4 ms·

Um. They should speak to lawyers right now, the UK has something called "Groundless Threats" protection for trademarks. The guy in question could quite possibly

by ig1 16y ago

Um. They should speak to lawyers right now, the UK has something called "Groundless Threats" protection for trademarks. The guy in question could quite possibly sue Groupon for a substantial amount and get the domain name back. Groupon knew the guy had the name and the intention to use it for a coupon service, and they then went ahead and registered the guys (unregistered) trademark with full knowledge that the guy was planning on using it (+ with the intention of forcing him to give up the domain). They then used the trademark to make him give up the domain. How could Groupon's lawyers not have warned them that this was a bad idea ?

shpxnvz 16y ago
Did the guy really have rights to the name? In the U.S., for instance, you have to actually use the mark in trade in order to establish a right to it - simply having thought of a use isn't enough. Is there no similar requirement in the UK?
- ig1 16y ago
  It's an interesting question, and I think one that would have to be decided before a court. Certainly trademarks for prelaunch products have been granted protection before if there's a clear intent for usage (for example the iPad). Given this guy had a specific plan and turned down a substantial amount of money for the domain, that's likely to play in his favour proving that he both had intent and that the brand had value. However in this case he doesn't even need to prove his usage was trademark worthy, the Groundless Threats doctrine just requires you to be threatened unfairly, which given it seems pretty clear from the interview that the trademark was registered in bad faith (knowing a competitor was going to use it) it seems likely to be covered. If a court finds he was made to sell his domain under duress from a groundless trademark threat then they could invalidate the sale and award substantial compensation. (ianal)
notahacker 16y ago
I'm guessing the high price they paid included some agreements to relinquish any potential IP claims. If it literally happened as described in the interview and the seller took the legal claim at face value they'd have surely settled for a lot less for the domain.
- ig1 16y ago
  It doesn't matter. If a court finds the contract was made under duress it could invalidate the whole thing including any litigation waivers.
  - notahacker 16y ago
    True, but again, I don't think the conversation took place exactly as outlined in the summary. If they were making veiled legal threats they'd have lowballed on price. An approach along the lines of "we really, really want the name and will pay big bucks for you to relinquish your rights to it; however much you like the name our trademarks are going to make it difficult for you to succeed with it and we're offering you way more than you'll conceivably make off parking income" doesn't seem unduly threatening
    - ig1 16y ago
      It depends on the context really, 250k may have been a low-ball offer, without knowing what they offered pre-trademark I guess it's hard to say. But yeah it depends exactly what was exchanged between the two parties, but even saying "our trademarks are going to make it difficult for you" could be considered as crossing the line, the UK has fairly stringent rules to prevent frivolous IP threats.
  - anigbrowl 16y ago
    But where do you see the threat here? They haven't tried to interfere with business operations or asserted the English guy would face a loss if he did not comply with their requests. All they did was advise him of their success in getting the mark and warn him off using the domain to infringe upon it in the future. His investment in the domain seems limited to the registration costs for a year or two, and there's no evidence he ever put time or money into building up any kind of business identity for it. If he had elected to just sit there and keep renewing, and www.groupon.com just took you to a blank page saying 'not affiliated with the Groupon company', nothing bad would have happened. I personally think that having made $250k for doing very little other than have a good idea, he's feeling extremely pleased right now and the last thing on his mind is spending his windfall on bringing a court case of dubious merit.
eli 16y ago
Well, it worked, so it doesn't seem to have been a bad idea so far... I assume whatever agreement they worked out to transfer the domain also precluded future lawsuits over it or the trademark, but IANAL
gojomo 16y ago
They didn't 'force' or 'threaten' him to do anything. Groupon got the trademark first -- by active use even before trademark registration. The other guy got the domain name first. Then the two parties struck a mutually beneficial deal based on their distinct rights. The domain-owner's 'intent' doesn't count for much; everyone with a domain name has a plausible 'intent' to use it for a related web project. And the suggestion they 'speak to lawyers right now' is goofy -- they certainly consulted much better legal counsel than is available in this discussion thread before spending $250K for an international domain purchase.
- ig1 16y ago
  I doubt they would have given a public interview on the topic if they had a UK trademark attorney to warn them they may be in grey territory. Even if there's a low probability of facing a lawsuit, as we've seen in the case of facebook, where there's money there's lawyers.
ig1 16y ago
Also it looks like they didn't mention groupon.com when they filed their trademark. I've made a more detailed analysis at http://news.ycombinator.com/item?id=1549608 http://news.ycombinator.com/item?id=1549608

by ig1 16y ago

shpxnvz 16y ago

Did the guy really have rights to the name? In the U.S., for instance, you have to actually use the mark in trade in order to establish a right to it - simply having thought of a use isn't enough. Is there no similar requirement in the UK?

