These aren't the same thing. When "Bob's Plumbing and Heat" run a promotion and say "Win a Toyota Camry!", no reasonable person would presume that Toyota endorses or is otherwise affiliated with Bob.

Now let's look at what the Loopt UI looked like:

1 - It's presented in a way that's extremely similar to what all of the other group-buying websites look like. Which is to say, a reasonable person can easily confuse this for a deal from an affiliate (Groupon-style)

2 - The bullet points do not do anything to dissuade this. In fact, nowhere on Mr. Agrawal's screenshot does the website mention that the merchant must approve the deal.

3 - In fact, there is nothing on the page that would indicate to a user that this isn't the standard group-buying affiliate-deal we're all used to seeing. There's not even messaging in the vein of "Tell Bi-Rite you want to see this deal!" that might defuse confusion.

So it really comes down to reasonable interpretations. When a reasonable internet user, who has heard of Groupon, LivingSocial, et al, sees this Loopt UI - would it be reasonable for him/her to perceive a affiliation or endorsement for Loopt from the merchant?

Personally, I'm leaning towards "probably". Had the user base of HN not been tipped to the business model prior to seeing the feature, I would expect much confusion even from our seasoned web-guru user base.

How about this analogy (tongue in cheek):

* Sunday Super-Deal: $50000 YCombinator Seed Funding! *

Value: $50000, Discount: 5%, You save: 5% off the share that YC would normally take

Purchased: 17 of 100

Time Remaining: 2d 21h 43m 13s

[Big Green Button ->]

Maybe I misunderstood the article - I thought that Loopt was saying, "Get $15 worth of stuff for $10 at BusinessCo!" without actually getting BusinessCo to agree to this - in which case the analogy would be like offering to give away a brand new Nissan without actually having a Nissan, or even a car.

If this is actually the Loopt business model, to offer deals that the businesses have not agreed to, you should fully expect to be sued in court for trademark infringement very soon. How could you be so short-sighted? You are driving traffic based on the brand name of another reputable company, who has not agreed to or even been asked if you could use their name.

It would be if the company didn't actually own the car, but instead "gave away" a car from a local auto dealer without their consent.