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01|05|2011 02:06 pm EDT

Groupon Addresses Australian Cybersquatting Problem

by Kevin Ohashi in Categories: Legal Issues

Groupon has addressed a question in their blog titled Why Groupon Isn’t in Australia. The short answer is a cybersquatter / competitor has registered Groupon.com.au and the Groupon Pty Ltd business name as well as filed for a trademark for Groupon.

The cybersquatter is Scoopon, a Groupon clone, which is owned by two brothers, Gabby and Hezi Leibovitch. This doesn’t appear to be an isolated incident either.  The brothers also own Woot.com.au and redirect it to a site similar to Woot.com (a deal of the day site owned by Amazon).  Their list continues with owning DealExtreme.com.au, DealExtreme.com is a popular deals site in the US, which redirects to their own deal website.  Andrew Mason doesn’t express as much concern about the cloning issue, but the trademark infringement seems to cross a line.

Andrew Mason writes:

“The way we see things, this is a classic case of domain squatting – an unfortunate reality of the Internet business. 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. But now they’ve changed their minds, and we believe that they’ll only sell us the domain and trademark if we’re willing to buy the entire Scoopon business from them. Left with no other options, we’ve filed a lawsuit against Scoopon, claiming that their Groupon trademark was filed in bad faith (amongst other things).”

Despite believing they could win the lawsuit, they still offered $286,000 for the domain name and trademark. The cost of litigation and the amount of time it would take to resolve the dispute before they could start building a business using their own name must have been factored into that price. Mason states it could take ‘over a year to resolve.’

Ultimately, Mason announces Groupon is filing a lawsuit against Scoopon and launching in Australia under the name a temporary name: Stardeals. His final message is directed towards Scoopon stating the $286,000 offer is still on the table and asks users to help persuade Scoopon to accept their original deal.

What do you think? Is trying to pay off the alleged cybersquatter for $286,000 is a savvy business move or sending the wrong message and encouraging others to follow suit?

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6 Comments

John

January 5, 2011 @ 2:54 pm EDT

Here’s the choices: If they pay, it opens the floodgates for other squatters to buy Groupon names in other ccTLDs with the expectation that they’ll be bought.

If the squatters get squashed by this one lawsuit, this will put the writing on the wall all over the world that it doesn’t pay to squat on Groupon names…

Adam Strong

January 6, 2011 @ 3:39 am EDT

It’s not just groupon names. These particular guys seem to have the MO of buying anything in .com.au that gains traction in the states.

William

January 6, 2011 @ 6:46 am EDT

No it is a terrible move. This guy owns a tiny slice of his own company and just cashed out for 9 figures (personally). The huge sums he’s dealing with has caused him to lose touch with reality.

When they bought groupon.com he similarly overpaid for it.

What they should do is setup sub-domains for each market. au.groupon.com would have been fine until they get this name and maybe fine forever – but instead they plan to build a brand w/ StarDeals and then throw it away once they get this domain? That is a LOL terrible decision.

William

January 6, 2011 @ 6:49 am EDT

” If they pay, it opens the floodgates for other squatters to buy Groupon names in other ccTLDs ”

I’d bet a hefty sum that these are all already taken in all meaningful markets and probably in non-meaningful markets as well. Hell, I”m sure Groupon figured out already that they needed to buy whatever was left.

jp

January 7, 2011 @ 2:09 am EDT

It is the logical move to make an offer that would cost them less than the cost of a lawsuit(all factors considered)

However it would also be logical at this point to make at least a defensive registration for every jurisdiction they believe they may someday want to do business in (where still available), as yes other squatters will do the same thing, and next time it may again make sense to pay off thes squatter vs paying the lawyer.

joseph david

January 16, 2011 @ 11:58 pm EDT

Ok, between paying off squatters or lawyers?…mmm…squaters win any day of the week.

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