In July 2006, Greenspan petitioned the US Patent & Trademark Office, asking that they revoke Facebook’s trademark rights to “Facebook,” “Face Book,” “Universal Face Book” and “Face Net.”
Then — and until now — Aaron claimed that Mark Zuckerberg got his idea for Facebook and it’s name only after the two had discussed plans for a project called “the Face Book” in 2003.
We’re not lawyers, but we’re pretty sure Aaron never had much of a case. According to Harvard’s Citizen Media Law Project:
A trademark is a sign, mark, or indicator used by an individual, business, or organisation to identity a product or service as its own and to distinguish the product or service from those of its competitors. A business name generally can be protected as a trademark under federal and state trademark law.
Trademark law is designed to avoid consumer confusion over the trademarks that businesses or other organisations use in connection with their goods and services.
To be eligible for protection, trademarks have to be either a) distinctive, or b) famous. It may not have been in 2003, but by 2006, Facebook was definitely famous. That fame gives Facebook a very strong claim to the trademark. In legalese, they’ve built up mountains of “good will,” and with it, the attention (and lawsuits) of people like Greenberg.
We’re guessing Facebook settled with Greenberg because it made business sense, not because it thought it would lose in court. Ending the controversy, however bogus, not only saves Facebook lawyer fees but also clears another hurdle in their ongoing quest to destination IPO.