About Pets Warehouse™ and Robert Novak

The First Pets Warehouse Lawsuit  "Its my hobby"  Pets Warehouse Slashdotted_- Part 1  What is Pets Warehouse Really Like as a Business?  "Service Recovery" is an Important Concept  Subsequent Pets Warehouse Lawsuits  Robert Novak Declares Bankruptcy  Pets Warehouse Continues Trading  Pets Warehouse Slashdotted - Part 2  My Opinion  Further Information

Dynamoo Diary - June 2003  

Some people can't take criticism very well. Frankly, I'm one of them but sometimes people take this to extremes in a way which is completely self-destructive.

Take Pets Warehouse™ (formerly petswarehouse.com, now pets-warehouse.com) - a large US pet supplies outfit with a combination of physical stores and a web storefront.. a combination of bricks and mortar and virtual business that has worked well in many cases.

Back in May 2001, Dan Resler from Virginia Commonwealth University posted this message on a mailing list indicating some problems he'd been having with the delivery of aquatic plants. He'd mistakely said "Pet Warehouse" initially, and then corrected it to "Pets Warehouse" ("Pet Warehouse" is an unrelated business).  Some members of the same mailing list said that they'd been having the same problems. There's really nothing out of the ordinary.. except what happens next.

The First Pets Warehouse™ Lawsuit [top]

It turns out that the owner of Pets Warehouse, Robert Novak, didn't like the criticism much and slapped the mailing list owners with a $15,000,000 lawsuit for libel and defamation. The whole matter is documented in this article (April 2002) at Salon.com and is well worth a read. The issue caused a huge amount of comment and worry over the perceived loss of "first amendment" rights, but despite protests, Robert Novak pressed on, forcing many of the accused to settle out of court.

"It's my hobby" - Robert Novak

The story was also picked up by the Long Island Business News in this story (June 2002). Amongst claims that Pets Warehouse™'s computers had been hacked and outlining Robert Novak's claim for the multimillion dollar lawsuit. In one telling paragraph, the report says:

The old saw says that an attorney who represents himself has a fool for a lawyer. Whoever made that up didn't envisage Novak, who is serving as his own lawyer. Novak doesn't have a law degree, but he is an old hand at legal wranglings. Talk to him and he cites case law, chapter and verse.

"It's my hobby," he said.

Pets Warehouse™ Slashdotted - Part 1 [top]

For those that don't know it, Slashdot is probably the world's premiere online community for nerds (its tagline is "News for Nerds. Stuff that Matters"). It's frequented by experts in the computer field, plus a number of those with expertise is legal matters when it comes to the Internet. In April 2002, they posted this story with a very long discussion on the merits of Robert Novak's legal action. Essentially, the community was aghast at the action, and of the failure of the US Federal Legal system in allowing this to take place.

What is Pets Warehouse™ Really Like as a Business? [top]

Dynamoo has had no experience buying from Pets Warehouse™. But other people have. Most significantly, the New York Better Business Bureau gives the following verdict in their report:

Based on our files, this firm has an unsatisfactory record.
 
The firm operates an affiliated business on the internet offering products through its Copiague location.
 
The company's size, volume of business, and number of transactions may have a bearing on the number complaints received by the BBB. The number of complaints filed against a company may not be as important as the type of complaints, and how the company handled them. The BBB generally does not pass judgement on the validity of complaints filed.
 
Closed Complaints
Total number of complaints processed by the BBB in last 36 months: 37
Total number of complaints processed by the BBB in last 12 months: 18
 
Complaints Concerned (Please understand that complaints may concern more than one issue)
Credit/Billing Issues: 22
Delivery Issues: 23
Defective/Damaged Merchandise: 2
Failure to Provide Service: 11
Delayed Service: 6
Failure to Provide Promised Adjustment: 5
Selling Practices: 3
Miscellaneous Issues: 1
 
Outcome of all complaints
Resolved -- The consumer received what she was seeking: 10
Resolved -- The consumer received a portion of what he was seeking: 2
Administratively Judged Resolved -- The business made an effort to resolve the complaint, but the consumer was not satisfied: 6
No Response: 19

Alexa gives a rating of 2.5 stars out of 5 (the lowest being 1 out of 5). Opinion is mixed, with a number of people who claim to have good service, and a number who claim to have had bad service. A search of Google Groups shows a similar mixed bag of opinions.

"Service Recovery" is an Important Concept [top]

In other words, there was a fair amount of negative feedback mixed with some good experiences. Most businesses would take that as a challenge and want to build on the good parts and fix the bad parts. One defendant in the case stated that he would have been happy if Pets Warehouse™ had said sorry and sent a voucher after the alleged poor service he'd received.

Indeed, this is a well known business tactic called service recovery, which recognises that business relationships don't always go smoothly, and puts in place a business ethic to identify problems with customers and to sort them out. The outcome of this is that usually the customer comes away very happy indeed, and they will come back again.

Slapping huge lawsuits on critics is not a recognised form of service recovery.

Subsequent Pets Warehouse™ Lawsuits [top]

Incredibly, Robert Novak has proceeded (to date) to bring, or have brought against him, six further lawsuits in total. Novak 2 was brought against various mailing list members and correspondents.

