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stevewlaw
stevewlaw, Attorney
Category: Business Law
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Experience:  25+ years and millions of dollars in settlements in catastrophic personal injury, wrongful death, and commercial litigation.
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We purchased a website from a seller based on the understanding

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We purchased a website from a seller based on the understanding that it was unique and they would not compete with us after the sale. We found out that as soon as they were paid, they took the original site and created a copy of it. We can test from various external points that that they are using the code of the site we purchased. This is in direct conflict of the understanding. The site we purchased has been operating for over 1 year, while their new site has been operating for 2-3 months. We have tried to contact the seller, but we are not getting any response back from them. Their domain is protected by Domains by Proxy who requires a subpoena to disclose the ownership details. The parties involved are the buyer, based in Arizona, and sellers based in India. I would like to know how to go about filing a suit and obtainting the whois information through the registrar. We would then like to file DMCA notices and ideally a favorable court order to have the competing site taken down. Please advise if you are able to help with the whole process.


Payment was sent to buyer through Escrow.com. We don't have a formal agreement signed and don't have any copyright filed with the USPTO, but nonetheless, we believe this is a matter of theft and we would still have sufficient defensible position as our site activity history precedes the copy site they have created. They only changed some minor CSS style sheet to make the site look a little different, but it's based on our exact site.

Submitted: 1 year ago.
Category: Business Law
Expert:  Kendell Kelly, Esq. replied 1 year ago.

KKPC :

Hello! I have a couple questions:

KKPC :

How was the non-compete confirmed if not in formal agreement?

KKPC :

Are the two sites operating in competition to each other (selling same things, in same area) or does the website purely look alike?

KKPC :

I am able to help with IP, DMCA, as well as the WIPO issues that may become apparent.

Customer:

We had several communications with the party to confirm via email prior to the sale, that one of the key expectations of the sales is that they would not complete by creating another site. Once the transaction was underway and we were in the closing period after they received their funds, they stopped communicating and we never got a formal agreement in place for the non-compete. However our communications via emails confirm this understanding.

Customer:

The sites are operating in direct competition to each other. They look very similar (other than some minor edits they have made), but the scripts they are using to offer the online tools are exactly the same, and they are offering the same content as our site provides.

Customer:

We bought the site with the code and scripts, making them our property and our copyright, and they are using the same scripts to run their site.

Customer:

I would disclose details but I am not sure if this is a public forum as I don't want to divulge details except in direct communications.

KKPC :

I believe this is indeed a public forum (I am still new to this platform), but I believe you as a customer may request to switch to PM messages. I apologize for not knowing, but I do know the two interfaces are very different!

KKPC :

Next question, how much was the sale price of the site? (I'm considering all the ways you can address this and in actuality there are a few!)

Customer:

The sale price was $250K

KKPC :

Okay! I believe I have enough info to provide you with a couple options. Your urgency level is listed as Medium, would it be okay for me to finish your answer in the morning? I was about to log off for the evening but saw your response.

Customer:

Yes you can respond to me by the morning

KKPC :

Perfect!! Chat with you tomorrow! Sleep well

KKPC :

Hello!! I have been attempting to catch you online because I do have one other thing to clarify -- Is the referenced "buyer" in Arizona the one running the potentially infringing website?

Customer:

The referenced buyer, my partners and I are based in Arizona. The ones running the infringing website is in India, but they seem to be using US based registrar and US and UK based hosting services.

Expert:  stevewlaw replied 1 year ago.
HiCustomer my name is XXXXX XXXXX I will do the best to help you. My advice is general only and does not create an attorney-client relationship. Good morning. I will try and help you the best I can. While you are based here in Arizona and your seller is based in India, that does not prevent you from filing suit against them in Arizona, unless your sales agreement provided a different choice of venue. I will assume, however, that you may file here in Arizona. I suggest that you file suit immediately in US District Court here in Arizona for breach of contract and fraud, and in connection therewith, request a Temporary Restraining Order. The Court, in light of the facts you have alleged, should readily grant the TRO. With your TRO, you can see who owns your site with Domainsbyproxy. They too are based in Arizona. I am sure you will find that your registrant is most likely based in India. You will also take your TRO to the web hosting service, like a GoDaddy, and they will hvae to take the site down based on your TRO. Hopefully it is GoDaddy - I am assuming so since they used Domainsbyproxy.

