BURLINGTON — A six-person Vermont company is fighting corporate lawyers from Facebook who want to block the startup’s trademark application with the federal government.
Based in Burlington, Designbook LLC is an online platform created to help engineers raise money for their inventions from investors nationwide. It also shares four letters of its name with the social networking giant Facebook Inc.
Kyle Clark, a 34-year-old materials engineer, founded Designbook in 2014 with 30-year-old electrical engineer Aaron Pollack. They self-fund the company for now, and their business model seeks to make money by taking a cut of what its users are able to raise through crowdfunding.
“When we do this for Vermont businesses it really exposes it to those investors in those markets,” Clark said. “You can now raise capital – being a Vermonter – from the same people who are investing in the businesses in San Francisco.”
Lawyers for Facebook filed formal opposition in May to Designbook’s application with the U.S. Patent and Trademark Office. Facebook’s main allegations are that Designbook’s name is so similar that it would both cause confusion in the marketplace and dilute its famous trademark.
Gov. Peter Shumlin almost immediately had Designbook’s back and joined in the public relations fight. In a letter that he mailed to Facebook’s CEO Mark Zuckerberg, Shumlin called the issue an “injustice” and referenced an earlier trademark battle that the “Eat More Kale” guy won against Chick-fil-A.
“The Vermonters behind this company are the type of people that make me proud to be this state’s Governor,” Shumlin wrote. “They are young, entrepreneurial, and innovative. Given your background, I am sure you can relate.
“The last thing these Vermonters deserve is for a giant corporation to threaten them unnecessarily,” Shumlin wrote. “We don’t stand for that type of injustice in Vermont. Just ask Chick-fil-A.”
A representative from Facebook’s corporate headquarters declined to issue a statement on the situation for this article. The company’s patent lawyers did not return inquiries for comment.
Documents filed with the U.S. Patent and Trademark Office say Facebook opposes several different types of Internet technologies offered using the company’s trademark. Those include social networking, online databases for college communities, and certain types of chat rooms. Two others include the right to use “Facebook” on clothing and unmanned aerial vehicles.
“Facebook is informed and believes, and based thereon alleges, that [the owners] filed the Designbook applications with the knowledge of, and the intent to call to mind, create a likelihood of confusion with regard to [Facebook],” the documents say.
Clark said he graduated from Harvard University a few years before Zuckerberg, who is now 31, attended and dropped out. Clark said his college and many others had a “facebook” that was similar to a yearbook. Zuckerberg and others created a digital version of that product, he said, just like his company.
The World Trademark Review ranks Facebook number 10 on a list of “trademark bullies,” and Business Insider ranks it as number 8. Monster Energy Company, which a craft brewer fought years ago over the term “Vermontster,” is also on the list. (That case was settled out of court, with an agreement between the drink-maker and the brewery.)
Peter Kunin, an intellectual property lawyer for Downs Rachlin Martin, said some trademarks need to be defended, but he called the Designbook situation a form of corporate “bullying.”
“In this case, the test of trademark infringement is whether people who are using Designbook will be confused into thinking they’re using Facebook,” Kunin said. “It’s highly unlikely that there’s any consumer confusion here, and in my view, no judge would ever issue a court order telling Designbook that they have to stop using their name.”
“I think what you’re seeing is the arrogance of a very large and very successful company, and the lack of a legal consequence to them,” Kunin said. “The cost is very modest to try to target a small company.”
Pollack, the other Designbook founder, said the trademark application process with the federal government can go on for several years when another company opposes it.
Kunin said Facebook is likely hoping Designbook will withdraw the application.
