Legal, Management

Groupon, Scoopon settle out of court over battle for local trademark, domain name

StartupSmart /

The legal battle between group buying giants Groupon and Scoopon has come to an end, with the two companies agreeing to settle out of court for the ownership of the Groupon trademark and Australian URL.

 

But one group buying analyst believes that while Groupon may now adopt its official trademark, there is still power in the StarDeals brand.

 

The settlement, the exact details of which have not been revealed, comes as the two companies were preparing to fight over the ownership of both elements in the Melbourne Federal Court.

 

Groupon had signalled its intention to fight for the trademark in a blog post earlier this year, arguing that brand integrity was crucial to its international expansion. The company was forced to adopt the StarDeals brand in Australia instead of its usual name.

 

“Groupon, Inc. has received registration approval for the domain name, www.groupon.com.au, and trademark, GROUPON, from IP Australia. Terms of the registration are not disclosed,” Groupon Australia has announced in a statement.

 

Scoopon also said it welcomed the settlement.

 

“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.”

 

“Scoopon has determined that as it now enjoys a leading position in the marketplace, when combined with the recent backing of the Tiger and Packer consortium of investors, that it is exceptionally well positioned to meet Groupon in the market.”

 

While the terms of the settlement are unknown, reports indicate the agreement is worth hundreds of thousands of dollars.

 

Earlier this year Groupon revealed that it had offered Scoopon $286,000 for both the Groupon.com.au URL and Groupon Australia trademark, but then accused the local site of reneging on the deal. Chief executive Andrew Mason said Scoopon wouldn’t hand over the IP unless it was acquired by Groupon.

 

It is unknown whether the investment from James Packer earlier this year in Catch of the Day had anything to do with the settlement.

 

The arrival of Groupon to the Australian market under a different brand caused controversy late last year, with analysts wondering whether the company would be able to compete against the growing number of local sites. With no brand recognition, Groupon had to struggle to compete.

 

But Telsyte senior research manager Sam Yip says the company has experienced strong growth – over 1,300% in the second quarter – which makes it the fifth-most popular site in the country, up from eighth.

 

Yip argues there may even be scope for the company to continue using the StarDeals brand.

 

“The next step is to educate the merchants with who Groupon is. A lot of merchants are savvy and understand the local market, but when it comes to international markets and understanding that this is one of the pioneers of group guying, they are 18 months ahead of us,” he says.

 

“There is opportunity for them to continue with the StarDeals brand. I think a lot of the large group buying sites will target niches – a lot of them have travel sections now. They’ve built brand equity in StarDeals so it would make sense to branch that off.”

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