(Photo:Shutterstock.com)

Williams & Connolly litigators scored a record-setting $500 million judgment on behalf of real estate information provider CoStar Group Inc.—the biggest award ever for copyright infringement of photographs, according to the firm, and the third-largest judgment for copyright infringement of any kind.

It's the final chapter in a case I first wrote about in late 2017, when the firm—in the atypical role of plaintiff's counsel—was in the process of crushing defendant Xceligent Inc., which was accused of stealing thousands of CoStar's copyrighted photographs and proprietary real estate data.

The annihilation is now complete. 

On Tuesday evening, Xceligent's Chapter 7 trustee (represented by John Carroll and Simon Fraser of Cozen O'Connor) filed a motion in bankruptcy court in Delaware for approval of the settlement. A federal judge in Kansas City, Missouri also needs to sign off on the deal.

CoStar won't actually get a check for $500 million—like most companies in bankruptcy, Xceligent apparently does not have half a billion dollars lying around. 

But Williams & Connolly lawyers led by partner Nicholas Boyle managed to shake loose $10.75 million from Xceligent's insurers to offset much of CoStar's legal expenses, and $500,000 to the trustee to partially reimburse some of Xceligent's creditors. The W&C team also included partners Bryan Wilson and Carl Metz and associates Mary Beth Hickcox-Howard, Matt Blumenstein, Sean Douglass and Yuan Youlin.

The alleged wrongdoing that led to Xceligent's demise is shocking in its scope. An independent monitor appointed by the Federal Trade Commission found that Xceligent improperly copied 38,489 images from CoStar. The actual copying was done by Xceligent "researchers" in India and the Philippines, CoStar said.

According to CoStar, Xceligent then turned around and integrated the stolen intellectual property into its own, lower-priced competing products.

The overseas investigation took a troubling twist when Williams & Connolly lawyers uncovered unrelated but key evidence implicating classified advertising website Backpage.com in sex trafficking.

Xceligent was allegedly using a company in the Philippines called Avion to copy CoStar's photos. But Xceligent wasn't Avion's only client—W&C investigators realized Backpage was using Avion as well, and in a way that raised obvious red flags.

"Upon finding these problematic materials in the hands of Backpage's Philippines agent, CoStar initiated contact with federal law enforcement and provided data assistance to the investigation of Backpage," Jaye Campbell, CoStar's head of litigation, told me last year.

The feds shut Backpage down and charged its founder with 93 counts including facilitating prostitution and money laundering. The directors and management of Avion have also been indicted on cybercrime charges by Philippines prosecutors.

As for CoStar, it's celebrating the resolution of its battle with Xceligent. "The scale of Xceligent's infringement and other bad acts is unprecedented in our industry," said CoStar's Campbell. "CoStar is pleased to have reached this result after many years of detailed investigation and coordinated litigation in courts around the world. Our partners at Williams & Connolly were indispensable to the effort."