It was less than a week ago that Tenthbit, the developers of the buzzy, new social-networking-app-for-couples (or other partners) Pair, picked up a $4.2 million seed round, money the founders said would be used to expand its mobile development and design teams. Now it looks like some of those funds might also need to go to legal bills.
Tenthbit is getting sued by pair Networks, a hosting and domain registration company based in Pittsburgh, for trademark infringement.
Tenthbit, meanwhile, has also sued pair Networks, to prevent the other suit from going ahead. Pair Networks is asking for an injunction on Pair the app, as well as “other relief as this Court deems appropriate.” Tenthbit argues the two do not compete directly, and would therefore not result in any brand confusion.
While trademark cases can be a dime a dozen — and there is no guarantee of how this one will fall — this one is interesting for a few reasons:
One is that it pits a startup working at the forefront of mobile social networking, against the kind of Internet company that has been around for years and is not so much about disruption as it is about making the internet work like it’s supposed to.
Another is that this old-school Internet company has apparently taken others to court for the same reason — and won. And there a couple of other twists to this story, as you’ll see below.
Tenthbit’s case against pair Networks was filed first, in a U.S. District Court in the District of Northern California, San Jose, on April 6 in an apparent attempt to stop pair Networks from filing its own case. That didn’t seem to work, and pair Networks filed its own case against Tenthbit in a Federal court in Pennsylvania on April 27. Both suits are embedded below.
Pair Networks alleges in its suit that Tenthbit “doubly infringes” on pair Network’s trademark through both the use of the brand “Pair” as well as its URL, www.trypair.com. Pair Networks says that it has spent “substantial amounts of time, effort, and money” to ensure that the public associates the Pair family of marks (these include pair.com, pair.net, and pair.org, among others) with its own company.
Pair Networks, founded in 1998, offers its services both in the U.S. as well as internationally and claims to be one of the world’s biggest privately-held hosting companies. It says it delivers more than one billion Web hits per day via its servers.
Pair the app, meanwhile, has seen over 220,000 downloads since it went live in the app store a month ago.
Pair Networks says that it has been policing for the use of its name by Internet-related companies for years now, and cites three different examples in its complaint where courts have ruled in its favor in other trademark infringement cases.
For its part, Tenthbit maintains that it is not in the same business as pair Networks — with a consumer mobile app being on the opposite end of the Internet spectrum from offering hosting and domain registration services to websites.
“It is axiomatic and commonplace that the same word may be used as a trademark by different parties provided that such use does not create a likelihood of confusion on the part of relevant consumers,” the app makers’ lawyers, Orrick, Herrington and Sutcliffe, write in response to the infringement claims.
There are a few other eyebrow-raising points in pair Networks’ complaint against Tenthbit:
- Pair Networks claims that its reputation is being damaged because Pair the app is associated with “explicit adult activity” like “sexting.” (The suit doesn’t mention the spinoffs that Pair has spawned, such as PairMixer, which helps you find someone to pair with on the app if you are unattached.)
- Weird coincidence: Pair Networks claims that Tenthbit possibly already knew about pair Networks when it had registered its own domain as trypair.com because it turns out that among the companies hosted by pair Networks is Y Combinator, the incubator where Tenthbit created and launched Pair. Y Combinator used pair Networks for hosting for at least six years.
- Pair Networks is asking to get all the profits that Tenthbit will have made from Pair the app. (For now, it’s a free app for iOS only, with no revenue-generating services incorporated into it at this point.)
The cases are due to be heard later this year. We have reached out to Pair, pair Networks and their legal teams for further comment.
Pair’s $4.2-million seed funding round, announced on May 1, came from an A-list of angels that included Ashton Kutcher’s A-Grade Ventures, Dave Morin, Paul Buchheit, Founder Collective, SV Angel, Lerer Ventures, Michael Birch, Sam Altman, CrunchFund, Tencent, Yuri Milner,Betaworks, Alexis Ohanian, Garry Tan, Harjeet Taggar, Gary Vaynerchuk, Brandee Barker, Brian Pokorny, Elad Gil, and Susan Wu.