Cybersquatting

Alleged Cybersquatting Almost Pays Off: Groupon Offered $286,000 for Groupon.com.au and Trademark

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GrouponThere’s an interesting post today on the Groupon Blog, written by CEO Andrew Mason, about a lawsuit filed in Australia concerning a ccTLD and trademark issue.

The blog post discusses how the founders of an Australian Groupon “clone,” known as Scoopon, registered the Australian ccTLD, Groupon.com.au. In addition, the company filed for an Australian trademark on the term “Groupon” about a week prior to the US-based company’s own filing.

Mason discussed how this seemingly risky endeavor almost paid off handsomely for the domain and trademark registrants:

As Groupon became internationally known, opportunistic domain squatters around the world started to buy local Groupon domain names, thinking that we’d eventually be forced to buy them at an insane price. In fact, we tried to do just that, reluctantly offering Gabby and Hezi Leibovich about $286,000 for the Groupon.com.au domain and trademark—an offer they accepted.

Allegedly, Gabby and Hezi Leibovich later backed out of the deal in an apparent attempt to get the company to buy their entire Scoopon company. As a result, Groupon was forced to file a lawsuit in Australia.

Interestingly enough, Groupon is trying to use the power of group persuasion to get the domain owners to sell for the $286,000 offer.  Mason is asking people to join  the “Groupon in Australia” Facebook  group to post a message on the wall encouraging Gabby and Hezi Leibovich to sell.

Many Trademark Holders Don’t Protect Their Brand in Today’s TLDs

There have been a whole lot of complaints from trademark owners that new TLDs could potentially cause massive amounts of cybersquatting.

Similarly, it could cost them tens of thousands of dollars or maybe much more to protect their brands in a variety of new TLDs when ICANN releases them. This whole debate sounds pretty interesting and the trademark owner contingent makes a good point about this.

Well, it would be a better point if they actually owned all of their brand names in existing TLDs, or if the ones they didn’t own were being cybersquatted in different TLDs.

I thought it would be interesting to take a look at some leading brands to see if their brand names were sitting unregistered, which I believe is what will happen for many new gTLD domain names. For instance, Xerox.sport hardly seems to be a domain name that would be coveted by cybersquatters.

Here are some unregistered brand names in various ccTLD and TLD extensions:

  • HewlettPackard.tv
  • NewYorkTimes.travel
  • McDonalds.aero
  • Intel.ac
  • MercedesBenz.sc
  • Gucci.jobs
  • MorganStanley.im
  • Xerox.fm
  • Danone.la
  • Motorola.name
  • Disney.mn
  • Budweiser.vc
  • Accenture.bz
  • Hyatt.ac

Lalaloopsy Dolls: Top 2010 Christmas Gifts But Not Good Domain Strategy

Lalaloopsy Dolls offered by MGA Entertainment are some of the hottest Christmas toys in 2010. Retailers are selling out of these Dolls left and right, and people are turning to the Internet to buy these dolls for Christmas gifts.

Although the company that sells the dolls registered the difficult to spell domain name,  Lalaloopsy.com, back in August of 2010, it didn’t register other domain names that are important to its brand. Both  LalaloopsyDoll.com and  LalaloopsyDolls.com are registered to people who don’t appear to be affiliated with the company.

Both these descriptive domain names have advertising on them with links to Christmas gifts. Additionally, typos of the brand domain name have also been registered and have PPC links on them.

Had the company spent less than $100 more, it could have bought a number of strategic domain names to protect the brand (and control visitors) online. Instead, private individuals appear to control these key Internet assets.

With childrens’ brands, it is even more critical that companies understand domain names and domain name strategy. Nefarious companies and individuals can easily take typos and other domain names and send visitors to any website they choose. They can also generate PPC revenue by putting ads on the domain names.

Perhaps a corporate domain registrar like Mark Monitor (where Lalaloopsy.com is registered) could add a tool that shows potential domain name typos at the time of purchase and warn registrants that others could buy similar sounding domain names. It would help generate revenue for them and would provide a service to registrants.

Buying Trademark Domain Names

Anyone who owns or has registered more than a handful of domain names has probably owned one or more names that infringe on the trademark of another company, whether its intentional or unintentional. Figuring out what domain names are dangerous to a domain portfolio is a big part of doing business as a domain investor.

Sometimes blatant trademarks pose no threat because the trademark holder doesn’t seem to care, and other times seemingly generic domain names become issues when overreaching companies attempt to take domain names using the legal system – or threats of the legal system. You need to be aware of the risks involved with domain investing before jumping in head first.

On average, I receive a few emails a month that go something like this: “I own the domain name xyz.com, and I am not sure if it’s a trademark. What do you think?

Although I would love to give my educated opinion when I get those emails, I almost always recommend that the person speak with a lawyer, since I have no legal experience. When I first started buying domain names around 2003, I registered some names that may have infringed on the trademarks of other companies. In fact, I received a couple of cease and desist letters. At different times, I reached out to Brett Lewis and John Berryhill who both gave me very good advice.

If you have real concerns about possible trademark names in your portfolio, it’s best to ask a domain lawyer rather than another domain investor. A domain investor may have some experience with trademark issues, but there’s no substitute for a legal professional. Just like you wouldn’t ask your dentist about a toenail problem, you shouldn’t expect a domain investor to answer your legal questions.

.CO Domains Subject to UDRP

I read an “Open Letter to .CO Registrants” posted on the .CO Registry website by Eduardo Santoyo, Vice President & ccTLD Manager for the Registry. I think any domain owner who bought .CO domain names should have a look at the letter to know where the Registry stands when it comes to trademark infringement.

Some of the key points discussed in this letter include:

  • .CO domain names are subject to UDRP
  • When you buy a .CO domain name, you must represent and warrant that you aren’t doing so to infringe on the rights of another company (whether you are bidding on a domain name or hand registering it)
  • .CO Registry will not give any refunds if a name is taken via UDRP or other legal action
  • Domain owners are responsible for doing their own due diligence

Most domain investors know the ramifications pertaining to registering trademark infringing domain names, but some people don’t. I received an email last week from someone who told me she registered several .CO domain names of Fortune 500 companies that didn’t think to register them on their own. She asked how she could sell them. I told her I had no idea but referred her to my Domain Lawyer article for references.

It’s good to see the Registry post an article like this, and it will certainly be interesting to see how many UDRP cases are filed and how soon until that begins. My bet is that there will be quite a lot, especially when a strong aftermarket develops.

Before You Register a Domain Name…

Registering a new domain name is simple. All you need to do is visit Godaddy, Name.com, Register.com, Moniker.com or another domain registrar of your choice, enter your domain name and extension, give your credit card number and personal information, and you are the owner of a brand new domain name for less than the cost of lunch. It’s that easy, which isn’t necessarily a good thing.

As I can see by some of the comments on my blog and mostly elsewhere about the NewYorkNewYork.com judgment, there are a lot of people who don’t understand the legalities about owning and using domain names in a legal manner. An innocent $10 domain registration can almost immediately become a potential $100,000 liability simply by using it in a way that infringes upon another company’s trademark.

Even though it’s simple to buy a domain name and put it to use immediately, domain registrants need to know the laws with regards to properly (legally) using a domain name. The Anti-Cybersquatting Consumer Protection Act is a good place to start, and I would also say a dose of common sense would be helpful too 😉

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