

How anti-competitive lawsuits by incumbents are killing early stage startups - garry
http://blog.garrytan.com/infanticide-how-anti-competitive-lawsuits-by

======
powera
Second edit: The article reads much better now with commentary about the
lawsuit.

As it stands, this article is mostly linkbait/self-promotion.

The title is very misleading; this article isn't about a trend, it's really
about one startup (that the author of the post is an advisor for) getting
sued. It's full of meaningless promotional statements like "Touch of Modern
actually seeks out modern products exclusively, to the exclusion of the
standard bourgeois bohemian hipsterdom of Fab", yet never even comments on
what the lawsuit is about.

Just because a company is small doesn't mean that anybody suing it is "abusing
the system". If you're saying the lawsuit is baseless and designed to just
penalize the startup, say SOMETHING about what the lawsuit is, don't just say
how awesome your product is.

~~~
garry
Edited: The suit claims violation of trademark and trade dress infringement,
improper use of IP (apparently the UI) and ironically, unfair competition.
While there are similarities between some pages of the design, I find it
difficult to believe Fab can claim all right to the use of Helvetica, or
industry-standard design elements like checkout buttons.

~~~
sriramk
Garry - like most here, I really respect your opinion but you should consider
whether you're letting your relationship with the team bias your view.

I was with you until I saw the screenshots in the TC post. The first one with
the same layout right down to the seal of authenticity below it - this is way
more than using common industry recognized design elements (like Fab using
Pinterest's grid layout for example). This is close to Samwer brothers
territory here.

They're also not doing themselves any favors with their response to Fab.
Raising a lot of money and having scale doesn't automatically make Fab a
villain. The claim on using open source frameworks is just bizarre/irrelevant.

Most of all, this doesn't pass the sniff test for me. At a quick glance, I
could have easily mistaken this site for something built out of Fab. If I were
Fab, I feel I would be angry and want them to stop copying my work directly.

~~~
selvan
"At a quick glance, I could have easily mistaken this site for something built
out of Fab. If I were Fab, I feel I would be angry and want them to stop
copying my work directly." -- If someone built competing search engine with a
text box & search button, would you be confusing it with Google ?. Shouldn't
people knowledge enough to differentiate & recognize brands by quality of
service offered by them?. There are many clones of Instagram, Groupon, Airbnb.
Systrom of Instagram told techcrunch,

"There might be 10 clones here, [but] there are also 20 clones from the United
States right? You know, being copied is something that I think that every
successful company will go through. Our biggest defensible asset really is our
community, and I think that’s the thing that you’re not going to find on any
of these replicas." ([http://techcrunch.com/2011/11/06/instagrams-kevin-
systrom-on...](http://techcrunch.com/2011/11/06/instagrams-kevin-systrom-on-
international-expansion-instagram-video-funding-rumors-and-more/))

and Instagram didn't sue their clones !!.

------
learc83
To win on trade dress, Fab.com is going to have to prove that the design is
distinctive, and that the average consumer associates the design with Fab.com

Their design is generic enough that I think it will be nearly impossible to
prove distinctiveness. I'm sure that A Touch of Modern can find plenty of very
similar sites to prove the design isn't distinctive.

Additionally the design elements can't serve a utilitarian purpose--the clock
icons next to the timer, and the price tags next to the price, clearly serve a
utilitarian purpose. What else would you use to highlight a timer or a price?

~~~
slapshot
> What else would you use to highlight a timer or a price?

A different color font, a larger font, a colorful highlight, arrows, bullets,
a speech balloon, quotation marks, an hourglass, a dollar sign, a picture of
money... there are many other designs available. That doesn't mean that it's
an automatic winner for Fab, but there are many other ways that ToM could have
designed the site.

> the design elements can't serve a utilitarian purpose

When courts use "functional purpose" in the trade dress context, they usually
mean things like product features that make the product work. For example,
courts have ruled that things like the physical design of a conveyor belt
can't be protected as trade dress (the "Value Engineering" case). I'm not sure
that design elements that highlight certain information are "functional" in
the way that a conveyor belt design is "functional."

That said, it might not matter: in the "Clicks Billiards" case (2001), the
Ninth Circuit held that a _combination_ of functional elements can be
protected as trade dress: there, the combination of 37 elements of a billiards
hall design were held to be eligible for protection even though some were
undeniably functional (the presence of acoustic tiling on parts of the walls
and a certain style of "drink rails") and some were pretty generic in
isolation (one was "dark mahogany wood finishes"). The court ruled that the
combination could still be protected. It looks like Fab is trying to make a
similar argument here that the combination adds up to being too similar. (This
lawsuit was filed in San Francisco, which is covered by the Ninth Circuit.)

------
citricsquid
I guess the true reasoning behind the lawsuit is only known by Fab, but I
don't think they're making baseless claims. Whether it's "fair" for them to
sue for something like this, I don't know, but this page is absolutely copied
from Fab.com:
[http://tctechcrunch2011.files.wordpress.com/2012/08/tomofab2...](http://tctechcrunch2011.files.wordpress.com/2012/08/tomofab2.jpg)

Also their statement doesn't address the actual claims, they spend 3
paragraphs talking about how they're better than Fab and how Fab is bigger
than them, one paragraph is mentions the accusations "All of our design
elements utilize open source frameworks and are developed in-house." but
doesn't address the issue either...

~~~
wheels
While I do think there was almost certainly some loose copying that happened
(from the little I know of such, not enough to cause trade-dress problems,
however), your link is a bad example. That could just as well be The Standard
E-Commerce Theme. About 90% of e-commerce shops have the exact same elements
on every page.

