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Online Startup Fab Sued for Copyright Infringement, 'Unfair' Competition

July 30, 2013
URL: http://www.entrepreneur.com/article/227624

Fab, the popular design oriented online retailer, is heading to court as a competitor with a similar name is suing the company over copyright infringement and what it claims are unfair competitive practices.

The lawsuit, filed in California last week by membership-based internet shoe retailer Just Fab, calls Fab's name "confusingly similar" and asserts that it "intended to capitalize on Just Fab's goodwill for Fab.com's own pecuniary gain." Just Fab asks that Fab be barred from selling any items that compete with its own and to reimburse the company for business lost due to competition and brand confusion.

In its defense, Fab says it will aggressively defend its brand. 

Fab originally launched in 2010 and was called Fabulis, a social network for gay men. Founders Jason Goldberg and Bradford Shellhammer changed the business model and re-named as Fab.com about a year later. Also launched in 2010, Just Fab originally billed itself as Just Fabulous. It was founded by Don Ressler and Adam Goldenberg.

The lawsuit comes about a month after Fab closed a $150 million round of financing, bringing total investment in the e-commerce company to $310 million. As Fab looks to expand its business, the company is laying off more than 100 employees in Europe as part of an effort to reduce redundancy in its European and U.S. flash-sales divisions. Seventy employees will be issued pinks slips immediately while the remaining are asked to stay on through the transition. Thirty-six employees will be asked to move to Berlin or New York.

Even amid the layoffs, Fab is hiring for 70 unfilled positions in the U.S. Europe and India, the company says.

Related: 10 Questions to Ask Before Naming Your Business