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Oversee.net Sues Skenzo, Oversee and Guillen Explain Their Sides

Two sides speak about Ad.com lawsuits.

Here’s the latest on the news Domain Name Wire broke earlier today about Marcos Guillen suing Directi/Skenzo for backing out of its $1.4M purchase of Ad.com.

First, Oversee.net (or one of its subsidiaries) also sued Directi/Skenzo for breaching the contract. That case has now been combined with Guillen’s case against the company. (Oversee.net is the parent company of auction organizer Moniker.)

In a statement released to Domain Name Wire, Oversee.net spokesperson Mason Cole explained:

It’s unfortunate this step had to be taken. It’s very important that all parties in an auction transaction — buyer, seller and auctioneer — as well as the auction process and auction laws, be respected. We’re continuing to ACTIVELY work with all parties and would very much like to resolve this outside the courts.

We also received an official explanation from Marcos Guillen, the “seller” of ad.com. Here’s what he had to say:

I don’t see this as a trademark issue. AOL’s claim of a trademark in a domain name I have owned since 1997, and I’ve been using it before for pay links and advertising, years before AOL claims of first use: example 1 example 2

AOL filed their trademark application after I agreed to list the domain name with Moniker for auction in September 2008. The ad.com auction was announced by Moniker on September 5, 2008…

Then, AOL rushed to file their trademark application on September 24, 2008, because the TRAFFIC auction was held on September 25, 2008. That is not a mere coincidence. They filed their application a day before the auction, and long after I had listed the domain name. The domain name did not sell at that auction, so it went to the next TRAFFIC auction.

Ask yourself how it is that I have had this domain name since 1997, and then in 2008, the day before an announced auction, a trademark application is filed by a company which claims it has “goodwill” in a mark that does not even correspond to a domain name they have? Why would they be using, as a trademark, something that would send their customers somewhere else? It doesn’t make sense. If you have a valuable business at automobiles.com, but did not own or operate auto.com, then why would you be branding and advertising as “auto.com”? That would be stupid.

The bidding war at TRAFFIC was exciting, but after that Skenzo started dragging their feet. They where supposed to pay 5 days later, but they didn’t. One week later they got an email from AOL lawyers, and everybody freaked out. AOL lawyers did a great job mudding the waters, they claimed that they have contacted me before (they had not), and Skenzo probably thought that they would be better off facing me in court than AOL. All the time, the AOL trademark application remained refused by the USPTO.

There is no trademark. There is a refused registration application filed under very curious circumstances, a screenshot made for the purpose of the application, no evidence at all of any common law rights, and no notice of a claim to me prior to listing the domain name for auction.

I believe Skenzo will come back to their senses now that the Hotels.com decision is out and the USPTO, on their own initiative, withdrew the allowance count for the AOL TM application. Otherwise I’ll have to think that the problem here is not really the trademarks, but Skenzo unwillingness to honor their agreement.

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  1. Troy

    In response to the seller, Marcos Guillen, the issue is not if there is a valid trademark or not. The issue is that he should have disclosed AOL’s threat before the auction. If all bidders on that domain had known that AOL was claiming a trademark and that extensive litigation was in the future for any purchaser then the price would have certainly been much, much lower.

    The seller forced the buyer into paying a premium price for a domain that had some serious baggage with it, but he did not disclose the baggage. There was not “full disclosure”.

    I think that AOL are the true bastards in this story though. Why the crap do they care if someone owns the domain Ad.com? What a bunch of litigious jerks. I am glad they are loosing market share year after year when I see a pathetic, bully like move like this.

    I really think they should explain themselves because all this seems to me is a case of attempted domain hijacking.

  2. D

    ^
    No, you read it – it filled before an auction where the name did NOT sell, it was sold at another auction 4 month later.

    Anyway Div should have paid, maybe ask Oversee to promise legal halp against AOL. The hit he is taking on his reputation + two lawsuits not worth it

  3. M. Menius

    Guillen sums it up beautifully …

    “Ask yourself how it is … a trademark application is filed by a company which claims it has “goodwill” in a mark that does not even correspond to a domain name they have?”

    AOL epitomize severe greed.

  4. Jamie Parks

    Marcos’ statement certainly sheds some light on this dispute. Can’t wait to hear/see what Skenzo’s response will be, hopefully it will come in the form of an escrow payment for a really spectacular domain name.

    Andrew if this domaining gig doesn’t work out for you, you may have a bright future in the alternative dispute resolutions business 🙂

  5. jp

    It might be better for Skenzo to just go and pay for the domain now cause when AOL loses this insane lawsuit it will be like throwing a huge safety net over ad.com, which will only increase its value given that it will be nearly guarnateed safe from any future TM attacks.

  6. WQ

    The whole AOL thing makes no sense.

