How IP Is Enforced Will Shape America’s Competitive Future

The patent and trademark office.

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Listings giant Zillow is facing one of the largest copyright lawsuits in history — and the case is a reminder that intellectual property protections are only as strong as their enforcement.

In a federal lawsuit filed on July 30^th, real estate analytics company CoStar Group accused Zillow of willfully infringing more than 45,000 of its copyrighted photographs, allegedly using them to lure property owners and managers to list on Zillow’s site and purchase advertising.

According to CoStar, Zillow’s infringement is so extensive that the damage could potentially reach $1 billion. The suit follows an ongoing Federal Trade Commission investigation into Zillow’s deal with competitor Redfin and a separate lawsuit filed by brokerage firm Compass.

If CoStar’s allegations are true, this case would be an extraordinary example of how fragile IP protections can be even in the United States — the U.S. has the strongest intellectual property (IP) protections of any country according to the U.S. Chamber of Commerce. And if this is a possibility under America’s relatively robust legal regime, the dangers are exponentially greater in other countries with weaker enforcement.

Intellectual property theft already costs Americans between $225 billion and $600 billion per year. While much of that figure stems from foreign theft, particularly from China, domestic disputes like CoStar’s battle with Zillow demonstrates that the problem goes well beyond international violators.

According to the National Intellectual Property Rights Coordination Center (IPRCC), intellectual property theft is on the rise – up 21% over the last year. When those practices become normalized, it doesn’t just harm the creator; it threatens the foundation of an innovation-driven economy.

This problem has been made worse by the mixed signals coming from Washington in recent years.

The United States Trade Representative (USTR) was blunt in a February 2025 report that assessed the Biden Administration’s decision to support the World Trade Organization’s (WTO) TRIPS waiver – an exemption from enforcing the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights.

The backing of this waiver meant that the Biden Administration supported the expropriation of the intellectual property rights of U.S. based biopharmaceutical manufacturers by eligible WTO countries. The argument was this expropriation would increase lower-income countries’ access to the Covid-19 vaccine.

In contrast to these expectations, the USTR argues that the waiver did not increase access to COVID-19 vaccines. While the policy failed to achieve its objectives, the USTR rightly worries that the violation of the companies’ property rights will “negatively impact the development of new treatments and cures for the next pandemic by weakening the standard for intellectual property protections and furthering a false narrative about the role of intellectual property and access to medicines.”

When the U.S. fails to defend its own IP standards internationally, it empowers foreign governments to keep treating American innovation as fair game for state-sponsored theft. It also sends a dangerous message to U.S. companies: if Washington treats IP protections as conditional, why shouldn’t they?

Consider what’s at stake. Intellectual property is the backbone of American leadership in technology, medicine, entertainment, and now artificial intelligence. Weakening those protections means fewer incentives to innovate, fewer new cures, and fewer jobs in the very industries that drive economic growth. For every CoStar that has the resources to challenge a well-financed alleged violator, there are countless smaller firms and individual creators who lack the resources to assert their rights.

The federal government has taken an important step in the right direction over the last six month by making it clear that IP protections are not bargaining chips. That principle now needs to be carried through in both trade and domestic enforcement.

Washington must hold foreign competitors accountable, but it must also ensure that our legal system delivers swift, meaningful consequences for IP theft at home. Companies cannot be allowed to build market share by freeloading off the investments of others.

The Zillow lawsuit should not be dismissed as a narrow corporate dispute. It highlights the importance of consistently enforcing the intellectual property rights that fuel our high-tech economy. If we fail that test, the costs won’t just be measured in court judgments. They’ll be measured in the erosion of America’s most powerful competitive advantage.