Groupon: Scoopon’s catch of the day

Quarter of a million settles squatting, trademark lawsuit

Australia’s Scoopon founders and group buying millionaires, Gabby and Hezi Leibovich, have settled a prolonged legal battle with group buying giant Groupon.

Groupon took the duo to court last year, filing cases in the US, New Zealand and Australia, after discovering that not only did the Leibovich’s launch a Groupon clone with Scoopon in Australia but also purchased the Groupon.com.au domain name, registered the company name Groupon Pty Ltd, and attempted to register the Groupon trademark in Australia.

According to Groupon, the Leibovich’s tried to register the Groupon trademark just seven days before Groupon did in Australia.

In early January, Groupon CEO Andrew Mason wrote about the saga on the company blog. “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 claimed the Leibovichs first accepted, and then reneged on, an offer for $US286,000 for the domain and trademark. Mason and Groupon believed that the Leibovich’s were holding them to ransom in the hope that Groupon would buy the entire Scoopon business.

While proceedings dragged on, the brothers sold a 40 per cent stake in the company, which includes Catch of the Day and Scoopon, for A$80 million to a consortium including Packer's Consolidated Press Holdings, Seek co-founder Andrew Bassat, and New York based hedge fund Tiger Global, in May. The investment valued the company at AU$200m.

Meanwhile the trademarking issue did not stop Groupon from entering the Australian market in February under the brand Stardeals.

Last week the Federal Court in Victoria dismissed the intellectual property action following an out of court settlement between the parties. Details of the settlement have not been disclosed but speculation suggest that the Leibovich’s succeeded in getting considerably more than the $250k on offer.

The groupon.com.au domain was transferred on July 14.

The Leibovichs said in a statement: "Scoopon is pleased today to announce that it has settled its legal dispute with Groupon in Australia, the US and in New Zealand. The parties have agreed to the Court making orders that, each of the parties claims against each other have been dismissed with no order as to costs.”

They added that as they now enjoy a leading position in the marketplace and have the backing of the Tiger and Packer consortium of investors, that “Scoopon is exceptionally well positioned to meet Groupon in the market.” ®