Next comes the tricky issue. That will be for the service of your lawsuit. If you don't have a US Agent for the Indian company, which I doubt you will find, then you will have to serve them internationally. Fortunately for you India is a signatory to the Hague Convention. That just means that the state departments of both countries get involved and can make service somewhat easier. That being said, service even through the Hague is long, tedious and expensive. You will have to have your entire complaint translated into the Indian language (so the brevity of your complaint is a good thing). Then the docs are sent overseas and you have to wait....and wait...until service is confirmed. Once service is confirmed your lawsuit really begins. That is assuming they file an answer.

Whether or not they file an answer does not make this any easier. If, and when you prevail, there will still be the matter of collecting your judgment in India. That will be even more difficult than the service was through the Hague Convention. And if your judgment is obtained by default, you need to be aware that foreign countries do not look favorably on judgments by default and there is a chance that Indian law may not recognize a default judgment from a foreign country.

You have an uphill road in terms of damages. But on the bright side, I believe you will have an easy chance at the TRO. But remember, they are short lived. You may, however, end up with a preliminary and permanent injunction which may be just what you're looking for anyway. However, be advised that if Domainsbyproxy and GoDaddy were to shut down the site, they obviously still possess the code and can re-register the site and be up and running almost immediately with a foreign registrar and hosting service, and then you are back right where you started. I sincerely XXXXX XXXXX information has been helpful to you. I too am in Arizona. Feel free to private message me or chat for further information. Thank you in advance for your positive rating and accepting my answer. Please keep me posted my friend. Steve
Customer: replied 1 year ago.

Steve, thank you for the comprehensive response.I would want to send the subpoeans and C&D to DomainsByProxy, Google and the hosts. What would you estimate the costs and initial timeframe be to file suit, TRO and subpoeans?

Expert:  stevewlaw replied 1 year ago.
Well you need to have the complaint prepared and filed. Depending on the complexity of the contract and the allegations in the complaint, I would estimate about 10-20 hours to prepare the complaint and get it filed. Then I would estimate about 5 hours for the court appearance in the Federal Courthouse in Phoenix on W. Washington. The cease and desist letter I would estimate about 2 hours to draft, review and revise. And for the subpoenas, I'd estimate about an hour or two each. I think all could be done within a couple of weeks.

I'd draft out a timeline first, and do your cease and desist letter to the infringer first, with the threat of litigation. That will be the model for the cease and desist letter that you'd use for domainsbyproxy and godaddy (or other web host). So altogether I'd say at the outside you're looking at 30 hours of work, plus or minus. The total cost would depend, of course, on the hourly attorney rate that you'd be paying. And you'd need to add the legal costs as well for the case filing, service of process of subpoenas, and the most expensive cost would, of course, be the service through the Hague which can go into the thousands as well. Translation costs of all documents into Indian language can be quite expensive. It's unfortunate, but this will not be cheap. However, you did pay $250K for something you expected to have exclusive rights to and you do not have those rights. I would venture to say that your loss of exclusivity has a large price tag all by itself. I hope this information is helpful. My direct email is seweinberger1 (at) gmail (dot) com. Again, thank you for the opportunity to help you, and for your positive rating and acceptance of my responses. Bonuses are not expected but always appreciated my friend. Best regards, Steve
stevewlaw, Attorney
Category: Business Law
Satisfied Customers: 199
Experience: 25+ years and millions of dollars in settlements in catastrophic personal injury, wrongful death, and commercial litigation.
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