RealEstate.com has unintentionally embroiled its adopted parent LendingTree in a mess.

According to a news story that Realty Times has confirmed is indeed true, General Motors is suing LendingTree in U.S. District Court in Flint, Michigan, to keep the lead generation company from using a domain name similar to the one that GMAC has registered.

GMAC (or more formally known as General Motors Acceptance) is the lending/real estate arm of GM. The real estate affiliate division is called GMAC Real Estate, which uses the domain name: http://www.gmacrealestate.com. This domain name was registered way back in 1999, says the company.

With only a dot to distinguish the site as a sub-domain from any original, RealEstate.com has created a clever lead-rerouting tool for the browser-impaired. But like the juvenile who didn't mean to burn down the house, crash the car, or run up that credit card, RealEstate.com has gotten LendingTree into a parental pickle. It's LendingTree that is responsible as the owner of the sub-domain name .realestate.com which it acquired along with RealEstate.com's other assets.

A quick keystroke in the browser shows that http://www.coldwellbanker.realestate.com, http://www.remax.realestate.com, and even http://www.weichert.realestate.com deposit visitors not to Coldwell Banker, RE/MAX or Weichert Realtors, but to RealEstate.com. But these companies may not have a beef with LendingTree unless their URLs are similar. Weichert Realtors, for example, does not go by Weichert Real Estate, and their URL is http://www.weichert.com.

But what about the other companies that use 'real estate' in their company names? Will they jump on GMAC's bandwagon?

Acquired by LendingTree from Primedia, RealEstate.com is no stranger to getting its parent in trouble. RealEstate.com, then owned by Primedia, was deeply involved in the listings scandal covered extensively by Realty Times in which The Real Estate Book's online listings were altered and used without permission as lead generators for LendingTree and other partners. A furious LendingTree claimed to have nothing to do with the scheme, and when the lawsuit between The Real Estate Book was settled out of court, LendingTree suddenly became the proud owner of RealEstate.com and Domania, key Primedia real estate channel holdings. Speculation is high that Primedia all but gave LendingTree the holdings to avoid getting squashed in a lawsuit.

RealEstate.com, with the coolest domain name in real estate, offered an opportunity to LendingTree to bring mortgage and agent-matching business through a new channel. As owner of the domain name RealEstate.com and the sub-domain .realestate.com, LendingTree would benefit if any word placed before the sub-domain routed visitors to the company's site.

Said a spokesperson to Realty Times, "We have never promoted or marketed in any way any sub-domain of RealEstate.com, and we have never in the past, nor would we ever in the future, do anything to divert GMAC's traffic."

LendingTree's public statement over the to-do is this:

"The claims filed by General Motors appear to arise from the fact that an imagined Web user who types www.gmac.realestate.com into a Web browser is directed to the RealEstate.com Web site now owned and operated by LendingTree.

"Because LendingTree owns the RealEstate.com domain and also all the "sub-domains" attached to it, any word entered mistakenly prior to the sub-domain of RealEstate.com will naturally call up RealEstate.com.

"GMAC alleges that this third-party use of the RealEstate.com domain constitutes an infringement of its trademark rights, and that this was done intentionally by LendingTree to divert customers from GMAC's Web site. This is simply not true. LendingTree has done nothing in the past, nor will it in the future, to divert GMAC's traffic.

"There are legitimate business reasons for setting up the domains in a manner that resolves the sub-domains of URLs into the main domain address. This is not unique, and even the previous owner of the RealEstate.com domain and sub-domain had the URL set up the same way.

"Further, GMAC never contacted LendingTree about its concerns, but apparently chose to file suit first rather than contacting us to request our assistance in resolving this issue, which we believe can be easily accomplished.

"It's important to note that we have never marketed or promoted in any way the use of any GMAC name or mark as a sub-domain of the RealEstate.com domain."

But it's the ludicrousness of being able to put in any name or company before the sub-domain that lends some credence to LendingTree's defense that there is "no strategy behind this."

Try it with your favorite movie star and see where http://www.bradpitt.realestate.com takes you. Not to muscle-bound Troy, that's for certain, but is Mr. Pitt really a source of lending leads either?

In other words, would the company deliberately open itself up to being sued by every movie star, real estate broker and company in the nation? Certainly not intentionally.

That's why GM's response is interesting. It isn't just GMAC defending its turf with a phone call or polite "cease and desist" letter from an attorney. It's GM, whose sheer size sends an intimidating zero-tolerance message.

LendingTree is defending RealEstate.com like any parent would, but behind closed doors, it might be a different story as this wild-child might get grounded for a while, because the last thing LendingTree wants to do right now is offend any real estate companies. The company is already fending off suits from Cendant brands and RE/MAX International on other matters.

Published: May 25, 2004

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