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Virtual Reality Startup MetaX Sues Meta For Rebrand, Says It 'Stands No Chance Against The Corporate Behemoth' The company is claiming Facebook's parent company, Meta, infringed upon its name.

By Gabrielle Bienasz

Opinions expressed by Entrepreneur contributors are their own.

MetaX has joined the ranks of companies suing social media giant Meta over its name, according to CNN.

MetaX, an immersive reality company founded in 2010, is suing Meta for trademark infringement. The company claims in a lawsuit that Meta "obliterated" the company's business, CNN reported. "Meta's small business stands no chance against the corporate behemoth," the complaint said.

Facebook's parent company changed its name to Meta in October.

Meta declared at the time it would represent the shift to virtual reality and augmented reality, "the next evolution in a long line of social technologies."

The "metaverse" has already struggled with safety and is still in its early stages.

According to CNN, MetaX filed the complaint Tuesday in the Southern District Court of New York and is looking to get an injunction to get Meta to stop using the name.

"Facebook's actions, illegally usurping our name and mark, have not only put our business in jeopardy, but that of the entire industry and the intellectual property rights of the innovators that have helped build it," Justin Bolognin, MetaX's CEO, said in a press release Tuesday.

The suit further argues Meta, even though it tried to say the companies were different, has copied its strategy for events -- and has permanently connected MetaX with "the toxicity that is inextricably linked with the Facebook brand," CNN added.

It's not the first time Meta has been accused of brutally edging out the competition. Virtual reality startups are struggling to sell products that can compete with the $299 headset from Meta, Recode reported in 2021. Meta has also been on a buying spree focused on VR companies, the outlet reported.

Stephanie Llamas, a metaverse researcher, told the outlet that Meta's involvement and approach could also be scaring away startups.

"I've spoken to a lot of developers who feel they don't even have a chance to enter the market because Facebook is buying up the technology that they're trying to develop," she said.

Multiple regulators are looking into the overall issue, sources told Bloomberg in January.

Meta has also been aggressive in pursuing metaverse-related patents, Insider reported in January.

At least one other company with a similar name, Meta Company, planned to sue Meta, Business Standard reported in November. (The company's website says it has "proceeded to file the necessary legal action.") Meta acquired the domain from MetaBank in December 2021 for $60 million, according to Payments Cards & Mobile.

At Meta's most recent earnings call in April, CEO Mark Zuckerberg said a "web version" of the metaverse would come out "later this year." That means you could see it without a VR headset.

The company's stock is down about 46% year to date. "While we're focusing on the biggest opportunities and challenges of today, I think it's important to build the foundation for the next era of social technology as well," Zuckerberg added in the call.

A representative for Meta did not immediately respond to a request for comment.

Gabrielle Bienasz is a staff writer at Entrepreneur. She previously worked at Insider and Inc. Magazine. 

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