Techdirt. Stories about "groupon"

Court Recognizes Daily Groupon Deal Hunters Aren't Likely To Be Confused By Groupion's Enterprise Software

Eric Goldman — Wed, 7 Dec 2011 00:09:00 PST

Groupion provides CRM software as a service (SaaS). Groupon distributes "deal of the day" offers that are typically unprofitable for advertisers and often have the extra "benefit" of causing the advertisers to get trashed on Yelp. Groupion sued Groupon for trademark infringement. I previously blogged on the complaint.

The court denies Groupion's various motions. The court runs through a typical multi-factor likelihood of consumer confusion analysis:

mark similarity. Calling this factor "critical," the court concludes that consumers can keep the marks separate. The visual depictions of the logos are different, Groupion has one more syllable, and the words are portmaneaus from different inspirations ("coupon" + "group" vs. "groupware" + "companion").
product similarity. "The parties' products are used for different functions and purposes, and are purchased by different classes of consumers."
marketing channels. The Internet's commonality is discounted (cite to Network Automation), and the rest of the parties' channels are disparate as you would expect when one company is B2B and the other B2C.
mark strength. The court says "Groupion" is weak because others are using similar marks in its field and Groupion didn't show evidence of the mark's commercial strength.
intent. Groupion asserted that Groupon must have selected the mark knowing about it, but Groupion didn't provide any evidence to that effect. Groupon's failure to stop after Groupion's C&D was irrelevant.
evidence of actual confusion. None of Groupion's evidence "demonstrates instances of actual confusion by its customers regarding the source of its products."
likelihood of expansion. Groupon bought a mobile apps business, but the court says it will use that to distribute deals, not for intracompany groupware.
purchaser care. B2B software buyers are careful, as are advertisers.

Thus, the factors point against Groupion's likelihood of success, so the court denies the preliminary injunction, Groupion's motion for summary judgment and motion to cancel Groupion's registered mark. I assume Groupon will view this as an invitation to bring its own summary judgment motion and kill this case. The judge's tone was unmistakable.

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Once Again, Big Companies Often Fail When Jumping Into A Space With A Smaller Competitor

Mike Masnick — Mon, 29 Aug 2011 19:57:00 PDT

The success (or, at least, the tremendous usage) of Groupon has driven a ton of competition into the market. Though, as we've noted in the past, many of the upstart competitors seem to be cargo cult copyists -- copying the superficial idea, without really understanding what makes Groupon so dominant in the space. The latest competitor who thought it was easy to copy and discovered otherwise appears to be Facebook, who is shutting down its daily deals business after just four short months.

Of course, back when it launched, many people wondered if Facebook would be a "Groupon killer," given its larger user base. This is yet another reminder that, contrary to what some people will claim, it's often not that easy for big players to just come in and copy an idea and take over the market. It happens sometimes, certainly, but it's a lot rarer than you think. It's why I'm always amused at people who worry that some big company is just going to "copy" their idea and wipe them out. If a company really understands an idea and a market deeply, it will quickly discover that a superficial copycat won't have much momentum... which appears to be exactly what happened with Facebook's deals offering. Big companies don't always win. In fact, it's a lot less common than some people will insist.

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Groupon... And The Difference Between Idea & Execution

Mike Masnick — Fri, 6 May 2011 18:37:06 PDT

About a month ago, the folks at Planet Money did a nice podcast on the economics of Groupon. There's no doubt that there's a bit of a "coupon" bubble going on these days, with tons of companies crowding into the space, and (as the Podcast notes) a bunch of ex-Wall St. types jumping into the space with talk of creating derivatives on coupons/deals. At the same time, plenty of people have mocked Groupon and insisted that its model isn't sustainable and others can easily come in and kill Groupon. In fact, some of the Wall St. guys who stayed on Wall St. are saying that Groupon's value shouldn't be that high because anyone with a phone can copy them.

Lots of people are discussing Felix Salmon's excellent analysis of the economics of Groupon, which is really more about the fact that Groupon has dominated the space because it executes well. That is, it's not about the idea, it's about the execution. The fact that it has remained dominant despite so many copycats shows that just copying isn't enough. This doesn't mean that Groupon will always be the best at executing (in fact, I doubt it will be). But it's not so simple as just coming in and copying.

This is an issue that comes up all the time when we talk about business and intellectual property. People who haven't built up businesses like this assume that all you need is the idea -- and if an idea can be copied, then the company can't succeed. But that ignores just how important the execution element is. Salmon talks about how hard Groupon works to make sure its advertisers are happy with the results, to a level beyond most of its competitors. However, I think there's another element of Groupon's execution that hasn't received nearly enough attention: how enjoyable it makes the whole thing for consumers.

Groupon employs a bunch of writers who work hard to make sure all of the deals are compelling, enjoyable and fun. It always amazes me how much people underestimate the value of the quality of the writing in Groupon's offers. However, where it really struck me was a few months back, when I was researching some newer competitors to Groupon -- in particular, newspapers that were offering deals directly to compete with Groupon. In theory, newspapers should be able to absolutely destroy Groupon. If you're just standing on the mountain looking down, and seeing who has the advantages here, it's clearly the newspapers. Newspapers already rely on local advertising and deals, and have established long-term relationships in the market. On top of that, newspapers employ a ton of (mostly) high quality writers as well, so they should be able to create similarly compelling content.

