
Is Groupon Sitting on a Legal Timebomb? - ig1
http://blog.awesomezombie.com/2010/07/is-groupon-sitting-on-legal-timebomb.html
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jeremymcanally
(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).

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gojomo
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.

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gojomo
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.

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paulgb
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.

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rprasad
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.

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dangero
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.

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btilly
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
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 ?

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

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

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whyenot
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
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).

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rprasad
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.

