Ad.com Sale Falls Through, Lawsuit Filed
Seller files suit after $1.4M deal falls through.
Ad.com owner Marcos Guillen has filed a lawsuit against Directi and Skenzo for backing out of its auction purchase of Ad.com.
The sale caught mainstream attention when Skenzo bought the domain at Moniker’s TRAFFIC auction in Silicon Valley this past April for $1.4M. But immediately after the sale, issues started popping up.
The exact circumstances leading to the failed purchase are not clear, although they are apparently related to intellectual property rights. (Directi and Skenzo founder Divyank Turakhia has not yet responded to a request for comment. We’ll update this story when/if he comments.) The USPTO trademark database shows six pending trademarks for Ad.com. One of the trademarks was filed by an AOL company. The other five were filed by a company called AD.COM INTERACTIVE MEDIA, INC. The latter filed its trademarks after the landmark purchase and is claiming a first use in commerce date of 1993. [Update: to reiterate, none of the 6 trademarks have been approved. AOL's application is for how it used Ad.com for its Advertising.com site. They submitted this specimen when filing. On August 14 the trademark examiner sent a non-final office action that the mark had not acquired distinctiveness. Given recent trademark cases such as Hotels.com, it's doubtful that AOL's application will be approved. Also, Ad.com has been offered for sale at previous Moniker auctions. AOL didn't file for the trademark until after Ad.com was advertised for sale.]
Guillen filed the lawsuit in Los Angeles Superior Court for Breach of Contract. He is seeking $1.4M, prejudgment interest, and/or damages according to proof.
The lawsuit is unfortunate for all parties involved, including auction organizer Moniker and the domain industry as a whole. The sale made up the bulk of Moniker’s revenue from the auction including a fat $210,000 commission. The next highest sale was BottledWater.com at $45,000.