Australia's Scoopon Won't Sell URL for $286,000, So Groupon Sues

Here’s the kind of attention you get when everyone thinks you have deep pockets.

In an appeal to customers today, Groupon co-founder and CEO Andrew Mason explained in a blog post why it is suing an Australian competitor, Scoopon.

And the story is pretty juicy: Gabby and Hezi Leibovitch, two brothers who started Scoopon in Australia, have purchased the Groupon.com.au domain name, registered the company name of Groupon Pty Limited and tried registering the Groupon trademark in Australia.

“The way we see things, this is a classic case of domain squatting–an unfortunate reality of the Internet business,” Mason wrote. “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.”

But wait, there’s more: Groupon offered the brothers $286,000 for the Groupon.com.au domain and trademark, and Mason claims they accepted the offer.

Then they changed their minds (presumably around the time Groupon turned down $6 billion from Google, and then was rumored to be raising nearly $1 billion in fresh capital). No doubt, the Leibovitch brothers now have a much richer number in mind.

To that end, Mason says his company is choosing the path of last resort: “Left with no other options, we’ve filed a lawsuit against Scoopon, claiming that their Groupon trademark was filed in bad faith (amongst other things).”

In the meantime, the nearly $300,000 offer continues to stand, and Groupon has opened shop under an alias: www.stardeals.com.au/.

If a court doesn’t come down on his side, Mason is hoping customers will: “Apologies–we don’t like to bother our customers with these things, but felt you deserved to understand why it’s taking us so long in Australia,” he wrote.

A “Groupon in Australia” Facebook group has been created to raise awareness of the situation, and by this afternoon had already counted 568 members.


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— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik