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Zillow and McMansion Hell have buried the hatchet.

The company won’t sue, and the blog won’t use images from Zillow anymore.
In a brief statement, Zillow said it will “not pursue any legal action.” The company issued the statement shortly after an Electronic Frontier Foundation attorney representing Kate Wagner fired back at Zillow in a five-page letter. Wagner is behind the viral architecture blog, McMansion Hell.
On Monday, Wagner received a demand letter from Zillow threatening a lawsuit over spurious copyright claims and possible violations of the Computer Fraud and Abuse Act, which is a federal anti-hacking law.

Even more bizarrely, as the EFF letter pointed out, Zillow did not own the images in question—it merely licensed them from others.
So it wasn’t clear how Zillow would have had standing to bring a suit. Plus, even if the company did somehow have standing, her satirical commentary was protected under the Fair Use doctrine of American copyright law.
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