How anti-competitive lawsuits by incumbents are killing early stage startups

http://blog.garrytan.com/infanticide-how-anti-competitive-lawsuits-by

by garry • 14 years ago

166 39 14 years ago

blog.garrytan.com

blahedo• 14 years ago

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• 14 years ago

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.

citricsquid4• 14 years ago

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...

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• 14 years ago

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.

citricsquid4• 14 years ago

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.

autophil2• 14 years ago

Exact same elements? Are 90% of these elements all arranged in the same way as the example shown? Absolutely not.

I read the article and felt empathy for a Touch of Modern, but then I see that example and think the article is dishonest.

Symmetry• 14 years ago

It seems to me that the main reason those two pages look so similar is that in the TouchOfModern page the product displayed somehow happens to be the exact same shade of red used in the Fab.com interface.

powera• 14 years ago

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• 14 years ago

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.

autophil2• 14 years ago

The only thing I got out of this rather lightweight article was "Business models shouldn't be copyrightable or patentable -- yet today's lawsuit seems to indicate that some entrepreneurs believe they are"

This insinuates Fab.com is suing because Touch of Modern has a similar business model.

However, I now sense this is deflecting the real truth, which is that more than just a business model and the use of Helvetica is being copied.

nailer• 14 years ago

It's more direct than that, screen shots from the suit: http://techcrunch.com/2012/08/15/fab-lawsuit-touch-of-modern... (iPad app popup warning)

sriramk• 14 years ago

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.

staunch• 14 years ago

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

erikpukinskis• 14 years ago

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

You either die a hero, or....

learc834• 14 years ago

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• 14 years ago

> 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.)

SeanLuke• 14 years ago

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/

sudonim• 14 years ago

Gilt has changed their homepage, but Im pretty sure they were both "inspired" by this page:

https://img.skitch.com/20120816-dhjgxct5wqjq26413w9j654g8q.p...

pauldix2• 14 years ago

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.

pauldix2• 14 years ago

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

grabeh• 14 years ago

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

talmand2• 14 years ago

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

paulsutter• 14 years ago

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.

talmand2• 14 years ago

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.

How anti-competitive lawsuits by incumbents are killing early stage startups

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