Jun 5, 2015 · 13 minutes

By and large, Americans are wildly forgiving when it comes to corporate misconduct, whether that means offshore tax avoidance, environmental impropriety, or even human rights abuses -- as long as they happen far far away, of course.

But when the corporation in question is Facebook, and the victim is that most worshipped totem of Western capitalism, "the small business," the Internet's outrage machine begins to smoke and spark and spin out of control-- even if this supposedly Biblical showdown is anything but one-sided.

The latest anti-Facebook blowout began last March when Facebook filed opposition paperwork with the US Patent and Trademark Office after a small, 11-month old, self-funded startup from Burlington, Vermont called Designbook attempted to register multiple trademarks for its name. Because both companies use the suffix "-book" in their name, and because both companies provide social networking services, Facebook argued that Designbook's efforts constitute a violation of the social media giant's existing trademarks.

Naturally, Designbook's founders Aaron Pollak and Kyle Clark became incensed. And this week the pair launched a big public relations push seeking to paint Facebook as a bully. While Designbook's services contain elements of social networking, Pollak and Clark argue, their firm targets a much more niche audience than Facebook's, providing services for founders to connect with engineers, designers, investors, lawyers, and other individuals who can help them achieve their entrepreneurial ambitions. What's more, the founders claim that the name "Designbook" is not a play on "Facebook," but a reference to a kind of startup dream journal that Pollak and Clark kept in college, full of company ideas that never came to fruition.

"I have my college design books -- It’s a very specific thing," Pollak told me over the phone, likening a design book to a yearbook or a phonebook, and characterizing Facebook's attempts to claim ownership over anything with the name "book" in the title as an example of gross corporate overreach.

"Stupid, pathetic mortals, Facebook is the only thing that can be a 'book,'" claims the startup in a public post made today on -- that's right -- Facebook. "Kneel before Facebook," it goes on to say. Pollak continued this self-righteous streak in an interview with Boston Magazinetelling the outlet, "We really believe this is a case of trademark extortion and corporate bullying."

The press loves a good "David vs. Goliath" story -- almost as much as it hates Facebook. So it's no surprise that news outlets have been quick to side with Designbook. The headline to the Daily Dot's write-up of the dispute reads, "Facebook bullies startup over name trademark." Ars Technica's headline is even more menacing: "Facebook sics trademark lawyers on 'Designbook' startup."

Pollak and Clark have even enlisted the support of Vermont Governor Peter Shumlin, who in a letter to Mark Zuckerberg wrote, “The last thing these Vermonters deserve is for a giant corporation to threaten them unnecessarily.”

As many of our readers know, I'm not a huge fan of many of Facebook's policies and procedures. So like everyone else I was quick to assume that Facebook was in the wrong. Check out the original illustration Pando's brilliant artist Brad Jonas drew for this piece, based on my initial pitch:

facebook-v-designbook

But before joining the easy chorus of opposition against Facebook, I stopped, took a breath, and talked to some lawyers. And the more conversations I had with trademark attorneys -- and the more I looked over Designbook's trademark registrations -- it became clear that this case is far more complicated than either the press or Designbook have painted it, raising questions about how much of a bully Facebook really is, and the intentions of Designbook's founders.

So what happened? Facebook asked Designbook to stop using its name?

No. Facebook has absolutely not asked Designbook to stop using its name. That may come as a surprise to many, considering some of the comparisons Pollak and even Vermont's governor have repeatedly made during this dispute. The pair invoked, for example, another major Vermont trademark controversy: the case of Chik-Fil-A, which sought and failed to block a man's efforts to parody the homophobic chicken shack's motto by selling "Eat More Kale" T-shirts. But unlike that dispute, Facebook has made no such demands for Designbook to "cease" or "desist" doing business under its name.

Nor has Facebook claimed ownership over phrases that contain the word "book," despite Pollak's fearmongering to Boston Magazine over what might happen to the words "yearbook" and "scrapbook" in the public discourse if Facebook is allowed to continue along this trajectory -- as if the Burlington High School yearbook staff along with their grandparents' Sunday scrapbooking circle will both be steamrolled by Facebook's litigators.

As Ed Timberlake, a trademark and copyright lawyer at Timberlake Law in North Carolina, tells me, Designbook already has a trademark, simply by virtue of operating under that name. And if Facebook did send Designbook a cease-and-desist letter, the company would be free to go to court to defend their trademark.

What did happen is that Designbook attempted to register that trademark with the US Patent and Trademark Office (USPTO) -- along with fourteen other trademarks covering various uses of its platform.

