Commentary

Yelp Wins Trademark Lawsuit Against Fake Review Company

Yelp recently mounted an anti-astroturfing initiative by suing the owner of AdBlaze, a company that allegedly sold fake reviews to businesses looking to boost their reputations.

Last week, Yelp won its case -- at least technically. U.S. District Court Judge William Orrick in the Northern District of California ruled on Wednesday that AdBlaze's owner, Florida resident Timothy Catron, infringed Yelp's trademark. Orrick entered an injunction prohibiting him from using Yelp's name in ads, or incorporating it in Web site names, in the future.

But even though Orrick ruled in Yelp's favor, he awarded the company just $45,000 -- far short of the $2 million it initially requested.

Orrick also denied Yelp's request for attorney's fees. Yelp didn't say what its legal bills came to, but the amount probably was hefty, considering that Yelp made numerous filings during the 16 months the case was in court.

The lawsuit dates to last June, when Yelp sued Catron for allegedly infringing Yelp's trademark by using its name in ads for AdBlaze's services, and on a site he operated. Yelp said its name was being used “in a manner that is likely to cause confusion, or to cause mistake, or to deceive.”

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Yelp said in its complaint that it blocked the IP addresses associated with Catron -- www.adblaze.com and www.BuyYelpReview.com -- but that the company continued to offer to sale businesses phony reviews. Catron allegedly charged $2,495 for a package of 100 reviews.

Yelp said it went so far as to mount a sting operation that involved purchasing fake write-ups for a phony business, which Yelp created specifically for that purpose.

Catron never appeared in court to defend himself.

Last month, U.S. Magistrate Judge Kandis Westmore recommended that Orrick rule in favor of Yelp, but only award it $45,000 in damages.

Yelp took issue with that suggestion, arguing that $45,000 wasn't enough to deter Catron, or other would-be review sellers, in the future. “At $45,000, Catron, or other parties seeking to emulate Catron, would break even by selling only 18 of their 100 review packages priced at $2,495,” Yelp argued. “Catron, and others like him, could reasonably conclude that they are likely to sell more than 18 review packages, making the endeavor profitable despite a default judgment being awarded against them.”

Yelp argued that any damage award should total at least $300,000.

But Orrick said in an order issued last week that Yelp hadn't shown any valid reason why it deserved that much money.

“Yelp offers no persuasive argument why a permanent injunction and award of $45,000 in damages will not have a sufficient deterrent effect,” he wrote. “While the plaintiff in a trademark infringement case is entitled to damages that will serve as a deterrent, it is not entitled to a windfall.”

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