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This appears to be Indiana’s first “Sponsored” ad case. Anyone who uses Facebook has seen the “Sponsored” ads on the right side of their screen. Those ads are one of the primary ways that Facebook makes money. Similar to the “keyword advertising” cases revolving around Google’s keyword searches, it now appears the time has come to litigate over what constitutes an acceptable use of someone else’s trademark in one of Facebook’s sponsored ads.

Quick summary of the facts:

1. Defendant ran the following Sponsored ad on Facebook:

Dans Comp Ad

2. Clicking the link takes users to a separate website where they complete a survey and enter their name, email and phone number in hopes of winning a free Dan’s Comp bicycle. Due to the prominent use of the Dan’s Comp logo, that website appears to be affiliated with Dan’s Comp (although it is not).

3. Nobody ever wins a bicycle.

4. Dan’s Comp’s reputation is damaged and the consuming public is potentially harmed.

Stay tuned for updates.

XP Innovation LLC v. Ian Smith

Court Case Number: 3:13-cv-00106-RLY-WGH
File Date: Friday, April 12, 2013
Plaintiff: XP Innovation LLC
Plaintiff Counsel: Amie P. Carter, Louis T. Perry of Baker & Daniels
Defendant: Ian Smith
Cause: Trademark Infringement, Unfair Competition and False Designation of Origin, False Advertising, Common Law Unfair Competition and Trademark Infringement
Court: Southern District of Indiana
Judge: Judge Richard L. Young
Referred To: Magistrate Judge William G. Hussmann, Jr.