Can You Spot the Real Utube?
Ralph Girkins, CEO of Universal Tube and Rollform Equipment, has been doing business online since the mid-1990s and has fielded angry e-mails before. But nothing prepared him for the rant that landed in his in box last October: "Where the f--- are all the videos? 1.5 billion for this piece of s--- website? Google (NASDAQ:GOOG) got taken!"
The writer, who referred to himself as "Tony Soprano," apparently had confused Universal Tube's website, Utube.com, with that of YouTube, the popular video-sharing site that was acquired by Google last October. So instead of finding an ever-changing archive of hundreds of millions of professional and amateur video clips, the angry Web surfer landed on "the original pipe and tube machinery site."
And he wasn't alone. Since last fall, more than 100,000 Web surfers a day have landed on Utube when they wanted to check out YouTube. (For a time, Utube.com crashed almost every day.) Nearly a year later, the traffic is just as heavy. Now the Perrysburg, Ohio-based company, a reseller of machinery used to make industrial tubes, has filed a lawsuit over the domain-name confusion, seeking unspecified damages from YouTube. "We could go to another URL, change our ads," says Girkins. "But why do I have to do that? This URL is mine."
Companies, of course, clash over domain names all the time. In 2001, a small cartoon and game development outfit in Chicago called iToons began receiving calls from people looking for iTunes, Apple's then-new music downloading site. The company dashed off a letter raising trademark concerns, but the flirtation with legal action was brief, says iToons co-founder Kevin Larson. Given Apple's legal resources, Larson decided he had "no hope of getting our brand back." So he changed his company's name to Snap2Play.
It sounds amusing, but the confusion has been no joke for Ralph Girkins. Universal Tube deals in refurbished large tube-forming equipment, which is bought by pipe and tube manufacturers. The average transaction at the company is $50,000, and some machinery costs as much as $500,000; sales hit about $12 million in 2006. Until last fall, Universal Tube's website received so few visitors that Girkins never even bothered tracking them. Clearly, Utube.com was never intended to be a mass market proposition.
Then, soon after Google purchased YouTube for a headline-making $1.65 billion, the e-mail started to pour in. One visitor, a detective in Melbourne, Australia, accused Utube.com of running a video that "may contain child porn." (See "Syntax Errors.") Girkins's 15 employees found themselves struggling to keep up with the volume of complaints.
Girkins called YouTube's lawyers, who proposed hosting, free of charge, what Web developers call a splash page, which would direct customers looking for YouTube away from Utube.com. But that didn't satisfy Girkins, who suggested that YouTube pay him a penny for each confused browser. YouTube rejected the idea and talks broke down.
So last October, Universal Tube filed suit in federal court, claiming trademark infringement. In a novel legal maneuver, Girkins's lawyers also asserted that YouTube's actions were the online equivalent of "trespassing to chattels," an old common law concept that applies to the misuse of property. The video-sharing site's URL, the suit contends, is akin to taking your neighbor's car for a joyride.
On June 4, 2007, Judge James G. Carr of the U.S. District Court in Northern Ohio dismissed the trespass claim, arguing that Universal Tube could not sue for trespass because it uses a third party to host its site, and trespass, as a legal concept, requires physical property. "The specter is raised that customers of Web-hosting services can't sue for trespass, and that is troubling," says Eric Goldman, a law professor at Santa Clara University. "We're dealing with that magic thing called property, and we're still figuring out what property means online." The trademark infringement suit will move forward. In an e-mail, Catherine Lacavera, the Google lawyer representing YouTube, said, "We're pleased that the court granted our motion to dismiss many of the claims. We believe the remaining claims lack merit and we will vigorously defend our legal position."
Since the suit was filed, companies have approached Girkins about selling videos--including porn--on Utube.com. One broker claimed he could sell the URL for $1 million. Meanwhile, the surge in traffic caused by YouTube's popularity has sent Universal Tube's Web-hosting costs to $1,500 a month, up from $20. In late 2006, Girkins decided to try to offset those costs by allowing ads on his site that sell mobile phone ring tones for a dollar. Revenue from this new feature averages $450 a day or $13,500 per month--enough, for now, to cover the company's legal fees.
The case is likely to drag on for at least a year, according to legal experts, and Girkins is apprehensive. After all, he wants to sell machinery, not ring tones, and anything that comes between him and a high-margin industrial customer is a problem. "What if I missed out on a guy who wanted a $400,000 roll press?" Girkins worries. Even $450 a day won't make up for the loss of cash or reputation.
Patrick Cliff can be reached at email@example.com.