Edit ModuleShow Tags
Edit ModuleShow Tags

‘Brazen Conduct’

‘Serial offender’ keeps going, at expense of 90 major brands


Published:

Beth Ewen

Who is Jason Rager?

He claims seven years of experience owning six different franchise brands in three industries, but doesn’t list any. He promotes a weekly webinar giving expert advice on franchising, 2 p.m. Eastern time every Wednesday, but leaves viewers listening to Muzak when he fails to show. He posts multiple articles on websites and two franchising guides on Smashwords, the site for self-publishing electronic books, but doesn’t specify his credentials.

That’s what we don’t know about Jason Rager. What we do know: He is labeled as a “serial offender” of franchise company trademarks, called out for “brazen conduct” and offering a “textbook example of cyber-squatting,” according to 11 domain name disputes decided against him in the last 12 months alone.

Eleven franchise brands—from Batteries Plus to Two Men and a Truck to Holiday Inn to Honeybaked Ham to Buffalo Wild Wings to Hardee’s—have spent thousands of dollars each to get their rightful domain names back from Jason Rager and his company, Paydues Inc. of Santa Fe, New Mexico.

All have prevailed, save for a single Batteries Plus claim that’s still in process. In all cases, no one has heard from Jason Rager or Paydues, a silence that attorneys call typical in domain name disputes. 

Yet the expensive and aggravating game goes on. Rager and Paydues have registered more than 90 additional domain names, according to a FastSigns International lawsuit decided by default in FastSigns’ favor in June. Most vary just slightly from the brand’s name, like mcdonaldsfranchises.net or wendysfranchises.com.

Like all cyber-squatters, Rager hopes to profit when people Google those famous brands but hit a few stray keystrokes or type in a generic word. Instead of visiting Domino’s or Golden Corral or H&R Block or several dozen other brands that Rager has registered, customers are routed to his site, and offered Jason Rager’s Franchise Analyzer software, loaded with glowing testimonials from unidentified customers and now on sale for $350. 

Who is Jason Rager? The better question is, Why is he still in business?

A sickening feeling

That’s what my boss wants to know, the owner and president of Franchise Times, John Hamburger. Some may know the saying, “Never pick a fight with someone who buys ink by the barrel,” attributed to Mark Twain and referring to the power of the press. 

The sentiment applies here, because we learned about Rager and Paydues only when our publishing company became a target. A salesperson Googled franchisetimes.org rather than .com and saw our logo and cover stories splashed alongside Rager’s products and appearing to endorse his.

It’s a sickening feeling for any proud employee, and outrageous to any business owner who pours heart and fortune into building a company. Hamburger holds up his legal bill with a grimace—six grand for getting back the domain name for the registered trademark he already owns. As Hamburger puts it, Rager and Paydues are costing a growing number of franchise companies money, time and reputation, with no end in sight. 

Ryan Palmer, attorney at Monroe Moxness Berg in Minneapolis, handled the Franchise Times claim, decided in our favor in September, and it’s just like the others. He used the UDRP, or the Uniform Domain Name Dispute Resolution Policy, which costs around $1,300 to file a claim plus $5,000 or so in attorneys’ fees, depending on case complexity. 

Then a panelist decides the case, and if it’s in favor of the complainant returns the use of the domain name, usually within 30 to 40 days. “It’s fast, efficient, and it’s solely focused on transferring the name,” Palmer says about the UDRP.

There are no provisions for money damages, however. For that, companies can use federal trademark law, but there are big negatives. “The downside is, it’s expensive and you often run into jurisdictional problems,” Palmer says. If it turns out the infringer lives in China or Bora Bora, for example, good luck with that.

That’s if you can find the person at all. Doug Isenberg is an attorney at the GigaLaw Firm in Atlanta, who in May prevailed in a claim for Holiday Inn against Rager and Paydues. Is Jason Rager a real person or an alias? he is asked.

“I don’t know,” he says, and that’s almost always the case in these claims. “Many domain registrants do not provide their correct name or contact details when they register, even though the rules say that you do so,” Isenberg says. He’s pursued claims against people registered as Barack Hussein Obama, or people identified with a random combination of letters.

Robert Badgley, of Locke Lord in Chicago, says although some trademark owners do sue in federal court, the vast majority want to move on. “A given trademark owner is simply trying to look after his own interests and isn’t really interested in saving the world from this person,” says Badgley, the panelist who decided the Hardee’s and Carl’s Jr. case against Rager and Paydues in December 2011, in favor of Hardee’s.

That leaves the infringer free to infringe again, with no penalty other than giving up a disputed domain name—and there are millions more.  “It works because there are over 200 million domain registrations today, and a domain name can be had for easily $10 or so,” says Isenberg about the operating mode for cyber-squatters. “It’s pretty quick and easy to generate revenue.”

For their part, register.com, godaddy.com and other companies that register domain names say they can’t police the system and still keep the cost low, a benefit for every company, not just those trying to illegitimately use others’ names.

The playing field is about to get much larger. By the end of 2013 or beginning of 2014, new domain names will be launched that will go far beyond .net and .org and .com—such as .hotel or .apple or .school and some 1,900 others now under consideration. “It’s a land rush, essentially, and people are going to grab whatever they can,” Palmer says.

How to stop a Rager

So a final question: How can a trademark owner stop someone like Rager? One tactic is to buy up several domain names similar to the main one, or those names with common typos. A must is to monitor your brand, which can be as simple as routinely searching for a variety of related domain names and seeing what comes up. 

“Do something,” urges Isenberg. “It may be impossible to pursue every cyber-squatter, but the right thing to do is at least pursue those that are causing the most problems, and to make yourself known as a trademark owner who enforces the brand online.”

One claim may not stop a Jason Rager, but dozens and dozens may slow him down. 

Beth Ewen is managing editor of Franchise Times. Send interesting legal cases to her at bewen@franchisetimes.com.

Edit ModuleShow Tags
Edit ModuleShow Tags