And yet, when I was looking at various newspaper Groupon clones, what struck me was how boring and dull their offers were. Even if the deals themselves were comparable (and they often weren't), they just weren't that interesting or compelling to read. And that's because the newspapers -- like the Wall St. analyst above -- are engaging in cargo cult copying, where they think that all that matters is copying the superficial idea -- while missing the secret sauce that goes into the less obvious execution.

As a final aside, the quality of Groupon's content highlights another key point that we've raised many times before: how "infinite goods" like content make scarce goods more valuable. In this case, the "content" created by Groupon's writers (and, yes, this is also an example of how advertising is content) is valuable. But no one's selling the "content." What Groupon is doing is using that good content to make the scarcity of the deals more valuable, making more people willing to buy them.

In the end, I will admit that I have my doubts about the overall sustainability of Groupon itself, but it's not because "the idea" is easily copyable. I'm just not convinced that Groupon can continue to execute as well, and some aspects of what it's offering have some elements of a fad written all over them. But claiming that the company is overvalued because the "idea" is too easy makes little sense.

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Groupon Sued For Its Google AdWords

Mike Masnick — Thu, 24 Mar 2011 18:59:00 PDT

A San Francisco tour company is now suing Groupon because it doesn't like the company's ads that were placed on Google AdWords. As you probably know, Google AdWords involves buying up keywords for ads that will be shown when people search for those words. Part of the process is that you bid how much you're willing to pay per click, and Google sprinkles some of its magic pixie dust and ranks the ads on a combination of how much people are willing to pay... and how often such ads are clicked (i.e., how effective they are).

However, San Francisco Comprehensive Tours is claiming that Groupon put up false or misleading ads based on the types of terms it used to buy. Things like "San Francisco Tours," "Alcatraz Tours," and "Napa Wine Tours." Apparently Groupon bid a high amount, because its ads shot up the list and the tour company claimed it had to pay more itself to keep moving up the ad listing. Of course, that's just how AdWords works, so what's the problem? Well, according to the tour company, Groupon was being misleading, because most of the time it offers none of the things that were being advertised, though in a few rare instances it has offered those things.

I can certainly understand why the tour company is upset, but I'm not sure it should be legally actionable. First of all, assuming there was a legitimate competitor, and they did the exact same thing, there would be no problem. Thus, just having your ads pushed down by a competitor is not and should not be against the law. And, if that's the case, can the tour company really claim "harm" here? It could have faced the exact same issue from a competitor, or even from someone who just bought the keywords to advertise something else. So, the real issue is whether the ads were misleading. And, if that's the case, it seems like more of an issue for the FTC rather than a private company. In fact, I'm wondering if there really was that much "harm" to the tour company? After all, if someone really is looking for a Napa wine tour, and they go to Groupon and see no such tour being offered, they're likely to go back and visit the next compelling ad on the list. In other words, this seems like the sort of thing that should pretty quickly work itself out.

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Groupon Sued For Having Short Expirations On Coupons

Mike Masnick — Thu, 3 Mar 2011 19:02:00 PST

While I'm still not as convinced as some that Groupon really is a sustainable long-term business, it is an interesting one to watch. And, with any massively successful business, it's no surprise that lawsuits -- especially of the class action type -- follow. The latest is that Groupon is being sued for having its deals expire too soon under the Credit Card Accountability Responsibility and Disclosure Act of 2009. That act does include a provision that gift cards cannot expire for at least five years. So it seems that the basis of this class action is to claim that the deals offered by Groupon are the equivalent of a "gift card," rather than a standard coupon, which can expire in much shorter time frames.

This seems like a pretty big stretch. It's not hard to see that Groupon is much closer to offering a coupon for sale, rather than a gift card. Furthermore, if we just look at the reasoning behind this provision in the law, again, that suggests this lawsuit is frivolous. The idea behind the five year expiry on gift cards is that it's often not entirely clear when those cards expire (they're often not marked) and since they work differently than a coupon (i.e., stored value of some kind, rather than a discount on a particular item) people often hold onto them for much longer. In this case, the expiration date of what's being sold is clearly stated, so comparing it to the situations with gift cards is misguided. The whole thing just seems like yet another attempt by class action lawyers to cash in at the expense of a successful company.

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How Trademark Law Is Supposed To Work: Groupon Sues Australian Clone That Tried To Squat Groupon Name

Mike Masnick — Mon, 10 Jan 2011 05:03:50 PST

While we've talked a lot about abusive trademark lawsuits that are more about attacking competitors or hindering speech, the core concept (which has since been significantly stretched) still does make some sense: it works as a form of consumer protection, to stop consumers from being fooled into believing, say, that Bob's Cola, is really Coca Cola -- a well known brand that they trust. When I saw a headline that Groupon had filed a lawsuit against a clone, I was worried that it would be an attack on a competitor (of which there are many). However, it appears that Groupon is still leaving most of the many, many clones out there alone. It's filed this particular lawsuit against Scoopon because the company tried to swipe the Groupon name in Australia. Not only did it register Groupon.com.au, it also registered its company name as Groupon Pty Limited and applied for the trademark on Groupon in Australia. That seems like a clear case of a company trying to confuse the public into believing it's the original Groupon, and a perfectly reasonable situation for using trademark law.