ig1 16y ago
It's an interesting question, and I think one that would have to be decided before a court. Certainly trademarks for prelaunch products have been granted protection before if there's a clear intent for usage (for example the iPad). Given this guy had a specific plan and turned down a substantial amount of money for the domain, that's likely to play in his favour proving that he both had intent and that the brand had value. However in this case he doesn't even need to prove his usage was trademark worthy, the Groundless Threats doctrine just requires you to be threatened unfairly, which given it seems pretty clear from the interview that the trademark was registered in bad faith (knowing a competitor was going to use it) it seems likely to be covered. If a court finds he was made to sell his domain under duress from a groundless trademark threat then they could invalidate the sale and award substantial compensation. (ianal)

notahacker 16y ago

I'm guessing the high price they paid included some agreements to relinquish any potential IP claims. If it literally happened as described in the interview and the seller took the legal claim at face value they'd have surely settled for a lot less for the domain.

ig1 16y ago
It doesn't matter. If a court finds the contract was made under duress it could invalidate the whole thing including any litigation waivers.
- notahacker 16y ago
  True, but again, I don't think the conversation took place exactly as outlined in the summary. If they were making veiled legal threats they'd have lowballed on price. An approach along the lines of "we really, really want the name and will pay big bucks for you to relinquish your rights to it; however much you like the name our trademarks are going to make it difficult for you to succeed with it and we're offering you way more than you'll conceivably make off parking income" doesn't seem unduly threatening
  - ig1 16y ago
    It depends on the context really, 250k may have been a low-ball offer, without knowing what they offered pre-trademark I guess it's hard to say. But yeah it depends exactly what was exchanged between the two parties, but even saying "our trademarks are going to make it difficult for you" could be considered as crossing the line, the UK has fairly stringent rules to prevent frivolous IP threats.
- anigbrowl 16y ago
  But where do you see the threat here? They haven't tried to interfere with business operations or asserted the English guy would face a loss if he did not comply with their requests. All they did was advise him of their success in getting the mark and warn him off using the domain to infringe upon it in the future. His investment in the domain seems limited to the registration costs for a year or two, and there's no evidence he ever put time or money into building up any kind of business identity for it. If he had elected to just sit there and keep renewing, and www.groupon.com just took you to a blank page saying 'not affiliated with the Groupon company', nothing bad would have happened. I personally think that having made $250k for doing very little other than have a good idea, he's feeling extremely pleased right now and the last thing on his mind is spending his windfall on bringing a court case of dubious merit.

eli 16y ago

Well, it worked, so it doesn't seem to have been a bad idea so far... I assume whatever agreement they worked out to transfer the domain also precluded future lawsuits over it or the trademark, but IANAL

gojomo 16y ago

They didn't 'force' or 'threaten' him to do anything. Groupon got the trademark first -- by active use even before trademark registration. The other guy got the domain name first. Then the two parties struck a mutually beneficial deal based on their distinct rights. The domain-owner's 'intent' doesn't count for much; everyone with a domain name has a plausible 'intent' to use it for a related web project. And the suggestion they 'speak to lawyers right now' is goofy -- they certainly consulted much better legal counsel than is available in this discussion thread before spending $250K for an international domain purchase.

ig1 16y ago
I doubt they would have given a public interview on the topic if they had a UK trademark attorney to warn them they may be in grey territory. Even if there's a low probability of facing a lawsuit, as we've seen in the case of facebook, where there's money there's lawyers.

ig1 16y ago

Also it looks like they didn't mention groupon.com when they filed their trademark. I've made a more detailed analysis at http://news.ycombinator.com/item?id=1549608 http://news.ycombinator.com/item?id=1549608