Thread: Carrying Out Due Diligence

If you're going to purchase a domain for $1.4 million, it's important to carry out due diligence. Domain Name Wire reports that the sale of Ad.com has fallen through as there appears to be 6 pending trademark applications at the USPTO for the mark "Ad.com." A little reminder before reading on: AOL purchased Advertising.com in 1994.

The first trademark application was filed on 24th September 2008 by Platform-A Inc. (an AOL company). It claims a "first use in commerce date" of 2004.

The other 5 applications were filed on 31st May 2009 (after the auction) but which claims a "first use in commerce date" of 1993. These 5 applications were filed by a company called "Ad.com Interactive Media, Inc." I wonder if this company is also related to AOL because if you look at AOL's website, you'll see it has a program called "Ad.com Network" :

Ad.com

With Platform-A's vast Ad.com Network, you can meet virtually any marketing objective.

Source: Where Ads Run/Advertising.com | platform-a.com

The owner of Ad.com is now suing Directi and Skenzo for backing out of the auction purchase. Assuming the pending applications is the reason for Directi/Skenzo backing out, then failing to carry out due diligence when appropriate is a hard lesson to learn.

I don't know that the 6 pending applications for "Ad.com" will actually be approved for registration. It's hard to believe that they can actually trademark the term "Ad.com" in association with advertising-related services. But time will tell how strong these applications really are...

Few things about this case (IMHO):
(i) May not be resolved quickly
(ii) Directi's name is at stake
(iii) Whatever the outcome, the decision will have a big impact.

Mod Edit: Merged post with related thread.

Ad.com Sale Falls Through, Lawsuit Filed
Tuesday, August 18th, 2009

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.





Source: Domain Name Wire » News » Ad.com Sale Falls Through, Lawsuit Filed - The Domain Industry's News Source

Ooops!

Originally Posted by Ace

Few things about this case (IMHO):
(i) May not be resolved quickly
(ii) Directi's name is at stake
(iii) Whatever the outcome, the decision will have a big impact.

I agree with what you say, Ace. It's likely going to be a very long, drawn-out affair.

Going by further articles I've read, it sounds like AOL is being really aggressive about protecting their so-called "Ad.com Network" brand. I think AOL is overreaching here. They own Advertising.com, not "Ad.com" and not "Advertise.com" ...although they probably wish they own these others domains . Also, these are generic terms.

Originally Posted by Ceres

The first trademark application was filed on 24th September 2008 by Platform-A Inc. (an AOL company). It claims a "first use in commerce date" of 2004.

I just checked the USPTO website. The Office is requesting additional evidence from Platform-A Inc.

As "Ad.com" is highly descriptive of the applicant's goods/services (ie advertising, marketing, and promotional services), the Office requires it to show that the mark has acquired distinctiveness.

Evidence of acquired distinctiveness may include specific dollar sales under the mark, advertising figures, samples of advertising, consumer or dealer statements of recognition of the mark as a source identifier, affidavits, and any other evidence that establishes the distinctiveness of the mark as an indicator of source.

Considering that "Ad" is a generic term, this request is not surprising...

just a point of view

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