MPR affiliate plays hardball with Gatheroo

The legal battle over the right to has gotten messier. In March, Gather, an online social networking company affiliated with Minnesota Public Radio, sued Warecorp, a Minnetonka-based company, for trademark infringement. The dispute is over the right of Warecorp to operate, a web site that was started after began charging for its services. The case is pending in U.S. District Court, in Massachusetts, where Gather is based. (For more background, see this previous Blotter post.

Warecorp has argued from the outset that the Massachusetts court has no jurisdiction over the company since it has no business operations in that state. However, in April the judge assigned to the case issued a preliminary injunction barring Warecorp from further use of the terms "Gather" or "Gatheroo."

At that point, Warecorp decided that its only reasonable fiscal choice was to settle the case. "It takes hundreds of thousands of dollars to win a trademark case," notes Chris Dykstra, who runs the Gatheroo web site, in an email. "It doesn't really matter if you are right or wrong. In these cases, the biggest wallet wins."

In April, the two sides engaged in settlement talks. According to legal filings, Warecorp agreed to change the web site name and cede all future rights to the domain. On April 19, a blog entry was posted on announcing the pending name change.

However this was apparently not enough to satisfy Gather. The company insisted that Warecorp must also pony up $80,000 to cover its legal costs and acknowledge that it had misused the Gather trademark. "During these negotiations it became very clear that Gather was (and is) as aggressive as it is possible to be and is very intent on extracting the most extreme punishment possible," writes Dykstra.

Just two days after Gatheroo had posted on its web site the company's intention to change its name, Gather filed a motion seeking to hold the company in contempt of court. It asked the court to initially fine Warecorp $10,000 for its continued use of the gatheroo name, with the fine doubling every 24 hours. Gather also sought a court order mandating that Warecorp's Internet service provider eliminate the company's access to the site.

The two sides are now in legal limbo. Warecorp is back to arguing that the Massachusetts court has no jurisdiction in the matter. Gather is seeking to have the preliminary injunction made permanent. In its most recent court filing the company claims that it will cost between $200,000 and $500,000 to undue the damage caused by the alleged trademark violation.

It's uncertain when the judge will rule on these issues.