Policy

What’s in a name? If the name is Meta, a lawsuit.

This David v. Goliath fight says as much about Facebook as it does about the state of trademarks in America.

A big Meta logo boxing a small MetaX logo.

The company formerly known as Facebook is already well on its way to doing for VR precisely what it did for social media.

Illustration: Christopher T. Fong/Protocol

In late July of 2017, thousands of sweaty concertgoers crammed into Randall’s Island Park in New York City for the three-day annual Panorama Music Festival. Headliners for the weekend included Frank Ocean, Solange and A Tribe Called Quest, but there was more than music to keep people entertained.

Beneath a bright white dome inside the park was a sensory overload of an art installation called The Lab. The VR- and AR-heavy show featured exhibits where attendees could “cover the sky in a string quartet of rainbow-colored blocks” or embark on “a warped, intergalactic survival adventure,” as one reviewer described it at the time. The Lab, which was in its second year at Panorama, was praised by Rolling Stone as a “groundbreaking virtual-reality experience.”

It also apparently had a fan at Facebook. In August of 2017, an executive at the social networking giant emailed Justin Bolognino, the founder of the small VR company that curated The Lab, to tell him how “AMAZING” and “spectacular” it all was. Before long, Facebook was teaming up with Bolognino’s company to pitch a project that would meld AR with AI.

The name of this little VR company Facebook hoped to partner with? Meta.

These details come from a lawsuit Bolognino’s company filed in July for, well, the obvious reasons. The lawsuit alleges that, despite their friendly history, Facebook (as we’ll call it in this story) willfully infringed on Meta’s trademark when it noisily renamed itself Meta in late 2021. Not only did Facebook change its name, the suit argues, but it began swallowing up Meta’s business in the live VR event space, setting up installations at some of the very same venues where Bolognino’s Meta had previously mounted shows and even featuring some of the very same artists in those shows.

Festivalgoers use VR headsets inside The Lab Powered by HP during the 2017 Panorama Music Festival at Randall's Island on July 30, 2017 in New York City. Festivalgoers use VR headsets inside The Lab during the 2017 Panorama Music Festival at Randall's Island. Photo: Rebecca Smeyne/Getty Images for Panorama

Meta’s side of the story certainly fits neatly into the prevailing narrative about Facebook, which has a history of borrowing — or outright buying — its best ideas from smaller, lesser-known competitors. But Meta will need to show Facebook to be more than just a bully. The legal case may end up saying as much about Facebook as it does about the state of trademark protections today.

Researchers have found that there really aren’t many unclaimed words left to trademark, leading to a lot more dumb corporate names in the world (Who could forget Tronc?), a lot more lawsuits and a much trickier environment for smaller players, who can’t afford to trample on competitors the way Facebook can.

“We are out of good names,” said Rebecca Tushnet, a professor of the First Amendment at Harvard Law School. “This is going to keep happening. It’s not an accident that there are a whole bunch of these cases, because it’s a very crowded field at this point.” The more crowded it becomes, the harder it is for companies to defend their trademark in the first place.

Facebook didn’t respond to Protocol’s request for comment, and Bolognino declined a request for an interview. But according to the filing, Facebook has argued in negotiations with Meta — whose corporate name is MetaX — that they offer “drastically different goods and services” because Facebook is, first and foremost, a “social technology company.”

We are out of good names.

Whether Meta will be able to successfully lay claim to its name, even against another company in the VR space, will reveal a lot about how narrow trademark rights have really become. “The allegations certainly are concerning, and the claim is plausible on its face,” Tushnet said. “But whether that means little Meta has rights against big Meta is far from certain.”

Based on the complaint, Meta has a lot going for it. It’s accusing Facebook of a type of trademark infringement called “reverse confusion,” in which the company that adopts a name second — in this case Facebook — is actually bigger and more famous than the one that adopted the trademark first. To test whether Meta is correct, the court will apply an eight-part test that considers, among other things, the similarity of the products, the defendant’s good faith in adopting the name and the sophistication of the consumers who might engage with the brand.

