Zillow will pay $212.5 million to settle a shareholder class action lawsuit over its handling of Zillow Offers, the home-flipping business it shut down in 2021.

The lawsuit alleged that Zillow executives painted an overly positive picture of Zillow Offers in the months before the shutdown, without disclosing how poorly the company was able to predict home prices. That kept the stock artificially high until Zillow revealed the problems and announced the shutdown in November 2021, according to the complaint.

The Seattle-based company disclosed the settlement Wednesday in an SEC filing. About $48 million of the payment is expected to come from insurance. The deal requires court approval and includes no admission of wrongdoing.

In a statement, a Zillow spokesperson said, “We are pleased that the parties have reached a resolution on the matter.”

The settlement comes about three weeks after the U.S. Supreme Court declined to hear Zillow’s challenge to the case’s class status. The U.S. Chamber of Commerce and other business groups backed Zillow’s petition.

Steve Berman, managing partner of Seattle law firm Hagens Berman, the court-appointed class counsel, told Real Estate News he believes it’s the largest single securities settlement in the history of the Western District of Washington, the federal court district that includes Seattle.

Separate shareholder lawsuits filed on the company’s behalf against its leaders, known as derivative suits, remain pending, according to the filing.

Zillow bet its future on buying and selling homes in 2019, when co-founder Rich Barton returned as CEO and projected the business would reach $20 billion in annual revenue within three to five years. The company used its pricing algorithms to buy houses, fix them up and resell them.

The effort unraveled in the fall of 2021. An analyst report found that two-thirds of 650 homes it sampled from Zillow’s inventory were listed for less than the company paid.

Days later, Zillow shut down the business, cut about 2,000 jobs and took a $304 million inventory writedown, with Barton citing the unpredictability of its home-price forecasts. Zillow’s stock fell 32% over two days, according to Reuters.

The original lawsuit, filed that month in federal court in Seattle, cited upbeat statements executives made in the months before the shutdown.

They included a September 2021 remark by Jeremy Wacksman, then Zillow’s chief operating officer and now its CEO, that “the strength and the appeal for Zillow Offers just continues to grow.” Investor Jeremy Jaeger later became the lead plaintiff.

The class covers investors who bought Zillow Class A or Class C shares between Aug. 5 and Nov. 2, 2021. If the judge grants preliminary approval, Zillow will pay the money into a settlement fund within 20 business days.

The Philippines launches nationwide online notarization, giving businesses new ways to handle eligible digital documents through accredited platforms.

The post Philippines Launches Online Notarization: What It Means for Business Documents appeared first on TechRepublic.

The Philippines launches nationwide online notarization, giving businesses new ways to handle eligible digital documents through accredited platforms.

The post Philippines Launches Online Notarization: What It Means for Business Documents appeared first on TechRepublic.

Jeff Kohler was working as a software engineer in 2005 when he started spending his nights and weekends on a side project: a web conferencing system that could record and replay live sessions. He filed for a patent without the help of a patent attorney, stuffing two CDs full of C++ source code into the application to show his work.

The patent was issued in 2010, and years later, after Kohler had joined Microsoft, the Redmond company licensed his technology for its Teams video-conferencing platform.

When YouTube later added the ability for viewers to pause, rewind, and change the playback speed of live video, Kohler saw in the feature what he considered to be his own invention. Kohler, who lives in Bellevue, Wash., sued Google for patent infringement in U.S. District Court in Seattle in April 2023.

But rather than defending the feature’s originality, Google argued that Kohler’s patent was too abstract to be eligible for patent protection. The district court agreed and dismissed the case, and the U.S. Court of Appeals for the Federal Circuit affirmed that decision.

Both decisions cited Alice Corp. v. CLS Bank International, a 2014 U.S. Supreme Court ruling that raised the bar for software patent eligibility by holding that an inventor cannot patent an “abstract idea” implemented with generic technology.

Since then, Alice has been used to invalidate thousands of software patents, and the Supreme Court has repeatedly declined to revisit the standard. Now, Kohler is asking the Supreme Court to take up his case, not to overturn Alice, but to clarify how courts should apply it.

“The patent legal system has become hostile to inventors,” Kohler said. “Because of Alice, my case got stopped before it even started.”

How Alice changed patent law

When Alice was handed down, patent trolls were on the rise: shadowy entities that bought vague patents to sue tech companies on shaky claims of patent infringement. 

That changed under the 2014 ruling, which requires that a patent clear two hurdles: the idea cannot be “abstract,” and it must propose a sufficiently “inventive concept.” The standard has become “a crucial tool” for fighting patent trolls, in the words of the Electronic Frontier Foundation.

But critics say it’s ill-suited to software patents. Because software inventions often rely on pre-existing hardware to run the source code, courts tend to find many of these patents to be insufficiently inventive.

Jon McMichael, an IP litigation partner at Fenwick who has written about Kohler’s case, said this challenge is common in patents where inventors rely on general-purpose computers and off-the-shelf hardware to implement their ideas. 

“That’s where those patent holders run into more problems,” he said.

Experts say the courts’ application of Alice has broadened to invalidate the patents of real inventors in addition to those of patent trolls. Toshiko Takenaka, a University of Washington IP law professor who is working on an academic paper about Kohler’s case, said Alice’s ability to quickly defeat bad actors comes “at the expense of the best inventors.”

“Software patents are too frequently being invalidated without giving the owner the opportunity to defend it,” Takenaka said. “This inventor provided something ordinary computers could not do, right? So therefore, in my view, this is an eligible invention.”

Some judges have raised similar concerns, including Federal Circuit Chief Judge Kimberly Moore, who authored the opinion affirming the dismissal of Kohler’s case. In a 2020 concurrence in a separate case, Moore wrote that she and her fellow judges were “unanimous in our unprecedented plea for guidance” from the Supreme Court on how to interpret Alice, which she called a “patent-killing judicial exception of our own creation.”

A quest for legal clarity

After filing his patent, Kohler spent more than 15 years at Microsoft, where he helped launch HoloLens and rose to senior director of product management for the Surface line. He later served as a product leader at Meta for its Horizon platform.

Kohler says he’s hopeful the Supreme Court will agree to hear his case because his petition takes a new approach, asking the court to clarify how to apply the Alice test rather than disputing the test entirely. His new attorney, Kathryn Jean Miller, who does not have prior patent law experience, was admitted to practice before the Supreme Court bar for this case.

“It’s me and my lawyer against the world,” Kohler said. “I never thought I would be doing something like this.”

The Supreme Court has declined more than 89 petitions related to Alice, some of which had the Solicitor General’s endorsement. The justices will decide on Sept. 28 whether to hear Kohler’s case and likely announce their decision the following week.

Kohler is hoping that other inventors will file amicus briefs, which are due by Sept. 23, to illustrate to the court the need for clarification.

“There’s a broad coalition of people who would like some sanity brought back to patent law, from small inventors and startups to former judges,” Kohler said. “That’s what I’m trying to do with my petition.”