4 ms·

Is Groupon Sitting on a Legal Timebomb?

18 points by ig1 16y ago

agscala 16y ago
Groupon is pretty great, I hope this doesn't mean any ill-will will come to it.
- whyenot 16y ago
  Groupon is pretty great, but the way they treated the owner of groupon.com, regardless of what British law may or may not say, wasn't.
  - tomjen3 16y ago
    Agreed. And it was a stupid move to boot: he could have done all sorts of nasty things, since a lot of people would have gone to groupon.com, whether or not that was their domain name (I used to go to dropbox.com all the time, back when it was a parked domain).
jeremymcanally 16y ago
(I am not a lawyer, etc.) I think the clause he highlights is meant to be read as "We don't know of anyone who is currently using this as a mark and has the sole right to it" not "We don't know of anyone who might use it at some point but currently isn't." That would render most trademarks un-fileable. Even so, it was sort of a jerk way to get a domain (even though the guy did get paid rather handsomely).
- gojomo 16y ago
  How is it a jerk way? Two efforts (at least) came up with the name independently. One team, the one now known as Groupon, put the name into commercial use, immediately acquiring trademark rights under ancient common law. They also then went a prudent step further, and registered the trademark. Another guy registered the domain earlier. Without lifting a finger to assert a trademark or implement a related business, he got a giant payday. From the details available, everything went as it's supposed to work -- everyone's customary rights were respected, and a mutually beneficial transaction occurred to move the domain asset to its most-productive use.
paulgb 16y ago
The emphasized text is this: > to the best of his/her knowledge and belief no other person, firm, corporation, or association has the right to use the mark in commerce IANAL, but doesn't "right" here imply exclusive right (ie. registered trademark)? Otherwise, everyone would have the "right" to use every (unregistered) mark in commerce, so this statement could never be true.
- rprasad 16y ago
  Yes and no. Because trademarks are market-specific, it is possible that someone else may have a trademark on "Groupon" in the context of say, dog food. So the trademark is not exclusive in that sense. However, each trademark holder would have the exclusive right to use the mark in their particular market.
btilly 16y ago
I am not a lawyer either. But I wonder what the phrase "has the right" means. If you read that as, "Has a trademark covering", they are fine because nobody had the right. Alternately if you read that as, "Has an established history doing business as", they are fine if the existing business had not been set up yet. There are other interpretations under which they would be not so fine. However my guess is that in the whole negotiation, there must have been discussions with actual qualified lawyers. If the original owner had a good legal case, I think that would have come up then. Therefore I'm inclined to believe that there is no legal problem. That said, their treatment of the original owner does seem pretty bad.
- ig1 16y ago
  One of the reasons I wrote up the blog post was to try and get some views from people who are trademark lawyers. We need to remember that lawyers are human too and screw up as well. How many programmers do you know who never miss things ?
gojomo 16y ago
The original domain owner's declared intent, expressed via private email, to someday use the domain did not confer him any trademark rights relevant to this declaration. And, it's reasonable to assume that a company that paid $250K in an international transaction for a domain name that matches its registered trademark had competent counsel.
edash 16y ago
The Hacker News post (from earlier today) mentioned in this article: http://news.ycombinator.com/item?id=1547943 http://news.ycombinator.com/item?id=1547943
rprasad 16y ago
To answer answerzombie's question: No, Groupon is not sitting on a legal timebomb. One of the reasons you would acquire a trademark is to establish a superior claim to a domain. A domain, by itself, is not a trademark and does not establish a trademark. Trademarks can be established in two ways: registration or actual use. Trademarks must remain in use to remain valid. Where you have competing claims to a mark, first in time takes priority. In this case, while the original holder of groupon.com may have been intending to use the domain, he apparently never got around to actually doing so before Groupon filed for a trademark. At that point, Groupon's trademark would have been "first in time". Plus, apparently the dude signed over whatever rights he had.
dangero 16y ago
Although I disagree with the author (groupon is not sitting on a legal timebomb), I think this is an important topic for entrepreneurs to understand. My family had a company that got caught up in a trademark dispute. It was a lot of he said, she said, as we fought over who had used the name first. In the end, the lawyers bankrupt both companies as they fought for the name. It's important when you're starting a business to avoid entanglements over trademarks, and honestly, if you do encounter a problem, you're better off just giving up your name and picking a new one than draining all your resources in a trademark dispute.

