By: Mark R. Malek

According to a story by an Australian publication titled “Business with Wall Street Journal,” Groupon has filed a suit against two Australian brothers that have purchased the domain http://www.groupon.com.au.  As indicated by the Groupon CEO in the article, as Groupon has become more popular, it has also become a target for “opportunistic domain squatters.”

No kidding!  It is almost a guarantee that anytime this set of facts comes up, it will soon be followed by cybersquatting. In other words, if you can name a trademark that became popular almost overnight, I will show you a case of cybersquatting. Cybersquatting occurs when someone registers a domain name that is the trademark (or substantially the trademark) of another.  For example, if I was on top of things way back in the day, I might have been able to register Nike.com.  I’d bet that the good people over at Nike would not have been too happy about it.  However, back then, i.e., when Al Gore first invented the internet (see background on my ongoing joke here), there was not a great deal of cases or legislation that dealt with what eventually became an issue – cybersquatting.  As such, and if I was somehow able to have registered Nike.com, the big plan would have been to somehow make money off of it.  That could be accomplished in one of two ways.  First, I could hold it hostage and wait for Nike to send me a huge paycheck.  Alternately, I could just start engaging in commerce and people who would normally be looking for Nike products would come across my products instead.

As you can imagine, that is not something that powerful companies with expensive trademark portfolios (and money for lobbyists) really liked.  We eventually saw laws and cases that took this type of behavior into account.  That is why we have very clear case law on that which constitutes cybersquatting (apparently called domain squatting in Australia).  The facts that I read in this story seemed pretty dead on, but I do not purport to be an expert on Australian law.

The perplexing thing about this case is that Groupon apparently offered the brothers about $300,000 to resolve the matter and turn over the domain name.  When it was turned down, I suspect that there were a group of people from the business development department at Groupon sitting around and scratching their heads trying to figure out why such an offer was turned down….probably the same way that a similar group at Google has been sitting around a table trying to figure out why Groupon turned down a $6Billion (yes, Billion with a B) offer.