What to do when your startup gets sued by a big player

Posted by Cashsquare on Wednesday September 03, 2014 @11:15AM
from the self-post dept.

Two years ago, I launched a social media gaming company called Cashsquare. Our small team set out to create the first real-life virtual game that lets people buy and sell real-life properties, but in a virtual gaming environment.

We wanted to bring online games to the real world and we did everything the right way. We brought together a talented team of developers and marketers, as well as individuals with years of experience in real estate development. We built a business plan. We found office space, which we shared to save costs. We secured our first round of investment. And we spent countless hours developing the game - all while legally dotting all of our i’s and crossing all of our t’s along the way. We were starting to see all of our efforts paying off.

Then, we got sued by Square, Inc. – the payment processing company. It turns out we were not the only victims. Square, Inc. also sued other startups with the word “square” in their names. Apparently, Square, Inc. feels that it has the monopoly on the word “square,” and it doesn’t matter that there’s no likelihood of confusion (to use the trademark parlance) between our real-life virtual game and Square Inc.’s payment processing business. It’s only a matter of time before Square, Inc. insists that Moscow’s Red Square or Beijing’s Tiananmen Square change their names.

What are we going to do?

We’re moving forward. We just launched our new version and our developers are pushing hard to make new features the next month. We feel we’ve invested a lot in our name and our brand, and we’re not backing down just because a larger company feels it can bully startups into submission.

This is a very realistic issue that many startups and founders may face. We are going to fight it and believe our startup will survive, because we do it for the love of the game.

We encourage all startups and founders to follow their passion and persevere in the face of adversity.

Boris Co-Founder, Cashsquare

( 27 comments | 43 points | on HN )

Re:What to do when your startup gets sued by a big player by crazypyro on Wednesday September 03, 2014 @12:07PM (#8263671)

Its ridiculous to me that a company can attempt to trademark such a common geometric shape's name. How did they get away with trademarking "Square"?

Edit: Holy crap. They've filed a TON of trademarks in a ton of different categories. How have they gotten all of these? You technically can't use Square in the name of anything dealing with a computer.

http://tmsearch.uspto.gov/bin/showfield?f=doc&state=4809:16h...

Just a few of them...

BTW, someone was granted "CodeSquare" trademark before those. Also FourSquare was before those and covers much of the same legal wording. I doubt they have a strong case against you, but IANAL. The fact that you use the word "Cash" and they have multiple trademarks in the financial and computer payment space may hurt your case though.

It gets more ridiculous... CodeSquare was granted a trademark in the Goods and Services IC 042. US 100 101. G & S and then 2 years later, Square comes along and trademarks "Square" in the exact same Goods and Services IC 042. US 100 101. G & S. I'm not a lawyer, but it seems like there is a contradiction. At the very least, as a layman, it looks like some underhanded lawyer-ing that they are now using offensively.

Lastly, Square (Aka Square Enix, the video game company) also has the trademark "Square" and also is in Goods and Services IC 042. US 100 101. G & S. So two companies own the "Square" trademark within a single category. I have no idea how any of this actually works out in law, but the fact that there is so much complexity and ambiguity is startling to me.

[ Parent | on HN ]

Re:What to do when your startup gets sued by a big player by mcintyre1994 on Wednesday September 03, 2014 @06:17PM (#8265764)

Just FYI your links seem to be to some kind of now expired session - not sure if there's a link that lets us reproduce the search but they're definitely not functional.

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Re:What to do when your startup gets sued by a big player by crazypyro on Thursday September 04, 2014 @09:26AM (#8268058)

That's unfortunate. All of the links are just searching "Square, Inc" and live only. Sorry that they aren't working and I can no longer edit.

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Re:What to do when your startup gets sued by a big player by JSeymourATL on Wednesday September 03, 2014 @02:20PM (#8264454)

Here's a good read >

The best defense when a big company attacks a smaller company is to take the fight to the press. America loves the little guy. It goes back to the colonies and the Redcoats. It’s in our D.N.A. http://boss.blogs.nytimes.com/2011/10/03/defending-david-aga...

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Re:What to do when your startup gets sued by a big player by loumf on Wednesday September 03, 2014 @11:38AM (#8263518)

Did you get sued or did you get a letter to stop using the name? It feels unlikely that the first communication you'd get from them is notice of a lawsuit.

IANAL, but ... Trademarks are one of those things where if you don't show evidence of fighting misuse, you can lose the trademark. This force makes lawyers and in-house counsel write these letters.

I do have to say that even though you are not a competitor of Square, the name cashsquare is a little confusing. With no other context, I would have thought it was related. Given trademark law and this name, it seems reasonable that you'd receive a letter.

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Re:What to do when your startup gets sued by a big player by ashleyp on Saturday September 06, 2014 @12:02PM (#8278634)

You've listed a whole bunch of other reasons as to why your company is going great, inpite of the name. I'm presuming the name's not the most important thing? Sucks that money will be wasted on marketing and branding...but it's better surely, to change that then risk loosing more? It's not fair. It's shit. But it could be better to do now than 2 years down the line when the name is more recognisable. Give it a fight if you can but I assume but the most important thing is protecting the entire company, not a name :).

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Re:What to do when your startup gets sued by a big player by alain94040 on Wednesday September 03, 2014 @12:27PM (#8263790)

Why fight it? The problem is that you have cash in your name, and Square deals with payments. So there is possible confusion. Just change your marketed name, it will cost less than any other option you have. Unless your name is so critical to the success of your game that you can't change it, but I assume it's not.

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Re:What to do when your startup gets sued by a big player by crazypyro on Wednesday September 03, 2014 @12:33PM (#8263833)

Why was Square trademark granted after CodeSquare's trademark then? Square deals with computers, so technically its also a violation.