Novak 3 was brought against various parties, but as a result of Novak's handling of the case, a counter-case was brought against him by lawyer John Benn. As a result of this, Novak was made bankrupt.

Novak 4 aims its sight even higher, bringing a lawsuit against Google, Overture, Kanoodle and others. Novak 4 effectively accuses the search engines of spreading the perceived slander and holds them liable.

Novak 5 follows his bankruptcy and brings action against Tucows and the Circuit Court of Colbert County, Alabama.

Novak 6 attempts to regain control of the domain name "petswarehouse.com" lost after the bankruptcy proceedings.

Novak 7 "involves a judgment against Novak by his attorneys for services that were rendered during his bankruptcy in the 1990s. Novak is appealing the amount the Bankruptcy Court ordred him to pay $27,603.00 to these attorneys."

All of these cases are detailed on the Petsforum page relating to the legal proceedings.

Remember.. this all started with some allegations of poor service from a single customer.

Robert Novak Declares Bankruptcy [top]

On June 2nd 2003, Robert Novak declared bankruptcy. At about this time, the domain petswarehouse.com was seized by the Colbert County Sheriff's department, and he was ordered to hand over the trademark "Pets Warehouse".

Pets Warehouse Continues Trading [top]

Pets Warehouse™ simply switched from the domain petswarehouse.com to pets-warehouse.com (with a hyphen) trading from the same address. Control was passed from Robert Novak to a company called Migizzi Inc. Exactly when this was done is not known, and no doubt this business transfer will be scrutinised.

I challenged Pets Warehouse™ on their affiliate board to clarify their trading position. The thread is difficult to follow because Pets Warehouse™ heavily edited it, but their position on key issues is this:

The company has been a victim of vexatious retaliatory litigation by a defendant of Bob’s Trademark infringement litigation against him.

This individual who in an effort to enforce his improper judgment tried to obtain the domain name petswarehouse.com and the Trademark Pets Warehouse obtained a default judgment through fraud and deception.

The trademark cannot be sold apart from the associated business therefore the trademark office rejected the Writ of execution.

and

The trademark has not, can not be affected by such Order for the following reasons.

Benn lacked Jurisdiction in seeking any State Court to adjudicate any application relating to a Federally Registered Trademark on July 30, 2002 “Pets Warehouse” registration number 2,600,670 as a matter of law.
Only a Federal Court has such jurisdiction pursuant to Title 15 U.S.C. §§ 1051-1157.
Plaintiff is a defendant in the Eastern District of New York case number CV-02-2978, he is alleged to have committed numerous torts involving Trademark infringements and 12 other claims including Federal computer crimes against Robert Novak.
The order is an inartful way to harass and circumvent his defense in the federal trademark infringement case in New York.
Moreover the rights to trademarks come from it use in commerce. Benn has no such rights. A trademark without the operating business and its goodwill cannot function as a trademark.

Bob Just talked to the USPTO to see if something else was done behind our backs.
The mark is in full effect and in good standing and is owned and controlled by us.

then:

The legal controversy has nothing to do with the web sites day-to-day operation. That operation is owned controlled and operated by Migizzi Inc.
See the Affiliate agreement you can read it clearly stated.
+This Agreement, made and entered by and between Migizzi Inc. d/b/a ("Pets Warehouse" or "we"), a New York Corporation+

That company does the credit cards and all banking.
Your commission check would come from that corporate account.

I myself am on the payroll of Migizzi Inc.

No matter what happens with the legal proceedings they have little or no effect on the operation of Pets-Warehouse. In fact if you do a Whois you will find that this Corp also owns the domain.
Migizzi has an exclusive license from Bob to use the Trademark Pets Warehouse in several domain names and further has the right to use it in conjunction with this affiliate program.

No further information was forthcoming except for some snide remarks from "Henry Brezen" their affiliate manager:

It appears you would rather embarrass and humiliate the company by repeating false facts.

It’s time to stop. The legal issues will not be discussed beyond what is necessary for the benefit of the affiliates.
This forum was purchased to facilitate our 156 affiliates in making money not your little detective adventures from across the pond.

Until you can ask intelligent questions without your way of embarrassing or humiliating the company. Your posts are not going to be responded to by us.

This is a nice way to treat a potential business partner.

Pets Warehouse™ Slashdotted - Part 2 [top]

The story was picked up again by Slashdot in June 2003, in this thread. Most interesting is the reference to the legal term barratry - defined as The offense of persistently instigating lawsuits, typically groundless ones. Clearly many of the Slashdot posters feel that justice has been served against Mr Novak.

My Opinion [top]

The Pets Warehouse™ story is a fantastic case study about how to kill a business and alienate customers. Instead of fixing the problems in a sensible way, Robert Novak drove himself to bankruptcy and caused misery for dozens of other people. This is not the way to run a business.

Further Information [top]

• Full Details on Legal Proceedings
• Salon.com - April 2002
• Long Island Business News - June 2002
• Slashdot, April 2002 and June 2003
• Better Business Bureau Report

Note: Pets Warehouse is a trademark. As of 10th June 2003, the US Patents and Trademarks office lists the owner as Robert Novak.