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  • Ad.com Sale Falls Through, Lawsuit Filed

    1. BY - Aug 18, 2009
    2. Policy & Law
    3. 65 Comments

    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.

65 Comments
  • The seller should make sure the domain name do not violate trademark.

    In this case, it is the sellers problem.

  • Sathees

    The domain name does not violate any trademark. There is not a valid Ad.com trademark, and never will be, because of official USPTO policy. Generic domain names can’t be trademarked!!

    Don’t you understand? AOL does not have a valid Ad.com trademark, they did apply for one, but it was never granted, and never will be.

    Everything else are just excuses to avoid payment.

  • @DC “generic domains” with trademarks are possible. I can think of 3 right off the bat.

    Ancestry.com
    Amazon.com
    Match.com

  • Adam, you are partially right, but you can’t trademark the .com part (see Hotels.com). Still, you could own a trademark using just the generic term, but only as long as the name is not related to the trademark category you are trying to use, ej. Amazon as a bookstore, Apple as a computer.

    However, Ancestry.com doesn’t really own any ancestry related trademark. You can’t have a category killer like that and obtain a trademark on it’s relevant category, USPTO will not allow it.

    So, again, you can’t trademark Ad.com. You could trademark ‘ad’ as something different, unrelated to advertisement, but that’s not the reason why they paid millions for category killers, is it?

  • Ancestry.com has 2 service mark trademarks . match.com has 4 different ones. CAN’T is debatable there’s all sorts of marks and I’m sure there are countless other examples.

    You argument that you can’t trademark generic terms especially in the context of this discussion is even more ridiculous given that advertise.com and advertising.com both already have LIVE trademarks granted to them. . . Now what were you saying again ?

  • Service trademarks, Adam. Logos.

  • I think you are thinking of Word Mark

    A service mark is used to identify a service rather than a product

    what does it matter? both advertise.com and advertising.com have trademarks (as well as others mentioned) and you stated “Generic domain names can’t be trademarked!!”

    The UDRP even recognizes service marks : “. . .domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights. . .”

    You aren’t an attorney and neither am I . . . but I’ve presented fact, not conjecture.

  • DC, if the seller (Mr. Guillen) and/or the auction organizer are so sure about ad.com is free of any such issues, wouldn’t you think they should indemnify the buyer of any such pre-existing claims?
    You are repeatedly asserting that USPTO will not allow such trademark (though adam has given counter cases) then, why is holding/pending the decision?
    I hope you realize that you are stretching it for too much to support a baseless law suite of a seller who don’t want to honor his responsibilities.

  • @Jamie Parks – A.mericas O.verreaching L.awyers

    That was SWEEEEET! (did you hire a comedy writer for that one, or did you pull that one up yourself? Either way, it made me laff because it was so on point! Good job broey)

    Back to the issue at hand, I think some of these people dogging Moniker for not “representing outstanding TM issues” on Ad.com are not recognizing that AOL filed their TM lawsuit A DAY BEFORE THE AUCTION, if I’m reading the report correctly.

    How can Moniker be aware of any TM issues if some bloated, desperate internet star with fading relevance files a lame and injurious TM lawsuit on a domain name they’ve never used, and has no “distinctive” qualities to give it a potential trademark? Whuuuuut?

    Div and Directi should just pay for the domain and man up.

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