Etsy Bitsy Trademark Problem

Etsy faces fraud lawsuit from investors over possible trademark issues.

In April, proving the doubters wrong, my girlfriend agreed to marry me. Please pray for her. A few days later, she sent me this picture:

It appears that a new right of passage for every bride-to-be is to receive/order a shirt where the word fiancé(e) is written like Beyoncé.  And you thought this would be the legacy of the “Single Ladies” video:

In any event, earlier this year, Beyoncé threatened to sue Etsy, Inc., owner of the popular online marketplace, over certain “Feyoncé” products being sold in Etsy shops on its website. Taylor Swift has also had her issues with Etsy sellers using her trademarks. Now, Etsy investors are getting in on the action.

Yesterday, investors filed a complaint against the company in New York federal court following a report that more than five percent of the 40 millions listings on Etsy may infringe the intellectual property rights of well-known brands. The complaint alleges that executives intentionally disregarded their knowledge of such issues when the company went public in April. Analysts have pointed out that shops on the site appear to sell items that may infringe trademarks belonging to Louis Vuitton, Chanel, Michael Kors, Disney, and the NFL – to name a few. That is a problem.

After going public, Etsy’s value quickly grew to more than $3 billion, selling at around $30 per share. It has slowly declined since then, hovering around $15 per share as we speak. Certainly, early investors are not happy the the stock price has fallen almost 50% since hitting the market. Only time will tell how much those investors knew about the intellectual property issues at the heart of the complaint when they made their investments. It could be that the lawsuit is only because they regret putting a ring on it.