CoStar Group Obtains $1 Million Judgment and Shuts Down Firm that Redistributed CoStar’s Real Estate Information Database

CoStar Establishes Reward Program; Whistleblowers Who Expose Data Theft or Illegal Password Sharing Eligible for 25% of Any Monetary Payment Resulting from Successful Prosecution

BETHESDA, Md., Jan. 17 /PRNewswire-FirstCall/ — CoStar Group, Inc. (Nasdaq: CSGP), the number one provider of information services to the commercial real estate industry, announced today that it obtained a $1,000,000 judgment to settle a complaint brought against Centers & Malls, LLC, a Lake Forest, Illinois limited liability company, for infringing on CoStar’s copyrighted commercial real estate information. The lawsuit, filed in the United States District Court of Maryland, alleged that Centers & Malls sold and distributed a real estate information product containing shopping center data that the Court found had been illegally obtained and copied from CoStar.

(Logo: http://www.newscom.com/cgi-bin/prnh/20060510/COSTARLOGO )

In addition to the $1,000,000 judgment, Centers & Malls agreed to cease all business operations, shut down its web site and permanently discontinue all sales, distribution and use of its real estate information product. Also, three individuals and one corporate entity associated with Centers & Malls agreed to execute non-compete agreements with CoStar covering a period of three years.

CoStar won a temporary restraining order against Centers & Malls last year after Judge Alexander Williams, Jr. of the United States District Court for Maryland ruled in CoStar’s favor. In ruling for CoStar, the Court affirmed that CoStar’s proprietary method of compiling and classifying information in its database is fully protected under copyright law. The Court found that a Centers & Malls partner, Garrett Van Siclen, had illegally obtained shopping center data from CoStar. The Court also found that two former CoStar sales representatives who had been working for Centers & Malls — Robert Galvin and Guy Hays — violated the non-compete provisions of their employment terms with CoStar.

“On behalf of our thousands of customers who subscribe to and use our service, CoStar is committed to prosecuting those who fraudulently access or otherwise illegally use our images or information databases,” said CoStar Group General Counsel Jonathan Coleman.

CoStar invests millions of dollars in research each year and customers expect the company to provide the highest quality information service available in the commercial real estate industry, and to keep prices as low as possible. To date, CoStar has historically managed to avoid significant price increases other than those consistent with the approximate rate of inflation.

“However, data theft is one of the biggest obstacles we face as we try to simultaneously control costs and continue to deliver a high quality information service to the thousands of legitimate customers,” said Coleman. “The acts of those who gain access to our data illegally threaten our ability to provide customers with the ongoing data enhancements and pricing they deserve,” said Coleman.

“Furthermore, customers who subscribe to CoStar expect us to take every reasonable measure to ensure that the individuals and firms that subscribe are the ones who benefit from the competitive advantage CoStar’s information service offers, not the ones who resort to theft,” Coleman added. “Fortunately, the technology available today makes it easier to detect theft and identify illegal password sharing.”

To help protect customers and combat data theft, CoStar Group has established an internal anti-piracy group that uses extensive fraud-detection technology to continually monitor CoStar’s online information products and to detect and prevent unauthorized access. When unlawful activity is detected, the anti-piracy group conducts investigations and prosecutes accordingly.

CoStar is also enlisting its customers’ help in reporting suspected cases of data theft by establishing a sizable reward program for anyone who reports unlawful sharing of passcodes or access to CoStar’s information services that results in successful prosecution. Under the reward program, subject to certain conditions, CoStar is prepared to share up to 25% of any monetary payment (net of legal and other costs) resulting from that prosecution. CoStar also unveiled a new web site, www.costar.com/antipiracy, which provides more information about its reward program and also informs customers about the broad use of CoStar data, maps and photographs that they enjoy as part of their online subscription service.

About CoStar Group, Inc.

CoStar Group, Inc. (Nasdaq: CSGP) is the number one provider of information services to commercial real estate professionals in the United States as well as the United Kingdom. CoStar’s suite of services offers customers access via the Internet to the most comprehensive database of commercial real estate information throughout the U.S. as well as in the United Kingdom and France. Headquartered in Bethesda, MD, the company has approximately 1,300 employees, including the largest professional research organization in the industry. For more information, visit www.costar.com.

This news release includes “forward-looking statements” including, without limitation, statements regarding CoStar’s expectations, beliefs, intentions or strategies regarding the future. These statements are subject to many risks and uncertainties that could cause actual results to differ materially from these statements. More information about potential factors that could cause actual results to differ materially from those discussed in the forward- looking statements include, but are not limited to, those stated in CoStar’s filings from time to time with the Securities and Exchange Commission, including CoStar's Form 10-K for the year ended December 31, 2006, under the heading “Risk Factors” and CoStar Group's Form 10-Q for the quarter ended September 30, 2007, under the heading “Risk Factors.” In addition to these statements, there can be no assurance that CoStar will be able to successfully prosecute those who fraudulently obtain access to or otherwise illegally use CoStar's images or information databases; that CoStar will continue to be able to avoid significant price increases other than those consistent with the approximate rate of inflation; or that CoStar will be able to provide customers with ongoing data enhancements and reasonable pricing. All forward- looking statements are based on information available to CoStar on the date hereof, and CoStar assumes no obligation to update such statements.

SOURCE CoStar Group, Inc.

© 2007 PR Newswire. All Rights Reserved.