Overstock.com Sues NoMoreRack.com alleged Infringement of its Trademark

A complaint was filed by the Salt Lake City–based e-tailer Overstock.com against its competing discount site NoMoreRack.com in the Utah Federal Court, saying the that the site was infringing on its trademarks by purchasing ads in Google with the word ‘Overstock’ in them.  Overstock.com also claim that the online ads prominently featuring the word overstock in a nearly identical font to its trademark.  The company says, “In these advertisements and others displayed on the Internet, Nomorerack intentionally and regularly capitalizes Overstock as though it was proper noun to foster additional confusion with the Overstock.com brand.”

It also charges that NoMoreRack has some very unhappy customers and because of that the D rating of NoMoreRack with the Better Business Bureau of New York— has since dropped to F—and that Overstock is hurt by its association with the site.  According to the bureau, NoMoreRack “failed to provide a sufficient explanation of how the company intends to correct the issues they have been experiencing.” Dissatisfied NoMoreRack customers are even organizing on Facebook.

NoMoreRack could not be reached for comment. However, its CEO, Deepak Agarwal told Fortune: “This lawsuit is frivolous and reflects the growing competitive threat from NoMoreRack.… The term overstock is common English, and we use it at times to accurately describe surplus products we are selling at deep discount on our site.”  He also pointed out that Overstock’s CEO has a history of lawsuits. In 2012, the company sued Goldman Sachs for short-selling its stock and lost.

According to Techcrunch, the total business turnover of NoMoreRack in 2012 was $100 million and it raised to around $300 million in 2013. It also recently secured a financing worth $40 million.

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