On all of these tests, Meta comes out on top, said Alexandra Roberts, a professor of law and media at Northeastern University. When it comes to the similarity of the product, Roberts said, “It’s really hard to deny they’re basically offering the same service.” Indeed, in Meta’s complaint, the company details how Facebook, under the Meta brand, has put on live VR experiences at South by Southwest, Coachella, The Smithsonian and the Cannes Lions festival — all events where Meta had previously held VR shows of its own.

“This is not a scenario I would wish on my worst enemy,” Bolognino told CNBC when the lawsuit was filed. “When Facebook stole the Meta brand from us, it just completely decimated our business.”

The allegations that Meta and Facebook had a relationship prior to Facebook’s rebrand may also count against the tech giant, as courts assess whether it was acting in good faith in assuming the name, Roberts said. “That’s not the most important factor, but it can be important thinking about damages,” she said.

And even though the event organizers that hire Meta for its VR services might be quite sophisticated, Roberts said, the average concertgoer wandering through the event “might not be paying a lot of attention.”

When Facebook stole the Meta brand from us, it just completely decimated our business.

But while Meta’s version of events is compelling, it’s only half the story. A global tech giant like Facebook, with its army of expensive lawyers, doesn’t just dismiss the existence of another similarly situated company of the same name without giving it some thought, said Eric Goldman, a professor at Santa Clara University School of Law. “Usually in a situation like this, if there’s someone the trademark lawyers thought was a real threat, they would try to buy them out before launching the rebrand,” Goldman said. In fact, Facebook did just that when it acquired the trademark belonging to Meta Financial Group for $60 million. “I’d like to see Facebook’s answer to this,” Goldman said. “I’d like to see what is the basis on which they decided to make a run for it.”

It could be, for instance, that Facebook determined the trademark space for the term “meta” was already crowded. “When it’s such a crowded field, each trademark owner has a very small slice of the overall terrain,” Goldman said, noting that he found more than 2,500 hits for trademarks including the term “meta.” “That tells you the word meta has been used by lots of trademark owners over the course of the years.”

Another possibility, Tushnet said, is that Facebook determined the term “meta” wasn’t a very strong trademark, since it’s so closely related to the metaverse. “The theory is, if you choose something that’s really, really descriptive of what you are, you just don’t have very broad rights,” Tushnet said. “The advantage you get should be from the reputation of your product or service — not from how easy it is to understand what you do.”

Meta unveils its new logo. Photo: Justin Sullivan/Getty Images

Whatever Facebook’s reasoning, it’s certainly not alone among tech companies facing trademark infringement suits. Amazon settled a suit with a Springfield, Missouri-based trucking company, Prime Inc., last month, after the company said Amazon’s Prime service could cause “irreparable harm” to Prime Inc. Uber similarly settled with a cloud computing company called Uber Operations that said it was bombarded with angry messages from Uber passengers. “It’s an economy-wide problem,” said Goldman. “There really aren’t any good solutions to it. There are just solutions with tradeoffs.”

In all likelihood, experts say, Meta’s case against Facebook will end in a settlement, with Meta walking away with damages and perhaps a rebrand, and Facebook writing the payout off as a rounding error as it continues its existential pursuit of the VR business.

If that’s the case, it might be a little more painful and pricey for Facebook than it would have been if it had bought out Meta before changing its name. But it won’t do much of anything to solve the underlying concern raised in Meta’s complaint and vexing regulators and lawmakers around the world — the idea that Facebook didn’t just take Meta’s name, it’s consuming the entire industry and some of its most promising competitors. The Federal Trade Commission is, at this very moment, seeking to block Facebook from acquiring another VR startup called Supernatural, arguing that Facebook is “trying to buy its way to the top.”

The company formerly known as Facebook is already well on its way to doing for VR precisely what it did for social media. That will be true no matter what its name is or how much it has to pay to keep it that way.

Facebook may be Meta now, but it’ll always act like Facebook.

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