Groupon Sues Clone

Published by: Frank Galvano on 5th Jan 2011 | View all blogs by Frank Galvano

Groupon Sues Clone

Groupon officials posted a message on its blog Wednesday explaining why the company is taking the unprecedented move of suing a Groupon clone, who is apparently squatting on the Groupon.com.au domain name. The case will begin in an Australian court on February 4th, and Groupon will conduct business in the country under the name Stardeals in the mean time.

Groupon CEO Andrew Mason said in the blog post that a Groupon clone named Scoopon has made life difficult for Groupon by purchasing the Groupon.com.au domain name, naming their company Groupon Pty Ltd., and registering the Groupon trademark in Australia just ahead of the real company.

“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,” Mason said on the blog.

He goes on to say that Groupon eventually did make an offer of $286,000 to the brothers who own Scoopon, which they accepted. Bu, the post adds, they eventually changed their minds and Groupon believes they will only sell the name if the entire Scoopon business is part of the deal. This belief prompted Groupon to file a lawsuit claiming the trademark was filed in bad faith (along with several other claims.)

According to separate reports, Groupon is also attempting to sue Scoopon owners for trademark infringement in its home state of Illinois, even though Scoopon is based in Australia. It is not quite clear how valid a claim based on a US trademark will be viewed internationally. But, given that Groupon is in the process of raising $1 billion and carries a valuation of $4.75 billion, it certainly has the resources to take the case as far as it can go.

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