In what may be the first time that the longtime allies have bumped heads in court, the National Association of Realtors has filed a lawsuit against realtor.com operator Move Inc. in order to clear the way for NAR to license the new .realtor top-level domain outside of the United States.
The Internet Corporation for Assigned Names and Numbers, which manages the Internet’s domain name system, awarded NAR the right to manage .realtor domains last summer.
NAR has been assigning .realtor Web addresses to members in the U.S., and when agents choose to use their .realtor domains to host their realtor.com profile pages, Move will host a stand-alone website for them at no charge (Move operates realtor.com under the terms of a 1996 licensing agreement with NAR).
The lawsuit is not only an unusual public airing of differences between NAR and Move, but reveals a previously undisclosed agreement in which NAR allegedly granted Move with “certain rights” over the assignment of .realtor domains.
According to the complaint, Move began to raise concerns about how the .realtor domain name might affect the business of realtor.com after NAR applied to ICANN to manage the domain in 2012.
NAR says Move “was concerned that so called ‘geographical’ domains, such as ‘Chicago.Realtor’ or ‘California.Realtor,’ could affect realtor.com’s placement in search results from search engines” and therefore affect realtor.com’s traffic.
In the end, “in light of their long-standing relationship with Move,” NAR voluntarily agreed to a top-level domain agreement with Move and that became effective June 24, 2013, the complaint said.
The agreement provided Move with “certain rights” concerning the Realtor Domain Names Program, a program which NAR claims is specifically limited to licensing or selling .realtor domains in the United States.
It is unclear what those rights are. Members who sign up for a .realtor domain must include their name in the domain, but are not prohibited from including geographic terms. Members have the option, but are not required, to direct their .realtor domain to their realtor.com profile page.
The agreement went into effect around the same time that NAR approved major changes to the realtor.com operating agreement in July 2013, giving Move more flexibility to publish listings from sources beyond those provided by Realtors.
NAR’s complaint was filed Nov. 10 in Delaware’s Chancery Court, just days before media giant News Corp. acquired Move and RealSelect with NAR’s blessing (RealSelect is the Move subsidiary that operates realtor.com).
According to the complaint, Move claims its agreements with NAR require the trade group to obtain Move’s permission first, if:
- The domains include the name of a geographic location outside the U.S., or
- The domains belong to websites that contain listing information for properties outside the U.S.
NAR and Realtors Information Network, the NAR subsidiary that oversees the realtor.com operating agreement, disagree with that interpretation. They’re asking the court to declare that they do not need Move’s permission to license .realtor domain names outside of the U.S., and that their agreements with Move do not create “any financial obligation on the part of NAR or RIN to Move or RealSelect as a result of licensing such domain names.”
NAR and RIN currently have agreements with the Canadian Real Estate Association (NAR’s counterpart to the north) and with Real Estate Domains LLC to license .realtor outside of the United States.
If NAR acquiesces to Move’s arguments, CREA and RED could sue NAR for breach of contract, NAR’s attorneys said in their complaint. If NAR doesn’t acquiesce, Move could sue, they said.
“This dispute leaves NAR and RIN in an untenable position that requires judicial intervention,” they said.
NAR and Move declined to comment for this story.
NAR began offering .realtor domains to U.S. and Canadian Realtors on Oct. 23. But in the complaint, NAR said it has held off providing geographical top-level domains to CREA while its dispute with Move is pending.
The trade group also said it needs to take steps to begin the proposed licensing of domain names outside the U.S. and Canada through RED, and therefore “prompt judicial resolution is necessary.”
“NAR cannot fully implement these agreements [with CREA and RED] while the threat of litigation by Move or RealSelect for breach of contract hangs over it,” NAR’s attorneys said.
When NAR announced it would begin making .realtor domains available to NAR and CREA members, Move and RealSelect allegedly told NAR that licensing domain names that included geographic names of locations outside the U.S. and domain names for sites that display listings for properties located outside the U.S. would violate that agreement as well as a trademark license agreement between NAR and RealSelect.
The latter grants RealSelect an “exclusive worldwide license except for use in Canada to use the licensed mark” in connection with the realtor.com operating agreement, the complaint said. NAR says the “licensed mark” refers to “realtor.com” and to “certain other domain name extensions” but not to NAR’s “Realtor” mark or to “.realtor.”
The realtor.com operating agreement includes a noncompete clause that prevents NAR from directly or indirectly engaging in the electronic display of real property ads or helping a third party to do so.
In 2005, Move and NAR signed an “exclusivity termination” agreement that NAR says allowed it to engage in any business or activity related to foreign property listings, directly or indirectly, and therefore released NAR from any exclusivity obligations related to listing data concerning the sale or lease of property located outside the U.S.
Therefore, even if the noncompete clause would have allowed Move to interfere with NAR’s licensure of top-level domains — which NAR says it did not — that 2005 agreement would have limited the scope of the clause to the U.S., the complaint said.
Move has filed a motion to dismiss the case and the court heard oral arguments earlier this week.
NAR and Move remain allies in other legal melees, notably their lawsuit against top real estate portal Zillow and former Move exec Errol Samuelson.
In a separate case, Move-owned listing syndicator ListHub and Zillow-owned Trulia today announced a settlement that will allow ListHub to stop sending listings to Trulia on April 7.