UPDATE:
We’re working on a settlement that should be a win-win. Wow, that was fast.

OP:
Last month, I filed a lawsuit for the very first time in my life against someone who was trying to mislead our community and profit from it. It wasn’t an easy decision, but it was the first time I had seen such brazen attempt of trademark fraud.

The problem wasn’t the domain name, but that he was trying to confuse and defraud our users by marketing the content and site as his own and profit from it.

The facts:
- The Cheezburger Network launched Failbooking.com on January 5, 2010 (The idea was based on Facebook fails posted on Failblog.org as early as 2008).
- A few days later, the owner of Failbook.com iframed Failbooking.com and attempted to auction off the domain for more than $50,000. (Failbook.com was registered in 2006, but it was a parked page until he iframed our site.)
Screenshot: Note that nowhere does he mention that he’s not related to our site, Failbooking.com, but the title of the page makes it look like Failbook is in fact Failbooking.com (click image to enlarge)

- The owner of Failbook.com tried to market our content and site as his own by promoting on social news and networking sites as Failbook.com
Screenshot: Here is the owner of Failbook.com, trying to promote his domain as if he were us. (click image to enlarge)

- The owner of Failbook.com, who runs an Internet marketing agency in Mexico also even bragged about the “easy traffic” he was getting due to Failbooking.com on Twitter. (Which appears to be missing now.)

- As soon as we were able get his attention, we sent him a settlement asking him to reimburse us for our legal expenses (approximately $9,000) and to agree in writing that he would not violate our trademark or promote others to violate our trademark. He refused and tried to rewrite history and is now levying personal threats.

When we first learned about this, we had a few choices:
1) Go after the domain via the Uniform Domain-Name Dispute-Resolution Policy.
2) Send a Cease and Desist.
3) Take the case to court.

Our logic?
1) We had no problems with someone else owning a similar domain, especially since he had registered the domain well before us and our problem was NOT with the domain name itself, but the fact that he was trying to confuse our users into thinking he was operating our site at Failbook.com. So we didn’t pursue going after the domain name.
2) Sending a C&D would not stop the domain auction in progress. He would still benefit from the fraudulent activities he committed.
3) Suing was the last choice, and the most costly one for us, but it would mean that we would stop him from profiting from the fraud. So after some serious thoughts, we felt this was the right choice to make. Iframing an entire site and marketing it as your own is not the same as linking to another site, and doesn’t even fall anywhere near fair use. Traffic is nice, but if our users were becoming confused about the ownership of the site and we had no idea what Failbook.com’s owner planned to do with the site once he did amass our users’ goodwill.

I know from a PR and legal perspective, I probably shouldn’t be writing about this, but I realize that I am a public person and that the Cheezburger Network is company based on the goodwill of our users. Suing someone doesn’t feel like being a good Netizen, but I feel that the owner of Failbook.com got caught red-handed while trying to commit fraud and is trying to rewrite history.

I hope this helps people understand why we decided to sue and hear both sides of the issue. We are continuing to reach out to settle the suit that would ensure that he will not try to mislead our users again. We are not looking to profit from the case, but if he continues to apologize to us in private and then threaten us in the next breath, we’ll have no choice but to continue with the suit.