a new version of AgentLink called AgentExpert. Plaintiff, the current owner of the AgentLink, seeks injunctive relief, actual damages in excess of $100,000, lost profits, restitution of all revenue and profits obtained by defendants' wrongful activities and punitive and exemplary damages. James P Martin Shartsis, Friese

"What I know is that we hired a couple of guys from Fishman & Davis that were fired from the company," says Orsi. They were part of Monsterdaata. Andrew Fishman and Brent Davis became principal owners of Monsterdaata software. They had a note to a buyer named Rudy Ruark, which had payment terms, and they worked in that company as owners and operators."

The other defendant, John Lorance was the chief technology officer, according to sources.

Continues Orsi, "We are involved in that Fishman & Davis, owned and operated the business, and they were fired by the person who had secured interest in Fishman and Davis. I believe it was the person who had an interest in the note. Prior to when they got fired, we were talking to them about their company merging with ours. Those discussions were ongoing, and we had also talked about them coming to work for us because we didn't want to assume the note. When they got fired, we hired them. A couple of other people who got fired, we also hired. When we hired them, it was because they had excellent contacts in the real estate industry. The reason we were interested in them is we wanted to include a telephony piece that we have now built into a new product called Agentexpert. We thought they could do the direct sales channel when they were hired. I was concerned that we not use anything from Fishman & Davis - AgentLink. We had discussed internally developing our own telephony piece, and we entered into a contract with a company called STI to build the telephony piece, and we are now selling this product through Fishman. Davis has since been fired. John Lorance is also gone.

"They (plaintiff) alleged that we sold trade secrets and customer lists, and made assertions about the company to support their product. I can tell you that when they were hired, (Lorance, Fishman and Davis) they were instructed not to do anything like that. We have terminated people who have done that. I told our technical people that we will not use the code from the other company. As far as contacting customers, I told them, we don't do that either. We don't smear; we sell on a positive note not on a negative."

Adds Orsi, "Our policy is that anyone who does that is terminated immediately."

What about the code - can Orsi prove that the code wasn't used? " I know we didn't use the code and I've confirmed that with our technical people. I know we didn't steal product ideas. The only thing we have done that is competitive to Agentlink is the telephony piece, but there is no exclusivity to that. We built our own code to go into our product with a company called STI."

The suit comes at a bad time for Homes.com, which had just emerged from bankruptcy and was looking forward to a new beginning.

Says Orsi, "I took every step I could imagine to prevent something like this from happening. It's a distraction. Bottom line is we hired two guys who were owners of Fishman & Davis and after they were terminated, they started our direct sales channel for our new product. We built the telephony piece with a company called STI, and they have been out selling it."

Agentexpert, Orsi explains, isn't really new. It's Homes.com's product known as AgentAdvantage with a telephony piece added to it, along with a couple of marketing products from a company called Imprev.

Partnering with other service providers to create a 'superproduct' is becoming more common in the industry.

"We have had a number of discussions with a number of companies who are interested in a similar arrangement," says Orsi.

Published: January 23, 2003

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