18 points by ig1 16y ago

agscala 16y ago

Groupon is pretty great, I hope this doesn't mean any ill-will will come to it.

whyenot 16y ago
Groupon is pretty great, but the way they treated the owner of groupon.com, regardless of what British law may or may not say, wasn't.
- tomjen3 16y ago
  Agreed. And it was a stupid move to boot: he could have done all sorts of nasty things, since a lot of people would have gone to groupon.com, whether or not that was their domain name (I used to go to dropbox.com all the time, back when it was a parked domain).

jeremymcanally 16y ago

(I am not a lawyer, etc.) I think the clause he highlights is meant to be read as "We don't know of anyone who is currently using this as a mark and has the sole right to it" not "We don't know of anyone who might use it at some point but currently isn't." That would render most trademarks un-fileable. Even so, it was sort of a jerk way to get a domain (even though the guy did get paid rather handsomely).

gojomo 16y ago
How is it a jerk way? Two efforts (at least) came up with the name independently. One team, the one now known as Groupon, put the name into commercial use, immediately acquiring trademark rights under ancient common law. They also then went a prudent step further, and registered the trademark. Another guy registered the domain earlier. Without lifting a finger to assert a trademark or implement a related business, he got a giant payday. From the details available, everything went as it's supposed to work -- everyone's customary rights were respected, and a mutually beneficial transaction occurred to move the domain asset to its most-productive use.

paulgb 16y ago

The emphasized text is this: > to the best of his/her knowledge and belief no other person, firm, corporation, or association has the right to use the mark in commerce IANAL, but doesn't "right" here imply exclusive right (ie. registered trademark)? Otherwise, everyone would have the "right" to use every (unregistered) mark in commerce, so this statement could never be true.

rprasad 16y ago
Yes and no. Because trademarks are market-specific, it is possible that someone else may have a trademark on "Groupon" in the context of say, dog food. So the trademark is not exclusive in that sense. However, each trademark holder would have the exclusive right to use the mark in their particular market.

btilly 16y ago

I am not a lawyer either. But I wonder what the phrase "has the right" means. If you read that as, "Has a trademark covering", they are fine because nobody had the right. Alternately if you read that as, "Has an established history doing business as", they are fine if the existing business had not been set up yet. There are other interpretations under which they would be not so fine. However my guess is that in the whole negotiation, there must have been discussions with actual qualified lawyers. If the original owner had a good legal case, I think that would have come up then. Therefore I'm inclined to believe that there is no legal problem. That said, their treatment of the original owner does seem pretty bad.

ig1 16y ago
One of the reasons I wrote up the blog post was to try and get some views from people who are trademark lawyers. We need to remember that lawyers are human too and screw up as well. How many programmers do you know who never miss things ?

gojomo 16y ago

The original domain owner's declared intent, expressed via private email, to someday use the domain did not confer him any trademark rights relevant to this declaration. And, it's reasonable to assume that a company that paid $250K in an international transaction for a domain name that matches its registered trademark had competent counsel.

edash 16y ago

The Hacker News post (from earlier today) mentioned in this article: http://news.ycombinator.com/item?id=1547943 http://news.ycombinator.com/item?id=1547943

rprasad 16y ago

To answer answerzombie's question: No, Groupon is not sitting on a legal timebomb. One of the reasons you would acquire a trademark is to establish a superior claim to a domain. A domain, by itself, is not a trademark and does not establish a trademark. Trademarks can be established in two ways: registration or actual use. Trademarks must remain in use to remain valid. Where you have competing claims to a mark, first in time takes priority. In this case, while the original holder of groupon.com may have been intending to use the domain, he apparently never got around to actually doing so before Groupon filed for a trademark. At that point, Groupon's trademark would have been "first in time". Plus, apparently the dude signed over whatever rights he had.

dangero 16y ago

Although I disagree with the author (groupon is not sitting on a legal timebomb), I think this is an important topic for entrepreneurs to understand. My family had a company that got caught up in a trademark dispute. It was a lot of he said, she said, as we fought over who had used the name first. In the end, the lawyers bankrupt both companies as they fought for the name. It's important when you're starting a business to avoid entanglements over trademarks, and honestly, if you do encounter a problem, you're better off just giving up your name and picking a new one than draining all your resources in a trademark dispute.