So what's the difference between the common law trademark Designbook already has and a "registered" trademark? When a company registers its trademark, they are given a tiny ® symbol that serves as a stamp of approval from the USPTO. If a company is awarded this distinction, and someone thereafter challenges it in a court of law over its name, the firm could point to its registered trademark as evidence that the company's already undergone a rigorous review process. It's a way of saying, "Hey, the USPTO already signed off on our trademark, so maybe you should think twice about suing us."

As part of that review process, the USPTO publishes the trademark as a pending registration in order to give other parties the chance to object before the deal is final. It's like at a wedding when the officiator says, "If anyone knows any reason why these two should not be wed, let him speak now, or forever hold his peace.”

That's when Facebook stood up in objection, arguing that four of Designbook's 15 requests violate existing trademarks held by Facebook protecting the use of the suffix "-book" by a social networking company.

Isn't that still the behavior of a "bully"?

That depends who you ask. Pollak obviously thinks so, going so far as to accuse Facebook of "extortion."

But Timberlake says that by opposing the registration, Facebook is merely playing its part in the procedural script set forth by the USPTO.

"It's not like they’re sending Designbook nasty messages," Timberlake says. "They’re following the exact process."

Copyright and trademark attorney Ron Coleman -- who is best known for defending Sarah Palin against copyright infringement claims over her use of an iconic 9/11 photo in a Facebook post -- sees things somewhere in the middle. In an email, he agrees with Timberlake that Facebook is "following the exact process" -- but says that the "process" is lousy.

"It is bullying, but it's such a matter of baked-in, standard Big IP procedure that the term has lost much of its punch," Coleman says. "It's bullying because the claim is not so strong and the real threat is being steamrolled into submission. But the courts have so firmly established that there is virtually never any down side for a big company to do this that [the] term trademark bullying just doesn't mean anything -- it's just plain 'enforcement.'"

This brings up a second point, which is of paramount importance in determining Facebook's "bully" status.

Do Facebook's claims have any merit?

Much of Pollak's anti-Facebook press tour has been spent arguing that Facebook's position is untenable. The reason, he says, is that in order to win this dispute Facebook would have to convince the trademark office that a reasonable person might confuse Designbook for Facebook, or at least a subsidiary of Facebook. And that, Pollak contends, is going to be very difficult for Facebook to accomplish.

"When [Facebook] filed an opposition, they had to create a claim that our use of the name was going to create some sort of confusion in the industry between what Facebook was and what we are," Pollak says. "Facebook is one of the largest companies in the world. We have different colors, different fonts, different SEO, different graphics. We're targeting different things."

That all makes sense. Facebook is a worldwide social network for everyone from your grandma to your dog. Designbook is a professional network for bringing various entrepreneurial stakeholders together to work on creative and commercial projects. No confusion there.

But according to Timberlake, "confusion" is only one of three factors the trademark office considers when determining the merits of a complaint. The second is "tarnishment," though that argument is likely dead on arrival because Designbook isn't likely to bring disgrace upon Facebook's brand. The last factor, however, might just fall in Facebook's favor. It's called "blurring" and it's essentially another way of saying Facebook's brand would be diluted if a bunch of other social networks launched with the word "book" in their name.

"The real juice of this," Timberlake says, "at least if I’m at Facebook and I’m looking at this situation, the strongest grounds to take to the trademark office is what’s calling blurring. It’s basically a way of going, 'Okay, even if people aren’t going to confuse these things, we still think it’s taking away the distinctiveness of our mark for people to go out and start using "Book" in the social online space.'"

Granted, for the "blurring" argument to be made, the brand must meet a exceptionally high bar of "famousness" (yes, that's the real legal term for it), And only a handful of companies have ever qualified for this defense, including mega-brands like Xerox, Kodak, Coca-Cola, and Reebok. Of course nothing is guaranteed, not even Facebook's legal status as a "famous" entity. But it's highly plausible that a court would consider Facebook -- what with its one-and-a-half billion users -- as famous enough to meet the requirements for blurring.

Says Timberlake: "Would somebody else using this mark kind of start chipping away at the distinctiveness of Facebook? I don’t know, that’s a pretty close case. I don’t think they’re bullying or going out on a limb. It’s what all of us would do."

It may sound ironic that the bigger a brand, the more trademark protections it has. But the central argument here isn't whether or Facebook's complaints are fair. It's whether or not they have merit. And if the complaints do have merit -- even if it's case is "not so strong" as Coleman put it -- can Facebook really be called a "bully"?

