Company called META that claims Facebook stole its name is suing for infringement
- Justin Bolognino claims his 12-year-old small business called META was destroyed after Facebook rebranded itself as Meta last year
- Bolognino is suing Facebook's parent company for trademark infringement and unfair competition, and is seeking unspecified monetary damages
- A legal scholar tells CNBC the company has a completely plausible claim
Imagine waking up to find that the name of the business you created more than a decade ago has been suddenly hijacked by one of the most powerful companies in the world.
That's what Justin Bolognino says happened to him, when Facebook rebranded itself as Meta last year. His small business is called META — its full name is METAx LLC.
"It was surreal. It was like watching a movie," Bolognino told CNBC in an exclusive on-camera interview, recalling when he first heard the news that Facebook was changing its name.
"This is not a scenario I ever wanted to have. This is not a scenario I would wish on my worst enemy," said Bolognino, who's now suing Facebook's parent company, Meta Platforms, for trademark infringement and unfair competition. "When Facebook stole the Meta brand from us, it just completely decimated our business."
Bolognino says he started his small business 12 years ago to create multi-sensory live experiences using virtual and augmented reality for events like Coachella. But business came to a screeching halt, Bolognino said, after Facebook's announcement last year.
"[The services we offer] are drastically identical… we have the same goal which is social immersion in virtual spaces," he said.
Dyan Finguerra-DuCharme, Bolognino's attorney and a partner at Pryor Cashman LLP, says she immediately reached out to Meta Platforms to tell the company it was infringing on her client's intellectual property rights.
"This issue of what's called reverse confusion, when you've got a small player who's been doing their business for a period of time, and then you get a giant corporate behemoth with sheer arrogance says 'I'm going to own this mark now and I'm going to do business with this regardless of the fact that you were here before me,'" she told CNBC.
Finguerra-DuCharme said the two companies engaged in eight months of negotiations. Despite handing over thousands of pages of information to resolve the issue, Meta Platforms would not come to the table, she said.
"Now my client goes out to try to market and promote its services, consumers now falsely and mistakenly believe that its services are coming from Facebook," she said.
Finguerra-DuCharme says her client has no option but to sue. According to the complaint, META's business has been "irreparably and irrevocably harmed."
CNBC reached out to Meta Platforms for comment, but did not immediately hear back.
Bolognino says he'll keep fighting no matter how long it takes.
"We would like to be compensated for our 12 years worth of building a brand so cool and so valuable that one of the biggest companies on Earth and Facebook wanted to steal it from us," he said.
The lawsuit doesn't specify the amount of monetary damages.
University of Michigan law professor Jessica Litman, co-author of the casebook "Trademarks and Unfair Competition Law: Cases and Materials," said META has a "completely plausible claim [against Meta Platforms] and could well prevail."
"The corporate name is METAx LLC, but the company registered META as a service mark in 2017, and the complaint alleges that they have used META as a service mark for its business," she said. "It doesn't matter for trademark infringement purposes what a party's corporate name is; it matters what trademark or service mark it uses in its business."
Litman says Meta Platforms probably wants to be careful about settling with META because there are a bunch of other businesses out there that are also using "Meta" as part of their mark – and could be encouraged to follow suit.
"On the other hand, it will almost certainly be cheaper to pay META enough money to cause it to change its name than to litigate the suit to its conclusion," Litman said.
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