Or better yet, FourSquare. Square has a trademark[0] on using "Square" when describing "computer software for determining and mapping the physical locations of consumers;", yet they were given the trademark, even though there could be clear confusion, based on the legal wording.

The obvious answer is that Square has lawyers that found all the possible ways they could trademark the word "Square", even if the connection is highly suspect. Now they are using it to take down companies that cannot afford to defend themselves.

[0]http://tmsearch.uspto.gov/bin/showfield?f=doc&state=4809:16h...

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Re:What to do when your startup gets sued by a big player by alain94040 on Wednesday September 03, 2014 @12:35PM (#8263844)

So your advice is...?

My advice was specific and achieves the goal of not going bankrupt for a startup. I have been through lawsuits before and I know how expensive and distracting they can be.

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Re:What to do when your startup gets sued by a big player by crazypyro on Wednesday September 03, 2014 @12:39PM (#8263872)

Yeah, I'm not disagreeing with your advice, nor was I the down-voter. It just sucks and I completely understand the author's frustration. Money wins in court though.

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Re:What to do when your startup gets sued by a big player by Cashsquare on Wednesday September 03, 2014 @02:15PM (#8264433)

Crazypro / alain94040 - thats the concern that we are facing first of all we dont want to spend money on something that we believe will not achieve what we planned to do, however we love our Brand and we dont want to give it up! thats why we are fighting for it.

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Re:What to do when your startup gets sued by a big player by Cashsquare on Wednesday September 03, 2014 @02:16PM (#8264436)

"Money wins in court though." - I hope not this time around! :)

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Re:What to do when your startup gets sued by a big player by kjs3 on Wednesday September 03, 2014 @01:45PM (#8264283)

Certainly the easiest is a re-brand. In fact, I'd approach Square with "we're willing to fight this, and it's going to cost both of us a lot of money...but with a proper financial incentive from Square to cover the costs associated with re-branding, we might be willing to entertain that option" (written in lawyer-speak, of course). An acquaintances company was basically paid mid six figures to change their name in somewhat similar circumstances, and they used it as a opportunity to do some interesting things, marketing wise.

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Re:What to do when your startup gets sued by a big player by Cashsquare on Wednesday September 03, 2014 @02:09PM (#8264403)

Hi Kj3, we have discussed this in one of our first conversation with Square, however Square first considered this option and then just disappeared for a while to then come back to sue us!

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Re:What to do when your startup gets sued by a big player by Spoom on Wednesday September 03, 2014 @03:10PM (#8264701)

So you substantiated their lawsuit by agreeing with them that there could be brand confusion, by offering a compromise. Unfortunate.

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Re:What to do when your startup gets sued by a big player by Cashsquare on Wednesday September 03, 2014 @03:22PM (#8264774)

Spoom - We never agreed that our brands could be confused, because we are nowhere close to what Square does. Games and processing is very different. But to avoid costly lawsuits, losing focus and if the compensation would be right (that would cover all our re-branding costs - 6 figures) we would consider it...However i must underline that Square started using the brand "Square Cash" just a couple months ago, which makes it very clear why Square really wanted our brand name. as an example they use the email: [email protected].

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Re:What to do when your startup gets sued by a big player by Spoom on Wednesday September 03, 2014 @05:16PM (#8265504)

Don't get me wrong, I understand where you're coming from and at a glance it looks like you're in the right, but their lawyers probably saw an opportunity when you provided a compromise.

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Re:What to do when your startup gets sued by a big player by AznHisoka on Wednesday September 03, 2014 @04:53PM (#8265413)

Dude, just rebrand. You're obsessing over a name that your fans probably aren't as crazy about.

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Re:What to do when your startup gets sued by a big player by rikkidi on Wednesday September 03, 2014 @11:23AM (#8263452)

Keep fighting, Boris! Although it is not always the company management's idea to bully startups (some have lawyers that get paid by the hour so they come up with cases) - it is still sad to see this happening... It would be nice to see startups unite to resist this kind of pressure

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Re:What to do when your startup gets sued by a big player by Cashsquare on Wednesday September 03, 2014 @02:17PM (#8264445)

Thanks rikkidi for the support! :)

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Re:What to do when your startup gets sued by a big player by RollAHardSix on Thursday September 04, 2014 @10:58PM (#8272093)

Seriously, your answer is right here.

https://www.youtube.com/watch?v=nvlTJrNJ5lA

Go contact a proper lawyer for more information on what to do legally.

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Re:What to do when your startup gets sued by a big player by erdemg on Wednesday September 03, 2014 @11:53AM (#8263600)

Keep moving, you still have Foursquare!

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Re:What to do when your startup gets sued by a big player by shortsightedsid on Wednesday September 03, 2014 @11:56AM (#8263610)

And Hollywood Squares!

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Re:What to do when your startup gets sued by a big player by yan_nazarov on Thursday September 04, 2014 @02:05PM (#8269725)

Big company, lots of money!!! Expensive lawyers! That what big companies do!!! Not nice Square!!!

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Re:What to do when your startup gets sued by a big player by AlyssaRowan on Wednesday September 03, 2014 @12:31PM (#8263824)

I wonder what Square-Enix aka Squaresoft aka Square would think of all this...?

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Re:What to do when your startup gets sued by a big player by crazypyro on Wednesday September 03, 2014 @12:47PM (#8263915)

Who knows? They both have patents on the same exact goods/services category.

http://tmsearch.uspto.gov/bin/showfield?f=doc&state=4808:lt2...

http://tmsearch.uspto.gov/bin/showfield?f=doc&state=4809:16h...

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Re:What to do when your startup gets sued by a big player by paul_pashaev on Thursday September 04, 2014 @02:00PM (#8269695)

Keep fighting, guys! All the best!!!

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