    Guillen should sue AOL for trying to TM a domain he owns. He can prove it already cost him 1.4M.

  7. Troy

    “@ D – right, but you make your representation when you originally submit your domain, not each time it is selected.”

    That might be the case with domain auctions, but legally he knew there were issues, as ridiculous as they are, and this is what will matter in the courtroom.

    Lawyer For Skenzo: So Mr. Guillen, did you know at the time you sold your domain to my client that AOL had claimed a trademark on in.

    Guillen: Uhhh… yes.

    Lawyer for Skenzo: And you neglected to tell my client of this, before he bid 1.4 MILLION dollars for it?

    Guillen: Uhhh… yes.

    End of case.

    I feel for both the buyer and seller in this, and have no problem sharing my opinion that AOL is the true greed monster, but the seller must disclose an issue like this. It is something that the buyer would have no way of discovering for himself without a seller disclosure.

    It is not like termites in a house, where you can do your own inspection.

    I do admit that it is a new area of law and new rules will need to be laid down by the courts, but I still think that one of the rules will have to do with full disclosure.

  8. Matt

    There are so many ways and angles to look at this situation….everyone is a bit right, and everyone is a bit wrong.

    Except AOL, they are completely wrong.

  9. Marcos Guillen

    Troy,

    I did not know anything about the AOL claim before the sale, period. I only found out when AOL contacted Skenzo, days after the sale was made, when payment was already late, and due.

    Don’t believe me? Fine. That’s what the justice system is for, we’ll do it the hard way.

    Marcos Guillen

  10. Troy

    “Troy,

    I did not know anything about the AOL claim before the sale, period. I only found out when AOL contacted Skenzo, days after the sale was made, when payment was already late, and due.

    Don’t believe me? Fine. That’s what the justice system is for, we’ll do it the hard way.

    Marcos Guillen

    Marcos,

    If that is the case then it changes the way that I see things. Full disclosure only applies to things that you know about. If you never knew then you never knew and in my opinion it is not your fault.

    I wish you the best with this whole situation.

  11. DumLaa

    Yeah, wonder kid got badly suckered into this one. He’s a smart kid though, chances are he asked Mon and Marc to cover him if someone messes around later. I’ll bet my last Yen that Mon and Marc refused. They knew this AOL mess was coming. Its cheaper to lure domainers into bad deals using champagne, eh? Make more money through litigation.

    “We just want the kid to honor this horribly messed up deal” … Yea, I want Elvis & MJ back.

  12. Money

    Looks like we would witness one more lawsuit being filed. This time it will be for defamation of character.

    Watchout F.S ! The hunters eyes are going to track you down…

    We would love to see that clip on YouTube too!

  13. eric rice

    Any buyer who found out about these problems would not complete this transaction. Unfortunately we are still in the wild west when it comes to domain auction contracts, confirming rights to sell etc…

  14. Domain Investor

    It is a different approach but it is a clear case of reverse hijacking.

    Maybe, AOL will end up paying $ 100K – $ 200K in legal fees (TM app., court, lawyer fees). And, their lawyers are probably saying that AOL has a 50 to 70% chance of success.
    Why shouldn’t AOL take the risk?
    (excluding the ethical argument)

    I asked Div. about the domain transaction 2 weeks ago. He was very disappointed but couldn’t say more.

    I agree with Eric Rice. It would be unwise to pay $ 1.4 mil. knowing there is a legal threat pending.

    I doubt Div. would have bid if he knew about the AOL threat.

    Did Moniker/Oversee know about the threat before they auctioned off the domain the first and second time?

  15. jblack

    Very interesting AOL contacted Skenzo so quickly after the auction, it shows they followed the event closely. So it makes one wonder if AOL was the other bidder on the phone that drove the price that high. If so, it could change the dynamics of the pending litigation.

  16. Viper

    @ jblack – I cant help but think cui bono (who benefits). If you zoom out a bit and think about it, its quite possible that AOl was the one on the phone.

    Its also possible that AOL is pressuring Marcos to sue assuring him legal support so that in case he wins he gets paid, and that leaves AOL with the opportunity to sue Div and probably make a buck too. Sandwiched between these two I wonder what his move will be…..

  17. Snoopy

    I don’t think Skenzo can really be expected to follow through on a transaction where the name is being C &D’d. The trademark issues probably should have been disclosed at auction, even if the owner thinks AOL is making a baseless claim (which is very likely the case) it still can’t be expected that a buyer should go ahead with the name in dispute.

  18. Henry

    It sounds like AOL is trying to bandage a missed opportunity, albeit the wrong way, by muddying the waters. If Divyank bows out, AOL stands a better chance to buy the name eventually.

    I still can’t understand why a technology corporation in the like of AOL will file a trademark on a generic word without obtaining the domain name equivalent first.

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