The definition of a bully in this context is a company that pursues litigation for no other reason than the fact that it's so big, with legal resources so formidable, that it can compel a smaller startup to withdraw its registrations before litigation even begins. But there's another reason Facebook has come out against Designbook's trademarks: It might just win. And like it or not, Facebook owes it to shareholders to capitalize on every competitive advantage -- within the bounds of the law -- at its disposal.

But are Designbook and Facebook even the same kind of company?

This is the final factor to consider. Pollak claims that Facebook's complaints are moot because Designbook, despite integrating social elements into its platform, is not a social network and therefore not a competitor to Facebook.

"The truth of our platform is we’re doing completely divergent things," Pollak told Boston Magazine. "We’re not targeting the Facebook community. Other than the fact that we’re both using an online platform, there’s really no similarity."

Pollak can argue all he wants about the differences between Designbook and Facebook, cataloging the list of features that differentiate each platform. But it has zero bearing on the merits of Facebook's case. Why? Because the argument isn't about what Designbook and Facebook do as companies, or what activity takes place on their platforms. It's about one thing and one thing only: The language used in the trademark registrations. And in a number of trademarks for which Designbook applied, the company describes itself operating precisely how Facebook does.

One the trademarks Facebook opposed, for example, describes Designbook as "Internet based introduction and social networking services." Facebook itself couldn't construct a better, more succinct description of its services. Another one of the contested trademarks reads, "Computer services in the nature of customized webpages featuring user-supplied information, personal and company profiles and information." And yet another reads, "Audio, text and video broadcasting services over the Internet or other communications networks featuring the uploaded, posted and tagged audio, text and video content of others." Designbook might as well have lifted the words directly from Facebook's pitch deck.

When I ask Pollak about this, he simply reiterates the point that Designbook is not like Facebook. That's because, once again, Designbook's services are limited to connecting entrepreneurs, programmers, designers, and investors for creative and commercial products. But crucially, not all of the trademark registrations make those restrictions clear.

Which brings up the last question:

Why on Earth did Designbook register 15 trademarks? And why do so many of them describe Facebook exactly?

When I ask Pollak this, the answer he gives to the first part of the question makes sense, at least on the surface: "Protecting an image and protecting a brand is what any responsible entrepreneur should do," he says. As for the second part of the question, he attributes the similarities to Facebook to the trademark office's weird and wonky filing process which demands different descriptions for different use cases.

"As far as I know that’s pretty standard," Pollak says.

But between legal fees and filing fees, registering trademarks can become extremely expensive, particularly for a bootstrapped company that's only 11 months old. Timberlake estimates that the price of filing 15 trademark registrations would be around $10,000. Pollak confirmed with me that the amount Designbook paid on trademarks was in "the thousands."

Both Timberlake and Coleman -- who have each represented startups in trademark dealings -- said it was unusual for a small startup to spend that much on registering trademarks. That, combined with the explicit similarities to Facebook's core business found in many of these filings, raises some suspicions about the innocence of Designbook's intentions.

"It just looks to me less like they’re a little person getting picked on and more like somebody who, for whatever reason, decided to poke a giant in the eye with a stick," Timberlake said.

Which could mean one of three things: Maybe Designbook has purposefully courted the ire of Facebook to gain the attention and sympathy of the press. Or maybe Designbook has hired a lawyer who's more concerned with earning trademark filing fees and the big paychecks that come with impending litigation than with the startup's financial well-being. Or maybe the founders have simply made some extremely questionable legal choices.

On the first charge, Pollak emphatically denies that PR was the motivation behind the move.

"Because we’re a self-funded business, this is money we’re putting on the line to build our business," Pollak says. "I would never use our resources to get into a fight with a major business for a little PR."

A big part of me believes him. If Pollak merely wanted press, there are cheaper ways to get it.

Coleman agrees: "They could have achieved the same thing in terms of getting FB's attention and any other publicity by filing five, or probably even one."

Regardless of Pollak's intentions, the framing of this story in the press as a case of unequivocal bullying by Facebook -- or even worse, a strange case of language policing that threatens to strike the words "book" and "face" from the public record -- isn't quite accurate.

As for the decision to file 15 trademark registrations, Pollak stands by it. Nor does he plan to withdraw the registrations or change Designbook's branding -- even though he knows his company faces an uphill battle.

"This isn’t David and Goliath because most the time people assume David wins. If you look, the vast majority of the time, David got squashed."

In the realm of wonky legal filings and potential litigation, Designbook is certainly the underdog. But in the court of opinion? It's hard to tell who's doing the squashing and who's getting squashed.

[illustration by Brad Jonas]