Editor's blog | California dreaming

Corporations occasionally sue their rivals. Think Apple pursuing Samsung in law courts around the world for breach of design rights and software patents. Or Anheuser Busch battling it out in various European jurisdictions with Czech brewer Budvar over the use of the name Budweiser. Chocolate giant Lindt even took a smaller competitor to court over the shape of chocolate Easter bunnies.

These proceedings usually have one thing in common: the claimants seek compensation for loss of business and revenue, sometimes worth millions. The lawsuit brought a few days ago by US legal platform LegalZoom against its rival Rocket Lawyer is different. It is entirely motivated, it seems, by altruism.

According to US media reports LegalZoom has filed a complaint in California challenging Rocket Lawyer’s use of the word ‘free’ in relation to some of its services and accusing it of “false and misleading advertising”.

The lawsuit comes after LegalZoom’s “numerous unsuccessful attempts” to make Rocket Lawyer put an end to such practices and to prevent “the continued deception of consumers and small business owners seeking online legal protection.”

What’s more, the Glendale-based organisation has apparently pledged to donate the “millions of dollars in damages” it is claiming to “non-profit organisations that provide legal services to the underserved”.

Set up in 2001, LegalZoom has been dreaming of setting up in the UK market since the early days of the Legal Services Act. In September, it announced a partnership – the terms of which are yet to be finalised – with QualitySolicitors.

But both in the US and over here the organisation has some way to go to fulfil its ambitions as “the nation’s leading provider of personalized, affordable online legal solutions for families and small businesses”.

Its website claims to have helped 2m customers in the past ten years, significantly less than the 20m claimed by Rocket Lawyer.

And the deferral of its IPO in early August, blamed on “adverse market conditions”, has been seen by commentators as a setback.

LegalZoom has not responded to our requests for comment and Rocket Lawyer have said they only found out about the claim when press reports were brought to their attention.

If the case does proceed, it will provide a rather bizarre twist in the war between the two private equity-funded legal businesses. Meanwhile, Google-backed Rocket Lawyer have pressed on with their plans to open for business in the UK, with an official launch on Wednesday 28 November. The lawsuit is unlikely to spoil the party, but for independent solicitors, every day the behemoths are spending trying to outdo each other is extra time for law firms to mount a defence on their patch.

UPDATE (27 November 2012): LegalZoom has sent Solicitors Journal a copy of the complaint, filed at the district court of the Central District of California on 20 November (attached).

In addition to claims that Rocket Lawyer is misleading the public over the nature of its 'free' services, the complaint includes allegations that Rocket Lawyer is in breach of LegalZoom's intellectual property rights.

In particular, it claims that Rocket Lawyer has unlawfully used the name 'LegalZoom', which is registered as a trade mark in relation to a range of legal services, by registering similar-sounding websites and buying 'LegalZoom' as a search term.

According to LegalZoom, Rocket Lawyer registered "in bad faith" the interne domain names www.legalzoomgadget.com and www.legalzoomer.com.

LegalZoom also says Rocket Lawyer bought as keywords 'LegalZoom', 'Legal Zoom' and 'LegalZoom.com' with Google, Yahoo and Bing, "to improperly divert potential consumers of LegalZoom to the RocketLawyer website by triggering sponsored links to www.rocketlawyer.com."