Sunday, December 30, 2007

Prosper Approaching Nuclear War

Lawsuits are like nuclear weapons, it's the option of last resort and pretty much assures either destruction of MASSIVE damage to all sides involved. When lawsuits fly the only winners will be the lawyers. ("Churla", Slashdot member).

Even though I've grown tired of covering Prosper's continual information warfare with its community, the war is spilling onto my blog. If you're unaware (and don't follow the forums), Prosper's intellectual property lawyers have sent a legal nasty-gram to the owner of for cybersquatting and trademark infringement. The individual happened to be an active member on the forums, and this tactic, predictably, pissed a whole bunch of otherwise grumpy people off.

It is here where I have to point out that I do consider lawyers the business equivalent of nuclear weapons. They tend to leave destruction and in their wake and no one tends to "win"; the winners just lose less. Lawyers have their place, but only in a mutually assured destruction sense. I had been hoping that some kind of reconciliation could be found between the disgruntled ex-forum posters who now haunt and Prosper's employees and management. The use of lawyers have deflated such idealistic pipe-smoking.

The site owner has now retained council through the Public Citizen Litigation Group and drafted a reply. Normally legal replies are rather boring affairs, but this specific lawyer really seemed to be enjoying himself. If you are at all interesting in intellectual property law, it's an entertaining read (there are days where I feel like such a geek). The reply also contains a most amusing footnote.

When we spoke, you suggested that my client should adopt the domain name "" That name would be inappropriate, because it is not an accurate depiction either of his web site or of his views about Prosper Marketplace. My client does not believe that your client "sucks." In fact, he is a member of the Prosper community who has made numerous loans to other Prosper members. His concern is about flaws in your client's collection processes, and, even more importantly, about your client's attempts to conceal those flaws from members who seek to have the flaws corrected for the better protection of all members. His web site does not seek to tear down Prosper, but rather to promote transparency about Prosper which he believes is essential to the proper functioning of the Prosper community. Moreover, the domain names, and are currently registered (albeit by somebody who is not using them in any manner related to Prosper). In any event, the lesson of Taubman, Bosley, TMI, Lamparello, and many similar cases that we have litigated for Internet speakers is that accurate domain names need not couple trademarks with vulgarities in order to be protected.

Even beyond this, I do hope that Prosper takes the reply's observation about the Streisand effect seriously. This has happened to Prosper and will continue to happen to them until they learn to walk softly (big stick or not).

Finally, your client may hope that by filing suit it will send a message to critics that the use of the Internet for uncensored comment on its activities will be costly. But its decision to file suit over this domain name may be even more costly for your client. Our experience with the other domain name cases that we have litigated is that the litigation itself brought more attention to the criticisms than they would otherwise have received. For example, a Google search for "prosper" does not bring up our client's site on the first page, or even the first several pages, of search results. If your client makes the mistake of filing the lawsuit that you threaten, that may well change. Indeed, although your client has become known to some Internet users, it is not well-known to the general public. I scarcely think it would be in your client's interest if the first thing that the general public learned about your client is that it is so afraid of open discussion that it needs to sue to stop easy access to that discussion.

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