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Do We Really Need A Patent Battle Over Group Buying?

Mike Masnick — Mon, 22 Nov 2010 16:36:49 PST

Back in the early dot com days there were a couple different "group buying" sites. I remember Accompany (whose name confused people when employees called them on the phone: "Hi, I'm calling from Accompany" "What company?" "Accompany") and Paul Allen's Mercata. There were a few others as well, and they all went away. However, in the last year or so, group buying has picked up steam again, with Groupon leading the way and lots of others entering the space quickly. And, of course, as with any "hot" area, you have to expect patent lawsuits to follow, as jealous folks who couldn't or didn't execute start suing those who executed better. Earlier this year, we already noted that Groupon clone Tippr bought Mercata's patents and were threatening Groupon over them. More recently, the small MobGob sued Groupon over some other patents... and now Groupon has responded by suing back with its own (acquired) patents.

I'm really trying to figure out how patents are helping anyone here, so perhaps the regular patent defenders can explain. Here's a highly dynamic market, where there are lots of competitors entering the space and trying out different things. The general concept of group buying is pretty straightforward and simple. It's hard to see how or why that deserves a patent. In fact, if you look closely at the space, you begin to notice that Groupon's success has had very little to do with the idea -- but with a few underlying tricks: in particular the fact that Groupon works really hard at good content production. It employs a bunch of writers, which make their deals seem more fun. So, quite seriously, if someone could explain how patents have benefited this market, I'd like to know. Because right now it seems to only be helping out a bunch of lawyers, at the expense of users.

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Groupon Photographer Caught Pretending Others' Photos Were Her Own... Group Pile On Fixes, Rather Than Copyright Law

Mike Masnick — Thu, 16 Sep 2010 07:33:58 PDT

We recently wrote about how social mores can often handle situations of copying or lack of credit much more effectively than copyright law. In a perfect example of that happening, Chris Tolles points us to a long comment thread on a Groupon deal, where a bunch of photographers expose another photographer for claiming others' images were her own. Assuming you're one of the six or seven people in the world who still hasn't heard about Groupon, the group buying site offers special deals from local merchants each day, where the deals require a certain number of buyers before the deal kicks in.

Over in Atlanta, the deal for Wednesday was supposed to be a $65 1-hour photography session with a photographer named Dana Dawes. If you follow the comment thread on the deal, Dawes is quite responsive for the first few answers, working over time to answer any questions she can. Somewhere in the middle, however, someone notes that it appears that photographs on Dawes' website portfolio appear to be slightly edited versions of others' photographs (with a Dawes watermark added to them). Some of the photographs are traced back to their original photographer, and then the thread goes somewhat crazy, with lots of folks calling Dawes out, yelling at GroupOn for allowing this, and people demanding refunds. Dawes tries to defend herself for a while, but doesn't do a very good job -- sometimes claiming that she's taken photos in Europe (which is something of a non sequitur) and then later trying to blame a webmaster for causing the problem (though, others point out that the same photos appear on her Facebook page as well).

Eventually, Groupon closed down the deal and refunded everyone's money, which makes sense.

But, of course, what struck me most was, yet again, how the group dynamics and social mores solved this issue in the course of just a couple of hours. Many photographers can be notoriously pro-copyright (and, frankly, when I've discussed photography issues, pro-stronger copyright photographers have often been the most... aggressive in angrily commenting here on Techdirt) and there are a few "that's copyright infringement!" claims in the thread from photographers. And while it's true that some of these may be copyright infringement, the bigger issue for most isn't the infringement, but the passing off of others' photographs as if they were Dawes' own. It's the difference between "plagiarism" and "infringement," to some extent. For example, say that Dawes had actually taken many of these photographs, but had assigned the copyright to others. In such a scenario, I would imagine most Groupon users wouldn't have been that offended if she posted such photos to her portfolio to demonstrate her work. Instead, the issue that gets people upset is the passing off of the photos as her own, which is separate from the copyright issue.

But, in the end, it wasn't copyright that fixed the situation, it was the overall social pressure of the group. In exposing what appears to have been a passing off of others' works, users quickly started demanding refunds, warning others, and alerting Groupon administrators to kill the deal and automatically issue refunds. And this wasn't a case of some hugely well-known photographer being copied either. In our last post, some insisted that social mores only work when the wronged party is well-known, ignoring just how much the internet will amplify the message of someone who has been wronged.

Now, I'll be the first to admit that such situations can backfire. You can certainly envision scenarios where social mores border on "mob rule" -- and pitchfork wielding mobs have certainly been known to make a mistake or two over the years. But at some point, people need to recognize that there are many other methods for dealing with these sorts of issues than immediately falling back on "copyright infringement!"

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