) is set to defend a trademark infringement lawsuit brought by
Timelines Inc. for using the term "timeline". Launched in 2009 by
Timelines Inc., the "timelines" application allowed users to
develop web pages featuring user-defined information related to
Timelines Inc. had sued Facebook for allegedly violating its
valid trademark on the term "timelines". Timelines Inc also
complained unfair competition in the lawsuit that was filed in
Sep 2011. Facebook countersued Timelines claiming the term to be
too generic for protection under any trademark. Facebook not only
asked the presiding judge to cancel the Timelines trademark but
also claimed non-infringement for using the term.
Coming to the current scenario, U.S. District Judge John W.
Darrah ruled against Facebook as it failed to produce evidence
that the Timelines trademark over the term was generic. The trial
is set to begin from Apr 22.
Reportedly, Timelines hopes to claim an amount equivalent to
Facebook's "timeline-derived ad revenue" in the event of the
company getting a favorable judgment. We believe that these
trials take up a lot of time to provide definitive results and
thus an out-of-court settlement cannot be ruled out in the
We believe that Facebook has significant growth opportunities
in the online advertising format. Facebook's massive user base
and its ability to track personal details over time make it a
formidable force in the online ad market.
Facebook can use this massive database to help advertisers
target relevant ads going forward. Moreover, the company has
acquired the Atlas Advertiser Suite from
) to strengthen its position in the online ad market. The
company's expansion in the mobile segment is impressive.
However, a volatile macroeconomic environment and increased
investments to expand mobile offerings are expected to hurt
margins in the near term. Competition from
) in the display ad market are the other headwinds going
Currently, Facebook has a Zacks Rank #3 (Hold).
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