Overstock loses lawsuit, but doesn't mention it

Posted Aug 31st 2008 4:00PM by Zac Bissonnette
Filed under: Law, Scandals

In the past, I've written about Overstock.com's (NASDAQ: OSTK) habit of issuing press releases to announce minor procedural victories in the deluge of lawsuits the company is a party to.

Apparently that only applies to victories. Last Tuesday, Online Media Daily reported that "Utah's highest state court has tossed a lawsuit accusing SmartBargains of engaging in unfair competition by displaying pop-up ads to Overstock.com visitors."

The Utah Supreme Court stated that "Overstock failed to show that SmartBargains' pop-ups, labeled with the SmartBargains' logo and appearing in a separate window on the top of Overstock's website, are deceptive, infringe a trademark, pass off SmartBargains' goods as those of Overstock's goods, or are likely to cause confusion."

Here's my question for Overstock and its controversial (to put it politely) CEO Patrick Byrne: why did Overstock issue a press release when it was dismissed from an antitrust lawsuit, but didn't make a similar announcement when a lawsuit it filed was dismissed. Even more hypocritical, Overstock issued a press release when it first filed the lawsuit back in 2004. If the filing of the lawsuit was material, isn't the dismissal equally material? It seems like a classic case of selective disclosure -- not illegal, just scummy.

Tags: OSTk, Overstock