Arguably, Youtube has lost its claim on "tube" by not defending its trademark:

http://en.wikipedia.org/wiki/Genericized_trademark#Avoiding_...

If Youtube had sent cease and desist letters to Godtube and other "-tubes", and escalated to court if the person hadn't ceased and desisted, it probably would have worked. (This doesn't get into the morality or cool/uncoolness or business strategy or PR aspects of it, it's just trademark law)

> I don't see how any company can own generic words when used as part of a phrase, even when the industry is the same.

Actually, that's exactly what a trademark is. Owning generic words and phrasings in the same industry.

> I can certainly create a company called MicroChime or YouChime or ChimeSoft.

Debatable. MicroChime would probably be okay if you sold small chimes. If you sold operating systems and business software, you'd absolutely get a cease and desist, and you'd almost certainly lose if it went to court. Again, this doesn't get into the morality of it, just how trademarks generally work these days.

I get what you're saying, but if you look at it from Facebook's point of view if they don't defend their trademark they'll lose it. If there are looks of [something]book.com social networks then [something]book.com just becomes a generic term for a social network. Facebook then loses the right to claim any sort of exclusivity at all on their trademark (I think that's how it works anyway, IANAL obviously)

So somebody could make sexbook (properly already could if it was not a social network, but, say, a book about about porn) but they couldn't make facebookofsex.com

This becomes a bit of a gray area when every other webapp now comes with some social feature.

The test is whether a customer/client would think this new site was associated/owned/blessed by facebook.

Now, if it has facebook widgets and like buttons all over it, you have problems.

Also consider the cost of your lawyer having fun with Facebook's legal team.