~~~
citricsquid
It's not the layout or the elements positioning, it's the _style_. You can
clearly see that they've seen style choices fab have made and copied them, for
example here is 4 things: <http://i.imgur.com/8ONGa.png>

I don't think it's plausible for ToM to have "coincidentally" made identical
style choices to Fab, they're just too alike to not be intentional copying.

~~~
bentlegen
I'm not a lawyer, or a designer, but those examples seem incredibly weak.

A generic tag icon next to the item price, in a different color? A "sale
ending" notice with different color, location, and font?

~~~
citricsquid
Fab.com is not some amazing technology, it's not going to change the world
with 1s and 0s, Fab is a brand and the way their website is presented is
important to their brand. The _style_ of something is the sum of all its
parts, it's the way something is designed and presented. Sure, on the face of
it having a clock next to the time to go is meaningless and sure having a tag
next to the price is meaningless, but when you have a website made up of lots
of things like that it becomes their "style".

To me it is absolutely certain that ToM made a concious effort to copy the
_style_ of Fab, through the composition and presentation of individual
elements and the layout of the site.

Branding is very important and can very easily confuse consumers, maybe Fab
are being overzealous and should have just asked ToM to stop copying their
branding, but to claim that because lots of websites have clock graphics next
to their timers that this isn't a copy is silly.

~~~
learc83
For trade dress infringement the design elements can't serve a utilitarian
purpose. So clocks and price tags used as icons to convey meaning don't count.

~~~
citricsquid
I'm not arguing the legitimacy of the lawsuit, I'm arguing that Garry and ToM
are being disingenuous claiming that fab.com are just trying to shut down
their competition, when it's quite clear to me (and others here) that the
_style_ of ToM is copied from Fab.com.

Whether or not they will win in court is irrelevant, what matters is that what
Fab.com is claiming (ToM copied them) is (in my opinion) an accurate claim.

~~~
learc83
>claiming that fab.com are just trying to shut down their competition

Their lawyers know that they most likely aren't going to win this--they're
just trying to force them to pay legal costs they can't afford.

In essence they are pursing a fairly frivolous lawsuit for the sole purpose of
removing competition.

------
talmand
I'm not a lawyer and cannot comment on the validity of the lawsuit nor the law
concerning this; but as a designer I can say that neither site has an original
design in any way. They both look like standard modern retail sites to me.
Design iterations on retail sites are often driven by the consumers who
purchase from them, therefore Fab should sue people who purchase items from
retail sites.

------
erikpukinskis
Ironically Southwest went on to use lobbying to shut down Texas high speed
rail projects.

You either die a hero, or....

------
paulsutter
I'm dissapointed that YC isn't more focused on teaching strategy - how to
attack an entrenched competitor by being different in a meaningful way.
Southwest is one of the great strategy stories of all time. Touch of Modern
may be hard working decent folks, but they have no apparent strategy.

I understand the intent. You're hoping that New York Times picks this up and
writes a trend piece. Yeah, I know, all is fair in love and war.

I just hate to see YC turn into a more self-righteous version of the Samwer
brothers. At least the Samwers have the good taste to keep their public
pronouncements to a minimum. I've never heard the Samwers claim to be
victimized.

------
SeanLuke
I don't know about the lawsuit, but the landing pages for touchofmodern.com
and fab.com are practically identical.

<http://fab.com/>

<https://www.touchofmodern.com/>

~~~
pauldix
as is the landing page for any <http://launchrock.com/> site and a million
other web sites on the internet. If that's the criteria for suing someone
(which it seems to be), we seriously need to rethink the entire system.
Throwing out all patent law sounds like a good start to me.

~~~
pauldix
although patent law doesn't seem to be the culprit here. Either way, it's
shameful that Fab can sue for look/feel.

~~~
endersshadow
> Either way, it's shameful that Fab can sue for look/feel.

Uh, really? You're talking about trademark and trade dress. Why, on this green
Earth, should you not be able to protect your marks or dress?

Also, this article points to Braniff, Trans-Texas, and Continental suing
Southwest as a historical corollary: It's not. Southwest was sued because it
was operating outside of federal regulations (which it claimed it could avoid
because it only operated in Texas) [1]. Fab is suing based on marks and dress
--something wildly different from Southwest's suit.

Additionally, trademark law nearly _requires_ you to vigilantly protect your
marks. In that way, it protects against selective suits and bullying where
beneficial.

[1]:
[https://en.wikipedia.org/wiki/Southwest_airlines#Foundation_...](https://en.wikipedia.org/wiki/Southwest_airlines#Foundation_.281966-1971.29)

------
staunch
What's even worse about this case is that Fab's business was very obviously
inspired by companies like Groupon and Pinterest.

------
grabeh
I suspect that a slight redesign of the site in question would not 'kill'
Touch of Modern.

~~~
talmand
Depends on what "slight redesign" means. Such a change could potentially cost
them a great deal of time and money.

------
blahedo
This article tells us _that_ the lawsuits are killing startups, but not so
much _how_ they're doing so. I guess we can sort of fill in the blanks, but
then why read the article?

~~~
kwekly
Quoth the author:

"I've been an advisor to the company for years, and you'd be hard pressed to
find a more hard-working, dedicated founding team that has endured every
roadblock and frustration a startup can experience. They recently decided to
pivot to selling modern design-oriented furniture, art, electronics and
housewares aimed at young professional men -- a segment they understood well
since it was one to which they also belonged. Things have been going great for
them, and I couldn't be happier."

He's a party with a vested interest, and is doing his bit to spin sympathetic
narrative. With humans, a good story is much more persuasive than facts or
content or substance.

